[Senate Hearing 109-783]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 109-783
 
 CURRENT AND FUTURE WORLDWIDE THREATS TO THE NATIONAL SECURITY OF THE 
                             UNITED STATES

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 28, 2006

                               __________

         Printed for the use of the Committee on Armed Services



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                      COMMITTEE ON ARMED SERVICES

                    JOHN WARNER, Virginia, Chairman

JOHN McCAIN, Arizona                 CARL LEVIN, Michigan
JAMES M. INHOFE, Oklahoma            EDWARD M. KENNEDY, Massachusetts
PAT ROBERTS, Kansas                  ROBERT C. BYRD, West Virginia
JEFF SESSIONS, Alabama               JOSEPH I. LIEBERMAN, Connecticut
SUSAN M. COLLINS, Maine              JACK REED, Rhode Island
JOHN ENSIGN, Nevada                  DANIEL K. AKAKA, Hawaii
JAMES M. TALENT, Missouri            BILL NELSON, Florida
SAXBY CHAMBLISS, Georgia             E. BENJAMIN NELSON, Nebraska
LINDSEY O. GRAHAM, South Carolina    MARK DAYTON, Minnesota
ELIZABETH DOLE, North Carolina       EVAN BAYH, Indiana
JOHN CORNYN, Texas                   HILLARY RODHAM CLINTON, New York
JOHN THUNE, South Dakota

                    Charles S. Abell, Staff Director

             Richard D. DeBobes, Democratic Staff Director

                                  (ii)

  




                            C O N T E N T S

                               __________

                    CHRONOLOGICAL LIST OF WITNESSES

 Current and Future Worldwide Threats to the National Security of the 
                             United States

                           february 28, 2006

                                                                   Page

Negroponte, Hon. John D., Director of National Intelligence; 
  Accompanied by Gen. Michael V. Hayden, USAF, Principal Deputy 
  Director, Office of the Director of National Intelligence......    11
Maples, LTG Michael D., USA, Director, Defense Intelligence 
  Agency.........................................................    26

                                 (iii)


 CURRENT AND FUTURE WORLDWIDE THREATS TO THE NATIONAL SECURITY OF THE 
                             UNITED STATES

                              ----------                              


                       TUESDAY, FEBRUARY 28, 2006

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:37 a.m. in room 
SH-216, Hart Senate Office Building, Senator John Warner 
(chairman) presiding.
    Committee members present: Senators Warner, Inhofe, 
Sessions, Collins, Talent, Cornyn, Thune, Levin, Kennedy, 
Lieberman, Bill Nelson, and Clinton.
    Committee staff members present: Charles S. Abell, staff 
director; Leah C. Brewer, nominations and hearings clerk; and 
John H. Quirk V, security clerk.
    Majority staff members present: William M. Caniano, 
professional staff member; Regina A. Dubey, professional staff 
member; Gregory T. Kiley, professional staff member; Sandra E. 
Luff, professional staff member; and Lynn F. Rusten, 
professional staff member.
    Minority staff members present: Richard D. DeBobes, 
Democratic staff director; Gabriella Eisen, research assistant; 
Evelyn N. Farkas, professional staff member; Richard W. 
Fieldhouse, professional staff member; Creighton Greene, 
professional staff member; and Bridget W. Higgins, research 
assistant.
    Staff assistants present: Jessica L. Kingston and Pendred 
K. Wilson.
    Committee members' assistants present: Cord Sterling and 
Samuel Zega, assistants to Senator Warner; John A. Bonsell and 
Jeremy Shull, assistants to Senator Inhofe; Chris Arnold, 
assistant to Senator Roberts; Arch Galloway II, assistant to 
Senator Sessions; Mackenzie M. Eaglen, assistant to Senator 
Collins; D'Arcy Grisier, assistant to Senator Ensign; Russell 
J. Thomasson, assistant to Senator Cornyn; Stuart C. Mallory, 
assistant to Senator Thune; Sharon L. Waxman, Mieke Y. Eoyang, 
and Joseph Axelrad, assistants to Senator Kennedy; Frederick M. 
Downey, assistant to Senator Lieberman; Richard Kessler, 
assistant to Senator Akaka; William K. Sutey, assistant to 
Senator Bill Nelson; and Andrew Shapiro, assistant to Senator 
Clinton.

       OPENING STATEMENT OF SENATOR JOHN WARNER, CHAIRMAN

    Chairman Warner. Good morning, everyone. The Committee on 
Armed Services meets today to receive the annual testimony on 
the current and future worldwide threats to the national 
security of our Nation and indeed that of our allies. The 
witnesses here today are a very distinguished panel. We have 
the Director of National Intelligence (DNI), Ambassador John D. 
Negroponte; General Michael Hayden, USAF, Principal Deputy 
Director of National Intelligence; and the Director of the 
Defense Intelligence Agency (DIA), Lieutenant General Michael 
D. Maples, USA.
    I join the committee in welcoming this distinguished panel 
this morning. Ambassador Negroponte and General Hayden are the 
first Director and Principal Deputy of National Intelligence to 
appear at a worldwide threat hearing before this committee, and 
General Maples makes his first appearance before the committee, 
since becoming the Director of DIA.
    A key lesson of September 11, 2001, is that America's 
intelligence agencies must work together as a single unified 
intelligence enterprise. The Intelligence Reform and Terrorism 
Prevention Act of 2004 created the position of DNI, to lead a 
unified Intelligence Community (IC) and serve as the principal 
adviser to the President on intelligence matters and indeed the 
co-equal branch of the Congress of the United States.
    The DNI has broad authorities over the IC. Ambassador 
Negroponte, I for one believe you have led the effort and met 
the challenges of bringing together this new organization.
    General Maples, I am also a strong advocate for 
departmental intelligence organizations like the DIA. These 
organizations are structured and staffed to provide highly 
valued support to their primary customers, the Secretary of 
Defense, the Chairman of the Joint Chiefs, and the combatant 
commanders throughout the world, and other components of our 
military. Your products are used by the analysts, policymakers, 
and commanders around the world, who do not have, 
understandably, the extensive infrastructure that you have in 
DIA, but you make your work product available to all.
    Our Nation looks to the national IC for warning, clarity, 
and reasoned estimates on a range of developing issues and 
potential challenges, not the least of which is the 
proliferation of weapons of mass destruction (WMD) and the ever 
growing number of nations who are participating more actively 
in the global world activities.
    Your work is not easy. Even on the best of days, your 
mission requires courage, vigilance, foresight, and taking a 
certain amount of plain old-fashioned risk to make your best 
judgment to do it in a very truthful and forthright way. During 
the time of transition in the IC, our Nation's demand for 
intelligence has never been greater than during this very 
period. I think once again your group, the three of you, are 
meeting those challenges.
    The technologies for acquiring and analyzing the 
information on terrorists differ significantly from those used 
to evaluate the military capabilities of other countries. You 
must do both. At the same time when advances in technology and 
increasing globalization complicate your work, you must do 
both. While never forgetting that we are in the middle of a 
war, with soldiers, airmen, and marines in harm's way, you have 
to make these analytical reports available to them. We commend 
you therefore for your service. I thank you for the opportunity 
of having you before us this morning.
    Now, there was some discussion about a limitation on time. 
You take such time as you feel necessary, Ambassador Negroponte 
and each of the witnesses. In consultation with my ranking 
member, I believe that we have a obligation to allocate almost 
50-50 the time in public session with that in classified 
session in Hart 219. Consequently, I ask the committee that we 
limit our questions to one round each, giving each member 8 
minutes, and then we will proceed to go into a closed session.
    Now, on the matter of the ports, it is very actively being 
considered by Congress in the committee structure. I am pleased 
to see that we are going to undertake this 45-day extensive 
examination. But I do believe that, while there were 
imperfections in the first Committee on Foreign Investments in 
the United States (CFIUS) round and Congress will address 
those, this committee has forwarded two letters at the 
recommendation of Senator Levin and myself to the Treasury 
Department and to Senate counsel regarding the legal questions. 
I will ask that those letters be made a part of today's record.
    [The information referred to follows:]
      
    
    
      
    
    
      
    
    
      
    
    
      
    Chairman Warner. This committee had a briefing last week, 
regrettably while so many members were away in their respective 
States. But I believe it was imperative that we have the 
principal and presumably the most knowledgeable individuals 
come before Congress and explain the CFIUS process that did 
take place, and that was done. I personally, and perhaps there 
are others, had the opportunity to go in to the Senate Select 
Committee on Intelligence (SSCI) and receive the briefing, 
Ambassador Negroponte, of your very able deputy, who I note is 
present here today, and I thank you for bringing him here.
    That was the process by which your organization funneled 
that intelligence that you felt was appropriate into the CFIUS 
process. I would hope that we would take an opportunity just 
procedurally here in open session to describe that process and 
what was done, and then we can explore the substance when we go 
into Hart 219.
    I respect the concerns of many Americans about this 
transaction and the various statements and positions taken by 
colleagues both in the House and here in the Senate. But I have 
diligently over the past week tried to devote as much time as I 
can to studying this issue and I feel, while there were flaws 
in the CFIUS process first time around, the 45-day option--is 
not an option any longer; I presume they have filed the papers 
to avail themselves of it here today, which I think will bring 
such clarity as needed, and we hopefully can go forward as a 
Nation with this transaction, assuming we do not discover in 
the next 45 days a basis for not doing so predicated on 
national security concerns.
    I say that because I have had familiarity with the United 
Arab Emerates (UAE) for a number of years. I have been there 
several times. It is astonishing to see the growth in the 
relationships between our countries since September 11, 2001. 
It is true that there were certain serious matters prior to 
September 11, 2001, involving individuals, financial 
transactions, and the like. But nevertheless, since that period 
of time, just our trade since 2003 to 2005 has gone to the 
point where we are now close to $10 billion in trade with the 
UAE. Tens of thousands of these containers are going back and 
forth between our two countries.
    To think that a company with a record such as this one, 
having been given the highest recognition by their peer group 
by selecting them as the most capable company in 2005 to manage 
port terminal facilities, would put this investment of $6.8 
billion towards these various port transactions, roughly 10 
percent of which only is here in the United States, and would 
do anything less than try to achieve the highest security 
levels regarding their operations to protect their investment, 
and indeed to maintain their reputation in the ports with which 
they are affiliated, because if they were to do otherwise this 
entire gigantic corporate spread of this company would be 
severely impacted.
    I also point out that we have had well over 500 ship visits 
to UAE. It is the only port that can accept our large carriers. 
It is essential that those carriers on these extended 
operations avail themselves with portside dockage such that a 
lot of heavy equipment can be transferred backwards and 
forwards, off the ship and on the ship and so forth, to enable 
it to continue with its missions. We have extensive air 
operations there that are supporting Iraq and Afghanistan. It 
is interesting, the number of Americans who are in UAE is 
something like 15,000 individuals who are working there.
    So I think when you look at the overall composition of our 
relationships, be they deployment, economic, or military, with 
this country, it shows a high degree of mutual trust. I do hope 
that in the weeks to come we can convey that message to our 
colleagues here in Congress and, more importantly, to the 
American people, who have legitimate concerns.
    There is not a one of us that does not have the pain in our 
hearts of September 11, 2001, the loss, the loss of the men and 
women of the Armed Forces of our Nation. But bear in mind that 
every day the relationship between our two countries goes on, 
it is in direct support of the fighting men and women who at 
this moment in so many ways are in harm's way. So let us be 
cautious as we pursue, but at the bottom line we will get to 
the determination one way or another, I am confident.
    It is terribly important because this global world in which 
we exist, you cannot look in isolation at a business contract 
like this without considering the diplomatic ramifications, the 
economic ramifications with other nations who are contemplating 
transactions with the United States, and indeed, as I have 
said, the military ramifications. It is all together, not just 
one isolated proposed contractual relationship.
    Senator Levin.

                STATEMENT OF SENATOR CARL LEVIN

    Senator Levin. Mr. Chairman, thank you. First let me join 
you in welcoming our witnesses to the committee this morning 
and to this hearing on threats facing the United States. This 
committee, as you mentioned, Mr. Chairman, has a special 
responsibility to the men and women of our Armed Forces to be 
vigilant on intelligence programs because decisions on whether 
or not to use military force and the planning for military 
operations depend so heavily on intelligence.
    This hearing will cover many critically important topics, 
such as North Korea and Iranian nuclear programs and the 
situation in the Middle East. But the situation in Iraq has 
reached the boiling point and we need to hear the views of our 
IC on what might stop the current spiral of violence.
    An article from the New York Times in yesterday's online 
news titled ``Baghdad Is Calm After Days of Sectarian 
Violence'' went on to describe the so-called calm: a bomb 
exploding outside a Sunni mosque in eastern Baghdad, killing 
four worshippers and injuring 18; a mortar attack on a house 
near a prominent mosque in northern Baghdad, killing four 
civilians and injuring 17; the police finding nine bodies 
blindfolded and shot in the head south of the capital; and 
another four bodies found to the north of the capital. That is 
what in the Baghdad area is called ``calm,'' apparently.
    I will be interested in the views of our witnesses this 
morning on what the IC believes it will take to convince the 
Iraqi leadership to make the necessary compromises to reach a 
national unity government and a unifying constitution. It is 
clearer than ever to me that we must act to change the current 
dynamic in Iraq and that the only thing that can produce that 
change is a political settlement that is accepted by all the 
major groups. Does the IC agree with that view?
    Ambassador Khalilzad wisely took a small step in that 
direction recently when he told the Iraqi leadership, ``We 
cannot invest billions of dollars in security forces if those 
forces are not trusted by the Iraqi people.''
    The Ambassador regrettably stopped short of telling the 
Iraqis that not just our dollars but our continued presence 
itself is not unconditional, and that because defeat of the 
insurgency requires a government of national unity, if the 
Iraqi leaders do not soon agree on a government of national 
unity, we must reassess the value of our continued presence.
    Last Saturday was the deadline set by their constitution 
for the Iraqi assembly to meet. They missed that critical 
deadline with apparently, and regrettably, no comment from us.
    The Iraqi leaders are feuding while Baghdad is burning.
    Does the IC agree that our clearly stating to Iraqi leaders 
that our continued presence is not unconditional and that 
``whether Iraqis avoid all-out civil war and have a future as a 
nation is in their hands, and if they do not seize that 
opportunity that we cannot protect them or save them from 
themselves'' might prompt the Iraqis to make the necessary 
political compromises?
    Ambassador Negroponte, your accurate assessments on these 
matters are of critical importance to us and to the Nation.
    I would be interested, Ambassador, in your reaction to an 
article in the March-April edition of Foreign Affairs written 
by Paul Pollar, who served directly under the Director of 
Central Intelligence as the former National Intelligence 
Officer (NIO) for the Middle East.
    Finally, on the subject that the chairman touched on, the 
transfer of port facilities in the UAE, let me just make a very 
brief comment. I am glad there is going to be a formal 
investigation. It is what the law calls for. It should have 
happened before there was approval.
    The law is clear on this matter that if there is a security 
concern--and obviously there was; the evidence of that is 
clear; there were many people who raised the concerns, 
including the Coast Guard. There were assurances that were 
obtained because of concerns. It is obvious that the law 
required a 45-day investigation to be triggered.
    For that investigation to be credible, the status quo needs 
to be maintained. You cannot have a transfer of ownership 
between now and the beginning of a 45-day investigation and 
suggest that that transfer has no effect. It would have to be 
unraveled if the 45-day investigation suggested that the 
transaction should not be completed, and according to the law 
our government would have to go to district court in order to 
undo a transaction that had already taken place.
    So I would hope that not only would the 45-day 
investigation begin promptly, but that also the status quo be 
maintained in terms of not transferring ownership to the Dubai 
government during the 45-day investigation.
    One of the most important goals in Congress's passing the 
Intelligence Reform and Terrorism Prevention Act of 2004 was to 
foster objective assessments and a willingness to speak truth 
to power. How our reforms are working, how they are being 
implemented, is also a subject that I think we would all be 
interested in hearing from our witnesses this morning.
    Again, Mr. Chairman, I want to thank you for convening this 
and thank you, thank all of the witnesses, for appearing before 
us.
    Chairman Warner. Thank you, Senator.
    Mr. Ambassador, we welcome you.

  STATEMENT OF HON. JOHN D. NEGROPONTE, DIRECTOR OF NATIONAL 
  INTELLIGENCE; ACCOMPANIED BY GEN. MICHAEL V. HAYDEN, USAF, 
 PRINCIPAL DEPUTY DIRECTOR, OFFICE OF THE DIRECTOR OF NATIONAL 
                          INTELLIGENCE

    Ambassador Negroponte. Chairman Warner, Ranking Member 
Levin, members of the committee: Thank you for the opportunity 
for myself and my colleague, DIA Director Lieutenant General 
Michael Maples, and General Michael Hayden, my Principal 
Deputy, to testify before you today.
    Let me begin with a straightforward statement of 
preoccupation. Terrorism is the preeminent threat to our 
citizens, to our Homeland, to our interests, and to our 
friends. My intention then is to talk about terrorism and 
violent Islamic extremism in this brief statement and 
thereafter limit myself to touching on four other important 
subjects: Iraq, WMD, particularly nuclear weapons as they 
relate to Iran and North Korea, political developments in Latin 
America, and lastly China. There are of course many other 
topics of concern to the IC. These will be covered in my 
statement for the record.
    First, the global jihadist threat. Entrenched grievances 
such as corruption and injustice and the slow pace of economic, 
social, and political change in most Muslim majority nations 
continue to fuel the global jihadist movement. Jihadists seek 
to overthrow regimes they regard as apostate and to eliminate 
western influence in the Muslim world, although most of their 
targets and victims are fellow Muslims. The movement is diffuse 
and subsumes three very different types of groups and 
individuals: first and foremost, al Qaeda, a weakened but 
resourceful organization; second, other Sunni jihadist groups, 
some affiliated with al Qaeda, some not; and third, self-
generating jihadist networks and cells.
    Working closely with our allies and friends, we have killed 
or captured most of the leadership behind the September 11, 
2001, attacks. But my colleagues and I still view the global 
jihadist terrorist movement which emerged from the Afghan-
Soviet conflict in the 1980s, but is today inspired and led by 
al Qaeda, as the preeminent threat to our citizens, to the 
Homeland, to our interests, and to our friends.
    The London and Madrid bombings demonstrated the extent to 
which European nations in particular are both vulnerable to 
terrorist attack and could be exploited operationally to 
facilitate attacks on us. Unfortunately, al Qaeda will attempt 
high-impact attacks for as long as its central command 
structure is functioning and affiliated groups are capable of 
furthering its interests. Although an attack using conventional 
explosives continues to be the most probable scenario, al Qaeda 
remains interested in acquiring chemical, biological, and 
nuclear materials or weapons.
    Ultimately, more than the acts of global jihadists, the 
debate between Muslim extremists and moderates will influence 
the future terrorist environment, the domestic stability of key 
U.S. partners, and the foreign policies of Muslim governments. 
The global jihadists are adding urgency to a debate within 
Islam over how religion should shape government. Growing 
internal demands for reform around the world and in many Muslim 
countries also are stimulating this debate. In general, it 
appears that Muslims are becoming more aware of their Islamic 
identity, leading to growing political activism. But increased 
political activism does not necessarily signal a trend towards 
radicalization. Most Muslims reject the extremist message and 
the violent agendas of the global jihadists. Indeed, as people 
of all backgrounds endorse democratic principles of freedom, 
equality, and the rule of law, they will be able to couple 
these principles with their religious beliefs, whatever they 
may be, to build better futures for their communities. In the 
Islamic world, increased freedoms will serve as a counterweight 
to a jihadist movement that only promises more 
authoritarianism, isolation, and economic stagnation.
    The threat from extremism and anti-western militancy is 
especially acute in Iraq. This is a difficult struggle. In 
looking at the year ahead, I would like to offer a balance 
sheet approach. Let me begin with some of the challenges pro-
democracy Iraqis face before turning to encouraging 
developments.
    Iraqi Sunni Arab disaffection is the primary enabler of the 
insurgency and is likely to remain high in 2006. In addition, 
the most extreme Sunni jihadists, such as those fighting with 
Zarqawi, will continue to attack Iraqis and coalition forces 
regardless of positive political developments.
    Iraqi security forces require better command and control to 
improve their effectiveness. Although the Kurds and the Shiite 
were accommodating to the underrepresented Sunnis in 2005, 
their desire to protect core interests, such as regional 
autonomy and de-Baathification, could make further compromise 
more difficult. Prospects for economic development in 2006 are 
constrained by the unstable security situation, insufficient 
commitment to economic reform, and corruption.
    But there are important encouraging developments in Iraq as 
well. The insurgents have failed to consolidate any gains from 
their attacks. To the contrary, they have not been able to 
establish any lasting territorial control. They were unable to 
disrupt either of the two national elections held last year or 
the constitutional referendum. They have not developed a 
political strategy to attract popular support beyond their 
Sunni Arab base and they have not shown the ability to 
coordinate nationwide operations.
    In addition, Iraqi security forces are taking on more 
demanding missions, making incremental progress towards 
operational independence, and becoming more capable of 
providing the stability Iraqis deserve and the economy needs in 
order to grow. Despite obvious efforts by Zarqawi's 
organization to use attacks on Shiite civilians to bait them 
into attacking their Sunni countrymen, the vast majority of 
Shiite have shown restraint. Perhaps most importantly, large-
scale Sunni participation in the last election has provided a 
first step towards diminishing Sunni support for the 
insurgency.
    After global jihadist terrorism, the ongoing development of 
WMD constitutes the second major threat to the safety of our 
Nation, to our deployed troops, and our allies. We are most 
concerned about the threat and destabilizing effect of nuclear 
proliferation. We are also concerned about the threat from 
biological agents or even chemical agents, which would have 
psychological and possibly political effects far greater than 
their actual magnitude.
    The time when a few states had monopolies over WMD is 
fading. Technologies, often dual use, move freely in a 
globalized economy, as do the scientific personnel who design 
them. It is more difficult for us to track efforts to acquire 
those widely available parts and production technologies. Yet 
the potential dangers of WMD proliferation are so grave that we 
must do everything possible to discover and disrupt it.
    With respect to Iran's nuclear program, our concerns are 
shared by many nations, by the International Atomic Energy 
Agency (IAEA), and of course Iran's neighbors. These concerns 
have increased since last summer because Iran has ended the 
suspension of its nuclear activities. President Ahmadinejad has 
made numerous unacceptable statements since his election. 
Hardliners have regained control of all the major branches and 
institutions of government and the government has become more 
effective at repressing the nascent shoots of personal freedom 
that had emerged earlier in the decade.
    Iran conducted a clandestine uranium enrichment program for 
nearly 2 decades in violation of its IAEA safeguards agreement 
and, despite its claims to the contrary, we assess that Iran 
seeks nuclear weapons. While Tehran probably does not yet have 
a nuclear weapon and probably has not yet produced or acquired 
the necessary fissile material, the danger that it will do so 
is a reason for immediate concern. Iran has the largest 
inventory of ballistic missiles in the Middle East, which 
Tehran views as an integral part of its strategy to deter and, 
if necessary, retaliate against forces in the region, including 
United States forces. The integration of nuclear weapons into 
Iran's ballistic systems would be destabilizing beyond the 
Middle East.
    Like Iran, North Korea threatens international security and 
is located in a historically volatile region. Unlike Iran, 
North Korea claims to have nuclear weapons already, a claim 
that we assess is probably true. Pyongyang sees nuclear weapons 
as the best way to deter superior U.S. and South Korean forces, 
to ensure regime security, as a lever for economic gain, and as 
a source of prestige. Accordingly, North Korea remains a major 
challenge to global nuclear nonproliferation regimes.
    We do not know the conditions under which North Korea would 
be willing to fully relinquish its nuclear weapons and its 
weapons programs, nor do we see signs of organized opposition 
to the regime among North Korea's political or military elite.
    A gradual consolidation of democratic institutions is the 
dominant trend in most of Latin America, where by year's end 10 
countries will have held presidential elections. Committed 
democrats in countries like Brazil and Chile are promoting 
economic growth and poverty alleviation and, despite battling 
persistent insurgent and paramilitary forces, Colombia remains 
committed to a democratic path.
    Nonetheless, radical populist figures in some countries 
advocate statist economic policies, show little respect for 
democratic institutions, and employ anti-U.S. rhetoric in 
trying to appeal to their constituencies. In Venezuela, 
President Chavez, if he wins reelection later this year, 
appears ready to use his control of the legislature and other 
institutions to continue to stifle the opposition and reduce 
press freedom. He is also spending considerable sums of money 
involving himself in the political and economic life of other 
countries in Latin America and elsewhere despite the very real 
economic development and social needs of his own country, a 
fact Venezuelans undoubtedly will notice. We expect Chavez to 
deepen his relationship with Castro and seek closer economic, 
military, and diplomatic ties with Iran and North Korea.
    In Bolivia, the victory of Evo Morales reflects the 
public's lack of faith in traditional political parties and 
institutions. Although since his election Morales appears to 
have moderated earlier promises to nationalize the hydrocarbons 
industry and cease coca eradication, his administration is 
sending mixed signals regarding its intentions.
    We are also closely monitoring the presidential contests in 
Peru and Nicaragua.
    Lastly, to address China, globalization is causing a shift 
of momentum in energy to greater Asia, where China has a 
steadily expanding reach and may become a peer competitor to 
the United States at some point. Consistent high rates of 
economic growth, driven by exploding foreign trade, have 
increased Beijing's political influence abroad and fueled a 
military modernization program that has steadily increased 
Beijing's force projection capabilities. Chinese foreign policy 
is currently focused on the country's immediate periphery, 
including Southeast Asia and Central Asia, where Beijing hopes 
to make economic inroads, to increase political influence, and 
to prevent a backlash against its rise.
    China also has been reaching out to the opposition parties 
on Taiwan and making economic overtures designed to win favor 
with the Taiwan public, although Beijing still refuses to deal 
with the elected leader in Taipei. Beijing also has expanded 
diplomatic and economic interaction with other major powers, 
especially Russia and the European Union (EU), and has begun to 
increase its presence in Africa and Latin America. China's 
military is vigorously pursuing a modernization program, a full 
suite of modern weapons and hardware for a large proportion of 
its overall force structure, designs for a more effective 
operational doctrine at the tactical and theater level, 
training reforms, and wide-ranging improvements in logistics, 
administration, financial management, mobilization, and other 
critical support functions.
    Beijing's biggest challenge is to sustain growth sufficient 
to keep unemployment and rural discontent from rising to 
destabilizing levels and to maintain increases in living 
standards. To do this, China must solve a number of difficult 
economic and legal problems, improve the education system, 
reduce environmental degradation, and improve governance by 
combatting corruption. Indeed, China's rise may be hobbled by 
systemic problems and the communist party's resistance to the 
demands for political participation that economic growth 
generates. Beijing's determination to repress real or perceived 
challenges from dispossessed peasants to religious 
organizations could lead to serious instability at home and 
less effective policies abroad.
    Senators, that concludes my prepared remarks and I thank 
you very much for your attention.
    [The prepared statement of Ambassador Negroponte follows:]
             Prepared Statement by Hon. John D. Negroponte
    Chairman Warner, Ranking Member Levin, members of the committee, 
thank you for the invitation to offer the Intelligence Community's (IC) 
assessment of the threats, challenges, and opportunities for the United 
States in today's world. I am pleased to be joined today by my 
colleague, DIA Director LTG Michael Maples.
    Let me begin with a straightforward statement of preoccupation: 
terrorism is the preeminent threat to our citizens, Homeland, 
interests, and friends. The war on terror is our first priority and 
driving concern as we press ahead with a major transformation of the IC 
we represent.
    We live in a world that is full of conflict, contradictions, and 
accelerating change. Viewed from the perspective of the Director of 
National Intelligence, the most dramatic change of all is the 
exponential increase in the number of targets we must identify, track, 
and analyze. Today, in addition to hostile nation-states, we are 
focusing on terrorist groups, proliferation networks, alienated 
communities, charismatic individuals, narcotraffickers, and microscopic 
influenza.
    The 21st century is less dangerous than the 20th century in certain 
respects, but more dangerous in others. Globalization, particularly of 
technologies that can be used to produce weapons of mass destruction 
(WMD), political instability around the world, the rise of emerging 
powers like China, the spread of the jihadist movement, and of course, 
the horrific events of September 11, 2001, demand heightened vigilance 
from our IC.
    Today, I will discuss:

         Global jihadists, their fanatical ideology, and the 
        civilized world's efforts to disrupt, dismantle and destroy 
        their networks;
         The struggle of the Iraqi and Afghan people to assert 
        their sovereignty over insurgency, terror, and extremism;
         WMD-related proliferation and two states of particular 
        concern: Iran and North Korea;
         Issues of political instability and governance in all 
        regions of the world that affect our ability to protect and 
        advance our interests; and
         Globalization, emerging powers, and such transnational 
        challenges as the geopolitics of energy, narcotrafficking, and 
        possible pandemics.

    In assessing these themes, we all must be mindful of the old 
dictum: forewarned is forearmed. Our policymakers, warfighters, and law 
enforcement officers need the best intelligence and analytic insight 
humanly and technically possible to help them peer into the onrushing 
shadow of the future and make the decisions that will protect American 
lives and interests. This has never been more true than now with U.S. 
and coalition forces in Iraq and Afghanistan--and the citizens and 
fledgling governments they help to protect--under attack. Addressing 
threats to their safety and providing the critical intelligence on a 
myriad of tactical and strategic issues must be--and is--a top priority 
for our IC.
    But in discussing all the many dangers the 21st century poses, it 
should be emphasized that they do not befall America alone. The issues 
we consider today confront responsible leaders everywhere. That is the 
true nature of the 21st century: accelerating change affecting and 
challenging us all.
                       the global jihadist threat
    Collaboration with our friends and allies around the world has 
helped us achieve some notable successes against the global jihadist 
threat. In fact, most of al Qaeda's setbacks last year were the result 
of our allies' efforts, either independently or with our assistance. 
Since September 11, 2001, examples of the high level of 
counterterrorism efforts around the world are many. Pakistan's 
commitment has enabled some of the most important captures to date. 
Saudi Arabia's resolve to counter the spread of terrorism has 
increased. Our relationship with Spain has strengthened since the March 
2004 Madrid train bombings. The British have long been our closest 
counterterrorism partners--the seamless cooperation in the aftermath of 
the July 2005 attacks in London reflected that commitment--while 
Australia, Canada, France, and many other nations remain stout allies. 
Nonetheless, much remains to be done; the battle is far from over.
    Jihadists seek to overthrow regimes they regard as ``apostate'' and 
to eliminate U.S. influence in the Muslim world. They attack Americans 
when they can, but most of their targets and victims are fellow 
Muslims. Nonetheless, the slow pace of economic, social, and political 
change in most Muslim majority nations are among the factors that 
continue to fuel a global jihadist movement. The movement is diffuse 
and subsumes three quite different types of groups and individuals:

         First and foremost, al Qaeda, a battered but 
        resourceful organization;
         Second, other Sunni jihadist groups, some affiliated 
        with al Qaeda, some not;
         Third, networks and cells that are the self-generating 
        progeny of al Qaeda.

Al Qaeda Remains Our Top Concern
    We have eliminated much of the leadership that presided over al 
Qaeda in 2001, and U.S.-led counterterrorism efforts in 2005 continue 
to disrupt its operations, take out its leaders and deplete its cadre. 
But the organization's core elements still plot and make preparations 
for terrorist strikes against the homeland and other targets from bases 
in the Pakistan-Afghanistan border area; they also have gained added 
reach through their merger with the Iraq-based network of Abu Mus'ab 
al-Zarqawi, which has broadened al Qaeda's appeal within the jihadist 
community and potentially put new resources at its disposal.
    Thanks to effective intelligence operations, we know a great deal 
about al Qaeda's vision. Zawahiri, al Qaeda's number two, is candid in 
his July 2005 letter to Zarqawi. He portrays the jihad in Iraq as a 
stepping-stone in the march toward a global caliphate, with the focus 
on Egypt, Syria, Jordan, Lebanon, Saudi Arabia, the Gulf States, and 
Israel. Zawahiri stresses the importance of having a secure base in 
Iraq from which to launch attacks elsewhere, including in the U.S. 
Homeland.
    In Osama bin Laden's audio tape of late January 2005, al Qaeda's 
top leader reaffirms the group's commitment to attack our Homeland and 
attempts to reassure supporters by claiming that the reason there has 
been no attack on the U.S. since 2001 is that he chose not to do so. 
The subsequent statement by Zawahiri is another indication that the 
group's leadership is not completely cutoff and can continue to get its 
message out to followers. The quick turnaround time and the frequency 
of Zawahiri statements in the past year underscore the high priority al 
Qaeda places on propaganda from its most senior leaders.
    Attacking the U.S. Homeland, U.S. interests overseas, and U.S. 
allies--in that order--are al Qaeda's top operational priorities. The 
group will attempt high-impact attacks for as long as its central 
command structure is functioning and affiliated groups are capable of 
furthering its interests, because even modest operational capabilities 
can yield a deadly and damaging attack. Although an attack using 
conventional explosives continues to be the most probable scenario, al 
Qaeda remains interested in acquiring chemical, biological, 
radiological, and nuclear materials or weapons to attack the United 
States, U.S. troops, and U.S. interests worldwide.
    Indeed, today, we are more likely to see an attack from terrorists 
using weapons or agents of mass destruction than states, although 
terrorists' capabilities would be much more limited. In fact, 
intelligence reporting indicates that nearly 40 terrorist 
organizations, insurgencies, or cults have used, possessed, or 
expressed an interest in chemical, biological, radiological, or nuclear 
agents or weapons. Many are capable of conducting simple, small-scale 
attacks, such as poisonings, or using improvised chemical devices.
Al Qaeda Inspires Other Sunni Jihadists
    The global jihadist movement also subsumes other Sunni extremist 
organizations, allied with or inspired by al Qaeda's global anti-
western agenda. These groups pose less danger to the U.S. Homeland than 
does al Qaeda, but they increasingly threaten our allies and interests 
abroad and are working to expand their reach and capabilities to 
conduct multiple and/or mass-casualty attacks outside their traditional 
areas of operation.
    Jemaah Islamiya (JI) is a well-organized group responsible for 
dozens of attacks killing hundreds of people in Southeast Asia. The 
threat of a JI attack against U.S. interests is greatest in Southeast 
Asia, but we assess that the group is committed to helping al Qaeda 
with attacks outside the region.
    The Islamic Jihad Union (IJU), which has allied itself with al 
Qaeda, operates in Central Asia and was responsible for the July 2004 
attacks against the U.S. and Israeli Embassies in Uzbekistan.
    The Libyan Islamic Fighting Group (LIFG) was formed to establish an 
Islamic state in Libya, but since the late 1990s it has expanded its 
goals to include anti-Western jihad alongside al Qaeda. LIFG has called 
on Muslims everywhere to fight the U.S. In Iraq.
    Pakistani militant groups--primarily focused on the Kashmir 
conflict--represent a persistent threat to regional stability and U.S. 
interests in South Asia and the Near East. They also pose a potential 
threat to our interests worldwide. Extremists convicted in Virginia in 
2003 of providing material support to terrorism trained with a 
Pakistani group, Lashkar-i-Tayyiba, before September 11.
New Jihadist Networks and Cells
    An important part of al Qaeda's strategy is to encourage a 
grassroots uprising of Muslims against the West. Emerging new networks 
and cells--the third element of the global jihadist threat--reflect 
aggressive jihadist efforts to exploit feelings of frustration and 
powerlessness in some Muslim communities, and to fuel the perception 
that the U.S. is anti-Islamic. Their rationale for using terrorism 
against the U.S. and establishing strict Islamic practices resonates 
with a small subset of Muslims. This has led to the emergence of a 
decentralized and diffused movement, with minimal centralized guidance 
or control, and numerous individuals and small cells--like those who 
conducted the May 2003 bombing in Morocco, the March 2004 bombings in 
Spain, and the July 2005 bombings in the U.K. Members of these groups 
have drawn inspiration from al Qaeda but appear to operate on their 
own.
    Such unaffiliated individuals, groups and cells represent a 
different threat than that of a defined organization. They are harder 
to spot and represent a serious intelligence challenge.
    Regrettably, we are not immune from the threat of such 
``homegrown'' jihadist cells. A network of Islamic extremists in Lodi, 
California, for example, maintained connections with Pakistani militant 
groups, recruited U.S. citizens for training at radical Karachi 
madrassas, sponsored Pakistani citizens for travel to the U.S. to work 
at mosques and madrassas, and according to the Federal Bureau of 
Investigation information, allegedly raised funds for international 
jihadist groups. In addition, prisons continue to be fertile 
recruitment ground for extremists who try to exploit converts to Islam.
Impact of Iraq on Global Jihad
    Should the Iraqi people prevail in establishing a stable political 
and security environment, the jihadists will be perceived to have 
failed and fewer jihadists will leave Iraq determined to carry on the 
fight elsewhere. But, we assess that should the jihadists thwart the 
Iraqis' efforts to establish a stable political and security 
environment, they could secure an operational base in Iraq and inspire 
sympathizers elsewhere to move beyond rhetoric to attempt attacks 
against neighboring Middle Eastern nations, Europe, and even the United 
States. The same dynamic pertains to al-Zarqawi. His capture would 
deprive the movement of a notorious leader, whereas his continued acts 
of terror could enable him to expand his following beyond his 
organization in Iraq much as Osama Bin Laden expanded al Qaeda in the 
1990s.
Impact of the Islamic Debate
    The debate between Muslim extremists and moderates also will 
influence the future terrorist environment, the domestic stability of 
key U.S. partners, and the foreign policies of governments throughout 
the Muslim world. The violent actions of global jihadists are adding 
urgency to the debate within Islam over how religion should shape 
government. Growing internal demands for reform around the world--and 
in many Muslim countries--further stimulate this debate. In general, 
Muslims are becoming more aware of their Islamic identity, leading to 
growing political activism; but this does not necessarily signal a 
trend toward radicalization. Most Muslims reject the extremist message 
and violent agendas of the global jihadists. Indeed, as people of all 
backgrounds endorse democratic principles of freedom, equality, and the 
rule of law, they will be able to couple these principles with their 
religious beliefs--whatever they may be--to build better futures for 
their communities. In the Islamic world, increased freedoms will serve 
as a counterweight to a jihadist movement that only promises more 
authoritarianism, isolation, and economic stagnation.
extremism and challenges to effective governance and legitimacy in iraq 
                            and afghanistan
    The threat from extremism and anti-Western militancy is especially 
acute in Iraq and Afghanistan. In discussing Iraq, I'd like to offer a 
``balance sheet'' to give a sense of where I see things today and what 
I see as the trends in 2006. Bold, inclusive leadership will be the 
critical factor in establishing an Iraqi constitutional democracy that 
is both viable as a nation-state and responsive to the diversity of 
Iraq's regions and people.
    Let me begin with some of these encouraging developments before 
turning to the challenges:

         The insurgents have not been able to establish any 
        lasting territorial control; were unable to disrupt either of 
        the two national elections held last year or the constitutional 
        referendum; have not developed a political strategy to attract 
        popular support beyond their Sunni Arab base; and have not 
        shown the ability to coordinate nationwide operations.
         Iraqi security forces are taking on more demanding 
        missions, making incremental progress toward operational 
        independence, and becoming more capable of providing the kind 
        of stability Iraqis deserve and the economy needs in order to 
        grow.
         Signs of open conflict between extreme Sunni jihadists 
        and Sunni nationalist elements of the insurgency, while so far 
        still localized, are encouraging and exploitable. The 
        jihadists' heavy-handed activities in Sunni areas in western 
        Iraq have caused tribal and nationalist elements in the 
        insurgency to reach out to the Baghdad government for support.
         Large-scale Sunni participation in the last elections 
        has provided a first step toward diminishing Sunni support for 
        the insurgency. There appears to be a strong desire among 
        Sunnis to explore the potential benefits of political 
        participation.

    But numerous challenges remain.
The Insurgency and Iraqi Security Forces
    Iraqi Sunni Arab disaffection is the primary enabler of the 
insurgency and is likely to remain high in 2006. Even if a broad, 
inclusive national government emerges, there almost certainly will be a 
lag time before we see a dampening effect on the insurgency. Insurgents 
continue to demonstrate the ability to recruit, supply, and attack 
coalition and Iraqi security forces, and their leaders continue to 
exploit Islamic themes, nationalism, and personal grievances to fuel 
opposition to the government and to recruit more fighters.
    The most extreme Sunni jihadists, such as those fighting with 
Zarqawi, will remain unreconciled and continue to attack Iraqis and 
coalition forces.
    These extreme Sunni jihadist elements, a subset of which are 
foreign fighters, constitute a small minority of the overall 
insurgency, but their use of high-profile suicide attacks gives them a 
disproportionate impact. The insurgents' use of increasingly lethal 
improvised explosive devices (IEDs), and the IED makers' adaptiveness 
to coalition countermeasures, remain the most significant day-to-day 
threat to coalition forces, and a complex challenge for the IC.
    Iraqi security forces require better command and control mechanisms 
to improve their effectiveness and are experiencing difficulty in 
managing ethnic and sectarian divides among their units and personnel.
Sunni Political Participation
    A key to establishing effective governance and security over the 
next 3 to 5 years is enhanced Sunni Arab political participation and a 
growing perception among Sunnis that the political process is 
addressing their interests. Sunnis will be focused on obtaining what 
they consider their demographically appropriate share of leadership 
positions in the new government--especially on the Constitutional 
Review Commission. Debates over federalism, central versus local 
control, and division of resources are likely to be complex. Success in 
satisfactorily resolving them will be key to advancing stability and 
prospects for a unified country. Although the Kurds and Shiite were 
accommodating to the underrepresented Sunnis in 2005, their desire to 
protect core interests--such as regional autonomy and de-
Baathification--could make further compromise more difficult.
    In the aftermath of the December elections, virtually all of the 
Iraq parties are seeking to create a broad-based government, but all 
want it to be formed on their terms. The Shiite and the Kurds will be 
the foundation of any governing coalition, but it is not yet clear to 
us whether they will include the main Sunni factions, particularly the 
Iraqi Consensus Front, or other smaller and politically weaker secular 
groups, such as Ayad Allawi's Iraqi National List. The Sunni parties 
have significant expectations for concessions from the Shiite and Kurds 
in order to justify their participation and avoid provoking more 
insurgent violence directed against Sunni political leaders.
Governance and Reconstruction
    During the coming year, Iraq's newly elected leadership will face a 
daunting set of governance tasks. The creation of a new, permanent 
government and the review of the Constitution by early summer will 
offer opportunities to find common ground and improve the effectiveness 
and legitimacy of the central government. There is a danger, however, 
that political negotiations and dealmaking will prove divisive. This 
could obstruct efforts to improve government performance, extend 
Baghdad's reach throughout the country, and build confidence in the 
democratic political process.
    Let me focus on one of those tasks--the economy. Restoration of 
basic services and the creation of jobs are critical to the well-being 
of Iraqi citizens, the legitimacy of the new government, and, 
indirectly, to eroding support for the insurgency. At this point, 
prospects for economic development in 2006 are constrained by the 
unstable security situation, insufficient commitment to economic 
reform, and corruption. Iraq is dependent on oil revenues to fund the 
government, so insurgents continue to disrupt oil infrastructure, 
despite the fielding of new Iraqi forces to protect it. Insurgents also 
are targeting trade and transportation. Intelligence has a key role to 
play in combating threats to pipelines, electric power grids, and 
personal safety.
Afghanistan
    Like Iraq, Afghanistan is a fragile new democracy struggling to 
overcome deep-seated social divisions, decades of repression, and acts 
of terrorism directed against ordinary citizens, officials, foreign aid 
workers, and coalition forces. These and other threats to the Karzai 
government also threaten important American interests--ranging from the 
defeat of terrorists who find haven along the Afghanistan-Pakistan 
border to the suppression of opium production.
    Afghan leaders face four critical challenges: containing the 
insurgency, building central government capacity and extending its 
authority, further containing warlordism, and confronting pervasive 
drug criminality. Intelligence is needed to assist, monitor, and 
protect Afghan, coalition, and North Atlantic Treaty Organization 
(NATO) efforts in all four endeavors.
    The volume and geographic scope of attacks increased last year, but 
the Taliban and other militants have not been able to stop the 
democratic process or expand their support base beyond Pashtun areas of 
the south and east. Nevertheless, the insurgent threat will impede the 
expansion of Kabul's writ, slow economic development, and limit 
progress in counternarcotics efforts.
    Ultimately, defeating the insurgency will depend heavily on 
continued international aid; effective coalition, NATO, and Afghan 
government security operations to prevent the insurgency from gaining a 
stronger foothold in some Pashtun areas; and the success of the 
government's reconciliation initiatives.

 WEAPONS OF MASS DESTRUCTION AND STATES OF KEY CONCERN: IRAN AND NORTH 
                                 KOREA

    The ongoing development of dangerous weapons and delivery systems 
constitutes the second major threat to the safety of our Nation, our 
deployed troops, and our allies. We are most concerned about the threat 
and destabilizing effect of nuclear proliferation. We are also 
concerned about the threat from biological agents--or even chemical 
agents, which would have psychological and possibly political effects 
far greater than their actual magnitude. Use by nation-states can still 
be constrained by the logic of deterrence and international control 
regimes, but these constraints may be of little utility in preventing 
the use of mass effect weapons by rogue regimes or terrorist groups.
    The time when a few states had monopolies over the most dangerous 
technologies has been over for many years. Moreover, our adversaries 
have more access to acquire and more opportunities to deliver such 
weapons than in the past. Technologies, often dual-use, move freely in 
our globalized economy, as do the scientific personnel who design them. 
So it is more difficult for us to track efforts to acquire those 
components and production technologies that are so widely available. 
The potential dangers of proliferation are so grave that we must do 
everything possible to discover and disrupt attempts by those who seek 
to acquire materials and weapons.
    We assess that some of the countries that are still pursuing WMD 
programs will continue to try to improve their capabilities and level 
of self-sufficiency over the next decade. We also are focused on the 
potential acquisition of such nuclear, chemical, and/or biological 
weapons--or the production technologies and materials necessary to 
produce them--by states that do not now have such programs, terrorist 
organizations like al Qaeda and by criminal organizations, alone or via 
middlemen.
    We are working with other elements of the U.S. Government regarding 
the safety and security of nuclear weapons and fissile material, 
pathogens, and chemical weapons in select countries.
Iran and North Korea: States of Highest Concern
    Our concerns about Iran are shared by many nations, by the IAEA, 
and of course, Iran's neighbors.
    Iran conducted a clandestine uranium enrichment program for nearly 
2 decades in violation of its IAEA safeguards agreement, and despite 
its claims to the contrary, we assess that Iran seeks nuclear weapons. 
We judge that Tehran probably does not yet have a nuclear weapon and 
probably has not yet produced or acquired the necessary fissile 
material. Nevertheless, the danger that it will acquire a nuclear 
weapon and the ability to integrate it with the ballistic missiles Iran 
already possesses is a reason for immediate concern. Iran already has 
the largest inventory of ballistic missiles in the Middle East, and 
Tehran views its ballistic missiles as an integral part of its strategy 
to deter--and if necessary retaliate against--forces in the region, 
including U.S. forces.
    As you are aware, Iran is located at the center of a vital--and 
volatile-- region, has strained relations with its neighbors, and is 
hostile to the United States, our friends, and our values. President 
Ahmadinejad has made numerous unacceptable statements since his 
election, hard-liners have control of all the major branches and 
institutions of government, and the government has become more 
effective and efficient at repressing the nascent shoots of personal 
freedom that had emerged in the late 1990s and earlier in the decade.
    Indeed, the regime today is more confident and assertive than it 
has been since the early days of the Islamic Republic. Several factors 
work in favor of the clerical regime's continued hold on power. Record 
oil and other revenue is permitting generous public spending, fueling 
strong economic growth, and swelling financial Reserves. At the same 
time, Iran is diversifying its foreign trading partners. Asia's share 
of Iran's trade has jumped to nearly match Europe's 40 percent share. 
Tehran sees diversification as a buffer against external efforts to 
isolate it.
    Although regime-threatening instability is unlikely, ingredients 
for political volatility remain, and Iran is wary of the political 
progress occurring in neighboring Iraq and Afghanistan. Ahmadinejad's 
rhetorical recklessness and his inexperience on the national and 
international stage also increase the risk of a misstep that could spur 
popular opposition, especially if more experienced conservatives cannot 
rein in his excesses. Over time, Ahmadi-Nejad's populist economic 
policies could--if enacted--deplete the government's financial 
resources and weaken a structurally flawed economy. For now, however, 
Supreme Leader Khamenei is keeping conservative fissures in check by 
balancing the various factions in government.
    Iranian policy toward Iraq and its activities there represent a 
particular concern. Iran seeks a Shiite-dominated and unified Iraq but 
also wants the U.S. to experience continued setbacks in our efforts to 
promote democracy and stability. Accordingly, Iran provides guidance 
and training to select Iraqi Shiite political groups and weapons and 
training to Shiite militant groups to enable anti-coalition attacks. 
Tehran has been responsible for at least some of the increasing 
lethality of anti-coalition attacks by providing Shiite militants with 
the capability to build IEDs with explosively formed projectiles 
similar to those developed by Iran and Lebanese Hizballah.
    Tehran's intentions to inflict pain on the United States in Iraq 
has been constrained by its caution to avoid giving Washington an 
excuse to attack it, the clerical leadership's general satisfaction 
with trends in Iraq, and Iran's desire to avoid chaos on its borders.
    Iranian conventional military power constitutes the greatest 
potential threat to Persian Gulf states and a challenge to U.S. 
interests. Iran is enhancing its ability to project its military 
power--primarily with missiles--in order to threaten to disrupt the 
operations and reinforcement of U.S. forces based in the region--
potentially intimidating regional allies into withholding support for 
U.S. policy toward Iran--and raising the costs of our regional presence 
for us and our allies.
    Tehran also continues to support a number of terrorist groups, 
viewing this capability as a critical regime safeguard by deterring 
U.S. and Israeli attacks, distracting and weakening Israel, and 
enhancing Iran's regional influence through intimidation. Lebanese 
Hizballah is Iran's main terrorist ally, which--although focused on its 
agenda in Lebanon and supporting anti-Israeli Palestinian terrorists--
has a worldwide support network and is capable of attacks against U.S. 
interests if it feels its Iranian patron is threatened. Tehran also 
supports Palestinian Islamic Jihad and other groups in the Persian 
Gulf, Central and South Asia, and elsewhere.

                              NORTH KOREA

    North Korea claims to have nuclear weapons--a claim that we assess 
is probably true--and has threatened to proliferate these weapons 
abroad. Thus, like Iran, North Korea threatens international security 
and is located in a historically volatile region. Its aggressive 
deployment posture threatens our allies in South Korea and U.S. troops 
on the peninsula. Pyongyang sells conventional weapons to Africa, Asia, 
and the Middle East, and has sold ballistic missiles to several Middle 
Eastern countries, further destabilizing regions already embroiled in 
conflict. It produces and smuggles abroad counterfeit U.S. currency, as 
well as narcotics, and other contraband.
    Pyongyang sees nuclear weapons as the best way to deter superior 
U.S. and South Korean forces, to ensure regime security, as a lever for 
economic gain, and as a source of prestige. Accordingly, North Korea 
remains a major challenge to the global nuclear nonproliferation 
regimes.

         GOVERNANCE, POLITICAL INSTABILITY, AND DEMOCRATIZATION

    Good governance and, over the long term, progress toward 
democratization are crucial factors in navigating through the period of 
international turmoil and transition that commenced with the end of the 
Cold War and that will continue well into the future. In the absence of 
effective governance and reform, political instability often 
compromises our security interests while threatening new democracies 
and pushing flailing states into failure.
    I will now review those states of greatest concern to the United 
States, framing my discussion within the context of trends and 
developments in their respective regions.

                       MIDDLE EAST AND SOUTH ASIA

Middle East
    The tensions between autocratic regimes, extremism, and democratic 
forces extend well beyond our earlier discussion about Iran, Iraq and 
Afghanistan to other countries in the Middle East. Emerging political 
competition and the energizing of public debate on the role of 
democracy and Islam in the region could lead to the opening of 
political systems and development of civic institutions, providing a 
possible bulwark against extremism. But the path to change is far from 
assured. Forces for change are vulnerable to fragmentation and 
longstanding regimes are increasingly adept at using both repression 
and limited reforms to moderate political pressures to assure their 
survival.
    We continue to watch closely events in Syria, a pivotal--but 
generally unhelpful--player in a troubled region. Despite the Syrian 
military withdrawal from Lebanon last year, Damascus still meddles in 
its internal affairs, seeks to undercut prospects for an Arab-Israeli 
peace, and has failed to crackdown consistently on militant 
infiltration into Iraq. By aligning itself with Iran, the Bashar al-
Asad regime is signaling its rejection of the Western world. Over the 
coming year, the Syrian regime could face internal challenges as 
various pressures--especially the fallout of the United Nations (U.N.) 
investigation into the assassination of the former Lebanese Prime 
Minister-- raise questions about President Bashar al-Asad's judgment 
and leadership capacity.
    Syria's exit from Lebanon has created political opportunities in 
Beirut, but sectarian tensions--especially the sense among Shiite that 
they are underrepresented in the government--and Damascus's meddling 
persist. Bombings since March targeting anti-Syria politicians and 
journalists have fueled sectarian animosities.
    Egypt held presidential and legislative elections for the first 
time with multiple presidential candidates in response to internal and 
external pressures for democratization. The Egyptian public, however, 
remains discontented by economic conditions, the Arab-Israeli problem, 
the U.S. presence in Iraq, and insufficient political freedoms.
    Saudi Arabia's crackdown on al Qaeda has prevented major terrorist 
attacks in the Kingdom for more than a year and degraded the remnants 
of the terror network's Saudi-based leadership, manpower, access to 
weapons, and operational capability. These developments, the Kingdom's 
smooth leadership transition and high oil prices have eased, but not 
eliminated, concerns about stability.
    Hamas's recent electoral performance ushered in a period of great 
uncertainty as President Abbas, the Israelis, and the rest of the world 
determine how to deal with a majority party in the Palestinian 
Legislative Council that conducts and supports terrorism and refuses to 
recognize or negotiate with Israel. The election, however, does not 
necessarily mean that the search for peace between Israel and the 
Palestinians is halted irrevocably. The vote garnered by Hamas may have 
been cast more against the Fatah government than for the Hamas program 
of rejecting Israel. In any case, Hamas now must contend with 
Palestinian public opinion that has over the years has supported the 
two-state solution.

                               SOUTH ASIA

    Many of our most important interests intersect in Pakistan. The 
Nation is at the frontline in the war on terror, having captured 
several al Qaeda leaders, but also remains a major source of extremism 
that poses a threat to Musharraf, to the U.S., and to neighboring India 
and Afghanistan. Musharraf faces few political challenges in his dual 
role as President and Chief of Army Staff, but has made only limited 
progress moving his country toward democracy. Pakistan retains a 
nuclear force outside the Treaty on the Non-Proliferation of Nuclear 
Weapons and not subject to full-scope IAEA safeguards and has been both 
recipient and source--via A.Q. Khan's proliferation activities--of 
nuclear weapons-related technologies. Pakistan's national elections 
scheduled for 2007 will be a key benchmark to determine whether the 
country is continuing to make progress in its democratic transition.
    Since India and Pakistan approached the brink of war in 2002, their 
peace process has lessened tensions and both appear committed to 
improving the bilateral relationship. A number of confidence-building 
measures, including new transportation links, have helped sustain the 
momentum. Still, the fact that both have nuclear weapons and missiles 
to deliver them entails obvious and dangerous risks of escalation.

                                EURASIA

    In Russia, President Putin's drive to centralize power and assert 
control over civil society, growing state control over strategic 
sectors of the economy, and the persistence of widespread corruption 
raise questions about the country's direction. Russia could become a 
more inward-looking and difficult interlocutor for the United States 
over the next several years. High profits from exports of oil and gas 
and perceived policy successes at home and abroad have bolstered 
Moscow's confidence.
    Russia probably will work with the United States on shared 
interests such as counterterrorism, counternarcotics, and 
counterproliferation. However, growing suspicions about Western 
intentions and Moscow's desire to demonstrate its independence and 
defend its own interests may make it harder to cooperate with Russia on 
areas of concern to the United States.
    Now, let me briefly examine the rest of post-Soviet Eurasia where 
the results in the past year have been mixed.
    Many of the former Soviet republics are led by autocratic, corrupt, 
clan-based regimes whose political stability is based on different 
levels of repression; yet, at the same time, we have seen in Georgia, 
Ukraine, and Kyrgyzstan the emergence of grassroots forces for change.
    Central Asia remains plagued by political stagnation and 
repression, rampant corruption, widespread poverty and widening socio-
economic inequalities, and other problems that nurture nascent radical 
sentiment and terrorism. In the worst, but not implausible case, 
central authority in one or more of these states could evaporate as 
rival clans or regions vie for power--opening the door to an expansion 
of terrorist and criminal activity on the model of failed states like 
Somalia and, when it was under Taliban rule, Afghanistan.

                             LATIN AMERICA

    A gradual consolidation and improvement of democratic institutions 
is the dominant trend in much of Latin America. By the year's end, 10 
countries will have held presidential elections and none is more 
important to U.S. interests than the contest in Mexico in July. Mexico 
has taken advantage of North American Free Trade Agreement (NAFTA) and 
its economy has become increasingly integrated with the U.S. and 
Canada. Committed democrats in countries like Brazil and Chile are 
promoting economic growth and poverty alleviation. Despite battling 
persistent insurgent and paramilitary forces with considerable success, 
Colombia remains committed to keeping on a democratic path. 
Nonetheless, radical populist figures in some countries advocate 
statist economic policies and show little respect for democratic 
institutions.
    In Venezuela, President Chavez, if he wins reelection later this 
year, appears ready to use his control of the legislature and other 
institutions to continue to stifle the opposition, reduce press 
freedom, and entrench himself through measures that are technically 
legal, but which nonetheless constrict democracy. We expect Chavez to 
deepen his relationship with Castro (Venezuela provides roughly two-
thirds of that island's oil needs on preferential credit terms). He 
also is seeking closer economic, military, and diplomatic ties with 
Iran and North Korea. Chavez has scaled back counternarcotics 
cooperation with the U.S.
    Increased oil revenues have allowed Chavez to embark on an activist 
foreign policy in Latin America that includes providing oil at 
favorable repayment rates to gain allies, using newly created media 
outlets to generate support for his Bolivarian goals, and meddling in 
the internal affairs of his neighbors by backing particular candidates 
for elective office.
    In Bolivia, South America's poorest country with the hemisphere's 
highest proportion of indigenous people, the victory of Evo Morales 
reflects the public's lack of faith in traditional political parties 
and institutions. Since his election he appears to have moderated his 
earlier promises to nationalize the hydrocarbons industry and cease 
coca eradication. But his administration continues to send mixed 
signals regarding its intentions.
    Haiti's newly elected government has substantial popular support 
but will face a wide variety of immediate challenges, including 
reaching out to opponents who question the legitimacy of the electoral 
process. President-elect Preval's strong backing among the urban poor 
may improve his chances for reducing the unchecked violence of slum 
gangs, and the recent renewal for 6 months of the mandate for the U.N. 
Stabilization Mission will give his administration some breathing room. 
The perception among would-be migrants that the U.S. migration policy 
is tough will continue to be the most important factor in deterring 
Haitians from fleeing their country.

                             SOUTHEAST ASIA

    Southeast Asia includes vibrant, diverse, and emerging democracies 
looking to the United States as a source of stability, wealth, and 
leadership. But it is also home to terrorism, separatist aspirations, 
crushing poverty, ethnic violence, and religious divisions. Burma 
remains a dictatorship, and Cambodia is retreating from progress on 
democracy and human rights made in the 1990s. The region is 
particularly at risk from avian flu, which I will address later at 
greater length. Al Qaeda affiliated and other extremist groups are 
present in many countries, although effective government policies have 
limited their growth and impact.
    The prospects for democratic consolidation are relatively bright in 
Indonesia, the country with the world's largest Muslim population. 
President Yudhoyono is moving forward to crack down on corruption, 
professionalize the military, bring peace to the long-troubled province 
of Aceh, and implement economic reforms. On the counterterrorism side, 
Indonesian authorities have detained or killed significant elements of 
Jemaah Islamiya (JI), the al Qaeda-linked terrorist group, but JI 
remains a tough foe.
    The Philippines remains committed to democracy despite political 
turbulence over alleged cheating in the 2004 election and repeated 
rumors of coup plots. Meanwhile, Manila continues to struggle with the 
35-year-old Islamic and Communist rebellions, and faces growing 
concerns over the presence of JI terrorists in the south.
    Thailand is searching for a formula to contain violence instigated 
by ethnic-Malay Muslim separatist groups in the far southern provinces. 
In 2005, the separatists showed signs of stronger organization and more 
lethal and brutal tactics targeting the government and Buddhist 
population in the south.

                                 AFRICA

    Some good news is coming out of Africa. The continent is enjoying 
real economic growth after a decade of declining per capita income. The 
past decade has also witnessed a definite, albeit gradual, trend toward 
greater democracy, openness, and multiparty elections. In Liberia, the 
inauguration of Ellen Johnson Sirleaf as President, following a hotly 
contested multi-party election, was a positive harbinger of a return to 
democratic rule in a battered nation.
    Yet, in much of the continent, humanitarian crises, instability, 
and conflict persist. Overlaying these enduring threats are the 
potential spread of jihadist ideology among disaffected Muslim 
populations and the region's growing importance as a source of energy. 
We are most concerned about Sudan and Nigeria.
    The signing of a Comprehensive Peace Agreement in Sudan last year 
was a major achievement, but the new Government of National Unity is 
being tested by the continuing conflict in Darfur, and instability in 
Chad is spilling over into western Sudan, further endangering 
humanitarian aid workers and assistance supply lines. Gains in 
stabilizing and improving the conditions in Darfur could be reversed if 
the new instability goes unchecked.
    The most important election on the African horizon will be held in 
spring 2007 in Nigeria, the continent's most populous country and 
largest oil producer. The vote has the potential to reinforce a 
democratic trend away from military rule--or it could lead to major 
disruption in a nation suffering frequent ethno-religious violence, 
criminal activity, and rampant corruption. Speculation that President 
Obasanjo will try to change the constitution so he can seek a third 
term in office is raising political tensions and, if proven true, 
threatens to unleash major turmoil and conflict. Such chaos in Nigeria 
could lead to disruption of oil supply, secessionist moves by regional 
governments, major refugee flows, and instability elsewhere in West 
Africa.

                    GLOBALIZATION AND RISING ACTORS

    To one degree or another, all nations are affected by the 
phenomenon known as globalization. Many see the United States as 
globalization's primary beneficiary, but the developments subsumed 
under its rubric operate largely beyond the control of all countries. 
Small, medium, and large states are both gaining and losing through 
technological and economic developments at a rate of speed unheard of 
in human history.
    Such recalibrations in regional and global standing usually emerge 
in the wake of war. But globalization isn't a war, even though its 
underside--fierce competition for global energy reserves, discrepancies 
between rich and poor, criminal networks that create and feed black 
markets in drugs and even human beings, and the rapid transmission of 
disease--has the look of a silent but titanic global struggle.
    One major recalibration of the global order enabled by 
globalization is the shift of world economic momentum and energy to 
greater Asia--led principally by explosive economic growth in China and 
the growing concentration of world manufacturing activity in and around 
it. India, too, is emerging as a new pole of greater Asia's surging 
economic and political power. These two Asian giants comprise fully a 
third of the world's population--a huge labor force eager for modern 
work, supported by significant scientific and technological 
capabilities, and an army of new claimants on the world's natural 
resources and capital.

                                 CHINA

    China is a rapidly rising power with steadily expanding global 
reach that may become a peer competitor to the United States at some 
point. Consistent high rates of economic growth, driven by exploding 
foreign trade, have increased Beijing's political influence abroad and 
fueled a military modernization program that has steadily increased 
Beijing's force projection capabilities.
    Chinese foreign policy is currently focused on the country's 
immediate periphery, including Southeast and Central Asia, where 
Beijing hopes to make economic inroads, increase political influence, 
and prevent a backlash against its rise. Its rhetoric toward Taiwan has 
been less inflammatory since Beijing passed its ``anti-secession'' law 
last spring. China has been reaching out to the opposition parties on 
Taiwan and making economic overtures designed to win favor with the 
Taiwan public--although Beijing still refuses to deal with the elected 
leader in Taipei.
    Beijing also has expanded diplomatic and economic interaction with 
other major powers--especially Russia and the EU--and begun to increase 
its presence in Africa and Latin America.
    China's military is vigorously pursuing a modernization program: a 
full suite of modern weapons and hardware for a large proportion of its 
overall force structure; designs for a more effective operational 
doctrine at the tactical and theater level; training reforms; and wide-
ranging improvements in logistics, administration, financial 
management, mobilization, and other critical support functions.
    Beijing's biggest challenge is to sustain growth sufficient to keep 
unemployment and rural discontent from rising to destabilizing levels 
and to maintain increases in living standards. To do this, China must 
solve a number of difficult economic and legal problems, improve the 
education system, reduce environmental degradation, and improve 
governance by combating corruption.
    Indeed, China's rise may be hobbled by systemic problems and the 
Communist Party's resistance to the demands for political participation 
that economic growth generates. Beijing's determination to repress real 
or perceived challenges--from dispossessed peasants to religious 
organizations--could lead to serious instability at home and less 
effective policies abroad.

                                 INDIA

    Rapid economic growth and increasing technological competence are 
securing India's leading role in South Asia, while helping India to 
realize its longstanding ambition to become a global power. India's 
growing confidence on the world stage as a result of its increasingly 
globalized business activity will make New Delhi a more effective 
partner for the United States, but also a more formidable player on 
issues such as those before the World Trade Organization.
    New Delhi seeks to play a key role in fostering democracy in the 
region, especially in Nepal and Bangladesh, and will continue to be a 
reliable ally against global terrorism, in part because India has been 
a frequent target for Islamic terrorists, mainly in Kashmir. India 
seeks better relations with its two main rivals--Pakistan and China--
recognizing that its regional disputes with them are hampering its 
larger goals on the world stage. Nevertheless, like China, India is 
using its newfound wealth and technical capabilities to extend its 
military reach.
    On the economic front, as Indian multinationals become more 
prevalent, they will offer competition and cooperation with the United 
States in fields such as energy, steel, and pharmaceuticals. New 
Delhi's pursuit of energy to fuel its rapidly growing economy adds to 
pressure on world prices and increases the likelihood that it will seek 
to augment its programs in nuclear power, coal technologies, and 
petroleum exploration. Like Pakistan, India is outside the 
nonproliferation treaty.

                   THREATS TO GLOBAL ENERGY SECURITY

    World energy markets seem certain to remain tight for the 
foreseeable future. Robust global economic expansion is pushing strong 
energy demand growth and--combined with instability in several oil 
producing regions--is increasing the geopolitical leverage of key 
energy producer states such as Iran, Saudi Arabia, Russia, and 
Venezuela. At the same time, the pursuit of secure energy supplies has 
become a much more significant driver of foreign policy in countries 
where energy demand growth is surging--particularly China and India.
    The changing global oil and gas market has encouraged Russia's 
assertiveness with Ukraine and Georgia, Iran's nuclear brinksmanship, 
and the populist ``petro-diplomacy'' of Venezuela's Hugo Chavez. 
Russia's recent but short-lived curtailment of natural gas deliveries 
to Ukraine temporarily reduced gas supplies to much of Europe and is an 
example of how energy can be used as both a political and economic 
tool. The gas disruption alarmed Europeans--reminding them of their 
dependence on Russian gas--and refocused debate on alternative energy 
sources.
    Foreign policy frictions, driven by energy security concerns, are 
likely to be fed by continued global efforts of Chinese and Indian 
firms to ink new oilfield development deals and to purchase stakes in 
foreign oil and gas properties. Although some of these moves may 
incrementally increase oil sector investment and global supplies, 
others may bolster countries such as Iran, Syria, and Sudan that pose 
significant U.S. national security risks or foreign policy challenges. 
For example, in Venezuela, Chavez is attempting to diversify oil 
exports away from the U.S.

             THE SECURITY THREAT FROM NARCOTICS TRAFFICKING

    In addition to the central U.S. national security interest in 
stemming the flow of drugs to this country, there are two international 
threats related to narcotics: first, the potential threat from an 
intersection of narcotics and extremism; and second, the threat from 
the impact of drugs on those ineffective and unreliable nation states 
about which we are so concerned.
    Although the worldwide trafficking-terrorist relationship is 
limited, the scope of these ties has grown modestly in recent years. A 
small number of terrorist groups engage the services of or accept 
donations from criminals, including narcotics traffickers, to help 
raise operational funds. While the revenue realized by extremists 
appears small when compared to that of the dedicated trafficking 
organizations, even small amounts of income can finance destructive 
acts of terror.
    The tie between drug trafficking and extremism is strongest in 
Colombia and Afghanistan. Both of Colombia's insurgencies and most of 
its paramilitary groups reap substantial benefits from cocaine 
transactions. In Afghanistan, the Taliban and Hizb-i Islami Gulbudin 
gain at least some of their financial support from their ties to local 
opiates traffickers. Ties between trafficking and extremists elsewhere 
are less robust and profitable. North African extremists involved in 
the 2004 Madrid train bombings reportedly used drug income to buy their 
explosives.
    Most major international organized crime groups have kept 
terrorists at arm's length, although some regional criminal gangs have 
supplied fraudulent or altered travel documents, moved illicit 
earnings, or provided other criminal services to members of insurgent 
or terrorist groups for a fee.
    Narcotics traffickers--and other organized criminals--typically do 
not want to see governments toppled but thrive in states where 
governments are weak, vulnerable to or seeking out corruption, and 
unable--or unwilling--to consistently enforce the rule of law. 
Nonetheless, a vicious cycle can develop in which a weakened government 
enables criminals to dangerously undercut the state's credibility and 
authority with the consequence that the investment climate suffers, 
economic growth withers, black market activity rises, and fewer 
resources are available for civil infrastructure and governance.

                THE THREAT FROM PANDEMICS AND EPIDEMICS

    In the 21st century, our IC has expanded the definition of bio-
threats to the U.S. beyond weapons to naturally occurring pandemics. 
The most pressing infectious disease challenge facing the U.S. is the 
potential emergence of a new and deadly avian influenza strain, which 
could cause a worldwide outbreak, or pandemic. International health 
experts worry that avian influenza could become transmissible among 
humans, threatening the health and lives of millions of people around 
the globe. There are many unknowns about avian flu, but even the 
specter of an outbreak could have significant effects on the 
international economy, whole societies, military operations, critical 
infrastructure, and diplomatic relations. Avian flu is not something we 
can fight alone. An effective response to it is highly dependent on the 
openness of affected nations in reporting outbreaks where and when they 
occur. But for internal political reasons, a lack of response 
capability, or disinclination to regard avian influenza as a 
significant threat, some countries are not forthcoming. In close 
coordination with the Department of Health and Human Services, the IC 
therefore is tracking a number of key countries that are--or could be--
especially prone to avian influenza outbreaks and where we cannot be 
confident that adequate information will be available through open 
sources. The IC also coordinates closely with the Department of 
Homeland Security (DHS) and provides input to the National Bio 
Surveillance Integration System at DHS.

                               CONCLUSION

    Each of the major intelligence challenges I have discussed today is 
affected by the accelerating change and transnational interplay that 
are the hallmarks of 21st century globalization. As a direct result, 
collecting, analyzing, and acting on solid intelligence have become 
increasingly difficult. To meet these new and reconfigured challenges, 
we need to work hand-in-hand with other responsible nations. 
Fortunately, the vast majority of governments in the world are 
responsible and responsive, but those that are not are neither few in 
numbers nor lacking in material resources and geopolitical influence.
    The powerful critiques of the 9/11 Commission and the WMD 
Commission, framed by statute in the Intelligence Reform and Terrorism 
Prevention Act of 2004 and taken to heart by the dedicated 
professionals of our Intelligence Community, have helped make us better 
prepared and more vigilant than we were on that terrible day in 
September 2001. But from an intelligence perspective, we cannot rest. 
We must transform our intelligence capabilities and cultures by fully 
integrating them from local law enforcement through national 
authorities in Washington to combatant commanders overseas. The more 
thoroughly we do that, the more clearly we will be able to see the 
threats lurking in the shadow of the future and ward them off.
    Thank you very much.

    Chairman Warner. Thank you very much, Mr. Ambassador.
    General Maples, do you have some prepared remarks? All 
statements will be admitted to the record in their entirety.

  STATEMENT OF LTG MICHAEL D. MAPLES, USA, DIRECTOR, DEFENSE 
                      INTELLIGENCE AGENCY

    General Maples. Thank you, Senator. I do have prepared 
remarks. I have prepared a statement to be entered into the 
record as well, but I would like to highlight a few of the 
comments.
    Chairman Warner. Please proceed.
    General Maples. First of all, Mr. Chairman and Ranking 
Member Levin, thank you very much for the honor and the 
opportunity to appear with the DNI before this committee today.
    It is also my privilege to lead the dedicated men and women 
of the DIA, outstanding military and civilian personnel who are 
deployed around the world in support of our warfighters, our 
defense planners, and our national security policymakers. I 
would also like to thank the committee for your support to 
defense intelligence, which I very much appreciate, as do all 
the members of the military.
    Terrorism remains the most significant threat. Despite 
relative isolation and pressure from counterterrorism 
operations, the al Qaeda leadership continues to follow both 
centralized and decentralized approaches to ensure its 
viability. On the centralized track, the core leadership is 
attempting to maintain a level of control over strategic 
planning. On the decentralized track, they are embracing and 
encouraging actions conducted by like-minded groups that 
encompass the al Qaeda-associated network.
    Other terrorist organizations pose a continuing threat to 
the United States, to our allies, and to our interests. 
Lebanese Hizballah remains a threat to U.S. interests and the 
Revolutionary Armed Forces of Colombia, the FARC, is seeking to 
escalate terrorist operations, including those against U.S. 
personnel and facilities. Several terrorist groups, 
particularly al Qaeda, remain interested in acquiring chemical, 
biological, radiological, and nuclear weapons.
    Turning to Iraq, the insurgency in Iraq is complex and it 
remains resilient. Insurgent attacks remain focused in Sunni-
dominated regions in the northern, central, and western parts 
of Iraq and IEDs remain the insurgents' preferred method of 
attack. Sunni Arabs form the core of the insurgency. Insurgent 
leaders exploit Sunni Arab social, economic, and historical 
grievances to recruit support. The insurgents are willing to 
use family, tribal, and professional relationships to advance 
their agenda.
    A smaller number of Iraqi terrorists and foreign fighters 
contribute to insurgent ranks. Psychologically, this group has 
a disproportionate impact because of the more spectacular 
attacks that they conduct. Since last year, tribal and local 
insurgent dissatisfaction with foreign fighter presence and 
tactics appears to have grown. However, the tension is 
localized and has not disrupted the overall strength of the 
insurgency.
    In Iraq, Abu Musab al-Zarqawi and al Qaeda in Iraq remain 
the major terrorist threat. He has been able to collaborate 
with disparate Sunni extremist groups and has increasingly 
attracted Iraqis into his organization, replacing foreign 
fighters with Iraqi nationals in most of the leadership 
positions. Coalition forces have significantly impacted al 
Qaeda in Iraq, killing and capturing several of Zarqawi's 
closest associates, constricting the flow of personnel, money, 
material, and degrading operations.
    Sunni Arab attitudes are changing as the elite increasingly 
embrace politics. However, the degree to which this will 
decrease insurgent violence is not yet clear. Even moderate 
Sunni Arab leaders see violence as a complement to their 
political platforms and are pursuing a dual track policy of 
political engagement and armed resistance.
    In Afghanistan, successful national and provincial 
legislative elections were held in September 2005. 
Afghanistan's efforts to disarm private militia groups have 
steadily progressed over the last year. The expansion of the 
Afghan national army and police force has allowed the 
government to stop officially recognizing private militias as 
serving a legitimate security role.
    The Taliban-dominated insurgency remains capable and 
resilient. In 2005 Taliban and other anti-coalition movement 
groups increased attacks by 20 percent. Insurgents also 
increased suicide attacks and more than doubled IED attacks. We 
judge that the insurgency appears emboldened by perceived 
tactical successes and will be active this spring.
    Pakistan remains key in the global war on terrorism. The 
Pakistan military continues to conduct operations in the 
federally administered tribal areas and has increased their 
capabilities. Pakistani counterterrorism operations temporarily 
disrupted local safe havens and forced some Taliban and al 
Qaeda operatives into Afghanistan.
    WMD and the means to deliver them continue to mature in a 
number of countries. Behind global terrorism, they represent 
our most significant challenge. We believe North Korea 
continues to produce plutonium for its nuclear weapons. Because 
of its strong security, nationalistic and economic motivations 
for possessing nuclear weapons, we are uncertain whether the 
North Korean government can be persuaded to fully relinquish 
its program.
    We believe Iran is committed to acquiring a nuclear weapon 
and is currently developing the infrastructure to produce 
highly enriched uranium and plutonium for that purpose.
    One of China's top military priorities is to strengthen and 
modernize its strategic nuclear deterrent force by increasing 
its size, accuracy, and survivability. The number of deployed 
Chinese nuclear-armed theater and strategic systems will 
increase in the next several years.
    States with chemical and biological programs remain a 
threat to our deployed forces, to our Homeland, and to our 
national interests. Some states have produced and weaponized 
agents, where others have not advanced beyond research and 
development. We believe that Iran maintains offensive chemical 
and biological weapons capabilities in various stages of 
development and we assess the Syrian government already has a 
stockpile of the nerve agent sarin and has apparently tried to 
develop a more toxic and persistent nerve agent.
    Numerous countries continue to improve and expand their 
ballistic missile forces, presenting us with increasing 
challenges. China continues to expand and modernize all 
categories of its ballistic missile forces to increase 
survivability and warfighting capabilities, to enhance their 
deterrence value, and to overcome ballistic missile defenses. 
North Korea continues to invest in its ballistic missile forces 
for diplomatic advantage, foreign sales, and to defend itself 
against attack. The Iranian government is developing ballistic 
missiles capable of striking Tel Aviv and reporting suggests 
that Iran is acquiring longer range ballistic missiles capable 
of reaching Central Europe.
    Turning to states of military significance, China's 
military modernization remains focused on developing or 
acquiring modern fighter aircraft, a blue water navy, and 
improved amphibious forces. The People's Liberation Army (PLA) 
completed its plan to cut 200,000 soldiers from the army, 
likely freeing resources for other modernization efforts.
    North Korean military forces remain capable of initiating 
an attack on the south, although they appear to be suffering 
from the country's economic decline.
    Iran recently concluded an arms deal with Russia for 
approximately 30 short-range air defense systems as well as 
other military hardware. When fully operational, these new 
systems will increase Iran's defensive capabilities and their 
ability to deny access to the Persian Gulf.
    Finally, many transnational issues will increase in 
importance to our national security. The revolution in 
telecommunications and transportation associated with 
globalization is decreasing distances between nations and 
instantly connecting like-minded groups and individuals around 
the world. Numerous states, terrorists and hacker groups, 
criminal syndicates, and individuals continue to pose a threat 
to our computer systems. The Chinese PLA continues to study 
cyberwarfare and is striving toward a doctrine on information 
warfare. Terrorist groups and extremists are also exploiting 
the Internet for intelligence collection and propaganda 
purposes.
    The absence of effective organized or responsible 
governments threatens our national security. Ungoverned or 
weakly governed states provide safe havens for terrorists, 
extremist groups, and criminal organizations to operate. 
Criminal organizations and networks have become increasingly 
adept at exploiting the global diffusion of sophisticated 
information, financial, and transportation networks. They are 
involved in illicit transfers of arms and military 
technologies, narcotics trafficking, alien smuggling, and cyber 
and financial crimes.
    Let me conclude by stating that our Nation is engaged in a 
long war against terrorism and violent extremism and we are 
faced with a multitude of threats that can affect our national 
security. The defense intelligence professionals will continue 
to provide information critical to our warfighters, defense 
planners, and our national security policymakers.
    Again, I would like to thank the committee for its support 
to defense intelligence and I look forward to your questions.
    [The prepared statement of General Maples follows:]

            Prepared Statement by LTG Michael D. Maples, USA

                              INTRODUCTION

    Good morning Mr. Chairman, Mr. Ranking Member, and members of the 
committee. It is my honor and privilege to testify before you today. I 
am also honored to lead the dedicated men and women of the Defense 
Intelligence Agency. These outstanding military and civilian 
intelligence professionals provide our warfighters, defense planners, 
and national security policymakers with information and knowledge 
essential to our national security. Many of our young intelligence 
professionals are executing their missions in remote and dangerous 
environments. I thank them for their service and the magnificent work 
they are doing for our Nation. I would also like to thank you for your 
continued support for defense intelligence; our capability to focus on 
potential threats to the Nation is essential. The threat testimony I am 
about to present represents what we know and judge to be the threats to 
our country, citizens, allies, and interests around the world today.
    The United States faces a variety of complex transnational threats 
and potential threats from states of concern. My testimony will outline 
the current threat from global terrorism and the state of the 
insurgencies in Iraq and Afghanistan. It will highlight the challenges 
of proliferation of Weapons of Mass Destruction (WMD). Finally, I will 
discuss developments in states of concern and other transnational 
issues that present both challenges and opportunities to enhance our 
national security.

                        GLOBAL WAR ON TERRORISM

Al Qaeda and Sunni Extremism
    Terrorism remains the most significant threat to our Nation. Al 
Qaeda and its affiliated groups demonstrate adaptability in response to 
our global war on terrorism. Al Qaeda leaders, Osama bin Laden and 
Ayman al-Zawahiri, are relatively isolated and under pressure from 
counterterrorist operations. Once the central banker of the Sunni 
extremist movement, the al Qaeda leadership has resorted to seeking 
funds from al Qaeda in Iraq (AQI) to supplement its income.
    Despite these problems, the al Qaeda leadership continues to follow 
both centralized and decentralized approaches to ensure its viability 
and that of the greater Sunni extremist movement. On the centralized 
track, the core leadership is attempting to maintain a level of control 
over strategic plans such as the war in Iraq and another major attack 
against the U.S. Homeland. On the decentralized track, they are 
embracing and encouraging terrorist acts by like-minded groups and 
individuals that encompass the al Qaeda associated movement. These 
groups include the Jemmah Islamiyah in Southeast Asia, the Group for 
Salafist Preaching and Combat (GSPC) in Africa, and Ansar al-Islam, in 
addition to AQI, in Iraq.
    In Iraq, al-Zarqawi and the AQI remains the major terrorist threat. 
He has been able to collaborate with disparate Sunni extremist groups, 
formalizing ties with some. He has increasingly attracted Iraqis into 
his organization, replacing foreign fighters with Iraqi nationals in 
many of AQI's leadership positions. Money, weapons and foreign fighters 
supporting terrorism move into Iraq, primarily through Syria and Iran. 
While responsible for less than 5 percent of the overall violence in 
Iraq, foreign terrorists are responsible for over 90 percent of suicide 
bombings. Coalition forces have dealt AQI serious blows, killing and 
capturing several of al-Zarqawi's closest associates, constricting the 
flow of personnel, money and material in and out of the country and 
degrading their operations. We are seeing divisions developing between 
AQI and some Sunni extremist groups.
    Iraq appears to be emerging as an al Qaeda platform for launching 
transnational terrorist attacks. This was borne out by the November 
hotel bombings and August rocket attack targeting U.S. Navy ships in 
Jordan.
    Al Qaeda will remain engaged in Afghanistan for ideological and 
operational reasons. Taliban and other anti-coalition militants are 
adopting al Qaeda tactics in Afghanistan.
    Al Qaeda and Sunni extremists maintained a high operational tempo 
on other fronts in 2005. The trend of attacking civilian targets 
continued, exemplified by the bombings of London's mass transit system, 
resort hotels in Egypt, and a theater catering to westerners in Qatar. 
Al Qaeda publicized these events with an aggressive propaganda campaign 
featuring video and audio tapes from senior al Qaeda leadership.
    Al Qaeda and associated jihadist groups utilize Internet technology 
for communications and propaganda. Technology, including e-mail, 
password-protected chat rooms, and websites, is used to communicate and 
reinforce jihadist ideology and promote anti-U.S. sentiment.
    Improved security, intelligence, and military cooperation resulted 
in the killing or capture of key al Qaeda operatives and degraded al 
Qaeda logistical networks. Effects of these global war on terror 
successes are most evident in the notable downturn in terrorist attacks 
in Saudi Arabia and the absence of another attack against the U.S. 
Homeland.
Other Terrorist Groups
    Other terrorist organizations also pose a continuing threat to the 
U.S., our allies and interests. Lebanese Hizballah remains primarily 
focused on Lebanon and anti-Israel operations. The group is avoiding 
open conflict with the U.S.
    The Revolutionary Armed Forces of Colombia (FARC) is seeking to 
escalate terrorist operations, including against U.S. interests. The 
FARC may be motivated to target U.S. personnel and facilities because 
it likely perceives that U.S. aid is fundamental to the Colombian 
government's counterinsurgency and counterterrorism successes.
CBRN Terrorism
    Several terrorist groups, particularly al Qaeda, remain interested 
in chemical, biological, radiological, and nuclear (CBRN) weapons. Al 
Qaeda's stated intention to conduct an attack exceeding the destruction 
of September 11 raises the possibility that future attacks may involve 
unconventional weapons.
MANPADS--Threat to Civil Aviation
    Proliferation of manportable air defense systems (MANPADS) to non-
state groups increases the likelihood of terrorist attacks against 
civilian and military aircraft worldwide. MANPADS are inexpensive, easy 
to transport, conceal and use, and are proven effective. While we have 
no indications of an imminent attack against commercial aircraft in the 
U.S., one could occur with little or no warning.
Islamic World
    Across several Islamic states, positive public opinion toward al 
Qaeda, Osama bin Laden and Sunni extremism has waned, according to 
polling. However, we have seen only a modest decline in financial 
support and recruitment to Sunni extremist groups. Popular backlashes 
were observed in Iraq and Jordan in response to the most brutal al 
Qaeda tactics, including hostage beheadings and attacks on civilians, 
Shiite, and public facilities, such as the bombing of western hotels in 
Amman, Jordan.
    Public opinion of the U.S. improved in some predominantly Muslim 
states, especially those in Asia, following our assistance to tsunami 
victims. Public attitudes toward the U.S. and Western countries in 
Pakistan improved following their assistance to earthquake victims in 
Kashmir last fall. Nevertheless, favorable opinions of the U.S. in many 
Muslim states remain low and are susceptible to changing events.
    Several Muslim countries have made political and economic reforms, 
increasing democratic practices, addressing corruption, economic 
underdevelopment and poor services to rapidly expanding populations. 
However, much more needs to be done. These continuing problems will be 
a source of instability and extremism in many Muslim countries for 
years to come. This could result in continuing challenges to U.S. 
security interests.
    The burgeoning population of European Muslims is resulting in 
social tension over immigration and integration, leading some to voice 
discontent through extremism and violence. Extremism has spread 
primarily through radical clerics, the Internet, and prisons. European 
countries are struggling to find ways to solve the economic and social 
problems that their Muslim populations face.
Saudi Arabia
    Saudi Arabian counterterrorism efforts over the past year appear to 
have degraded terrorist capabilities within the kingdom. In 2005, only 
two terrorist attacks occurred compared to 15 significant attacks in 
2004.
Pakistan
    Pakistan remains key in the global war on terror. The Pakistan 
military continues to conduct operations in the federally Administered 
Tribal Areas. Pakistani counterterrorism operations temporarily 
disrupted local safe-havens and forced some Taliban and al Qaeda 
operatives into Afghanistan, making them vulnerable to coalition 
operations.

                            CONFLICT IN IRAQ

    The insurgency in Iraq is complex, yet remains strong, and 
resilient. In January 2006, attacks averaged approximately 70 per day 
compared with approximately 90 attacks per day during the same period 
in 2005 and 25 in 2004. Attacks declined after the January 2005 
elections, but crept upward to an all-time high of 99 per day in 
October. Insurgent attacks remain focused in Sunni-dominated regions in 
northern, central and western Iraq. Improvised explosive devices (IEDs) 
remain the insurgents' preferred method of attack.
    Reporting indicates sectarian violence is increasing; however, 
quantifying the trend is difficult. The elections appear to have 
heightened tension and polarized sectarian divides. The perception of 
sectarian violence is increasing in both Sunni and Shiite areas. We 
continue to see a rise in AQI-led attacks against Shiites and their 
religious shrines.
    Sunni Arabs form the core of the insurgency. Insurgent leaders 
exploit Sunni Arab social, economic, historical and religious 
grievances to recruit both active and tacit support. With over a 
million Sunni Arab military-aged males in Iraq, insurgents have little 
difficulty mobilizing enough fighters and support to sustain current 
levels of violence. Few are motivated by Baathism, but insurgents are 
willing to use familial, tribal and professional relationships 
established during the former regime to advance their agenda. Networks 
based on these relationships remain the greatest long-term threat to 
stability in Iraq.
    A smaller number of Iraqi terrorists and foreign fighters 
contribute to insurgent ranks. Psychologically, they have a 
disproportionate impact because of their spectacular attacks. Sunni 
Arab leaders hold no influence over foreign terrorists such as al Qaeda 
in Iraq. Since last year, tribal and local insurgent dissatisfaction 
with foreign fighter presence and tactics appears to have grown. 
However, tension is localized and has not disrupted the overall 
strength of the insurgency.
    Security remains the most urgent issue facing the majority of 
Iraqis. Many elements of Iraqi security forces are loyal to sectarian 
and party interests. Insurgents have infiltrated some units. Nationwide 
opposition to coalition presence persists. Many Iraqis in Sunni Arab 
cities, where the insurgency is strongest, have confidence in the 
eventual success of ``armed national resistance.'' Most Iraqis consider 
those who perpetrate violence against civilians to be ``criminals'' or 
``terrorists,'' but those who attack the coalition as ``patriots.''
    Sunni Arab attitudes are changing as the elite increasingly embrace 
politics; however, the degree to which this will decrease insurgent 
violence is not yet clear. Even moderate Sunni Arab leaders see 
violence as a complement to their political platforms and are pursuing 
a ``dual track'' policy of political engagement and armed resistance. 
Other segments of the insurgency are irreconcilable and continue to 
stage attacks regardless of the political conditions.
    Increased Sunni Arab representation in the Council of 
Representatives could foster consensus policies and decisions. However, 
the new government will face many of the same challenges as its 
predecessor. Crime and corruption are major problems exacerbating the 
security situation. The economy is also a major factor; unemployment 
and provision of basic services will not likely improve in the near-
term.
    The degree to which Shiite and Kurdish leaders accommodate Sunni 
Arab demands on core issues like federalism and de-Baathification is 
key to success in Iraq. Absent an effective engagement strategy 
designed to foster comprehensive reconciliation, Sunni Arab elites have 
little cause to support the rebuilding of Iraq. Many Sunni Arab leaders 
view the current political solutions as predicated on perpetual 
minority status in a Shiite-Kurd dominated government. So long as Sunni 
Arabs are denied access to resources and lack a meaningful presence in 
government, they will continue to resort to violence.

                        CONFLICT IN AFGHANISTAN

    Afghanistan held successful national and provincial legislative 
elections in September 2005, following the previous year's successful 
Presidential election. While neither pro-government nor opposition 
elements gained a majority in the new National Assembly, President 
Karzai's supporters appear to constitute the largest single voting 
bloc.
    Afghanistan's efforts to disarm private militia groups have 
steadily progressed over the last year. The expansion of the Afghan 
National Army and police force has allowed the government to stop 
officially recognizing private militias as serving a legitimate 
security role.
    Despite significant progress on the political front, the Taliban-
dominated insurgency remains a capable and resilient threat. In 2005, 
Taliban and other anti-coalition movement groups increased attacks by 
20 percent over 2004. Insurgents also increased suicide attacks almost 
four-fold, more than doubled IEDs attacks and increasingly used 
beheadings to terrorize the local population. This more active enemy 
will continue to negatively impact Afghan government and international 
efforts to create a stable Afghanistan. We judge insurgents now 
represent a greater threat to the expansion of Afghan government 
authority than at any point since late 2001, and will be active this 
spring.
    The thriving narcotics trade also poses a significant threat to 
Afghanistan's progress. Narcotics production is corroding the country's 
developing institutions and distorting the licit economy. The narcotics 
trade has provided Afghan warlords, militia commanders, and corrupt 
government officials with substantial revenue and enabled the 
insurgency to operate in regions of southern and northeastern 
Afghanistan.
    The Karzai government has a multi-faceted strategy to curbing 
narcotics production. Kabul's counternarcotic strategy includes 
interdiction, alternative development, public awareness, poppy 
reduction, law enforcement and judicial reform, drug treatment, and 
regional cooperation. Two counternarcotics forces, stood up by Kabul in 
2004, seized metric-ton quantities of opiates during various operations 
over the last 18 months. Kabul also launched a new judicial task force 
this year to prosecute narcotics traffickers, and extradited a major 
narcotics dealer to the United States.

                      WEAPONS OF MASS DESTRUCTION

    WMD and the means to deliver them continue to mature in a number of 
countries, posing a significant threat to our Homeland, allies, 
deployed forces, and international interests. Behind global terrorism, 
they represent the most significant threat we face.
Nuclear
    We believe that North Korea continued to produce plutonium for its 
nuclear weapons program from its 5-Megawatt Yongbyon reactor in 2005. 
However, we do not know with certainty that North Korea has any nuclear 
weapons. Additionally, activity at the Yongbyon 50-megawatt reactor 
suggests Pyongyang is seeking to convince Washington it will follow 
through on threats to resume construction on this unfinished nuclear 
reactor, adding another source for weapons-grade plutonium.
    We believe Iran is committed to acquiring a nuclear weapon and is 
currently developing its nuclear infrastructure, which could produce 
highly enriched uranium and plutonium for that purpose. Despite a 
suspension agreement with the EU-3 and a noncompliance finding at the 
September 2005 IAEA Board of Governors meeting, the Iranian government 
broke with the Paris Accord and resumed activities at its uranium 
conversion and centrifuge research and development facilities.
    One of China's top military priorities is to strengthen and 
modernize its strategic nuclear deterrent force by increasing its size, 
accuracy and survivability. It is likely the number of deployed Chinese 
nuclear-armed theater and strategic systems will increase in the next 
several years. China currently has more than 100 nuclear warheads. We 
believe China has sufficient fissile material to support this growth.
    We believe that India and Pakistan also continue expanding and 
modernizing their nuclear weapon stockpiles. Pakistan has also 
developed the capability to produce plutonium for potential weapons 
use.
Chemical and Biological Weapons
    States with chemical and biological programs remain a threat to our 
deployed forces, Homeland, and interests. Some states have produced and 
weaponized agents whereas others have not advanced beyond research and 
development. For example, we believe that Iran maintains offensive 
chemical and biological weapons capabilities in various stages of 
development. We believe Syria already has a stockpile of the nerve 
agent sarin and apparently has tried to develop a more toxic and 
persistent nerve agent. We also believe the Syrian government maintains 
an offensive biological weapons research and development program.
Ballistic Missiles
    China continues to expand and modernize its ballistic missile 
forces to increase their survivability and warfighting capabilities, 
enhance their coercion and deterrence value and overcome ballistic 
missile defenses. Beijing is developing a new submarine launched 
ballistic missile (SLBM), the 8,000+ kilometer range JL-2. China has 
begun flight testing all these systems, which likely will be ready for 
deployment later this decade. China continues to develop new short, 
medium, and intermediate ballistic missiles and has fielded numerous 
short-range ballistic missiles to brigades near Taiwan.
    North Korea continues to invest in its ballistic missile forces for 
diplomatic advantage, foreign sales and to defend itself against 
attack. During 2005, a new solid-propellant short-range ballistic 
missile was tested, and Pyongyang is likely developing intermediate-
range ballistic missile (IRBM) and intercontinental ballistic missile 
(ICBM) capabilities.
    Overall numbers of Russian strategic ballistic missiles continue to 
decline. Nevertheless, Russian leaders are committed to maintaining 
these forces as a credible nuclear deterrent and symbol of great power 
status. Russia has flight-tested a new SLBM, the Bulava-30. Russia 
continues development of the SS-27 and is developing and fielding 
maneuvering missiles and payloads to help defeat ballistic missile 
defenses.
    Iran continues work on its ballistic missile programs. Tehran is 
developing ballistic missiles to target Tel Aviv and press reporting 
suggests Iran is acquiring longer-range ballistic missiles capable of 
striking Central Europe.
    India and Pakistan maintain aggressive ballistic missile programs. 
India flight tested a SLBM for the first time in spring 2005. Pakistan 
is developing a new medium-range ballistic missile (MRBM).
Cruise Missiles
    The threat to deployed U.S. forces and our allies posed by cruise 
missiles, which include land-attack cruise missiles, lethal unmanned 
aerial vehicles (UAV), and anti-ship cruise missiles, is expected to 
increase though 2010. Several countries began or continued to develop 
and produce new land attack cruise missiles and/or anti-ship cruise 
missiles in 2005. Advancements in technology will increase the 
difficulty in countering modern anti-ship cruise missiles. Several 
anti-ship cruise missiles will have a secondary land-attack capability. 
New land attack cruise missiles and lethal UAVs entering service, as 
well as their proliferation, will increase the threat to land-based 
assets.

                        OTHER STATES OF CONCERN

Iran
    Tehran will back the emerging Iraqi government to ensure a non-
threatening, stable neighbor, while thwarting any U.S. and coalition 
interest to extend operations into Iran.
    Tehran maintains relationships with numerous Iraqi Shiite factions, 
and will maintain its support for Iraqi Shiite elements working in 
contrast to coalition goals. We believe Iran has provided lethal aid to 
Iraqi Shiite insurgents. In addition to supporting Iraqi elements, Iran 
will continue to support Lebanese Hizballah and Palestinian 
rejectionist groups in the region, posing a threat to U.S. interests.
    Iran's military developments have centered on its ballistic missile 
program, which Tehran views as its primary deterrent. Over the past 
year, Iran continued testing its MRBM and also tested anti-ship 
missiles. Iran recently concluded a deal with Russia for approximately 
30 short-range air defense systems, as well as other military hardware. 
When these systems become fully operational, they will significantly 
enhance Iran's defensive capabilities and ability to deny access to the 
Persian Gulf through the Strait of Hormuz.
Syria
    The Syrian government has somewhat improved security along the Iraq 
border and increased arrests of foreign fighters and al Qaeda elements. 
Nevertheless, Syria remains the primary transit route for Iraq-bound 
foreign fighters and is a safe-haven for Iraqi Baathists and other 
former regime elements.
    Damascus continues to support Lebanese Hizballah and provide 
several Palestinian rejectionist groups safe-haven.
    Syria continues to make some improvements to its conventional 
forces, but did not make any major weapons acquisitions in 2005.
North Korea
    Persuading North Korea to follow through on its September 2005 
pledge to abandon all its nuclear weapons programs is a significant 
challenge for the U.S. and the other Six-Party Talks participants. We 
expect the North will employ tactics at future talks to maximize its 
own economic benefit and minimize what it must yield.
    While Pyongyang appears intent on continuing the current North-
South dialogue, it maintains a military force of approximately 1 
million personnel. The majority are deployed close to the South Korean 
border.
    North Korean military forces continue to suffer the consequences of 
the North's economic decline, but remain capable of initiating an 
attack on South Korea. North Korea's large force provides the regime 
with an effective deterrent against the more prosperous and modern 
South and the self-perceived option of employing threats and bravado to 
influence policy in Washington and Seoul.
China
    China's military modernization remains focused on developing or 
acquiring modern fighter aircraft, a blue-water navy, and improved 
amphibious forces. The People's Liberation Army (PLA) completed its 
plan to cut 200,000 soldiers from the Army, likely freeing resources 
for other modernization efforts. The PLA is also emphasizing 
counterterrorism, domestic security and maritime deployments. China's 
announced defense budget in 2005 was approximately $30 billion, 
continuing a trend of double digit increases.
    Eventual unification with Taiwan remains a national goal. Chinese 
efforts to strengthen its economy, enhance its international influence, 
and increase military capabilities will better enable it to isolate and 
undermine pro-separation political forces on Taiwan.
    China will continue to be instrumental in resolving the North 
Korean nuclear issue. Over the past year, Beijing played a constructive 
role in facilitating the Six-Party Talks process.
    China's global engagement has become more active. Beijing's need to 
sustain economic development and gain access to markets, raw materials 
and resources, as well as its desire to build global influence and 
limit Taiwan's international contacts, is driving this activity. Moscow 
remains an important strategic and military partner for Beijing. Last 
summer's Sino-Russia military exercise involved air, naval, amphibious 
and ground operations.
    China's energy demands, particularly petroleum, have risen sharply. 
China is the world's second largest consumer and third largest importer 
of oil. Economic growth will ensure this trend continues. In response, 
Beijing has launched a worldwide search to address petroleum 
requirements, investing in oil sectors of regimes like Sudan and Iran.
Russia
    Despite an improving economy, Moscow has not addressed difficult 
domestic problems that will limit the scale and scope of military 
recovery. Russia faces increasingly negative demographic trends, a 
smaller number of draft-age males and worsening public health problems.
Central Asian States
    All five Central Asian regimes--Uzbekistan, Kazakhstan, Kyrgyzstan, 
Tajikistan, and Turkmenistan--operate under varying degrees of 
authoritarian leadership, repression and corruption. Each will continue 
to face internal stability challenges in coming years, primarily due to 
poor governance, porous borders, crime, corruption, unemployment, and 
poverty. If living standards and governance fail to improve, the spread 
of Islamic extremism could pose a further threat to stability.
    All Central Asian states will continue to voice support for the 
global war on terror, but fears of western support for local democratic 
movements will hinder cooperation. Basing and overflight rights for 
coalition forces supporting Operation Enduring Freedom (OEF) will 
likely continue to be granted on a case-by-case basis.
Venezuela
    Increased oil revenue has allowed Venezuela to pursue an ambitious 
military modernization program to include the purchase of additional 
transport and maritime surveillance aircraft, surface ships, and 
helicopters. Venezuela is considering acquiring additional advanced 
fighter aircraft and submarines. Once integrated, the new equipment 
will significantly increase Venezuela's military capabilities.
    We judge President Chavez's strategic objectives include 
undermining U.S. regional influence and unifying Latin America under 
his Bolivarian leftist ideology. While curtailing ties with the U.S., 
President Chavez has sought to expand military and commercial ties with 
Cuba, China, Iran, and Russia, and has intensified efforts to influence 
some regional governments by offering preferential oil deals.

                          TRANSNATIONAL ISSUES

    Many transnational issues will increase in importance to our 
national security, providing us both challenges and opportunities in 
the next 10 to 15 years and beyond. The revolution in telecommunication 
and transportation associated with globalization is decreasing 
distances between nations and instantly connecting like minded groups 
and individuals around the world. There clearly are many economic, 
political, and cultural benefits to these developments. However, these 
same developments present us numerous challenges. This section 
highlights several of those issues, in addition to the more traditional 
ones of Global Defense Spending and Space and Space Denial Systems.
Information Operations
    Numerous states, terrorist and hackers groups, criminal syndicates, 
and individuals continue to pose a threat to our computer systems. 
States represent the greatest threat. The Chinese PLA, for instance, is 
striving toward a doctrinal Information Warfare capability. Many other 
nations are using computer network operations for intelligence 
collection. Terrorist groups are exploiting the Internet for 
intelligence collection, command, control, and communications, and 
propaganda purposes. Over the last few years, hackers have exploited 
thousands of DOD systems. Attribution has remained elusive with 
identities established in only a few cases.
New Ungoverned or Weakly Governed States
    The absence of effective, organized, or responsible governments 
threatens our national security. Ungoverned or weakly governed states 
provide safe-havens for terrorists, extremist groups and criminal 
organizations to operate with anonymity and impunity. Our challenge 
will be to understand the conditions leading to such governance 
failure, enabling us to act with regional allies to help avert the 
development of these extremist safe havens before they emerge.
International Crime
    Criminal organizations and networks have become increasingly adept 
at exploiting the global diffusion of sophisticated information, 
financial, and transportation networks. Criminal organizations are 
involved in illicit transfers of arms and military technologies, 
narcotics trafficking, alien smuggling, cyber and financial crimes. 
Depending on whether governments with WMD capabilities can or will 
control such weapons and materials, the risk could increase that 
organized criminal groups will traffic in nuclear, biological, or 
chemical weapons.
Natural Disasters and Pandemics
    Natural disasters present humanitarian and security challenges for 
affected governments and the international community. Poor responses 
can destabilize governments. Conversely, rapid and effective relief 
operations can enhance domestic and international standing. Examples 
include the favorable responses to Thailand, Indonesia, and India after 
the 2004 Asian tsunami, as well as the positive response our own 
government received for assistance offered to Asian states. Disaster 
response can even serve as an opportunity to resolve disputes; the 
Indonesian government worked with indigenous insurgent groups after the 
tsunami.
    Pandemics also pose security challenges. Currently the H5N1 avian 
influenza virus is of concern. Although primarily a bird disease, 
nearly 170 humans have been infected since 2003, with over half dying. 
If H5N1 begins spreading easily among people, a highly lethal pandemic 
could emerge, causing significant economic and humanitarian losses. The 
virus is endemic in Southeast Asia but has been detected in Central 
Asia, Africa, Russia, and both Western and Eastern Europe. Many 
countries cannot identify outbreaks and countries such as North Korea 
and Russia may withhold outbreak information, fearing the political and 
economic impact of full disclosure.
Oil and Water Resources
    Growing populations and economies in many industrializing nations 
and other countries are placing strains on natural resources, 
increasing the potential for conflict and instability. While oil prices 
have stabilized, the prospect of higher prices continues to threaten 
global economic expansion, encourage instability and provide increased 
revenue for several regimes often hostile to our interests. Oil 
production will remain stretched thin over the next several years, 
sustaining market pressure and limiting the ability to quickly respond 
to major supply shortfalls.
    Competition over water resources may also become a catalyst for 
conflict in regions where population and economic expansion increase 
water demand. Disputes over water will likely exacerbate existing 
tensions in many parts of the world such as the Middle East, North 
Africa, Sub-Saharan Africa, South Asia, and Southeast Asia.
Global Defense Spending
    Several transnational issues pose both short-term and long-term 
challenges to the U.S. Non-U.S. global defense spending has remained 
relatively steady the past 2 years, amounting to an estimated $680 
billion in 2005. China and Russia, ranked one and two respectively, 
each accounting for approximately $82 billion. The top 10 countries 
account for two-thirds of total spending or about $450 billion. Asia, 
led by China, is the only region showing consistent growth in defense 
spending. Additionally, Russia and Venezuela are the only major 
petroleum producers who have consistently used their oil revenues to 
fund military modernization and expansion programs.
    Russia, China, and North Korea are of particular concern as 
proliferators of conventional weapons and military technology. Russia 
remains the largest exporter of military equipment behind the United 
States, selling approximately $5.4 billion in 2004 and $4.6 billion in 
2005 of advanced weapons and military related technology. Items include 
modern aircraft, ground equipment, major surface combatants and 
submarines, ballistic and cruise missiles, advanced air defense 
systems, and sophisticated communication and radar systems. We expect 
Russian sales to average between $4 to $6 billion annually for the 
immediate future. China is emerging as a leading arms exporter with 
sales averaging almost $800 million annually. India is another nation 
that could become a proliferator of advanced conventional weapons. New 
Delhi and Moscow have been jointly developing and aggressively 
marketing a supersonic anti-ship cruise missile.
Space and Space-Denial Capabilities
    Although Russia and China are the primary states of concern 
regarding military space and space-denial programs, the increasing 
availability of space technology, products, and services is providing 
other countries with selective capabilities in key areas. Worldwide, 
this availability is fueled by the proliferation of advanced satellite 
technologies, including small satellite systems, and increased 
cooperation and activity among nation-states and space-related 
consortia. These developments provide some countries new or more 
capable communications, reconnaissance, and targeting capabilities as 
most space systems have dual-use, military-civilian applications.
    Several countries are developing capabilities which threaten U.S. 
space assets. Some countries already have fielded systems with inherent 
anti-satellite capabilities, such as satellite-tracking laser range-
finding devices and nuclear-armed ballistic missiles. A few countries 
have programs seeking improved space object tracking and kinetic or 
directed energy weapons capabilities. However, researching these 
technologies is expensive and most are not expected to be widely 
available within the next few years. Other state and non-state entities 
are pursuing more limited and asymmetric approaches which do not 
require extensive resources or a high-tech industrial base. These 
efforts include denial and deception, electronic warfare or signal 
jamming, and ground segment physical attack.

                               CONCLUSION

    Our Nation is engaged in a long war against terrorism and violent 
extremism, and we are faced with a multitude of that can affect our 
national security interests. Defense intelligence professionals will 
continue to provide the necessary information to our warfighters, 
defense planners and national security policymakers. Providing support 
to our soldiers, sailors, airmen, and marines engaged in the global war 
on terrorism and insurgencies in Iraq and Afghanistan is our first 
priority. We are focusing considerable resources to help prevent or 
counterproliferation of WMD. We must also monitor states of concern and 
other transnational issues. Developments in these areas provide the 
potential for future challenges and opportunities to promote our 
national security. I look forward to your questions.

    Chairman Warner. Thank you very much.
    General Hayden, do you have some opening remarks?
    General Hayden. No, I do not, Mr. Chairman. Thank you.
    Chairman Warner. Thank you. Then we will proceed with the 
questions. Colleagues, I estimate that with 8 minutes each it 
will take us almost an hour and a half to get through, but that 
should enable us to have sufficient time to have a very 
thorough and in-depth closed session. So we will proceed.
    Mr. Ambassador, the use of the word ``civil war'' in Iraq. 
Could you give us basically what you would establish as the 
criteria of the situation transcending from the very high level 
of insurgency and killing and disruption today into what you 
would characterize as a civil war? What are the benchmarks that 
we should look for?
    Ambassador Negroponte. I think the benchmarks, among 
others, Mr. Chairman, would involve complete loss of central 
government security control, the disintegration or 
deterioration of the security forces of the country, and of the 
forces of disorder, such as unauthorized forces that might be 
bearing arms against the country, getting the upper hand in the 
situation.
    I suppose the political mirror image of that would be some 
kind of cessation of the political process that was determined 
by Resolution 1546 3 years ago, and which the Iraqis have 
carried out step by step every step of the way, from transition 
from a Coalition Provisional Authority to an interim government 
to a transitional government and now to a definitive 
government. I think if that process were to be severely 
disrupted, I think that would be another one of the indicators.
    Chairman Warner. How do you equate the three levels of 
really governance in that nation--and I don't order them in any 
particular preference, but there is the newly elected 
government, which is ever so slowly coming into being. As 
pointed out I think by Senator Levin, the assembly, that is the 
275 elected representatives, still have not met yet; is that 
correct?
    Ambassador Negroponte. That is correct, yes.
    Chairman Warner. Therefore that process is indeterminate in 
how it goes along.
    The next really level of governance and influence are the 
religious leaders. Of recent they have responded to this 
immediate crisis in the aftermath of the regrettable bombing of 
the Golden Dome Mosque. Now, they have a great deal of 
influence and they are exerting that influence, I think, to 
forestall any further disruption of a magnitude of a civil war. 
Lastly is the tribal authority still has a great deal of 
influence.
    Sort of characterize the three levels as you see them and 
the degree of their influence?
    Ambassador Negroponte. With respect to the first, the 
government, you are right to point out that the new government 
has not been formed as yet, Mr. Chairman, but the old 
government still exists, of course, and is functioning and will 
function until such time as the new government is formulated.
    I think that as important as that was the fact that in the 
course of this crisis of the past several days the political 
leaders of the country, both in the government and outside of 
it, representing all of the different factions--Shiite, Sunni, 
Kurdish, and others--have come together, I think in part as a 
result of the horrific events of the last week.
    Chairman Warner. I concur in that observation.
    Ambassador Negroponte. Second, with respect to the 
religious leadership of the country, I think that by and large 
they have been a force for restraint. Certainly the Ayatollah 
Sistani, the leader of, the Grand Ayatollah of the Shiite 
movement in Iraq, has played a moderating role I think 
throughout the course of the past 3 years and I think he 
continued to play it during this crisis. So I think there also 
we have seen a constructive role played by the religious 
community.
    As to the tribal elements, they are one of a number of 
other political factors at work in that country. I am afraid I 
do not know specifically what role they may have played in this 
most recent crisis. But I think the government and the 
religious community have been the most important.
    Chairman Warner. They have played a constructive role thus 
far.
    General Maples, do you concur with the current assessment 
that civil war is not there yet, but that it is just beneath 
the surface?
    General Maples. Yes, sir, I do. I believe that the 
underlying conditions are present, but that we are not involved 
in a civil war at this time.
    Chairman Warner. What would be the role of our U.S. forces 
in the event that civil war were to erupt?
    General Maples. Sir, that will be decided, of course, by 
the commanders on the scene.
    Chairman Warner. By the on-scene commanders.
    General Maples. Yes, sir.
    Chairman Warner. But clearly you have some view as to what 
participation or nonparticipation the border nations might 
take. Let us start with Iran. What are they likely to do? Would 
they seal their borders or begin to have a more porous--put in 
supplies needed for presumably the Shiite faction?
    General Maples. Sir, we do believe that Iran is supporting 
the Shiite currently. We would expect that that would probably 
continue, although we would assess that it is not in Iran's 
interest to see a full-scale civil war in Iraq and that they 
would probably act to avoid that.
    Chairman Warner. They are not likely to send any of their 
active forces in?
    General Maples. No, sir, we do not see that at all.
    Chairman Warner. What about Syria?
    General Maples. Sir, we do not see any movement on Syria's 
part either to send forces into Iraq.
    Chairman Warner. And Jordan?
    General Maples. No, sir.
    Chairman Warner. Saudi Arabia?
    General Maples. Sir, we would not expect that.
    Chairman Warner. So if this escalates to the proportions of 
civil war, the bordering nations probably will do whatever is 
in their self-interest, but not likely to get heavily engaged; 
is that correct?
    General Maples. Sir, I would concur with that.
    Chairman Warner. General Hayden, on the question of China, 
a nation has a right to establish that level of military 
strength to protect itself, its own national security. But in 
the judgment of many, including myself, I think that they are 
creating a military force far beyond what is needed to protect 
their own security interests and it is most likely to try and 
project influence and perhaps even force elsewhere in the 
region.
    Do you have a view on that?
    General Hayden. Yes, sir, Senator. There are a variety of 
factors involved. As you suggest, it is one of the most 
fascinating aspects of looking at Chinese actions. As we see 
the pieces, we then try to create parallax from those pieces 
back to what is generating each and every step. I think you 
have laid it out fairly well. I think there are multiple 
motivations. There are some very specific concrete things they 
do across the Taiwan Straits that seem to us to be directly 
related to the circumstances there.
    There are, I think and as the Ambassador pointed out in his 
remarks, this expansion of influence regionally. In addition, 
and this is the one that is toughest for us to measure, there 
seem to be some things they are doing--how to put it--because 
they are doing it; that they have this perception, there is 
almost a momentum in Chinese thinking that great powers--and 
they clearly want to be viewed as a great power--need certain 
things, and they are not necessarily tied to a specific 
military event, either proposed or expected, but simply become 
the trappings of, I will use the word, their global legitimacy.
    Our challenge is to try to shred out the motivation of 
these different steps they are taking.
    Chairman Warner. Good, thank you.
    In the coming weeks we are likely to see the Army Field 
Manual on Interrogation is expected to be released. The Senate 
of course established through a vote, and the House joined us, 
the uniform standards will be set forth in this manual. I would 
like to have on the record: Did both your organizations, 
Ambassador Negroponte and General Maples, have a voice in the 
formation of the Army Field Manual that will be released next 
week, and did you do it, of course, from the perspective of 
preserving the very valuable information that sometimes can be 
derived from incarceration of the adversaries?
    Ambassador Negroponte. I would concur with you, Senator, on 
the value of interrogating detainees and the contribution that 
they can make to our human intelligence (HUMINT). As to any 
input we might have had to the Army Field Manual, I am not 
aware of a role on the part of the IC in the development of 
that manual.
    Chairman Warner. General Maples?
    General Maples. Sir, we were, the DIA was very involved in 
the development of the manual. After the manual was written by 
the Army, it was staffed within the DIA. It was reviewed both 
by Defense HUMINT personnel, because the manual is a HUMINT 
operations manual, so both from the HUMINT Directorate and from 
the Defense HUMINT Management Office. I personally read the 
entire manual and provided input to the final copy.
    Chairman Warner. I go back to you, Ambassador Negroponte. 
You in a sense are the voice for the civilian side of the 
incarceration and interrogation process. I would assume General 
Maples looked at the military side. But it seems to me that 
those civilians who are involved in this very critical 
responsibility should receive some assurance that it was looked 
at from their perspective. Maybe you might consider that before 
it is finally released.
    Ambassador Negroponte, as you undoubtedly are aware, there 
is a very active consideration in Congress of this port 
situation. Your organization has a sub-group called the 
Community Acquisition Risk Assessment Center. The head of that 
organization is present here today and he came up to the SSCI 
and briefed a group of us here in the past week.
    I judged that that report was--I somehow gained the 
impression that that report was the overall assessment of the 
IC, be it the uniformed side or the civilian side or all the 
parts put together, and while we cannot in this fora state what 
those assessments were, I gained the impression that was the 
final assessment on behalf of the IC towards the CFIUS process.
    Could you take us through what your organization did?
    Ambassador Negroponte. Yes, Senator, I would be pleased to 
do that. Perhaps know from the briefing that you received 
earlier, the IC is not per September a member of CFIUS.
    Chairman Warner. That is correct.
    Ambassador Negroponte. But the CFIUS will task us with 
certain requirements and to look into what risks might occur as 
a result of a proposed acquisition. In this particular 
instance, the procedure that was followed was that our 
Community Acquisition Risk Center was asked on the 2nd of 
November to provide an assessment, which we then took a 1-month 
period to do, and on the 5th of December we submitted the 
results of our inquiry with regards to the Dubai Ports (DP) 
World and the Dubai Ports Authority and Dubai Ports 
International, who are the companies involved in this 
transaction. We provided that assessment back to CFIUS.
    So that was the process that was followed. Now, there have 
been some other assessments, whether they are related to port 
security or some other subject, done by other parts of the 
departments of the government, such as the Coast Guard, for 
example, which were provided to their department head. But that 
was done separately from this inquiry that we conducted.
    Chairman Warner. I will leave it to Chairman Collins as a 
member of her committee. She very carefully probed those issues 
yesterday and I am sure she may have some questions on that 
point.
    Did you in your report make a final conclusion and are you 
at liberty to feel that your organization discovered any 
factors which in your judgment would have affected the security 
of this country in an adverse way?
    Ambassador Negroponte. Yes, we did, and on the basis of our 
inquiry we assessed the threat to U.S. national security posed 
by DP World to be low. In other words, we did not see any red 
flags come up during the course of our inquiry.
    Chairman Warner. I thank you very much, Mr. Ambassador.
    Senator Levin.
    Senator Levin. The threat to our security, your overall 
assessment, from that transaction is low?
    Ambassador Negroponte. That was our----
    Senator Levin. So not nonexistent; it is just low?
    Ambassador Negroponte. I think it is low, moderate, and 
high.
    Senator Levin. But there is no assessment, then, that there 
is no threat?
    Ambassador Negroponte. There is no such thing in our view 
as zero risk.
    Senator Levin. So that you have three options, low, 
moderate, or high?
    Ambassador Negroponte. I believe so, sir.
    Senator Levin. The Coast Guard report which the chairman 
referred to is dated after you submitted your intelligence 
assessment. Is that correct?
    Ambassador Negroponte. That is correct.
    Senator Levin. So that was not presented to you? You did 
not consider that?
    Ambassador Negroponte. That is correct.
    Senator Levin. I think there was a different impression 
that was given to the Homeland Security and Governmental 
Affairs Committee yesterday, but I am going to let our chairman 
comment on that. That is my recollection. I was there, but her 
recollection may be a lot sharper on that issue.
    Ambassador Negroponte. My understanding, Senator, is we 
submitted our report on December 5. The Coast Guard report was 
December 13.
    Senator Levin. Yes.
    Ambassador Negroponte. I would add, my understanding is 
that the Coast Guard did not interpose any objection to the 
transaction and the DHS concurred in it and that some steps 
were taken, some adjustments were made, and there was a letter 
of assurance from the company back to us as a result of 
whatever issues might have been raised.
    Chairman Warner. Ambassador, in your statement, you say 
that there will be a lag time almost certainly before we see a 
dampening effect on the insurgency, even if there is a broad, 
inclusive national government that emerges in Iraq. I think 
that is a useful point. What would be the effect on the 
insurgency if there is not a broad, inclusive national 
government?
    Ambassador Negroponte. I think first of all it would be a 
pity, a lost opportunity, as far as the democratic process in 
Iraq itself is concerned. As to what effect it might have, it 
would, I think, deprive us or deprive the political system in 
Iraq of the opportunity to involve some of the people who are 
bearing arms or who may be inclined to bear arms against the 
government to participate in the political process. So I think 
it could have the effect of prolonging the insurgency.
    Senator Levin. You think that the failure to have a broad 
national government agreed to would contribute to the 
insurgency?
    Ambassador Negroponte. I say could. I cannot be absolutely 
certain.
    Senator Levin. Could it contribute?
    Ambassador Negroponte. I think the fact of the government 
not being adequately inclusive could have the effect of 
prolonging the insurgency. I would be comfortable making that 
statement.
    Senator Levin. Do you think it is important in terms of 
defeating the insurgency that there be a broadly-based national 
government?
    Ambassador Negroponte. I think it is important, yes. I 
think it is important that the democratic and the political 
process that the Iraqis have set out for themselves continue to 
go forward.
    Senator Levin. But basically, you agree that it is 
important in terms of defeating the insurgency that there be 
such a broadly-based national government? I want to start from 
there. Your answer is yes?
    Ambassador Negroponte. Yes.
    Senator Levin. What do you assess to be the likelihood of 
such a broad-based agreement being reached? Is it likely? Is it 
iffy? How would you assess it?
    Ambassador Negroponte. I think one way of looking at that, 
Senator, is I think the chances are better now than they might 
have been previously. When you think about it, a year ago the 
Sunnis were boycotting the electoral process entirely. They 
were saying they did not want to have anything to do with it. 
Then last fall a million more Sunnis, people in the Sunni 
regions of the country, registered to vote and they have now 
elected 55 representatives to the legislature, where previously 
they had none.
    So I would say as a matter of the political trend in Iraq, 
I would say the chances are more likely now than they were a 
year ago.
    Senator Levin. Would you say they are likely, putting aside 
that trend?
    Ambassador Negroponte. I do not have my crystal ball, but I 
can just assure you that an enormous amount of effort is being 
devoted to that.
    Senator Levin. Would you agree with my statement that if 
the Iraqis do not seize the opportunity to put together a 
broadly-based political agreement that we cannot save them from 
themselves?
    Ambassador Negroponte. I think you are trying to draw me to 
a conclusion here with a hypothetical question. I would rather 
state it affirmatively. I think it is definitely in their 
interest to work as hard as they can to achieve an inclusive 
government and I think that deserves a great deal of effort.
    Senator Levin. I think that the chairman raised a question 
about whether or not you have been involved in the Field 
Manual. Is it not correct that under the McCain amendment that 
detainees in our custody, regardless of whose custody, what the 
source is, whether the DOD is the source or whether it is the 
IC is the source, that all detainees in our custody are subject 
to the Army Field Manual? Is that your understanding of the 
McCain amendment?
    Ambassador Negroponte. My understanding--first of all let 
me say, Senator, that it is our full intention to comply with 
the law and with the McCain amendment, as we have been doing.
    Senator Levin. That answers the question. That is 
satisfactory. Because of time, let me go on. It is your 
intention to comply with it, that is fine.
    North Korea. You have given us assessment a couple years 
ago in the unclassified----
    Chairman Warner. Senator Levin, I think the witness wanted 
to add a comment.
    Ambassador Negroponte. I think that is fine, Senator.
    Chairman Warner. All right.
    Senator Levin. I think he is probably happy to stop there, 
too.
    A couple of years ago you gave us an unclassified 
assessment that North Korea had one to two nuclear weapons. 
What is your current unclassified assessment as to the number 
of nuclear weapons that North Korea has?
    Ambassador Negroponte. I do not think there is an answer to 
that question. I do not think we have an answer to that 
question, Senator. We know that they have a lot of fissile 
material, but trying to put a number on it I think would be 
very hard.
    Senator Levin. So you have not put a number on it?
    Ambassador Negroponte. I have been very reluctant to get 
into numbers because it means--first of all, we assess that 
they probably have nuclear weapons, as they claim that they do. 
But we do not know for a fact that they have such weapons. So 
we are in the situation here of assessing that they have them. 
So to then say with precision the number they have I think 
would be difficult to do with our level of knowledge. It would 
merely be an extrapolation or a speculation on our part.
    Senator Levin. You have given us that before, but you are 
not willing to give it to us now and that is your answer.
    Going back just to the port issue for a moment, there was 
an open press report back in December 2002, right before the 
Iraq war, that said that the commander of the United States 
Navy's Fifth Fleet alleged that a Dubai-based shipping firm 
shipped materials from Dubai to Iraq that could be used for 
constructing high-grade explosives. That article quotes a U.S. 
Navy spokesperson as saying that the Navy had ``photographic 
evidence that clearly proves that these chemicals were recently 
shipped into Iraq.''
    My question to you is this. Did the UAE officials and 
leaders look the other way when shipments of illicit cargo took 
place from the UAE in Dubai prior to the war?
    Ambassador Negroponte. Did the UAE--I was interrupted or 
distracted.
    Chairman Warner. Could I intervene, without detracting from 
your time. The voice that you are hearing comes from an 
internal system in the control of security, and there has been 
a package located in some of the buildings. At this point there 
is no assessment that we in this room are under any risk. I 
apologize for that background noise.
    Senator Inhofe. It has been cleared now.
    Chairman Warner. It has been cleared, thank you.
    Senator Levin, go ahead.
    Senator Levin. Just my last question. Should I repeat it?
    Ambassador Negroponte. If you would not mind, Senator. I am 
sorry.
    Senator Levin. Sure. There was an open newspaper report 
that quoted the commander of the U.S. Navy's Fifth Fleet, 
saying that there was a shipping company in Dubai that shipped 
materials from Dubai to Iraq that could be used for 
constructing high-grade explosives in Iraq, and quoted the U.S. 
Navy spokesman as saying that the Navy had ``photographic 
evidence that clearly proves that the chemicals were recently 
shipped into Iraq.''
    My question to you is did the IC make an assessment as to 
whether or not UAE officials and leaders looked the other way 
prior to the Iraq war? This is now after September 11, 2001, 
but prior to the Iraq war; that they looked the other way as 
illicit cargoes under U.N. and our embargoes were shipped into 
Iraq? That is my question.
    Ambassador Negroponte. I am afraid I will just have to take 
that question, Senator, because I am not----
    Senator Levin. Take? I am sorry?
    Ambassador Negroponte. If I could provide you a response 
for the record, because I am not familiar with that particular 
report.
    [The information referred to follows:]

    [Deleted.]

    Senator Levin. Thank you.
    My time is up. Thank you.
    Chairman Warner. Thank you very much.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    I am going to use my time to talk about one of my favorite 
subjects, that everyone has ignored up until the last couple of 
weeks. That is on this proposed sale of the P&O Port Company to 
DP World. I have to say, Mr. Chairman, I am opposed to this, 
but for a totally different reason than others are. For one 
thing, I do not see any threat there with the UAE. I do not see 
any threat with the corporation involved that is part of the 
UAE. I do not see the threats there at all.
    But I think there are any number of corporations from any 
number of countries that they could have chosen, that CFIUS 
could have chosen, that would not be controversial, allowing 
people to demagogue this thing, as they are doing right now, 
criticizing the President. So I just want to say that, while I 
oppose it, I am not opposed to it for national security 
reasons. Just I think he could have done it with somebody else 
and not subjected himself to that kind of criticism.
    Now, I would caution the Democrats not to get too excited 
about this because during the last administration the UAE could 
not do anything wrong. Our doors were open, we were inviting 
them over, we sold $8 billion worth of F-16s, anti-aircraft and 
anti-ship missiles, and other advanced weapons to the UAE. It 
even required a special waiver signed by the President to do 
it. Nonetheless, that was what was going on. If you might 
remember, Mr. Chairman, in the Afghanistan thing when Osama bin 
Laden was actually found and targeted, we did not go through 
with that because there were some UAE officials there and they 
were afraid there might be some collateral damage to them.
    So anyway, I just want to mention that we have had enough 
hypocrisy on that. But I would like to talk a little bit about 
CFIUS. In a way I am kind of glad this happened because I have 
been concerned. You mentioned in your opening remarks, Mr. 
Chairman, that you have had time over the last week to study 
the CFIUS process. I have had time over the last 12 years to 
study it and I have been studying it and talking about it.
    Prior to a month ago, if you had asked any member of this 
body about CFIUS they would probably think you were talking 
about some communicable disease. But in fact this is something 
that has been a problem for a long time ago. There have been 
four times in the last 12 years where the proposed foreign 
acquisitions in the United States have threatened our security. 
In 1998 the Clinton administration turned over management of 
the 144-acre terminal at the former U.S. Naval Station in Long 
Beach to the Chinese Ocean Shipping Company. It was called 
COSCO. We remember that time and all the hysteria that took 
place, to turn it over to a company like that, that had 
relationships in arms trading with Iran, Iraq, Syria, North 
Korea, Pakistan, Cuba, and other countries, and even 
contributed to, Mr. Chairman, street gangs in Los Angeles.
    Now, we went ahead and did this and turned it over. We were 
able to stop this turnover at that time. I will quote from the 
L.A. Times. This was in 1998: ``The embattled COSCO deal came 
to an end Thursday night when congressional conferees submitted 
to Congress the 1998-1999 Defense Authorization Bill. Leading 
the effort to block COSCO from the facility were Senator James 
Inhofe and Representative Duncan Hunter of San Diego.''
    So CFIUS had said at that time yes, they wanted to do it, 
but we were able to block it and we won that one. Now, that was 
just one battle.
    Then my concern with the CFIUS process last April when I 
delivered four speeches on the floor of the Senate concerning 
China, and I appreciate very much, Ambassador, your bringing up 
some of your concerns about China. People seem not to be paying 
as much attention as they should.
    While examining this, you came across the disturbing 
purchase of China buying a U.S. company called Magna-Quench. 
This all started in 1995, and we started talking about the 
threat that was out there. Magna-Quench has access to a type of 
a metal that is necessary for us to use in some of the 
precision guided munitions that we have. At that time we talked 
about Magna-Quench and its international, incorporated. In 1995 
the Chinese corporations bought Magna-Quench, a supplier of 
rare earth metals used in the guidance system of smart bombs. 
Over 12 years, the country has been moving piecemeal--and this 
is what we said in 1995--to China from the United States 
different elements of this company, and they are now all 
located in China.
    I would only say that--I am quoting right now from a 
statement I made on the floor; this was April 4, 2005, where we 
said that this was going to happen and in fact this has 
happened.
    Now we are in a situation in the United States where we 
have no domestic supplier of rare earth metals such as are 
essential for precision guided munitions. I would say it is a 
clear national security concern.
    More recently, I was concerned with China's state-owned 
China National Offshore Oil Corporation (CNOOC) in its attempt 
to buy out Unocal. We all remember that, and people were making 
a lot of concern about that at that time. But we stayed on that 
until finally, in spite of what CFIUS was recommending--that 
is, they were recommending that the purchase take place and 
that Unocal would be a part of the Chinese government--we won 
that and CNOOC finally withdrew its application.
    We also testified before the U.S.-China Commission on July 
21, 2005. On July 21, 2005, we were concerned about the fact 
that our committee, Mr. Chairman, our committee, was concerned 
at that time about what was happening in China, so we developed 
the U.S.-China Economic and Security Review Commission. This is 
a bipartisan commission to submit to Congress on an annual 
basis the threats that are out there to our national security 
and our economic security.
    The commission has been doing this. It is a bipartisan 
committee, 12 members. Three were appointed, as I recall, by 
the Speaker, three by the minority, three by the majority and 
three by the minority of the Senate. These are 2-year terms. So 
it has worked out real well.
    Now, over the past several months I have been pointing out 
that the CFIUS process has ignored some major issues which 
threaten our national security. Not just the China Commission 
gave a list of reasons why we need to change the process, the 
structure of CFIUS, but the Government Accountability Office 
(GAO) has recently issued a report on CFIUS that is right in 
line with these recommendations.
    So it is not just me. It is the U.S. China Commission, the 
GAO, and because of the fact that--we actually had this, Mr. 
Chairman, in our defense authorization bill, but when that got 
stalled, our language got stalled, and so I introduced it as a 
free-standing bill. It was assigned to the Banking, Housing, 
and Urban Affairs Committee because the Chairman of CFIUS is 
the Secretary of Treasury.
    So if you look at CFIUS, if you want to see, if anyone out 
there thinks that they are doing any kind of a job at all, I 
have to say that they have received over 1,520 notifications 
and investigated only 24. Only 24 out of 1,500, Mr. Chairman. 
Of those investigated, only one acquisition has been stopped by 
the President. That was President George the First. So that is 
one out of 1,520 and it just shows that this thing is not 
working.
    So the bill that I introduced would reform the system. It 
would reform it consistent with the recommendations of the 
U.S.-China Commission. I would only quote from this morning's 
editorial by the Rocky Mountain News. They said: ``The Bush 
administration should embrace a plan suggested last summer by 
Senator James Inhofe that would place the Pentagon, not the 
Department of Treasury, in charge of all interagency reviews on 
foreign state-owned investments that could affect national 
security.'' I would like to ask unanimous consent the entire 
editorial will be entered in the record at this point.
    Chairman Warner. Without objection.
    [The information referred to follows:]
      
    
    
      
    Senator Inhofe. So in conclusion, I would only say that I 
have placed in the front of each member a synopsis of that 
bill, a history of that bill, and asking for co-sponsors. I 
think now is finally we are in a position we will be able to 
pass something we were not able to pass before.
    So I have used my time, Mr. Chairman, but I do want to say 
that I hope that General Maples and General Hayden and others 
who are concerned with what has been going on--this old 
argument of WMD, which has always been a phony argument from 
the beginning--now that we have the information that has been 
testified, not before this committee but certainly in closed 
session by this General Saddas, where he has all kinds of 
evidence as to the individuals who transported the weapons out 
of Iraq into Syria, and I am hoping that we will be able to 
pursue that so that finally we can put that one to sleep, when 
in fact the big problem with Iraq was they never had WMD. They 
had terrorist training camps in places like Ramadi, Samarrah, 
and Salman Pak, and those are now dead on the vine.
    Thank you, Mr. Chairman.
    Chairman Warner. Thank you, Senator, and I certainly 
acknowledge the important contribution that you have given 
towards the longevity of the CFIUS program. My reference to the 
study, I was studying this one case----
    Senator Inhofe. Yes, I understand.
    Chairman Warner.--and preparing for the committee briefing 
the other day.
    Senator Kennedy.
    Senator Kennedy. Thank you. Thank you very much, Mr. 
Chairman, and thank all of our panelists for their service to 
our country. I thank you, Ambassador, for your earlier comments 
covering a wide variety of different national security sort of 
challenges that we are facing.
    I would like to come back and give the focus and attention 
to what I think most American service men, wherever they are, 
are thinking about and that is Iraq. Most families are thinking 
about it, Americans are thinking about what is happening, the 
dangers of deterioration and civil conflict, what is going to 
happen to our service men and women, some 2,300 who have been 
killed there, the great majority obviously by offensive 
activities, but others killed in the region, all heroes, and 
some 16,000 wounded.
    I think the Americans are looking for what are the real 
prospects over there. I know you gave some description in 
response to earlier questions. We have had a recent U.S. Agency 
for International Development (USAID) request for proposals 
already describe Iraq as a low-intensity civil war, the words 
that they use, the USAID used it. General Sanchez said on 
January 7, told soldiers preparing to deploy in Iraq during a 
ceremony in Heidelberg: ``The country is on the verge of civil 
war.'' General Maples in his testimony here talks about 
sectarian violence is increasing, this morning.
    Now, in the State of the Union President Bush said: ``I am 
confident in our plan for victory. I am confident in the will 
of the Iraqi people. Fellow citizens, we are in this fight to 
win and we are winning.'' Those are the words of the President, 
``we are winning.''
    Even in your written testimony today, you mention about the 
lag time before we see a dampening effect on the insurgency. 
That is very different from the rosy statements by the 
President that we are winning, and the American people know the 
difference.
    Did you tell the President we were winning? Did you ever 
use those words with him?
    Ambassador Negroponte. I personally?
    Senator Kennedy. Yes.
    Ambassador Negroponte. Recalling conversations I have had 
with the President and other members of the administration, my 
view has always been that we are moving in the right direction, 
that we are making progress. I analyze it usually in terms of 
the political process there, progress towards achieving their 
political timetable on the one hand and progress towards 
developing their army and their police forces, effective 
military and police forces, and I believe that progress has 
been made in both those areas.
    I believe that, yes, things are moving in a positive 
direction in Iraq overall.
    Senator Kennedy. You are not using the words ``we are 
winning'' this morning, are you? Are you using--are we winning 
the battle there? Would you use those as a description of the 
circumstances in Iraq?
    Ambassador Negroponte. I believe that if you take the 
overall situation in Iraq, political and security situation, 
that progress is being made and if we continue to make that 
kind of progress that, yes, we can win in Iraq.
    Senator Kennedy. This headline here in the Washington Post 
is truly moving and has to be startling to all Americans: 
``Toll in Iraq, Deadly Surge, 1,300 More, Count Eclipses Other 
Tallies Since the Shrine Attack.'' The toll was more than three 
times higher than the figure previously reported by the U.S. 
military in the news media.
    We have General Maples' testimony here, reporting indicates 
sectarian violence is increasing. This is this morning. The 
elections appear to have heightened the tension and polarized 
sectarian divides.
    Then on the next page he continues: ``Sunni attitudes are 
changing as the elite increasingly embrace politics. However, 
the degree to which they will decrease insurgent violence is 
not yet clear.'' That would appear that even including the 
Sunnis into the government, at least according to General 
Maples, indicates that it does not appear that there will be a 
decrease in the insurgent violence, not really clear what is 
going to happen. ``Even moderate Sunni leaders see violence as 
a complement.'' ``Even moderate Sunni Arab leaders see violence 
as a complement to their political platforms and are pursuing a 
dual track.''
    We have a report this morning, the Sunnis--this is from 
Knight-Ridder: ``Sunnis in Iraq may be arming for Shiite 
militias. Sunni Muslims from all across central Iraq, alarmed 
by how easily the Muslim fighters had attacked their mosque 
during the last week's clashes, are sending weapons and 
preparing to dispatch their own fighters to the Iraqi capital 
in case of further violence.''
    We are just looking for an assessment, Ambassador, as to 
what in the world is happening and what your own assessment is 
of what is going to happen in these next days and next weeks.
    General Maples, can you help me out?
    General Maples. Sir, I will stand by the assessments that I 
provided. I do believe that this last week has been a very 
significant week in Iraq. The level of sectarian violence 
increased significantly on the ground based on the bombings of 
the mosque. We saw exactly the deep divides that exist between 
the Shiite and the Sunni in Iraq.
    I think we should take heart in the leaders who have come 
forward at this point, but we are also in a very tenuous 
situation right now, I believe. I think that more violence, 
were it to occur, were it to be stimulated by al Qaeda in Iraq, 
would have a very significant impact on the situation in Iraq. 
I believe that the Sunni population will continue to use 
violence as a means or a leverage to continue to represent 
their political interests.
    It has been heartening as well, though, to see Sunni 
leaders start to step forward to look for that national unity 
government and to participate in that, and I do think that that 
is a means to lessen the violence. Nevertheless, I think 
violence will remain with us for the time being.
    Senator Kennedy. We have to take our hats off to the 
courageous individuals who are trying to dampen down the 
violence, and all of us do.
    What is your--I would like to--in response to an earlier 
question, General, about if there were the development of the 
civil war what our troops would do, and I think in response to 
an earlier question you said that would be up to the 
commanders. Am I right?
    General Maples. Yes, sir.
    Senator Kennedy. What is the guidance now? What is the--to 
try and get ahead of the curve in case there is a real 
deterioration, what is the overall kind of framework? What is 
the guidance that is given to our commanders? Can you tell us 
now?
    General Maples. Sir, I am not aware of the guidance that 
has been provided to the commanders on the ground.
    Senator Kennedy. When will that guidance--if we see this 
kind of danger that you are describing now, would we not 
anticipate that it would be useful that our commanders would 
have some kind of guidance as to how they are going to proceed 
if there is going to be a deterioration, which you think is 
possible, if there is increased activity by al Qaeda and if the 
religious leaders are not able to continue to be as brave and 
courageous and successful as they have been?
    General Maples. Sir, I am sure the commanders are taking 
those actions and they are providing the guidance to the forces 
on the ground. I am just not aware of what that is.
    Senator Kennedy. Let me move on if I could, Ambassador, to 
the issue on the National Security Agency (NSA). I know this is 
an issue of sensitivity and importance. I am asking if you 
would, please, if you could just answer the question. The 
Attorney General described the NSA--this is the Attorney 
General in our Judiciary Committee. The Attorney General 
described the NSA surveillance program as military activities. 
So I wanted to just get your view about this program, whether 
it is considered a military operation. Is this considered a 
military operation? Are the military involved in the 
apprehension or detention of any suspects? To the extent that 
you can comment on, if you are able to, or maybe you want to do 
it later, to the actions of the Fourth Circuit, which have 
taken two cases now and have remanded those cases because of 
issues relating to tainted evidence that may very well be a 
part of the NSA program.
    I will put it in greater detail because I cannot expect 
that you might know about those cases. But maybe you do or 
maybe General Hayden can comment on it. Could you quickly, 
because my time has expired, comment?
    Ambassador Negroponte. If I could invite General Hayden.
    Senator Kennedy. All right, if General Hayden can.
    General Hayden. Senator, I do not have any details on the 
cases, so I am sorry about that.
    Senator Kennedy. I will give you a written question on 
that.
    General Hayden. Thank you.
    Senator Kennedy. If you could just address those other 
issues please.
    General Hayden. Yes, sir, kind of the military aspect of 
the activity.
    Senator Kennedy. The military, and is there any action by 
the military in terms of the activities, detention of any of 
the individuals, of any of the suspects. Are they involved in 
any of that.
    General Hayden. Certainly not inside the United States. 
This is fundamentally, though, a foreign intelligence program 
and it could lead to information that would lead to action by 
U.S. Armed Forces abroad.
    Senator Kennedy. My question just was related to the 
aspects of it that are here in the United States.
    General Hayden. Yes, sir. No, there would not. But I need 
to make an additional point because you asked was it a military 
activity.
    Senator Kennedy. Okay.
    General Hayden. The way we are wired as a community, the 
authority to do what NSA does, signals intelligence (SIGINT), 
which is legally defined as electronic surveillance for a 
foreign intelligence purpose, all the authority of the U.S. 
Government to do that activity is actually in the person of the 
Secretary of Defense. Since President Truman, SIGINT, 
electronic surveillance for a foreign intelligence purpose, 
comes to the Director of NSA through the Secretary of Defense. 
So in that sense it is an inherently military activity.
    Chairman Warner. Thank you very much, Senator Kennedy.
    Senator Collins.
    Senator Kennedy. Thank you very much.
    Senator Collins. Thank you.
    Mr. Ambassador, I want to follow up on the statement that 
Senator Inhofe made about the composition of the CFIUS. 
Currently there is no direct IC representative on the 
committee, is that correct?
    Ambassador Negroponte. That is correct.
    Senator Collins. Yet the purpose of this committee is to 
evaluate the national security implications of proposed 
transactions. Moreover, the committee is not chaired by a DOD 
official. It is not chaired by a DHS official. It is chaired by 
a Treasury official. Is that correct also?
    Ambassador Negroponte. Yes.
    Senator Collins. I know that the IC provides a threat 
assessment to the committee to help guide its analysis. But do 
you think that the IC should actually be a named member of the 
committee? It is a pretty big committee. It has 12 members, it 
has the head of the Office of Management and Budget (OMB) on 
it, and yet it does not have a representative from the IC. 
Should we change the composition of the committee?
    Ambassador Negroponte. I do not think I am going to offer 
you an opinion on that. But I do think that whatever 
arrangement we have, whether we are on the committee or not, I 
think we should continue to be as plugged in as possible, as 
connected as possible, to the process. Whether we are formally 
a member of the committee or not, I believe that we should 
participate in the process.
    Senator Collins. It seems strange to me that we have a lot 
of representation from various offices within the White House, 
for example, that do not have national security implications or 
responsibilities and yet we do not have a seat at the table for 
the IC, despite the fact that what we are really talking about 
here is an analysis of the intelligence in order to make a 
determination on national security.
    So I guess I want to press you a little further on this. Do 
you not think that a representative from the IC should be a 
member of the committee? Do you not think it would improve the 
process?
    Ambassador Negroponte. I understand your question and it 
may be something that the Treasury and others who set the 
policy on this may wish to consider going forward. But again, I 
would reiterate that I think the important point is our 
participation. I certainly think that going forward you are 
going to see us continue to be very, very involved in providing 
and meeting whatever requirements are levied upon us by the 
committee.
    Senator Collins. Let me switch to another issue of great 
concern to me. The purpose of the Intelligence Reform and 
Terrorism Protection Act of 2004, which my friend from 
Connecticut and I authored, was to create a strong DNI who 
would be clearly the head of the IC. As you are well aware, the 
Secretary of Defense last November issued a directive that 
outlined the authorities and responsibilities of the Under 
Secretary of Defense for Intelligence with respect to the NSA, 
the National Geospatial-Intelligence Agency (NGA), and the 
National Reconnaissance Organization (NRO), three critical 
intelligence agencies.
    As General Hayden is well aware, during the debate on the 
intelligence reform bill we spent a great deal of time arguing 
and debating the proper lines of authority for those three 
critical agencies. Because they are combat support agencies, we 
agreed that they should remain within the Pentagon. But we were 
very clear in the law and in the legislative history that the 
DNI played a very important role in directing the activities of 
those three agencies.
    Some intelligence experts have viewed the November 
directive by the Secretary of Defense as undermining the DNI's 
authority over those three critical intelligence agencies or at 
least creating confusion about the reporting relationships.
    My first question for you on this is did you express any 
concerns to the DOD about this directive?
    Ambassador Negroponte. If I could answer your question 
broadly first of all, Senator. You mentioned the NSA, you 
mentioned NGA, you mentioned the NRO. As you say, they have a 
combat support role. But there are a couple of very, very 
important areas where we in the DNI have the lead. One is with 
respect to budget as it affects--because these are all agencies 
that are supported out of the national intelligence budget. So 
I think the budget formulation process is one very important 
aspect.
    The other is the intelligence requirements. We have what we 
call a national intelligence priorities framework, which I have 
taken a direct and personal interest in and which is shaped 
under the leadership of the DNI, and which sets the collection 
priorities for these different institutions.
    So those are two ways in which we exercise the kind of 
authorities that were visualized for us by the law.
    The third point I would make is that under General Hayden's 
leadership we now have the program managers of the major 
intelligence agencies meeting under General Hayden's leadership 
on a weekly basis, and that is the NSA, the NGA, the NRO, the 
Central Intelligence Agency (CIA) and the FBI. So that is it.
    So I think there are a number of different ways in which we 
are exercising these authorities. But I might invite General 
Hayden to add, and particularly on this question of whether we 
commented on this order that you are referring to, Senator.
    Senator Collins. Let me just say, I am very aware of those 
authorities because we fought very hard to get them in the law, 
as Senator Lieberman will attest and as General Hayden is well 
aware.
    Ambassador Negroponte. I just want to assure you that we 
are exercising them. That is the real key point.
    Senator Collins. Right. I am concerned about the signal 
that is being sent by the DOD directive and that is why I want 
to know what discussions occurred and whether you raised 
concerns.
    General Hayden. Yes, ma'am. Secretary Cambone and I worked 
on that for about 3 months and there was a constant dialogue. I 
think those who have expressed concern are largely reacting to 
the fact of the document and what it might symbolize rather 
than what is really in the document. Secretary Cambone took 
every change that I offered and recommended inside the 
document.
    He had been building that charter for almost as long as he 
had an office. I think it is unfortunate that they finally got 
done with it at that time because it did have some symbolism, I 
think, that was probably unintended.
    To just put a finer point on the five powers that you gave 
us, I actually think in terms of--not in spite of the DOD 
regulation, but in many ways incorporated within it, the power 
you gave us with regard to finances is strong. Tasking is 
strong, policy is strong. You gave us authority over 
classification and release, which remain strong and this DOD 
directive does not affect.
    The one area that we are working on now, and I do not mean 
to invite help because I think we will work our way through it 
quite well, is the area of personnel. What you have there are 
IC personnel who are also in a Cabinet-level department and we 
look at those people as intelligence people and the Secretary 
certainly looks upon those as DOD folks.
    We are in the process of building what I would call case 
law inside your broad direction for us to create a Goldwater-
Nichols-like approach to the IC. Other than that one, I think 
the other four are really rock solid, and we are working on the 
fifth.
    Senator Collins. Thank you.
    Chairman Warner. Thank you, Senator Collins.
    Senator Lieberman.
    Senator Lieberman. Thanks, Mr. Chairman.
    Needless to say, I associate myself with Senator Collins' 
questions. General Hayden, I know you were not asking for help, 
but we are from the Federal Government and we are here to help. 
[Laughter.]
    General Hayden. I am glad to see you, sir.
    Senator Lieberman. Good to see you, General.
    Incidentally, General Hayden was very important to many of 
us as we formulated the reform of the intelligence apparatus of 
our government in response to the 9/11 Commission.
    Thanks to the three of you. I want to just focus first on 
this UAE DP World acquisition of terminals arrangement. I feel 
very strongly, as has been said here, that the UAE has been a 
very good ally. DP World from all that I know has a very good 
reputation as a company. That does not mean they deserve a free 
pass when they come in to acquire terminals in the U.S. There 
is a law, but they certainly deserve a fair hearing.
    I want to share with you, Ambassador Negroponte, my--it is 
not quite a conclusion, but a worry, that the existing 
apparatus for evaluating the acquisition by a foreign company 
of an American company, that the process of reviewing that is 
more technological focused, technology focused, than it is 
security focused; that it was set up and some of the origins 
have more to do with the acquisition of companies involved in 
technologies that might be used against the U.S.
    This is a very different circumstance, terminals at a port 
arousing great concern among the American people, Members of 
Congress. This is not technology, obviously. The American 
people, Members of Congress, want to know, is there some reason 
why the UAE DP World acquisition of these terminals in the U.S. 
will create an opening for terrorists to strike at us. So give 
me your reaction to my concern that the office within CARAC--I 
forget what it stands for--may have been traditionally more 
focused on technology concerns than security concerns as we 
know them and feel them here?
    Ambassador Negroponte. I think that CARAC is the Corporate 
Accountability and Risk Assurance Committee.
    Senator Lieberman. Right.
    Ambassador Negroponte. I think that the historical genesis 
that you mention may be correct, Senator, but they were also 
asked in this request to look at whether or not there were any 
general threats to national security perceived as a result of 
this proposed acquisition. So I think they took a somewhat 
broader look.
    The other thing I would say is that going forward I think 
clearly, as a result of the attention that this issue has 
generated, we are going to take a hard look and we are taking a 
hard look at the kind of support we are going to be providing 
to CFIUS.
    Senator Lieberman. That is very important for me to hear 
and I think a lot of us to hear. My impression, having spent 
some time on this over the last week or so as many of us have, 
is that the investigation that was done the first time around 
could have been more aggressive from a security point of view. 
I do not know that it missed anything, but I hope that you will 
put your own hands on this and make sure in this second 45-day 
review or the first 45-day review that when you reach a 
conclusion that we can have total confidence that you have gone 
down every potential path to make sure that U.S. security will 
not be compromised by this transaction.
    Ambassador Negroponte. You can be assured that I will take 
a personal interest in the matter, Senator.
    Senator Lieberman. I appreciate that.
    I want to go to Iraq for a moment. It is quite natural for 
people in Congress and the American people to ask whether we 
are winning in Iraq, but I must say whenever I hear that 
question I think of something I read long ago. It may be from 
Winston Churchill because he is usually the source of lot of 
good insight in these matters, which is about war, which is 
that ``War is a succession of catastrophes that ends in victory 
for one side.''
    There is a lot of wisdom there, particularly if you believe 
in the cause for which you are fighting, which I do and I know 
you do. We made the world safer by overthrowing Saddam Hussein. 
We are now in a different phase of our involvement there and it 
is, I believe, to create the security conditions under which 
the Iraqis can self-govern and self-protect, to improve their 
security forces. In doing that, we will have achieved an 
extraordinary victory in the war for the hearts and minds of 
the Islamic world because we will have created a different 
model for governance for life in the Arab world.
    Now, this is a tough battle because not only are we facing 
terrorists, who I will get to in a minute; we are facing 
historic sectarian pulls in the country. But when you say there 
has been progress achieved, I agree with you. Three 
extraordinary elections, people turning out; a political 
leadership that really is striving to bring the country 
together, not to divide it--there are plenty of forces that 
want to divide it--facing a brutal enemy. One might say that as 
the political leadership comes together, as the Sunnis have 
gone from zero to 55 in the National Iraqi assembly, as the 
leaders begin to work on a coalition government, the enemy gets 
more desperate.
    What an outrageous act, to blow up a bomb in this mosque in 
Samarrah, which is a holy site of Shiite Islam. Just think of 
how any of us of other religions would feel if one of the 
holiest sites of our religion was attacked. In the midst of 
that, the Shiite religious leaders and now the representatives 
of the four different groups in Iraq--Shiite, Sunni, Kurd, and 
secular--have really tried to pull together.
    So I am not kidding myself. This is a tough battle. I know 
you are not, either. I have talked a little bit about 
catastrophe leading to victory. I think we know what success 
would mean. But I want you to talk a little bit about what not 
winning would mean. What would the consequences of a civil war 
in Iraq be for Iraq and for the region?
    I might say, just to put an exclamation point on this, when 
the terrorists blow up the mosque in Samarrah I do not view 
that as a defeat for us. I view it as another example of how 
outrageous and evil the opposition is and how important it is 
that we stick with the Iraqis who are trying to create a united 
country.
    So what are the consequences of civil war on Iraq?
    Ambassador Negroponte. I think first clearly the 
consequences for the people of Iraq would be catastrophic, and 
who knows where that would lead in terms of what kind of 
political evolution that it might lead to, but clearly it would 
jeopardize, seriously jeopardize, the political, the democratic 
political process on which they are presently embarked. One can 
only begin to imagine what the political outcomes would be.
    But the other point I would make is that if chaos were to 
descend upon Iraq or the forces of democracy were to be 
defeated in that country, then I think clearly this would have 
implications for the rest of the Middle East region and indeed 
the world.
    Senator Lieberman. In what way?
    Ambassador Negroponte. I just would recall the letter of 
the deputy, of bin Laden's deputy, Mr. Zawahiri, to Zarqawi 
back in July when he talked about and reaffirmed their 
commitment to establishing a global caliphate and they saw 
Iraq, success in Iraq for them, as just the first step towards 
then spreading their activities to the Levant and even to 
Western Europe and then of course to our own Homeland.
    So I would see it as a serious setback, among other things, 
to the global war on terror.
    Senator Lieberman. Is there not a reasonable possibility, 
if not a probability, that if there was a civil war that broke 
out in Iraq that the other regional powers would get involved, 
certainly Shiite with Shiite and Sunni with Sunni, and that 
might lead to a larger conflict in the Middle East?
    Ambassador Negroponte. It is a possibility. General Maples 
was asked that question earlier and I think he rightly said 
that the different neighboring countries initially might be 
reluctant to get involved. But I think, depending on the course 
of events, that might well be a temptation. You might see some 
kind of eruption of conflict between the Sunni and the Shiite 
worlds, for example, if this were to happen, if that is what 
you are alluding to.
    Senator Lieberman. I am, but I presume at least a more 
aggressive role by Shiite nations like Iran in supporting the 
Shiites and Sunni nations like Saudi Arabia and Jordan in 
supporting the Sunnis who are there?
    Ambassador Negroponte. I think that is a possibility, and 
of course we have indications that Iran has already got quite 
close ties with some of the extremist elements, Shiite 
elements, inside of Iraq.
    Senator Lieberman. Thank you.
    Thanks, Mr. Chairman.
    Chairman Warner. Thank you very much, Senator. Certainly it 
would leave a vast area for new base camps and training camps 
for terrorism if that were to happen.
    Senator Cornyn.
    Senator Cornyn. Thank you, Mr. Chairman.
    Chairman Warner. Then we will proceed to the Senator from 
New York right after that.
    Senator Cornyn. I appreciate it, each of you being here and 
your service to our Nation.
    Ambassador Negroponte, let me ask you first about Latin 
America. You alluded to that in some of your earlier remarks 
and obviously we are engaged, it looks like, in a big debate 
about border security and immigration reform. I think it is 
important that the American people know that not just the 
Border Patrol and the DHS are concerned about homeland security 
and protecting our borders from the threats that may come 
across those borders, but that all assets of the Federal 
Government are dedicated to that effort and that we are using 
the same sort of tools that are available to our DOD in the DHS 
when it comes to intelligence gathering and that everyone in 
the IC is providing input and making a contribution to that 
effort.
    Do you see things that we can and should be doing that we 
are not currently doing with regard to protecting our southern 
border in particular from the possibility of exploitation by 
terrorists or someone bringing in WMD?
    Ambassador Negroponte. I do not, Senator. But I would also 
say that the lead for that kind of intelligence rests with the 
DHS and some of the other domestic agencies, although we do 
work extremely closely with the Mexican authorities. We have a 
very close liaison relationship with the authorities in Mexico, 
directed very much at this question of our security of our 
border areas.
    Senator Cornyn. I know because of your past service as 
Ambassador that you have a lot of knowledge about it. But I 
will share that concern with you, that our various Federal 
agencies are not as closely coordinated as they might be in 
terms of providing all national assets that could be used. This 
is obviously an international border and we know that Mexico 
has a border security problem of its own and that it is 
currently being used as an international transit point for 
human smugglers. Obviously, these are organized crime figures 
who are interested in making money and they will do it by 
transporting and trafficking drugs or people or weapons or 
terrorists. It is a very grave concern of mine and I know it is 
shared by other members.
    General Hayden, I would like to turn to the NSA, your 
former service as head of the NSA. I do not want to talk to you 
about the law. That is what is happening over at the Judiciary 
Committee hearing, which I am missing, unfortunately. But I 
want to talk to you about technology and the challenge that we 
have gathering intelligence under a Foreign Intelligence 
Surveillance Act (FISA) that was written in 1978, with the 
change in the way that we communicate, and in particular with 
digital communication over the Internet and with the fact that 
the FISA process can be quite time-intensive and operate in 
more or less of a linear fashion.
    If we, for example, find that there is communication that 
we want to surveil coming from a particular Internet Protocol 
(IP) address, I understand that it can take up to 15 days to 
prepare a request to the FISA court to authorize surveillance 
of that foreign intelligence. But of course, in a digital world 
where information is disaggregated and routed then through the 
most efficient means and then reassembled at the collection 
point by the recipient, I know multiple IP addresses can be 
involved, and if we have to get a separate FISA warrant for a 
serial sending of messages throughout the cyberspace it may 
involve huge delays in time, which may threaten us and make us 
more vulnerable.
    Would you speak to that perhaps more coherently and more 
cogently than I did?
    General Hayden. Actually, no, sir. You have laid it out 
very well. But I can offer an additional thought or two. I know 
you visited some of the activities of the agency and because of 
that I know you are aware that FISA does offer tremendous 
opportunities, tools, for the agency to conduct its mission.
    But you are also correct in that many things have changed 
since 1978. The way we communicate as a species has, number 
one, magnified over and over and over and over almost in fact 
exponentially, and then the variety, the various ways that 
communications move has also changed a great deal. In some 
ways, one of the issues we have before us as a people as we 
balance security and liberty is that the global 
telecommunications system and our enemies do not recognize 
borders the same way we do, and I will underscore ``global 
telecommunications systems.'' Our laws do recognize borders and 
should and there should be different standards for activities 
conducted by an agency like NSA, again electronic surveillance 
for a foreign intelligence purpose, when it involves inside or 
outside the borders of the United States. There should be 
distinct differences.
    One of the issues that we faced as an agency, however, in 
the days and weeks after the attacks in September 2001, that in 
some ways the changes in technologies had made the reach and 
impact of the statute, written in 1978, beyond the intent of 
those who crafted it because they could not have known the 
changes in technologies that followed. That is about as far as 
I can go in an open session, sir.
    Senator Cornyn. But as a factual matter, is it true that if 
the FBI or some intelligence agency wanted to get a FISA 
warrant and assuming it takes 15 days to do the paperwork, 
which I understand is similar to the thickness of a novel, to 
get information from a particular IP address, then they 
discover information there that it has been transmitted from 
another IP address and they have to go back and get another 
FISA warrant for that, that while technologically you might be 
able to hop from four or five IP addresses in a morning to get 
to the source of the information on a timely basis that might 
disrupt or otherwise deter a terrorist attack, that it could 
take you under that hypothetical, let us say five hops, 75 days 
to get that same information? Is that one of the practical 
problems we are confronted with?
    General Hayden. Yes, it is. We talked about, I have used 
the phrase ``hot pursuit'' and ``necessary agility'' and so on 
to describe what it is NSA is able to do under the President's 
authorization that is different than what it was under FISA.
    I would offer another view as well, maybe just a 
reinforcement of that point. As Director during that period of 
time when this was in effect, we looked at this authorization 
more often than that 45-day cycle. We understood this difficult 
question of security and liberty. I could never in my own 
mind--let me put it another way. Believe me, if we could have 
done this under the statute as it has been constructed and as 
it is now currently implemented and still given the American 
people an even similar degree of safety, of course we would 
have. But it did not.
    Senator Cornyn. My time has expired, but I just think it is 
important for my colleagues, all Congress, to understand. We 
have different technical proficiency in Congress. Some Senators 
and Congressmen use a lot of technology. Others probably never 
turn on their desktop computer in their office. So I think it 
is important that we all understand the revolution in 
communication and technology that has been created with the 
advent of Internet communications and the importance of 
responding to that in a way that helps keep us safer.
    Thank you, Mr. Chairman.
    Chairman Warner. Thank you very much, Senator. An excellent 
line of questions. I must say that I feel that we should have 
in this record the following from the General, because I have 
advocated this publicly and in the closed sessions, that, given 
what the Senator from Texas has said and your careful 
responses, is it not timely that Congress address such 
amendments and changes to that framework of laws such that we 
bring up-to-date the ability of your organization and others to 
do the necessary surveillance to protect in the world of 
terrorism at this time?
    General Hayden. Again, I have said in other fora as well 
when we have discussed that kind of issue, as long as it can be 
done in a way that would not reveal capabilities and our 
tactics and techniques and procedures to the enemy.
    Chairman Warner. But we have managed to do that heretofore 
with other amendments to the various intelligence laws, so I am 
sure we can do it this time, because I did pose that question 
to you in other fora and I know in your own heart you think it 
is time that we address this issue.
    Senator Clinton.
    Senator Clinton. Thank you very much, Mr. Chairman, and 
thank you for your last question and your response, General.
    Ambassador Negroponte, I just want to try to close the loop 
a minute on the DP World purchase. Were you or your staff aware 
of the Coast Guard intelligence coordination center assessment 
about the many intelligence gaps that made it very difficult to 
infer potential unknown threats, including operations, 
personnel, and foreign influence, when you responded to the 
inquiry from CFIUS about the National Intelligence Estimate 
(NIE)?
    Ambassador Negroponte. As I said earlier, Senator, our 
report was submitted to the Treasury before the Coast Guard 
report. Ours was submitted on December 5. The Coast Guard 
submitted its--the date of its report is something like 
December 13 if I am not mistaken. So we were not aware of that 
specific report.
    But I have--and I spoke to Secretary Chertoff just this 
morning--ascertained that the objections or the issues that the 
Coast Guard raised were resolved to their own satisfaction, 
because they ended up being supportive of this transaction, as 
was the DHS, and a letter of assurance and some safeguards were 
built into the transaction as a result of some of the issues 
that were raised by the Coast Guard.
    Senator Clinton. Mr. Ambassador, as part of the 45-day 
review will you be conducting a NIE of the UAE efforts to 
combat terrorism domestically and internationally?
    Ambassador Negroponte. We have not been asked to do that, 
Senator, and I do not know whether we can conduct a NIE in that 
period of time. But we will certainly participate in the 45-day 
review and address whatever questions we are asked to address.
    Senator Clinton. Would it be possible to expedite an NIE in 
response to a request from this committee if it were 
forthcoming?
    Ambassador Negroponte. Whether it be an NIE or some kind of 
an assessment, an assessment of some kind I am certain we could 
provide to the committee.
    Senator Clinton. Mr. Chairman, it might be appropriate for 
you and Senator Levin to consider asking for such a request as 
part of the 45-day review, because we need to get this system 
operating more efficiently, and certainly if the Coast Guard is 
making an intelligence assessment after the DNI submits an 
intelligence assessment we need to get this better focused. 
Perhaps we could make such a request and it might then have the 
effect of having everything channeled to the DNI and getting 
whatever review results would be most beneficial for the final 
decision.
    Chairman Warner. Senator, we will take that under 
advisement. My initial reaction is I think you have made an 
important observation and it is likely we will do it. I 
mentioned earlier when the hearing started, as a consequence of 
our previous briefing, in which you were a very active 
participant last week, we put in a series of legal questions to 
Treasury and legal counsel for the Senate on the various issues 
that you and Senator Levin raised.
    Senator Clinton. Thank you, Mr. Chairman.
    Senator Levin. I wonder if you would just yield on that 
request.
    Senator Clinton. Certainly.
    Senator Levin. On that request, because I think it is an 
important request.
    Chairman Warner. You take your full time after we opine 
here.
    Senator Levin. It will not be an opining. It will just be a 
question.
    I would assume that your request would ask them to go back 
in their assessment to pre-September 11, 2001, as to what the 
activities were of Dubai relative to joining the war on 
terrorism, pre-Iraq, between September 11, 2001, and the Iraq 
war, and post-Iraq war, because there is clearly very different 
aspects to their conduct and behavior, at least from everything 
I have read, in those periods. So I would assume that your 
request would include those periods. Is that a fair----
    Senator Clinton. Oh, that certainly is a fair assumption.
    Senator Levin. I knew it would be. Thank you.
    Senator Clinton. Well stated, as always.
    I would like to turn now back to North Korea and the 
development of nuclear weapons. General Maples, last year your 
predecessor told me before this committee that North Korea had 
the ability to arm a missile with a nuclear device. Now, the 
ability to arm is one issue and obviously an alarming one. 
Another is whether it can be successfully delivered. Does the 
DIA assess that North Korea has developed an ICBM capable of 
delivering a nuclear warhead to the United States? If not, how 
many more years before North Korea has that capability?
    General Maples. We assess that they are in the process of 
developing an ICBM that would be capable of delivering a 
nuclear warhead, but they have not done so yet, nor have they 
tested.
    Senator Clinton. Ambassador Negroponte, last year North 
Korean officials asserted that they have a nuclear weapons 
arsenal. They have also declared that they have reprocessed the 
8,000 fuel rods that had been frozen from 1994 to 2003, which 
means that over the last 4 years North Korea has potentially 
produced up to six more nuclear weapons on top of the one to 
two devices the IC assessed they already had.
    In addition, the reactor the North Koreans restarted over a 
year ago continues to produce plutonium, enough for about 
another nuclear device per year. Analysts have concluded that 
North Korea could have up to 12 nuclear weapons this year. At 
the end of last year, Senator Levin asked you to produce a 
comprehensive NIE on North Korea's nuclear and long-range 
missile programs because there had not been one for several 
years, and I thank you and your staff for completing that 
estimate and sending it to the committee.
    I now hope that we can update the 2002 unclassified 
estimate that North Korea has one to two weapons. What is your 
unclassified intelligence estimate regarding the number of 
nuclear devices or weapons that North Korea currently 
possesses? Is it still one to two or is it a new range?
    Ambassador Negroponte. Senator, when I was asked a similar 
question earlier I was reluctant to try and put a number on 
this. I think you are right to point out the fact that there is 
this fissile material and that it is being produced regularly. 
But since we do not know for an absolute fact that they have 
nuclear weapons, to then try and extrapolate from the fact that 
they have this fissile material as to exactly how many weapons 
they have I think is a difficult thing to do.
    But there is no question that there is a potential there 
for a number of weapons to be in their possession. I am just 
reluctant to pinpoint a specific number because I do not want 
to convey the impression that we know for a fact that they have 
that many weapons.
    Senator Clinton. Mr. Ambassador, I think, though, that 
there has been enough discussion of this and certainly there 
has been enough testimony that creates a range. Porter Goss 
testified as to a range that seemed to suggest it was more than 
one to two. It seems timely that you would publish for the 
benefit of public debate an unclassified version of the new NIE 
on North Korea and also publish a new update, since the last 
one was published 4 years ago, before North Korea withdrew from 
the Agreed Framework, to the unclassified estimate of the 
number of nuclear devices or weapons that North Korea 
possesses, because this is an ongoing debate. This is a serious 
security challenge and I think the public deserves to have a 
base level of information on which to participate.
    With respect to nuclear reactors, we know they currently 
operate a five megawatt reactor. Another 50-megawatt reactor 
has remained under construction for some time and in November 
of last year the Washington Post reported that during a trip to 
North Korea American scientist Sig Hecker was told by the 
director of the unfinished 50-megawatt reactor that 
construction was going to start soon and implied it would be 
finished in a couple of years, an obviously very troubling 
development.
    Can the IC comment on whether North Korea has resumed 
construction of the 50-megawatt reactor?
    Ambassador Negroponte. I suspect we can, but I do not have 
the answer handy at the moment, Senator. I will submit a 
response for the record.
    [The information referred to follows:]

    [Deleted.]

    Senator Clinton. Finally, with respect to the Six-Party 
Talks, it has been disappointing certainly to me, I assume to 
others as well, that we have outsourced our policy with respect 
to North Korea to the Six-Party Talks, which really means 
outsourcing it to China. I do not think that is a wise 
decision.
    Let me ask, General Maples, what are the military 
implications of the failure of the Six-Party Talks to bring any 
halt, temporary or permanent, to North Korean nuclear 
activities?
    General Maples. Ma'am, we believe of course North Korea 
would continue on in the development of nuclear material and 
nuclear weapons and that without the Six-Party Talks there 
would be little likelihood that they would give up their 
nuclear program.
    Senator Clinton. I have no doubt that the Six-Party Talks 
are to some extent useful, but I worry that the Six-Party Talks 
have really devolved into the Chinese talks, and the Chinese 
have their own agenda and I am not sure that the Six-Party 
Talks is the only route we should be following to deal with 
North Korea.
    Thank you.
    Chairman Warner. Thank you very much, Senator.
    Senator Bill Nelson.
    Senator Bill Nelson. Thank you, Mr. Chairman.
    General Maples, I am going to ask you when we go into 
closed session about the latest on Captain Michael Scott 
Speicher. But in the mean time, in the open session: Just 
recently, Venezuela is reported to have received the first of 
three Russian helicopters and is ordering a lot more. There has 
been a report out for some period of time of ordering 150,000 
rifles and a whole bunch of MiGs, the more advanced MiGs. How 
concerned is our DOD about the increased militarization and the 
increased expansionism of Venezuela?
    General Maples. We are very concerned about the purchase of 
arms that we see going on in Venezuela right now. We do see 
increased capability that is being brought to them by the fact 
that they can finance arms purchases from oil production. We 
see their efforts, as you are aware, to purchase both aircraft 
and patrol boats that the DOD has taken an active interest in 
attempting to deny that purchase going through.
    So Venezuela is seeking a number of capabilities, both for 
their own defense, but also that gives them greater capability 
that could operate elsewhere in South and Latin America and 
within the Gulf area.
    Senator Bill Nelson. About the cozy relationship between 
Venezuela and Cuba and as a result of propping up Fidel 
Castro's regime and then allowing Castro to send doctors and 
nurses and so forth all over Latin America, what is the daily 
dollar value of that assistance that Venezuela is providing to 
Castro?
    Ambassador Negroponte. Senator, I do not have an estimate 
at hand for what the daily dollar value is, although I think we 
could try to ascertain that. But I would say that it is clear 
that he is spending hundreds of millions, if not more, for his 
very extravagant foreign policy, as I said in my prepared 
statement, at the expense of the Venezuelan people, because 
there is a great deal of poverty in that country, so that it 
cannot have escaped the notice of the people that he is 
pursuing these very expensive policies.
    [The information referred to follows:]

           Office of the Director of National Intelligence,
                                    Washington, DC, March 14, 2006.
The Honorable Bill Nelson,
United States Senate,
Washington, DC.
    Dear Senator Nelson: During the February 28, 2006, Senate Armed 
Services Committee Annual Threat Assessment Hearing, you asked a 
question regarding the financial benefits that Cuba is receiving from 
Venezuela. Director Negroponte asked that we follow up on his behalf 
with more details on this subject.
    [Deleted.]
    If you have any further questions regarding this information, 
please contact the Office of Legislative Affairs, Mike Tiddy at (703) 
482-1796.
            Sincerely,
                               Darlene M. Connelly,
                   Director, Office of Legislative Affairs.

    Senator Bill Nelson. Do you want to handle in closed 
session the question about the triborder region in South 
America and the potential infiltration of al Qaeda?
    Ambassador Negroponte. I would be prepared to try and do 
that, yes.
    Senator Bill Nelson. Thank you.
    Chairman Warner. Thank you very much, Senator.
    Senator Levin, do you have a wrap-up question?
    Senator Levin. Just one question, following up on 
Ambassador Negroponte's assessment of the risk. Let me ask 
General Maples this same question: Has the DIA done an 
assessment of the risk of having a foreign government control 
port facilities in the United States?
    General Maples. Sir, we did an assessment on the technology 
risk and the risk associated with technology transfer, but not 
on the risk of a foreign government. There was a statement in 
the risk assessment that we provided that did address an issue 
that in this particular instance a foreign government that we 
did not have necessarily knowledge of in terms of acquiring the 
company would have access to our ports. But specifically, it 
was related to the transfer of technology.
    Senator Levin. What was the risk that you assessed 
relative--you have not done an assessment of the risk of having 
a foreign government control port facilities?
    General Maples. Not per se, no, sir.
    Senator Levin. The risk that you did assess, the 
technology----
    General Maples. It was the risk of technology transfer----
    Senator Levin. To?
    General Maples.--and our assessment was low.
    Senator Levin. Okay. Would you doublecheck for me, for the 
committee, whether or not the DIA has done a risk assessment 
overall as to the transfer of port facilities to a foreign 
government's control? Would you doublecheck that?
    General Maples. Sir, I will doublecheck. There was a 
statement in the technology risk assessment that we did that 
spoke to the fact that a foreign government would be 
controlling port operations in the United States. It was a part 
of the same assessment, and it was raised to low to moderate 
risk based on that factor. But it was a single assessment 
related to technology transfer.
    Senator Levin. So if a foreign government controlled the 
facilities relative to that transfer, at that point the risk 
goes from low to low to moderate?
    General Maples. Yes, sir.
    Senator Levin. Ambassador Negroponte, have you seen that 
assessment?
    Ambassador Negroponte. Yes, I have.
    Senator Levin. Okay.
    Chairman Warner. Thank you.
    Senator Lieberman asked a very good question about the 
consequences of a successful civil war in Iraq and your 
responses were very forthcoming. I now think it is important to 
look at if the forces of a civil war were to erupt, as you 
pointed out, Ambassador Negroponte, the first thing that we 
would look to is the ability of the government to try and mount 
an effort to stop that civil war. I think it is the consensus 
of opinion, certainly this Senator feels strongly, that our 
forces should not be involved in the actual combat of that 
civil war. We would turn it over--I say we would turn it over. 
I think the government of Iraq, such as it is today, would have 
to look to their own forces that we have trained and equipped. 
We now have over 100 battalions, half of which have been 
categorized and rated as fully capable of leading in combat 
operations, not totally independent but nevertheless leading.
    My question to you, General, is what is your assessment? 
Should a civil war or the factors that would be judged as 
tantamount to a civil war be present and there is general 
insurrection taking place in many areas, what capability does 
the trained force and equipped force by the United States and 
coalition partners have with regard to their ability to put it 
down, at the direction presumably of the government, and 
frankly have the courage to stay with it?
    Now, the one chapter in history which I bring up is I 
remember following very well as our forces invaded into Iraq. 
There came a time where the army of Saddam Hussein literally 
dissolved. They left their weapons, they left their positions, 
and they went back to their origins, their home, their tribes, 
and the like.
    Give us your assessment of how hard this force would fight 
to try and restore law and order and enable the government to 
continue to govern?
    General Maples. Sir, I would assess that in fact the Iraqi 
security forces would fight very hard. I think that their 
leadership, their feeling of national pride, their desire to 
have a national and a strong Iraq, that they would support the 
national government and would fight very hard to try to control 
the situation.
    Chairman Warner. Even if they are fighting their own 
countrymen?
    General Maples. I believe so, yes.
    They of course do have both their own sectarian loyalties, 
they have their own tribal loyalties, that they would have to 
overcome. But we are seeing very strong leadership within the 
Iraqi security forces and we have seen them perform.
    Chairman Warner. That is encouraging.
    Ambassador Negroponte, do you have anything to add to that?
    Ambassador Negroponte. Just that I think it is a lot better 
than it was a couple years ago. When I arrived there, Senator, 
as Ambassador to Iraq, there was hardly a national security 
force, a few battalions at best. Now we have reached the 
numbers that you talk about.
    The other point I would add is I think their performance 
during this recent situation during the past week has been 
quite positive. They were able to enforce this nationwide 
curfew and I think have been playing a strong role.
    Chairman Warner. Thank you very much.
    Senator Bill Nelson. Mr. Chairman, may I follow that by 
asking the Ambassador: To what degree do you see this attempted 
civil war continuing to play out?
    Ambassador Negroponte. I think first of all, as we were 
commenting earlier, that the political leadership of the 
country as well as the religious leadership is rising to the 
situation. I think the Ambassador, Ambassador Khalilzad, used 
the phrase I saw quoted today about how they came up to the 
edge, the brink, and they realized they do not want to fall 
down that precipice. So I think they are struggling mightily to 
avoid that.
    Chairman Warner. Thank you very much.
    Ambassador Negroponte. I think that is important.
    Chairman Warner. The committee will----
    Senator Levin. I have a request for the record. May I make 
a request for the record?
    Chairman Warner. Yes.
    Senator Levin. General, you made a very important statement 
that I would like you to expand for the record, that when the 
government owns a port facility instead of a company that the 
risk assessment goes from low to low to moderate. If you could 
expand that for the record, since that is a very significant 
statement, as to why you believe that is true, I would 
appreciate it.
    General Maples. Yes, sir.
    [The information referred to follows:]

    All CFIUS assessments produced by DIA are generated through an all-
source analytical process that uses both open-source and classified 
information. In formulating the overall risk assessment, DIA evaluates 
six dimensions of risk:

         Technology relative to the state of the art.
         Technology targeting.
         Company history.
         Foreign government policies and practices.
         Technology transfer.
         Technology diversion.

    On the basis of evidence discovered during the analytical process, 
each dimension is scored on a scale of 1-5, equating to low, low-
moderate, moderate, moderate-high, and high risk. Scores for each 
dimension are averaged, an initial assessment is made, and an internal 
analytical peer review determines whether any adjustments to the 
initial assessment are necessary.
    [Deleted.]

    Chairman Warner. The committee will resume in closed 
session in approximately 10 minutes in room Hart 219. We had a 
very good hearing. We are adjourned
    [Questions for the record with answers supplied follow:]

               QUESTIONS SUBMITTED BY SENATOR JOHN MCCAIN
                               DETAINEES

    1. Senator McCain. Ambassador Negroponte, at a hearing of the 
Senate Judiciary Committee on February 6, Senator Graham asked Attorney 
General Gonzales: ``Is it the position of the administration that an 
enactment by Congress prohibiting the cruel, inhumane, and degrading 
treatment of a detainee intrudes on the inherent power of the President 
to conduct the war?'' The Attorney General answered: ``Senator, I don't 
know whether or not we have done that specific analysis.'' Is it your 
view that all Intelligence Community (IC) employees are legally 
prohibited from inflicting cruel, inhumane, or degrading treatment upon 
any detainee, at any location, in any circumstance? If, in your view, 
there is a circumstance in which an IC employee could legally engage in 
cruel, inhumane, or degrading treatment, please describe.
    Ambassador Negroponte. All IC personnel must comply with the DTA's 
proscription. on subjecting persons to cruel, inhuman, or degrading 
treatment or punishment, as defined pursuant to that statute by the 
U.S. Reservation to the Convention Against Torture and Other Cruel, 
Inhuman, or Degrading Treatment or Punishment.

    2. Senator McCain. Ambassador Negroponte, does the IC have 
guidelines or regulations sufficient to ensure compliance at all times 
with the prohibition in U.S. law against sending persons in U.S. 
custody or control to countries where they are likely to be subjected 
to torture or other forms of cruel, inhuman, or degrading treatment?
    Ambassador Negroponte. [Deleted.]

    3. Senator McCain. Ambassador Negroponte, has the IC developed 
regulations to implement the legislative ban on cruel, inhumane, and 
degrading treatment?
    Ambassador Negroponte. [Deleted.]

    4. Senator McCain. Ambassador Negroponte, has specific guidance 
been issued to all interrogators and detaining personnel that would 
clearly communicate the implications of the new law in concrete terms?
    Ambassador Negroponte. [Deleted.]

    5. Senator McCain. Ambassador Negroponte, has the list of 
permissible interrogation techniques changed since the legislation has 
passed?
    Ambassador Negroponte. [Deleted.]

                                  IRAQ

    6. Senator McCain. Ambassador Negroponte, there are various 
theories put forward by those who advocate a drawdown in our troop 
presence in Iraq. Some say that by drawing down we would improve the 
situation by ending the perception of occupation. Others say that by 
drawing down we will force the Iraqis to deal with political issues 
they have postponed. Both of these arguments seem to me to miss the 
broader issue of Sunni-Shia violence, which could easily expand to fill 
any security vacuum. In the assessment of our IC, what is the likeliest 
outcome of a precipitous withdrawal of coalition troops?
    Ambassador Negroponte. We assess that a precipitous withdrawal of 
coalition forces would place great strain on and possibly result in the 
collapse of Iraq's central authority, while dramatically increasing the 
likelihood of inter- and intra-sectarian violence. Absent the 
moderating influence of the coalition presence, Shia recriminations 
against suspected Sunni insurgents and terrorists probably would be 
swift and severe.
    Several factors would hinder an effective government response to an 
expected rise in insurgent violence following a coalition withdrawal. 
The cohesion of Iraq's new security forces also would be jeopardized 
because these forces lack adequate unit logistics and the Iraqis are 
still developing their ministries' procurement, oversight, and training 
functions. The number and strength of sectarian militias almost 
certainly would rise. If the center collapses, the Kurds probably would 
move swiftly to cement their hold on disputed areas, including Kirkuk. 
The number of displaced persons probably would rise due to ethno-
sectarian fears and localized fighting.
    Terrorists in Iraq also would be able to use a precipitous 
coalition withdrawal to their advantage by claiming victory and playing 
upon Iraqi fears of abandonment by the international community to boost 
their influence and recruiting. Moreover, a precipitous withdrawal 
would add impetus to the terrorists' plan to use Iraq as a base for 
attacks conducted elsewhere, as outlined in the vision espoused by 
Osama bin Laden's deputy, Ayman al-Zawahiri, in his communication last 
year with Abu Mus'ab al-Zarqawi.

                                  IRAN

    7. Senator McCain. Ambassador Negroponte, several different 
timelines for Iran to possess a nuclear weapons capability have been 
reported in recent months ranging from having the capability in a 
matter of years to a matter of months. What is your current assessment?
    Ambassador Negroponte. [Deleted.]

    8. Senator McCain. Ambassador Negroponte, there are some reports 
that indicate that, even if Russia and Iran strike a deal to enrich 
uranium in Russia, Iran might continue the small-scale enrichment it 
has begun. If Iran did continue this activity, what potential would it 
have for Iran's presumptive weapons program? What kind of threat would 
this pose to the United States?
    Ambassador Negroponte. [Deleted.]

    9. Senator McCain. Ambassador Negroponte, the Iranian leadership 
has displayed contempt for the diplomatic process and has shunned the 
efforts of the International Atomic Energy Agency (IAEA). Recently they 
launched a Euro-based oil futures market in attempts to further 
insulate their economy from possible sanctions. If diplomatic measures 
are completely exhausted, to what measures do you think the Iranian 
leadership will be responsive?
    Ambassador Negroponte. [Deleted.]

    10. Senator McCain. Ambassador Negroponte, with the current focus 
primarily on a possible Iranian nuclear threat, are we overlooking 
Iran's conventional threat to its neighbors?
    Ambassador Negroponte. [Deleted.]

    11. Senator McCain. Ambassador Negroponte, what conventional 
warfare scenarios do you see as a near-future possibility?
    Ambassador Negroponte. [Deleted.]

                             RUSSIA/GEORGIA

    12. Senator McCain. Ambassador Negroponte, earlier this year, a 
pipeline explosion suspended Russian gas exports to Georgia, in the 
middle of winter. The Georgian government accused Russia of 
deliberately blowing up the line in an effort to coerce the country, 
and reports indicate that the area in which the explosion took place 
was accessible only to Russian security officials. Russia has denied 
the accusations. What do we know now?
    Ambassador Negroponte. Georgian President Saakashvili stated 
publicly and many other Georgians believe that Russia was responsible 
for the explosions on 22 January that damaged the major gas pipelines 
and a high-voltage electricity line that provide energy to Georgia. In 
general, we have little independent information with which to assess 
the Georgian claims, and much of the information that we are able to 
obtain is second-hand information, primarily from open sources or from 
sources with known biases.
    The severity of the damage to the gas pipeline and electrical 
transmission line and the prompt Russian actions to repair the damage, 
however, suggest that Moscow was not responsible for the bombings. 
After the explosions Russian state-controlled gas giant Gazprom and 
electricity monopoly Unified Energy Systems rerouted gas volumes bound 
for Georgia through Azerbaijan and worked around the clock in efforts 
to repair the damaged gas pipelines and electrical transmission line.
    The locations of the explosions at the gas pipelines were not in 
the immediate vicinity of the border control post but were located one 
kilometer and 3.6 kilometers from the border guards checkpoint 
according to press reporting. The ruggedness of the terrain at the site 
of the explosion, as shown in photos from the scene, coupled with the 
reported distance of the explosion from the Russian border post 
suggests that the explosion might not have been visible from the 
Russian border post.
    We have no independent information on the nature of the explosives 
used, although, according to reporting in the press Russian authorities 
recovered unexploded ``homemade'' bombs with electronic timers at the 
site of the electricity lines. We have no information on the results of 
any Russian investigation of the explosions. This is not the first time 
that energy infrastructure has been targeted in the North Caucasus. In 
2005 Russian sappers defused a bomb that was discovered under the 
Mozdok-Tbisili gas pipeline near the border between Ingushetia and 
North Ossetia, according to press reporting. To the best of our 
knowledge, however, no group has claimed responsibility for the 
explosions, and Chechen rebels, who immediately were suspected to have 
committed the acts, denied responsibility for the explosions, according 
to press reporting, after Tbilisi publicly accused the Kremlin. We 
cannot exclude the possible involvement of rebel groups, however.

                         GLOBAL JIHADIST THREAT

    13. Senator McCain. Ambassador Negroponte, why, in the IC's 
assessment, do al Qaeda and affiliated terrorists seek to attack the 
United States and its friends? Professor Robert Pape at the University 
of Chicago suggests that it is physical occupation--the presence of 
American troops in the Arabian peninsula, among other places, that 
fuels attacks. What is your assessment of this argument?
    Ambassador Negroponte. [Deleted.]

                                PAKISTAN

    14. Senator McCain. Ambassador Negroponte, are you satisfied with 
the degree of intelligence and operational cooperation with Pakistan?
    Ambassador Negroponte. [Deleted.]

    15. Senator McCain. Ambassador Negroponte, could the government of 
Pakistan be doing more to help us track down al Qaeda leadership, 
including Osama bin Laden?
    Ambassador Negroponte. [Deleted.]

                     MUSLIM WORLD/U.S. ISOLATIONISM

    16. Senator McCain. Ambassador Negroponte, in your prepared 
testimony, you refer to the debate between Muslim extremists and 
moderates, and note that this debate will influence the future 
terrorist environment, among other things. Does the U.S. have a role to 
play in this debate--beyond our promotion of democracy and reform at 
the governmental level--or is this something that must be worked out 
among Muslims themselves? If the U.S. does have a role, what should it 
be?
    Ambassador Negroponte. [Deleted.]

          NONPROLIFERATION REGIME/INDIA CIVILIAN NUCLEAR DEAL

    17. Senator McCain. Ambassador Negroponte, in your prepared 
testimony you rightly highlight the threat and destabilizing effect of 
nuclear proliferation. One key element in restraining states from 
``going nuclear'' has been the Nuclear Nonproliferation Treaty (NPT). 
During the President's trip to India later this week, he is expected to 
strike a deal with India that would provide an exemption for India--
though it has not signed the NPT and has gone nuclear, the U.S. would 
provide it with civilian nuclear technology nonetheless. Such a deal 
would require Congress to change its laws, and the administration is 
expected to push for this once the deal is struck. What does the IC 
assess would be the reaction of medium-size non-nuclear states of such 
a deal?
    Ambassador Negroponte. Reactions noted thus far have primarily been 
from member countries of the Nuclear Suppliers Group (NSG). Most NSG 
members that are also medium-size non-nuclear states have been asking 
questions about the effect of the deal on India's ability to expand its 
nuclear weapons capability; the effect on the NPT of permitting 
extensive civilian nuclear cooperation with a non-NPT country that 
possesses nuclear weapons; whether China may seek a similar deal for 
Pakistan; and whether India has agreed to do enough in return for 
expanded civil nuclear cooperation. We will continue to monitor the 
reactions of other countries to the U.S.-India arrangement.

    18. Senator McCain. Ambassador Negroponte, how might countries like 
South Korea, Egypt, Brazil, South Africa, etc. react when they see that 
it is possible to develop nuclear weapons outside the NPT framework and 
still enjoy the benefits of civilian nuclear cooperation?
    Ambassador Negroponte. We currently have no indications that these 
countries would intend to change their nuclear policies in response to 
the U.S.-India civil nuclear arrangement, but we will continue to 
monitor for any such changes.
                                 ______
                                 
               Questions Submitted by Senator John Cornyn

                    TECHNICAL INTELLIGENCE ANALYSIS

    19. Senator Cornyn. Ambassador Negroponte, the number of scientists 
and engineers in the world is increasing relative to production of 
similar expertise in the United States. Are there threats posed to the 
United States as a result of increased technical expertise in other 
countries?
    Ambassador Negroponte. [Deleted.]

    20. Senator Cornyn. Ambassador Negroponte, how do you identify and 
monitor new technology developments in the rest of the world?
    Ambassador Negroponte. [Deleted.]

    21. Senator Cornyn. Ambassador Negroponte, how has the rapid flow 
of technology around the globe changed requirements for collection and 
analysis of technical intelligence?
    Ambassador Negroponte. [Deleted.]

    22. Senator Cornyn. Ambassador Negroponte, do you have the right 
manpower and mix of skills in the workforce to evaluate potential 
threats in highly technical areas?
    Ambassador Negroponte. This is a good question, and one we've spent 
a great deal of time on. We believe the approach to human capital we're 
undertaking provides us with a powerful and unique means to an end--
accomplishing our national security mission, in the face of threats to 
our security, as well as the human capital challenges that our Nation 
faces. In this regard, we drafted a comprehensive Strategic Human 
Capital Plan that clearly addresses this question, among a host of 
others, and includes myriad human capital initiatives.
    This Strategic Human Capital Plan, along with the IC-wide policy 
and program ``architecture'' we're also developing, establishes three 
broad goals designed to help shape and achieve our desired end-state: 
Maximize our capacity; leverage our capabilities; and strengthen our 
community. Complementing these goals, we've undertaken three aggressive 
steps:

         First, we validate our required analytic competencies. In 
        partnership with the Deputy Director of National Intelligence 
        for Analysis, we are validating an IC analytic competency model 
        that identifies critical knowledge, skills, and attributes 
        required to conduct effective intelligence analysis, now and in 
        the future. The model, to be implemented this fiscal year, 
        includes general analytic competencies (such things as critical 
        thinking); categories of ``target'' expertise, based on topics 
        and countries set forth in the National Intelligence Priorities 
        Framework (NIPF); and analytic tradecraft--the tools and 
        methods used by the intelligence disciplines. I am proud to say 
        that in March, we took our first tangible steps in this regard, 
        orchestrating a series of competency reviews by our analysis 
        experts. This was to very specifically discern the very 
        competencies we need now and in the future.
         Next, we are cataloging our analytic resources. This 
        competency model I just mentioned will be integrated into the 
        Analytic Resources Catalog (ARC). Already online, the ARC 
        provides a detailed inventory of the thousands of intelligence 
        analysts in the IC, according to their expertise and 
        experience, compared against the requirements projected by the 
        NIPF. By listing individual analysts by name and expertise in 
        its ``Yellow Pages'' feature, the ARC will also enable and 
        encourage informal information- and knowledge-sharing networks, 
        another top DNI priority.
         Finally, we turn our attention to other critical areas, as we 
        are moving towards processes that allow us to manage human 
        capital by function and profession. The analytic community's 
        efforts offer a template for the rest of the IC. Each major 
        functional community, in partnership with HC professionals, 
        will be looked at for a similar approach. Comprehensive, 
        functionally-specific competency models should be developed in 
        fiscal year 2006 and 2007. These will be used to help us 
        determine more precise staffing levels, IC-wide, and in each 
        individual component, as well as the annual accession, 
        training, and retention targets necessary to meet and sustain 
        those levels. In addition, these models will serve as the basis 
        for function-specific qualification, training, and performance 
        standards. I would emphasize that these models and standards 
        would serve as a common, IC-wide baseline and would not 
        preclude additional, component-specific competencies, so long 
        as they meet required standardized methodological rigor.

    I'd like to also mention that we don't see these as static 
processes. We see them as evolving and changing in response to world 
dynamics and the threats. In this vein, we have processes that help us 
continually define and redefine the expertise requirements needed to 
support our vital missions, based on the advances in technology and 
adaptations of our adversaries. Second, we continually work to have the 
best processes for acquiring and training personnel with the requisite 
expertise to fully evaluate the threat potential of technologies and 
our adversaries. Third, we have processes for identifying and 
leveraging world-class expertise that resides outside the IC, to assure 
we can capitalize on the diverse and extensive expertise available in 
our country.
                                 ______
                                 
            Questions Submitted by Senator Edward M. Kennedy

                       PRESIDENTIAL DAILY BRIEFS

    23. Senator Kennedy. Ambassador Negroponte, as part of its 
investigation of the pre-war intelligence, the Senate Intelligence 
Committee asked to review the Presidential Daily Briefs (PDBs) relevant 
to the key issues of Iraq's WMD and Saddam Hussein's links to 
terrorists. The request was denied. Members of the Silberman-Robb 
Commission appointed by the President to examine pre-war intelligence 
were given access to parts of the PDBs on Iraq's WMD program. Four of 
the 10 members of the 9/11 Commission were given parts of PDBs they 
requested. If these Commissioners were given such access, Congress 
should be given access as well for its own investigation of the all-
important questions about why we went to war and the way we went to 
war. The Intelligence Committee is now working on the second phase of 
its investigation--which will address how the administration used the 
intelligence on Iraq to make the case for war. To support the 
Intelligence Committee's investigation, will you agree to provide the 
PDBs on Iraq?
    Ambassador Negroponte. PDBs are Presidential documents and the ODNI 
does not make the determination to provide PDBs. The PDB throughout its 
history has been a sensitive and highly confidential document prepared 
exclusively for the President. It is written for the President 
personally and literally in the second person, and he shares it with 
only a handful of others in his administration. Only in the most 
extraordinary circumstances relating to the 9/11 Commission, and in a 
circumstance that did not set any precedent has it ever been shared 
outside the executive branch. The Silberman-Robb Commission was a board 
reporting directly to the President and within the executive branch. We 
are unaware of any precedent in the country's history for providing the 
PDBs to Congress.

    24. Senator Kennedy. Ambassador Negroponte, even if you believe 
it's the President's decision, do you think this information should be 
available to Congress?
    Ambassador Negroponte. The President, to conduct his duties, must 
be able to request and receive certain documents that he can feel 
confident will remain personal and confidential. The PDB is written 
with only the President in mind, which allows a special trust and 
confidence in the way it is written, and the presentation of certain 
unique content, some extraordinarily sensitive and operational in 
nature. It is personally briefed, read, and discussed with the 
President on a daily basis; at heart, the PDB is an ongoing dialogue 
between the President and key elements of the IC, which must be 
protected.

                                AL QAEDA

    25. Senator Kennedy. Ambassador Negroponte and General Maples, in 
General Maples' prepared testimony he stated ``Al Qaeda leaders, Osama 
bin Laden and Ayman al-Zawahiri, are relatively isolated and under 
pressure from counterterrorist operations. Once the central banker of 
the Sunni extremist movement, the al Qaeda leadership has resorted to 
seeking funds from al Qaeda in Iraq to supplement its income.'' How 
dependent is the al Qaeda leadership on funding from al Qaeda in Iraq?
    Ambassador Negroponte. [Deleted.]
    General Maples. [Deleted.]

    26. Senator Kennedy. Ambassador Negroponte and General Maples, what 
percentage of its funding do we believe comes from al Qaeda in Iraq? A 
majority?
    Ambassador Negroponte. [Deleted.]
    General Maples. [Deleted.]

                            VIOLENCE IN IRAQ

    27. Senator Kennedy. Ambassador Negroponte, you stated in your 
prepared testimony that if a broad, inclusive national government 
emerges, there almost certainly will be a lag time before we see a 
dampening effect on the insurgency. What do you mean by a lag time?
    Ambassador Negroponte. [Deleted.]

    28. Senator Kennedy. Ambassador Negroponte, what is the assessment 
of the amount of lag time under the best-case scenario--6 months? A 
year? Longer?
    Ambassador Negroponte. [Deleted.]

    29. Senator Kennedy. Ambassador Negroponte, what do you mean by 
``dampening effect?'' Do you mean that even under the best case 
scenario the violence will not end?
    Ambassador Negroponte. [Deleted.]

    30. Senator Kennedy. General Maples, in your prepared testimony you 
stated, ``Sunni Arab attitudes are changing as the elite increasingly 
embrace politics; however, the degree to which this will decrease 
insurgent violence is not yet clear.'' Are you suggesting that there's 
not a clear nexus between politics and violence on the streets?
    General Maples. Iraqi political developments can and do influence 
Sunni Arab violence on the streets; however, other factors impact the 
overall attack levels as well. As demonstrated during the recent 
elections, some Sunni Arab leaders can influence their constituencies 
to reduce violence, but this does not extend to an ability to influence 
all Iraqi Sunni elements comprising the insurgency.
    Insurgents will become gradually isolated if Iraqi Sunni Arabs 
perceive that they have gained adequate and effective national and 
local political representation. Sunni Arabs need reassurance that they 
will see improvements in the economy and the provision of basic 
services, and that de-Baathification's impact will be limited. Support 
for the insurgency will also decline if Sunni Arabs gain confidence 
that the Iraqi security forces, currently perceived as agents of 
Kurdish and Shiite domination, will protect their interests.
    Al Qaeda terrorists will not be swayed by political progress in 
Iraq and will violently oppose any Iraqi government that is not 
dominated by Sunni Islamists who support their objectives. Criminal 
elements are largely unresponsive to political developments, though as 
Iraqi police become more effective and the economy improves, we expect 
to see this category of violence decrease as well.

    31. Senator Kennedy. General Maples, if it's not yet clear whether 
violence will wane with the political process, when will it become 
clear--6 months? A year? Longer?
    General Maples. [Deleted.]

                                CHALABI

    32. Senator Kennedy. Ambassador Negroponte and General Maples, has 
the CIA or any agency within the IC conducted a damage assessment on 
Chalabi and his alleged leaks of intelligence to Iran? If not, why not? 
If so, what does the assessment show?
    Ambassador Negroponte. [Deleted.]
    General Maples. [Deleted.]

    33. Senator Kennedy. Ambassador Negroponte and General Maples, what 
steps have been taken to mitigate any damage that may have resulted 
from such leaks?
    Ambassador Negroponte. [Deleted.]
    General Maples. [Deleted.]

    34. Senator Kennedy. Ambassador Negroponte and General Maples, what 
relationship, if any, does any element of the IC have with Chalabi? 
Please fully describe any such relationship.
    Ambassador Negroponte. [Deleted.]
    General Maples. [Deleted.]

  national security agency surveillance programs in the united states
    35. Senator Kennedy. Ambassador Negroponte, I am concerned that the 
legal uncertainties surrounding this program will undermine our 
national security and will also undermine Federal prosecutions against 
terrorists. It may be happening already. In United States v. Al-Timimi, 
No. 05-4761 (4th Cir. Feb. 16, 2006), an order was granted suspending 
the briefing schedule pending the filing of a motion to remand for 
evidentiary hearings on the impact of the National Security Agency's 
(NSA) warrantless surveillance program on the case of Ali Al-Timimi who 
had been sentenced to life in prison for terrorism-related activities. 
In United States v. Abu Ali, No. 05-053 (E.D. Va. Feb. 17, 2006), an 
order was granted on a motion to stay the proceedings pending an 
official government declaration detailing how the NSA program may have 
been used directly or indirectly in the prosecution of its case against 
Ahmed Omar Abu Ali. In United States v. Faris, No. 03-189 (E.D. Va. 
Feb. 8, 2006), an order was granted appointing new counsel and 
requiring the government to respond to the defendant's motion to vacate 
within 60 days, in part because of the government's alleged use of 
warrantless surveillance in the case against the defendant. Is 
information from the NSA program being passed to the FBI for arrests?
    Ambassador Negroponte. The NSA intelligence surveillance activities 
confirmed by the President involve targeting for interception by the 
NSA of communications where one party is outside the United States and 
there is probable cause (``reasonable grounds'') to believe that at 
least one party to the communication is a member or agent of al Qaeda 
or an affiliated terrorist organization (hereinafter, the ``Terrorist 
Surveillance Program,'' the ``Program,'' or the ``TSP'').
    The TSP is an intelligence program designed to detect and prevent 
terrorist attacks against the United States. As appropriate, lead 
information obtained from the program is, of course, passed to the 
Federal Bureau of Investigation (FBI). FBI Director Robert S. Mueller 
testified at the Worldwide Threat Hearing before the Senate Select 
Intelligence Committee on February 2, 2006, that the FBI receives a 
number of leads from NSA programs, including the TSP. He further 
testified that leads from the TSP have been valuable in identifying 
would-be terrorists and those who provide material support to 
terrorists.
    As for the cases you mention, in United States v. Ali Al Timimi, 
the government did not oppose the defendant's motion to remand his case 
to the district court in order to pursue further proceedings concerning 
defendant's allegations that he was the subject of surveillance by the 
NSA and that his communications with counsel have been improperly 
denied. The Fourth Circuit granted the motion to remand on April 25, 
2006. If the district court orders the government to respond to the 
defendant's allegations, the Department of Justice will do so. The 
sentencing of Ahmed Omar Abu Ali, a Virginia man convicted of 
conspiring to assassinate the President, had been postponed as a result 
of the defendant's request for information regarding alleged use of NSA 
surveillance in his case. Those issues were resolved by the district 
court, and, on March 29, 2006, Ahmed Omar Abu Ali was sentenced to 30 
years in prison followed by 30 years of supervised release. Finally, in 
United States v. Faris, the defendant filed a motion to vacate his 
conviction, in which he alleged that his trial counsel was ineffective, 
because counsel, among other things, did not seek discovery from the 
government regarding electronic surveillance. The government filed an 
opposition to the motion to vacate on April 10, 2006. The district 
court has not yet ruled on the motion.
    As of April 28, 2006, in every case in which a United States 
District Court Judge has ruled on a defense request for information, an 
order has been issued denying the defendant's motion. Obviously, the 
mere fact that a criminal defendant makes allegations that his 
prosecution was somehow ``tainted'' by undisclosed warrantless 
surveillance does not make it so. Courts will frequently request that 
the government respond to new issues raised by a criminal defendant, 
irrespective of the ultimate merits of the issue.

    36. Senator Kennedy. Ambassador Negroponte, has information from 
the program been used in a court as evidence in a prosecution or to 
obtain a warrant for additional surveillance?
    Ambassador Negroponte. Answering this question would require a 
discussion of operational details. As agreed to by congressional 
leadership, operational details, and a full briefing, on the NSA 
program have been provided to the full membership of the Senate Select 
Committee on Intelligence.

    37. Senator Kennedy. Ambassador Negroponte, isn't it true that a 
criminal prosecution of a terrorist could be crippled if a court finds 
that critical evidence was obtained illegally?
    Ambassador Negroponte. The TSP is a NSA intelligence activity 
developed for the purpose of detecting and preventing terrorist 
attacks. However, as previously discussed, leads from this intelligence 
program are passed to the FBI wherever appropriate. Based on the 
comprehensive legal analysis performed by the Department of Justice, 
the Administration believes that the TSP complies fully with Federal 
law. Accordingly, as indicated in his statements before the Senate 
Judiciary Committee on February 6, 2006, the Attorney General believes 
that no terrorist prosecution will be jeopardized as a result of the 
program. For a detailed discussion of the legal bases for the program, 
please refer to the Department of Justice's paper of January 19, 2006. 
See Legal Authorities Supporting the Activities of the National 
Security Agency Described by the President (January 19, 2006).

    38. Senator Kennedy. Ambassador Negroponte, isn't it true that an 
amendment to the Foreign Intelligence Surveillance Act (FISA) could 
have eliminated all risk that a court would find that such evidence was 
obtained illegally?
    Ambassador Negroponte. The administration believes that an 
amendment to the FISA is unnecessary because the Authorization for the 
Use of Military Force of September 18, 2001 (Force Resolution) provides 
statutory authority for the TSP, consistent with the FISA. As detailed 
in the Department of Justice's paper of January 19, 2006, the FISA 
explicitly contemplates that other statutes, such as the Force 
Resolution, may authorize the conduct of intelligence surveillance 
outside of the procedures set forth under the FISA. See Legal 
Authorities Supporting the Activities of the National Security Agency 
Described by the President (January 19, 2006). Consistent with the 
Supreme Court's examination of the Force Resolution in Hamdi v. 
Rumsfeld, the Department of Justice has concluded that the Force 
Resolution authorizes this activity for foreign intelligence purposes 
as an incident of force directed against those who planned, authorized, 
committed, or aided the September 11th terrorist attacks. See Hamdi v. 
Rumsfeld, 542 U.S. 507 (2004). Other Presidents, including Woodrow 
Wilson and Franklin Roosevelt, also have interpreted general force 
authorization resolutions that did not specifically address 
surveillance to permit warrantless surveillance to intercept suspected 
enemy communications. The language of the Force Resolution must be read 
against this historical backdrop.

    39. Senator Kennedy. Ambassador Negroponte, have you ever discussed 
with members of this committee the changes in the law that you think 
are needed?
    Ambassador Negroponte. For the reasons stated previously, it is my 
view that no changes to the law are needed at this time for the TSP. 
For that reason, I do not recall any conversations with members 
requesting legislation related to the TSP. However, I stand ready to 
work with the committee on any legislation that it may wish to 
consider.

    40. Senator Kennedy. Ambassador Negroponte, have any communications 
intercepted under the NSA's program resulted in any arrests or 
convictions in a counterterrorism investigation? If so, how many? 
Please provide specific details of each case.
    Ambassador Negroponte. As previously stated, leads from this 
intelligence program are passed to the FBI wherever appropriate. FBI 
Director Robert S. Mueller testified at the Worldwide Threat Hearing 
before the Senate Select Intelligence Committee on February 2, 2006, 
that FBI receives a number of leads from NSA programs, including the 
TSP. He further testified that leads from the TSP have been valuable in 
identifying would-be terrorists and those who provide material support 
to terrorists.
    Providing further information in response to this question would 
require a discussion of operational details. As agreed to by 
congressional leadership, operational details, and a full briefing, on 
the NSA program have been provided to the full membership of the Senate 
Select Committee on Intelligence.

    41. Senator Kennedy. Ambassador Negroponte, has any surveillance 
been terminated because it has been determined to be of little value?
    Ambassador Negroponte. The IC cannot afford to expend resources on 
targets that do not provide valuable information. This is particularly 
true in the area of counterterrorism, where the consequence of a missed 
opportunity could be catastrophic. The TSP was developed to add speed 
and agility to the Government's efforts to protect the United States 
from terrorist attacks. Thus, any questions as to the value of TSP 
coverage are, by necessity, addressed and resolved in an expeditious 
manner.

    42. Senator Kennedy. Ambassador Negroponte, how many people at DOD 
knew about the program?
    Ambassador Negroponte. Answering this question would require a 
discussion of operational details. As agreed to by congressional 
leadership, operational details, and a full briefing, on the NSA 
program have been provided to the full membership of the Senate Select 
Committee on Intelligence.

    43. Senator Kennedy. Ambassador Negroponte, what protocols were in 
place at the start to protect the program's integrity? What about now?
    Ambassador Negroponte. Since its inception, the TSP has been the 
subject of regular and ongoing legal and operational reviews. As stated 
previously by the then Principal Deputy Director of National 
Intelligence, General Michael V. Hayden, the TSP has been subject to 
the most intense oversight regime in NSA's history. That regime 
includes oversight by the NSA's Office of General Counsel and Office of 
Inspector General as well as the Department of Justice. The program has 
been, and continues to be, reviewed approximately every 45 days. That 
review includes an evaluation of the TSP's effectiveness and a thorough 
assessment of the current threat to the United States posed by al Qaeda 
and affiliated terrorist organizations.

     oversight of the national security agency surveillance program
    44. Senator Kennedy. Ambassador Negroponte, we've heard a great 
deal about internal reviews on the NSA's warrantless surveillance 
program. Various administration officials have stated that the 
Inspector General of the NSA reviewed the Agency's wiretapping program, 
but it's the Inspector General of the DOD who has statutory reporting 
requirements and oversight over both the NSA and its Inspector General. 
In light of the concerns raised about the lack of congressional and 
judicial oversight of the NSA surveillance, can you confirm whether the 
Inspector General of the DOD knew about the program? Did he review it 
all--or only on a periodic basis?
    Ambassador Negroponte. Answering this question would require a 
discussion of operational details. As agreed to by congressional 
leadership, operational details, and a full briefing, on the NSA 
program have been provided to the full membership of the Senate Select 
Committee on Intelligence.

    45. Senator Kennedy. Ambassador Negroponte, did the Inspector 
General of the DOD conduct any formal or informal investigation of the 
program?
    Ambassador Negroponte. Answering this question would require a 
discussion of operational details. As agreed to by congressional 
leadership, operational details, and a full briefing, on the NSA 
program have been provided to the full membership of the Senate Select 
Committee on Intelligence.

    46. Senator Kennedy. Ambassador Negroponte, are there any plans to 
do so now?
    Ambassador Negroponte. Answering this question would require a 
discussion of operational details. As agreed to by congressional 
leadership, operational details, and a full briefing, on the NSA 
program have been provided to the full membership of the Senate Select 
Committee on Intelligence.

    47. Senator Kennedy. Ambassador Negroponte, what about the 
Inspector General for the Office of National Intelligence?
    Ambassador Negroponte. Answering this question would require a 
discussion of operational details. As agreed to by congressional 
leadership, operational details, and a full briefing, on the NSA 
program have been provided to the full membership of the Senate Select 
Committee on Intelligence.

    48. Senator Kennedy. Ambassador Negroponte, what about the Civil 
Liberties Protection Officer serving under the Director of National 
Intelligence--did he ever know about the program or participate in 
internal reviews and approvals?
    Ambassador Negroponte. Answering this question would require a 
discussion of operational details. As agreed to by congressional 
leadership, operational details, and a full briefing, on the NSA 
program have been provided to the full membership of the Senate Select 
Committee on Intelligence.

    49. Senator Kennedy. Ambassador Negroponte, in 2004, the DOD 
established an Assistant to the Secretary for Intelligence Oversight, 
with responsibility for overseeing intelligence activities by the DOD 
and its agencies, including the NSA. The responsibilities for this 
office were further clarified in a document signed by Paul Wolfowitz. 
It instructs the office to see that all activities are conducted in 
``compliance with Federal law,'' and designates the Assistant to the 
Secretary as the ``principal staff assistant and advisor'' on 
independent intelligence oversight. Has this instruction been followed?
    Ambassador Negroponte. The Attorney General has reviewed the TSP 
and has determined, in his capacity as the chief law enforcement 
officer for the United States Government, that the TSP is in full 
compliance with Federal law. Consistent with Deputy Secretary of 
Defense Wolfowitz's memorandum, the Assistant to the Secretary for 
Intelligence Oversight is the principal staff assistant and advisor on 
independent intelligence oversight for the Department of Defense. 
Operational details, and a full briefing, on the NSA program have been 
shared with the full membership of the Senate Select Committee on 
Intelligence.

    50. Senator Kennedy. Ambassador Negroponte, was the Assistant to 
the Secretary for Intelligence Oversight aware of this program?
    Ambassador Negroponte. Answering this question would require a 
discussion of operational details. As agreed to by congressional 
leadership, operational details, and a full briefing, on the NSA 
program have been provided to the full membership of the Senate Select 
Committee on Intelligence.

    51. Senator Kennedy. Ambassador Negroponte, did the Assistant to 
the Secretary conduct any oversight over this program?
    Ambassador Negroponte. Answering this question would require a 
discussion of operational details. As agreed to by congressional 
leadership, operational details, and a full briefing, on the NSA 
program have been provided to the full membership of the Senate Select 
Committee on Intelligence.
                                 ______
                                 
           Questions Submitted by Senator Joseph I. Lieberman

                                CARTOONS

    52. Senator Lieberman. General Maples, the impact of the Danish 
cartoons of the Prophet Muhammad has been considerable, perhaps beyond 
what we might have anticipated. It is important that we understand how 
and why the violence escalated across the Middle East. Do we know if al 
Qaeda was involved in intensifying the conflict over the cartoons? If 
so, where were they involved?
    General Maples. [Deleted.]

                       QUADRENNIAL DEFENSE REVIEW

    53. Senator Lieberman. General Maples, according to the Quadrennial 
Defense Review (QDR), the United States Navy is planning to move at 
least six carriers and 60 percent of its submarine fleet to the Pacific 
in the near future. Reports warn that China continues to increase its 
submarine production. China now possesses five different classes of 
submarines in its seapower arsenal. By 2010, the Chinese fleet may 
consist of over 50 moderate-to-modern attack submarines which could be 
used to engage the United States, Japan, or Taiwan. Clearly, the United 
States views the Chinese buildup as a significant risk. With the 
submarine fleet we have now, and continuing at the rate of production 
of only one boat a year until 2012, is the United States able to 
counter effectively the increasing number of submarines the Chinese put 
to sea?
    General Maples. Defense intelligence and the greater IC are 
carefully monitoring the increase in the number of combatants and 
capabilities in China's People's Liberation Army Navy (PLAN) and 
providing that intelligence to our warfighters, defense planners, and 
national security policymakers. An assessment of our present and 
projected capability to counter the PLAN submarines is better provided 
by our combatant commander in the region.

    54. Senator Lieberman. General Maples, can you describe the 
intelligence risk we will sustain if this inequality of production 
continues?
    General Maples. An inequality in the number of submarines produced 
annually by the United States and China will result in operational risk 
and an ``intelligence risk.''

                             HORN OF AFRICA

    55. Senator Lieberman. Ambassador Negroponte, reports have 
indicated that terrorist activity in the Horn of Africa has increased. 
Can you describe what the United States is doing in this region to 
stymie this growth?
    Ambassador Negroponte. [Deleted.]

    56. Senator Lieberman. Ambassador Negroponte, are the extremists in 
North Africa subsidiaries of al Qaeda?
    Ambassador Negroponte. [Deleted.]

    57. Senator Lieberman. Ambassador Negroponte, what tactics can we 
employ to prevent the proliferation of terrorism in this region of the 
world?
    Ambassador Negroponte. [Deleted.]

                              CENTRAL ASIA

    58. Senator Lieberman. Ambassador Negroponte, some extremist Muslim 
theorists see the former Soviet republics in Central Asia as part of 
the ``global caliphate'' linking the Islamic world from Spain to 
Indonesia. As poverty spreads across the region, are terrorist 
organizations targeting Central Asia for future development?
    Ambassador Negroponte. [Deleted.]

    59. Senator Lieberman. Ambassador Negroponte, what is the United 
States doing to prevent the spread of terrorist groups in this area of 
the world, such as the Islamic Movement of Uzbekistan (IMU)?
    Ambassador Negroponte. [Deleted.]

    60. Senator Lieberman. Ambassador Negroponte, is the terrorist 
threat in Central Asia manageable at this point in time, or is it 
growing exponentially?
    Ambassador Negroponte. [Deleted.]
                                 ______
                                 
                Questions Submitted by Senator Jack Reed

           IMPLICATIONS OF GLOBAL TECHNOLOGY COMPETITIVENESS

    61. Senator Reed. Ambassador Negroponte, the National Intelligence 
Council recently produced a report titled ``Global Trends in Science 
and Technology Education: Policy Implications for U.S. National 
Security and Competitiveness''. Among the report's findings is that 
``technical superiority for national defense is eroding''. Can you 
provide specific examples of technology areas where we are seeing a 
real decline in technical superiority?
    Ambassador Negroponte. [Deleted.]

    62. Senator Reed. Ambassador Negroponte, what are the specific 
implications for national security that arise from this decline?
    Ambassador Negroponte. [Deleted.]
                                 ______
                                 
             Questions Submitted by Senator Daniel K. Akaka

                   PHILLIPINO TERRORIST ORGANIZATIONS

    63. Senator Akaka. Ambassador Negroponte, you mentioned briefly in 
your testimony that there has been some political turbulence over the 
2004 election but it seems to be that the region is becoming 
increasingly unstable. Just last week, a group of Philippine marine 
officers attempted to overthrow the Philippine Government. Although the 
plot failed, there seems to be every evidence that there will be 
similar uprisings in the future. What effect do you believe the recent 
political instability in the Philippines will have on efforts to 
neutralize the growth of terrorist groups in the Philippines such as 
the Abu Sayyaf Group and Jemahh Islamiyah?
    Ambassador Negroponte. [Deleted.]

                              NORTH KOREA

    64. Senator Akaka. Ambassador Negroponte, you testified that North 
Korea remains a state of high concern. In addition to its claims to 
have nuclear weapons, you state that North Korea produces and smuggles 
aboard counterfeit U.S. currency. As you well know, as a result of 
these allegations North Korea has boycotted further nuclear non-
proliferation talks. Last week, North Korea agreed to send 
representatives to New York next month to discuss claims that North 
Korea is involved in large-scale counterfeiting and distribution of 
U.S. currency. What affect, if any, do you think this meeting could 
have on the resumption of talks with North Korea regarding the nuclear 
disarmament process?
    Ambassador Negroponte. [Deleted.]

                         IRAQI SECURITY FORCES

    65. Senator Akaka. Ambassador Negroponte, you stated that the Iraqi 
Security Forces are experiencing difficulty in managing ethnic and 
sectarian divides among their units and personnel. What steps do you 
feel need to be undertaken to ensure that the Iraqi Security Forces 
will act as a national force rather than Shi'ite or Kurdish forces?
    Ambassador Negroponte. [Deleted.]

                     RUSSIAN AND IRANIAN RELATIONS

    66. Senator Akaka. General Maples, on Sunday, February 26, 2006, 
Iran and Russia announced that they had made an initial agreement to 
establish a joint uranium enrichment venture in which Russia would 
enrich uranium for Iran in Russian territory. Although there are many 
details that still need to be worked out before a final agreement is 
reached, to what extent would this agreement lessen nuclear 
nonproliferation security concerns related to Iran?
    General Maples. [Deleted.]

                               AVIAN FLU

    67. Senator Akaka. Ambassador Negroponte, General Maples, and 
General Hayden, the IC has been paying more attention in recent years 
to nontraditional threats. One concern that many of us have is the 
threat of pandemic flu virus infecting millions. The human and economic 
cost would be extremely high. Recently, we have learned that H51A flu 
virus killed birds in Europe, most recently in France, and in Africa 
and has infected humans in Turkey and in Iraq. This virus appears to 
have originated in Asia, perhaps in China, where more infections have 
been found. Could you describe the level of cooperation China is 
providing the world health community in helping to understand the virus 
and its impact?
    Ambassador Negroponte. [Deleted.]
    General Maples. [Deleted.]
    General Hayden. [Deleted.]

                            AL QAEDA IN IRAQ

    68. Senator Akaka. Ambassador Negroponte, General Maples, and 
General Hayden, al Qaeda in Iraq (AQI) seems to have grown as a 
security threat in Iraq. Despite reports that various Iraqi groups are 
resisting AQI, there is no doubt that AQI represents a substantial 
threat to U.S. forces and to the Iraqi people. Could you explain where 
AQI is getting its financial support for its continuing operations?
    Ambassador Negroponte. [Deleted.]
    General Maples. [Deleted.]
    Ambassador Negroponte. [Deleted.]

    69. Senator Akaka. Ambassador Negroponte, General Maples, and 
General Hayden, does AQI pose a threat to our interests outside of Iraq 
and, if so, what threat does it pose?
    Ambassador Negroponte. [Deleted.]
    General Maples. [Deleted.]
    General Hayden. [Deleted.]

                                TALIBAN

    70. Senator Akaka. Ambassador Negroponte, General Maples, and 
General Hayden, there have been a number of reports that the Taliban in 
Afghanistan have strengthened their base inside the country. As we move 
into the warmer months, what should we expect to see in terms of 
Taliban activity in Afghanistan?
    Ambassador Negroponte. [Deleted.]
    General Maples. [Deleted.]
    General Hayden. [Deleted.]

    71. Senator Akaka. Ambassador Negroponte, General Maples, and 
General Hayden, are there any signs that the Taliban is receiving 
support from the Pakistani government?
    Ambassador Negroponte. [Deleted.]
    General Maples. [Deleted.]
    General Hayden. [Deleted.]

                            MOKTADA AL-SADR

    72. Senator Akaka. Ambassador Negroponte, General Maples, and 
General Hayden, in Iraq, Moktada al-Sadr, a prominent Shiite cleric 
with close ties to Iran, appears to have turned his attacks against the 
American presence into political power. There are reports that he has 
gained considerable support among younger clerics, that he is a force 
behind the new Iraqi Prime Minister Jaafari, that his militia have in 
many instances taken over the local police, and that they are enforcing 
Islamic religious law in the streets and in the schools. What concerns 
do you have about al-Sadr's increasing political, social, and security 
power?
    Ambassador Negroponte. [Deleted.]
    General Maples. [Deleted.]
    General Hayden. [Deleted.]
                                 ______
                                 
               Questions Submitted by Senator Bill Nelson

                     CUBAN AND VENEZUELAN RELATIONS

    73. Senator Bill Nelson. Ambassador Negroponte, it has been 
reported that Cuba receives up to 90,000 barrels per day in 
preferential oil agreements from Venezuela. What is the daily dollar 
value of assistance that Venezuela is providing to Cuba through oil 
transfers and direct cash? Please provide an unclassified estimate.
    Ambassador Negroponte. Caracas probably is providing Havana with 
what nets out to at least $3 million a day in assistance. Cuba imports 
more than $6 million of petroleum products a day from Venezuela, 
ostensibly paying for its purchases with the services of some 21,000 
medical personnel, teachers, sports trainers, and other specialists who 
work in Venezuela. Nevertheless, the value of services provided by 
Cuban personnel calculated at market prices would probably total only 
$3 million daily. Caracas may also accept Cuban goods as payment, but 
Havana's exports to Venezuela--at about $250,000 a day--hardly make up 
the shortfall. There is sparse information on Venezuela's direct cash 
assistance to Cuba, but any such aid is probably insignificant compared 
with its oil transfers.

    74. Senator Bill Nelson. Ambassador Negroponte, Venezuela is using 
its vast oil revenues to undermine U.S. influence in Latin America and 
to pursue an ambitious military modernization program. Since Cuba 
remains on the State Department's terrorist list and provides support 
to foreign terrorist organizations, I am concerned about their alliance 
with Venezuela. In addition to doctors and sports coaches, what forms 
of military, political, and security assistance is Cuba providing 
Venezuela and other Latin American countries on Venezuela's behalf?
    Ambassador Negroponte. [Deleted.]

    [Whereupon, at 12:02 p.m., the committee adjourned.]

                                 
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