[Senate Hearing 111-62]
[From the U.S. Government Publishing Office]



                                                         S. Hrg. 111-62
 
  CURRENT AND PROJECTED NATIONAL SECURITY THREATS TO THE UNITED STATES

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

                                HEARING

                               BEFORE THE

                    SELECT COMMITTEE ON INTELLIGENCE

                                 OF THE

                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 12, 2009

                               __________

      Printed for the use of the Select Committee on Intelligence


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate


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                    SELECT COMMITTEE ON INTELLIGENCE

           [Established by S. Res. 400, 94th Cong., 2d Sess.]
                 DIANNE FEINSTEIN, California, Chairman
              CHRISTOPHER S. BOND, Missouri, Vice Chairman
JOHN D. ROCKEFELLER IV, West         ORRIN G. HATCH, Utah
    Virginia                         OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon                    SAXBY CHAMBLISS, Georgia
EVAN BAYH, Indiana                   RICHARD BURR, North Carolina
BARBARA A. MIKULSKI, Maryland        TOM COBURN, Oklahoma
RUSSELL D. FEINGOLD, Wisconsin       JAMES E. RISCH, Idaho
BILL NELSON, Florida
SHELDON WHITEHOUSE, Rhode Island
                     HARRY REID, Nevada, Ex Officio
                 MITCH McCONNELL, Kentucky, Ex Officio
                    CARL LEVIN, Michigan, Ex Officio
                    JOHN McCAIN, Arizona, Ex Officio
                              ----------                              
                     David Grannis, Staff Director
                Louis B. Tucker, Minority Staff Director
                    Kathleen P. McGhee, Chief Clerk
                                CONTENTS

                              ----------                              

                           FEBRUARY 12, 2009

                           OPENING STATEMENTS

Opening Statement of Hon. Dianne Feinstein, Chairman, a U.S. 
  Senator from California........................................     1
Bond, Hon. Christopher S., Vice Chairman, a U.S. Senator from 
  Missouri.......................................................     2

                                WITNESS

Admiral Dennis C. Blair, USN (Ret.), Director of National 
  Intelligence...................................................     4

                       SUBMISSIONS FOR THE RECORD

Prepared Statement of Admiral Dennis C. Blair....................    10
Kathleen Turner, Director of Legislative Affairs, Office of the 
  Director of National Intelligence, letter transmitting 
  responses to questions from Committee Members, April 24, 2009..    80


  CURRENT AND PROJECTED NATIONAL SECURITY THREATS TO THE UNITED STATES

                              ----------                              


                      THURSDAY, FEBRUARY 12, 2009

                               U.S. Senate,
           Senate Select Committee on Intelligence,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:35 p.m., in 
Room SH-216, Hart Senate Office Building, the Honorable Dianne 
Feinstein (Chairman of the Committee) presiding.
    Committee Members Present: Senators Feinstein, Rockefeller, 
Wyden, Bayh, Mikulski, Feingold, Nelson of Florida, Whitehouse, 
Bond, Hatch, Snowe, Chambliss, and Risch.
    Chairman Feinstein. The hearing will come to order.

 OPENING STATEMENT OF HON. DIANNE FEINSTEIN, CHAIRMAN, A U.S. 
                    SENATOR FROM CALIFORNIA

    Our hearing today is the Senate Select Committee on 
Intelligence's 15th annual Worldwide Threat hearing. Today 
we're going to hear testimony from Director Dennis Blair, the 
Director of the national intelligence community. This will be 
his first testimony to us since assuming his new position, so 
congratulations, Director, and welcome.
    As the DNI, Mr. Blair is in charge of the 16 agencies that 
comprise the intelligence community. Since he is the manager of 
the entire IC, Director Blair has requested that he be the sole 
witness at the table, and the Committee has agreed to his 
request. It should be said, however, that his testimony and 
responses today reflect the analytical judgments of all of the 
intelligence agencies.
    Director Blair, we understand you've been on the job for 
two weeks and should not be expected to know every nuance of 
every judgment held by tens of thousands of intelligence 
analysts. We expect that you will turn, if you need to, to 
other experts behind you to provide more detailed responses to 
Members' questions. That's up to you.
    At times the intelligence community speaks with one voice. 
At other times there are differing views held by one or more 
agencies on a topic of vital interest to our national security. 
I think we believe that this is not a shortcoming; it is a 
strength. We should view the free and open exchanges of the 
intelligence community to be a strength.
    The President and his advisers, our leaders in the military 
and diplomatic corps, and Members of Congress need to know all 
the perspectives and all the threats to better set the policies 
to protect our union, and that is the point of this.
    So, it is with a great deal of pleasure that I welcome you 
to your first public World Threat hearing. And I will now turn 
to the distinguished Vice Chairman for his remarks, and then we 
will have seven-minute rounds based on the early bird rule.

OPENING STATEMENT OF CHRISTOPHER S. BOND, VICE CHAIRMAN, A U.S. 
                     SENATOR FROM MISSOURI

    Vice Chairman Bond. Thank you very much, Madam Chair, and I 
join with her in welcoming the new Director, Director Blair, 
before the Committee--your first time as the DNI.
    And we would note, as we've discussed before, that the 
intelligence community has significantly improved its 
capabilities and performance since 2004 when we passed the 
reorganization. But work remains to be done. We look forward to 
working with you in this Congress to help where we need to in 
legislation.
    Today you're going to discuss current and projected 
threats, and our nation's senior leaders depend upon good 
information from the intelligence community. Most Americans 
never know the sacrifices made by, or the tremendous debt we 
owe, the brave men and women who are the front lines facing 
threats we are about to discuss, and in many areas do work that 
the public will never know about.
    It's our responsibility on the Committee to ensure that the 
agencies have the resources, capabilities and authorities, and 
to do so we need to be kept informed of the threats, issues and 
regional developments so we know how to best provide for them. 
At times it seems to me that people tend to forget the direct 
assault on this country on September 11th, over seven years 
ago, the lessons we learned from that day, and those who were 
responsible have vowed to inflict more harm upon us.
    We went into Afghanistan, deposed the Taliban, removed the 
threat to the United States from al-Qa'ida sanctuaries there. 
And we went into and removed the base operations of al-Qa'ida 
in Iraq. But we still have not been able to eliminate the al-
Qa'ida and the Taliban insurgencies emanating from the 
Federally Administered Tribal Areas in Pakistan, which fuel the 
Afghan insurgency and allow al-Qa'ida to organize, train and 
plan operations. And we look forward to working with you on 
formulating a good policy.
    The continued existence and operations of al-Qa'ida with 
global outreach continue to be of concern. While we focus our 
efforts in Iraq, Afghanistan and Pakistan, al-Qa'ida operatives 
in Algeria, the Sahel, Yemen, the Horn of Africa are able to 
train, rest and prepare for attacks in the region and against 
the U.S. or our allies. We have to pay attention to al-Qa'ida 
wherever it operates and we look forward to getting information 
from you on that.
    I'm also very much concerned about the motives of Iranian 
leaders who continue to provide overt support, training, 
weapons and assistance to militants in Iraq and Afghanistan, as 
well as to organizations like Hezbollah, Hamas and the 
Palestinian Islamic Jihad. The intelligence community told us 
in late 1907 that we did not know Iran's intentions, but we 
knew it was pursing a weapons capability in the nuclear field 
until at least 2003. Additionally, we now see Tehran making 
significant advancements in its civilian nuclear program, which 
could give Iran the technical capability necessary to produce 
highly-enriched uranium, which requires very careful attention.
    And we constantly hear a litany of other threats that face 
the United States, including the intensification of 
disagreements with Russia, the possibility of an outbreak of 
hostilities between India and Pakistan, Chinese-Taiwan 
confrontation, the North Korean nuclear program, continued 
proliferations of missiles and weapons of mass destruction, as 
well as any number of foreign intelligence organizations that 
seek to spy on and weaken the U.S.
    Other threats are out there. One year ago your predecessor, 
Mike McConnell, presciently warned us about the increasing 
threat in the cyber realm. He said, ``The U.S. information 
technology infrastructure, which includes telecommunications, 
computer networks and systems, and the data that reside on 
those systems is critical to virtually every aspect of our 
modern life. On threats to our IT infrastructure, an important 
focus of this community, we assess that nations, including 
Russia and China, have long had the technical capabilities to 
target U.S. information systems for intelligence collection.'' 
``The worrisome part,'' he said last year, ``is today they 
could also target information infrastructure systems for 
degradation or destruction.'' And I'd like to hear your 
thoughts on that.
    Additionally, I think we've become aware that energy, and 
its control, in many nations which are not friendly to us 
allows them to have a very large and potentially harmful impact 
on international security and international relations. We have 
seen what they have been able to do with cutting off of 
supplies, what some of our major energy producers have been 
able to accomplish in the foreign policy realms by cutting off 
energy supplies and threatening to do so.
    My personal belief is that our inability to get the most 
effective pressure on Iran that we could pose, from an economic 
standpoint, is our inability to cut off the supply of refined 
petroleum to Iran. And it is my strong suspicion that the 
energy supply lines have influenced, and perhaps kept, some of 
our allies who should be as concerned as we are about Iran, 
from utilizing that very, very important economic and 
diplomatic weapon. We need to do a better job on that, as we've 
discussed with you. We are sadly lacking in energy intelligence 
from hostile nations.
    Finally, one of the biggest threats we face, as always, is 
what we haven't uncovered yet--the unknown threat that falls 
outside our spheres of collection, flies under the radar and is 
not recognizable as a threat to any of our sources. The 
intelligence community has to see beyond traditional security 
models, break down old threat paradigms and create new 
methodologies and tradecraft for recognizing the threats we 
haven't seen before.
    This means we have to recognize that we don't always know 
what we don't know, and find a way to discover it anyway. My 
primary concern, as ever, is being able to prevent attacks on 
the U.S. and to guarantee the continued safety of the American 
people. I'd look to you now to help us to find what those 
threats may be.
    Thank you, Madam Chair. And, again, welcome Mr. Director.
    Chairman Feinstein. Thank you very much, Mr. Vice Chairman.
    And we'll now proceed to you, Mr. Director. I wonder if I 
might ask that you confine your remarks to 15 minutes, if 
that's convenient. If it isn't, just ask for more time so that 
we have ample time to ask questions.
    Thank you.

OPENING STATEMENT OF ADMIRAL DENNIS BLAIR, USN (RET.), DIRECTOR 
                    OF NATIONAL INTELLIGENCE

    Director Blair. Yes, Madam Chair. Fifteen minutes should be 
plenty adequate.
    And I would like to thank the Committee for confirming me 
since we last met. After two weeks on the job, I can tell you 
it's a tremendously patriotic, highly-skilled and brave 
workforce that I have the pleasure to lead. And in the 
preparation for this testimony this afternoon, and other 
editions of it that that will come later, we had a lively 
exchange; everybody participated.
    I'm happy to say that we do share the facts in the 
intelligence community quite widely, but we often have 
different opinions. And, as the Chairman said, I think that's a 
healthy way to do it, and I heard a lot of that debate as I was 
preparing to speak to you this afternoon.
    I'd like to begin my remarks--and my remarks are not just 
looking at threats but also looking at opportunities and 
looking at the security landscape that we face. I think at the 
beginning of a new administration, at the beginning of a new 
Congress, it's a good time to take stock and see where the 
United States needs to go to protect its interests in a major 
way before we get into all of the details of having to go 
operational as we must, and it's in that spirit that I offer my 
remarks.
    I'd like to begin with the global economic crisis because 
it already looms as the most serious one in decades, if not in 
centuries. Since September, 2008, 10 nations have committed to 
new IMF programs. Unlike the 1997-1998 Asian financial crisis, 
countries will not be able to export their way out of this one 
because of the global nature.
    Chairman Feinstein. The mics are difficult, and you have to 
speak--pull it as close to you as you can, and you have to 
speak unidirectionally into it.
    Director Blair. All right, I will try to keep my head 
still. Thank you.
    Chairman Feinstein. Thanks.
    Director Blair. The stakes in this are high. Mexico, with 
its close trade links to the United States, is vulnerable to a 
prolonged U.S. recession. Europe and the former Soviet Union 
have experienced anti-state demonstrations. Much of the former 
Soviet Union, Latin America, Sub-Saharan Africa lack sufficient 
cash reserves and access to international aid. Economic crises 
increase the risk of regime-threatening instability if they are 
prolonged for a one- to two-year period, and instability can 
loosen the fragile hold that many developing countries have on 
law and order, which can spill out in dangerous ways into the 
international community.
    There are some silver linings. With low oil prices, 
Venezuela will face financial constraints this year. Iran's 
president faces less-than-certain prospects for reelection in 
June. However, a serious energy supply crunch may happen in the 
longer-term future if sustained low prices lead to the deferral 
or the canceling of energy infrastructure projects in the near 
term. So it's a confluence of events there.
    This crisis presents challenges for the United States. 
We're generally held to be responsible for it. The November G-
20 summit has brought the influence of emerging market nations 
into the larger group, but the U.S. also has opportunities to 
demonstrate increased leadership. Our openness, developed 
skills and workforce mobility put us in a better position to 
reinvent ourselves. Moreover, Washington will have the 
opportunity to fashion new global structures that can benefit 
all.
    Moving now to terrorism, we have seen progress in Muslim 
opinion turning against terrorist groups. Over the last 18 
months al-Qa'ida has faced public criticism from prominent 
religious leaders and even from fellow extremists. In 2008, 
these terrorists did not achieve their goal of conducting 
another major attack on the U.S., and no major country is at 
immediate risk of collapse from extremist terrorist groups.
    Replacing the loss of key leaders since 2008 in Pakistan's 
Federal Administered Tribal Areas has proved difficult for al-
Qa'ida. Al-Qa'ida in Iraq has been squeezed. Saudi Arabia's 
aggressive counterterrorism efforts have rendered the Kingdom a 
harsh operating environment for al-Qa'ida. But despite these 
setbacks, al-Qa'ida remains dangerous. Yemen is reemerging as a 
jihadist battleground. The capabilities of terrorist groups in 
East Africa will increase in the next year, and we remain 
concerned about the potential for homegrown American extremists 
inspired by al-Qa'ida's militant ideology to plan attacks 
within the United States.
    There are many challenges in that region that stretches 
from the Middle East to South Asia, despite this progress 
against countering violent extremism that I recounted. The U.S. 
has strong tools, from military force to diplomacy. We have 
good relations with the vast majority of states in the region, 
and we will need all of these tools in order to help forge a 
durable structure of peace and renewed prosperity in the 
region. The revival of Iran as a regional power, the deepening 
of ethnic, sectarian and economic divisions across most of the 
region, the looming leadership succession among U.S. allies are 
all reshaping this landscape.
    Hezbollah and Hamas, with support from Persian Iran, have 
successfully seized the mantle of resistance to Israel from 
moderate secular Arab regimes. Battle lines are increasingly 
drawn, not between Israel and Arab countries, but also between 
secular Arab nationalists and ascendant Islamic nationalist 
movements inside the Arab states.
    The Iranian regime views the United States as its principal 
enemy and also as a threat to them. A more assertive regional 
Iranian foreign policy, coupled with its dogged development of 
a deliverable nuclear weapon, alarms most of the governments 
from Riyadh to Tel Aviv. The Levant is the key focal area for 
these strategic shifts. Recent fighting between Israel and 
Hamas in the Gaza Strip has deepened Palestinian political 
divisions. It has also widened the rift between regional 
moderates--led by Egypt, Saudi Arabia and Jordan--and 
hardliners, including Iran, Hezbollah and Syria.
    With Hamas controlling Gaza and Hezbollah growing stronger 
in Lebanon, progress on a Palestinian-Israeli accord is going 
to be more difficult. With Iran developing a nuclear weapon 
capability and with Israel determined not to allow it, there is 
potential for an Iran-Israeli confrontation or crisis. Moderate 
Arab states fear a nuclear-armed Iran, but without progress on 
the Palestine settlement, they're harder put to defend their 
ties to the United States.
    In Iraq, coalition and Iraqi operations and dwindling 
popular tolerance for violence are sidelining the extremists. 
Fewer Iraqis are dying at the hands of their countrymen than at 
any time in the past two years. Nevertheless, disputed internal 
boundaries, Sunni perceptions of government repression, or 
increased foreign support to insurgent or militia groups could 
reverse political and security process, and Baghdad will also 
be coping with declining oil revenues, its primary source of 
government budgets.
    In Afghanistan, the Taliban-dominated insurgency forces 
have demonstrated greater aggressiveness in recent months. 
Improved governance and extended developments were hampered in 
2008 by a lack of security. Afghan leaders must tackle endemic 
corruption and an extensive drug trade. Progress has been made 
in expanding and fielding the Afghan National Army, but many 
factors hamper efforts to make these units capable of 
independent action. The upcoming 2009 presidential election 
will present a greater security challenge than did that in 
2004, and insurgents probably will make a concerted effort to 
disrupt it.
    And no improvement is possible in Afghanistan without 
Pakistan taking control of its border areas, improving 
governance and creating economic and educational opportunities 
throughout the country. In 2008, Islamabad intensified its 
counterinsurgency efforts, but its record in dealing with 
militants has been mixed, as it balances conflicting internal 
and counterterrorist priorities. The government is losing 
authority in the north and the west. And even in the more 
developed areas of the country, mounting economic hardships and 
frustration over poor governance have given rise to greater 
radicalization.
    The time when only a few states had access to the most 
dangerous technologies is long over. Often dual use, they 
circulate easily in our globalized economy, as does the 
scientific expertise to put them together into weapons. It's 
difficult for the United States and its partners to track 
efforts to acquire components and production technologies. 
They're widely available. Traditional deterrence and diplomacy 
constraints may not prevent terrorist groups from using mass-
effect weapons. So, one of the most important security 
challenges facing the United States is fashioning a more 
effective nonproliferation strategy with our partners in this 
effort.
    The assessment that was in our 2007 National Intelligence 
Estimate about Iran's nuclear weapons programs are generally 
still valid today. Tehran, at a minimum, is keeping open the 
option to develop deliverable nuclear weapons. The halt in the 
recent past in some aspects of the program was primarily in 
response to increasing international scrutiny and pressure. 
Some combination of threats--threats of intensified 
international scrutiny and pressures, along with opportunities 
for Iran to achieve its security goals--might prompt Tehran to 
extend the halt to some nuclear weapons-related activities.
    Turning to Asia, rapidly becoming a long-term locus of 
power in the world, Japan remains the second-largest economy 
and a strong ally, but the global downturn is also exacting a 
heavy toll on Japan's economy. To realize its aspirations to 
play a stronger regional and even global role will require 
political leadership and some difficult decisions. The rising 
giants, China and India, are playing increasing regional roles 
economically, politically and militarily. China tries to secure 
access to markets, commodities and energy supplies needed to 
sustain domestic economic growth, and their diplomacy seeks 
favorable relations with other powers, especially the United 
States, in order to facilitate it. The global economic slowdown 
threatens China's domestic stability and China's leaders are 
taking both economic and security actions to deal with it.
    Taiwan, as an area of tension in U.S.-China relations, has 
substantially relaxed. The Taiwan President Ma, inaugurated in 
May, has resumed dialogue with Beijing, and leaders on both 
sides of the straits are cautiously optimistic about less-
confrontational relations. But preparations for a possible 
Taiwan conflict nevertheless drive modernization goals for the 
People's Liberation Army, and China's security interests are 
broadening beyond Taiwan. A full civilian and military space 
capability and formidable capabilities in cyberspace are being 
rapidly developed. China will attempt to develop at least a 
limited naval power projection capability, which is already 
reflected in anti-piracy operations off the coast of Somalia.
    Like China, India's expanding economy will lead New Delhi 
to pursue new trade partners, gain access to vital energy 
markets and generate other resources that sustain rapid growth. 
India's growth rate will slow this coming year, but ample 
reserves and a sound banking system will help ensure relative 
stability.
    Determined efforts by Indian and Pakistan leaders to 
improve relations could unravel unless Islamabad, for its part, 
takes meaningful steps to cut support to anti-Indian militant 
groups and New Delhi, for its part, makes credible efforts to 
allay Pakistan's security concerns. The increase in violent 
attacks within India is a cause of great concern to its 
government, as is instability in neighboring countries in South 
Asia.
    On the global stage, Indian leaders will continue to follow 
an independent course. That we are both democracies does not 
guarantee a congruence of interests. Nonetheless, good 
relations with the United States will be essential for India to 
realize its global ambitions.
    Although the Middle East and Asia have the highest call on 
our attention, our concerns are broader. Russia is actively 
cultivating relations with regional powers, including China, 
Iran, Venezuela. Moscow also is trying to maintain control over 
energy networks to Europe and East Asia. Russian leaders have 
recently spoken positively about the possibilities for change 
in the U.S.-Russian dynamic but NATO enlargement, the conflict 
over Georgia's separatist regions, and missile defense will all 
pose difficulties.
    In Latin America, populist, often autocratic regimes pose 
challenges to the region's longer-term success. Basic law and 
order issues, including rising violent crime and powerful drug-
trafficking organizations confront the key hemispheric nations, 
as do uneven governance and institution-building efforts in 
combating chronic corruption. The corruptive influence and 
increasing violence of Mexican drug cartels impedes Mexico 
City's ability to govern parts of its country. Unless the 
United States is able to deliver market access on a permanent 
basis, its traditionally privileged position in the region 
could erode with an concomitant decline in political influence.
    Africa has made substantial economic and political progress 
over the last decade. The level of open warfare has declined 
significantly, especially in Liberia, Sierra Leone and the 
Ivory Coast. But the drop in commodity prices and the global 
recession will test the durability of the region's recent 
positive growth trend.
    Even before the current crisis, the six percent GDP growth 
rate of the continent, though impressive, could not bring about 
the necessary structural reforms to reduce poverty, and a 
number of intractable conflicts persist in the Democratic 
Republic of Congo, Nigeria, Sudan, and Somalia. In Darfur, U.N. 
peace talks remain stymied and a larger peacekeeping force is 
slow to deploy.
    Let me finish with the long-term challenge of environmental 
security and the threats to our information technology 
infrastructure. Adding more than a billion people to the 
world's population by 2025 will put pressure on clean energy 
sources and food and water supplies. Most of the world's 
population will move from rural areas to urban areas seeking 
greater opportunity. Many, particularly in Asia, will achieve 
more advanced lifestyles with a greater per capita consumption 
and greater per capita generation of pollution.
    According to the United Nations Intergovernmental Panel on 
Climate Change, physical effects of climate change will worsen 
in coming years. Multilateral policymaking on climate change is 
likely to be substantial and a growing priority within 
traditional security affairs. The world sees the United States 
in a pivotal leadership role. As effects of climate change 
mount, the U.S. will come under increasing pressure to help the 
international community set goals for emission reductions and 
to help others through technical progress.
    And finally, threats to our information technology 
infrastructure are an important IC focus, as they were last 
year, as the Vice Chairman mentioned. Our information 
infrastructure is both becoming indispensable to the 
functioning of our society and it's becoming vulnerable to 
catastrophic disruption in a way that the old analog 
decentralized systems were not. Cyber systems are being 
targeted for exploitation and potential for disruption or 
destruction by a growing array of both state and non-state 
actors.
    If I could have two more minutes, Madam Chairman, I think I 
can finish up. Thank you.
    Network defense technologies exist. They're widely 
available but they often are not uniformly adopted within our 
networks. A number of nations, including Russia and China, can 
disrupt elements of the U.S. information infrastructure. We 
must take proactive measures to detect and prevent intrusions 
before they do significant damage.
    We must recognize that cyber defense is not a one-time fix. 
It requires continual involvement in hardware, in software, in 
cyber defenses, and in personnel. The international security 
environment we face is complex. The global financial crisis has 
exacerbated what was already a growing set of political and 
economic uncertainties. We're nevertheless in a strong position 
to shape a world reflecting universal aspirations and values 
that have motivated Americans since 1776--human rights, the 
rule of law, liberal market economics, social justice.
    Whether we can succeed will depend in part on the actions 
we take here at home--restoring strong economic growth, 
maintaining the scientific and technological edge, defending 
ourselves at reasonable cost while preserving our civil 
liberties. It will also depend on our actions abroad, not only 
in how we deal with regions, regimes, and individual crises, 
but also in developing new cooperative multilateral approaches, 
whether they're formal or informal, for effective international 
cooperation in areas like trade and finance, in neutralizing 
extremist groups using terrorism, in controlling the 
proliferation of weapons of mass destruction, in developing 
codes of conduct in defenses in cyberspace and in real space, 
and in mitigating and slowing the effects of global climate 
change.
    Madam Chairman, thank you very much. I'm ready to turn this 
into a discussion.
    Chairman Feinstein. You have said what you want to say?
    Director Blair. I have. Thank you.
    [The prepared statement of Director Blair follows:]

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    Chairman Feinstein. Good. Good. Let me begin.
    I'm looking at a National Public Radio release dated 
February 3rd of this year and it begins, ``CIA-directed air 
strikes against al-Qa'ida leaders and facilities in Pakistan 
over the past six to nine months have been so successful, 
according to senior U.S. officials, that it is now possible to 
foresee a `complete al-Qa'ida defeat' in the mountainous region 
along the border with Afghanistan.''
    Do you agree with this statement? Has, in fact, al-Qa'ida 
leadership been decimated? Is it close to defeat? If not, 
please explain why you disagree. If this is not the case, why 
then are senior U.S. officials discussing this with the press?
    Director Blair. Madam Chairman, I think that senior al-
Qa'ida leadership is considerably less powerful, able to 
communicate with its forces, able to plan and conduct attacks 
than it was a year ago, two years ago. I would not share 
whoever it was who talked to that radio station's judgment that 
we are within sight of victory or that it is giving up on its 
aspirations both against the United States as partners and 
against the countries in the region. I have no idea why people 
would talk in those terms when the facts as I know them are not 
that optimistic.
    Chairman Feinstein. I don't know whether you'd care to 
comment on this, but I also notice that Mr. Holbrooke in 
Pakistan ran into considerable concern about the use of the 
Predator strikes in the FATA area of Pakistan, and yet, as I 
understand it, these are flown out of a Pakistani base.
    The question I have is how do you view this situation? If 
the Pakistanis won't go in and decimate the terrorist 
leadership, and the terrorist leadership is allowed to grow, 
it's going to impact Pakistan negatively, perhaps even to the 
extent of one day hopefully not but possibly taking down its 
government. How do we develop the kind of nexus we should have 
with the government of Pakistan to really have an effective 
attack on people who are major national security threats both 
to Pakistan, to Afghanistan, and to our own country?
    Director Blair. Madam Chairman, I think you put your finger 
on the key to dealing with the terrorists and extremist groups 
in that area. It does depend on Pakistan's effort, with our 
assistance. I think that Pakistan is sorting out some of those 
questions itself internally because the relationship between 
groups and tribes and the government and the security services 
and the armed forces has been very complicated in Pakistan in 
the past and there are a lot of different agendas being played 
out within those circles.
    I think for our part we have to give it intense and 
persistent leadership. We have to let the Pakistanis know that 
we're there working with them for the long haul against these 
common threats, and that they need to come to the realization 
with the point that you basically expressed, that these are as 
much a threat to Pakistan as they are to others and they really 
need to put their shoulder to the wheel in a way that benefits 
all of us. I'm not sure that all of Pakistan is quite there yet 
and that's really our challenge.
    Chairman Feinstein. Let me, if I might, change to 
Hezbollah. Director Tenet used to tell us that Hezbollah was 
really far more sophisticated than most other groups of its 
type. In the wake of the 2006 war with Israel, has Hezbollah's 
position strengthened or weakened?
    Director Blair. Strengthened.
    Chairman Feinstein. And you believe that today, then, it is 
a stronger threat to the United States or a stronger threat to 
Israel? How is it in effect a stronger threat today?
    Director Blair. I think it's a stronger threat today 
because it has rebuilt the weapon stocks that it used up in the 
2006 war. It has learned lessons from that war which it has 
applied to its capability in the future, and so it is better 
prepared for future conflict. As to what it will actually do, 
that's a harder question. It certainly believes that Israel is 
the enemy and the Israelis believe that Hezbollah is the enemy 
so there's a confrontation there that will go on for some time.
    The attitude towards the United States, I think, is 
influenced by Iranian relations with the United States and 
Iranian calculations of what the effect of violence would be. 
So I think that it's really at least a three-sided game--United 
States, Israel, Iran, Hezbollah--four-sided. Syria is a fifth 
part of that calculation but your fundamental question about 
the capability, I think they are stronger than they were 
before.
    Chairman Feinstein. Thank you. Now, I wanted to get in one 
more question and tap your experience as CINCPAC and your 
knowledge of the Chinese-Taiwanese situation. I've read all 
your writings on the subject and I basically agree with your 
comments and I think they're very perceptive and astute.
    The relationship has a very difficult dynamic to it--all 
the missiles on the coast of China faced at Taiwan, our defense 
sales to Taiwan which then irritate the Chinese, and yet the 
Chinese now beginning to take action to sort of soothe the 
waters.
    The latest, I guess, is the head of the big, beautiful 
museum in Taipei going to Beijing to facilitate some sharing of 
art, which is also a small, but nonetheless welcome sign.
    How do you view, in this new dynamic, the China-Taiwan 
relationship? What should we be aware of and what should we 
look out for?
    Director Blair. I think, Madam Chairman, that the 
developments since President Ma was elected are the most 
positive that we've seen in recent years. And the steps that 
are being taken between his government and China are very 
encouraging in terms of working on practical problems like 
travel, bank transfers, art and so on.
    I think that developing some momentum in terms of things 
that can be done for the benefit of both sides are important 
and I applaud both sides for taking those steps.
    I think that as far as what we can do, a key part of it is 
making sure that military measures are unattractive to all 
sides, to both sides in that confrontation. And that means 
maintaining the balance, which is really what the Taiwan 
Relations Act calls for. So clearly, on the one hand, Taiwan 
should not be so defenseless that it feels that it has to do 
everything that China says. On the other hand, China cannot be 
so overwhelming that it can bully Taiwan.
    On the other hand, Taiwan has to realize that its long-term 
security lies in some sort of an arrangement with China. It 
does not lie in military defenses. So if we can keep that 
balance correct, then all of the incentives are toward solving 
the problems in political and people-to-people ways. And I 
think they can, over time. I think there are arrangements that 
could be made that would give Taiwan the international space 
that they feel they deserve and give China the reassurance that 
one China is a realistic policy.
    And so we just have to encourage the events and make sure 
that military adventures are unattractive.
    Chairman Feinstein. Thank you. My time is up.
    Vice Chairman.
    Vice Chairman Bond. Thank you, Madam Chair.
    Mr. Director, many of us on this Committee criticized the 
way the 2007 NIE on Iran was drafted, which in the key 
unclassified judgments left the impression in the public that 
intelligence community was not concerned about Iran's nuclear 
efforts.
    Indeed, today's article in The Los Angeles Times notes 
statements by the President and Mr. Panetta, when he was before 
us for confirmation, about the intent of Iran to seek nuclear 
capability. And they go onto say, ``This language reflects the 
extent to which senior U.S. officials now discount an NIE 
issued in November 2007 that was instrumental in derailing U.S. 
and European efforts to pressure Iran to shut down its nuclear 
program.''
    In light of that, do you believe that the release of 
intelligence community judgments, and NIEs themselves, can be 
damaging to our national security interests?
    Director Blair. Mr. Vice Chairman, I agree that we can 
cause as much harm as good by releasing many of these NIEs on 
very difficult subjects in which a great deal of secret 
intelligence--which the taxpayers have paid an awful lot of 
money for us to use to collect secrets--are put forth in the 
wrong way. And I think it's something we have to think 
carefully about.
    Frankly, when I was here for confirmation hearings, I was a 
little less aware of how difficult this question is than I am 
in the couple of weeks since I've been on the job. The 
preparing of these remarks was not easy, in trying to figure 
out what to say in unclassified settings and classified 
settings. So it's something that I think can cause us problems 
if not handled very well.
    Vice Chairman Bond. Well, I would agree with you. I'm a 
great believer that experience is what you get when you 
expected to get something else. And I hope the intelligence 
community learned something from it. I would hope that you 
would be producing an update of the Iran nuclear NIE.
    And do you--for the record, at this point--have any 
assessment of the likelihood that Iran would forgo the 
development of nuclear weapons? Is there anything that you 
could say publicly that would indicate they are looking at 
forgoing this capability that most of us think they are 
pursuing?
    Director Blair. I can say in this forum that Iran is 
clearly developing all the components of a deliverable nuclear 
weapons program--fissionable material, nuclear weaponizing 
capability and the means to deliver it. Whether they take it 
all the way to nuclear weapons and become a nuclear power I 
think will depend a great deal on their own internal decisions.
    But I do think that the international community--no one in 
the international community wants a nuclear-armed Iran either. 
The question is, what are you going to do about it? And if the 
international community can put together the right package of 
sticks and potential reassurances that will meet some of these 
security concerns that Iran feels, then there's a chance. 
There's a chance that they will choose another course. Other 
nations have.
    I don't think it's a done deal either way, but I think it's 
going to be a difficult task for the international community 
both because it's split, and because of the advantages that 
many Iranians clearly feel would be served by having nuclear 
weapons. So I would not rule it out, but it's not something 
that's going to fall off--it's not like falling off a log.
    Vice Chairman Bond. Turning to an area where you have 
special expertise and I have a great deal of interest, I 
noticed that an Indonesian court recently handed out 15-year 
sentences to Jemaah Islamiyah leaders Abu Dujana and Zarkasih 
in April of 1908 and they've not conducted a large-scale anti-
Western attack since the Bali bombing in October 2005.
    How would you characterize the relationship we have with 
Indonesia on counterterrorism and intelligence issues? And how 
much do you think they have degraded the capabilities of JI, 
which I regard as a serious terrorist organization?
    Director Blair. Mr. Vice Chairman, as you say, we've 
discussed Indonesia and I think we agree that Indonesia has 
made great strides against JI. Once the Bali bombing really 
jolted them into realizing what a threat it was to Indonesia, 
they took very aggressive action.
    We assisted them in certain ways, but the primary drive and 
the primary actions were taken by Indonesia--as they were by 
other Southeast Asian nations who took on this task, Malaysia, 
Singapore in particular, in addition to Indonesia.
    So think JI is much weaker than it was. It's not entirely 
eliminated, but I think Indonesia's done a good job of bringing 
it under control.
    Vice Chairman Bond. I agree also with your suggestion in 
your statement that current low prices for energy, along with 
the possibility that much higher prices will come when we 
recover from this economic downturn, which I think is going to 
happen if we can take the toxic assets out of the financial 
system, that we face very high fuel prices, with all of the 
problems that causes. And I know the International Energy 
Agency has concluded that, just to replace the accelerating 
depletion and maintain current oil levels through 2030, we'll 
have to find the equivalent production of four-and-a-half Saudi 
Arabias.
    Do you think that we can expect that magnitude of 
production, given constraints on North American exploration and 
production, as well as the fact that national oil companies 
like Venezuela's dominate 80 percent of the world's oil 
reserves? And do you believe this energy security problem 
presents a serious threat to our national interest?
    Director Blair. Yes, sir. I agree completely that it 
presents a very serious threat. And I also agree with your 
analysis that if we go on doing as we did before--more 
nationalized oil companies that are not investing in their 
infrastructure, low prices currently knocking out oil 
projects--and then we resume growth, all of the tight supply-
demand that we've seen in the last couple of years will be 
there, with the transportation structure stretched to the 
limit, small interruptions having huge spikes in prices, the 
consequence economic disruption.
    We have got to change that. We have got to change that 
balance or else we are storing up great trouble for the United 
States, friends and many others in the world.
    So it's got to be a multipronged approach of working on 
both production and alternatives and conservation in order to 
get off of this oil supply that is strung tight as a wire 
throughout the world.
    Vice Chairman Bond. Thank you for a very thoughtful answer.
    Madam Chair.
    Chairman Feinstein. Thank you very much, Mr. Vice Chairman.
    Senator Wyden.
    Senator Wyden. Thank you very much, Madam Chair. And 
Director Blair, thank you for your courtesy and responsiveness 
to me over these last few months.
    A number of Senators on both sides of the aisle are very 
concerned about cyber terror, and you've referred to it; 
colleagues have referred to it. And I want to start my 
questioning in this area by your assessment of how vulnerable 
is the U.S. power grid to cyber attack.
    Director Blair. I think a lot of things have been done in 
the power grid recently with the realization of its 
vulnerability. A couple of years ago I'd say it was a piece of 
cake to people even with quite low skills. Because of the 
emphasis on it, it's not down at that level; however, a very 
skilled attack by a group that really knew what it was doing 
could cause us some problems. So there's a great deal more work 
that has to be done there.
    Senator Wyden. I'm also concerned that the development of 
the smart grid could create more potential vectors for cyber 
attack. Do you share that view?
    Director Blair. I think in building a smart grid, Senator, 
we have to take security into account right from the beginning. 
As you know, anytime you centralize and make efficient and cut 
your margins, you open up vulnerabilities not only to just 
stuff happening but also to malicious attack like cyber. So I 
don't know the technical details of the SCADA systems and 
interconnections of the smart grid, but if we don't build in a 
more robust cyber defense from the very first building block, 
we're leaving ourselves wide open.
    Senator Wyden. In your view, Director, are there any 
terrorist groups capable of mounting a significant cyber attack 
on our country today?
    Director Blair. When I think of the things that terrorist 
groups can do to us, Senator Wyden, the cyber capability is not 
the one in which I feel they have the greatest skills for the 
greatest destruction. I think that they have other terrible 
things they can do to us that they are working on harder, 
they're better able to do, and they seem to be more motivated 
to do. So it's possible, but I don't think the combination of 
terror and cyber is the nexus that we are most worried about.
    Senator Wyden. Let me turn to another subject, if I could. 
I've been very concerned about the potential for violence 
against Iraqi translators that are currently working for our 
military. It's been important that these individuals' 
identities be kept secret so they aren't subject to reprisals 
and retribution from anti-American groups inside the country. 
I've worked with the Defense Department in this regard to try 
to protect these translators with masks. DOD has tried to work 
with our office.
    But I'm also concerned about the possibility that anti-
American elements of Iraqi government ministries might seek to 
uncover these translators' identities by accessing tax records 
or other government information. How would you assess right now 
the seriousness of this, and particularly, can you tell us 
anything about ministries or other elements of the Iraqi 
government that the translators ought to be concerned about?
    Director Blair. Senator Wyden, I know the threat to 
translators is real. I have friends from the armed forces who 
personally took steps to get translators out of Iraq because it 
was so dangerous to them. The overall situation is much better 
now.
    I was not aware of the particular problem of Iraqi 
government records being a potential source to identify them, 
which could be used as the basis for making attacks on them. 
I'll have to take a look into that and get back to you. But the 
general principle of making sure that those who helped us 
through providing translating services is the right one, and we 
need to help them.
    Senator Wyden. I'd appreciate a prompt answer on that, 
Director, because I am concerned about the possibility of these 
anti-American elements looking at yet other strategies to make 
life difficult for our translators.
    Director Blair. Right.
    Senator Wyden. These translators are performing a great 
service in terms of advancing American security in a very 
difficult arena, and I appreciate your interest.
    Let me ask you a question, if I could, now about Iran. 
Obviously members of this Committee are following the Iranian 
presidential election, and it's certainly my hope, I'm sure 
shared, that President Ahmadi-nejad gets replaced by a more 
stable and more rational individual. But of course in Iran, the 
president is not the commander in chief, and his influence over 
foreign policy is more limited than perhaps many political 
systems.
    Is it your view that a change in president would result in 
a significant shift in Iranian foreign policy? And let's start 
particularly with the prospect that a replacement of President 
Ahmadi-nejad would result in a shift in nuclear policy.
    Director Blair. Senator, I don't believe that a change of a 
single individual as president would change in and of itself a 
fundamental Iranian policy like development of nuclear weapons. 
I think that those decisions are taken by the groups around the 
Supreme Leader, which is more than one person. So I think that 
we can't put our hopes in Iran on great changes to their policy 
towards the United States based on the presidential election 
itself.
    Senator Wyden. I think you've touched on this, but what can 
you say in a public setting with respect to Iran's current 
support for Hamas and Hezbollah? And what does Iran get out of 
providing this support, in your judgment?
    Director Blair. I would say there are at least two 
motivations for Iran's support of these groups. One of them is 
to seize control of the resistance narrative within the Middle 
East as opposed to the peace narrative, which is what we and 
many others favor. Iran seeks to associate itself, even though 
it's Persian, with the Arab cause against Israel. It feels that 
will benefit its power in the region.
    And the second one is, fundamentally I think they don't 
like Israel, and anything that they can do to help somebody 
that's going against Israel is sort of good in their mind. So I 
would say those two things motivate them.
    Senator Wyden. I share your view.
    Madam Chair, thank you.
    Chairman Feinstein. Senator Rockefeller.
    Senator Rockefeller. Thank you, Madam Chairman.
    Two questions on China: When President Clinton was 
President, they obviously had the missile fire-over, and it 
turned out in fact that the missiles were empty. But that 
certainly didn't make any difference as far as the 
international community to find that out. One of the things 
I've always worried about--I've always been worried about is 
the fact that in the PLA, that these more senior generals, the 
ones who would have been responsible for what went on at that 
time, for example, are not being followed in their relative 
moderation by the younger PLA officers coming up--that they 
tend to be more nationalistic, more willing to take risks. And 
I'm interested in your view on that.
    Director Blair. I think that most of our evidence on that, 
Senator Rockefeller, is pretty incomplete and somewhat 
anecdotal. My personal experiences with--when I think of my 
personal experiences with junior officers and when I think of 
my discussions in China, I think that in general junior 
officers tend to be more aggressive and swashbuckling. They are 
definitely told to be ready to attack Taiwan, to fulfill the 
historic destiny of China, and when you train junior officers 
to go do a military job, they become enthusiastic about it. 
They put their heart into it. They want to do it.
    You know the saying that war is old men sending young men 
out to die, and the older men often, I think, tend to be a 
little more aware of the penalties and the dangers and perhaps 
are a bit conservative.
    So it's hard to say what will happen when these junior 
officers become more senior officers--get a little more 
seasoning, get the real responsibility, have to look the issues 
in the eye if you unloose the hordes.
    China is not a combat service. If you look at the junior 
officers in the United States armed forces, they know what war 
is. They've been out there. They've seen their buddies and 
their men die. They know that things happen that you're not 
planning on. The PLA officers don't see that. They do war 
games; they do exercises. Nobody bleeds and dies in exercises.
    So I think you have a valid concern that the younger 
generation of the PLA may not have as careful an appreciation 
of war as their senior officers.
    That being said, I do think that the overall leadership of 
China is a fairly careful, conservative group who recognize 
that China's primary problems are internal--social change, 
achieving enough economic prosperity that they can take care of 
their population and raise the standard of living. And I think 
they also think that you can't believe everything you hear from 
the armed forces, and if you have a more careful way, it's 
probably worth taking it.
    So I think within the leadership that actually makes 
decisions in China, there's a certain amount of care and 
caution, but I would not discount your observation about some 
of the junior military officers.
    Senator Rockefeller. The senior leader in China is not of 
the military.
    Director Blair. Is not what, sir?
    Senator Rockefeller. Is not of the military.
    Director Blair. Right.
    Senator Rockefeller. And that adds, I think, to the 
equation. I'm not quite sure how.
    Let me skip to India. It's amazing to me to read the book, 
written in 1947, ``Freedom at Midnight,'' and compare that to 
what's happening today and to look at the dynamics between 
India and Pakistan, Kashmir, the rest of it, at that time and 
the situation today. And I'm an optimist--I have to be an 
optimist. We all have to be optimists because we have to search 
for solutions. But it's really quite difficult, absent what we 
focus on, and that is, is India going to send a nuclear bomb 
towards Pakistan and Pakistan towards India? Maybe there will 
be military clashes. There have been for years in the Kashmir 
area.
    What it is in the makeup of those two countries that 
actually wants to find resolution, that wants to get along, I'm 
not sure where that is. Where do you see that? Is it because of 
the nuclear power thing? Does it go beyond that?
    Director Blair. I think there are a number of factors, 
Senator Rockefeller, that would perhaps change the attitude 
that was there in 1947. One certainly is the nuclear--
possession of nuclear weapons by both sides. There is no doubt 
that senior Pakistanis and Indians feel that a war between them 
that got out of hand and would result in tremendous devastation 
for both sides, far more than the issues in general in Kashmir 
that they're confronting over.
    I think also the violent extremism in the region of South 
Asia is changing attitudes, perhaps slowly, in Pakistan and in 
India. We talked a little bit about that earlier in this 
session and how Pakistan is realizing that this violent 
extremism can be a threat to them. The Indians too are becoming 
concerned about----
    Senator Rockefeller. Let me interrupt you because of my 
time problem. If you look at virtually all of these countries 
across the world, outside of Europe and us perhaps, the thing 
that strikes you more than anything else is that over 50 
percent of all of the populations are 25 or below, 20 or below, 
14 or below, and therefore have neither any sense of history, 
any sort of sense of the future, any sense of a coherent 
pattern within their own lives, and that is a destabilizing 
factor. Now, that doesn't just apply to Pakistan and India, but 
I wonder if you would comment just on the age factor and the 
future of radicalism in really the world.
    Director Blair. I've looked at some of the academic 
research on it, and, Senator, there are far more questions than 
there are answers, and it would not be useful for me to talk 
about it at that time. But it's sort of one of those--it's 
something big out there; we just don't know which way it's 
going to cut, and we ought to be working on it and thinking 
about it some more.
    Senator Rockefeller. I'll be back in a second round. Thank 
you, Madam Chairman.
    Chairman Feinstein. Thank you very much, Senator. Senator 
Bayh?
    Senator Bayh. Thank you, Chairman, and thank you, Director. 
I'm going to try and move fairly quickly. I had several 
questions I wanted to ask in a limited amount of time.
    You're fresh to the job, two weeks, as you mentioned, and 
sometimes first impressions can offer some insights--someone 
coming into an organization new--a new set of eyes to some 
problems, so I'm going to ask you three quick questions about 
this. And since this is an open hearing, we're essentially 
talking to the American people.
    I've been struck since my service on this Committee by how 
much we don't know about some of the major challenges to our 
national security. And that puts leaders like the President and 
yourself in positions of making life-and-death decisions on the 
basis of imperfect knowledge or gaps in the knowledge. So I'm 
interested in your initial impression after the first two weeks 
about just how much we know about the threats to our national 
security. I would put it to you this way. On a scale of one to 
100, with 100 being perfect clairvoyance and one being 
cluelessness, how would you rate our capacity to assess the 
threats that we face?
    Director Blair. Senator, based on 10 days of hard work and 
a little bit of thought around the edges, I'm pretty confident 
that we have a general idea of what threats, opportunities and 
trends are. What we can only do, in a prioritized and spotty 
way, is really drill down into that issue to get the real 
tactical-level details----
    Senator Bayh. So your answer is, it's pretty good.
    Director Blair. I'd say in general it's pretty good.
    Senator Bayh. Where would the most significant gaps be?
    Director Blair. I'd say the most significant gaps are in 
the areas that are not traditional state threats, that we have 
not figured out the right way to collect information and we 
have not grown the analysts to do it. I'm thinking of Senator 
Bond's energy security. We understand a lot of it, but we don't 
understand the detail that we should in order to be able to 
make very precise recommendations. I'm thinking of things like 
some of the----
    Senator Bayh. So we're better with nation states, with the 
possible exception of North Korea and some aspects of Iran. 
We're not as good with non-state actors.
    Director Blair. We can take a nation state apart if we put 
the resources on it.
    Senator Bayh. What's your initial assessment of the 
structure that was adopted in the wake of 9/11? You've been 
there 10 days; it may be too soon, but I'm interested in your 
first impression. You know, we created the directorship. The 
CIA Director is now different. Is it your initial impression 
that that is a useful structure? Should we contemplate 
combining those two missions going forward? I mean, do we have 
more coordination, or have we added another level of 
bureaucracy or some of each? How would you net that out so far?
    Director Blair. I think we have more coordination, Senator, 
with more to go. It still requires top-down pressure to achieve 
integrated operation in many areas. It doesn't come naturally 
to some of the----
    Senator Bayh. So your initial impression is the new 
structure has been a positive.
    Director Blair. Has been a positive.
    Senator Bayh. Now, some people suggest possibly combining 
the two functions in one human being, but your initial 
impression is that the division is, on a net basis, a better 
structure.
    Director Blair. You mean go back to the old Director of CIA 
as Director of Central Intelligence, that one?
    Senator Bayh. And it also has the coordinating function 
with a little more heft than was previously the case.
    Director Blair. It's interesting; I talked to a previous 
Director who had both jobs, when it was, and he said, I don't 
know how I did them both. They're two separate jobs. They 
should be done separately. And my first impression is I tend to 
agree with him, but I'll be talking about that.
    Senator Bayh. Do you get along pretty well with Secretary 
Gates?
    Director Blair. Yes, sir.
    Senator Bayh. My impression is a lot of this has to do with 
who the personalities are and how well they get along, as much 
as it does with the structure.
    Well, thank you for your initial impressions. Just a couple 
more things. There are published reports from time to time 
about the timeline for when Iran would have a weapon 
capability. To the extent you're allowed to talk about such 
things--and the Israelis seem to have a little more aggressive 
timeline than has been published with regard to us--can you 
give the American people any indication about what timeframe 
we're looking at here, with having to confront that event?
    Director Blair. Yes, sir, I could say that if Iran pursued 
its centrifuge uranium technology, they could have a weapon as 
early as 2010, but it might take them until 2015.
    Senator Bayh. So that's next year--possibly as soon as next 
year.
    Director Blair. It's possibly as soon as next year.
    Senator Bayh. And they just launched a satellite, if I'm 
not incorrect, so they're clearly working on their missile 
capabilities.
    Director Blair. There's a missile that will carry it, and 
you don't need a missile to carry it.
    Senator Bayh. So in your opinion, Director, any combination 
of carrots and sticks we could use to dissuade them from 
seeking a military capability, or is that just a strategic 
decision they've made that they're going to pursue?
    Director Blair. We have seen in the past that international 
scrutiny and sticks have made changes in their behavior, in 
pieces of it. They have not----
    Senator Bayh. Has the lower price of oil made them more 
vulnerable at this moment, so possibly sticks might be have a 
little bit more impact?
    Director Blair. I think that the lower price of oil has an 
effect. I think it has to be more comprehensive, though. The 
economic penalty that they would pay would have to be more 
comprehensive in order to really be a stick that would have an 
effect.
    Senator Bayh. Well, they are somewhat vulnerable to imports 
of energy.
    My last question--I've got about a minute left here--there 
was a published report in the last couple of days to the effect 
that the Pakistani government has been more cooperative in 
dealing with al-Qa'ida in the tribal areas. They view them as 
foreigners that are disruptive. They've not been as cooperative 
with regard to rooting out the Taliban, particularly in the 
city of Quetta--I hope I pronounced that correctly--because 
they know that we're going to be leaving Afghanistan at some 
point in time and they view the Taliban as not only some 
leverage within Afghanistan but also possibly as a 
counterbalance to India.
    Is that your initial impression as well, that they have not 
been cooperative in dealing with Taliban, particularly the 
leaders who possibly are headquartered in the Pakistani city I 
just mentioned?
    Director Blair. I'd rather go into specifics in closed 
session, Senator, but the overall idea of the unevenness of 
Pakistani cooperation is correct.
    Senator Bayh. Director, thank you.
    Chairman Feinstein. Thank you very much, Senator Bayh. 
Senator Hatch is not here. Senator Mikulski is here.
    Senator Mikulski. Director Blair, first of all, welcome. 
We're very pleased regarding your confirmation. I think we're 
very fortunate that you've chosen to come back to government 
service. And I think we share with you your compliments to the 
men and women who work in our intelligence services, both 
abroad and also here within our own country. The fact that we 
haven't had an attack in seven-and-a-half years is a tribute to 
them.
    Let me go right to my questions. One goes to Iran. Like 
Senator Bayh, I'll do some quick ones.
    On February 3rd, Iran used its own rocket to launch a small 
communications satellite in orbit. They began this satellite 
some years ago, but they're only the ninth country in the world 
to have that ability, to put a rocket up--a satellite into 
space. The State Department calls it worrisome. What is your 
assessment of what that means, and do you believe that we need 
to, in addition to their nuclear capability, additionally be 
worried about their growing scientific and technical 
capability?
    Director Blair. Senator Mikulski, I think Iran's space 
launch demonstrated that they are mastering multistage missile 
technology, and that technology can be used for peaceful 
pursuits and it can be used for military pursuits. They have 
some smart scientists and good engineers. If they put resources 
on it, they can make a serious missile force.
    Senator Mikulski. Thank you. I also have another question 
about Egypt and the tunnels into Gaza, but I would like to keep 
that for a closed session.
    I'd like to go to the cyber threat, essentially which I 
think is a transnational threat. In your testimony, on page 38, 
you talk about how because our technology, our infotech 
technology is now increasingly designed and manufactured 
overseas, this in and of itself can present a threat. Could you 
elaborate on that?
    Director Blair. The the operating systems of virtually all 
equipment, whether it be communications or also military 
equipment, is partly embedded in the chips that are built into 
the system, and then it's partly the software that is handled 
through computers. And if you know where a particular chip is 
going and what it's going to be used for, and you have control 
of it for a while, you can doctor it for purposes that--you can 
help make it go stupid; you can destroy it.
    And so, clever adversaries, if they can get into that 
supply chain at various points, can affect the equipment that 
we use in our communications systems, in our military weapons 
systems, and elsewhere. So we just have to figure out ways to 
protect this all the way.
    Senator Mikulski. Well then, based on that, would you say 
that in terms of the cyber threat, where we often think a 
state-supported threat, a big country with big technology 
capability could target us, but are you saying that because of 
that--and also, further on in your testimony--that both 
organized crime and then individual kind of hackers for hire 
could pose threats to our critical infrastructure in some way 
or other?
    Director Blair. As far as technical capabilities go, I 
think either one of those groups could pose threats. In terms 
of motivation and why they do it, I think there are probably 
different factors at work. Criminals obviously have great 
incentive to go after financial networks and just earn money. 
Hackers seem to take a joy in strange ways--watching lights go 
out, funny things on screens. They seem to do it for reasons 
that are hard to figure out. I think the technical fixes and 
the sort of cooperation are sort of similar to stop all those 
kinds of threats.
    Senator Mikulski. Well, as I understand it, General Jones 
at the National Security Council has asked Melissa Hathaway to 
do a 60-day review of our cyber security situation. And I know 
the Chairwoman has delayed our hearing on cyber security, our 
classified one. And we hope to really probe into this because I 
think this is one of these threats that is an invisible threat, 
and then, wham, it could have serious consequences.
    Let me get into one other area, though, before my time is 
up, and it goes to the Bayh question, what did you find in your 
first 10 days? What I see--and I wanted your reaction--is in 
this year's threat, world threat assessment, there is a growing 
emphasis once again on narcotics. Narcotics seem to be an 
insidious evil that has many tentacles that could undermine the 
United States of America or our efforts. Look at Mexico. We all 
know of the terrible death of a general in Cancun. Cancun is 
now being guarded. Afghanistan--corruption seems to go up to 
the highest levels, and we're going to be asked to send troops 
essentially to defend their corrupt situation.
    Is it one of your surprises in your return to government in 
the 10 days the growing issues around narcotics, and do you see 
kind of expanding our counternarcotics effort because it has 
such an insidious and undermining effect on us?
    Director Blair. I think it's gotten worse in the time that 
I've been out of government, and the effect on--I mean, we all 
know the human tragedy of drugs within the country--blasted 
lives and crime and so on. The international effects of it, 
though, I think have been worse in the last dozen years in the 
areas that you mention. So it is one of the things that I think 
has gone the wrong direction.
    Senator Mikulski. Thank you. Thank you very much.
    Chairman Feinstein. Thank you very much, Senator. Senator 
Chambliss is not here. Senator Nelson is not here.
    Senator Whitehouse?
    Senator Whitehouse. Thank you, Chairman. Welcome back, 
Admiral. It doesn't seem like very long since you were last 
here. We don't let you get away far.
    You note in your testimony the importance of keeping up 
pressure on al-Qa'ida in the Federal Administered Tribal Areas. 
Not too long ago Senator Snowe and I traveled to Eastern 
Afghanistan, right adjacent to the FATA, and over and over 
again in the different briefings we received, the problem of 
the border came up. To the Talibani syndicates operating in 
that area and to al-Qa'ida, it matters not at all. It does not 
enter their calculations. It is a zero factor. But for us and 
for the legitimate governments on either side, it is a 
considerable impediment to working in a concerted way to 
address that problem.
    I was briefed by our military commanders about the 
establishment of the border coordination centers, which would 
be trilateral--U.S., Afghan and Pakistan. Only one is up. We 
didn't have the chance to have a look at it and see how 
effective it is. Others are under way.
    It strikes me that, given the importance of this threat in 
that area, given the significance of the disability that the 
border presents to our efforts, that these border coordination 
centers should be a very high matter of national priority. Now, 
I understand that they raise a whole variety of issues, 
including how do you make sure that the Afghan and Pakistani 
participation in those coordination centers is secure and 
doesn't compromise important information? And that's a 
difficult problem, but it doesn't seem to me that it's an 
insoluble problem.
    I'd like to hear how high a priority you think those are 
and what you think we can do to accelerate that strategy, 
because in theory we should be able to be operating in real 
syncopation on one side and the other, driving them over the 
border and catching them on the other side, and that capability 
doesn't really seem to be established yet.
    Director Blair. Senator, I agree with you. In theory, we 
ought to be able to run a seamless operation. The trouble is 
that our partners on those two sides of the borders have quite 
different capabilities, motivations and willingness to work 
with us. So in fact what you find is you have to deal 
differently with your partners on one side of the border from 
that on the other.
    There's no doubt that the solution to the area has got to 
be something that goes across borders. Afghanistan can never be 
secure if the Pakistan FATA area is not. And an international 
effort beefed up in Afghanistan is not going to be successful 
unless there's addressal from Pakistan. And in fact the 
Administration review that's going on now is an Afghanistan-
Pakistan review and, as you know, Special Representative 
Holbrooke's responsibility goes across both areas.
    We talked about those border posts. I'm certainly for them 
in theory. I just haven't had time to see whether from a 
practical point of view they are fulfilling the potential that 
we both think they should have. And if we don't do it that way, 
we've got to do it some way in order to use our intelligence 
capabilities to have the Pakistanis enforcing law and order on 
their side of the border and dealing with the insurgents on the 
Taliban side too. So we'll continue to push it.
    Senator Whitehouse. To the extent that if we don't do it 
that way, we have to do it some way, to paraphrase what you 
said, I'm not aware of any other some way, which is one of the 
reasons I'm focusing on these particular centers. If you can 
say it in an open session like that, do you have something else 
in mind when you're----
    Director Blair. Well, if we could get a----
    Senator Whitehouse. Do you have to do it some way other 
than this?
    Director Blair. If we could get a full-up intelligence-
sharing arrangement with the Pakistan armed forces that would 
sort of work through the Pakistani army from the center out, 
that would be another way to do it rather than putting our 
effort on the border in the local situation. We could empower 
Pakistan units in the counterinsurgency operations that they 
are conducting. That's really what I had in mind in terms of 
the alternative.
    Senator Whitehouse. Yes. I agree with you. I think it's 
actually not necessary to be physically located there, so long 
as the goals of trilateral participation and quick response and 
ability to effectively marshal our assets on both sides of the 
border are met.
    Director Blair. Right. And not allowing the bad guys to go 
over an artificial line and thumb their noses at us because 
nothing will happen on the other side of the line.
    Senator Whitehouse. Yes.
    Director Blair. That's the objective. Yes, sir.
    Senator Whitehouse. Precisely.
    This is almost a philosophical question, and it touches on 
what America is and what it should be and all of that. But if, 
hypothetically, Americans had done something that was truly 
horrible and was classified deeply secret and you were faced 
with the choice of whether to, to some extent, confess it in 
order to correct it versus keeping it deeply classified in 
order to avoid the reputational harm that might ensue, how 
would you analyze that question, and what are the principles or 
the priorities that you would bring to bear on it?
    Director Blair. I believe in my bones that the United 
States acts lawfully and legally when it does it right. I think 
that the combination of the laws that are passed, the training 
of the people we have in the executive branch--we have a solid 
legal and moral foundation for what we do, even in areas that 
involve killing people like the armed forces and the things 
that we do in the intelligence services. Therefore, I believe 
that if something terrible were done, it would be done by 
somebody who had broken the laws and the procedures and the 
training that we'd given them, and that person should be held 
to account for it.
    Senator Whitehouse. My time has expired. Thank you, 
Admiral.
    Thank you, Chairman.
    Chairman Feinstein. Thank you very much, Senator.
    Senator Snowe is not here. Senator Feingold, you're next.
    Senator Feingold. I thank the Chair.
    Thank you, sir. In your opening statement you stated that 
terrorist threats to U.S. interests in the Horn of Africa are 
increasing. And you also indicated that U.S. counterterrorism 
efforts there will be challenged by the ``high profile U.S. 
role in the region and the perception that this constitutes 
foreign intervention in Somalia.'' But the problem, as I've 
long seen it, is that the U.S. role is not that it's too high 
profile; in most respects, I think our engagement has been 
really grossly insufficient. But to the extent there is a 
perception that we support foreign intervention, isn't that 
based in part on our association with Ethiopia's actual 
intervention?
    Director Blair. Certainly the Ethiopians weren't very 
popular in Somalia, and the perception that anybody was helping 
them wasn't popular there. Yes, sir, that's true.
    I think my remarks were referring more to the--you're more 
familiar than I am with the legacy in Africa, and the 
experience with the attempt to establish Africa Command I think 
was instructive in that regard. I think most American military 
people thought that was a helpful thing and most African--many 
African countries of course thought that this was a secret plan 
for a military-dominated policy in ways that had hurt them 
before. So I think that we don't always take our actions in a 
way that makes them achieve their goals.
    Senator Feingold. Okay. But specifically on this issue of 
Somalia and Ethiopia, I take it you're indicating that the 
perception would certainly be by many in Somalia that we were 
pretty deeply associated with the Ethiopian intervention. Is 
that correct?
    Director Blair. As I'm thinking about that question, I'm 
not sure I know enough to answer that correctly. I think our 
policy in Somalia was not very coherent in the past few years 
with all of the turmoil and the warlord fighting.
    Senator Feingold. Well, that's for sure. That's a given. My 
question is, what is the perception of what our role was vis-a-
vis Ethiopia's intervention. My guess is and belief is that 
they think it was--what the facts are is one thing----
    Director Blair. Oh, I see. Right.
    Senator Feingold [continuing]. But the perception is that 
we were deeply involved. Is that something that you would agree 
with?
    Director Blair. I don't know. I don't know. I'd have to get 
back to you.
    Senator Feingold. Okay. We'll move on.
    If we're to overcome these challenges to our 
counterterrorism efforts, doesn't it make sense--and you're 
alluding to this already--to develop a strategy that 
strengthens diplomatic, humanitarian and other aspects of our 
policies that are not perceived as foreign intervention?
    Director Blair. Yes.
    Senator Feingold. And I'd like to repeat that really almost 
stunning sentence with which you opened your statement. You 
said, ``The primary near-term security concern of the United 
States is the global economic crisis and its geopolitical 
implication.'' And then you went on to describe how the crisis 
is already destabilizing some countries, with more to come.
    So do you think we're well positioned right now to monitor 
around the world the effects of this crisis and the ways it 
will damage our national security? Is the intelligence 
community positioned to anticipate, for example, when a 
government's going to fall, when a government's going to turn 
against us, or that it would in some cases simply lack the 
resources needed to work with us on issues of mutual concern?
    Director Blair. Senator, I think we'll be able to have some 
warning of these economic difficulties turning into real 
political difficulties.
    I think my placement of the economic crisis at the head of 
the list is formed by my thinking that in recent years it seems 
that we've had more security problems from failed states, from 
states that have been in trouble, than we have from strong 
states that have been an adversary to us in the traditional 
way. It seems that when you have states that are on the feather 
edge of being able to get a grip on law and order and economic 
development and so on, if that is knocked off course by 
economic difficulties, by the ethnic/sectarian/tribal rivalries 
takeover--and I just think if you look at the numbers, there 
are a lot of states who were barely keeping up with the sort of 
six percent growth in Africa, with the overall couple of 
percent growth in the world, and when those growth rates go 
down, my gut tells me that there are going to be problems 
coming out of that. And we are looking for that to see what it 
will be, and it seems that those areas are what have caused us 
the most problems in recent years.
    Senator Feingold. I understand you've already indicated 
this in response to some questions from Senator Bayh, and all I 
can say is I couldn't agree with you more. This is absolutely 
an essential understanding of what the threats are, is that 
these are the places where we really, really are going to have 
problems if we don't anticipate it. So I thank you for 
reiterating that.
    I think part of the lesson here is that we have to be 
prepared to anticipate the crises before they happen and not 
constantly being in a reactive mode. And Mr. Panetta testified 
at his confirmation hearing that he was concerned that we 
aren't allocating enough resources to the countries and regions 
that the intelligence community has already assessed or where 
our ``primary near-term security concern'' is taking place.
    Mr. Panetta also committed to conducting a review of CIA 
operations and resources to make sure that we have a global 
focus and are considering long-term and emerging threats. As 
DNI, will you commit to undertaking an intelligence community-
wide review along these lines?
    Director Blair. I think that's a very good idea to do that, 
Yes, sir.
    Senator Feingold. Another lesson is that anticipating and 
tracking complex, multi-faceted issues--like the impact of 
economic crises and instability--and the likelihood of a 
particular region of the world becoming a terrorist safehaven 
requires a combination of clandestine collection and diplomatic 
and other overt reporting.
    Director Blair, do you agree? And, if so, how do we go 
about prepositioning all of our government's eyes and ears, 
both clandestine and overt, so that we're not being caught 
flat-footed?
    Director Blair. I think that the clandestine side of it 
probably is the more difficult. There are a great number of 
sensors out there in nongovernmental organizations, travelers, 
businessmen in the open-source intelligence. So, we can get, I 
think, a good general idea of what's going on in troubled areas 
without having agents there.
    But then, to get behind that, into the motivations of the 
criminal leaders and other leaders who are taking advantage of 
the situation for their own things, I find that that's where 
the open- source intelligence stops. That's where you have to 
get people on the ground; you have to bring signals 
intelligence to bear.
    And then, frankly, one of our collection difficulties is 
trying to move that spotlight around so it is on the right 
places. We can't cover everything to the depth that we would 
like and we need to make good choices.
    Senator Feingold. And then even when we are able to cover 
things, somehow we have to put together the clandestine and 
overt information in a coordinated way. And in this regard, I 
mentioned to you before, this Committee passed legislation last 
Congress creating an independent commission to study this 
problem and make recommendations. So, I hope you'll work with 
me in getting this commission in place, because the sooner we 
do it, the better we'll be able to get ahead of these crises. 
My time's up. I apologize.
    Chairman Feinstein. Thank you very much, Senator.
    We could have a brief second round, if that's agreeable to 
you.
    Director Blair. Sure. Yes, ma'am.
    Chairman Feinstein. The country that hasn't been discussed, 
that I think is a very important fulcrum in all of this, is 
Russia--Russia under Medvedev and Russia under Putin; and where 
is that country going; and can it become a dependable partner 
for the United States?
    It seems to me that there's a situation where virtually 
anything that happens seems to rub Russia the wrong way. And 
yet what we need is a real partner in nuclear nonproliferation, 
in counterterrorism. How do you see this relationship at the 
present time, and what would you advise American policy be to 
improve it?
    Director Blair. I think the economic crisis is probably 
causing Russia to do some reconsidering. They've been on a roll 
for the past 10 years or so, with oil revenues and other 
revenues. That, combined with a, sort of, reassertion of Russia 
prerogatives in the world has made the government enormously 
popular and given them a free hand to continue that.
    But the social contract they struck was continued economic 
prosperity and a good strong Russia, in return for pretty sharp 
limitations on personal freedom. That contract is fraying now, 
I think, with the global economic prices--the price of oil 
going down; we've already seen demonstrations in Russia.
    I don't think their regime is threatening right now, but 
they show popular discontent being right under surface if the 
Russian government can't deliver the economic goods that have 
been a strong basis of their popularity. So, I think Russian 
has to rethink what it's doing.
    As far as its overseas policy goes, I think that Russia 
has--a certain self-image it's projecting. But, I also think 
that they have specific interests that they view, and that 
there may be areas--and I would advise this to policymakers--
that we can find a match between what Russia wants and what the 
United States wants.
    I'm disappointed, frankly, in the Russian role in the Manas 
base negotiations in Kyrgyzstan. It appears that Russia is not 
playing a helpful role, even though, in general, Russia 
believes that the United States' role in Afghanistan and in 
dealing with the terrorism in the country is to their good too, 
because they face, of course, Sunni violent extremism in their 
Southern areas.
    So Russia has a certain amount of ambivalence. They don't 
mind poking a stick in our eye if they can, but they do, I 
think, recognize that there are some things that we see 
together. On Iran, Russia does not want a nuclear-armed Iran, 
but it also would like some other things from Iran.
    So you see this ambivalence in Russian approaches to 
individual issues. And where there's ambivalence, perhaps 
there's a chance to work out some deals. So, I think we have to 
explore that.
    Chairman Feinstein. As I look at it, if you look at just 
the geopolitics of the big, large powerful nations--Russia, 
China, India, the United States, the European community--it 
seems to me that the asymmetric nations of the world, and the 
potential threat from this asymmetric nature of the world today 
should bring those big nations together.
    Instead, we always get tripped up. There was the Georgia 
escapade--and I don't know if you've had a chance to look at 
that as to if there is blame, where that blame rests, in terms 
of beginning that; and what are the chain of dominos, if any, 
that it has unleashed. Would you care to comment on that part 
of the equation?
    Director Blair. I haven't had a chance yet, Madam Chairman, 
to sort of go back over how that crisis came off. But, I agree 
with you that there are many areas in which the interests of 
the large countries run very much together.
    And I think, to the extent that they feel that those are 
really strong interests that really threaten them, you get a 
higher level of cooperation than when they think that they can 
be, sort of, played also to gain some advantage, at the same 
time you're getting enough protection for yourself that you're 
satisfying national needs.
    But, I think we should probe that with Russia, as we should 
with the other countries that you mentioned, and keep our 
hedges up so that if things turn out badly we can cover our own 
interests, but look for these areas.
    Chairman Feinstein. Would you care to put on the record 
where the main cyber threats to the United States--what two 
countries they are coming from?
    Director Blair. I can tell you, in terms of capability, 
that Russia and China--and I'm talking both military and 
civilian hackers who may be hired by crime or may be 
motivated--they're right up there at top of the list.
    Chairman Feinstein. Do you see any nexus between the 
Russian organized crime, cyber networks, and the government?
    Director Blair. I'd rather not answer that in this session, 
Madam Chairman.
    Chairman Feinstein. Okay, fair enough.
    It would be fair to say, then, that the great bulk of the 
cyber intrusions are coming either from China or from Russia?
    Director Blair. They're coming from Internet Protocol 
addresses in those countries. As you know, you can bounce 
around to disguise where you're coming from, but a large 
portion of them are coming out of IP addresses in China and in 
Russia.
    Chairman Feinstein. Well, where I'm going with this is, we 
know that we are going to be looking at cyber in some detail on 
this Committee----
    Director Blair. Right.
    Chairman Feinstein [continuing]. And yet it seems to me 
that, other than the intelligence world, there is a very real 
policy gap out here where the diplomatic world needs to step 
in. And when things happen, countries need to get demarched, as 
opposed to keeping all of this under wraps so that all one does 
is build one's own technology to get closer and closer to cyber 
warfare.
    Candidly, I am not interested in doing that. I am 
interested in holding countries responsible for the behavior of 
their entities. And I think it's a much more responsible course 
in the long-run if you have American policymakers heavily 
engaged with their counterparts in other countries, driving 
toward international treaties and agreements which prevent 
cyber intrusions which could result one day, if left 
unaddressed, in a cyber war.
    Director Blair. I agree that if we could develop some sort 
of a code of conduct and approach that the major nations agreed 
on to cyber space, the fact that we have--although somewhat 
imperfectly--in the high seas maritime regime, we have a little 
bit of in the space regime in which everybody recognizes that 
if we turn the offense loose in these areas, it's to all of our 
disadvantage, that would be in the interest of all of us. And 
it would apply some regulation to these activities more at the 
source than having to deal with it the way we do now.
    Chairman Feinstein. Thank you very much.
    Mr. Vice Chairman.
    Vice Chairman Bond. Mr. Director, I want to go back to that 
in just a moment, but some of the questions that have been 
raised brings me back to the statement for the record, which 
began: ``The primary near-term security concern of the United 
States is the global economic crisis, regime-threatening 
instability, increased nationalism, Caribbean refuge flows'', 
and certainly, I'm very much concerned about protectionist 
policies, Asian refugees, instability and other things.
    And I believe we have to get the toxic debt out of the 
credit markets to solve that, but when it comes to the focus of 
the intelligence community, we've got threats from terrorism, 
the wars in Afghanistan and Iraq, the threat posed by Iran's 
pursuit of nuclear capability, and the Middle East crisis.
    Now, I hope you don't mean by that that the primary focus 
of the intelligence community is going to be on finding out 
what you recently described as readily observable and open-
source information on the conditions of the country.
    The primary emphasis of the IC, I would think--from the 
great bulk of questions and answers here--has got to be on 
these current threats that we face, does it not?
    Director Blair. Mr. Vice Chairman, I was not making a 
statement about what we would turn our collection 
capabilities--which are designed for various purposes--to. My 
intent in drawing attention to the economic crisis was more to 
inform policy of the things that could really cause real 
problems for the United States if they developed a certain way. 
But I won't be turning satellites to look at GDP accounts.
    Vice Chairman Bond. Well, I think a number of people had a 
concern about that, because what the intelligence community--
and we discussed the long-term concerns about getting adequate 
energy intelligence, something that I think the IC is uniquely 
capable of doing, which is not available in open source. But I 
wanted to make sure the emphasis was going to continue to be on 
these threats that I think most of us have described.
    Director Blair. Yes, sir. And I was trying to act as your 
intelligence officer for the Senate, not necessarily in the 
Intelligence Committee, but as members of the body that has to 
make big decisions for American policy in the future. And I 
just think that what the Senate ought to be worrying about is 
the economic crisis.
    Vice Chairman Bond. That's something we need to get right 
and I'll have some comments on TARP later.
    Director Blair. Yes, sir.
    Vice Chairman Bond. You've mentioned the problem dealing 
with cyber attacks from major state actors. And I think the 
Chair has rightly pointed out that this needs to be a higher-
level executive, diplomatic exchange.
    How are we able--or are we able--to prosecute suspected 
espionage cases or attacks? Do we have any ability to go after 
those who perpetrate cyber invasions either for the purpose of 
acquiring information or for the purpose of degrading or 
destroying our system? Do we have any means of going after 
those?
    Director Blair. This is such a new area that I'd really 
like to have most of the discussion in closed session. There 
are some things we can talk about----
    Vice Chairman Bond. All right.
    Director Blair. About how you--there have been things in 
this country--finding a hacker, being able to zero in on a 
person and determine who it is. When you get into more 
sophisticated attacks that are across continents and through 
firewalls and so on, you get into some pretty fancy----
    Vice Chairman Bond. It's very difficult, in other words.
    Director Blair. Technically and legally and I'd rather 
discuss those with you in a closed session, if I could, Mr. 
Vice Chairman.
    Vice Chairman Bond. One of the questions about China, we 
all know that it reportedly spent $59 billion in 2008 on its 
military forces--a significant increase.
    What impact, if any, does this have on our strategic 
relationship with Taiwan? And do you see a long-term threat to 
the United States from this increased budget by China?
    Director Blair. As China does increase its military 
expenditure, it does pose a greater threat to Taiwan, Mr. Vice 
Chairman. And unless Taiwan does something about it--and we're 
really the only other country helping them do it--that means 
we're going to have to help them some more in order to maintain 
a balance so that China's military might won't turn into 
coercive capability or military capability. So it does have an 
effect.
    As far as an effect on the United States, it really depends 
on how China uses that military power. Right now they've sent a 
couple of ships to participate in piracy patrols off Somalia. 
That's a good thing. More is better of that kind of thing.
    If they turn extended naval power into trying to coerce 
other small countries in that area of the world, that's a bad 
thing and we would take an entirely different thing to it. So 
it kind of depends.
    Vice Chairman Bond. Let me jump just very quickly to 
another areas. Recent reports describe several Yemeni Gitmo 
detainees who have been released from Saudi rehabilitation who 
returned to terrorism. What is your assessment of threat to 
U.S. interests from al-Qa'ida and affiliated groups in Yemen? 
And what is the recidivism rate for released Gitmo detainees?
    Director Blair. I'm hesitating because I can't remember 
what the classification level is.
    There is a recidivism rate of the entire Saudi program. 
There is a somewhat higher recidivism rate of those from 
Guantanamo who've been brought back. And the Saudis are 
increasing their efforts, because they see the same problem 
that we do. I can give you the number in closed session, but it 
is not a 100 percent foolproof program, although we give high 
marks to the Saudis in general for the efforts they are making 
in reeducation and in taking--not only punitive, but also these 
rehabilitation efforts. It's making a difference.
    Vice Chairman Bond. Thank you, Mr. Director.
    Chairman Feinstein. Thank you, Mr. Vice Chairman.
    Senator Rockefeller.
    Senator Rockefeller. Thank you, Madam Chairman.
    I'm going to ask you a very different kind of question, but 
one which I think has enormous consequences both in this 
country and across the world--or you may disagree.
    At last year's global threats hearing, I asked General 
Hayden a question about the Army Field Manual standards for 
interrogation. And in the course of the discussion that 
followed, he revealed publicly that we've waterboarded three 
al-Qa'ida terrorists.
    For too many people in our government, and in my judgment 
in our country, there's a mistaken impression that 
waterboarding is what has to be done to get actionable 
intelligence to keep America safe. It's not. It's torture. And 
the great majority of the interrogation community believes 
that's not the best way to get actionable intelligence in the 
first place.
    It's already done great damage to our national security, 
both as a poor interrogation tool and as a boon to terrorist 
recruitment worldwide. So I want to ask you about the threat 
that this misunderstanding poses to our national security.
    Two years ago, Brigadier General Patrick Finnegan, the dean 
of West Point, took several military and FBI interrogators to 
try to convince the producers of this TV show ``24'' not to 
glorify torture, because it was having a toxic effect on 
cadets' training and ethics.
    So my questions are as follows: How does this 
misunderstanding about torture affect our most valuable 
national security resources--the young men and women who 
volunteer to service in the military or the intelligence 
agencies? Do they believe that Jack Bauer is what a good 
intelligence agent is supposed to act like?
    I'll ask a few more: The Hollywood producer of ``24,'' one 
Joel Surnow, is celebrated in some circles--most circles--for 
the show's depiction of the tough choices that have to be made 
in the war on terrorism. Justice Scalia has cited Jack Bauer's 
torture of terrorist suspects, and our former Secretary of 
Homeland Security, Michael Chertoff, said of the show, 
``Frankly, it reflects real life.'' In your decades of service 
to our nation's security, would you say that this TV show 
reflects real life?
    Director Blair. I've never seen an episode of that show, 
Senator, so I can't help you.
    Senator Rockefeller. That's a copout. That's a copout.
    Director Blair. It happens to be true.
    Senator Rockefeller. I understand that.
    Director Blair. But on the general point, no. We don't want 
to--I mean, I can tell you my leadership and the leadership 
that I admire in the armed forces and the intelligence services 
does not believe that you have to be tough and mean to do a 
good job for your country. You have to be following the 
traditions of your service. You have to follow America's ideals 
while you're getting the job done. You have to act lawfully. 
Those are the leaders that most of us admire, and that's my 
experience of what most of the leaders are. We don't glorify 
torture and killing, and there won't be torture on my watch.
    Senator Rockefeller. And I understand that. But on their 
watch, they have it regularly, and it's the most popular TV 
show in America.
    I simply raise that as a question of how what's going on 
can be used for money-making purposes, and in the process not 
only affect young people in our country and how they approach, 
potentially, public service in the intelligence community or 
elsewhere, as well as the Muslim world. It worries me greatly. 
It's one television show, and it worries me greatly.
    Director Blair. American popular culture is sometimes our 
worst enemy overseas, isn't it, Senator Rockefeller?
    I have traveled, and everybody thinks that America is about 
some of these shows that are made as violent and as lurid as 
they can be so that they will up their ratings. I don't think 
that reflects the real America. I don't think that's who we 
are. I don't think that's who we want to be, and I think it's a 
bad reflection of what this country is really about.
    Senator Rockefeller. I'll send you a copy.
    Director Blair. All right.
    Senator Rockefeller. Thank you, sir.
    Vice Chairman Bond. [Presiding] Thank you, Senator 
Rockefeller.
    Senator Whitehouse.
    Senator Whitehouse. Thank you, Vice Chairman.
    There have been a great number of questions this afternoon 
about our cyber security probelms.
    Director Blair. Good. Good.
    Senator Whitehouse. Those have been pursued--there have 
been some very deeply classified elements to the way in which 
we have begun to address the cyber security problem. It also 
raises issues about privacy. It raises issues about civil 
liberties. It raises issues about domestic wiretapping and so 
forth.
    And it strikes me that in order to address those issues and 
enjoy public confidence that those issues have been adequately 
addressed, then very significant aspects of the way in which we 
address cyber terrorism have to be brought out from behind the 
dark screen of classification. We have to have some public 
debate and discussion over these issues. We have to open up the 
scope of people who are given access to some of the classified 
functions.
    And I'm wondering if you have given any thought to how one 
might go about doing that. It's almost unfair to ask you, if 
you've been in office all of two weeks, but it strikes me that 
this is an issue that it's worth starting to grapple with, 
particularly if, as the current plan proceeds, it passes 
decision points that should be informed by that kind of a 
discussion.
    Director Blair. I've given thought to that, Senator 
Whitehouse, and in fact those exact concerns are central in 
this review we're conducting. I'm not sure that the technical 
answers for privacy will be much different from what we know 
now. But if we are to be able to apply these technical answers 
in this complex, interrelated infospace that is the reality of 
modern communications, the American people have to have 
confidence that they are being applied in a way that respects 
privacy and civil liberties.
    I think just a couple of points that will be an advantage. 
Number one, since all these things have to be done at cyber 
speed--blocking attacks, cleansing places--the algorithms to do 
that have to be written ahead of time and be in place. So in 
the writing of the algorithms, you can take into account the 
sorts of concerns that we're talking about and they can be 
reviewed by civil liberties experts; they can be shown to 
Congress.
    They can be talked about, I think, in concept if not in 
particular so that people know that these are being set up in 
the right way. Then oversight is key--the monitoring of these 
so that you all and everyone else has confidence that if 
somehow some of these procedures break down or go wrong, there 
are ways to deal with it, they're fixed, and they're done in a 
way.
    So I think that we have to build these sorts of 
considerations into the structure of the equipment, and I think 
we can talk about that in a procedural and unclass way as long 
as we don't get into the code which detects a particular piece 
of malware so that somebody can design one that's better.
    So I think it's a challenge to us, especially because we're 
spies. You know, people don't trust us in general, so we have a 
further distance to go if the expertise that's developed for 
espionage that is used for these purposes. So we recognize that 
burden, and I think it's incumbent on us to do it that way.
    Senator Whitehouse. Well, given the brevity of your tenure 
and the complexity of the situation, I certainly do not 
begrudge you the 60 days. I'm delighted to hear that this is a 
part of that analysis that's taking place in that 60 days, and 
I look forward to being in touch with you again at the 
conclusion of your process. I appreciate it very much. Thank 
you, sir.
    Director Blair. Yes, sir.
    Vice Chairman Bond. Further questions from you, Senator 
Whitehouse, or Senator Rockefeller? [No response.]
    Vice Chairman Bond. I was just going to ask one last 
question. At last year's threat hearing, Director Hayden was 
asked about restricting governmental interrogations to those 
outlined in the Army Field Manual. He responded there is a 
universe of lawful interrogations that we have a right to use, 
and the Army Field Manual listing is only a subset but do not 
consist of all lawful interrogation tools. Have you had the 
opportunity to review that question and determine whether there 
is an area to use techniques beyond the Army Field Manual and 
whether that might be necessary for high value detainees?
    Director Blair. We are, Senator Bond--and I remember you 
and I had this conversation in the confirmation hearing and 
all--and the task forces which have been set up by the 
executive orders that we discussed are now in existence. And we 
are not only looking at that exact universe of interrogation 
techniques. we are trying to bring in some more science and 
research in that area so we can determine what is the best and 
most effective way to get the information that we need.
    So we are looking at it with a pretty open aperture, but 
the principles that we discussed of having a single manual, but 
not one which is a training manual for our adversaries, are 
very much in our mind also. So we're started down that road, 
and everything you and I discussed is still in play.
    Vice Chairman Bond. Well, we'll look forward to hearing 
your conclusions, Mr. Director.
    I'm sure I could ask you a lot more questions, but I 
appreciate your participation in the hearing, and I think it's 
about that time.
    On behalf of the Chair, this hearing is adjourned. Thank 
you.
    [Whereupon, at 4:35 p.m., the Committee adjourned.]

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