[Senate Hearing 112-252]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-252
 
  CURRENT AND PROJECTED NATIONAL SECURITY THREATS TO THE UNITED STATES

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



                                HEARING

                               BEFORE THE

                    SELECT COMMITTEE ON INTELLIGENCE

                                 OF THE

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                      WEDNESDAY, FEBRUARY 16, 2011

                               __________

      Printed for the use of the Select Committee on Intelligence


         Available via the World Wide Web: http://www.fdsys.gov





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                    SELECT COMMITTEE ON INTELLIGENCE

           [Established by S. Res. 400, 94th Cong., 2d Sess.]

                 DIANNE FEINSTEIN, California, Chairman
                SAXBY CHAMBLISS, Georgia, Vice Chairman

JOHN D. ROCKEFELLER IV, West         OLYMPIA J. SNOWE, Maine
    Virginia                         RICHARD BURR, North Carolina
RON WYDEN, Oregon                    JAMES E. RISCH, Idaho
BARBARA A. MIKULSKI, Maryland        DANIEL COATS, Indiana
BILL NELSON, Florida                 ROY BLUNT, Missouri
KENT CONRAD, North Dakota            MARCO RUBIO, Florida
MARK UDALL, Colorado
MARK WARNER, Virginia
                     HARRY REID, Nevada, Ex Officio
                 MITCH McCONNELL, Kentucky, Ex Officio
                    CARL LEVIN, Michigan, Ex Officio
                    JOHN McCAIN, Arizona, Ex Officio
                              ----------                              
                     David Grannis, Staff Director
            Martha Scott Poindexter, Minority Staff Director
                    Kathleen P. McGhee, Chief Clerk
                                CONTENTS

                              ----------                              

                           FEBRUARY 16, 2011

                           OPENING STATEMENTS

Feinstein, Hon. Dianne, Chairman, a U.S. Senator from California.     1
Chambliss, Hon. Saxby, Vice Chairman, a U.S. Senator from Georgia     2

                               WITNESSES

Hon. James R. Clapper, Jr., Director of National Intelligence....     4
Hon. Leon Panetta, Director, Central Intelligence Agency.........    44
Hon. Robert S. Mueller III, Director, Federal Bureau of 
  Investigation..................................................    46
Lieutenant General Ronald Burgess, USA, Director, Defense 
  Intelligence Agency............................................    58
Hon. Michael Leiter, Director, National Counterterrorism Center..    60
Hon. Phillip Goldberg, Assistant Secretary of State for 
  Intelligence and Research......................................    65

                         SUPPLEMENTAL MATERIAL

Prepared statement of Hon. James R. Clapper, Jr..................     9


  CURRENT AND PROJECTED NATIONAL SECURITY THREATS TO THE UNITED STATES

                              ----------                              


                      WEDNESDAY, FEBRUARY 16, 2011

                                       U.S. Senate,
                          Select Committee on Intelligence,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:03 a.m., in 
Room SH-216, Hart Senate Office Building, the Honorable Dianne 
Feinstein (Chairman of the Committee) presiding.
    Committee Members Present: Senators Feinstein, Wyden, 
Mikulski, Conrad, Udall of Colorado, Warner, Chambliss, Snowe, 
Burr, Risch, Coats, Blunt, and Rubio.

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

    Chairman Feinstein. Good morning, everyone. This hearing 
will come to order.
    This Committee meets today in open session to hear 
testimony from the leaders of the intelligence community on the 
threats facing the United States. The Committee has been 
holding worldwide threat hearings since 1994 as a way to focus 
the Committee and the Senate on the national security 
challenges and opportunities that we face as a nation and to 
allow the American public a view into the assessments of the 
United States intelligence agencies about the dangerous world 
in which we live.
    Yesterday the Senate passed overwhelmingly at least a 
temporary extension, to the end of May, of three very vital 
sections of the United States PATRIOT Act. And I have been 
surprised about how much misunderstanding they have caused. 
I've also been surprised at how short memories are.
    Explosives today are much more sophisticated. They are 
undetectable. Just a very short time ago, in Dubai, printer 
cartridges were found with an undetectable explosive in them. 
And if it hadn't been for good intelligence that brought the 
inspectors back a second time and said, ``You've got to open 
these things up and look,'' two bombs would have left Dubai, 
headed for the United States, theoretically to Chicago--I don't 
know whether this is actually fact, but to a synagogue in 
Chicago--and likely would have exploded either over Canada or 
part of the United States.
    So this, to me, is eloquent testimony of the need to 
provide the opportunities for intelligence. This nation does 
still remain in jeopardy. Just a short time ago you had both 
Director Clapper as well as Secretary Napolitano testify in the 
House about the level of concern, threat and potential jeopardy 
to our country.
    So I think these tools are very important. And I am always 
surprised at the opposition, because I would have thought 
somebody, if they had a problem, would have called me and said, 
``Look, this is being done wrong; please take a look at it,'' 
because previously, from time to time, the Judiciary Committee 
and the Intelligence Committee do just that.
    But providing the intelligence community with the tools 
they need, with proper due process--and we do have such a thing 
as a Foreign Intelligence Surveillance Court that meets 24/7, 
that gives what is essentially like a warrant, so the roving 
wiretap is all done in a legal way, and the only difference is 
that the individual is the target, not the specific telephone, 
because they change telephones so quickly. So the technology 
that improves also means that intelligence techniques have to 
improve.
    I'm going to skip most of this, but let me just say that it 
is my hope in the coming months that we will be able to prepare 
the American public to work with the public media and set 
expectations that make clear that, in the event of an attack we 
hope won't come, the fault lies with those who commit those 
acts, not with those who go to work every day to prevent these 
attacks. I think, for those of us that read the intelligence on 
a regular basis, we know that there is jeopardy out there. And 
we know that, if something were to happen in this country, 
everyone sitting at this table would be asked, ``Why didn't you 
know?'' And they have to have the tools to find out. And we 
have to see that the due process is provided in that process.
    So I think we've come a very long way since 9/11. I truly 
believe our country is much safer than it was prior to 9/11. 
And a great deal of it really is due to the people testifying 
here today and to the agencies that they so well run. I deeply 
believe that.
    So let me introduce the witnesses. They are the Director of 
National Intelligence, James Clapper, who will deliver the 
opening statement following the comments of the Vice Chairman; 
the Director of the Central Intelligence Agency, whom I've 
happened to have known for a very long time, Leon Panetta; the 
Director of the Defense Intelligence Agency, General Ronald 
Burgess; the Director of the Federal Bureau of Investigation, 
also whom I've known for a long time, Bob Mueller; and the 
Director of the National Counterterrorism Center, Michael 
Leiter; Assistant Secretary of State for Intelligence and 
Research Philip Goldberg.
    So I would like to note that this will be Director 
Mueller's final appearance at a worldwide threat hearing, as he 
is now nine and a half years into his 10-year term as FBI 
Director. But we have another half year with you, Director 
Mueller, so I don't want to engage in goodbyes at this time. 
And who knows, maybe there's a way that won't happen.
    So now, if I may, I'd like to turn to the distinguished 
Vice Chairman of this Committee, with whom it is a pleasure for 
me to work, Senator Chambliss.

  OPENING STATEMENT OF HON. SAXBY CHAMBLISS, VICE CHAIRMAN, A 
                   U.S. SENATOR FROM GEORGIA

    Vice Chairman Chambliss. Well, thanks, Madam Chairman. And 
again, it's a privilege for me to have the opportunity to 
continue to work with you on this particular issue that's of 
such vital importance.
    And maybe we ought to start that chant, ``Ten more years.''
    [Laughter.]
    I'd be in favor of that.
    Gentlemen--and this is a very impressive lineup we have 
this morning--thanks for being here. Thanks for your 
willingness to serve our country in the respective capacities 
that each of you do. Together you represent the men and women 
of the intelligence community who work quietly behind the 
scenes, often in dangerous locations, to ensure our nation's 
safety. And our thanks goes out to each and every one of those 
folks that work for you and put their life in harm's way every 
single day, and we appreciate them very much.
    Recent events in the Middle East and North Africa remind us 
how rapidly the world can change. The Internet and social 
network media play a key role in this evolving landscape and 
can complicate our ability to understand and keep pace with 
unfolding events. We saw it in Tunisia and in Egypt, may be 
watching it soon elsewhere.
    Staying ahead of the curve means that the IC must be inside 
the networks to collect not only on high-level decisionmakers, 
but all those who are positioned to affect the status quo. This 
is as true in the context of international leadership and 
regional stability as it is in terrorist networks and 
insurgencies.
    We look to the IC to tell us of impending threats. This is 
not easy, but it is your job and you must be organized, 
resourced and equipped to do it. Congress must help equip you 
by ensuring you have the tools and appropriate authorities to 
do this job.
    Three important tools in the Foreign Intelligence 
Surveillance Act expire soon. Each one of those--lone wolf, 
roving wiretaps and business records--is an essential authority 
and we must make sure that they remain in force. Obviously, the 
Senate acted last night on a short-term extension of these, and 
we hope that we're able to get a more lengthy extension in the 
very near future.
    And again, to General Clapper and Director Mueller and 
General Alexander, who is not here, thank you for coming over 
the other night and visiting with our folks and providing some 
very valuable answers to questions.
    Another area where Congress must help is in interrogation 
and detention policy. Two years after the President's executive 
orders on interrogation and detention, we still do not have an 
adequate system in place for detaining captured terrorists, 
collecting intelligence from them, and holding them until they 
can no longer do us harm. We cannot keep letting dangerous 
detainees go free. It's time for Congress to provide a 
framework for detention and interrogation wherever detainees 
are captured.
    Congress can and must help in these and other areas, like 
cyber. But in these difficult economic times, resources are 
certainly a challenge. Resources are not infinite and must be 
prioritized. I caution the IC to not spread itself too thin in 
trying to respond to every potential national security issue 
without an honest assessment of your capabilities to add value. 
In my opinion, assessments produced in the past year--such as 
``The Technology on Fresh Water Availability in 2040'' and 
``The Devil in the Corner: Cookstoves and the Developing 
World''--have no place in the IC.
    This is more true at a time when you are facing severe 
budget constraints and priorities like terrorism, detainee 
recidivism, the proliferation of weapons of mass destruction, 
the cyber threat, two wars and unstable countries throughout 
the Middle East. You must focus on the greatest threats and 
leave issues that have little intelligence value or that can be 
better analyzed elsewhere to others in the government or, more 
importantly, the private sector.
    Today is your opportunity to tell us how you have ranked 
the biggest threats we face and where you think your resources 
should be focused. It is imperative that the $55 billion in 
taxpayer money you have requested will be spent wisely. Again, 
I thank you for your service to our country. Thanks for being 
here today.
    And, Madam Chair, I look forward to their testimony.
    Chairman Feinstein. Thank you very much, Mr. Vice Chairman.
    Before turning to Director Clapper, the rounds will be five 
minutes and we'll use the early-bird rule, so that everybody 
knows.
    Director Clapper, welcome.

 STATEMENT OF HON. JAMES R. CLAPPER, JR., DIRECTOR OF NATIONAL 
  INTELLIGENCE, ACCOMPANIED BY: HON. LEON PANETTA, DIRECTOR, 
   CENTRAL INTELLIGENCE AGENCY; HON. ROBERT S. MUELLER III, 
 DIRECTOR, FEDERAL BUREAU OF INVESTIGATION; LIEUTENANT GENERAL 
  RONALD BURGESS, USA, DIRECTOR, DEFENSE INTELLIGENCE AGENCY; 
   HON. MICHAEL LEITER, DIRECTOR, NATIONAL COUNTERTERRORISM 
CENTER; AND HON. PHILLIP GOLDBERG, ASSISTANT SECRETARY OF STATE 
                 FOR INTELLIGENCE AND RESEARCH

    Director Clapper. Thank you, Madam Chairman, Vice Chairman 
Chambliss, distinguished members of the Committee, for inviting 
us to present the 2011 Worldwide Threat Assessment. I'm very 
pleased and proud to be joined by my intelligence community 
colleagues. The intelligence community is indeed a team, and 
it's a community I'm very proud to be associated with.
    Represented at the witness table today, as you alluded, are 
hundreds of years of experience and dedicated public service. 
I'd like to especially commend Director Bob Mueller for his 
superb service, as you have recognized him as the FBI Director 
for nearly a decade. He's been an outstanding participant, 
partner and leader in the intelligence community--and my good 
friend, CIA Director Panetta, whose years of public service and 
wisdom have been so helpful to me. And the two organizations 
they head are two of the crown jewels of the intelligence 
community and they and the nation are fortunate to have such 
magnificent leaders.
    I want to express my appreciation to this Committee as 
well, first to publicly acknowledge your unanimous vote in 
support of the president's nominee as my principal deputy--my 
gain, Leon's loss--Ms. Stephanie O'Sullivan, to be the 
Principal Deputy DNI. As was shown by this vote to get our team 
in place, your support and partnership are essential. And, 
secondly and more broadly, the intelligence community needs 
your oversight.
    As I know you understand, it's not possible to cover the 
full scope of worldwide threats in brief oral remarks, so I'd 
like to take this opportunity to highlight four broad areas of 
significant concern to the intelligence community. Subject to 
your concurrence, I've submitted a longer statement for the 
record that reflects the collective insights of the 
extraordinary men and women of this community.
    First and foremost is terrorism. Counterterrorism is our 
top priority because job one for the intelligence community is 
to keep Americans safe and the homeland secure. The 
intelligence community has helped thwart many potentially 
devastating attacks. One of the most recent was the cargo bomb 
plot that you alluded to, this past October. We've apprehended 
many bad actors throughout the world and greatly weakened much 
of al-Qaida's core capabilities, including operations, 
training, and propaganda. We're especially focused on al-
Qaida's resolve to recruit Americans and to spawn affiliate 
groups, most notably its chapter in the Arabian Peninsula.
    We also see disturbing instances of self-radicalization 
among our citizens. While homegrown terrorists are numerically 
a small part of the global threat, they have a disproportionate 
impact because they understand our homeland, have connections 
here and have easier access to U.S. facilities.
    Counterterrorism is central to our overseas operations, 
notably in Afghanistan. And while progress in our efforts to 
disrupt, dismantle and defeat al-Qaida is hard-won, we have 
seen and I believe will continue to see success in governance, 
security and economic development that will erode the 
willingness of the Afghan people to support the Taliban and 
their al-Qaida allies.
    Although U.S. combat operations have come to an official 
close in Iraq, bombings by terrorists--specifically al-Qaida--
mean that our work to help solidify the security gains we've 
made there thus far remain a high priority.
    Another major concern is proliferation of weapons of mass 
destruction. The proliferation threat environment is a fluid, 
borderless arena that reflects the broader global reality of an 
increasingly free movement of people, goods and information. 
While this environment is critical for peaceful scientific and 
economic advances, it also allows the materials, technologies 
and, importantly, know-how related to chemical, biological, 
radiological and nuclear weapons, as well as missile delivery 
systems, to be shared with ease and speed.
    Iran is a key challenge. In the months following the 2009 
Iranian elections, we saw a popular movement challenge the 
authority of its government. We also saw the Iranian government 
crack down with harsher authoritarian control, and today we are 
seeing similar unrest, although so far on a much smaller scale 
than was the case in 2009, and a similarly harsh crackdown by 
the regime.
    We look forward to discussing Iran further with you in 
closed session, particularly its nuclear posture. But suffice 
it to say here we see a disturbing confluence of events--an 
Iran that is increasingly rigid, autocratic, dependent on 
coercion to maintain control and defiant toward the West, and 
an Iran that continues to advance its uranium enrichment 
capabilities along with what appears to be the scientific, 
technical and industrial capacity to produce nuclear weapons if 
its leaders choose to do so.
    North Korea's nuclear weapons and missile programs also 
pose a serious threat, both regionally and beyond. Pyongyang 
has signaled a willingness to reengage in dialogue, but it also 
craves international recognition as a nuclear weapons power, 
and it has shown troubling willingness to sell nuclear 
technologies.
    Third, I'd also want to highlight another major challenge 
for the intelligence community, the reality that we live in an 
interconnected, interdependent world where instability can 
arise and spread quickly beyond the borders. Of course, vivid 
examples of this include the sudden fall of the Ben Ali regime 
in Tunisia and the contagious mass uprisings in Egypt which led 
to the departure of former president Mubarak and demonstrations 
elsewhere. The intelligence community is following these fast-
moving events closely.
    I'd like to take a moment here to address some recent 
questions that have been raised as to whether the intelligence 
community has been tracking and reporting on these events 
effectively. The answer, I believe, in short, is yes. For some 
time the intelligence community has been assessing the 
political and socioeconomic drivers of instability in the 
region, including analyses of historical transitions of power 
to understand future risks to regime stability.
    Specific triggers for how and when instability would lead 
to the collapse of various regimes cannot always be known or 
predicted.
    What intelligence can do in such cases is reduce, but 
certainly not completely eliminate, uncertainty for 
decisionmakers, whether in the White House, the Congress, the 
embassy or the foxhole, as we did in this instance. But we are 
not clairvoyant.
    The intelligence community provided critical intelligence 
before and throughout this crisis and has been reporting on 
unrest, demographic changes, economic uncertainty and the lack 
of political expression for these frustrations.
    In addition to our classified sources in the analysis, from 
mid-December to mid-February, we produced some 15,000 open-
source products on the region, providing insights from 
traditional local media--both print and electronic--to include 
social media. In this regard, I'd like to clarify a less-than-
precise turn of phrase I used last week during a hearing with 
the House Intelligence Committee where I characterized the 
Muslim Brotherhood as largely secular.
    In my attempt to shorthand my description of the Muslim 
Brotherhood, my message was lost and that's regrettable. The 
Muslim Brotherhood is obviously not secular. What I had hoped 
to convey and would like to clearly state here is that the 
Muslim Brotherhood in Egypt tries to work through a political 
system that has been largely secular in its orientation.
    The Muslim Brotherhood is a large, heterogeneous global 
organization whose agenda and impact differ from country to 
country. In Egypt, it has gained much of its support through 
both grassroots outreach and nonreligious functions like 
providing health clinics and daycare centers. It also has 
different factions, including a conservative wing whose 
interpretation of Islam runs counter to broad electoral 
participation, and a younger, more liberal wing who are more 
inclined to work through a secular political process.
    In any event, I expect the Muslim Brotherhood will likely 
be a part of the political process in Egypt, as will other 
opposition groups. What we saw in Egypt was far broader than 
the Muslim Brotherhood and included people of different faiths, 
ages and walks of life.
    What's happening in the Mideast is yet another 
manifestation of the fact that economic challenges have become 
paramount in our interdependent world and cannot be 
underestimated, from increasing debt to fluctuating growth to 
China's economic rise.
    Another example of such interdependent challenges are cyber 
threats and their impacts on our national security and economic 
prosperity. This threat is increasing in scope and scale. 
Industry estimates that the production of malicious software 
has reached its highest level yet, with an average of 60,000 
new programs or variations identified every day.
    Moreover, we're seeing a rise in intellectual property 
theft. Industry has estimated that the loss of intellectual 
property worldwide to cyber crime continues to increase, with 
the most recent 2008 annual figures approach $1 trillion in 
losses. While costs are extremely difficult to pinpoint, we 
believe this trend is only getting worse.
    Last year, some of our largest information technology 
companies discovered that throughout much of 2009 they had been 
the targets of systematic efforts to penetrate their networks 
and acquire proprietary data. The intrusions attempted to gain 
access to repositories of source code, the underlying software 
that comprises the intellectual secret sauce, if you will, of 
most of these companies.
    Along with following current cyber threats, the 
intelligence community is analyzing the interconnected 
implications of energy security, drug trafficking, emerging 
diseases, water availability, international organized crime, 
climate change, humanitarian disasters, and other global 
issues.
    In the face of these challenges, we in the intelligence 
community must always remain attentive to developments in all 
parts of the globe and in many spheres of activity. And that is 
why I consider it imperative that we must sustain a robust, 
balanced array of intelligence capabilities.
    Fourth, counterintelligence is another area of great 
concern to me. We face a wide range of foreign intelligence 
threats to our economic, political, and military interests at 
home and abroad. In addition, cyber and other threats clearly 
tied to foreign intelligence services and unauthorized 
disclosures of sensitive and classified U.S. government 
information also pose substantial challenges.
    Perhaps the most prominent example recently is the 
unauthorized downloading of classified documents, subsequently 
released by WikiLeaks. From an intelligence perspective, these 
disclosures have been very damaging.
    I want to assure the Committee that as part of a broader 
whole-of-government effort, we in the intelligence community 
are working to better protect our information networks by 
improving audit and access controls, increasing our ability to 
detect and deter insider threats, and expanding awareness of 
foreign intelligence threats across the U.S. government. I 
believe we can and will respond to the problems of intrusions 
and leaks, but we must do without degrading essential 
intelligence integration and information sharing.
    In sum, the intelligence community is better able to 
understand the vast array of interlocking concerns and trends, 
anticipate developments, and stay ahead of adversaries, 
precisely because we operate as an integrated community. And 
our presence here today, I like to think, is a manifestation of 
that.
    This is a segue for me to say a few words about the value 
and size of the Office of the Director of National 
Intelligence, as that too has been a subject of extensive 
debate.
    Shortly after I became the DNI six months ago, I 
commissioned a thorough review of the organization in the 
context of the intelligence reform law, other statutes and 
executive orders and what they direct the DNI to do. I decided 
we could reduce or eliminate some functions not required by law 
or executive order that are not core missions.
    I also identified elements that should transfer out of the 
ODNI to another agency that would carry out these services of 
common concern on behalf of the DNI. Or, said another way, we 
don't have to do everything on the DNI staff. Based on this 
efficiencies review, the Office of the DNI is being reduced in 
size and budget. And I look forward, at a separate time, to 
presenting our plans in detail to the Committee.
    I think the value added by the ODNI is the integration of 
intelligence efforts and activities--in particular, the 
harmonization of collection and analysis to ensure that the 
community is acquiring the best possible intelligence and 
providing the best possible analysis on the difficult issues 
that the nation faces.
    I thank you and the distinguished members of the Committee 
for your support to the intelligence community and your 
dedication to the security of the nation. My colleagues and I 
look forward to your questions and our discussion.
    [The prepared statement of Director Clapper follows:]


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    Chairman Feinstein. And yours is the only statement?
    Director Clapper. Yes, ma'am.
    Chairman Feinstein. All right. I'll begin the questions.
    I wanted to ask you a couple of questions about the Muslim 
Brotherhood. How committed is it to the Egyptian-Israeli peace 
agreement?
    Director Clapper. That's a hard question to answer, Madam 
Chairman, because of the factors I outlined about the 
heterogeneity, if you will, of the Muslim Brotherhood. I would 
assess that they're probably not in favor of the treaty. That I 
think, though, will be one voice in the emerging political 
milieu in Egypt, since they have indicated they want to form a 
political party and that will be one voice.
    I think it is also worthy to note that the SCAF--the 
Supreme Council of the Armed Forces--has reaffirmed its 
commitment to, actually, all treaty commitments, and 
particularly the Egypt-Israel peace treaty.
    Chairman Feinstein. What, to the best of the intelligence 
community's knowledge, is the position of the Muslim 
Brotherhood on stopping weapons smuggling into Gaza?
    Director Clapper. Again, I don't know that there is a 
stated position of the Muslim Brotherhood on this issue. I 
would surmise they're probably supportive of that. But again, 
it's hard to, at this point, point to a specific agenda of the 
Muslim Brotherhood as a group.
    Chairman Feinstein. What is its position with respect or 
relationship with respect to Iran?
    Director Clapper. That too remains to be seen. I think 
Iran, of course, would like to exploit the situation--not only 
in Egypt, but elsewhere in the region which are undergoing some 
upheavals. And I think what that relationship would turn out to 
be, again, it remains to be seen and we're certainly going to 
watch for that.
    Chairman Feinstein. The reason I asked these questions is 
because, you know, in the various television coverage there's 
been a lot of commentary to the fact, well, the Muslim 
Brotherhood really only represents about a third of the people.
    Well, when you don't have a wide spectrum of political 
parties, a third of the people is a lot of people--any of us 
could tell you that. You really take seriously any opponent 
that represents a third of a constituency.
    And I think it's been passed off as, well, it's secular and 
it wants a secular government. And I think from an intelligence 
perspective it is critical that we know what is that position 
and what is apt to happen. Egypt is the key country in the 
Middle East, and I worry about that.
    Director Clapper. Well, we share your concern, Madam 
Chairman, and this is obviously something we're going to watch. 
We're going to have to step up our observation. We're going to 
have to see how the constitutional reform effort unfolds. At 
least one of the members of the constitutional reform committee 
does represent the Muslim Brotherhood, so they will be 
participating in that process. So as that unfolds, obviously 
we're going to be watching that very carefully to determine 
just what the agenda will be of the Muslim Brotherhood.
    Chairman Feinstein. One other question. In the week leading 
up to the major protests in Egypt, on January 25th, after 
Tunisia's protests were in full force, how many warning 
products did the IC write on Egypt?
    Director Clapper. The key event, at least from my vantage, 
was the sudden, snap decision made by President Ben Ali in 
Tunisia about the 14th or 15th of January. I am convinced that 
the day he drove to work when that happened he wasn't planning 
on doing that. That was a very quick decision on his part. When 
that happened we, I think, upped the game there on describing 
the general conditions elsewhere in the region and what the 
potential would be for the ``contagion''--to use the now-
popular term--as that might affect Egypt. And so we tracked 
that very carefully.
    We can certainly provide you an accounting of specifically 
I think--and in fact----
    Chairman Feinstein. You have, and I've been through it.
    Director Clapper. Stephanie Sullivan did in her follow-up 
to a question that came up during her hearing.
    Chairman Feinstein. I believe that most of it came from 
CENTCOM, where there was some, as opposed to the IC. And the 
reason I bring that up is I think that's a lacking on our part 
really not to include this kind of open source--I mean, I'm not 
a big computer person but I looked at Facebook--and I'm not a 
member of Facebook--and you could get right in and you could 
see everything about it and all the comments of people. And it 
seems to me that this ought to be watched very carefully to be 
able to give our policymakers and our leadership some advance 
notice. And I think we were at fault in that regard.
    Director Clapper. Well, we can always do better. There's 
always room for improvement here, but the Open Source Center, 
which I think has done some marvelous work--and it might be 
worth a separate session on their observation of the media in 
all of these countries--the classical print media; electronic, 
to include radio and television; and social media--and the 
analysis they've done--they were doing on that. And as you've 
seen and as you've observed, correctly so, this is a huge area 
that we need to watch.
    I have to also say, though, that social media does not 
represent a command-and-control network. So the fact that 
there's a lot of activity certainly is an indicator, but it 
doesn't necessarily give you the specific time and circumstance 
of the events that occurred both in Tunisia and Egypt.
    Chairman Feinstein. Mr. Panetta, you wanted to respond?
    Director Panetta. Yes. If I could just add to that, we've 
been watching this since 2007, looking at social networks and 
what's going on there. It is a huge responsibility because of 
the tremendous growth in information. Just to give you an idea, 
there's 600 million Facebook accounts out there. There's 
something like 190 million Twitter accounts. There's 35,000 
hours of YouTube that is upgraded every day.
    So there's a massive amount of data out there, and the real 
challenge is going through the diversity of languages, going 
through the different sites that are out there, how do we look 
at the relevant web sites to be able to draw from them the kind 
of information that will help us? So this involves a tremendous 
amount of analysis.
    I think the Open Source Center has done tremendous work at 
trying to monitor these areas. I mean, the fact that you're on 
a web site or a social network is not necessarily predictive of 
what will take place. Having said that, it's really important 
for us to monitor these areas and try to get the best sense of 
what networks, what web sites are having the largest impact.
    Chairman Feinstein. Thank you.
    Mr. Vice Chairman.
    Vice Chairman Chambliss. Director Clapper, it's unfortunate 
that the press tended to misconstrue what you had to say with 
respect to the Muslim Brotherhood. Those of us that know you 
and know the community knew exactly what you meant.
    And I just have one other follow-up on that particular 
issue--and Director Panetta, if you have any comment on this 
also, I'd appreciate it. Do you consider the Muslim Brotherhood 
an extremist Islamic organization or is it an Islamic 
organization that certainly has some members who may be 
extremists?
    Director Clapper. I would probably go for the latter 
characterization. There are clearly other places--there are 
extremists, no question about it, in the Muslim Brotherhood, 
and again, its agenda varies from country to country. There is 
an umbrella organization--an international organization which 
really doesn't specifically direct the individual chapters or 
franchises.
    Vice Chairman Chambliss. Okay.
    Director Panetta, any comment?
    Director Panetta. I think the Director has stressed this 
but it's important to make the point: This is not a monolithic 
organization. It's an organization that goes back to the 1920s, 
and it varies from area to area. I mean, if you look at 
different countries and different versions of the Muslim 
Brotherhood, they have different characteristics, they have 
different approaches. There are groups of extremists that are 
part of some of these areas. There are lawyers and 
professionals that are part of the Muslim Brotherhood, for 
example, in Egypt.
    And so it's very difficult to kind of say, okay, they are 
extremist. It is clear that within the Muslim Brotherhood there 
are extremist elements that we have to pay attention to, and 
that's something we watch very closely to make sure that they 
are not able to exert their influence on the directions of 
governments in that region.
    Vice Chairman Chambliss. Director Mueller, I talked in my 
opening statement about the extension of the three PATRIOT Act 
provisions on ``lone wolf,'' roving wiretaps, and access to 
business records. There's been a lot of I think misinformation 
put out in the media, particularly over the last several days, 
with respect to these three provisions.
    I'd like for you to address those three provisions and to 
particularly address these four questions: One, why are they 
important and necessary authorities; do you support making 
those three provisions permanent; what are the operational 
problems caused by sunsetting those provisions; and do you have 
the authority under these provisions currently in law to access 
information without a court order?
    Director Mueller. Sir, let me start with the three 
provisions as you pointed out. Let me start with the business 
records provision, which allows us to go to the FISA Court and 
obtain an order to produce records that may be relevant to, 
say, a foreign intelligence investigation relating to somebody 
who's trying to steal our secrets or a terrorist. Upon us 
showing that the records sought are relevant to this particular 
investigation--a specific showing it is--the FISA Court would 
issue an order allowing us to get those records.
    It's been used over 380 times since 2001. It provides us 
the ability to get records other than telephone toll records, 
which we can get through another provision of the statutes, but 
allows us to get records such as FedEx or UPS records, if you 
had something along the lines of what the chairperson 
indicated, the recent attacks, or records relating to the 
purchase of hydrogen peroxide or license records. Records that 
we would get automatically with a grand jury subpoena on the 
criminal side, the 215 process allows us to get on the national 
security side.
    If we did not have that capability we would be 
exceptionally limited to the records that we can get, and the 
foundation for the continuation of an investigation where we 
may want to get a wire intercept, for instance, would be 
undercut by our inability to get the base records that would be 
necessary to pursue the investigation.
    One point I'll make with each of these three provisions is 
that we have to go and make a showing to the FISA Court in 
order to get the order directing the production of those 
records.
    The second provision is the roving wiretap provision, which 
enables us, when we make a showing that the target of our 
surveillance is attempting to thwart that surveillance, when we 
make that showing to the FISA Court, the FISA Court will issue 
an order allowing us to focus on that individual, as opposed to 
each particular telephone that individual may be using.
    If we go and make a showing that an intelligence officer 
from some other country is changing his telephone number daily 
or weekly, rather than having to go back to the FISA Court each 
time he changes that number, the FISA Court order allows us to 
stay on that individual regardless of the change of telephone 
number, having made a showing that he is trying to thwart 
surveillance. Again, this goes through the FISA Court.
    If we did not have that provision, it would make it 
exceptionally difficult in situations where there are so many 
means of communications now which--and this order, this 
particular order enables us to focus on the person without 
going back daily, if not weekly, to get a change of order from 
the FISA Court.
    The last provision is called the lone wolf provision. It 
indicates that an individual non-U.S. citizen whom we have 
reason to believe is involved with terrorists, we can use the 
FISA authorities by going to the FISA Court and showing that 
this individual is involved in terrorist activities, but do not 
have to make the additional showing that he is an associate of 
a particularized terrorist group.
    Back in 2001 with Moussaoui, who was here in the United 
States taking flight lessons, the issue was whether or not he 
was tied into a particular terrorist group. If you could not 
make that tie, we could not use the FISA authorities, and this 
particular provision was put into the law to avoid that 
particular circumstance happening again and allowing us to go 
up on a non-U.S. citizen who was involved in terrorist 
activities with the approval and the order of a court.
    And while we have not used this provision yet, we can 
anticipate the circumstances in the future where we would have 
to utilize that provision.
    Vice Chairman Chambliss. And making them permanent and 
problems with sunsets?
    Director Mueller. Yes. I recommend doing it permanently. I 
believe that the procedure is in place with the FISA Court, the 
due process required. And every time we come up to a day in 
which it is going to lapse or sunset, we are in a degree of 
uncertainty as to what's going to happen after that.
    If there is not the continuation of it, we then have to go 
back and go through thousands of investigations to look at what 
impact the lapsing of these provisions will have in our ability 
to pursue those investigations down the road, and what tools we 
might have to further those investigations.
    And so each time it comes up we're in a period of 
uncertainty until it is reauthorized for a particular period of 
time. And quite obviously I would suggest that, given the 
threats we face, the provisions of these particular rules, that 
it would be appropriate to permanently reauthorize these three 
provisions.
    Vice Chairman Chambliss. Thank you.
    Chairman Feinstein. Thank you, Mr. Vice Chairman.
    Senator Wyden.
    Senator Wyden. Thank you, Madam Chair, and thanks to all of 
you for the service that you are rendering our country.
    Gentlemen, I don't take a back seat to anyone when it comes 
to protecting intelligence sources, operations and methods. 
That is absolutely crucial to the security and well-being of 
our country.
    But I will tell you I am increasingly troubled about the 
intelligence community's reliance on secret law. And this is 
the legal interpretations of the key laws, instances where 
government agencies are relying on a secret interpretation of 
what the law says without telling the public what the 
interpretations are. And to me, if there is a gap between what 
the public believes the law is and what the government secretly 
thinks the law is, I think we've got a problem on our hands.
    So let me start with you, Director Clapper, with a question 
that gets into the PATRIOT Act, because that's obviously a key 
one we're going to have to deal with in the days ahead.
    Director Clapper, do you believe that members of the 
American public now have enough access to key information to 
figure out how our government is interpreting the PATRIOT Act?
    Director Clapper. Sir, I do believe there is a wealth of 
information there. I would refer to the Department of Justice 
or FBI web pages on this subject as a source of public 
information. There is in the case of the PATRIOT Act 
potentially, you know, what I think is a fairly small segment 
of that which is secret, for much of the reason you outlined. 
That's why these activities are overseen by a court and as well 
overseen by the Intelligence Committees on behalf of the 
American public.
    I think it's our objective to make this as transparent and 
explainable to the American public as possible, and minimize as 
much as we can that which is secret.
    Bob, do you want to add to that?
    Director Mueller. I think what I would say is I do believe 
that the legal opinions of the Department of Justice are made 
available appropriately; that is not to say that an opinion 
that is classified, that is widely distributed. But I know that 
there is a distribution discussion with Congress even in those 
areas in which there is substantial classification. But again, 
I'd have to defer to the Office of Legal Counsel in Justice to 
determine how that process goes forward.
    Senator Wyden. I'm talking, Mr. Mueller, about the American 
people. And I believe that the American people would be 
absolutely stunned--I think Members of Congress, many of them, 
would be stunned if they knew how the PATRIOT Act was being 
interpreted and applied in practice.
    Now, I voted last night for the short-term extension. I'd 
rather deal with this now and permanently, rather than kicking 
the can down the road. But I'm going to insist on significant 
reforms in this area.
    We're not talking about operations and methods. Those have 
got to be protected for the security of the public. But there 
is a huge gap today between how you all are interpreting the 
PATRIOT Act, and what the American people think the PATRIOT Act 
is all about, and it's going to need to be resolved.
    So let me follow up with the second question for you, Mr. 
Clapper, again in this regard. And this deals with your 
authority to take action against Americans who've taken up arms 
against the United States.
    A year ago your predecessor, Director Blair, said, ``We 
take direct actions against terrorists in the intelligence 
community. If we think that direct action will involve killing 
an American, we get specific permission to do that.'' Now, that 
is obviously a statement with great consequence, and it 
certainly raises a lot of important issues.
    In my experience, you don't see a government official 
making a statement like that without an extensive amount of 
legal analysis. I've asked for that legal analysis; nothing has 
been handed over yet, which again drives home the point that 
when we're talking about operations and methods, absolutely, we 
have to protect the men and women in the field.
    But we ought to have these legal interpretations, and I'd 
like to know your answer to my question in this regard, with 
respect to getting that interpretation in our hands.
    Director Clapper. Well, we--and I think I speak for all of 
us--are committed to ensuring that the Congress understands the 
legal basis for intelligence activities, any intelligence 
activity. In fact, this is a requirement of the Intelligence 
Authorization Act for FY '10. And it's my understanding that 
the members of the Committee have been briefed on these and 
other authorities.
    I think the issue that you get to, and at the root of your 
question, is what Director Mueller alluded to, which is the 
actual provision of the formal written Office of Legal Counsel 
opinions at the Department of Justice and whether or not they, 
in their entirety, can be provided to Congress, which is kind 
of not our--at least not my--call to make. But I will assure 
you I am committed to ensuring that Congress understands the 
legal basis for any and all intelligence activities.
    Senator Wyden. Well, right now, with respect to the 
executive branch's official interpretation of what the law 
means, we're not getting it. And I think that's an issue--well, 
my round has expired, so we can continue this--that I'm going 
to insist on reforms here. I want to see us come up with a 
bipartisan set of reforms for the PATRIOT Act; we're not there 
yet. And I'll look forward to continuing this conversation.
    Madam Chair, thank you.
    Chairman Feinstein. Thank you very much, Senator.
    Senator Udall, you are up next.
    Senator Udall. Thank you, Madam Chair. Good morning, 
gentlemen.
    Maybe I could turn to cyber. I serve on the Armed Services 
Committee as well as the Intelligence Committee and this is of 
increasing interest in both sectors. Could you all respond to 
how much our security posture has improved and how do you 
measure such progress? For instance, intrusion rates--are they 
dropping for .mil or .gov systems and how have our cyber 
defenses forced our adversaries to change their tactics and, if 
you will, up their game to penetrate our networks? I'm not 
quite sure who to start with but would welcome--maybe General 
Clapper.
    Director Clapper. Well, let me start, sir. I think in this 
setting I can say that certainly the threat has increased and, 
you know, I've tried to outline some of the manifestations of 
that in my opening statement. But I also think we're making 
progress in defending our cyber, particularly at least in the 
government-military realm, and I would ask your forbearance in 
going into specifics, statistics and where are the sources of 
the attacks and et cetera in a closed session.
    Senator Udall. Thank you for that appropriate response. 
Other members of the panel? Director Panetta.
    Director Panetta. Senator, I said this the other day and 
I'll repeat it--that I really do think that the cyber area is 
the battleground of the future, that we are talking about 
increasing capabilities, increasing imaginative uses of cyber 
that I think hold the potential for basically being able to 
paralyze and cripple a country if it's used to bring down a 
grid system or the financial systems or the government systems 
of the country.
    So it concerns us a great deal. We're seeing more attacks 
out there. I think we have successfully defended against many 
of those attacks but at the same time I think we've got to be 
aggressive at making sure we know how these attacks are coming.
    Senator Udall. Director Mueller.
    Director Mueller. Yes, sir. I think all of us believe that 
each of our entities has got to grow substantially over the 
forthcoming years to address cyber attacks in all of their 
iterations. One of the problems we have is, at the outset of an 
attack you do not know whether it is a foreign country, foreign 
government, somebody affiliated with a foreign government, a 
group of hackers or the high school student across the way, and 
we are all aligned in our particular specialties--
counterintelligence if it's a foreign government, criminal if 
it's somebody who is intruding for criminal purposes.
    One of the entities we've established which is very helpful 
is called the National Cyber Investigative Joint Task Force, 
where representatives of all of us sit together so that if 
there is an intrusion we have all of our areas of expertise, 
including NSA, quite obviously, to try to identify that 
intrusion and then determine how we best follow and track that 
intrusion.
    So while I think all of us would agree that cyber threats 
are increasing dramatically--daily, monthly, weekly--we 
understand that we have to come together and work very closely 
together in order to attribute those attacks and then pursue 
and deter those attacks in the future.
    Senator Udall. Others who wish to comment on the panel? I 
would note that the chairwoman led a delegation of Senators to 
China last year and we had a series of conversations with 
Chinese leaders about working together in this area. It strikes 
me that nation-states, multinational corporations, institutions 
of all types have an interest in working together. It may be 
more the insurgent kinds of groups that are the threat here.
    We clearly know more about how to go on offense than to 
play defense. But I appreciate the attention all of you are 
paying to this important area and I know the Committee will 
continue to learn more in closed briefings and work to see if 
we can't understand better how we meet this threat. So thanks 
again for your service and for being here today.
    Chairman Feinstein. Thank you, Senator Udall.
    Senator Coats.
    Senator Coats. Thank you, Madam Chairman. First of all, I 
want to thank everyone at the table here. Your job is immensely 
complex and the multiplicity of threats that you have to deal 
with is such that you're on call 24/7. So I hope we can provide 
you with coffee sometime during this hearing. But I just 
appreciate the hard work all of you are putting in in trying to 
provide security for our country in a really, really complex 
difficult time.
    Director Clapper, I also appreciate your clarification of 
your statement on Muslim Brotherhood. All of us who have stood 
for election understand how sometimes, given a second chance, 
we would have elaborated or not said anything. Wasn't it Will 
Rogers who said never pass up an opportunity to shut up? I've 
faced that situation a number of times and should have used his 
advice.
    I do want to ask you, however, about another statement that 
you made. It's on Page 4 of your statement and I'll quote it 
and I think you even mentioned it in your opening statement: 
``We continue to assess Iran is keeping the option open to 
develop nuclear weapons in part by developing various nuclear 
capabilities that better position it to produce such weapons 
should it choose to do so. We do not know, however, if Iran 
will eventually decide to build nuclear weapons.''
    I've got three things that bother me or concern me about 
that statement. Number one, if we look at what has happened 
over the past several years with Iran's extravagant and 
continuing efforts to defy U.N. Security Council resolutions, 
if we look at its abrogation of its safeguards agreement, the 
regime's toleration of broad international condemnation, the 
ever-ratcheting sanctions that we're imposing against it, to me 
it's hard to--I mean, even in the face of domestic unrest the 
defiance seems to be extraordinarily strong and unremitting and 
it's hard to conclude, I think, that Iran isn't pursuing that. 
If they're not, they're playing quite a game of bluff.
    Secondly, I'm concerned that such a statement might 
undermine the resolve to go forward and apply even stronger 
sanctions. I think that's been suggested by some in the 
administration, that even the current level of sanctions 
doesn't seem to be having the desired effect. Some effect, 
perhaps--hopefully better. But there is some serious thought by 
a number of the leaders within the administration saying even 
this is not enough and we may need to do more.
    And then thirdly, I think my concern with the statement is 
that even if they have not taken the enriched uranium to the 
point of constructing a nuclear weapon, isn't it just a short 
matter of time delay between having the capabilities all in 
place and actually developing the weapon? I'm just concerned 
about waking up some morning and you'd have been waken up at 
3:00 a.m. and I would turn on CNN and hear that Iran has 
successfully tested a nuclear weapon capability. I just wonder 
if you want to elaborate on that statement a little bit for the 
reasons that I suggested.
    Director Clapper. Senator Coats, it's obviously a great 
question and as you may have heard or seen we have completed 
what's called a memorandum to holders, which is an update of 
the 2007 National Intelligence Estimate that was done on this 
very issue, which is scheduled to be briefed to the Committee 
staff this afternoon and right now is scheduled to be briefed 
to Members the week of 14 March. I have the National 
Intelligence Officer who led that update present here today, 
should you want to get briefed.
    I think, though, the direct and fulsome answers to your 
very relevant and pertinent questions would be best addressed 
in a closed session.
    Senator Coats. All right. Well, I'll tell you what I'll do. 
I'll set aside my reaction to your statement, assuming that 
perhaps there's more to be learned about this that might better 
clarify that statement.
    Director Clapper. Yes, sir. That statement represents what, 
you know, we judged we could say publicly. There obviously is 
much more detail that underlies that statement and I think that 
you should hear that in closed session.
    Senator Coats. Madam Chairman, I don't think I should go 
any further down this road.
    Chairman Feinstein. That briefing will be classified, so 
you will get everything you need.
    Senator Coats. I understand. I just, for the record, wanted 
to clarify your current thinking on the public statement that 
was made.
    And I thank the Chairman.
    Chairman Feinstein. Thank you very much, Senator.
    Senator Conrad, you're next.
    Senator Conrad. Thank you, Madam Chairman.
    I'm new to the Intelligence Committee and I just want to 
say how impressed I am by your leadership and by the way you 
and the Ranking Member work together on this Committee. This is 
the way it should be. And I'm delighted by what I've seen 
already.
    I also want to say to the gentlemen here testifying how 
deeply impressed I've been by what I've learned about the 
operations that you have under way--things that we cannot talk 
about.
    I have been so struck by criticisms in the press directed 
at you that you can't respond to. But the American people 
should know what I've learned here tells me you have had 
remarkable success. I am so impressed by information that was 
provided specifically on Egypt. Truly, you know, at some point 
in the history, there will be a chance for the stories to be 
told of what you've done, and it's really remarkable.
    I want to go back to the question of cyber, because, as I 
look across the broad front of threats to this country, I think 
it's a place that's getting too little attention. Senator 
Whitehouse--who served on the Committee and was very involved 
in these issues--had a chance to brief me. He talked about the 
very good work Senator Mikulski and Senator Snowe have done 
with him on a major report on the cyber threats.
    General Clapper, I picked up on your statement about $1 
trillion in costs of cyber attacks. Can you clarify: Is that a 
cumulative total? Is that private sector losses? Can you give 
us some sense?
    Director Clapper. It's a cumulative total based on private 
sector estimates of what they believe has been lost because of 
cyber intrusions--primarily from criminals, hackers and the 
like.
    Senator Conrad. You know, if we put that in perspective, 
this is a staggering, staggering number--a trillion dollars in 
losses because of cyber attacks.
    And if we look at 2010, we had Google reporting their 
announcement on penetration of their systems. We had disclosure 
of the compromise of classified DOD networks; we had the 
Stuxnet virus discovery. We had the report on NASDAQ systems 
being attacked.
    I'm not certain that there is a public recognition of how 
significant these cyber attacks are and the threat they pose to 
our country.
    I would ask this, because I know it's very difficult in 
this open session for us to have a full conversation, but I'd 
like to hear from you how the witnesses who are here today 
would characterize our efforts on the cyber front.
    Director Clapper. Well, it's like many things we do--good, 
but could be better. I think there is realization--at least 
among myself and my colleagues here--of what the threat is. I 
think Leon has characterized it very well. And there is more to 
be done. Obviously, the Congress is very involved in this. 
There are multiple legislative proposals that have been made on 
how to do this, so we await the outcome of that.
    One thing you alluded to, Senator Conrad, which I think is 
right on the money--and Senator Whitehouse, a former member of 
this Committee, spoke to this, as has Senator Mikulski--is we 
have a responsibility here to do better in attempting to 
educate the public at large about the magnitude of this threat.
    In my former capacity as Under Secretary of Defense for 
Intelligence in DOD, I was party to a number of industry fora 
that the Department led--first by Gordon England when he was 
Deputy Secretary and carried on by Bill Lynn, the current 
Deputy Secretary, who, by the way, has been a tremendous 
proponent for doing this--just focusing on the defense 
industrial sector.
    I believe there is a growing awareness, certainly among the 
leaders of the principal industries affected, of what needs to 
be done. And there is an emerging partnership here that's 
gotten better and better. But I think a point that you alluded 
to, which I think is right on the money, and that is the need 
for us to be more forthcoming with the magnitude of the 
threat--I mean, with obvious due deference to security and 
sources and methods.
    Senator Conrad. You know, one thing I've noticed is the 
private sector, they're very reluctant to have any publicity 
about successful attacks on them. And so that means the public 
is not fully aware of how successful some of these attacks have 
been.
    My time is expired, but I'm very interested in following up 
in terms of what we can do on this Committee, and more broadly 
in Congress, to help respond to what I think is a growing 
threat that is extremely serious to the national security.
    I thank the Chair.
    Chairman Feinstein. And I thank you, Senator Conrad.
    Senator Snowe.
    Senator Snowe. Thank you. Good timing.
    Chairman Feinstein. Yes, excellent.
    Senator Snowe. Thank you, Madam Chair.
    Director Clapper, I wanted to follow up on some of the 
issues that were raised by my colleague, Senator Kent Conrad, 
about the issue of cybersecurity, because there are multiple 
facets to this issue that expose our vulnerability and so 
obviously, one of our greatest threats. And that's why I've 
been working on this initiative with Senator Whitehouse, as 
well as Senator Rockefeller and Senator Mikulski.
    On one dimension of that that has, I think, gotten 
attention this week--and I wanted to ask you about it--I know 
that you have mentioned in your testimony in the past about the 
degree to which we're seeing more malicious cyber activity 
targeting U.S. companies, that almost two-thirds of U.S. firms 
have reported that they've been the victim of cyber security 
incidents or information breaches, which is more than tripled 
from 2009, according to what you've indicated.
    Now, you're a member of the Committee on Foreign Investment 
in the United States. As I understand it, CFIUS--as it's 
known--informed Huawei that they should divest themselves of 
the 3Leaf Systems, which is a California-based server company. 
They have rejected that and I gather they're waiting as to 
whether or not the President would make a determination, take 
any action. He has 15 days in which to do it.
    I'd like to get your comments on your view of this company. 
But it does present a serious problem, because obviously, a lot 
of American companies are going to be purchasing this 
technology. They have no guidance, no understanding. We 
haven't, obviously, yet the policy to understand the manner to 
which or the degree to which they can penetrate our systems. 
You know, we understand the serious vulnerabilities involved 
and the threats that are involved. And so this is a good 
example of one of the problems that we are facing in this 
country.
    In addition to that, the U.S.-China Economic and Security 
Review Commission issued a report in January that talks about 
how Huawei maintains a cooperative agreement with the China 
Development Bank worth $30 billion. And as you know, Huawei has 
been the subject of numerous questions in terms of its 
association with respect to its management and close ties to 
the Chinese military--not to mention the billions of dollars of 
potential subsidies that makes our companies vulnerable here in 
the United States to that as well.
    So can you comment on your views on that and where do we go 
from here?
    Director Clapper. Well, I probably shouldn't get into the 
specifics of Huawei, since this is a matter of litigation 
within the government.
    I would say, though, that what this highlights is the 
importance of understanding supply chains. And this is one of 
the--well, the two-edged sword of globalization has been the 
interdependence of the industries and particularly in the 
telecommunications business, where there's been a collapsing of 
these large companies as they've merged.
    And so the whole issue of--rather than singling out Huawei, 
which is just one example--there are others--of ensuring that 
our industry is aware of, in a very specific way, the supply 
chain implications and the potential security threats that are 
posed when we depend on foreign concerns for key components in 
any of our telecommunications network.
    Senator Snowe. Well, you know, I see in the report of the 
Commission that it not only identifies Huawei but I think also 
another company, DTE. So obviously, these are major global 
manufacturers. So they obviously have enormous implications.
    Now, there's a company in Maine, for example, that I gather 
was approached, Director Mueller, by the FBI with respect to 
their purchase of Huawei equipment and was asked not to use 
that equipment.
    So this is the problem here as we go on down the line for a 
company--and they obviously chose to go forward with it. But, 
you know, these companies don't have any direction. They don't 
have, really, the benefit until it's too late of any 
information.
    But this is going on exponentially, especially with 
companies the size of Huawei. And so, Director Mueller, I don't 
know if you can comment on this particular case or not. It 
doesn't identify the company. But nevertheless to say that they 
were approached by the FBI because they had used them to 
purchase their equipment and obviously had made a significant 
investment already.
    Director Mueller. I don't think I can speak to the 
particular case but would be happy to get you the information 
and discuss it in another forum.
    Senator Snowe. I thank you. I guess it points to the issue 
as to how we're going to review this whole process. Do we think 
it's working right currently, General Clapper?
    Director Clapper. Well, this is related to a previous 
response about better outreach, better education if we become 
aware of pending transactions--and I'm not singling out Huawei 
but any of these where there is a national security 
implication. I have been working this with the Office of the 
National Counterintelligence Executive, which is embedded in 
the DNI staff, on this very issue.
    How can we do broader outreach to ensure that, if we learn 
of them, that there are such pending transactions which could 
have--again, dependent on foreign supply chain--which could 
have national security implications? I think we need to do 
better at our outreach. But one of our problems is finding out 
about these transactions that are pending right at the eleventh 
hour.
    Senator Snowe. Well, I think that that's the point. I mean, 
is the current CFIUS process working? Do we need to do 
something differently? And I think that that is something, 
Madam Chair, that we need to be working on with you regarding 
this issue because it could get beyond us.
    Director Clapper. I'm not really in a position to comment 
on the overall effectiveness of the CFIUS process. I do think, 
though, that once it reaches a CFIUS transaction, that the 
intelligence community's views are made known.
    Senator Snowe. You're a member, though. You're a non-voting 
member. Is that right?
    Director Clapper. I think that's my status, yes.
    Senator Snowe. Okay. But there are seven agencies--seven 
departments that are involved.
    Director Clapper. Right.
    Senator Snowe. Clearly, I'm wondering if it is too late by 
the time it gets to the attention of this committee. That's 
something we need to look at.
    Thank you.
    Chairman Feinstein. Thank you very much, Senator Snowe.
    Senator Rubio.
    Senator Rubio. Thank you.
    This question's for Director Mueller. I want to talk a 
little bit ----
    Chairman Feinstein. I beg your pardon. If you could hold 
up, I missed a very important member, Senator Mikulski, who was 
next.
    Senator Mikulski. Madam Chair, I'm the longest woman 
serving. Thank you for helping me not to be the longest 
waiting.
    Chairman Feinstein. Yes.
    [Laughter.]
    Senator Mikulski. First of all, General Clapper and to all 
at the table, we really do want to thank you for your service. 
The fact is Senator Conrad said the enormous successes that 
we've had, the fact that there's not been another major attack 
on the United States of America, says something's got to be 
working and working pretty well. So we want to thank you for 
that. Also, General Clapper, I want to thank you for bringing 
the array of your intel team to speak here. Usually, it's only 
the DNI, and I think it adds to a very robust way to have all 
of you here.
    I want to focus, if I could, on Director Mueller. First of 
all, Director Mueller, we've been together for 10 years. You 
came to the FBI just a few weeks before the horrific attack on 
the United States and the terrible events at the World Trade 
Center. Your term expires in September.
    So one of my questions will be: As we look at every issue 
of the day, whether it's a Twitter revolution, Wikipedia leaks, 
whatever, in your decade now as you are looking at it, what 
would you say and advise the Committee are the top issues that 
we need to maintain an enduring vigilance over as we respond to 
fast-breaking, late-breaking events of the du jour? Because the 
Committee has to be in it for what are with the enduring 
threats and what do we really need to stand sentry over from 
your perspective at the FBI in your collaboration with the 
intel community.
    Director Mueller. If you look at the array of threats that 
we face and you prioritize them, quite obviously, it's the 
threats from terrorism coming out of the FATA, Pakistan, 
Afghanistan, given Shahzad, Zazi, the cases that we've had 
where either TTP or al-Qaida have contributed to the ability of 
persons to try to undertake attacks in the United States; 
Yemen, with the printer bombs as an example, as well as the 
Christmas Day attacks, with the ability of individuals to come 
up with ingenious ways of constructing IEDs to get through our 
various checkpoints; Somalia.
    But then also we cannot forget domestic terrorism in the 
sense that militias, white supremacists--continually in the 
back of our mind, there is the Oklahoma City and the McVeighs 
that we have to be alert to.
    And so the array of terrorist threats are not going to go 
away in the near future.
    Second to that, which is as important, is the threat of 
spies. And we go to the cyber, and this will lead into the 
cyber arena. In the days of old, intelligence officers would 
operate out of embassies or what have you and you'd have a way 
of addressing them. Today, it's as easy, if not easier, to 
insert or intrude into various systems and exfiltrate the 
information you need, with far less risk to the individuals.
    And then the third area, which has been alluded to here, is 
the growth of cyber and all of its iterations. And by that I 
mean a criminal robbing banks, the theft of intellectual 
property, exfiltration of information from DOD or others. It is 
not lost upon us that several years ago, a group of individuals 
brought Estonia to its knees as a result of displeasure at 
actions that the Estonian government had undertaken. And, more 
recently, in Georgia, before the Russians attacked Georgia, 
it's no secret that they went a far ways to dismantling the 
command-and-control capabilities of the Georgian authorities.
    And so in terms of terrorism, that would be a high 
priority, but also protecting our secrets from those 
governments and other individuals who want to steal them and 
then preparing--particularly NSA and others--the cyber--I don't 
want to call it a battlefield--but the cyber arena which has 
both offensive as well as defensive responsibilities.
    Senator Mikulski. Which takes me to something unique to the 
FBI, which is the role of organized crime. Often in the old 
days of either the CIA agent with the tan raincoat running down 
alleys or trying to turn people or the old gumshoe days of the 
FBI, you now have essentially non-nation-state actors in the 
field of organized--we're talking about organized international 
crime.
    Do you see that as a threat to our critical infrastructure 
where organized crime through, particularly in the area of 
financial services--the NASDAQ intrusion, for example, where 
they could have done flash trades or any number of things that 
could have had a devastating effect. It would have been another 
attack on Wall Street, far less visible, but equally as 
devastating.
    Would you comment on the role of organized crime and the 
world of cyber? And is this another area where we need to stay 
right on the edge of our chair?
    Director Mueller. It's an area that we are focusing on.
    I testified, I think, a couple of weeks ago--I can't 
remember which panel--but we focused on recent arrests we've 
made with the assistance of our Eastern European counterparts.
    Inasmuch as there is a triangle of individuals in certain 
governments associated with organized criminal groups, as well 
as with businesses, that can obtain a stranglehold on a 
particular supply and utilize that stranglehold to extort 
monies or businesses, it's the evolution of organized crime 
from where we knew it in our cities with the traditional 
organized-criminal groups we went after to criminal groups 
throughout the world who have much more power, much more access 
to governmental authority, and much more access to the 
capabilities of utilizing cyber capabilities to attack and 
obtain the funds that ordinarily they would get by the payoff 
in a bar.
    Senator Mikulski. Got it.
    Thank you, Madam Chair. I know my time has expired.
    Chairman Feinstein. Thank you very much, Senator.
    Senator Rubio.
    Senator Rubio. Thank you. Thank you very much.
    First of all, let me begin by thanking all of you for your 
service to our country. This is, I guess, my first meeting on 
this Committee. I'm new to all of this. And I beg your 
indulgence if I ask you questions that may have been 
established in previous hearings or what have you. But thank 
you again for your service. You have a very difficult job.
    That being said, Director Mueller, what I wanted to ask was 
about high-value detainees. In particular, what is the primary 
mandate of the FBI when it interrogates high-value detainees? 
Is it to gather information for criminal prosecution, or is it 
to gather information so we can disrupt and prevent attacks?
    Director Mueller. Obtain intelligence. Number one is to 
obtain intelligence.
    Senator Rubio. In that light, then, the current 
interrogation techniques that are in place, are they sufficient 
to accomplish that goal, or do we need techniques to go outside 
the Army Field Manual?
    Director Mueller. The techniques that we use and have been 
approved for use over a number of years are not necessarily co-
extensive with the Army Field Manual. But we continue to use 
them both domestically and internationally because they've been 
tried and tested over years. And they are sufficient, I 
believe, to obtain the information that we need.
    Senator Rubio. So it's your testimony that the techniques 
that we have in place today get us all the information we need 
from the high-value detainees that we are----
    Director Mueller. I believe that to be the case.
    Senator Rubio. Okay. And Director Panetta, my 
understanding, from the reading materials is that the CIA 
provides backup on high-value detainees. Is that correct?
    Director Panetta. That's correct. We usually are there, 
provide support, provide questions, and will work with the FBI 
to try to achieve the information that we are seeking.
    Senator Rubio. I'm not here to trigger a turf war, but my 
question is, is that the highest and best use of the Central 
Intelligence Agency on these issues, or would we gather more 
intelligence if the CIA were empowered to do more?
    Director Panetta. Look, the name of the game is to get the 
best intelligence we can to try to protect this country. And I 
think right now the process that we have in place to deploy 
these teams of interrogators--CIA, FBI, the DIA--is part of 
that process as well.
    When we deploy those teams of interrogators to go after a 
high-value target, it brings together the best resources that 
we have in order to try to get the information we need. So it 
works pretty well.
    Senator Rubio. So your testimony is that it's the highest 
and best use of the CIA?
    Director Panetta. I think that kind of partnership is the 
best way to use the resources from all three in order to get 
the information we need.
    Senator Rubio. Now, maybe this is for everyone, or maybe 
you'll decide among yourselves who answers this, I'm interested 
in Afghan detainees in particular. Do we have the authority we 
need to hold and interrogate detainees that are obtained in 
Afghanistan, outside of Afghanistan?
    Director Panetta. With regards to----
    Senator Rubio. Let me make this question simpler. I 
apologize. Maybe I didn't ask it right. The uncertainty over 
where to hold detainees outside of Afghanistan, is that 
impeding our intelligence-gathering efforts?
    Director Panetta. No, it isn't, because, you know, any 
individual that we're after either comes under the jurisdiction 
of the country that they're in or, in cases of Afghanistan, 
they're usually put into a military facility. And that gives us 
the opportunity to go after and interrogate them there.
    Senator Rubio. So the existing detention capabilities that 
we have in place today are optimizing our intelligence-
gathering capabilities? Is that the testimony?
    Director Panetta. The ability to detain them in a place 
where we can then interrogate them, that process works very 
well.
    Senator Rubio. Okay. Rising recidivism from former GTMO 
detainees, how are we tracking that? I'm not sure what efforts 
are being taken to keep an eye on that. I know that's in 
essence--what's the latest and greatest on----
    Director Clapper. I think General Burgess, Director of 
Defense Intelligence Agency, would be the best to answer that 
question, sir.
    General Burgess. Sir, we have a system that has been in 
place now for a few years where we track the recidivism rate, 
and we put a report out quarterly dealing with that. And I 
think the report is fairly self-explanatory. It is a classified 
report, and it is provided to the Committee and to the others.
    But I think the process that we have in place is a good 
one. The concern is always confirmed, is one of those things 
that's a pretty set piece, suspected is--you know, the devil is 
in the details, as I would say, where there is always some 
discussion on that as we come to our figures on recidivism.
    Senator Rubio. And again, if we can't answer here, I 
understand. I'm not asking for numbers or figures that would 
compromise any information. I guess the general gist of it, is 
this an area of growing concern? Because I didn't see it 
mentioned in any of the statements, the recidivism rate from 
Guantanamo. Is that an area of concern for the intelligence 
community?
    General Burgess. Well, yes, sir, it is. I mean, if we have 
one recidivist, that's one too many. So we are concerned about 
this, and we do track it. And that effort is a focus of the 
Defense Intelligence Agency. So, yes, sir, we are concerned 
about it.
    Senator Rubio. Thank you.
    Chairman Feinstein. Thank you, Senator. Senator Risch.
    Senator Risch. I'm going to pass, thank you.
    Chairman Feinstein. Okay. I think we'll have one more 
round, and I'll begin.
    Mr. Panetta and Mr. Leiter, I'd like to turn to Pakistan. 
I've become more and more concerned. It appears the ISI walks 
both sides of the street. The failure of the country to turn 
over two leading--one operator, one leader--from the Mumbai 
attack to India; the reluctance to go into North Waziristan; 
the development of a safe harbor; the concentration of a number 
of terrorist groups in that safe harbor; the fact that Pakistan 
has major flood issues and yet has chosen to build another 
nuclear weapon, which to some, I think, seems a very bad choice 
at this time.
    So I'd like to have comments from both of you, and Mr. 
Panetta in particular; you go there very often. I think we 
ought to really understand where we are with this country. And 
I won't go into the failings of a government, but I think 
there's every reason to believe that concern is rising over 
what the future is going to be.
    Director Panetta. Madam Chairman, this is one of the most 
complicated relationships that I've seen in a long time in this 
town. On the one hand, obviously we are involved at targeting 
the leadership of al-Qa'ida there in the FATA. And we do get 
the cooperation of the Pakistanis in that effort in trying to 
target those individuals that concern us and that threaten this 
country, and threaten their country as well.
    In addition to that we have gotten their cooperation on a 
military basis, being able to go into places like South 
Waziristan and have a military presence there, moving some 
troops from the Indian border for the purposes of doing that. 
And that has been appreciated as well.
    At the same time, obviously they look at issues related to 
their national interest and take steps that further complicate 
our relationship and create tensions between our country and 
theirs. And that happens a great deal. And our effort is to try 
to work through those, because, in the end, what I try to 
convince the Pakistanis of is that we have a common enemy and 
we have common issues that require the cooperation and 
partnership of both countries in order to be able to deal with 
those threats.
    But I have to tell you that it is very complicated and it 
does involve oftentimes conflicting viewpoints of how we deal 
with issues.
    Mr. Leiter. Madam Chairman, I think first I would say that 
your citation of points are fair and accurate ones of the 
challenges we face.
    With respect to the terrorism situation in Pakistan, first 
I would note, we still see al-Qa'ida in Pakistan being at its 
weakest point since 9/11. Some of that has to do with what the 
Pakistanis have done with us; some of that is what they allow 
us to do. But it is critical that we have really hurt al-Qa'ida 
core in a very meaningful way.
    That being said, there are certainly weaknesses in that 
cooperation at times, and in particular I think the ongoing 
dispute that you note about the Mumbai attackers feeds into the 
tension between the two nations and can also undermine some of 
our counterterrorism efforts, not just at al-Qa'ida but also 
Lashkar-e-Taiba.
    Chairman Feinstein. You, Mr. Leiter, made a comment at the 
House hearing about Lashkar-e-Taiba having the ability to 
strike the United States and Europe. Could you expand on that?
    Mr. Leiter. I can to some degree in this setting, Madam 
Chairman. What we have not yet seen is a history of them doing 
so. We are certainly concerned by some indicators we see of 
them expanding their horizons beyond the region. Certainly they 
have the capacity--it's a large organization.
    What they did in India could theoretically be launched 
elsewhere. But we have not yet seen those steps occur. I think 
the additional point that I would stress is they can still be a 
very destabilizing factor in the region. So, even without 
striking in the U.S. or Europe, a further attack by Lashkar-e-
Taiba in India would very much hurt our national security and 
our counterterrorism interests in Pakistan.
    Chairman Feinstein. Mr. Panetta, you mentioned trying to 
work through these issues. I just wonder how effective a 
position that is.
    Director Panetta. Sure. Madam Chairman, because we are 
involved in obviously very important efforts to deal with an 
enemy that threatens this country and we're doing it in their 
nation, in the FATA and the tribal areas, it does require that 
we have to go out of our way to do everything possible to get 
their cooperation. And for that reason I spend an awful lot of 
time talking with my counterpart, both in Pakistan and here as 
well to try to see if we can focus on some common issues.
    We have some common areas that we can work on. We work with 
them; we work with our Afghan counterparts, as well, to try to 
develop a coordinated approach to dealing with this. At the 
same time, there are issues that we have with regards to how 
they operate, the ties they have to certain groups that concern 
us, that we try to work through in these discussions. I have to 
be part Director of the CIA and part diplomat in order to get 
this job done.
    Chairman Feinstein. Could you speak to what the rationale 
is for the building of another nuclear weapon? How much of the 
country has been underwater and really in difficult, difficult 
circumstances?
    Director Panetta. Well, again, one of those other 
complicating issues is the fact that they're a nuclear power. 
They have a number of nuclear sites throughout their country, 
and they have proceeded to keep up development of their nuclear 
weapons. As far as the broad policy implications of the 
economy, the politics, the stability of that country, dealing 
with the flood damage, you need to ask them why they're not 
paying attention to those other problems.
    Chairman Feinstein. Thank you very much.
    Mr. Vice Chairman.
    Vice Chairman Chambliss. Thanks, Madam Chairman.
    General Burgess, going back to this Guantanamo detainee 
issue, the recidivism rate, as I understand it, is in excess of 
25 percent today. That means one out of every four that have 
been let go, turned over to another country, has engaged on the 
battlefield against American or maybe Afghan troops.
    Now, that's what we know. I suspect the number is probably 
higher than that because we don't know all of the individuals 
who have gone back to the battlefield. Our policy that's in 
place today has even allowed some of those prisoners to be 
returned to places like Yemen, where we have very little 
control, and my understanding on a visit to Yemen is that they 
basically were sent back to their tribal region and they have a 
personal obligation on themselves to report back to us. Nobody 
believes and certainly they haven't on their own initiative 
come and told us where they are and what they're doing, so they 
basically have no supervision.
    We are now down to probably the real hardcore in 
Guantanamo. Do you see any further revisions in our policy with 
respect to those individuals, and with what's happening in the 
Middle East today, particularly Tunisia, Egypt, a number of 
other countries--Bahrain, I noticed this morning, is the latest 
to have protests--has this had an impact and reflected upon our 
decisions with respect to release of those individuals to any 
particular country?
    General Burgess. Sir, in regards to the first part of your 
question, the 25 percent figure that you mention is a 
combination of both confirmed and suspected. So the whole 25 
percent would not be confirmed by the Defense Intelligence 
Agency in terms of having returned to the fight or reengaged.
    The intelligence people in DIA--I would say in the 
community, though I'm reticent to speak on behalf of the 
community--would not push back on your statement in terms of 
there is concern out there as we return some to certain 
countries that the following mechanisms are not totally in 
place that would make us comfortable in that, but that is more 
of a policy call.
    And then, to the last part of your question, sir, I would 
defer because I don't think it's appropriate for me to be 
commenting on policy as the Director of the Defense 
Intelligence Agency.
    Director Clapper. Sir, if I might add, one important 
factoid I think I should mention is that the President 
suspended any further repatriations to Yemen precisely because 
they don't have the apparatus there to either monitor or 
rehabilitate. And with the new processes that have been 
instituted, that 25 percent recidivism rate--in the last two 
years or so I think there are now five--two confirmed and three 
suspected--that are recidivists.
    Now, the counter to that, of course, is that you need more 
time--more time would elapse, you would discover these people. 
So it remains to be seen. There are about, I think, 172 
detainees remaining at Gitmo, and, as you correctly pointed 
out, the bulk of those, from a single nationality standpoint, I 
think are Yemeni. And right now I don't think there's much 
likelihood of our returning anyone to Yemen, particularly in 
light of, as you pointed out, the upheavals that are going on 
there. And that certainly would bear on any of the other 
countries that are affected that we might consider for 
repatriation.
    Vice Chairman Chambliss. Well, we've got a problem in this 
area that the Chairman and I have already had some initial 
conversation about, and Senator Graham and I have been working 
on a piece of legislation that's going to be forthcoming. And 
the problem is, General Burgess or Director Panetta, let's say 
your folks were successful in capturing bin Laden, Zawahiri, 
any other HVT, tomorrow, what are you going to do with them?
    Director Panetta. The process would obviously involve, 
especially with the two targets you just described--we would 
probably move them quickly into military jurisdiction at Bagram 
for questioning, and then eventually move them probably to 
Guantanamo.
    Vice Chairman Chambliss. We haven't moved anybody to 
Guantanamo in years now. And, obviously, there's been a move 
towards closure of that facility, and I would tend to agree 
with you that's probably the best place for anybody to go right 
now, the safest place from a national security standpoint. 
Politically, it may not be popular, but certainly it is. I 
appreciate your honesty and straightforwardness about what you 
would do.
    Director Clapper. If we were to capture either one of those 
two luminaries--if I can use that term--I think that that would 
probably be a matter of some interagency discussions as to what 
their ultimate disposition would be and whether they would be 
tried or not. That would, I am sure, if we did capture them, be 
subject to some discussion.
    Vice Chairman Chambliss. Thank you.
    Chairman Feinstein. Thank you, Mr. Vice Chairman.
    Senator Wyden.
    Senator Wyden. Thank you, Madam Chair.
    Director Clapper, I think you know that I'm going to ask a 
follow-up question about Stephanie O'Sullivan. I think we've 
communicated it to your staff.
    And let me approach it this way. You know, this, to me, is 
not about finger pointing. I mean, this is about the American 
people see $50 billion going out the door in terms of 
intelligence, and they want to see particularly how information 
is made available to policymakers in a timely kind of fashion.
    And we got a classified response to the questions that I 
asked Ms. O'Sullivan at her hearing, and voted for her, and I 
think she's going to be a good person in your operation. But I 
want to go further and see what we can get on the public record 
with respect to this area.
    Now, I come to this almost by way of saying that nobody 
ought to think that the intelligence community should have 
predicted that a street vendor in Tunisia was going to go light 
themselves on fire and trigger these protests all around the 
world. But at some point, Mr. Director, after that young man's 
self-immolation and the events of that period, it must have 
been clear to intelligence community analysts that this wave of 
protests was going to threaten President Mubarak's hold on 
power. And at some point analysts must have communicated this 
to policymakers. When did that happen?
    Director Clapper. Sir, if you're looking for a date, I 
would pick January 14th, when Ben Ali, in what I thought was a 
surprising snap decision, he dismissed the government. He 
called for new parliamentary elections within six months, 
declared a state of emergency, announced he was stepping down 
temporarily and then fled to Saudi Arabia.
    That, I think, was the tipping point, if you will. And we 
saw--the community, I think, pretty clearly saw what the 
contagion effect was going to be and those states throughout 
the Mideast that would be most susceptible to that contagion, 
prominently among whom was Egypt.
    Senator Wyden. Are you satisfied with the way in which the 
intelligence community handled it? And do you, looking back 
now--always easy to come back in hindsight--are you looking at 
any improvements or adjustments given what you've seen?
    Director Clapper. Well, I think the first comment I would 
make, sir, is that we're not like Sherwin Williams paint. We 
don't cover the Earth equally. And so, frankly, Tunisia was 
probably not up there on our top 10 countries we were watching 
closely.
    So there is the aspect of, you know, the spread, the 
balance of our collection----
    Senator Wyden. Priorities.
    Director Clapper. Priorities, exactly. So, obviously, we're 
going to work on that. I think the notion--as the Chairman 
correctly observed--is, you know, we're going to pay a lot more 
attention to social media and what else could we do there to 
extract a warning from this.
    But, to me, this is--a good friend of mine wrote a piece on 
this. This is somewhat like an 85-year-old man who's 
overweight, has high cholesterol, diabetes, heart disease, 
doesn't eat well, doesn't sleep well and you know their life 
expectancy is not very good. Very difficult to foretell exactly 
when he'll expire, but you know the conditions are there. And 
that's a rough analogy, I think, to what we're facing here in 
predicting these exact tipping points, having insight into the 
dynamics of crowd psychology.
    The fact that the movement in Egypt had no defined leader 
or leaders, this was a spontaneous thing fed, no question, by 
social media. So this is a new phenomenon, frankly, and I think 
we do need to improve our attention to that.
    Another interesting aspect is the extent to which 
governments permit access to the Internet or participation in 
Facebook. And so we've done a lot of work on that since then. 
But to me, again, the tipping point--and personally, it 
surprised me--was when Ben Ali made a snap decision and left.
    Senator Wyden. Madam Chair, Director Panetta wants to 
respond.
    I did want to ask one question about Iran before we wrap up 
because I don't think we've asked the question.
    Can Director Panetta respond and I ask one last question?
    Director Panetta. If I could, because it's an important 
question, our job is to provide the very best, the most timely, 
the most relevant intelligence we can to the President and to 
policymakers here.
    We have, over the years, long warned about the dangers in 
this region. I think last year alone we had about 450 
intelligence reports that talked about the factors that were 
dangerous in the region--factors like regressive regimes, 
economic and political stagnation, the lack of freedoms, the 
lack of reforms.
    And yet, at the same time, it is difficult to predict the 
future. The most difficult thing is to get into the head of 
somebody and try to figure out what that person is going to 
decide. We have that problem with the leaders in Iran, in North 
Korea and, clearly, with Ben Ali, the same issue. How do you 
get into someone's head when they make the decision to get out 
of the country?
    So I think we do a pretty good job of teeing up the dangers 
in an area. What we do need to do is to have a better 
understanding and better collection on these triggers. What 
triggers these events? And there it's the unmet expectations. 
It's the large increase in numbers of youth, educated, out-of-
work, that play on the Internet. What is the role of the 
Internet and the social network, and how does that play into 
demonstrations? The military's role. Generally, we would all 
say, after 20 or 30 years of someone in government, that the 
military is going to be loyal to that individual and basically 
support establishing security. That did not happen. In Tunisia 
and in Egypt, they were working both sides.
    And so understanding that is really important. What I've 
done is, we've formed a 35-member task force in the Directorate 
of Intelligence to basically collect on these issues. What's 
the popular sentiment? What's the loyalty of the military? 
What's the strength of the opposition? What's the role of the 
Internet?
    We have got to do a better job at collecting in those areas 
so that we can have a better sense of what might tip off these 
kinds of changes.
    Vice Chairman Chambliss. Before we leave that and you ask 
your Iranian question, let me make a comment and have your 
reaction, Director Panetta.
    I'm the first to criticize the community when I think we've 
screwed up or made a mistake. But here, as we do look back on 
it now, is it not a fair statement to say that your station 
chiefs really did have a feeling of the uneasiness in this 
region of the world in virtually every country, but certainly 
they weren't on the Twitter list of the individuals in Egypt 
who sent this around. They weren't on the Facebook account. 
They had no idea that this individual in the marketplace was 
going to set himself on fire.
    And I think that's what we missed, but gee whiz, I don't 
know how we do otherwise. But my feeling from having talked to 
your station chiefs--in not every country--that there was a 
feeling on their part, and they had communicated that back to 
you in headquarters, that there are powder kegs in that part of 
the world.
    Director Panetta. Absolutely. Absolutely, your point is 
correct. Our COSs, for a period of time, have been indicating 
the various factors that they were concerned about that we now 
see playing out in the demonstrations that are taking place 
throughout that region.
    Senator Wyden. Thank you both. I appreciate your fleshing 
out the information that we have now, because obviously people 
are going to look at this as an important case for quite some 
time to come with respect to how the community reacts to a 
surprising set of events. And this is helpful to have it 
fleshed out.
    I just didn't want to wrap up, Director Clapper, without 
getting into Iran, at least to some extent.
    Your testimony said that the IC, the intelligence 
community, continues to judge that Iran's nuclear 
decisionmaking is guided by a cost-benefit approach rather than 
a determination to pursue nuclear weapons at all cost.
    Now, last year, the administration succeeded in convincing 
the international community to impose new and tougher sanctions 
on the Iranian regime. In your view, what impact have these 
sanctions had on the Iranian regime today?
    Director Clapper. Well, they clearly have had an impact on 
the Iranian economy, which I think is increasingly affecting 
the average citizen. I'm not sure the average citizen in Iran 
sees it that way, but that is the effect. And obviously the 
point here is to induce a change in behavior on the part of the 
Iranians.
    Senator Wyden. How seriously do you think the regime is 
taking the sanctions?
    Director Clapper. I think--and I'll ask others if they want 
to contribute to this--but I think it is clearly a factor on 
their mind. As the screws have gotten tighter, I think they 
clearly are seeing the effect. I can't say, frankly, that that 
has had an effect on their nuclear program at this point.
    Mr. Goldberg. I would add that, in areas like insurance, 
banking, shipping, gasoline, clearly in refining, that it's had 
quite an impact and that that's had an impact on the population 
as well.
    But the last point that Director Clapper made about the 
direct impact is one that maybe we could discuss in another 
setting.
    Senator Wyden. Yes. I'm interested in a classified forum to 
know more about the effect it's had on the regime.
    And one last point that I think we can get into in public 
here. Your testimony touches, Director Clapper, on the fact 
that the Iranian regime is expected to contain threats to its 
stability from the Iranian opposition but that its actions have 
opened up a rift between traditional conservatives and what 
are, in effect, the hard-line conservatives.
    So if this rift were to continue, are the traditional 
conservatives likely to start coming over to the opposition 
side, the opposition movement?
    Director Clapper. Well, at this point, I'm not real 
sanguine that's going to happen, and I base that on the most 
recent round of demonstrations on Monday, which the Iranian 
government managed to suppress. And, by the way, included in 
that suppression is suppressing access to the Internet and the 
social media, et al. So, again, these regimes have gotten very 
sensitive, as we have, about the importance.
    I think another thing I'd cite is executions have spiked at 
an all-time high in Iran. And so that has a chilling effect, I 
think, on the opposition. The two opposition leaders for this 
movement--there was a vote by the Majlis, over 200 of which 
voted to execute them.
    And, of course, you have the irony, as the President cited, 
of the Iranian regime praising the demonstrations in the 
streets of Cairo and other places. It's fine elsewhere, but not 
here.
    Senator Wyden. Not in our neighborhood.
    Director Clapper. Right.
    Senator Wyden. All right. Thank you all and, again, thank 
you for your service. It's been a helpful hearing this morning.
    Thank you, Madam Chair.
    Chairman Feinstein. Thank you very much, Senator Wyden.
    Gentlemen, thank you so much. The hearing is adjourned.
    [Whereupon, at 11:55 p.m., the Committee adjourned.]
  

                                  
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