[Senate Hearing 113-89]
[From the U.S. Government Publishing Office]



                                                         S. Hrg. 113-89
 
             CURRENT AND PROJECTED NATIONAL SECURITY 
                   THREATS TO THE UNITED STATES
=======================================================================


                                HEARING

                               BEFORE THE

                    SELECT COMMITTEE ON INTELLIGENCE

                                 OF THE

                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                        TUESDAY, MARCH 12, 2013

                               __________

      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         RICHARD BURR, North Carolina
    Virginia                         JAMES E. RISCH, Idaho
RON WYDEN, Oregon                    DANIEL COATS, Indiana
BARBARA A. MIKULSKI, Maryland        MARCO RUBIO, Florida
MARK UDALL, Colorado                 SUSAN COLLINS, Maine
MARK WARNER, Virginia                TOM COBURN, Oklahoma
MARTIN HEINRICH, New Mexico
ANGUS KING, Maine
                     HARRY REID, Nevada, Ex Officio
                 MITCH McCONNELL, Kentucky, Ex Officio
                    CARL LEVIN, Michigan, Ex Officio
                   JAMES INHOFE, Oklahoma, Ex Officio
                              ----------                              
                     David Grannis, Staff Director
            Martha Scott Poindexter, Minority Staff Director
                    Kathleen P. McGhee, Chief Clerk


                                CONTENTS

                              ----------                              

                             MARCH 12, 2013

                           OPENING STATEMENTS

Feinstein, Hon. Dianne, Chairman, a U.S. Senator from California.     1
Chambliss, Hon. Saxby, Vice Chairman, a U.S. Senator from Georgia     3

                                WITNESS

Clapper, Hon. James R., Director of National Intelligence, 
  Accompanied by: Mueller, Hon. Robert, Director, Federal Bureau 
  of Investigation; Brennan, John O., Director, Central 
  Intelligence Agency; Goldberg, Hon. Philip, Assistant Secretary 
  of State for Intelligence and Research; Olsen, Matthew, 
  Director, National Counterterrorism Center; and Flynn, Lt. Gen. 
  Michael T., Director, Defense Intelligence Agency..............     6
    Prepared Statement for the Record on the Worldwide Threat 
      Assessment of the U.S. Intelligence Community by James R. 
      Clapper....................................................    13


  CURRENT AND PROJECTED NATIONAL SECURITY THREATS TO THE UNITED STATES

                              ----------                              


                        TUESDAY, MARCH 12, 2013

                                       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, Chambliss, 
Rockefeller, Wyden, Mikulski, Udall (of Colorado), Heinrich, 
King, Coats, Rubio, and Collins.

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

    Chairman Feinstein. The Committee will come to order. We 
meet today in open session, as we've done since 1994, actually, 
to hear an unclassified briefing from our intelligence leaders 
on the threats that face our nation; hence the title--the 
``World Threat Hearing.''
    As Members know, we will immediately follow this session 
with a closed one, and I'll ask that Members refrain from 
asking questions here that have classified answers. This 
hearing is really a unique opportunity to inform the American 
public, to the extent we can, about the threats we face as a 
nation and worldwide.
    Let me begin by welcoming our witnesses and thanking them 
for being here. They are: The Director of National 
Intelligence, Jim Clapper, who will provide the opening 
statement on behalf of the Intelligence Community; the Director 
of the CIA, new to the job, John Brennan--actually, it's his 
fifth full day; the Director of the FBI, Bob Mueller, now 
nearly twelve years on the job, and who, barring another 
unforeseen intervention by the Congress, is appearing in his 
last Worldwide Threat Hearing before this Committee--but Bob, 
you never know; the Director of the Defense Intelligence 
Agency, Lieutenant General Michael Flynn; the Director of the 
National Counterterrorism Center, Matt Olsen; and the Assistant 
Secretary of State for Intelligence and Research, Ambassador 
Phil Goldberg.
    So welcome, all of you.
    DNI Clapper, thank you for your Statement for the Record, 
which I have read. It's submitted in both classified and 
unclassified form, and we very much appreciate it.
    It is clear that the threats to the United States are many. 
They are diffused, and they are complex. We face a continuing 
threat at home from terrorist attack, most notably from al-
Qa'ida in the Arabian Peninsula, which we call AQAP, but also 
from home grown extremists, such as Nidal Hasan, the Fort Hood 
shooter; Najibullah Zazi, who attempted to blow up the New York 
subway; and Faisal Shahzad, the attempted Times Square bomber.
    It's notable that the Statement for the Record includes the 
assessment that, due to recent losses, the core of al-Qa'ida in 
Pakistan--and I quote--``is probably unable to carry out large, 
complex attacks in the West,'' end quote, although its desire 
to do so hasn't changed. This appears to be a stronger 
statement than in the past about the effect of counterterrorism 
operations against al-Qa'ida.
    Since last year's threat hearing, our staff has been 
keeping a tally of terrorism-related arrests in the United 
States. With the arrest on March 5th of Riaz Khan, for 
conspiring to provide material support to terrorists in 
connection with the suicide bombing of ISI headquarters in 
Pakistan, there have now been 105 terrorism-related arrests in 
the United States in the past four years. We have actually 
listed these, and that's the number: 105 arrests in the last 
four years. In our federal criminal court system, those arrests 
will most likely lead to a conviction or a guilty plea. If 
those arrests have not resulted in convictions or guilty pleas, 
it is only because the case is still ongoing.
    Another indicator of the success of our criminal justice 
system in prosecuting terrorists is, in 2011, the Department of 
Justice released a list of terrorism trials conducted since 
2001 and reported a total of 438 convictions from September 11, 
2001 to December 31, 2010; so in those nine years, 438 
convictions in federal courts.
    We have also been briefed recently on the detention and 
arrest of Sulaiman Abu Ghaith, Osama bin Laden's son-in-law and 
al-Qa'ida spokesman. And I'd like to commend the witnesses for 
your agencies' work in bringing him to the United States to be 
prosecuted in the federal criminal court, where he faces a life 
sentence.
    Of course, as the terrorist threat has receded, the threat 
from cyber attack and cyber espionage has grown. We have seen 
large-scale denial-of-service attacks against United States 
banks, and recent public reports, including by the computer 
security firm Mandiant, about massive cyber penetrations and 
loss of intellectual property from United States businesses.
    I am very concerned, also, about the instability that seems 
to be festering across Northern Africa--from Mali to Egypt to 
Libya and beyond, breeding and harboring a new generation of 
extremists. Some of the governments in the region are unable or 
unwilling to take action against these terrorist groups, 
meaning that the rest of the world will need to focus energy 
and attention to preventing a safe haven and launching pad for 
future attacks.
    In Syria, there is a massive and still-growing humanitarian 
disaster under way, with no end in sight, as the regime and the 
opposition appear nearly at a stalemate. This Committee has 
been very concerned about the possibility that President Bashar 
Assad would become sufficiently desperate to use its chemical 
weapons stockpile. And I note that the DNI's statement includes 
exactly that warning.
    I know the President has expressed that the use of chemical 
weapons would be a redline for the United States, and I would 
predict that the United States Senate would demand a strong and 
swift response should the use of such weapons occur.
    Of course, Syria is not the only WMD state to be making 
headlines. North Korea has claimed a third nuclear weapons 
test, has displayed a road-mobile ballistic missile, and 
demonstrated the capability of its Taepodong-2 missile. The 
regime is now disavowing the 1953 armistice with the South. 
There's perhaps nowhere else on Earth where the capacity to 
wreak enormous damage is matched by the possibility of North 
Korea using their nuclear weapons.
    Both the Syrian and North Korean examples demonstrate the 
need to prevent Iran from obtaining nuclear weapons, yet its 
work at Natanz and Fordow continue, and Revolutionary Guard and 
Hezbollah proxies are growing bolder and more capable of their 
terrorist attack plotting around the world.
    So these, and many other threats and challenges, face the 
Intelligence Community and play a very critical role in 
providing warning to United States policymakers, and to 
providing insight to shape their policy decisions. 
Unfortunately, the IC is being asked to do this work under the 
self-inflicted damage of sequestration.
    I know, Director Clapper, that you have been planning for 
sequestration and would like to speak to its effects. I have an 
amendment to the appropriations legislation currently on the 
Senate Floor that will provide the Community with as much 
flexibility as possible to implement the cuts made by 
sequestration, in the same way as the rest of the Department of 
Defense, to make sure that intelligence efforts, and therefore 
our national security, can proceed as much the same as 
possible.
    Let me now turn to the distinguished Vice Chairman, Saxby 
Chambliss, for his opening remarks.

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

    Vice Chairman Chambliss. Well thanks, Madam Chair, and I 
join in welcoming Director Clapper, as well as all of our other 
witnesses today, and particularly Mr. Brennan, as his first 
testimony as the Director of CIA--Mr. Director, 
congratulations; and to Bob Mueller--I had a conversation with 
Bob when his last term was ending, and implored him to think 
about staying.
    I will expect to have that conversation again with you, 
Director Mueller; we may not be successful this time. But you 
have provided great leadership at a great agency, and all of 
America is safer because of the kind of leadership that you 
have provided. We'll have many more opportunities, I hope, to 
say thanks, but we don't want to miss any of those 
opportunities.
    I particularly appreciate all of you being here today to 
talk about the threats that face our nation. These threats come 
in all forms--terrorism, espionage, cyber, and good old 
fashioned counterintelligence--and from all corners of the 
globe. Today, the American people have the chance to hear 
first-hand from those on the front lines what these threats 
mean to the security of our nation.
    Let me just start out by noting that today's hearing 
follows a lively discussion over the past month about the 
potential for the domestic use of drones. While the 
administration has put many fears to rest over the last few 
days, this debate brought new attention to the difficulty 
Congress often faces in getting information from the executive 
branch.
    The Intelligence Community is obligated, under the National 
Security Act, to keep the congressional intelligence committees 
fully and currently informed of its intelligence activities, 
including covert action. We cannot do the oversight the 
American people expect of us if every request for information 
becomes a protracted battle.
    As a group, our witnesses represent the entire Intelligence 
Community, and each of you has made a commitment to this 
Committee to provide information when we request it. We 
understand there may be rare exceptions to this rule, but we 
are now operating in an environment in which the exception has 
become the rule, and this simply has to stop.
    Let me now turn to the threats facing our nation. We've 
heard it said over the past year that core al-Qa'ida has been 
decimated and is on the run. Its Pakistan-based leadership is 
crumbling under the pressure of U.S. and allied 
counterterrorism efforts.
    But new threats, posed by al-Qa'ida affiliates and other 
similar organizations, are emerging--and possibly expanding--in 
places like Yemen, North Africa, and Mali. The past six months 
alone have brought the terrorist attacks in Benghazi and 
Algeria that claimed innocent American lives. Clearly, these 
attacks show that radical and extreme ideologies are not going 
away anytime soon. Instead, these terrorist organizations are 
regrouping and gathering strength.
    When we entered Afghanistan in October 2001, our goal was 
to put the al-Qa'ida terrorist training camps and military 
installations of the Taliban regime out of business. Now, as we 
prepare to leave Afghanistan nearly twelve years later, the 
Taliban, the Haqqani Network, and similar groups in Afghanistan 
and Pakistan seem to have mostly survived years of 
counterinsurgency and counter-terrorism operations. This raises 
the inevitable question of whether these groups will be able to 
create a sanctuary, like we saw before 9/11, once the U.S. 
coalition withdraws in 2014.
    As we face new threats from al-Qa'ida affiliates, we are 
badly overdue for a long-term detention policy that allows us 
to fully and effectively interrogate terrorist detainees. Last 
week, Osama bin Laden's son-in-law was indicted in federal 
court in New York after being captured overseas. While Sulaiman 
Abu Ghaith is finally facing justice for his long affiliation 
with bin Laden and al-Qa'ida, I firmly believe this 
administration's refusal to place new detainees at Guantanamo 
Bay is hurting our ability to collect intelligence.
    It seems as though we now either just kill terrorists or 
give them Miranda warnings. Dead terrorists don't talk. And 
when we Mirandize the ones we do capture, after just 50 
minutes, or 90 minutes, we aren't likely to get the timely 
intelligence we need. Three years ago, we had the same 
conversation, following the failed Christmas Day Bombing, and 
I'm disappointed that this scenario seems to be repeating 
itself.
    Whether Abu Ghaith is ultimately tried in federal court or 
a military commission is not the primary question; it is 
whether we maximize our opportunity to gather good intelligence 
up front. Waiting for a potential plea deal before getting 
access again, as we saw with the Christmas Day Bomber, is, I 
believe, simply the wrong approach.
    I'm very concerned that we have returned to the dangerous 
pre-9/11 reactive mindset, where international terrorists were 
treated as ordinary criminals. This is a mistake we should not 
repeat. The administration's handling of Abu Ghaith also seems 
to directly contradict the National Defense Authorization Act, 
which specifically called for individuals like him to be held 
in military custody.
    Now, I understand that the administration adopted 
procedures that effectively undermined the spirit of this 
military custody requirement. And what I believe is an abuse of 
the NDAA's waiver provision, the administration created broad, 
accepted categories under which they can continue to avoid 
placing terrorists in military custody. I would simply ask--if 
someone like Abu Ghaith will not be held in military custody 
for interrogation purposes, then who will be?
    Of course, terrorism is not our only threat. The 
possibility of Iran acquiring nuclear weapons, and North 
Korea's nuclear test, and other provocations, merit our close 
attention, as does the increasing conflict in Syria. It is 
critical that we ensure the Intelligence Community can give us 
a clear reading into these ``hot spots'' and to what may lie 
over the horizon.
    At the same time, cyber espionage and intrusions are 
growing every day, and if we are going to prevent the siphoning 
off of our intellectual property to hackers and nation-states 
alike, then Congress must work with the private sector in a 
truly cooperative way. We must pass voluntary information 
sharing legislation that completely protects companies from the 
threat of lawsuits. The government must put its own cyber house 
in order, and we must make sure that our criminal penalties are 
sufficient to punish and deter cyber intruders.
    Gentlemen, today is your opportunity to give the country a 
real glimpse of what it means to be on the front lines of the 
Intelligence Community. There is no doubt that today's slimming 
budgets, combined with increasing and diverse threats, clearly 
present a challenge to the entire Intelligence Community.
    Your task is not an easy one. But I am confident that the 
men and women of the Intelligence Community, who work so hard 
every day in defense of this nation, will rise to this 
challenge and not only get the job done, but, under your 
leadership, they will do it well.
    Madam Chair, I thank you and look forward to a discussion 
with our witnesses.
    Chairman Feinstein. Thank you very much for those comments. 
We will now proceed. Director Clapper, you have the floor, and 
it's my understanding you're going to make the comments on 
behalf of everyone?
    Director Clapper. Yes, Madam Chairman.
    Chairman Feinstein. And then we will be able to ask 
questions. The rounds will be five minutes because we have a 
classified hearing, and we will go according to seniority, 
alternating sides.
    Please proceed, Director Clapper.

      STATEMENT OF JAMES R. CLAPPER, DIRECTOR OF NATIONAL 
   INTELLIGENCE ON BEHALF OF THE UNITED STATES INTELLIGENCE 
                           COMMUNITY

    Director Clapper. Chairman Feinstein, Vice Chairman 
Chambliss, and distinguished Members of the Committee, as you 
indicated, we're here to present the 2013 Worldwide Threat 
Assessment. You already introduced my colleagues, but I do want 
to speak very briefly about, sort of, the alpha and omega of 
tenure in the Intelligence Community.
    Bob Mueller, approaching now twelve years in office, is a 
very distinguished director of the FBI, and a tremendous 
colleague for me--in this job and in previous ones I've held.
    And of course, I could not be more delighted and more proud 
to have John Brennan confirmed and installed as Director of the 
Central Intelligence Agency. It's my view that John will go 
down as one of the distinguished directors of CIA.
    These remarks and our two Statements for the Record--one 
unclassified, and then a much more detailed classified one--
reflect the collective judgments of the extraordinary men and 
women of the United States Intelligence Community. And it's our 
privilege--those of us who are here and those who aren't--a 
privilege and honor to serve in these positions to lead them, 
and now, as I will discuss shortly, our solemn duty to try to 
protect them.
    As you know, Madam Chairman, I have serious reservations 
about conducting open hearings on the worldwide threat, 
especially the question and answer sessions. While I believe 
it's important to keep the American public informed about the 
threats that our nation faces, I believe that can be done 
through unclassified opening statements and statements for the 
record. As you also know, we're ready to answer any and all of 
your questions in closed session, but an open hearing on 
intelligence matters is something of a contradiction in terms.
    While our statements for the record and your opening 
statements can be reviewed in advance for classification 
issues, our answers to your questions cannot. And our attempts 
to avoid revealing classified information sometimes leads to 
misinterpretation, or accusations that we're being circumspect 
for improper reasons. It's a hazard we have encountered when 
publicly discussing sensitive details of national security 
matters.
    So, when we ask to discuss certain matters in the closed 
session, it's not to evade, but rather to protect our 
intelligence sources and methods and, if I might add, to be 
sensitive to the often delicate relations we have with our 
allies and partners. They, too, all carefully listen to and 
watch these hearings, as I have learned the hard way.
    The topic that you both alluded to--the topic that is 
foremost on our minds this year--is, of course, sequestration. 
You haven't seen much public discourse on the impact of these 
indiscriminate cuts on intelligence. We haven't been on the 
talk shows, and you don't read much about it in the printed 
media. So, let me now be blunt--for you, and for the American 
people: sequestration forces the Intelligence Community to 
reduce all intelligence activities and functions without regard 
to impact our mission.
    In my considered judgment as the nation's senior 
intelligence officer, sequestration jeopardizes our nation's 
safety and security, and this jeopardy will increase over time. 
The National Intelligence Program, or NIP, as it's called, 
which I manage, is spread across six cabinet departments and 
two independent agencies. Much of it is included in the DoD 
budget.
    For that portion of the NIP, the Congress directed that the 
National Intelligence Program use an even more onerous set of 
rules to carry out these cuts than that imposed on the Defense 
Department. This restrictive Program, Project, and Activity--or 
PPA structure, as it's known--compounds the damage because it 
restricts our ability to manage where to take deductions in a 
balanced and rational way.
    Accordingly, the sheer size of the budget cut--well over $4 
billion, or about 7 percent of the NIP--will directly compel us 
to do less with less. I'll give you some examples--and I'll 
have to be circumspect here in an open, unclassified setting, 
but we're prepared to speak more specifically in a classified 
setting--of the impacts of sequestration.
    We'll reduce HUMINT, technical, and counterintelligence 
operations, resulting in fewer collection opportunities while 
increasing the risk of strategic surprise. This includes, for 
example, possibly furloughing thousands of FBI employees funded 
in the National Intelligence Program.
    Our cyber efforts will be impacted. This is an area where, 
as you all know, we need to keep ahead of rapid technology 
advances to maintain and increase access to adversaries as well 
as provide warning of a cyber attack against the U.S.
    Critical analysis and tools will be cut back. So, we'll 
reduce global coverage, and may risk missing the early signs of 
a threat. Our response to customers will suffer, as well.
    We'll let go over five thousand contractors--and that 
number may grow--who are an integral part of the Intelligence 
Community. And this is on top of the thousands of contractors 
we've let go in previous years.
    We'll delay major systems acquisitions, and we'll 
decommission older, but still productive, overhead 
reconnaissance capabilities, thus reducing coverage. Virtually 
all of the 39 major systems acquisitions across the 
Intelligence Community would be wounded.
    We'll have to re-negotiate contracts, and slip schedules to 
the right, which, in the long run, will cost us more. And we'll 
scale back cutting-edge research that helps us maintain a 
strategic advantage.
    Since we're already halfway through the fiscal year, the 
mandate of across-the-board cuts is equivalent to 13 percent, 
because we'll be forced to take them in just seven months. 
These condensed timelines magnify the impact these cuts will 
have on the IC.
    So, in response, our approach starts with the premise that 
mission comes first. Therefore, our two highest priorities are, 
one, to protect our most valuable resource--our civilian 
workforce--so we can focus on the threats we face; and two, to 
support overseas operations.
    Our civilian workforce works 24/7 around the world, and is 
crucial to performing that mission. It is our civilian 
professionals who will provide the resilience and ingenuity to 
help compensate for the other cuts we'll incur. I am resolutely 
committed to minimizing the number and lengths of furloughs 
that would be required, not only because of the direct impact 
on our mission, but because of the severe impact on the morale 
of the people who do it. I plan to follow Deputy Secretary of 
Defense Ash Carter's sterling example and have my pay reduced, 
as well, in solidarity with any IC employees that have to be 
furloughed.
    Now, let me emphasize here that we are not arguing against 
taking our share of the budget reductions. What I am saying is 
that we must manage this budget crisis and continue our vital 
missions. And, in so doing, we'll minimize the impact on our 
nation and on our employees. Therefore, I plan to submit a 
reprogramming action that mitigates some of the most egregious 
cuts to help us cut in a more rational, mission-focused manner. 
And in this, I'm asking for your support, and the other 
intelligence oversight committees, for expedited management and 
consideration.
    And Madam Chairman, I want to, on behalf of the entire 
Intelligence Community, thank you for your leadership and your 
care for the mission of the Intelligence Community and for 
introducing a bill that would give us that flexibility.
    Now, I must tell you that, unfortunately, I've seen this 
movie before. Twenty years ago, I served as Director of the 
Defense Intelligence Agency--the job that Lieutenant General 
Mike Flynn has now. We were then enjoying reaping the peace 
dividend occasioned by the end of the Cold War.
    We reduced the Intelligence Community by 23 percent. During 
the mid to late 1990s, we closed many CIA stations, reduced 
HUMINT collectors, cut analysts, allowed our overhead 
architecture to atrophy, and we neglected basic infrastructure 
needs, such as power, space, and cooling, and we let our 
facilities decay. And most damaging, most devastatingly, we 
badly distorted the workforce.
    All of that, of course, was reversed in the wake of 9/11. 
And thanks to the support of the Congress over the last decade, 
we rebuilt the Intelligence Community into the premier of such 
capability on the planet. And now, if we're not careful, we 
risk another damaging downward spiral. So I'm going to do all I 
can to prevent history from repeating that cycle.
    But, to be clear, the scope and magnitude of the cuts 
already under way will be long lasting. Unlike more directly-
observable sequestration impacts, like shorter hours of public 
parks, or longer security lines at airports, the degradation to 
intelligence will be insidious. It will be gradual and almost 
invisible--unless and until, of course, we have an intelligence 
failure.
    With that preface as a backdrop, let me turn now to a brief 
wave-top review of global threat trends and challenges; 
although, Madam Chairman, you and the Vice Chair have, I think, 
done an admirable job of that already.
    I will say that in my almost fifty years of intelligence, I 
do not recall a period in which we've confronted a more diverse 
array of threats, crises, and challenges around the world, 
which you both described. To me, this makes sequestration even 
more incongruous. This year's threat assessment illustrates how 
dramatically the world and our threat environment are changing.
    Threats are growing more interconnected and viral. Events 
that at first seem local and irrelevant can quickly set off 
transnational disruptions that affect U.S. national interests. 
It's a world in which our definition of war now includes a soft 
version. We can add cyber and financial to the list of weapons 
being used against us. And such attacks can be deniable and 
non-attributable.
    So, when it comes to the distinct threat areas, our 
statement this year leads with cyber. And it's hard to 
overemphasize its significance.
    Increasingly, state and non-state actors are gaining and 
using cyber expertise. They apply cyber techniques and 
capabilities to achieve strategic objectives, by gathering 
sensitive information from public and private sector entities, 
controlling the content and flow of information, and 
challenging perceived adversaries of cyber space.
    These capabilities put all sectors of our country at risk--
from government and private networks to critical 
infrastructures. We see indications that some terrorist 
organizations are interested in developing offensive cyber 
capabilities, and that cyber criminals are using a growing 
black market to sell cyber tools that fall into the hands of 
both state and non-state actors.
    This year, we include natural resources as a factor 
affecting national security because shifts in human geography, 
climate, disease, and competition for natural resources have 
national security implications. Many countries that are 
extremely important to U.S. interests that sit in already-
volatile areas of the world are living with extreme water and 
food stress that can destabilize governments. This includes 
Afghanistan and Pakistan in South Asia, Egypt, Iraq, Syria, 
Yemen, and Libya in the Arab world, and many other nation-
states across Africa and in our own hemisphere.
    Water challenges include not only problems with quality and 
quantity, but with flooding. Some countries will almost 
certainly exert leverage over their neighbors to preserve their 
own water interests, and water infrastructure can be considered 
a viable target for terrorists.
    In the United States, Germany, and Japan, less than 15 
percent of household expenditures are for food. In India and 
China, that figure climbs to more than 20 percent. In Egypt, 
Vietnam, and Nigeria, it rises to greater than 35 percent. And 
in Algeria, Pakistan, and Azerbaijan, more than 45 percent of 
household expenses are just for food.
    Terrorists, militants, and international crime groups are 
certain to use declining local food security to gain legitimacy 
and undermine government authority. Intentional introduction of 
a livestock or plant disease could be a greater threat to the 
United States and the global food system than a direct attack 
on food supplies intended to kill humans.
    So there will most assuredly be security concerns with 
respect to health and pandemics, energy, and climate change. 
Environmental stressors are not just humanitarian issues; they 
legitimately threaten regional stability.
    On the issue of terrorism, the threat from core al-Qa'ida 
and the potential for a massive coordinated attack on the 
United States is diminished, but the global jihadist movement 
is a more diversified, decentralized, and persistent threat. 
Lone wolves, domestic extremists, and jihadist-inspired groups 
remain determined to attack Western interests, as they have 
done most recently in Libya and Algeria.
    The turmoil in the Arab world has brought a spike in 
threats to U.S. interests. The rise of new governments in 
Egypt, Tunisia, Yemen, and Libya, along with ongoing unrest in 
Syria and Mali, provide openings for opportunistic individuals 
and groups. In these and other regions of the world, extremists 
can take advantage of diminished counterterrorism capabilities, 
porous borders, and internal stressors; most especially, a high 
proportion of unemployed young males.
    Development and proliferation of weapons of mass 
destruction is another major threat to U.S. interests. North 
Korea has already demonstrated capabilities that threaten the 
United States and the security environment in East Asia.
    It announced last month that it concluded its third nuclear 
test, and last April, it displayed what appears to be a road-
mobile intercontinental ballistic missile. We believe North 
Korea has already taken initial steps towards fielding this 
system, although it remains untested. It also used its 
Taepdong-2 launch vehicle to put a satellite in orbit in 
December, thus demonstrating its long-range missile technology. 
These developments have been accompanied with extremely 
aggressive public rhetoric towards the United States and the 
Republic of Korea.
    Iran continues to develop technical expertise in a number 
of areas, including uranium enrichment, nuclear reactors, and 
ballistic missiles, from which it could draw it if decided to 
build missile-deliverable nuclear weapons. These technical 
advancements strengthen our assessment that Tehran has the 
scientific, technical, and industrial capacity to produce 
nuclear weapons. This makes the central issue its political 
will to do so. Such a decision will reside with the supreme 
leader, and at this point, we don't know if he'll eventually 
decide to build nuclear weapons.
    The United States and our allies are tracking Syria's 
munitions stockpiles, particularly its chemical and biological 
warfare agents, which are all part of a large, complex, and 
geographically dispersed program. Its advanced chemical weapons 
program has the potential to inflict mass casualties.
    This adds to our concern that the increasingly beleaguered 
regime, having found its escalation of violence through 
conventional means inadequate, might be preparing to use 
chemical weapons against the Syrian people. And besides the 
regime's use, non-governmental groups or individuals in Syria 
could gain access to such materials.
    Let me now briefly address regional threats around the 
world. Some nations in the Middle East and North Africa are 
making progress toward Democratic rule, but most are 
experiencing levels of violence and political backsliding. 
Islamic actors have been the chief beneficiaries of the 
political openings, and extremist parties in Egypt, Tunisia, 
and Morocco will probably solidify their influence this year.
    After almost two years of conflict in Syria, the erosion of 
the regime's capabilities is accelerating. We see this in its 
territorial losses, military manpower, and logistic shortages. 
The regime's aggressive violence and the deteriorating security 
conditions have led to increased civilian casualties.
    This sort of violence too often accompanies major political 
upheaval, being perpetuated by elites trying to assert or 
retain control. This violence and economic dislocation has led 
to more than two million Syrians being displaced, both 
internally and externally.
    In Iran, leaders are exploiting the unrest in the Arab 
world to try to spread influence abroad and undermine the 
United States and our allies. However, Tehran faces a worsening 
financial outlook since sanctions were implemented in 2012 on 
its oil exports and central bank.
    Iran continues to be a destabilizing force in the region, 
providing weapons and training to Syrian forces, and standing 
up a militia force there to fight the Syrian opposition. Iran's 
efforts to secure regional dominance, however, achieve limited 
results, and the fall of the Assad regime in Syria would be a 
major strategic loss for Tehran.
    In Iraq, sectarian tensions are rising between the majority 
Shi'a and minority Sunni. Last year, we saw a rise in vehicle 
and suicide bombings by al-Qa'ida in Iraq. However, AQI almost 
certainly lacks the strength to overwhelm Iraqi security 
forces, and Iraq is producing and exporting oil at its highest 
levels in two decades.
    Moving to South Asia, the Taliban-led insurgency has 
diminished in some areas of Afghanistan, but remains resilient 
and capable of challenging U.S. and international goals. The 
coalition drawdown will have an impact on Afghanistan's 
economy, which is likely to decline after 2014.
    In Pakistan, the government made no concerted effort to 
institute much-needed policy and tax reforms, and the country 
faces extremely challenging prospects for sustainable economic 
growth. On a more positive note, this past year, the Pakistani 
armed forces continued their operations in the Federally 
Administered Tribal Areas, or FATA, which have been safe havens 
for al-Qa'ida and the Taliban. Pakistan also saw fewer domestic 
attacks from the militant group of TTP.
    Across Africa, violence, corruption, and extremism will 
threaten U.S. interests this year. We've seen strides in 
development in some areas--Ghana here, is noteworthy. And 
international efforts have combined with domestic support to 
bring more stability to Somalia. But we still see unresolved 
conflict between Sudan and South Sudan, extremist attacks in 
Nigeria, the collapse of governance in Northern Mali, and 
persistent conflict in Central Africa, especially in the great 
lakes region.
    China is supplementing its more advanced military 
capabilities by bolstering maritime law enforcement to support 
its claims in the South and East China Seas. It continues its 
military buildup and its aggressive information-stealing 
campaigns.
    Russia will continue to resist putting more international 
pressure on Syria or Iran, and will continue to display its 
great sensitivity to missile defense.
    Closer to home, despite positive trends toward democracy 
and economic development, Latin America and the Caribbean 
contend with weak institutions, slow recovery from devastating 
natural disasters, and drug-related violence and trafficking, 
which, of course, is a major threat to the United States.
    On another aspect of transnational organized crime, roughly 
20 million human beings are being trafficked around the world, 
an issue on which we've increased our efforts to support law 
enforcement. Virtually every country on the face of the Earth 
is a source, a transit point, or a destination for human 
trafficking, and some fall in more than one category.
    In sum, given the magnitude and complexity of our global 
responsibilities, our strong, persistent, and reliable 
intelligence capabilities have never been more important or 
urgent, and I have trouble reconciling this imperative with 
sequestration.
    With that, I thank you for your attention, and we are ready 
to address your questions.
    [The Statement for the Record on the Worldwide Threat 
Assessment of the U.S. Intelligence Community, prepared by 
Director Clapper, follows:]
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    Chairman Feinstein. Thank you very much, Director Clapper, 
and thank you for the written comments, as well--I think 
they're excellent.
    Director Mueller, in a quick question, I mentioned the 100 
terrorist-related arrests in the United States since January of 
2009, and the number of convictions since 2011 at over 400.
    Let me ask you this question: Has the FBI been impeded in 
its ability to conduct investigations or collect intelligence 
from terrorist suspects because of the need to read Miranda 
rights or present a suspect to a court?
    Director Mueller. It's hard to respond specifically, 
because there may be an occasion where it was an issue in an 
investigation, but for the most part, the answer is no. If you 
talk to agents who do this for a living, I think they would 
tell you that it is their ability to elicit information by 
developing rapport with individuals that is a prime mover, in 
terms of providing the appropriate intelligence.
    And let me, if I could, put in context what I think is the 
underselling, or the underestimating, the ability of the 
criminal justice system to produce intelligence. I, for one, 
understand that if there is a terrorist attack, it is going to 
be on us. I, for one, am very concerned about maximizing the 
access to intelligence. One of the things I do think is 
underestimated is the ability of the criminal justice system to 
do just that.
    There has not been--well, there are very, very few cases, 
of the numbers that you mentioned, where we have not ultimately 
obtained the cooperation of the individual, albeit going 
through--as the Senator points out--going through the criminal 
justice system.
    But we have a number of cases where we have convicted 
persons, and because of our plea bargaining in our system, we 
have gotten the cooperation we need. And that cooperation has 
led to our testifying in cases in the UK and elsewhere because 
we had intelligence, from our system, that they did not have.
    If you look at three of the cases that were prominent in 
terms of providing intelligence--you start with David Headley, 
out of Chicago, who opened the door to us in terms of the 
Mumbai attacks; if you look at Najibullah Zazi in the plot to 
bomb the New York City subway, that case couldn't have 
proceeded without his full cooperation; and then another 
individual by the name of Bryant Neal Vinas.
    In every case, we try to look at the best option. And I'm 
not saying that--in certain cases, the military tribunal option 
is not the best option to go. But I do think that the ability 
of the criminal justice system to produce intelligence is often 
overlooked.
    Chairman Feinstein. Thank you very much.
    For either Director Clapper or Mr. Brennan: In light of 
recent warnings by North Korea, including the renunciation of 
the ceasefire with South Korea after six decades, does the IC 
assess that they could actually take provocative action that 
could lead to a renewal of active hostilities with the South?
    Director Clapper. Let me start, and then John can jump in.
    Absolutely. I, personally, having followed Korea ever since 
I served there in the mid 1980s as the Director of Intelligence 
for U.S. Forces Korea, am very concerned about the actions of 
the new young leader--very belligerent--and the rhetoric that 
has been emanating from the North Korean regime.
    The rhetoric, while it is propaganda-laced, is also an 
indicator of their attitude, and perhaps their intent. So, for 
my part, I am very concerned about what they might do, and they 
certainly, if they so choose, could initiate a provocative 
action against the South.
    Chairman Feinstein. Director Brennan, would you like to add 
to that?
    Director Brennan. I would agree with Director Clapper. This 
is a very dynamic time right now, with the new leader. I think 
it also just underscores the importance of making sure that our 
analytic capabilities, as well as our collection capabilities, 
are as strong as possible, because what we're talking about are 
developments that have strategic importance and potential 
consequence for U.S. interests, not just in northeast Asia, but 
also globally.
    So I think this is one of the areas that we, as the 
Intelligence Community, and certainly the CIA, need to pay 
particularly close attention to.
    Chairman Feinstein. Thank you.
    Mr. Vice Chairman.
    Vice Chairman Chambliss. Thanks, Madam Chair.
    Director Clapper, let me just address for one second your 
comments relative to sequestration, and just initially say that 
we are spending too much money in Washington. I don't think 
there's any disagreement about that. And actually, the 
reduction in $1.2 billion in spending is not a bad idea.
    But your reference to the way in which we're doing it is 
exactly right. It's a foolish way to reduce spending--to tell 
every aspect of the federal government, ``You don't have a 
choice. You're mandated to reduce spending across the board by 
whatever the dollar amount is in your specific agency, or your 
office.''
    Let me just give you the assurance, and everybody here at 
the table, the assurance that the Chairman, myself, and every 
Member of this Committee is committed to ensuring that the 
Intelligence Community does not suffer from the lack of 
resources. One thing the Constitution is very clear about is 
that it is the role of Congress to provide for the national 
security of Americans. And we intend to honor our obligation.
    You, and the men and women that work under you, are very 
professional, and you're doing your job. You're doing exactly 
what we ask you to do. So we want you to know that we're 
committing to do everything within our power to ensure that the 
resources are there to allow you to continue to do what you're 
asked to do every single day.
    Director Clapper. Senator Chambliss, first, I very much 
appreciate that. I think, on behalf of the men and women in the 
entire Intelligence Community, now, more than ever, we are 
dependent on, particularly, our two oversight committees--this 
one and the House Permanent Select Committee on Intelligence--
to be our stewards and our advocates.
    That said, let me stress that I am not, and none of us are, 
suggesting that we won't take our fair share of the cuts.
    Vice Chairman Chambliss. Sure.
    Director Clapper. All we're asking for is the latitude on 
how to take them, to minimize the damage.
    Vice Chairman Chambliss. And I know you mean it exactly 
that way, and we're going to have your back on this as we go 
through this. It's not going to be easy, but we're going to 
work hard to do it right.
    Senator Mikulski. Mr. Vice Chairman, a point of personal 
privilege--I have to go to the Floor on the continuing 
resolution. May I respond to your comments, the Chair and 
General Clapper, in terms of the state of play?
    Vice Chairman Chambliss. Sure.
    Senator Mikulski. We have a continuing resolution on the 
Floor. This does not deal with the sequester--that's being 
negotiated by the higher powers, whether it's a charm offensive 
or whether it's an offensive. My job, along with Senator 
Shelby's, is to move the continuing resolution. We are working 
steadily, on a bipartisan basis, to do that.
    But the money is spartan, and it is frugal. And in terms of 
the flexibility that you've just asked for, that the Chair has 
spoken pretty firmly with me about, along with other Members, 
we will not have that in our bill. We were told that was a 
poison pill. And I'm not just saying that to you, Mr. Clapper, 
but to our colleagues. And I would like that as we go through 
the rest of the day, we could talk to see if we could have an 
amendment that would accomplish that.
    But we were told, by both the House and by others, that 
this was a poison pill. I'd like to do everything I can to not 
only get you the money, but the administrative framework for 
you to properly do the money.
    So if we could work together, if I could have your help, 
but I can't deal--first of all, I can say nothing but positive 
things about Senator Shelby; we've worked very well, we've co-
sponsored our bill. But if we can do what you want us to do, we 
need help. And if we could do that, we would. We do want to 
work with you. We so admire you.
    And I'm going to my other duty station.
    Director Clapper. Senator Mikulski, if I may just--again, 
in the complex arcana of PPAs, all we're asking for is to be 
treated identically as the Department of Defense. And the same 
PPA arrangement as the larger Department gets, so would we. But 
we have been singled out for very small exacting PPAs, which 
greatly restricts the latitude to move money around to mitigate 
the damage.
    Chairman Feinstein. And Director, as the Senator knows, the 
only thing that this amendment would do that's being introduced 
today--and I will give this to the Chairman--is essentially to 
give you that authority. You would be treated as defense units 
are treated.
    Senator Mikulski. Madam Chair, I welcome you giving me this 
amendment. I'd also like you to give it to Senators Reid and 
McConnell, Boehner, and the House Democratic leadership, as 
well.
    Chairman Feinstein. Will do.
    Senator Mikulski. You know, again, I always hoped that a 
higher power would be on my side. The Pope, they meet for--we 
will have a new Pope, and I'd like you to have new flexibility. 
Okay?
    Chairman Feinstein. Okay.
    Senator Mikulski. But it's going to take higher power, and 
this is what you need to show them.
    Chairman Feinstein. We will--today.
    Senator Mikulski. Thank you. Because it's not Shelby-
Mikulski here.
    Chairman Feinstein. Okay. Thank you very much.
    Shall we continue?
    Vice Chairman Chambliss. Let me direct this to both 
Director Clapper and Director Mueller: Obviously, we're still 
in the stage of remorse, relative to the death of four brave 
Americans in Benghazi. The American people have demanded 
answers, and frankly, we have not been able to provide them the 
types of answers that they have asked to this point because we 
haven't been given all of the answers.
    I realize we're in an open hearing, but what I would like 
to ask Director Clapper and Director Mueller is to tell the 
American people--number one, Director Clapper, what are our 
lessons learned here, as we move forward? We know we have a lot 
of other vulnerable spots around the world.
    Director Mueller, what can you, in an open hearing, tell us 
about the progress towards bringing these murderers to justice?
    Director Clapper. Well, first of all, Senator Chambliss, I 
think one lesson in this is a greater emphasis on the 
Intelligence Community on force protection for our diplomat 
facilities. And I can, in a closed context, go into 
specifically what I mean by that. And that clearly was, I 
think, a shortfall for us, having a better appreciation of the 
tactical situation at a diplomatic facility.
    I guess the other lesson learned is--don't do talking 
points, unclassified talking points. That's the other lesson I 
learned.
    Director Mueller. With regard to the investigation, 
Senator, a couple of points: Since this occurred, we've had 
teams on the ground in Tripoli, and elsewhere around the world, 
conducting the investigation.
    With regard to the cooperation of the Libyan authorities, 
there is a willingness exhibited by their actions to cooperate. 
However, it is exceptionally difficult, particularly in eastern 
Libya, in Benghazi. And that has been a hurdle that we have not 
seen elsewhere where we've had similar incidents.
    Nonetheless, we have received the cooperation from the 
Libyan authorities. I traveled there in January to continue to 
coordinate with them. And I will say that the investigation has 
not been stymied. There are hurdles that we've had to overcome, 
but it's ongoing, and I believe it will only prove to be 
fruitful.
    Vice Chairman Chambliss. Thanks very much, gentlemen.
    Chairman Feinstein. Thank you very much, Mr. Vice Chairman.
    I'll give the next four and see what happens in terms of 
arrival: Rockefeller, Burr, Wyden, and Udall.
    Senator Rockefeller.
    Senator Rockefeller. Thank you, Madam Chair.
    I cannot help, Director Clapper and John Brennan, but bring 
up the subject that Saxby did in his opening comments, because 
to me talk was just given about a good relationship between the 
Intelligence Community and Congress. What happened over the 
last couple of weeks is a threat; is a threat to trust--between 
us and you, us towards you, you towards us. And I'm going to 
ask for comments just from the director, and from Director 
Brennan.
    What basically happened was we were given certain things 
that we requested, primarily because you, sir, were up for 
confirmation. And had we not been given some of those things 
which we requested, the confirmation would not have had the 
votes, and it wouldn't have mattered who had been put up.
    It's a terrible situation. And I think you're absolutely 
superb, absolutely superb. I've been through every--for the 
last almost thirty years, I've been through every CIA director, 
and I think you're the best. And I mean that.
    But the irony was that we were given certain things to look 
at, and then we were told, as we did that, when we finally got 
our staff to be allowed to participate--this goes all the way 
back to 2001. Then ``minders''--as I sat with my intelligence 
expert in a room to read these opinions, there was a Department 
of Justice ``minder'' who was sent in to watch us. I was not 
aware that that person was going to have to be there. That was 
an insult to me, and I kicked the person out. She said, ``My 
orders are I have to be here.'' And then I said something 
else--I told her to leave.
    We have to find a way for us to trust each other. And I 
don't think that we've--maybe, mutually--but in any event, we 
haven't figured it out. Things, after the confirmation, went 
directly back to the way they were from 2001/2002 to 2007. We 
had a classified briefing, and all of our staff was kicked out. 
All of our staff was kicked out, with one exception--two 
exceptions. I was outraged.
    And you can talk about worldwide threats, but unless we 
have our common purpose together, like it was after 9/11, where 
everybody was on the same team. Everybody was fighting for the 
same thing. Everybody was working with everybody else. That was 
the deal. We were eager to do it. The first bill that passed 
after 9/11 was allowing the FBI and the CIA to talk to each 
other. Maybe we need another bill allowing the Intelligence 
Community to talk to us openly--more openly than they have. 
It's a real problem.
    John Brennan, you have--I don't think this is your 
instinct--through your four-hour grilling, and I thought you 
were superb. And on the questions that you had to deflect just 
a bit, I thought you should have deflected, and I respected 
that.
    But we cannot be told that documents that could be in our 
purview to look at, which, in fact, have nothing in them that 
would make our review of them a threat to anybody at all, that 
we can't have them, or that our staff cannot be in attendance.
    What would happen if we had you here, and all the folks 
behind you had to stay out of the room--all of you? That's the 
comparable situation. I'm not a lawyer. I'm not an intelligence 
analyst or specialist. I need advice. I need counsel. I need 
staff. I have a superb one, as we all do.
    Is there a way, in your mind, that we can somehow come to 
an understanding that makes this program, or problem, work the 
way it should, to work it out the way it should, so that we're 
comfortable with each other; that you protect yourself when you 
absolutely have to, but you don't protect yourself beyond where 
you absolutely have to, so that we can trust each other, and 
really concentrate on worldwide threats, sir?
    Director Clapper. Senator Rockefeller, let me start. And 
then I know John has views on this, having experienced the 
process that I won't ever go through again--confirmation; I've 
done it three times, and that's more than anybody should stand. 
And what I'll say probably won't be entirely satisfactory to 
you.
    I think all of us--and I think I speak for all my 
colleagues in the Intelligence Community who are here and those 
who aren't--that trust is fundamental to the relationship 
between the Intelligence Community and our oversight 
committees. The oversight committees have a unique 
responsibility, unlike others, because so much of what we do is 
classified, it's secret.
    So we recognize the doubly-important responsibility that 
you have on behalf of the American public, since not everything 
we do can be revealed. As a general rule, that which is under 
our control, and activities that we manage and oversee, I think 
our record has been pretty good, pretty consistent in sharing 
that with you, because, again, we depend so heavily on you for 
your support.
    When there are documents that are elsewhere in the 
executive branch--OLC opinions, just to name one example--or 
when we are attempting to abide by a longstanding practice of 
executive privilege, which has been practiced by both 
Republican and Democratic administrations, I think that's where 
we begin to have problems.
    But I will tell you, for that which is fully under our 
control and for which we manage, I think I can pledge to you 
that we will endeavor to earn your trust.
    John.
    Director Brennan. Senator, like most hostages, I was 
excluded from the ransom negotiations during my confirmation 
process. But one of the things that I have committed to myself 
is to familiarize myself intimately with the rules and 
procedures that govern the interaction with this Committee and 
other oversight committees for programs and activities that 
fall under my purview.
    And what I want to be able to do is to speak with the 
Chairman and the Vice Chairman about this, because I don't know 
what those procedures have been heretofore. I'll pick up on 
Jim's point--Director Clapper's point--about some things that 
are beyond the purview of the Intelligence Community or the CIA 
to make some decisions on. But what I really want to do is to 
have as much dialogue as possible with you so that that trust 
can be built up, so that we are able to address these issues 
earlier.
    As I think the Vice Chairman was pointing out, on some of 
the matters related to--like the Benghazi talking points and 
other things, what we need to do is address it as early on as 
possible, because, like an angle, the lines of an angle get 
further apart the further out they go. And I really do believe 
that what we can do is, up front, have a clear understanding of 
what your interests are, what your requirements are, and then I 
think what we need to do is to do what we can in order to give 
you what you need to fulfill your statutory responsibilities of 
oversight.
    Senator Rockefeller. Either I or others, in the second 
round, will continue this.
    Chairman Feinstein. Thank you, Senator Rockefeller.
    I just want to add one quick thing right here. The OLC 
opinions, in particular, particularly with our obligation, 
which is robust oversight, you cannot know whether something is 
carried out by the executive branch within the law unless you 
see those opinions, which phrase the law. And I think that's 
the problem--it's very difficult not to look at them, and to 
make judgments without understanding. I'll just leave you with 
that.
    Senator Coats.
    Senator Coats. Madam Chairman, thank you.
    Director Clapper, I note that of all the topics that you 
chose to talk about, you put cyber right at the very top. And I 
think I understand why--you state that we are undergoing a 
major transformation intertwined with digital technologies and 
the internet that has profound implications for U.S. economic 
and national security.
    I was very disappointed that we were not able to put a 
legislative package together in the last Congress--it failed in 
the waning days of the Congress. The President followed up with 
an Executive Order. I know, Director Brennan, you were part of 
putting that Executive Order together. It's limited in terms of 
what it can do, so I'm hoping we can work together to fashion a 
proper legislative proposal that will enhance our ability to 
better understand, and better deal with, this ever-growing 
critical threat to our economy and to our national security.
    In that regard, I noted that the Executive Order from the 
President indicated a strong willingness to share information 
from the government with private industry. But the hang-up here 
is that the reverse--information from private industry shared 
with the government--hit some road blocks. And we need some 
incentives to provide private industry to feel secure, in terms 
of their sharing of propriety information, and the impact on 
its competitiveness with others, and so forth.
    Providing such things as liability, coverage, and so forth, 
and assuring that the standards that are set are compatible 
with industry standards, I think, are critical issues there. So 
I think I'm making a statement in that regard that hopefully we 
can address that, and keep that at the level of priority where 
you have put it. I know the majority leader has said we need to 
take that up; unfortunately, we're all caught up in debate in 
issues relative to the fiscal situation--sequester, as you've 
talked about. But this is a serious subject, and we need to get 
on it sooner rather than later.
    I want to just briefly flip to a question on Iran and ask 
maybe both you, and Director Brennan, just to--if you have 
anything to say about the cyber, that's fine, but also, just to 
put this into one question:
    We have ever-ratcheting sanctions against Iran, in terms of 
its pursuit of nuclear weapon capability, development: a) Have 
you seen any glimpse of possible change in the decision-making 
and will of the leadership, which will decide whether or not 
they will comply in any sense at all with the requests being 
made by the global community relative to their pursuit?
    And, b) Are there concerns, and maybe you want to save this 
for the closed session, but are there concerns relative to the 
cooperation agreement signed between North Korea and Iran 
relative to ballistic missile technology and other aspects that 
might modify the timetable in which you assess Iran's ability 
to get this capability?
    Director Clapper. Let me just start on the first part of 
your question. The second one--the potential relationship 
between North Korea and Iran--might be better addressed in the 
closed session.
    Clearly, the sanctions have had profound impact on Iran's 
economy--by any measure, whether it's inflation, unemployment, 
the availability of commodities, et cetera--and that situation 
is getting worse.
    At the same time, at least publicly, overtly, that has not 
prompted a change in the Iranian leadership, specifically the 
supreme leader's approach.
    We can go into perhaps a more detailed discussion in a 
closed setting about some indications that I think would be of 
interest to you. And I probably ought to let it go at that.
    Senator Coats. Fair enough.
    Director Brennan.
    Director Brennan. Senator, the only thing I would add is 
that on your first point related to cyber, the seriousness and 
the diversity of the threats that this country faces in the 
cyber domain are increasing on a daily basis. And from my 
perspective, I think this is one of the real significant 
national security challenges we face. And the threat is going 
to continue, and it's going to grow.
    What we need to do, as a country, is reduce the 
vulnerabilities and take the mitigation steps. So, again, from 
a national security perspective, I very much hope that the 
Congress will move forward with legislation, and the issues 
that you raise, on terms of information sharing and liability, 
are the key ones. And hopefully, that legislation will get 
through.
    Director Clapper. If I could tag onto what John just said, 
I think your brief discussion really highlighted the, sort of, 
what I call ``organizing principles,'' those tenets that would 
have to be covered. And I think the standards that need to be 
applied would apply both to the government and the private 
sector.
    And the other thing I would want to mention is the due 
consideration for civil liberties and privacy in whatever 
legislation that eventually is enacted.
    Senator Coats. I assume both of you would acknowledge that 
time is of the essence here?
    Director Clapper. Yes, sir.
    Senator Coats. The sooner we get this done, the better.
    Thank you, Madam Chair.
    Chairman Feinstein. Thank you very much, Senator.
    Senator Udall. Excuse me--Senator Wyden.
    Senator Wyden. Thank you very much, Madam Chair.
    Director Brennan, first of all--congratulations. I 
appreciated the chance to talk about a number of issues with 
you previously, and I'm going to be asking you some additional 
questions about drones and targeted killings in the days ahead, 
but for today, my congratulations.
    Director Clapper, I want to ask you what I asked you about 
a year ago, and that was the matter of surveillance--
particularly, what the rules are that an intelligence agency 
would have to follow in order to electronically track the 
movements and locations of an American inside the United 
States. And I asked you about this a year ago, and you said 
that your lawyers were studying this, and I hope that since a 
year has passed, we can get some answers to these questions.
    So first, let me ask the question: If an intelligence 
agency wants to electronically track the movements and 
whereabouts of an American inside the United States, how much 
evidence do they need?
    Director Clapper. Well, first of all, let me just say, sir, 
that particularly in the case of NSA and CIA, there are 
strictures against tracking American citizens in the United 
States for foreign intelligence purposes. And that's what those 
agencies are set up to do.
    I think, though, when--I might ask Director Mueller to 
speak to this because what you're referring to, I think, 
devolves into the law enforcement/criminal area, so----
    Senator Wyden. Let me--and I do want to hear from Director 
Mueller, but I'm trying to get some general principles out with 
respect to intelligence. And you've cited, certainly, some 
areas that are relevant, but what I'm really trying to do is 
get an unclassified answer to a question about what the law 
authorizes.
    Director Clapper. The law, of course, as you know, is 
embedded in the Foreign Surveillance Intelligence Act, the 
amendment to which was recently extended for five years, and it 
places very strict strictures on the Intelligence Community's 
tracking of U.S. persons where there is a terrorism nexus. And 
that is overseen, very strictly, by both the FISA Court as well 
as within the executive branch, both by my office and the 
attorney general. So there are very strict rules about that, as 
you know, as we've discussed.
    Senator Wyden. But, as you know, there are some fundamental 
questions about the balance between security and liberty that 
transcend just the FISA question. So, what I would like to do 
is see if we can get a direct answer to the question about when 
the Intel Community needs to get a warrant, for example, when a 
lesser amount of evidence would do; and second, the 
circumstances when no specific evidence is needed at all.
    And the FISA law does not specify whether a warrant is 
required, so that's the reason that I'm asking the question. I 
asked it a year ago----
    Director Clapper. I'd like to ask Director Mueller to help 
me with that question.
    Senator Wyden. And Mr. Director, I'm anxious to hear from 
Director Mueller, who I greatly respect, but I also need to 
hear from you with respect to the Intelligence Community. 
That's why I asked it a year ago, and----
    Director Clapper. As I said, Senator Wyden, in the case of 
CIA and NSA, who are engaged in foreign intelligence 
collection, that's a practice that they do not engage in.
    Senator Wyden. Director Mueller.
    Director Mueller. Well, Senator, let me start by saying 
that there's no real distinction in what we do between the 
criminal and the national security--if we require it in the 
criminal side, we require it in national security. We treat 
them the same; there is no distinction between our intelligence 
cases in terms of undertaking the activity you suggest, and our 
criminal cases.
    That being said, in the wake of the Jones decision, which 
I'm sure you're familiar with--that has put some things in an 
area where we're waiting to see where the courts go. But 
obviously, as I said, if you were going to trespass to install 
a device, then that requires a warrant, and the standard on 
that warrant is still up in the air.
    And consequently, to give you a more precise answer to a 
particular question on a particular monitoring, I would have to 
be more factually based and then apply the law to that 
particular set of facts.
    Senator Wyden. Director Mueller, you have identified the 
exact reason why I'm trying to get an answer from Director 
Clapper, because there's no question we are going to watch what 
the courts do in the days ahead. The question is what will be 
the rights of Americans while that is still being fleshed out? 
And the fact is FISA does not specify whether a warrant is 
required.
    I know I'm out of time for this round, but I just want you 
to know, Director Clapper, respectfully, I will be asking this 
question of you--just like we did with respect to the legal 
documents for targeted killings, which we finally got after 
seven requests over a two-year period--until we get an answer, 
because I think Americans are entitled to a direct answer to 
that question.
    Thank you, Madam Chair.
    Chairman Feinstein. Would you like Director Mueller to 
respond? I think it would be helpful.
    Senator Wyden. Madam Chair, I think the director did, and 
he gave a very thoughtful answer, which is that the courts are 
still wrestling with the various interpretations of it. I think 
that is a correct answer by Director Mueller, but we still have 
the question remaining--what are the rights of Americans, as of 
today, while the courts are wrestling with this? And that is 
the matter we have not gotten an answer to. And I will follow 
it up again on my second round.
    Thank you, Madam Chair.
    Chairman Feinstein. Well, would you like to respond to 
that? I'll give you the opportunity.
    Director Mueller. The only thing I would add, Senator, is 
that with the law--disarray is probably too strong, but not 
having been totally identified, we take the most conservative 
approach----
    Chairman Feinstein. Fair enough.
    Director Mueller [continuing]. To ensure that the evidence 
that is captured will pass scrutiny, regardless of how the 
court may come down.
    Chairman Feinstein. Thank you very much.
    Next is Senator Rubio.
    Senator Rubio. Thank you, Madam Chair.
    I guess we can start with you, General Clapper, but then 
everyone can weigh in if they have an opinion. I want to talk 
about Egypt for a moment.
    First of all, I want to have a clear understanding about 
their security apparatus, and in particular, their military, 
that, for a long time, has been seen as a professional 
organization, which was committed to upholding its 
international obligations and with which we had a good working 
relationship.
    What is the status of that relationship now? How heavily 
influenced have they become with recent political changes--in 
particular, with the election of President Morsi, and the 
coming to power of the Muslim Brotherhood? Has that changed the 
nature, or is it changing the nature, of those organizations?
    Director Clapper. Well, I think the military, as an 
institution in Egypt, has attempted to sustain its status and 
its stature as a professional military organization, and not, 
wherever it can be avoided, be drawn into the internal 
political upheavals that are going on in Egypt.
    Senator Rubio. In terms of the upheaval that they're 
facing, what, in your judgment, or in the judgment of any of 
the panelists, are the most significant security risks that 
they face? And I'll tell you the context of how I'm asking this 
question: We have recently seen sales of jet planes or--you 
know, these other existing contracts, and tanks, and so forth--
but it strikes me that the real security concerns increasingly 
should be towards security in the Sinai, upholding their peace 
treaty with their neighbors, providing for improved law 
enforcement in the streets there, where we've seen a rise in 
criminality.
    Can anyone comment on what the real security risks are? 
Again, it strikes me that Egypt is not at risk of being invaded 
by some foreign army anytime soon. So, shouldn't the weapons 
systems they're acquiring and so forth kind of reflect their 
real security needs?
    Director Clapper. Well, that's kind of up to----
    Senator Rubio. I know that's a policy decision.
    Director Clapper. That's their policy decision. But I think 
you've highlighted, though, what the challenges are in Egypt, 
particularly with respect to security of the Sinai, which I 
believe they recognize they have a challenge there, and I think 
their intent is to--they may attempt to modify it--but I think, 
by and large, they wish to support the peace treaty.
    To me, the fundamental challenges that face Egypt have to 
do with its economy. And it's kind of a spiral--one of the 
impacts on their economy has been a decline in tourism, and 
that's related to the security situation. I think they 
recognize that. So, they clearly--I mean, they know they have 
internal challenges that they have to deal with.
    Senator Rubio. So their real security challenges are 
internal; in essence, street crime, which--my understanding is 
it's gotten pretty dangerous, particularly in Cairo, but in 
some of the other tourist areas. And also, there are security 
obligations vis-a-vis the peace treaty, and Sinai, and so 
forth.
    I think that the other question is broader, and again, any 
input from anyone is welcome on this, and that's the general 
direction that they are headed governmentally. And obviously, 
you know, there was an election, and there are questions about 
reforms to the constitution in Egypt.
    But where is, in your judgment, Egypt headed? In essence, 
where is the Muslim Brotherhood or President Morsi, to the 
extent he's heavily influenced by them, headed in the long 
term? Is it a real commitment to a democratic transition? Is it 
a real commitment toward a more Islamist type state? Or is it 
still in flux, and they're kind of trying to figure out how 
they can grow their economy and at the same time bring about 
these changes that the Muslim Brotherhood base of President 
Morsi is asking for?
    Director Clapper. I think the latter, the third condition--
it's still in flux. I think the leadership of Egypt, when 
they're in charge, is influenced heavily by pragmatic aspects 
and challenges, like the state of the economy, and security in 
the streets.
    However, at the same time, I think their ideology is 
clearly influenced by the Muslim Brotherhood. That's evident in 
some of the constitutional provisions, particularly having to 
do with the rights of women.
    Senator Rubio. And in that vein, U.S. policy, particularly 
U.S. aid policy towards Egypt, would probably weigh heavily on 
the pragmatic side of the equation for these leaders--in 
particular, their ability to receive the financing they need to 
stabilize their economy, and also to provide the gear they need 
to provide the security so people feel safe in Egypt again.
    Director Clapper. Yes, sir, but not at any price. I think 
they're very--understandably--very sensitive about their 
sovereignty and the extent to which we or anyone else can 
dictate to them what their behavior is. And, of course, that's 
not just the United States; it's the International Monetary 
Fund, and others, that ascribe conditions for financial aid. 
And that's an issue for the Egyptian policy apparatus to 
decide.
    Senator Rubio. All right. Thank you.
    Chairman Feinstein. Thank you very much, Senator Rubio.
    Senator Udall.
    Senator Udall. Thank you, Madam Chair.
    Director Clapper, I want to also associate myself with 
Senator Feinstein's remarks on the threat assessment documents; 
very readable, very helpful. I'm not sure you'd read it if you 
wanted a good night's sleep, but thank you for the work your 
team has done.
    Let me turn to the 6,000-page report that this Committee 
produced on the CIA's detention and interrogation program. I 
stated at Director Brennan's confirmation hearing that I was 
very concerned that inaccurate information on the management, 
operation, and effectiveness of the CIA's detention and 
interrogation program was provided by the CIA to the White 
House, the DOJ, Congress, and the public.
    As you know, Director Brennan expressed shock at the 
report's contents. And I understand that you had a similar 
personal reaction to the report; is that accurate? Were you 
also taken aback by the report's contents?
    Director Clapper. Yes, I was taken aback, by its length and 
breadth and all that, but I also think that I would counsel 
hearing from the Agency and its response to the RDI. I might 
ask John to comment on that.
    Senator Udall. Yeah, well, if I might, General, I'm going 
to do that. I want to get the director to comment, as well. But 
let me turn to Director Mueller.
    In an interview in Vanity Fair, Director, in December 2008, 
you were asked about terrorist attacks and whether they were 
disrupted thanks to intelligence obtained through the use of 
the CIA's enhanced interrogation techniques. And you responded, 
without elaborating, ``I don't believe that's been the case.'' 
And then months later, in April 2009, your spokesperson, John 
Miller, confirmed that your quote in the Vanity Fair article 
was accurate.
    Director, have you seen any information since April 2009 to 
change your views on this topic?
    Director Mueller. What I was trying to express is that I 
was really not in a position to see, because I was not aware of 
either the practices or the facts.
    Senator Udall. Thank you for that. And I do want to follow 
up with you later in that regard, as well.
    I would like to turn now to Director Brennan. ``Director 
Brennan''--it's nice to be able to say that. Congratulations on 
your confirmation. I appreciate your comment on being the 
hostage, and the hostage not being involved in the 
negotiations. I really look forward to working with you in your 
new role.
    As you remember, in the confirmation hearing, we discussed 
the Committee's study and the importance of putting reforms in 
place to prevent past mistakes from happening again. And I also 
pushed for declassification of the Committee's report. At that 
hearing, I pointed out that misinformation about the CIA's 
detention and interrogation program is, quote, ``regularly and 
publicly repeated today by former CIA officials, either 
knowingly or unknowingly.''
    And then last week, before you were even on the job for 
your first day, a newspaper story was published quoting a 
senior intelligence official who claimed that, quote, ``The CIA 
is objecting to a majority of the 6,000-page report,'' which, I 
should note, has 35,000 footnotes directly sourced to CIA 
documents.
    And this newspaper article included numerous inaccurate 
statements about the Committee's report, including that it has 
20 recommendations, which it does not.
    While it appears that the unnamed intelligence officials 
quoted in the paper were unfamiliar with the Committee's 
report, I'm concerned that, despite the Chairman going out of 
her way to make sure that only the specifically-named 
individuals at the CIA have access to the report, CIA personnel 
are leaking what may or may not be the CIA's official response 
to the report.
    And it seems that unnamed CIA officials are putting you in 
a particularly awkward position by making public their 
disagreement with the report's conclusions, even before you 
have a chance to weigh in as the new CIA director.
    So, I have three questions concerning the leak, and I want 
to run through them and then give you time to respond: One, do 
you believe that this is a leak of the CIA's views, despite the 
fact that these officials seem unfamiliar with the report? Two, 
do you anticipate looking into the leak? And three, as far as 
I'm aware, there's no new deadline for the CIA to provide 
comments on the Committee's report to this Committee.
    In my view, it's in no one's interest to delay the process. 
Can you give the Committee a sense as to when we can expect the 
CIA's comments?
    Director Brennan. Thank you, Senator. First of all, I'm not 
going to speculate on who might have been responsible for the 
information that appeared in the newspaper. I know that people 
are looking into that right now to see whether or not there was 
any disclosure of classified information, but there is a real 
interest on the part of CIA to be as responsive as possible to 
this Committee and on that report.
    And I've had a number of discussions with Deputy Director 
Michael Morell and other Members of the leadership team, and 
the response and comments on that report will be coming back to 
this Committee. I'd like to be able to say that it will be done 
within a month's time; hopefully before then. But I know that 
there have been a number of conversations with Members of this 
Committee on that, and it is my firm resolve to look at what 
the CIA has pulled together in response to that report and get 
back to this Committee on it.
    Senator Udall. Thank you. I look forward to your firm 
resolve resulting in an as-soon-as-possible response to this 
seminal and important report from which we really need to learn 
the lessons so that we don't repeat the mistakes that were 
made. Thanks again, and congratulations, Director Brennan.
    Chairman Feinstein. Thank you very much, Senator Udall.
    Senator Collins.
    Senator Collins. Thank you, Madam Chairman.
    Director Clapper, in your opening statement, you certainly 
painted a bleak, dark picture of a very dangerous world. And I 
share your concern about the impact of sequestration on the 
Intelligence Community.
    Senator Udall and I have introduced what I believe to be 
the only bipartisan flexibility bill that would give, 
essentially, agencies the ability to set priorities; submit 
their plans to the Appropriations Committee the way you do with 
reprogramming requests now. It's sort of an enhanced 
reprogramming authority.
    I talked to Senator Mikulski about it. She has a similar 
vision in mind. I know the Chairman also has an amendment 
dealing just with the IC. And I just want to encourage you to 
make the disastrous consequences of sequestration known to the 
Senate leaders and the House leaders, because that's really 
where the decision is being made. And I think it's critical 
that they hear from you, and indeed from all Members of this 
panel, about what the consequences would be, particularly in 
light of the dire threat situation that we face.
    I want to turn now to Iran. During a Senate Armed Services 
Committee hearing last week, the Commander of U.S. Central 
Command testified that the current diplomatic and economic 
efforts to stop Iran from obtaining a nuclear weapons 
capability are not working. Do you agree with that assessment?
    Director Clapper. Not completely. I think, as I indicated 
earlier, the sanctions are having a huge impact on Iran. And I 
think clearly that that is going to have an influence on their 
decision-making calculus, and we see indications of that.
    But where I do agree, at least to this point, is that the 
sanctions thus far have not induced a change in Iranian 
government policy.
    Senator Collins. Well, I think the fact that they haven't 
produced a change suggests that General Mattis is correct in 
saying that they're not working.
    But let me follow up with Mr. Goldberg with a second 
question. The President has exempted nine countries from fully 
complying with the sanctions on Iran because they have 
demonstrated a significant reduction in the purchase of Iranian 
petroleum-based products. These nine countries, however, 
include some of Iran's biggest trading partners, including 
China, India, and Turkey. And Turkey was granted an exemption, 
even after it conceded that it had helped Iran conduct energy 
exports through the acquisition of billions of dollars of gold.
    What is your assessment of what would happen to Iran's 
fiscal and economic situation if these nine countries were not 
exempt from the U.S. sanctions policy?
    Mr. Goldberg. What I can tell you, Senator Collins, is that 
the overall amount of Iranian oil that is being exported is 
down considerably; that there were workarounds and exemptions 
made for those who reduced over time. And that's a constant 
evaluation and consideration.
    But the actual amount of Iranian oil being exported is 
down. And it's probably--well, I think maybe I'd reserve on the 
exact quantity for a closed session.
    Senator Collins. I would suggest--and maybe we'll get into 
this in the closed session--there needs to be much more 
transparency in order for us to make a judgment on whether or 
not doing such sweeping exemptions is wise policy.
    I just want to quickly touch on cyber security, Director 
Brennan, since you and I worked extremely closely on that issue 
last year when Senator Lieberman and I repeatedly tried to get 
our comprehensive bill through. And we also worked very closely 
with General Alexander.
    As you know, I had real reservations about the President 
issuing an Executive Order because I believe it sends the wrong 
signal that this issue can be taken care of through an 
Executive Order. So I just want to get you on the record this 
morning that you do not believe that the Executive Order is a 
substitute for legislation, and that only legislation can take 
further actions, such as conferring a grant of immunity on 
private sector companies that comply with standards. Is that an 
accurate assessment?
    Director Brennan. Senator, I'm no longer part of the Policy 
Community; I'm part of the Intelligence Community now. And what 
I will just say is that based upon the nature, scope, and 
diversity of the cyber threat that is out there, I think that 
we need to do more as a country to address the vulnerabilities 
that we have and take the steps that we need to in order to 
protect our infrastructure, our networks, from these types of 
cyber attacks.
    And I do believe that there are enhancements in legislation 
that can be made, and that need to be made, in order to help us 
as a country protect our systems, our networks, our 
infrastructure from those types of attacks.
    Senator Collins. Thank you.
    Chairman Feinstein. Thank you very much, Senator.
    Senator Heinrich.
    Senator Heinrich. Thank you, Madam Chair.
    Director Clapper, this Committee spent an awful lot of time 
examining the process that resulted in the unclassified 
Benghazi talking points. And you've touched on that a little 
bit this morning.
    I just have one simple question around that that I want to 
ask you: In your professional view of that process, was it in 
any way unduly politicized?
    Director Clapper. Absolutely not.
    Senator Heinrich. Thank you for a very simple answer. We 
don't get those very often, so I want to say I really 
appreciate it.
    I want to move on to Syria for a few minutes. And just to, 
sort of, set the table, I wanted to ask how you would describe 
the current state of the opposition in Syria?
    Director Clapper. Well, the opposition is gaining in 
strength. It is increasingly gaining territory. At the same 
time, the regime is--as I indicated in my statement--is 
experiencing shortages in manpower and logistics.
    That said, the opposition is still fragmented. There are 
literally hundreds of these opposition battalions of varying 
strengths and cuts, and there are attempts being made by the 
opposition to bring some overarching command and control to 
that.
    The bad news in all this, I believe, with respect to the 
opposition of course, is the increasing prevalence of the al-
Nusra Front, which is the al-Qa'ida in Iraq offshoot that has 
gained strength, both numerically and otherwise, in Syria. And 
they've been pretty astute about this, and they are, where they 
can, providing more and more municipal services in what is a 
very terrible situation from a humanitarian standpoint.
    As well, there has been a growing infusion of foreign 
fighters that have been attracted to the conflict in Syria, who 
have joined the opposition. And so the opposition, in my view, 
and the al-Nusra Front specifically, has been very astute about 
that.
    The question, of course, comes up--how long will Assad 
last? And our standard answer is his days are numbered; we just 
don't know the number. I think our assessment is he is very 
committed to hanging in there and sustaining his control of the 
regime.
    Senator Heinrich. How would you assess Iran's overall--the 
role that they're playing in Syria today?
    Director Clapper. Well, increasingly, they're being drawn 
into Syria, both in terms of providing material aid and, as 
well, advice, to the extent of organizing militias, and that 
sort of thing. So Iran, together with their surrogate, the 
Hezbollah, has a huge stake in keeping Syria under control of 
the regime. It would be a tremendous loss--strategic loss--for 
the Iranians, if the regime falls.
    Senator Heinrich. You mentioned that Assad's days are 
numbered; how do you think Iran is going to, or will react to, 
a post-Assad Syria?
    Director Clapper. Well, I think they will try to--that's 
one of the reasons they're investing, both materially and with 
advisors and some fighters, is to maintain their interest and 
their physical presence there, so whatever form some successor 
regime takes, or if there's fragmentation, that they would at 
least have a foothold in Syria. I'm saying that, so we really 
don't know what their strategy is.
    Senator Heinrich. I'll leave you with one last question, 
and then I'll give back my time.
    On Egypt, how capable do you think that the current 
Egyptian government is in handling the unrest that we're seeing 
currently?
    Director Clapper. The unrest, you say?
    Senator Heinrich. Yes.
    Director Clapper. Well, they were able to suppress the 
violence in Port Said that was occasioned by the trials of the 
so-called ``soccer hooligans.'' So I think they have the 
capability, and when they put their minds to it, they can 
maintain order.
    Senator Heinrich. Thank you.
    Madam Chair, I yield back.
    Chairman Feinstein. Thank you very much, Senator.
    Senator King.
    Senator King. Thank you, Madam Chairman.
    Mr. Clapper, I want to call upon your long years of 
experience. We put a lot of stock in sanctions and have over 
the years, and we're putting a lot of stock in sanctions right 
now in Iran. My concern is that we as Americans tend to think 
that other countries will think and act and react the way we 
do, when, in reality, their systems just are very different 
than ours.
    My question on Iran is--is there a sufficient middle class 
who has the political power to have any influence on the 
regime's decisions, based upon the squeeze applied by the 
sanctions? In other words, does the supreme ayatollah care that 
his economy is going down?
    Director Clapper. Excellent question, sir. And yes, he 
does. He does care. And it does concern him about the 
deterioration in the economy because of the prospect for 
promoting unrest among the citizenry of Iran. And we are seeing 
more signs of that.
    At the same time, though, I think the supreme leader's 
standard is a level of privation that Iran suffered during the 
Iran-Iraq War. And he doesn't believe they've reached that 
point yet.
    And of course, as the supreme leader looks westward, or 
looks at us, he can argue that, you know, we're on the decline; 
our influence is declining, particularly in that part of the 
world. And so, you know, his view of the world may not be 
necessarily fact-based, particularly when it comes to internal 
conditions in his country.
    Senator King. Thank you. Turning again to another 
longstanding part of U.S. policy, which is nuclear deterrence, 
which has been our policy since the late 1940s, does deterrence 
work with a country like North Korea, or Iran?
    And sort of the same question--do they care? Mutually 
assured destruction--are they responsive to that kind of 
rational thinking that guided U.S. policy for fifty years; are 
these countries like the Soviet Union--that we can have some 
confidence that they're going to make a rational decision, 
knowing that if they do something crazy, they're going to be 
wiped out?
    Director Clapper. Well, I do think they both understand 
that. I'm not sure about deterrence for North Korea, where they 
would expect us to use a nuclear weapon. But they certainly 
respect the capability of our military. They've gone to school 
on what we've done, starting with Desert Storm. I know that for 
a fact.
    So I think deterrence, in this broadest context, does work, 
and does have impact on the decision-making calculus of these 
two countries.
    Senator King. Mr. Brennan, you had a brief colloquy with 
Senator Collins on last year's cyber bill. That bill did not 
get through. There were objections, I understand, from business 
interests.
    I know you're not on the policy side anymore, but are there 
things we can do to get that bill through? There's a certain 
urgency here, and I believe it went twice before the Senate--it 
didn't go through either time. What's happening to get that 
done?
    Director Brennan. I'm sure there are things that the 
Congress can do to push this forward. There were differences of 
view last year on the legislation. Again, I would just 
underscore the importance of being able to come up with some 
legislation that's going to be addressed, some of the 
vulnerabilities that our adversaries are taking advantage of, 
whether they be states, whether they be activists or organized 
criminal groups; vulnerabilities exist that we need to be able 
to address.
    Senator King. Would you characterize the cyber threat as 
accelerating?
    Director Brennan. Absolutely.
    Senator King. Madam Chairman, that's all I have. Thank you.
    Chairman Feinstein. Thank you very much.
    Just on cyber, the Vice Chairman and I have resolved to try 
to work together and see if we can't get a bill that we can 
agree to move through the Committee on the information sharing 
part of it. That might be of help to you. So we will begin that 
effort shortly.
    We will have one other quick round. I have a question on 
Hezbollah, and this is it, Director: Does the IC assess that 
Hezbollah and the Iranian Qods Force will continue to conduct 
terrorist attacks against Israelis and Americans, as Hezbollah 
has recently done in other places?
    That's a yes or no question, I think.
    Director Clapper. Yes. I think they clearly have the intent 
to do that, when they can.
    Chairman Feinstein. Okay. How does Hezbollah's capacity 
compare with that of al-Qa'ida at this time?
    Director Clapper. I don't think they reach that level of 
al-Qa'ida--core al-Qa'ida at its height. I don't believe that's 
the case. I might ask Matt Olsen if he'd like to comment on 
that.
    Chairman Feinstein. Good.
    Mr. Olsen.
    Director Olsen. Thank you very much, Chairman.
    I would agree with Director Clapper. To be specific, I 
wouldn't--compared to core al-Qa'ida ten years ago, Hezbollah 
is not at that level. Hezbollah does have a presence that 
extends to many countries around the world. We've seen plots 
and activity from Hezbollah across the globe, but we haven't 
seen anything like the capability or activity that we've seen 
from al-Qa'ida over the last ten years.
    Chairman Feinstein. Thank you.
    Mr. Vice Chairman.
    Vice Chairman Chambliss. Director Olsen, you are the guy 
who is responsible for gathering all of the information from 
the Intelligence Community, sifting through it, and making some 
critical decisions, not only about who gets what, but where the 
danger is.
    This is a public hearing. Tell the American public what 
keeps Matt Olsen awake at night.
    Director Olsen. Thank you, Mr. Vice Chairman.
    I would say that there are a number of things that we're 
particularly concerned about. From an overseas perspective, it 
is the decentralized nature of the threat from al-Qa'ida. As 
we've talked about this morning, the threat from core al-Qa'ida 
is greatly diminished. It is nowhere near where it was ten 
years ago. But we have seen that threat become geographically 
dispersed, as affiliated groups, and groups sympathetic to al-
Qa'ida and al-Qa'ida's message, have grown in areas--for 
example, in North Africa.
    Probably the most significant of those affiliated groups, 
from our perspective, is al-Qa'ida in the Arabian Peninsula. 
We've seen AQAP seek to carry out attacks against aviation 
targets three times over the last several years. So I would put 
AQAP at the top of the list, from an overseas perspective.
    Looking closer to home and the Homeland, the number one 
concern for an attack, albeit a small-scale, unsophisticated 
attack, likely comes from home grown extremists who may well be 
inspired or radicalized by the message that al-Qa'ida sends. 
But it would be more likely a person more likely to act alone 
or in a very small group to carry out an unsophisticated 
attack, and that's very difficult for us, from an intelligence 
perspective, to see in advance and therefore, to be able to 
disrupt.
    Vice Chairman Chambliss. Is there an aggressive effort on 
the part of al-Qa'ida, as well as other affiliated groups, or 
other terrorist groups, for that matter, to develop American 
home grown terrorists?
    Director Olsen. Sir, we definitely have seen--from both al-
Qa'ida core in Pakistan, as well as AQAP in Yemen--an effort to 
reach out beyond those regions into the United States to 
radicalize individuals who are here who may be susceptible to 
that kind of a message. They may be simply wayward 
knuckleheads, but they may well be inspired by that message, 
and seek to carry out an attack.
    Vice Chairman Chambliss. Now, let me address that to you 
also, Director Mueller, since the FBI has jurisdiction over 
domestic criminal and terrorist activity, and I'd like your 
comments on what you see taking place, from the standpoint of 
home grown terrorists.
    Director Mueller. Let me start by saying that the threat 
from AQAP, particularly with airliners, has not dissipated over 
the years. There's still that threat out there. The individuals 
who were responsible for the previous attempts are still there. 
So I join him with identifying that as a principal concern 
overseas.
    More directly at home, it is the radicalization of 
individuals on the Internet, who develop the desire and the 
will to undertake attacks. They're finding it very difficult to 
find co-conspirators, others that would join in. But then 
again, the Internet can facilitate that kind of a meeting/
coming together for an attack. And it is the lone wolves that 
we are principally concerned about.
    The other point I would put in terms of keeping me awake is 
cyber, and the fact that what is happening in the cyber arena 
cuts across any of our disciplines, whether it be 
counterintelligence or counterterrorism, as well as criminal. 
And the various objectives, goals, of discrete individuals 
utilizing the cyber arena, whether it be for criminal purposes 
or for terrorist purposes, has grown to be right up there with 
AQAP, home grown terrorists, and cyber attackers.
    Vice Chairman Chambliss. Thanks, Madam.
    Chairman Feinstein. Thanks, Mr. Vice Chairman.
    Senator Rockefeller, are you okay? No, you're not okay?
    Senator Rockefeller. No, I am--I think I'm okay. I've got a 
couple of questions I'd like to ask, but I'd rather get to the 
closed hearing.
    Chairman Feinstein. Okay.
    I know, Senator Wyden, you have a question you'd like to 
ask.
    Senator Wyden. Just one, Madam Chair, and I thank you.
    And this is for you, Director Clapper--again, on the 
surveillance front. And I hope we can do this in just a yes or 
no answer, because I know Senator Feinstein wants to move on.
    Last summer, the NSA director was at a conference and he 
was asked a question about the NSA surveillance of Americans. 
He replied, and I quote here, ``The story that we have 
millions, or hundreds of millions, of dossiers on people is 
completely false.''
    The reason I'm asking the question is, having served on the 
Committee now for a dozen years, I don't really know what a 
dossier is in this context. So, what I wanted to see is if you 
could give me a yes or no answer to the question--does the NSA 
collect any type of data at all on millions, or hundreds of 
millions, of Americans?
    Director Clapper. No, sir.
    Senator Wyden. It does not?
    Director Clapper. Not wittingly. There are cases where they 
could inadvertently, perhaps, collect, but not wittingly.
    Senator Wyden. All right. Thank you. I'll have additional 
questions to give you in writing on that point, but I thank you 
for the answer.
    Chairman Feinstein. Thank you very much, Senator Wyden.
    Senator King.
    Senator King. Just a follow-up on Senator Chambliss' 
questions--my concern is we keep talking about al-Qa'ida, but 
my impression, and Mr. Olsen, perhaps I'll direct this to you--
we have to realize that it only takes four or five people these 
days to mount some kind of threat.
    Is there a danger that we are so focused on al-Qa'ida that 
we're going to miss the second cousin of al-Qa'ida that arises 
in Brazil or someplace, that constitutes a serious threat?
    Director Olsen. Well, I don't think so. I think that's 
reflected on this panel. Director Brennan, Director Mueller, 
Director Clapper--all of us work very closely together to look 
forward to determine where that next threat is coming from. 
We're very focused on, for example, the activities of groups in 
North Africa that may simply be sympathetic to al-Qa'ida, but 
certainly haven't reached the level of being affiliated 
officially with al-Qa'ida.
    And so, all of our organizations--and I certainly know I 
can speak on behalf of the people working at the National 
Counterterrorism Center--are laser-focused on trying to 
identify that next threat. Are we going to be perfect every 
time? The answer to that is no, but we are very, very focused 
on trying to look forward to see that next threat, and that's 
something that we're doing together as a Community.
    Senator King. Mr. Mueller.
    Director Mueller. If I might add, we have threats across 
the board--domestic threats. We have not forgotten the bombing 
of the Oklahoma City federal building in 1995. And while, yes, 
we look at threats from outside that can be ultimately 
undertaken within the United States and look at home grown 
terrorists, we look across the board and try to anticipate, not 
only with international terrorists affiliated in some way or 
shape with al-Qa'ida, but with others that are affiliated with 
more extremist, radicalized groups domestically.
    Senator King. Are you seeing any increase in the number of 
those groups not related to Islamic extremists, but more home 
grown?
    Director Mueller. I would say, to a certain extent, it's 
cyclical. If there are groups who may lose their leaders--
either they were incarcerated or have passed--then the 
capabilities of that group to undertake an attack would be 
diminished. And we've seen that off and on.
    We also see that many of the more radical groups or 
extremist groups do not want to be associated with the lone 
wolves and will push them out, which is a problem, because if 
you have surveillance or you can understand what's happening in 
a substantial extremist group, to have somebody with the intent 
to undertake attack with nobody around them, that presents a 
separate special challenge.
    Director Clapper. We are seeing Northern Africa's, as Matt 
alluded to, a proliferation of Ansar al-Sharia chapters--
Tunisia and Libya, to name two cases--which seem focused much 
more on local, regional issues, Western interests only as they 
are present in those particular countries, and less inclined--
at least at this point--to promote attacks elsewhere, although 
that's always a possibility.
    So we watch these groups as they evolve in their 
objectives.
    Senator King. Thank you.
    Thank you, Madam Chair.
    Chairman Feinstein. Thank you.
    Let me thank you, everyone, first of all, on behalf of this 
Committee, for your service to the country, for your presence 
here today, for your testimony--and to those of you that didn't 
have a chance to respond, we look forward to seeing you in the 
Committee on some of these issues.
    We will recess and reconvene directly to our SCIF right 
down the hall, at the call of the Chair.
    So thank you, and this hearing is recessed.
    [Whereupon, at 11:54 a.m., the Committee recessed briefly 
to reconvene in a closed session.]
  

                                  
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