[Senate Hearing 115-396]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 115-396

  NOMINATION OF WILLIAM R. EVANINA TO BE THE DIRECTOR OF THE NATIONAL 
                COUNTERINTELLIGENCE AND SECURITY CENTER

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

                                HEARING

                               BEFORE THE

                    SELECT COMMITTEE ON INTELLIGENCE

                                 OF THE

                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                         TUESDAY, MAY 15, 2018

                               __________

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                    SELECT COMMITTEE ON INTELLIGENCE

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

                 RICHARD BURR, North Carolina, Chairman
                MARK R. WARNER, Virginia, Vice Chairman

JAMES E. RISCH, Idaho                DIANNE FEINSTEIN, California
MARCO RUBIO, Florida                 RON WYDEN, Oregon
SUSAN COLLINS, Maine                 MARTIN HEINRICH, New Mexico
ROY BLUNT, Missouri                  ANGUS KING, Maine
JAMES LANKFORD, Oklahoma             JOE MANCHIN III, West Virginia
TOM COTTON, Arkansas                 KAMALA HARRIS, California
JOHN CORNYN, Texas
                 MITCH McCONNELL, Kentucky, Ex Officio
                  CHUCK SCHUMER, New York, Ex Officio
                    JOHN McCAIN, Arizona, Ex Officio
                  JACK REED, Rhode Island, Ex Officio
                              ----------                              
                      Chris Joyner, Staff Director
                 Michael Casey, Minority Staff Director
                   Kelsey Stroud Bailey, Chief Clerk
                               
                               
                               CONTENTS

                              ----------                              

                              MAY 15, 2018

                           OPENING STATEMENTS

Burr, Hon. Richard, Chairman, a U.S. Senator from North Carolina.     1
Warner, Mark R., Vice Chairman, a U.S. Senator from Virginia.....     2

                                WITNESS

William R. Evanina, nominated to be Director, National 
  Counterintelligence and Security Center........................     3
    Prepared statement...........................................     6

                         SUPPLEMENTAL MATERIAL

Questionnaire for Completion by Presidential Nominees............    26
Additional Prehearing Questions..................................    48
Questions for the Record.........................................    75

 
  NOMINATION OF WILLIAM R. EVANINA TO BE THE DIRECTOR OF THE NATIONAL 
                COUNTERINTELLIGENCE AND SECURITY CENTER

                              ----------                              


                         TUESDAY, MAY 15, 2018

                                       U.S. Senate,
                          Select Committee on Intelligence,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:31 a.m. in Room 
SD-106, Dirksen Senate Office Building, Hon. Richard Burr 
(Chairman of the Committee) presiding.
    Present: Burr, Warner, Rubio, Lankford, Wyden, Heinrich, 
King, and Harris.

   OPENING STATEMENT OF HON. RICHARD BURR, CHAIRMAN, A U.S. 
                  SENATOR FROM NORTH CAROLINA

    Chairman Burr. I'd like to call this hearing to order. I'd 
like to welcome our witness today, Bill Evanina, President 
Trump's nominee to be Director of the National 
Counterintelligence and Security Center, or NCSC.
    Bill, congratulations on your nomination. I'd like to note 
that you've already served honorably as Director of NCSC since 
June of 2014, before the position required Senate confirmation, 
necessitating this hearing. So, this is a little bit out of the 
ordinary.
    I'd like to start by recognizing your family: your wife, 
JulieAnne, and your sons, Dominic, who's 13, and Will, who is 
19 months old and currently holding down the fort at home.
    [Laughter.]
    I had an opportunity to meet your wife and oldest son as we 
had breakfast this morning, and I just want to say thank you 
for allowing him to serve so many years in government. And to 
Dominic, thank you for your dad, because he does important 
stuff. I want you to know that.
    Our goal in conducting this hearing is to enable the 
committee to consider the nominee's qualifications and to allow 
for thoughtful deliberation by the members.
    Director Evanina has provided substantive written responses 
to over 55 questions presented by the committee. And, today, of 
course, committee members will be able to ask additional 
questions and to hear from him in open session.
    Director Evanina graduated from Wilkes University and 
earned a master's degree in educational leadership from Arcadia 
University. He has served in government for over 23 years, 
including service as a supervisory special agent and assistant 
section chief with the Federal Bureau of Investigation, and 
prior to joining NCSC served as chief of counterespionage at 
the Central Intelligence Agency.
    Director Evanina, you're being asked to lead this agency 
during a period of significant and wide-ranging 
counterintelligence threats against our Nation. I'm hopeful 
that, moving forward, you'll be an influential and forceful 
advocate for those foreign intelligence tools you believe are 
necessary to keep our citizens safe while protecting Americans' 
privacy.
    As I've mentioned to others during this nomination hearing, 
I can assure you that this committee will faithfully follow its 
charter and conduct vigorous and real-time oversight of the 
intelligence community, its operations and its activities. 
We'll ask difficult and probing questions of you, your staff; 
and we expect honest, complete and timely responses. I look 
forward to supporting your nomination and ensuring 
consideration without delay.
    Thank you again for being here. I look forward to your 
testimony.
    I'll now recognize the Vice Chairman.

OPENING STATEMENT OF HON. MARK R. WARNER, VICE CHAIRMAN, A U.S. 
                     SENATOR FROM VIRGINIA

    Vice Chairman Warner. Thank you, Mr. Chairman.
    I want to echo the Chairman's remarks in welcoming Bill 
Evanina today. Obviously, Bill, 22-year veteran of the FBI, 
Director of the National Counterintelligence and Security 
Center. As the Chairman mentioned, you've had this job for four 
years. But we thought it was so important that we made it 
Senate-confirmed, so you get to go through your first 
confirmation hearing process. You're obviously no stranger to 
this committee and all the members on the committee. You've 
briefed us many times, and I think you bring remarkable skills 
to this position.
    In my questions today, I want to focus on two issues. One 
is security clearances. This committee has had a couple 
hearings on that subject, both open and closed. We all know the 
DNI is the government's security executive agent and you as the 
DNI's point person have to take the lead on that.
    As you've acknowledged, and I think this committee 
additionally has acknowledged, the current system is broken: 
740,000-person backlog, costs too much, takes too long, way too 
complex. We've had lots of testimony about continuous 
evaluation, better use of technology, trying to knock down, on 
the DOD side, a big amount of that backlog. I'd like this 
morning if you would add a little more details and provide us 
any update.
    The second issue that I want to focus on will be your role 
to oversee the counterintelligence security activities across 
the U.S. government, particularly with regards to some of our 
near-peer nation-state adversaries, Russia, China, their whole-
of-society approaches. I believe, particularly the challenge 
posed by China in terms of its acquisition of our technology 
secrets, and their penetration of starting at early stage 
companies, through the penetration of universities, and some of 
the companies that this committee has highlighted in the past. 
We're going to need to up our game on that. So I look forward 
to your testimony on that subject as well.
    Thank you, Mr. Chairman. I look forward to the witness' 
testimony.
    Chairman Burr. Thank you, Vice Chairman.
    Bill, could I ask you to stand and raise your right hand?
    Do you solemnly swear to give the committee the truth, the 
whole truth, and nothing but the truth, so help you God?
    Mr. Evanina. I do.
    Chairman Burr. Please be seated.

 TESTIMONY OF WILLIAM R. EVANINA, NOMINATED TO BE THE DIRECTOR 
    OF THE NATIONAL COUNTERINTELLIGENCE AND SECURITY CENTER

    Chairman Burr. Director, before we move to your statement, 
I'll ask you five standard questions that the committee poses 
to each nominee who appears before us. They just require a 
simple yes-or-no answer.
    Do you agree to appear before the committee here or in 
other venues when invited?
    Mr. Evanina. Yes.
    Chairman Burr. If confirmed, do you agree to send officials 
from your office to appear before the committee and designated 
staff when invited?
    Mr. Evanina. Yes.
    Chairman Burr. Do you agree to provide documents or any 
other materials requested by the committee in order to carry 
out its oversight and legislative responsibilities?
    Mr. Evanina. Yes.
    Chairman Burr. Will you ensure that your office and your 
staff provides such materials to the committee when requested?
    Mr. Evanina. Yes.
    Chairman Burr. And fifth, do you agree to inform and fully 
brief to the fullest extent possible all members of the 
committee on all intelligence activities, rather than just the 
Chairman and the Vice Chairman?
    Mr. Evanina. Yes.
    Chairman Burr. Thank you very much.
    We'll now proceed to your opening statement, after which 
I'll recognize members by seniority for five minutes. Bill, the 
floor is yours.
    Mr. Evanina. Thank you, Senator.
    Chairman, Vice Chairman, members: I have issued a statement 
for the record which I'd like to be added to the record and 
I'll have some brief comments.
    It's an honor to appear with you today to consider my 
nomination to be the first Director of the National 
Counterintelligence and Security Center, or NCSC. It's also an 
honor and privilege that this Congress has decided this 
position to be important enough to make it a Senate-confirmed 
position. I'm also honored the President and Director of 
National Intelligence Dan Coats have the trust and confidence 
in me to fulfill this position.
    I would first like to express my gratitude to my family: my 
father John, my mother Barbara, my brother Steven, my sister 
Tanya, most especially my wife, JulieAnne, and my sons Dominic 
and Will.
    Lastly, I would like to thank the women and men of the 
National Counterintelligence and Security Center, who are 
dedicated professionals, and their successes in the last few 
years have made NCSC the global leader in counterintelligence 
and security.
    Mr. Chairman, I was born and raised in Peckville, 
Pennsylvania, a small blue-collar town just north of Scranton. 
There, through my family and friends, I learned the value of 
integrity, hard work and service to others.
    One of those neighbors was Gino Merli, private first class 
in the U.S. Army during World War II. Mr. Merli was awarded the 
Medal of Honor, two Purple Hearts and a Bronze Star for his 
heroic activities in the Battle of the Bulge. Spending time 
with Mr. Merli and other role models growing up, I learned the 
value of character, citizenship and service, and we should 
never take our democracy or freedom for granted.
    Mr. Chairman, I am proud to be a career public servant. 
I've been in Federal service for over 29 years, 22 of which as 
a proud member of the FBI. I've held a wide spectrum of 
positions in the FBI and, as you mentioned, chief of the 
Central Intelligence Agency's counterespionage group.
    Mr. Chairman, the threat we face from our adversaries is 
progressive, persistent, and requires constant mitigation by 
our government and private sector. The most prominent and 
enduring nation-state intelligence threats will continue to be 
Russia and China. However, Iran, North Korea and others are 
prominent with their intent and increasing capabilities.
    I believe the aggressive Russian intelligence services will 
continue their efforts to interfere and create distrust in our 
democratic processes, encourage anti-U.S. political views, and 
weaken our U.S. partnerships and European allies.
    China's utilization of intelligence services and 
nontraditional collectors to advance their national development 
continues to place our national security at risk. The U.S. must 
continually and aggressively respond to China's systematic 
theft of U.S. technology, trade secrets, proprietary data, 
research and development across wide swaths of the U.S. 
economy. Mr. Chairman, I proffer today that our economic 
security is our national security.
    Mr. Chairman, historically, the mitigation of these 
national security threats lay solely at the feet of the 
intelligence community and Federal law enforcement. I proffer 
today, that to successfully thwart the threats and the 
complexity that we see not only requires a whole-of-government 
approach, but a whole-of-country approach.
    Mr. Chairman, insider threats are a pernicious intelligence 
vulnerability that we face every day. Although we'll never 
eliminate the possibility of a bad actor within our walls, we 
continue to strive toward enhanced technical and behavioral 
solutions to prevent catastrophic damage, as well as to develop 
creative solutions to prevent and deter this activity.
    Mr. Chairman, as you and the Vice Chairman are fully aware, 
our government security clearance process is outdated and 
inefficient. It is currently undergoing a comprehensive 
overhaul.
    We plan and will develop and implement a process that 
results in the expeditious onboarding of qualified U.S. 
citizens both into government and in cleared industry with 
agility and reciprocity. At the same time, we must not reduce 
the quality of the investigations, to ensure that we are 
bringing on a quality, highly trusted workforce to protect our 
secrets.
    If confirmed, and as the executor of the DNI's role of 
security executive agent, I am committed to leading this 
effort, in partnership with the Office of Personnel Management, 
the Office of Management and Budget, and Department of Defense.
    Mr. Chairman, I am humbled. If confirmed, I would become 
the first Senate-confirmed Director representing the men and 
women of the NCSC. As well, I will represent the men and women 
who have toiled for decades in the counterintelligence security 
field, often without attribution and knowledge. They do so to 
protect our people, our data, our secrets and our Nation.
    Chairman Burr, Vice Chairman Warner, members of the 
committee, thank you again for your consideration of my 
nomination. I look forward to your questions.
    [The prepared statement of Mr. Evanina follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Burr. Bill, thank you very much for that 
testimony. The Chair would recognize himself, and then the Vice 
Chairman and then members by seniority for up to five minutes 
of questions.
    Bill, we've talked about it before: Leaks of classified 
information put sensitive sources and methods at risk and cause 
irreparable damage to our national security. Congress took 
action accordingly in the FISA Amendments Reauthorization Act 
of 2017 by imposing enhanced penalties on those convicted of 
unauthorized disclosures.
    If confirmed, how do you plan to address insider threats 
and the security of sensitive and classified information?
    Mr. Evanina. Mr. Chairman, thank you for that question. And 
I would concur that the unauthorized disclosure of classified 
information is not only traumatic to the secrets that we lose 
as a country, but they're also harmful and insidious to the men 
and women who serve to protect them every day.
    If confirmed, I will continue to work with my Federal law 
enforcement partners, both at the FBI and Department of 
Justice, to enhance not only the investigations, but the 
penalties for such unauthorized disclosures, as well as with 
the intelligence community, to enhance their ability to 
identify unauthorized disclosures within their walls and 
provide the most effective and efficient monitoring and provide 
information where that information--to the Department of 
Justice and the FBI for prosecution.
    Chairman Burr. Good.
    Foreign counterintelligence threats to our government 
supply chain continue to increase and China has become a big 
part of these threats. In your experience in 
counterintelligence both at NCSC and in your prior positions at 
CIA and the Bureau, how has China's counterintelligence threat 
grown? And what should we be concerned with?
    Mr. Evanina. Thank you, Mr. Chairman. I do believe China is 
one of the gravest concerns that we have moving forward as a 
Nation with respect to our economic security. China's 
utilization of a whole-of-government approach towards the 
United States to increase their economic and military 
development is problematic.
    The utilization of nontraditional collectors here in the 
United States--engineers, scientists, students in school--and 
their ability to, from a cyber-enabled perspective, identify 
and attract unclassified data from our research facilities, 
continues to allow the U.S. to not only lose positions, jobs, 
research and funding, as well as provide first-to-market 
capability to the Chinese and take our ingenuity and 
proprietary data and trade secrets away.
    Chairman Burr. In your response to the committee's 
questions, you stated that some of the greatest challenges to 
NCSC include conducting effective and sustained outreach to 
Federal partners, research labs and the private sector, as well 
as securing funding for supply-chain risk management. What are 
the plans for improving our government's supply-chain risk 
management?
    Mr. Evanina. Thank you, Mr. Chairman. Supply-chain 
mitigation efforts are nothing new to the U.S. However, in the 
last couple years they've become increasingly problematic via 
awareness. What NCSC does is provide that sliver of 
counterintelligence aspect to the who and why is implementing 
and mitigating our supply chain, our adversaries. And we 
provide and work in partnership with the non-Title 50 
organizations, General Services Administration, the labs, the 
weapons labs, DOE labs, to provide awareness and what the 
threat is emanating from our adversaries, to help them 
mitigate, from their perspective, and protect their data from 
leaving their facilities.
    Chairman Burr. I thank you for that, and I want to 
encourage you that in the role of Director please continue to 
focus on that greatly. This committee has been extremely 
involved in supply chain concerns that we have, and it seems to 
slip through the cracks from a jurisdictional standpoint in 
Congress and, for that fact, in government.
    Vice Chairman.
    Vice Chairman Warner. Thank you, Mr. Chairman.
    Bill, I'm going to start with clearance reform. I think 
you'll recall when we had the hearings, bipartisan complete 
agreement the system is broken. It's 740,000-plus on the 
backlog. This is a security risk. This is an economic risk in 
terms of our ability then to brief companies.
    I was very concerned that we invited all the relevant 
parties to testify. OMB chose not to. I would like you to give 
us an update on whether OMB is on the team now in trying to 
make this a priority.
    And we'd had some discussion that that large-number 
backlog, you were going to be able to cut a dramatic amount of 
that backlog back in a relatively short timeline. Can you give 
us an update on that?
    Mr. Evanina. Thank you, Vice Chairman Warner.
    Yes. As a matter of fact, I think subsequent to our 
beginning this process back in March, in our Trusted Workforce 
2.0 initiative, with our partners, Office of Management and 
Budget, OPM and DOD, as well as a host of other organizations 
and departments, we have been working diligently to provide 
this committee and the government with two specific things. 
Number one, a dramatic reduction to the backlog; and number 
two, the development of a new business process of how we will 
vet qualified citizens in the U.S. in an agile, expeditious 
manner, at the same time making sure they're trusted.
    With respect to your question on the backlog, we currently 
are in the final stages of a paper for the DNI to issue that's 
being coordinated through the intergovernmental process right 
now, which I believe, with some dramatic changes to how we 
currently do the business process of investigations, once 
implemented, will probably get us to a position we could 
estimate probably a 20 percent reduction to backlog within six 
months.
    Vice Chairman Warner. Only 20 percent in six months? That's 
a little less ambitious than I think we discussed earlier. And 
is OMB part of the process at this point?
    Mr. Evanina. OMB is a major part of the process. Again, the 
four main individuals are OMB, OPM, DOD and ODNI.
    Vice Chairman Warner. Well, and will these new business 
processes include reciprocity and common standards between 
government and our contractors?
    Mr. Evanina. Yes, sir.
    Vice Chairman Warner. Again, my hope would be, since I 
understand a lot of these were on the Secret level, the DOD has 
said there was an ability to take, I thought, a much greater 
percentage of that backlog down with administrative action.
    And then, on a going-forward basis I would hope that we 
would see a reduction greater than 20 percent. That would only 
take us down--you know, if we moved from 740,000 to half a 
million, that still doesn't do very well if we're at the end of 
this calendar year.
    Mr. Evanina. Senator, I agree with you and concur. I think 
some of the contingencies will be predicated upon the transfer 
of the MBIB inventory to DOD and how that impacts the planned 
mitigation efforts. We do not have an effective algorithm for 
that at this moment, but we are excited. That 20 percent is 
probably a conservative number.
    Vice Chairman Warner. On the question of 
counterintelligence with China, again, a number of members on 
this committee have raised concerns about certain of the 
Chinese telecom companies and their penetration into the 
American market. I was actually pleased that the President 
acted on one of those companies, ZTE.
    Now, it appears that that is simply a bargaining chip in 
negotiations with China. I don't think that is the appropriate 
way. If this is a security threat, it is a security threat and 
needs to be dealt with as such, not as a bargaining chip in 
terms of greater trade negotiations. My concern as well is that 
we are asking purchasers of equipment at local government, 
private sector, we're asking others who are in the venture 
community and others to understand the threat of China, but I 
don't believe we can fully brief that threat if they don't have 
appropriate security clearances within their own institutions--
again, another challenge that comes out of the backlog issue.
    How will we be able to move aggressively on having a 
standardized brief to universities, tech companies, VCs on the 
real threat of China? That brief I think will have to be some 
parts classified, as well as unclassified. Do you want to 
address that?
    Mr. Evanina. Vice Chairman, I would concur. And I think 
over the last two years we've made a lot of progress with our 
interagency partners, the FBI and DHS, in promulgating such 
advice and awareness and threat to not only academia and 
industry, with respect to the threat from China and other 
nation-states who are pernicious in their stealing our 
proprietary data and trade secrets. We will continue to do that 
and work with the associations.
    And I concur with your point that I think private-sector 
leadership, that is at the CEO level, needs to be a little bit 
more active in terms of obtaining security clearances so that 
that information that is classified can get to them in a more 
effective and efficient manner.
    Chairman Burr. Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman.
    I want to pick up, Mr. Evanina, on the Vice Chairman's 
point with respect to ZTE specifically. And thank you for the 
visit we had in our office. I thought it was very helpful.
    Now, in 2012, the House Intelligence Committee issued a 
non-classified bipartisan report on national security issues 
posed by the Chinese telecom companies, and one of them was 
ZTE. The report concluded that the risks associated with ZTE's 
provision of equipment to U.S. critical infrastructure could 
undermine American national security interests. Do you agree 
with that bipartisan report?
    Mr. Evanina. Senator Wyden, I do.
    Senator Wyden. Okay. Now, they recommended that the United 
States should view with suspicion the continued penetration of 
the U.S. telecommunications market by ZTE. Do you agree with 
that?
    Mr. Evanina. Yes.
    Senator Wyden. Now, I appreciate the response. The 
President's comment over the weekend about ZTE I think 
obviously raises extraordinary national security questions, as 
well as economic policy concerns. So, if you're confirmed, I 
hope you're going to stand up to the White House on this issue.
    Let me ask something with respect to where things stand 
now. What are the national security implications of giving ZTE 
sanctions relief?
    Mr. Evanina. Well, Senator Wyden, I'm not particularly up 
to speed with the sanctions with regard specifically to ZTE. I 
will say that the intelligence community and Federal law 
enforcement is on the record with this committee and the 
American people with respect to the threat posed by China 
Telecom.
    Senator Wyden. But as a general proposition, giving 
sanctions relief to a company like this, where there has been a 
bipartisan, non-classified report, as a general proposition 
that strikes me as a mistake from a counterintelligence 
standpoint, from a cyber-security standpoint, from an economic 
policy standpoint. So just tell me, as a general proposition, 
whether you would agree with that.
    Mr. Evanina. Well, Senator, I would agree that we will 
continue to provide the policymakers in this body with the 
relevant intelligence information to have effective policy----
    Senator Wyden. That's not the question I'm asking. Set 
aside ZTE. As a general proposition, does that raise the 
concerns I mentioned--economics, national security, cyber-
security? Seems to me it's pretty low-hanging fruit here to say 
yes.
    Mr. Evanina. Well, Senator, again I'm not up to speed with 
the sanctions per se with your reference. So I would have to 
continue with--we will continue advising on the foreign 
intelligence threat to policymakers who want to employ those 
sanctions.
    Senator Wyden. Let me ask you one other question. What has 
been learned, again from a counterintelligence standpoint, 
since the OPM breach? You know, obviously, that affected an 
extraordinary number of Americans. I would hope that that would 
be seen as a wake-up call and there would be some substantive 
changes.
    So what has been learned? What has changed since the OPM 
breach?
    Mr. Evanina. Thank you for that question, Senator Wyden.
    I think that the biggest OPM reflection is that I think we 
learned as a country that nothing is off limits from foreign 
adversary attack here, specifically in our non-Title 50 
organizations in our country and government as a whole. The 
intelligence community is no longer just the target and victim 
of adversaries; that as a country we need to be aware of our 
proprietary data, trade secrets and PII.
    Senator Wyden. Let me ask you one other question about 
encryption. Obviously counterintelligence risks are not limited 
just to classified systems. Extremely politically sensitive 
information is conveyed every day by government officials and 
members of Congress over unsecured phones. Should the 
intelligence community recommend that policymakers encrypt 
their unclassified phone conversations?
    Mr. Evanina. Yes, Senator.
    Senator Wyden. Okay. Thank you. I hope that you will think 
some more about this matter that has been raised by ZTE. I can 
understand why you might not want to comment about a specific 
company. But, I'm telling you, as a general proposition, this 
ought to be an enormous alarm bell from the standpoint of 
counterintelligence, cyber-security, and economics. So I hope 
you'll think more about that.
    Thank you, Mr. Chairman.
    Chairman Burr. Senator Rubio.
    Senator Rubio. Thank you, Mr. Evanina, for being here. 
Would you ever use a ZTE phone?
    Mr. Evanina. I would not, Senator.
    Senator Rubio. Would you recommend anyone in any sort of 
position that's sensitive, whether in commerce or in government 
or in contracting, use a ZTE phone?
    Mr. Evanina. No, I would not.
    Senator Rubio. So it's not an exaggeration to be--there's 
somehow the notion out there by some that this is a hysteria, 
not just unique to ZTE. But it is a fact, is it not, that China 
utilizes its telecommunication companies for purposes of 
espionage. Even if those companies' leadership may not be open 
to it, they don't really have a choice but to be cooperative.
    Mr. Evanina. Senator Rubio, we've been on the record in the 
intelligence community and law enforcement of that fact.
    Senator Rubio. There's an additional national security 
factor at play, and that is that Made in China 2025 is an 
endeavor by the Chinese government to dominate the top fields 
of the 21st century, many of them in telecommunications, 
aerospace, biomedicine, et cetera. If in fact they achieve that 
because they're more competitive, because they have better 
ideas, because they out-innovate us, that's one thing. But 
that's not how they're pursuing it. How they are pursuing it, 
is it not, is they are stealing intellectual property, reverse-
engineering, the transfer of intellectual property?
    There is a strategic aim on the part of the Chinese 
government to steal the commercial intellectual property of 
this country in order to advance themselves into a position of 
dominance in these key fields. Is that not something that is 
pretty clear?
    Mr. Evanina. That is correct, Senator.
    Senator Rubio. And that poses a national security threat, 
because our commercial capacity--just like our shipbuilding 
capacity is important to our military hardware and our 
aerospace is, our technological capacity in the private sector. 
If we lose the high ground and another nation is dominant 
because they cheated their way into that position, does that 
not pose a direct national security threat to the United 
States?
    Mr. Evanina. It does, Senator. And, as I mentioned, I 
believe our economic security is our national security.
    Senator Rubio. Now, I want to talk about a separate topic 
that has not, I don't believe, ever been discussed before, 
certainly not today. As you know, we live in an environment 
where false claims, even ones that are totally preposterous, 
can easily be spread on social media. And often the media, 
under tremendous pressure to deliver clicks on their website or 
ratings on their television station through outrage, are quick 
to jump on it.
    I raise that because of the concept of something called 
``deep fakes.'' Are you familiar with that term?
    Mr. Evanina. I am not, sir.
    Senator Rubio. A deep fake is the ability to manipulate 
sound, images, or video to make it appear that a certain person 
did something that they didn't do. These videos in fact are 
increasingly realistic. The quality of these fakes is rapidly 
increasing due to artificial intelligence. Machine learning 
algorithms are paired with facial mapping software to make it 
easy and cheap to insert someone's face into a video and 
produce a very realistic-looking video of someone saying or 
doing something they never said or did.
    This, by the way, technology is pretty widely available on 
the internet and people have used it already for all sorts of 
nefarious purposes at the individual level. I think you can 
only imagine what a nation-state could do with that technology, 
particularly to our politics.
    If we could imagine for a moment, a foreign intelligence 
agency could use deep fakes to produce a fake video of an 
American politician using a racial epithet or taking a bribe or 
anything of that nature. They could use a fake video of a U.S. 
soldier massacring civilians overseas. They could use a fake 
video of a U.S. official admitting a secret plan to do some 
conspiracy theory of some kind. They could use a fake video of 
a prominent official discussing some sort of impending disaster 
that could sow panic. And imagine a compelling video like this 
produced on the eve of an election or a few days before major 
public policy decision with a culture that has already a kind 
of a built-in bias towards believing outrageous things, a media 
that is quick to promulgate it and spread it, and of course 
social media, where you can't stop its spread.
    I believe that this is the next wave of attacks against 
America and Western democracies, is the ability to produce fake 
videos that can only be determined to be fake after extensive 
analytical analysis, and by then the election is over and 
millions of Americans have seen an image that they want to 
believe anyway because of their preconceived bias against that 
individual.
    You've never heard of that term, but I ask you, is there 
any work being done anywhere in the U.S. government to begin to 
confront the threat that could be posed, or will be posed in my 
view, by the ability to produce realistic-looking fake video 
and audio that could be used to cause all sorts of chaos in our 
country?
    Mr. Evanina. Thank you, Senator Rubio, for that question. 
And the answer is yes. The entire intelligence community and 
Federal law enforcement is actively working to not only 
understand the complexities and capabilities of our 
adversaries, but what, from a predictive analysis perspective, 
we may face going forward, particularly with the election this 
fall, as well as in 2020.
    Chairman Burr. Senator Heinrich.
    Senator Heinrich. Mr. Evanina, welcome.
    The DOD has recently banned sales of ZTE phones at military 
exchanges, as well as Huawei equipment. And last month, the 
Commerce Department banned China's smartphone maker, ZTE, from 
using U.S. technology after it illegally shipped U.S. goods to 
both Iran and to North Korea. This comes after numerous 
intelligence community warnings that ZTE poses a major cyber-
security threat.
    Yet, as we saw this week, President Trump announced that he 
is working with the Chinese president to give ZTE, quote, ``a 
way to get back into business fast,'' end quote.
    Do you assess that ZTE represents an economic or security 
threat to the United States?
    Mr. Evanina. Thank you for the question, Senator. I believe 
the intelligence community and law enforcement are clearly on 
the record, both in the public and in classified settings, with 
the threat from Chinese telecommunications companies.
    Senator Heinrich. Are you concerned from a 
counterintelligence perspective? Does it make sense to overrule 
the advice and judgment of the national security community and 
to offer ZTE a way to get back into business fast?
    Mr. Evanina. Thank you, Senator. I believe our role in the 
intelligence community and the counterintelligence community is 
to provide the relevant facts of the issue in the 
investigations to the policymakers for their decision-making 
processes.
    Senator Heinrich. How are you raising those facts with this 
White House?
    Mr. Evanina. We are garnering the support of the entire 
intelligence community and regulatory community. And, as a 
matter of fact, I think we've had meetings as recently as 
yesterday at the White House.
    Senator Heinrich. If China believes that we are willing to 
use national security matters as bargaining chips in trade 
negotiations, how do you think that will impact their behavior, 
moving forward?
    Mr. Evanina. Senator, thanks for the question. I'm not an 
expert on the Chinese diplomatic processes, but I can tell you 
that our national security is first and foremost in our 
perspective. And the whole-of-country approach posed by China 
clearly makes it difficult for us to bifurcate the issues.
    Senator Heinrich. So two months ago DHS and the FBI issued 
a rare public alert about a large-scale Russian cyber campaign 
targeting the U.S. power grid and other critical infrastructure 
with an intent to extract information and potentially lay a 
foundation for future offensive operations. This alert went 
further than past alerts, confirming Russia as the culprit and 
including indicators of compromise and a list of detection and 
prevention measures.
    What's happened since March of this year, when the alert 
went out? And is this Russian cyber campaign ongoing?
    Mr. Evanina. Senator, thank you for that question. And I 
would agree that the pervasive threat from the cyber 
perspective by the Russian government continues today and will 
into the future.
    The Federal Government, specifically the intelligence 
community, Federal law enforcement and DHS, have been working 
with the private sector every day.
    As a matter of fact, NCSC, we brought in not only the 
Department of Energy, but major companies in the fuel, gas and 
oil perspective to give them a one-day read-in in a classified 
brief of the threat, so we could help them mitigate those 
issues back in their home facilities.
    Senator Heinrich. Did that include utilities as well?
    Mr. Evanina. It did.
    Senator Heinrich. Are you seeing a greater sense of urgency 
on the part of utility companies and other energy institutions 
to utilize this new information?
    Mr. Evanina. Yes.
    Senator Heinrich. Are we getting utility leadership through 
the clearance process fast enough?
    Mr. Evanina. I'm not sure about that, Senator. I'd have to 
get back to you with respect to the speed at which that's 
occurring.
    Senator Heinrich. Because that's another concern. And I 
know Senator Warner brought up the overall issue. I mean, one 
of the things that we have heard on the Energy and Natural 
Resources Committee is, that even former members of Congress 
who served on the relevant intelligence committee, can't get 
through that process.
    And so, if we don't have partners who are read in on the 
other side, it makes it very difficult for those utilities and 
those other energy institutions to actually implement the 
changes that they need to implement.
    Mr. Evanina. Thank you, Senator. I believe, working closely 
with DHS--they are working diligently to provide an expeditious 
process to get individuals and companies cleared so they can 
receive this threat information on a real-time basis.
    Senator Heinrich. You've said that continuous evaluation is 
not the future, it's now, and that the government honestly has 
not done a good job. Industry is able to conduct continuous 
evaluation of their employees. Why has it been difficult for 
the government to do so? And what can we do about that?
    Mr. Evanina. Thank you, Senator, for the question. 
Continuous evaluation has been a constant bedrock in the 
intelligence community for years. What we've been asked to do 
at NCSC, through the auspices of the ODNI, from this committee 
is provide a robust continuous evaluation program for the rest 
of the Executive Branch, and we have done that. We are probably 
80 percent complete, ahead of schedule, hope to be fully 
complete by the end of the year. We are expecting to have 20-
plus agencies and 100,000 Federal employees outside the 
intelligence community enrolled into our continuous evaluation 
plan.
    Senator Heinrich. Thank you, Mr. Evanina.
    Thank you, Mr. Chair.
    Chairman Burr. Senator Lankford.
    Senator Lankford. Mr. Chairman, thank you very much.
    Thanks for being here and for going through this process. 
And by the way, thank you for your years of service leading up 
to this. It's exceptionally valuable for the country.
    You make several very interesting statements in your 
opening statement and in your written statement that I want to 
be able to ask you to drill down a little bit deeper on. You 
made this statement: ``A growing set of threat actors are now 
capable of using cyber operations to remotely access 
traditional intelligence targets, as well as a broader set of 
U.S. targets, including critical infrastructure and supply 
chain, often without attribution.''
    What are you recommending there? You're making a statement 
there, but you're also making a recommendation.
    Mr. Evanina. Thank you for that question, Senator Lankford. 
I believe that we as a Nation need to be more in a true public-
private partnership with those out in our country who actually 
make things and build things--our utility companies, the 
energy, telecommunications and financial networks that are the 
bedrock of our Nation. The government needs to partner in a 
very, very close manner with them, so they can understand the 
threat and provide efforts to help mitigate that threat.
    Senator Lankford. So what does that look like? In a public-
private partnership, are you talking about government dictating 
how this would work in the private industry and the private 
industry does it? The private industry sets a set of standards 
from NIST or from wherever it may be?
    Is this DHS? What entity do you think does that? And where 
does that happen most efficiently?
    Mr. Evanina. Thank you, Senator. I believe that it's a 
combination, starting with DHS. What we do at NCSC is provide 
that sliver of counterintelligence threat to not only the DHS 
and Department of Energy, but as well as all those companies, 
so they can understand the who and why and what's happening, 
and then help other Federal organizations and regulators 
provide mitigation to those. If I believe that those companies 
out there providing those services don't understand the threat 
and how it's manifested, they can't be in an effective position 
to prevent it.
    Senator Lankford. What's the best way for them to get 
information about the threat? If I'm a pipeline company in 
Oklahoma, what's the best way for me to be able to determine 
what's the real threats that are coming at me?
    Mr. Evanina. Two ways, sir: through the Department of 
Energy, as well as the FERC, who is the regulator for that 
organization we work very closely with to provide threat 
information. And I believe that process is pretty effective.
    Senator Lankford. Talk to me a little bit about hiring and 
retaining individuals for the team. You've got a lot of 
competition getting some of the best folks. We've got some 
incredible patriots that are there because of their love for 
their country and their respect for the rule of law. What are 
you seeing right now for hiring and retaining individuals and 
for the future?
    Mr. Evanina. Thank you, Senator. I'm pretty aware that the 
intelligence community continues to attract to the right type 
of amazing U.S. citizens for their jobs. I believe that our 
mission in the intelligence community will win the day. The 
challenge is getting them in the door, as we spoke of. But I 
believe the mission will keep them in for long periods of time.
    The security clearance process has been--the undergoing of 
the business process re-engineering will help get us the 
individuals in the door quicker, more expeditious, not only in 
the government, but in the private sector, including industry 
as well.
    Senator Lankford. You had a nice, long hesitation on the 
security process, which all of us have incredible frustrations 
with at this desk and those that are doing the hiring. What is 
the right length of time to be able to get through a security 
clearance? Because we will do a good security clearance, but 
right now it's a ridiculous amount of time. What's the right 
amount of time?
    Mr. Evanina. Well, Senator, it's a trick question, but I'll 
give you--I believe that Secret clearances and below, which are 
primarily Department of Defense, I think in the end state we 
should be able to clear 80 or 90 percent of those within 30 
days.
    Senator Lankford. How long will it take to get to that 
spot, you think?
    Mr. Evanina. Again, with my partners watching closely here, 
I would have to say within the next two years we're able to get 
to that as an official policy and implementation. It's a little 
bit more complicated at the Top Secret level, as you're aware.
    Senator Lankford. Sure.
    Mr. Evanina. We're working on those metrics, as well.
    Senator Lankford. Yes, but most people are not going 
through the Top Secret level starting out through the 
clearance. I think a 30-day, 45-day even, is a reasonable 
amount of time to be able to go through a Secret clearance. 
What is the time right now per clearance?
    Mr. Evanina. It's closer to 100 days, sir.
    Senator Lankford. Right. And for many people in excess of 
that, and that's a major issue for us.
    You also make some interesting comments about the election 
security in your opening statement and in your written 
statement. Your concerns continue to rise about a Russian 
threat towards our election security. I know we're partnering 
with DHS. My question to you is not about the threat; it's 
about how we're responding to it. What's the current level of 
cooperation between you and DHS in preparing for those threats 
because DHS has the lead?
    Mr. Evanina. Thank you, sir.
    And DHS has been a great partner, not only with the 
intelligence side, but NPPD, who has direct interface with the 
State and locals with respect to the election process, which--
elections are local. We have been working really closely with 
them, bringing the entire intelligence community to service DHS 
and provide real, up-to-date threat information like we have 
never done before, so that DHS can manifest that information 
and provide mitigation strategies for all elections who are at 
the local level.
    Senator Lankford. So cooperation and communication between 
DHS and you are consistent right now?
    Mr. Evanina. That's correct.
    Senator Lankford. Okay, thank you.
    I yield back.
    Chairman Burr. Senator King.
    Senator King. Thank you, Mr. Chairman.
    Mr. Evanina, welcome. Delighted to have you here today and 
appreciate the service that you've provided.
    First, I want to associate myself with Senator Rubio's 
comments and emphasize one point. He talked about the deep 
fake, the idea of being able to create an alternative reality. 
If you add to that the powers of social media, it's a perfect 
storm of disinformation, because you can create the false 
reality and then you can circulate it in a way that it's very 
hard to counteract, to find, to see.
    If somebody puts a negative ad about you on television, you 
can put up your own ad to rebut it. In this case, you're 
chasing smoke. It's all over the place--e-mails, Twitter, 
Facebook. It's very difficult. So, I think this is a very 
serious challenge.
    That brings me to your comment on question 16 of the 
prehearing questions. You said: ``I remain concerned that we 
may still be underestimating Russian capabilities and plans to 
influence the 2018 midterm and future elections.'' That's a 
chilling statement. Could you elaborate on that a bit?
    Mr. Evanina. Thank you, Senator. I would say that I don't 
think anyone in my profession or the intelligence community 
will underestimate the potential of the Russian Federation, 
Vladimir Putin, or the intelligence service in their 
capabilities, but, more importantly, their intent. And I think, 
from what we saw in the last election cycle, their intent is 
there and their capabilities are clearly there.
    To your first statement regarding the deep fake, I think 
that serves as an opportunity for us in the analytical 
community and the Federal Government to provide enhanced 
training and awareness of the deep fake; and maybe also an 
opportunity to partner with the private sector and social media 
companies to understand the capabilities of our adversaries on 
our own social media networks.
    Senator King. Well, the ultimate defense on that is for our 
public to understand when they're being conned, for them to 
realize where this is coming from. And I think sources are very 
important.
    You mentioned about the capabilities of the Russians and 
their intent. Do you have any doubt about the accuracy of the 
January 2017 report of the intelligence community on the 
Russian activities in the 2016 election?
    Mr. Evanina. I do not.
    Senator King. Thank you.
    I also want to emphasize a point that's been made several 
times before. The clearance backlog is an enormous problem. My 
frustration is, I can't find out a single point, the single 
point in the United States government that's in charge of 
solving this problem. And I know it's not you, but you're in a 
key position. And I believe that in order to solve it it's 
going to take--and I keep hearing ``whole-of-government.'' 
Whenever I hear ``whole-of-government,'' I think that means 
``none-of-government.''
    Somebody's got to be in charge, and I hope that you will 
urge the administration, the IC, DNI, to take charge of this 
issue so that it's not scattered all over the government, 
because we've got to solve it. We had testimony there are 
something like 950,000 security clearances in backlog, and 
we're losing good people. There's an opportunity cost there, 
and it's just unacceptable in terms of our ability to defend 
the country.
    So, I hope you will take on, as part of your mission, 
pushing for an organizational response to this, where there's 
some central responsibility and accountability for this.
    Mr. Evanina. Thank you, Senator. The government looks to 
the Director of National Intelligence as the security executive 
agent for this process, and I believe, and the government 
believes through executive order, that he is accountable for 
the policies set forth, how we conduct investigations and 
adjudications. And by virtue of--as executor of that program, I 
believe that responsibility of leadership lies with me.
    Senator King. When I was in business, I always tried to 
formulate contracts and relationships so that you had one 
throat to choke.
    [Laughter.]
    And that was the way you can get things done.
    On this question of cyber security and the attacks on our 
country, in my view and the view of many of us in this 
committee and in other committees, one of the fundamental 
problems with our response to this is that it's purely 
defensive; that we're simply trying to patch our way out of 
this problem; and that there is no deterrent, there is no cyber 
doctrine or cyber strategy that will deter our adversaries and 
make them think twice. We had testimony before Armed Services 
from the head of the NSA that nothing we have done would, 
quote, ``change the calculus of our adversaries.''
    Do you believe that this is an area that we need to do more 
work in and develop a public deterrence strategy so that those 
who intend to attack us through cyber, just as they would 
through kinetic, believe that they will and will certainly pay 
a price?
    Mr. Evanina. I do, sir.
    Senator King. And could you expand on that a bit?
    Mr. Evanina. Well, I believe two aspects of that. Number 
one, I think our adversaries need to know that our deterrence 
policy is real and it will manifest itself in their home base 
so they understand it.
    But I think more importantly, I think we owe it to the 
American people for them to understand that the government has 
policies and procedures in place to protect them, protect 
private industry, from these cyber threats that we face.
    So I concur we need to be a little bit more effective and 
efficient with our deterrence policies.
    Senator King. I hope you will help us develop that 
strategy, because I think otherwise we're just going to 
continue to be chipped away at. Again, we're looked on as a 
kind of free lunch in this regard.
    Thank you. I appreciate your testimony.
    Mr. Evanina. Thank you.
    Chairman Burr. Thank you, Senator King.
    Vice Chairman Warner. I just want to echo what Senator King 
has said, that we need that articulated cyber doctrine. I was, 
again, disappointed that it appears the National Security 
Council is now trying to eliminate the cyber position in the 
White House, a direct report to the President. That does not 
send the right signal.
    But thank you very much, Bill, for your testimony. I look 
forward to working with you.
    Mr. Evanina. Thank you, Senator.
    Chairman Burr. I have to admit I was questioning whether 
Senator King was going to be quoted from this hearing about a 
cyber doctrine or ``one throat to choke.''
    [Laughter.]
    I have a feeling I know which way it's going to go.
    Senator King. I realized I was taking that risk as the 
words were leaving my----
    [Laughter.]
    Chairman Burr. I think we have exhausted questions, 
Director. Thank you, and I thank your family again for your 
willingness to serve.
    Let me note for members, QFRs are required before the end 
of business today. It is my intent to move the Director out of 
committee next week, so that we can get this to the floor as 
quickly as we can.
    With that, again, our thanks for your service.
    This hearing is adjourned.
    [Whereupon, at 10:18 a.m., the hearing was adjourned.]

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