[Senate Hearing 117-247]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 117-247
 
                     NOMINATION OF SHANNON CORLESS
                     TO BE ASSISTANT SECRETARY FOR
                       INTELLIGENCE AND ANALYSIS,
                    U.S. DEPARTMENT OF THE TREASURY

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

                                HEARING

                               BEFORE THE

                    SELECT COMMITTEE ON INTELLIGENCE

                                 OF THE

                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 30, 2021

                               __________

      Printed for the use of the Select Committee on Intelligence
      
      
      
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]       
      


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


             U.S. GOVERNMENT PUBLISHING OFFICE 
46-623PDF           WASHINGTON : 2022 
    
        
        
                    SELECT COMMITTEE ON INTELLIGENCE

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

                   MARK R. WARNER, Virginia, Chairman
                  MARCO RUBIO, Florida, Vice Chairman

DIANNE FEINSTEIN, California         RICHARD BURR, North Carolina
RON WYDEN, Oregon                    JAMES E. RISCH, Idaho
MARTIN HEINRICH, New Mexico          SUSAN COLLINS, Maine
ANGUS KING, Maine                    ROY BLUNT, Missouri
MICHAEL F. BENNET, Colorado          TOM COTTON, Arkansas
BOB CASEY, Pennsylvania              JOHN CORNYN, Texas
KIRSTEN E. GILLIBRAND, New York      BEN SASSE, Nebraska

                  CHUCK SCHUMER, New York, Ex Officio
                 MITCH McCONNELL, Kentucky, Ex Officio
                  JACK REED, Rhode Island, Ex Officio
                   JAMES INHOFE, Oklahoma, Ex Officio
                              ----------                              
                     Michael Casey, Staff Director
                  Brian Walsh, Minority Staff Director
                   Kelsey Stroud Bailey, Chief Clerk
                   
                            C O N T E N T S
                            
                            

                              ----------                              

                           NOVEMBER 30, 2021

                           OPENING STATEMENTS

                                                                   Page

Warner, Hon. Mark R., a U.S. Senator from Virginia...............     1
Rubio, Hon. Marco, a U.S. Senator from Florida...................     2
Cornyn, Hon. John, a U.S. Senator from Texas.....................     3

                                WITNESS

Corless, Shannon, Nominee to be Assistant Secretary for 
  Intelligence and Analysis, U.S. Department of the Treasury.....    11
    Prepared Statement...........................................    14

                         SUPPLEMENTAL MATERIAL

Nomination material for Shannon Corless
    Questionnaire for Completion by Presidential Nominees........    34
    Additional Pre-Hearing Questions.............................    51
    Post-Hearing Questions.......................................    61
    Letter of support dated November 29, 2021 from Senator Dan 
      Coats......................................................     5
    Letter of support dated November 17, 2021 from Stuart Levey..     6
    Letter of support dated November 1, 2021 from James R. 
      Clapper....................................................     8
    Letter of support dated October 29, 2021 from Hon. Mike 
      Rogers.....................................................    10


                     NOMINATION OF SHANNON CORLESS

                     TO BE ASSISTANT SECRETARY FOR

                       INTELLIGENCE AND ANALYSIS,

                    U.S. DEPARTMENT OF THE TREASURY

                              ----------                              


                       TUESDAY, NOVEMBER 30, 2021

                                       U.S. Senate,
                          Select Committee on Intelligence,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:30 p.m., in 
Room SH-216 in the Hart Senate Office Building, Hon. Mark R. 
Warner (Chairman of the Committee) presiding.
    Present: Senators Warner, Rubio, Wyden, Heinrich, King, 
Bennet, Casey, Gillibrand, Burr, Risch, Collins, Blunt, Cornyn, 
and Sasse.

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

    Chairman Warner. I would like to call this hearing to 
order.
    Before we get to our witnesses, I want to acknowledge that 
today is the birthday of the oldest Member on the Committee, 
Richard Burr, and we want to wish Richard a very, very happy 
birthday.
    Senator Burr. I will correct you on that. You're right 
about the birthday. You're not right about the oldest.
    Chairman Warner. I know. I was hoping that somebody might 
self-correct that. But Richard, happy birthday.
    Again, welcome Ms. Corless, and welcome to your family. I 
had a chance to meet briefly Josh and Declan and your mom, 
Linda, and your brother, Chet. Congratulations on your 
nomination to be Assistant Secretary of the Treasury for 
Intelligence and Analysis.
    Welcome also, obviously, to John Cornyn, who's going to 
introduce you.
    You come to this position as a highly qualified and highly 
recommended nominee. You're currently the Intelligence 
Community Executive and National Intelligence Manager for 
Economic Security and Financial Intelligence at the office of 
the DNI. It's clearly a position of direct relevance to the 
position you're about to be nominated for and hopefully will be 
confirmed for. My understanding is that you currently have the 
IC's activities and assessments relating to economic security, 
energy security, export controls, investment security, 
sanctions, the supply chain, telecom, threat, finance and 
trade, including engagements with interagency process and our 
foreign partners.
    So we'll probably ask you on each of those subjects today. 
You obviously have come highly recommended by your former boss, 
DNI Jim Clapper. I understand Dan Coats and former HPSCI 
Chairman Mike Rogers, as well. And obviously, John Cornyn 
doesn't introduce or recommend that many folks, so that's a 
very, very good sign as well. The fact is, that kind of broad 
bipartisan support is absolutely what we need in the 
Intelligence Community. Nonpartisan professionalism throughout 
the community. The office that you hopefully will be coming to, 
the Office of Intelligence and Analysis, is really, really 
important. I know you're going to be over at Treasury. When we 
get to our questions, I'd like to hear your thoughts on the 
importance of financial intelligence to the IC, and what 
capabilities Treasury's OIA brings to the table, especially as 
we enter a period of strategic competition with countries like 
China and Russia.
    I have not mentioned this to Senator Rubio yet, but Senator 
Cornyn and I, most or all of us on this Committee, are 
obviously very supportive of the CHIPS Bill and trying to make 
sure that we protect our semiconductor industry.
    I'm reading today from DIA, there was some information 
about a potential American company that is perhaps being 
acquired by China. This is exactly the thing we need to 
prevent. And I don't know whether I can, I'm not sure where 
that kind of responsibility fits in the overall framework. 
Senator Cornyn, Senator Feinstein did a good job on CFIUS 
Reform a few years back. But this is still an area that we 
need, I think, a lot more work on. This whole movement around 
financial intelligence--follow the money--was obviously a 
critical component of our fight against terrorism extremism. I 
think we're going to have to follow the money in the same way, 
particularly as we see the emerging challenges that China and 
particularly the Communist Party of China is putting forward. I 
think we also are interested in some of the effects of the 
digital Yuan, how that plays into the whole power balance. 
Also, how we deal with Russia from their cyber activities to 
their use of proxies. And again, the follow the money 
component, I think, is terribly important.
    So I thank you for being willing to serve. And a big thank 
you to all the women and men who served under your leadership 
in your current position. The Vice Chairman will now make a 
statement, followed by Senator Cornyn. And then, Ms. Corless, 
you will be sworn in and invited to give your introductory 
statement. After this, the Members' questions will be in five 
minute rounds.
    I now recognize the Vice Chairman.

  OPENING STATEMENT OF HON. MARCO RUBIO, A U.S. SENATOR FROM 
                            FLORIDA

    Vice Chairman Rubio. Thank you, Mr. Chairman. And thank 
you, Ms. Corless, for being here, for your willingness to serve 
in this capacity, for your years of service. You have two 
decades of service in the Intelligence Community and extensive 
experience in financial intelligence. And this is a department, 
in the Treasury Department, that is a really critical member of 
the Intelligence Community. It has a really important mandate. 
I think one that's become even more important in the last few 
years. Obviously, within the context of those challenges, I 
think none is greater at this point, that's widely 
acknowledged, than that posed by the Chinese Communist Party. 
They have a holistic, comprehensive, long-term, and committed 
plan that they're using both licit and illicit means to 
dominate particularly global emerging technologies to displace 
the United States, and, ultimately, to reshape the rules based 
on international order to its benefit. They used to hide that 
ambition. They hide it a lot less these days. And it certainly 
puts a tremendous amount of pressure on us. So I appreciate 
your long standing work on CFIUS.
    I would be interested to hear a little bit today about how 
you'll support efforts to identify and ensure U.S. companies 
are not providing--not just being acquired--but providing data, 
capital technology, know-how to Chinese state-owned companies 
and state controlled, so called private companies that advance 
the goals of the Communist Party, as I described earlier. 
Through the things like joint venture, venture capital, private 
equity, and other vehicles, which make the tracking of some of 
these things harder than ever before. I know it's not your 
doing or in your department, but once again today for the 
second time at hearing, I expressed the concern I have with the 
Administration's recent decision to remove the FARC from the 
Foreign Terrorist Organization lists. I'm just deeply concerned 
that it's going to contribute to a quick unraveling of decades 
of progress in Colombia and actually goes against the wishes of 
our democratic partners in Colombia, a very stable ally, who we 
worked very closely with throughout all these years. Without, I 
think, the expectation of this Committee in a role, like the 
one you will play, is that you will provide the support needed 
to better inform policy decisions such as these and others, and 
that it not be driven by political agendas. From all I have 
seen and read so far, there's no reason to expect that you 
won't meet that standard.
    And so, we're grateful for your willingness to continue to 
serve, and we look forward to your testimony.
    Thank you.
    Chairman Warner. Thank you, Senator Rubio.
    I now recognize Senator Cornyn for a formal introduction.

  OPENING STATEMENT OF HON. JOHN CORNYN, A U.S. SENATOR FROM 
                             TEXAS

    Senator Cornyn. Well, thank you, Mr. Chairman and Vice 
Chairman Rubio. Thank you for holding this hearing to consider 
the nomination of Shannon Corless to serve as Assistant 
Secretary for Intelligence and Analysis at the Department of 
Treasury. She's accompanied by her husband and son and her mom 
and her brother, and we welcome all of you here today.
    I appreciate the opportunity to introduce her to you 
briefly. I had a chance to work with Ms. Corless a few years 
ago when we were working on reforms to the Committee on Foreign 
Investment in the United States, which we all know as CFIUS. 
There was a clear need to modernize the CFIUS process to 
prevent predatory investments by adversaries like China and 
Russia from impacting our national security.
    To close that security gap, Senator Feinstein and I 
introduced the Foreign Investment Risk Review Modernization 
Act, now known as FIRRMA, and we looked to Ms. Corless for her 
expert non-partisan advice. Her tireless work as an 
intelligence professional was integral to ensuring that we got 
this legislation right. She provided expertise, advice, and 
experience to a process that ultimately saw FIRRMA signed into 
law.
    But her interaction with that legislation did not end 
there. In her capacity at the Office of the Director of 
National Intelligence, Shannon has adeptly overseen the 
expansion of capabilities within the Intelligence Community to 
comply with the requirements to support the updated CFIUS 
regime. I'm proud of the process we all made together, since 
FIRRMA became law, and I imagined Ms. Corless is as well. She 
should be. But we all know that the threat from our foreign 
adversaries has not all of a sudden evaporated. Our adversaries 
continue searching for ways to undermine the United States and 
threaten our position as the preeminent global power.
    That's exactly why we need intelligence professionals like 
Ms. Corless in key positions. In a meeting in my office 
yesterday, Ms. Corless and I had the opportunity to discuss the 
importance of export controls and outbound investment reviews, 
something along the lines that Senator Casey and I have been 
advocating for, as a way to round out what we began with CFIUS 
reform. And we look forward to asking you a few questions about 
that topic.
    The Assistant Secretary for Intelligence and Analysis, the 
Department of Treasury plays a vital role in ensuring our 
continued economic security. At a time when our adversaries are 
testing American power all around the world, we cannot ignore 
the economic component of our national security. Ms. Corless' 
passion for national security, her work at the ODNI and her 
nearly 20 years of experience in the Intelligence Community, in 
my opinion, make her an ideal candidate for this position.
    I have confidence that if confirmed, she'll continue to 
serve our country with honor and integrity and act in the best 
interest of our national security. Our country is fortunate to 
have leaders willing to answer the call to preserve American 
strength and to serve our country despite the hard work, long 
hours, and thankless expectations that often accompany such 
service.
    Finally, I would be remiss if I didn't mention in my 
comments that while Shannon is a native of Florida, she did 
live in Dallas, Texas, for a few years as a child, and that 
makes her a fellow Texan in my eyes--or at least an honorary 
Texan.
    I'm honored to introduce her to the Committee today.
    Thank you very much, Mr. Chairman.
    Chairman Warner. Thank you, Senator Cornyn. I now ask 
unanimous consent that the many letters of support for the 
nominees received by the Committee be entered into the record 
without objection.
    [Letters of support for the Nominee follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]   
        
    Chairman Warner. With that we'll proceed to the 
administering of the oath.
    So, will the witness please stand and raise her right hand?
    Do you solemnly swear to give this Committee the truth, the 
full truth and nothing but the truth, so help you God?
    Ms. Corless. I do.
    Chairman Warner. Please be seated.
    Before we move to your opening statement, I'll now ask you 
to answer the five standard questions that the Committee poses 
to each nominee who appears before us. They require a simple 
yes or no as an answer for the record.
    First, do you agree to appear before the Committee here or 
in other venues when invited?
    Ms. Corless. I agree.
    Chairman Warner. If confirmed, do you agree to send 
officials from your office to appear before the Committee and 
designated staff when invited?
    Ms. Corless. Yes.
    Chairman Warner. Do you agree to provide documents or other 
materials requested by the Committee in order for it to carry 
out its oversight and legislative responsibilities?
    Ms. Corless. Yes.
    Chairman Warner. Will you ensure that your office and your 
staff provide such material to the Committee when requested?
    Ms. Corless. Yes.
    Chairman Warner. Do you agree to inform and fully brief to 
the fullest extent possible, all members of the Committee on 
intelligence activities, covert activity, and covert actions 
rather than only the Chairman and the Vice Chairman?
    Ms. Corless. Yes.
    Chairman Warner. Thank you very much, and we will now 
proceed to your opening statement.


STATEMENT OF SHANNON CORLESS, NOMINEE TO BE ASSISTANT SECRETARY 
 FOR INTELLIGENCE AND ANALYSIS, U.S. DEPARTMENT OF THE TREASURY

    Ms. Corless. Chairman, Vice Chairman and distinguished 
members of the Committee, it is truly an honor to sit before 
you today as you consider my nomination for the role of 
Assistant Secretary for Intelligence and Analysis at the U.S. 
Department of the Treasury.
    I am deeply grateful to President Biden, Vice President 
Harris, Secretary Yellen, and Deputy Secretary Adeyemo for 
their confidence in me, and also to the Director of National 
Intelligence Avril Haines for her support and encouragement in 
my decision to accept this nomination.
    I want to take a moment to recognize several important 
individuals in my life, without whom today would not have been 
possible. First and foremost, my husband Josh; he is the love 
of my life, my best friend, and the most amazing father to our 
two children, Declan and Margo.
    I would also like to recognize my mother and father Linda 
and Bill Ratliff and my brother Chet. Our parents were the 
ultimate role models. They instilled in us from a young age a 
sense of confidence that we are capable of achieving our goals 
and realizing our dreams. My father passed away nearly 10 years 
ago, and while it saddens me enormously that he's not around to 
savor this moment, I know that he is with me every step of the 
way.
    I would also like to recognize my in-laws, Joseph and 
Sylvia Corless, who have truly become like a second set of 
parents to me. And finally, I would like to recognize my late 
grandmother, Virginia Moser Horgan, who passed away on 
Christmas night of 2020 from complications related to COVID. 
There are so many more people, family, friends and colleagues 
to whom I owe a debt of gratitude for their love and support.
    My interest in service to country came at an early age. I 
grew up in Tampa, Florida, near MacDill Air Force Base. I 
vividly recall watching my father, a television anchor at WFLA 
TV in Tampa, report daily on Operation Desert Storm. The 
conflict and my father's role in reporting it led to many 
conversations at home about the history of service in my 
family. This included my great grandfather's service in World 
War I, both grandfathers' service in World War II and the 
Korean War respectively, and my great uncle, Colonel Robert 
Montel, who spent over 30 years in the Army. My uncle served in 
a variety of special forces roles and posts throughout his 
career, including as commander of the 5th Special Forces Group. 
He was my inspiration to pursue a career in national security. 
And he readily indulged and encouraged my growing interest as a 
child and young adult.
    This passion for national security led me first to work 
with the Office of Naval Intelligence and then at the Office of 
the Director of National Intelligence, where I have overseen 
the provision of broad intelligence for support to Treasury, 
including with respect to Treasury's role as Chair of the 
Committee on Foreign Investment in the United States. I am 
currently responsible for leading the Intelligence Community's 
economic security and financial intelligence mission. In short, 
my team is responsible for ensuring that the IC is postured to 
support policy customers on issues such as CFIUS reviews, 
export controls, telecommunications, sanctions implementation, 
and the rise of digital assets, among many others.
    The position I am being considered for today, the Assistant 
Secretary for the Department of the Treasury Office of 
Intelligence and Analysis, or OIA, is perhaps one of the most 
unique roles in the IC. The Department of the Treasury is the 
only finance ministry in the world to have its own intelligence 
component. Though OIA may have been born out of 9/11 and 
designed to play a key role in the U.S. government's 
counterterrorism efforts, it is increasingly pivotal to our 
government's efforts to compete with China and assure U.S. 
economic security and that of our allies. Leading an 
organization with such a unique and critical responsibility is 
an opportunity I am eager to take on. And one I feel I am 
prepared to lead, drawing upon my decades of service to the IC 
and leadership in the IC.
    If confirmed to the role of Assistant Secretary, I will 
strive to ensure that OIA has the human capital and technology 
resources it needs to successfully execute its mission. 
Intelligence integration has been a central pillar and guiding 
principle of my career at ODNI. If confirmed, I intend to 
leverage that experience and ensure that OIA continues to lead 
when appropriate, and partners with IC colleagues always. My 
entire career has been in the IC, where I am privileged to work 
with extraordinarily committed and talented colleagues. I never 
imagined I would have the opportunity to be considered for this 
role, but I am deeply honored to be nominated and I look 
forward to your questions.
    Thank you.
    [The prepared statement of the Nominee follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
    
    
    Chairman Warner. Thank you, Ms. Corless. And for planning 
purposes, if any members of the Committee wish to submit 
questions for the record, after today's hearing, please do so 
by 5 p.m. this Thursday, December 2nd.
    And as usual, we recognize members for five minutes each in 
order of seniority at the gavel, followed by order of arrival.
    Because we actually got a larger turnout than I 
anticipated, I'm only going to ask you one question and make 
sure all my colleagues get in, if there's something they don't 
get to them, I'll get you on a second round.
    How do we, from your vantage point right now at ODNI, we're 
supposed to see some of these efforts to collaborate these 
economic financial challenges and threats we face. How do we 
make sure we stay up with what China's doing?
    I want to cite this case, where they're potentially buying 
into a cutting-edge semiconductor entity here in the United 
States and seems like everything we've done that should have 
been red flashing lights. How do we make sure that we don't 
have gaps in obtaining this information? That we have the right 
tools in place to follow it?
    I know from a written standpoint where Treasury OIA fits 
in, but how do you see your role fitting in with having this 
role of coordination at ODNI? And what do we need to do to 
improve the product?
    Ms. Corless. Sure, Senator, thank you very much for that 
question. Thank you again for the opportunity to meet with you 
the other day.
    So I think I would offer a couple of points to your 
question. First, OIA's responsibility within the Department of 
the Treasury is to identify, deter, and help enable disruption 
of threats to the U.S. financial system. And I think that would 
come in a variety of different ways that would certainly come 
through potential cyberattacks to financial system, but it also 
comes through efforts to acquire intellectual property, to 
invest in as U.S. companies gain access to technological 
capabilities.
    So I think the role and responsibility of OIA in this 
regard is to ensure that it is providing strategic analysis to 
Secretary Yellen, and to other senior leadership within the 
government, so that they understand how we see that China is 
trying to adjust to our efforts to stop their access to 
technology, through efforts like CFIUS reform. Something that I 
think we all well know is that China is a learning adversary 
and while we make great strides to reform how we are reviewing 
the foreign investments in the U.S., we should expect that they 
will try to continue to get around those.
    So certainly making sure that we have our collection and 
analysis. Our collection and priorities in place that they are 
in alignment with what we understand to be the priorities of 
the administration.
    But also critical to that is our partnerships with our 
foreign partners and our private sector partners. Without those 
partnerships, and without understanding what private sector 
sees as trends in industry, it'll be hard for us to necessarily 
get ahead of the problem.
    Chairman Warner. Well, thank you, I would simply say I was 
out at ODNI recently, and on the subject of China's economic 
efforts and kind of ask a basic question about which American 
venture funds are investing in which of these Chinese tech 
companies and these good analysts, but they almost felt like 
they were constrained from looking at American enterprise. I 
mean, this was a question that at a big Wall Street firm, you'd 
have a first year analyst to get an answer in a matter of 
hours, if not, days. So I do hope with your background coming 
into this role, this is an area we're going to need to beef up 
our skills and our playing sense.
    And, again, your question about making sure we partner 
with, or your comment making sure we partner with the private 
sector, is very critical.
    Vice Chairman.
    Vice Chairman Rubio. Thank you, again for being here. Look, 
it's my belief that the Communist Party of China isn't simply a 
competitor of the United States, but they're engaged in a zero-
sum game that they seek to grow at our expense, and ultimately 
to displace us as the world's most powerful and influential 
nation in every realm.
    Do you agree with that assessment? Do you share that same 
view?
    Ms. Corless. Sure. Senator Rubio, I see China as perhaps 
our greatest strategic competitor. We know that they go after 
U.S. critical technologies using a whole of government, in a 
comprehensive approach we know they use the traditional methods 
such as espionage. We also know that they work with academia. 
They leverage the seams in our system, whether it would be 
CFIUS reviews or export control. They take advantage of those. 
So I absolutely agree that we are facing a significant 
challenge with China.
    Vice Chairman Rubio. Yes. I get that they're a challenge. 
And they're not our only global competitor. I guess the 
question really is, are they engaged in a zero-sum game in your 
view? You don't have to agree with my view, I'm just wondering, 
do you agree that they seek to displace us to become the 
world's most powerful country as opposed to simply being a 
competitor that wants to reach parity?
    Ms. Corless. Senator, that is a very good question. It's a 
complex one. And I do think that there is a great reason for 
concern that they do have an aim of displacing U.S. economic 
superiority. And I think for that reason, it's all the more 
important that OIA, makes sure that it provides the best 
strategic analysis that it can to the Secretary. If confirmed, 
I will ensure that OIA will do so.
    Vice Chairman Rubio. So is there anything in the time that 
you've been working in that position--you can't divulge it 
obviously in this setting--that leads you to be more cautious 
about the assessment than I've been? I mean, I've made a pretty 
straightforward pronouncement. And that is China is involved in 
a zero-sum game in which they believe either they win or we 
win, but we can't both benefit.
    Is there anything that you've seen or come across, that 
gives you some pause and reaching the same conclusion in such 
terms?
    Ms. Corless. Senator, thank you very much for that 
question. I think that is probably one that is better reserved 
for a classified conversation, and I would be more than happy 
to come back and talk to you and your staff about that 
question.
    Vice Chairman Rubio. Okay, so putting aside anything in 
your work, I just want to be fundamentally clear: what I just 
said about the zero-sum game, you obviously acknowledge that 
that's a concern, and you acknowledge that they are a 
significant, powerful competitor. But you're not able to say, 
as I have said, that they're involved in a zero-sum game, at 
least not in this setting?
    Ms. Corless. So, Senator, yes, I think I would agree with 
everything that you've just said. We absolutely see them as 
perhaps our greatest strategic competitor. And they are, at 
least sitting in within my role right now, they are the 
priority of the ODNI and of the Intelligence Community in terms 
of how we are placing our resources and trying to get at the 
challenge.
    Vice Chairman Rubio. Alright, let me ask you, related to 
that question: the Chinese laws require companies to turn over 
information to the Chinese State and the CCP, clearly blurring 
the military and civilian sector through this military/civil 
fusion strategy.
    Given that, is there any meaningful distinction, for 
example, at this point between Chinese state-owned entities and 
what they claim to be private companies, given the reach--in 
essence, no matter how private you think you are, under Chinese 
law, if the Communist Party tells you, we need your data, we 
want your information, you have to do this, they have to do it, 
or they don't exist as a company anymore.
    At this point, is there any real distinction when it comes 
to the purpose of reviewing investments and things of that 
nature?
    Ms. Corless. Senator, if I understand your question 
correctly, are you asking if there is truly a distinction 
between the state-owned enterprises and a company that may put 
itself out as a private Chinese company?
    Vice Chairman Rubio. Correct.
    Ms. Corless. I think that while there may be some validity 
to making that distinction, I think what we ultimately have to 
realize is that the Chinese government has a number of levers 
over companies that may put themselves out as being private, 
and there are requirements for them to go back to seek certain 
approvals from the government in order to seek outbound 
investments in the United States or in countries like our 
allies in Europe.
    And so I think whether--I almost wondered the extent 
sometimes whether it's a distinction without a difference, 
because of the nature of the Chinese laws, as you pointed out.
    Vice Chairman Rubio. Okay, thank you.
    Chairman Warner. Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman. Good to see you, 
Ms. Corless, and I certainly know you've gotten positive 
reviews for your work.
    I'm going to start with a question we told you then I would 
ask you about under the Terrorist Finance Tracking Program. The 
Treasury Department obtains information on financial 
transactions from the Swift Company, which is used by thousands 
of financial institutions to move money around the world. The 
program has been controversial, because the Treasury Department 
just scoops up the data, meaning it gets information on the 
personal financial transactions of countless innocent people.
    More than a year ago, the independent Privacy and Civil 
Liberties Board reviewed the program, and urged the Treasury do 
more to protect the privacy of individual Americans, as we 
indicated before the hearing. What's been done?
    Ms. Corless. I'm sorry, Senator, could you repeat the last 
part of your question?
    Senator Wyden. We said that we would be asking, given the 
recommendation from the board more than a year ago, that more 
had to be done to protect the privacy of individual Americans. 
What's been done?
    Ms. Corless. So, Senator, thank you for the question. I am 
familiar with the Terrorist Finance Tracking Program. But it is 
one that I would need to be briefed on, if confirmed, upon 
arrival with the Treasury, to better understand how it is used 
and what OIA's role is in it.
    That being said--and certainly how I would be implementing 
any of the board's recommendations--I do want to ensure, I 
would ensure, that OIA, if I'm confirmed for this role, abides 
by both the spirit and the intent of the ODNI's processes and 
procedures with respect to handling U.S. persons' information, 
and ensuring protection of civil liberties.
    Senator Wyden. Why don't I let you put that in writing? 
Because I did tell you that I was going to ask the question.
    Second question is about following the money. Over the 
years, the previous Presidents spent decades developing and 
maintaining and relying on financial relationships with Russia. 
Other administration officials had compromising links to other 
countries such as Turkey. And I'm very concerned about foreign 
adversaries exploiting financial entanglements to undermine our 
democracy. Are you?
    Ms. Corless. Senator, yes, I absolutely am concerned about 
that. And I think, understanding how money moves, it gives us 
insight into the nature of the relationships and how these 
adversaries might be trying to circumvent U.S. laws, to 
circumvent our sanctions process. If confirmed, that is 
absolutely something that I would ensure that OIA continues to 
do because it is core to their mission.
    While OIA was born out of 9/11 and focused on countering 
terrorism threats, we see considerable applicability of that 
same approach to understanding how China and Russia and other 
adversaries such as Iran and North Korea are trying to use that 
approach.
    Senator Wyden. Let's be very specific then. I appreciate 
your answer. As chairman of the Senate Finance Committee--and I 
should note that I believe there are six members of the 
Committee in the room now--so there is a real connection 
between the Finance Committee, Treasury, and Intelligence and 
as chairman of the Committee, I've long been concerned about 
the ways in which government investigators are prevented from 
following the money. Specifically, large private investment 
funds are a $10 trillion global industry, yet are exempt from 
most due diligence and disclosure rules that other investment 
vehicles are subject to.
    If you're confirmed, will you examine whether private 
offshore investment funds like hedge funds and private equity 
firms are being used to launder money at scale and potentially 
evade sanctions or finance terrorism?
    Ms. Corless. Senator Wyden, thank you for your question. If 
confirmed, I will ensure that OIA will continue to look at a 
variety of mechanisms which are used for money laundering, 
whether it be through mechanisms, such as what you just 
mentioned, whether it may be through the use of 
cryptocurrencies or other tools.
    Senator Wyden. I'd like a written answer to that question 
as well, Ms. Corless. These are hugely consequential issues. 
Ten trillion, a global industry to a great extent exempt from 
due diligence and disclosure rules that other investment 
vehicles are subject to. I want to know whether you're going to 
examine those.
    So I've asked you two questions. As I say, I've heard only 
positive things about you. I'd like those in writing and under 
the rules that comes in through the Chair and the Vice Chair. 
So I'll look forward to that. Thank you.
    Thank you, Mr. Chairman.
    Chairman Warner. I would echo this issue of investment 
firms. I think is something that literally only fairly recently 
I have become aware of. You talk about terrorism. You also talk 
about all the challenges we've--we've tried to deal with 
challenging, for example China. That's all opaque as well.
    Senator Burr.
    Senator Burr. Thank you, Mr. Chairman. Shannon, welcome. 
Our paths have had the opportunity to cross a number of times 
over the years. I don't have questions for you, I just have a 
few comments.
    One, it's refreshing to see somebody as qualified nominated 
for a spot in the intelligence community and I will say that 
this administration has held a high standard for anybody within 
the intel community and you're at the top of that list.
    You talk about I&A being created out of 9/11. I can still 
remember when the office stood up and we had these young, smart 
guys with computers downstairs in the basement, probably the 
worst office in the building, and it didn't take them long 
before they tracked down exactly how terrorist financing was 
happening. And they began to shut it down, even in the most 
rudimentary way.
    My observation on that is we can do much more than just 
track terrorism dollars down there. I would hope that when you 
got there you would look at an expanded horizon as to how that 
asset can be used. And I'm sure it's there, probably in a 
different office. Probably they're a little older now, probably 
the technology they use is a little bit better, but I think it 
is a strong force multiplier for us in a lot of the things that 
we're concerned with.
    Second, Treasury is the loudest voice in the room for 
CFIUS, but it seems that entities like the State Department 
bring more assets to tip the scales when the vote happens and 
how the votes line up. I just want to encourage you to make 
sure that not only is Treasury a loud voice, they're the 
loudest voice in the room.
    What the Chairman and the Vice Chairman have expressed 
about China concerns all of us on this Committee. It should 
concern every American, but we've reached out and read 
companies and academia into the China threat, and it by no 
means is overwhelming when they walk away that they understand 
just how big a threat this is. You'll see it, you'll know it, 
you'll have the factual information. Make sure that the voice 
at Treasury is the loudest voice that goes in the room on some 
of the CFIUS decisions.
    The last thing I want to say is you're probably the only 
one in an intel role that fits into an agency that's not an 
intelligence agency with the possible exception of the State 
Department. We have high expectations about this intelligence 
component at the Treasury and it's much different than the 
intelligence component at the State Department because your 
information goes to a much broader array of the intelligence 
community. They don't have the insight that you're going to 
have from your technical folks, from your analytic team. So it 
is valuable that you make sure that that is properly broadcast 
throughout the intelligence community to influence what 
analysts are writing, but more importantly so the products that 
we get on the Hill, as policymakers, we make the best decisions 
that we possibly can. So you really are in a pivotal, pivotal 
role where you're going.
    I wish you tremendous success. I have high expectations of 
you. I know you're going to make us proud and you already have 
made your parents proud. Thank you for doing this.
    Chairman Warner. Senator Casey.
    Senator Casey. Mr. Chairman, thanks very much.
    Ms. Corless, we're grateful for your willingness to serve 
again, especially at this time. I wanted to raise some 
questions with you, some of which we had a chance to talk about 
recently, I guess just last week, about this question of 
outbound investment and the review of that investment. We've 
seen over the last couple of years how the Chinese government 
has really politicized--I think that's an understatement--both 
U.S. supply chain security as well as so many other issues 
relating to this concern that I have and many have about 
outbound investment. We know that CFIUS and the export control 
regime have not been designed to address the gaps in knowledge 
that we face and how this outbound U.S. investment to China and 
other non-market economies are in fact badly compromising U.S. 
supply chain and our national security.
    The good news is this recognition that many of us have 
identified, or this concern, I should say, that many of us have 
recognized has gotten the attention of both branches of 
government and some other entities as well. National Security 
Advisor Jake Sullivan noted in July, and I'm quoting, ``That 
the White House is looking at the impact of outbound U.S. 
investment flows that could circumvent the spirit of export 
controls and otherwise enhance the technological capacity of 
our competitors in a way that harm--in ways that harms our 
national security,'' unquote.
    The U.S.-China Economic and Security Review Commission 
published a series of recommendations--32 of them. Number 13 
says, and I quote, Congress should consider, quote, 
``legislation to create the authority to screen the offshoring 
of critical supply chains and production capabilities to the 
PRC to protect U.S. national and economic security 
interests''--and it goes on from there. As Senator Cornyn made 
reference to in his opening statements here today, in his 
introduction of you, we've teamed up to a really bipartisan 
bill, beyond just the two of us, to introduce the National 
Critical Capabilities Defense Act which would establish the 
mechanism we're talking about.
    So first question is to what extent are both industrial and 
supply chain intelligence--or to what extent are they an 
element of financial intelligence?
    Ms. Corless. Senator, thank you for that question. I think 
you could easily argue that they are an element of financial 
intelligence because it is about trying to understand how our 
adversaries are trying to disrupt our financial infrastructure. 
And so to the extent that we're talking about industrial 
policies or efforts that they may have underway to take 
advantage of vulnerabilities in our supply chains, 
vulnerabilities in our infrastructure, you could easily make a 
connection between the two.
    Senator Casey. And the second question, I guess my last, 
would be what gaps do we have in understanding how Chinese 
state-owned enterprises weaponize either investment or 
weaponize the outflow of capital, or even joint ventures, to 
the detriment of, and against the interests of the United 
States?
    Ms. Corless. Senator, thank you for that question. I think 
in part that question is one that's easier to discuss in more 
detail in a classified setting, but I think it's very clear 
when China shares with us its five-year plans, they share what 
exactly they are intending to invest in, and that is certainly 
something that we can use to help us better understand where we 
need to focus our efforts to countering the challenges that 
they present to us.
    But yes, I'd be more than happy to answer those more in 
depth in a classified setting.
    Senator Casey. Well, I appreciate that and I thank you for 
the answers to the questions. We'll have more time to discuss 
them in a different setting as well, but we're grateful not 
only for your public service but that of your family by 
extension. So thanks very much.
    Thanks, Mr. Chairman.
    Chairman Warner. Senator Cornyn?
    Senator Cornyn. Ms. Corless, thank you. Senator Casey's 
asked most of my questions--how we can fill the gaps left by 
CFIUS reform on the export side, export controls, and the like. 
But recently colleagues and I went to Taipei to Taiwan 
Semiconductor where they use Dutch lithography machinery, which 
is enormously expensive and sophisticated machinery, to build 
the most advanced microchips in Taiwan.
    But I know at different times the People's Republic of 
China and the CCP have attempted to purchase that kind of 
machinery, and that that there's been discussions about whether 
they should be able to gain access to that. But in the absence 
of formal or legal controls on the sale and export of machines 
made in other countries, what tools, if any, are available to 
the U.S. Government to try to deter the sale of some of this 
advanced equipment that would allow China, conceivably at some 
point, to catch up with the rest of the world?
    Ms. Corless. Senator Cornyn, thank you for that question 
and thanks again for the opportunity to meet yesterday in 
advance of this hearing and for your kind remarks in your 
introduction of me.
    Perhaps it's less appropriate for me to talk about tools 
available to the U.S. Government and more appropriate for me to 
speak to the need for the IC and for OIA in particular to make 
sure that we are providing--that we have our collection 
priorities align such that they can ensure that we get better 
insight into what China's gaps are, what their capability gaps 
are, what gaps they're trying to close.
    And then similarly, to ensure that OIA, in concert with 
other IC colleagues, is producing strategic analysis that 
informs any policies that Secretary Yellen or others in the 
government might take on to try and counter this challenge. I 
think I would also add here that this is another example of 
making sure that we have really strong and robust relationships 
with our foreign partners because to the extent that we may not 
have tools that we can use to counter this challenge, they may 
very well. Or it could be that it's an issue that falls out of 
our jurisdiction, in which case partnerships that we have with 
some of our European allies, I think--and our allies such as 
Japan and India and Australia--are increasingly important.
    Chairman Warner. Senator Gillibrand.
    Senator Gillibrand. Thank you, Mr. Chairman.
    Thank you, Ms. Corless. I appreciate your dedication to 
serving in this capacity and I want to echo the remarks of 
Senator Burr. I thought his statements were exactly on point. 
In your responses to questions sent by the Committee, you 
listed, quote, ``Ensuring that OIA is effectively utilizing 
human resources to enhance the financial intelligence expertise 
of OIA's workforce,'' as your first priority.
    Given that OIA was largely born of the post-9/11 work on 
investigating terrorism financing, do you feel confident that 
the current workforce has the necessary skills and training to 
meet the challenge posed to our Nation by China?
    And what skills and capabilities can you identify as 
necessary to ensuring OIA is able to protect and increase its 
competitive advantages against China and Russia?
    Furthermore, if confirmed, what steps will you take to 
ensure that you're hiring, training, and retaining the 
necessary talent at OAI to counter the threat posed to the 
United States by China? And what lessons have you learned from 
your time at ODNI that will inform your approach to ensuring 
your workforce is able to meet the strategic challenges posed 
by China?
    Ms. Corless. Senator Gillibrand, thank you very much for 
that question. I appreciate it. While I'm obviously not in the 
position of assistant secretary yet within OIA, my current 
position has given me a decent amount of insight into the 
unique nature of the mission as well as the broad skill set 
that is required to support the efforts with respect to 
following the money; for example, economics, global financial 
infrastructure, virtual currencies, and the like. That's an 
example of the broad set of expertise that OIA has and needs to 
continue to build out.
    Unfortunately, as you all probably well know, these are 
very similar skill sets that the private sector highly values 
and so we need to make sure that we are doing what we can to 
recruit folks with this expertise--and that we are training 
them appropriately, as well. These are folks that we often lose 
to Wall Street, to the tech firms, and the like.
    So I think it's important that we understand what our 
baseline competencies are that we need. I think we need to make 
sure that we take advantage of a variety of U.S. Government 
tools that exist to recruit highly qualified experts and I know 
that there is a provision in the upcoming Intel Authorization 
Act which essentially is a pilot program of sorts to bring 
individuals like this in and to compensate them accordingly.
    If confirmed, I look forward to working with the Committee 
and across the Department to see that pilot program through.
    Senator Gillibrand. So one of the ideas that is in the NDAA 
for this Committee is a Cyber Academy to do exactly that, to 
train a whole set of young recruits like the service academies 
to work in civilian capacities in the Federal Government like 
at Treasury, like for you in the intel community, throughout 
the intel community including Department of Energy, including 
CIA and NSA, to do the type of work you're talking about. 
Because I would imagine you will also need skills in data 
protection, surveillance capitalism, cryptocurrency, 
blockchain; and people who have the expertise to be able to 
understand how those technologies are being used by China, by 
Russia, by adversaries to undermine national security, to 
undermine our economy, to undermine our financial services 
industry, to undermine our entire financial underpinnings.
    So to the extent recruitment and retention of the brightest 
and best workforce will be essential for your completion of 
your mission and duties, we hope that we can create this Cyber 
Academy, to create a curriculum and to create even an ROTC-type 
program and collaborate with existing universities to build 
that workforce for you. I hope that I can work with you on 
developing that curriculum and developing that pipeline of 
talent to staff some of your efforts.
    Ms. Corless. Senator, thank you for that. I am always in 
favor of new and innovative ways come at critical challenges 
like this, particularly with respect to recruitment of a next 
generation workforce for the intelligence community. And to the 
extent that we have opportunities to work together and with 
your staff to explore those, if confirmed, I would be honored 
to do so.
    Senator Gillibrand. Thank you. Thank you, Mr. Chairman.
    Chairman Warner. Senator Collins.
    Senator Collins. Thank you. Let me begin, Ms. Corless, by 
congratulating you for your nomination. I would join my 
colleagues in saying that you have an impressive background and 
that it should equip you well in your new position should you 
be confirmed--I know you always have to add that phrase--which 
I anticipate that you will be.
    I want to talk a bit about the fact that we are pivoting 
away from terrorism and terrorism financing in the focus on 
Russia and China. The collapse of Afghanistan amid the chaotic 
withdrawal by the administration has allowed the Taliban 
obviously to seize control of the country, but equally 
worrisome, it opens the possibility that once again Afghanistan 
will be a safe haven for terrorist groups intent on attacking 
us.
    What can be done to ensure that any humanitarian assistance 
that is sent to Afghanistan, whose people are in dire need, is 
not diverted to strengthen terrorist groups?
    Ms. Corless. Senator, thank you for that question and I 
think it's a valid one, what you highlighted at the outset, the 
pivot from counterterrorism to great power competition and the 
focus on China and Russia. Certainly the core mission of OIA is 
still going to remain through a pivot like this, identifying 
tracking and enabling the threats of disruption to the U.S. 
financial system; and certainly understanding, too, how much is 
moving to places where we may not want it to go.
    And so I think what I would offer as well, while OIA is 
making an effort to pivot toward great power competition, that 
capability still resides within OIA to follow the money, if you 
will, and also to work closely with interagency partners to 
understand where U.S. aid may be going, to understand what 
those targets might be so, that we can potentially inform and 
better direct, as a government, where that aid is going.
    Senator Collins. About a decade ago, when former Senator 
Joe Lieberman and I headed the Homeland Security Committee, I 
remember vividly testimony that we received from the Treasury 
Department in which the officials said that Saudi Arabia was 
the epicenter of terrorism financing. That was his phrase. As 
you look around the world today and as we see increasing 
threats which I believe will become even stronger with the 
collapse of Afghanistan, what country or countries would you 
describe as the epicenter of terrorism financing?
    Ms. Corless. Senator, I thank you very much for that 
question. What I think I would offer in this setting is that 
financial centers around the world are attractive to people 
engaged in illicit financial activity. It's crucial that OIA 
continues to partner with these financial centers to understand 
how the systems are being abused and to understand how money 
may be used to--furthering efforts with respect to terrorism-
related activity.
    So if confirmed, I pledge that I would continue to work 
with our Treasury policy counterparts to understand where 
illicit financial activity is occurring so that we can 
effectively engage with counterparts around the world.
    Senator Collins. Well, just quickly, a final question. 
Would Iran be on your list?
    Ms. Corless. Senator Collins, I think we are certainly 
concerned with Iran's malign influence behavior and their 
funding of Hezbollah. So yes, I think I would be concerned.
    Senator Collins. Thank you.
    Chairman Warner. Senator Blunt.
    Senator Blunt. Thank you, Chairman.
    Shannon, congratulations to you and your family. This 
hasn't been the toughest hearing anybody's ever had in this 
Committee--for good reason. I've watched your work. Dan Coats 
and others, in addition to Senator Cornyn, have stepped up to 
say great things about your work in the past.
    Following up on Senator Collins' question about diverted 
aid, there have been several stories recently about state-
sponsored groups that seem to do very well collecting U.S. 
unemployment during the pandemic and even terrorist groups 
that, you know, would suggest they were obviously people they 
weren't and start collecting those kinds of funds.
    How big a problem do you think that is and what can we do 
about it and what's the role of somebody in your job, working 
with the Department of Labor or wherever these checks are going 
from, to people who actually are in other countries? Though 
obviously they're not saying that when they apply for those 
moneys. And I've seen numbers adding up to billions of dollars 
maybe going to places that were just pure fraud and some of 
them were state-sponsored entities.
    Ms. Corless. Senator Blunt, thank you for that question. So 
I have heard what--much of what you have just shared. It is 
something that I probably would need to go back and get briefed 
on by colleagues to better understand the challenge and the--
the veracity of the concerns. So I'd be more than happy to come 
back and discuss in further detail with you and your staff.
    Senator Blunt. Well, I'd like you to do that and I think, 
you know, it's obvious people with access to computers and lots 
of great skills to suggest they're different people and they 
really can take advantage of particularly situations like we've 
been in for the last 18 months, where we're trying to get aid 
to people as quickly as we can who wouldn't have anticipated 
needing it, and what do we do to see that we're not using that 
to fund other activities that we don't want to fund.
    What would you say is the greatest outside threat to our 
financial system?
    Ms. Corless. Senator, thank you for that question. I think 
without a doubt we are greatly concerned about the cyber 
threats posed by China and Russia to the U.S. financial system 
and their efforts and intents to take advantage of the 
vulnerabilities both with our financial system but also with 
respect to our critical infrastructure. We may not talk about 
it as much and as at length as we do with China and Russia, but 
I think we also would share that we had the same concerns with 
Iran and North Korea as well, too.
    If confirmed for this position, I would ensure that OIA 
continues to stay on top of that issue and produce a strategic 
analysis that examines those issues in detail and ensures that 
the Secretary and other senior leaders within the government 
are informed to take actions that they feel are necessary to 
protect our infrastructure.
    Senator Blunt. Right. Cyber threat. And as I suggested in 
the other question, and as Senator Collins suggested in her 
question, is serious cybercrime, some state-sponsored, some 
terrorist-sponsored, some just sponsored by people who'd rather 
they had our money than we had our money in the United States. 
I think that could wind up taking a lot of the time of this job 
over the foreseeable future.
    Thank you, Chairman.
    Chairman Warner. Let me echo what Senator Blunt said. I'd 
be really curious. I mean, I saw those same stories, literally 
in the hundreds of millions, if not billions potentially, 
that--and the stories appeared and then I never saw--and maybe 
shame on all of us--that that was many, many months ago and I 
don't think we've ever gotten a readout on that ever.
    Senator Blunt. Yes. I saw some stories just this week and 
we had somebody in our office the other day talking about 
people in prison, also with lots of time and the access to 
computers, and they've just decided they're going to apply for 
unemployment on behalf of them or somebody they know who starts 
getting unemployment checks. But I think where Shannon's 
concerned, particularly the outside people that could use that 
and, you know, they spend their time, particularly terrorist 
groups, being totally deceptive and this is a source of revenue 
we don't want them to have.
    Chairman Warner. Absolutely. Well, Ms. Corless, my friend 
Senator Blunt said you've gotten through this hearing so far 
pretty well, but you're down to that last Senator who's always 
been a bit notorious about trying to raise the zinger 
questions.
    Senator Sasse. Failing nominees? Is that what I'm known 
for? Well, let's call the--.
    Chairman Warner. We're going to move to Senator Sasse.
    Senator Sasse.--let's call the Chairman of the Finance 
Committee instead, Mark.
    This question you're asking about, all of the fraud in the 
payments in the COVID response package three and four seems 
like great, important work for the Finance Committee to do as 
oversight. So when Chairman Wyden was here, he noted that six 
of the nine of us who were here at that point were on that 
committee. Maybe you and I could jointly stiff-arm him that we 
ought to actually have a Finance Committee hearing.
    Ms. Corless, congratulations on your nomination and 
congratulations to your family as well and getting to have, I 
guess, two-thirds of them with you today. In your response to 
your pre-hearing questions, you noted that malign actors cannot 
be permitted to utilize cryptocurrency, digital assets, or 
other electronic payment forms as a means of evading sanctions, 
financing terrorism, or violating other U.S. laws. Is China 
included in that list?
    Ms. Corless. If I understand your question correctly, 
Senator, you're asking if China is using cryptocurrency to 
circumvent the U.S. financial system?
    Senator Sasse. Yes.
    Ms. Corless. So I think this is again one probably I would 
like to discuss in more detail appropriately in a classified 
setting, but that said, I think we are generally concerned with 
the potential that criminal actors, non-State actors, and then 
certainly countries like China and Russia, would use 
cryptocurrencies as a manner to circumvent--and Iran and North 
Korea as well--to circumvent U.S. sanctions and other U.S. 
laws. Absolutely.
    Senator Sasse. Thank you. I think there are probably a lot 
of us on this Committee who would like to continue to learn 
from you on that topic in a classified setting. So then in our 
public setting, walk us and the American people through, more 
broadly, not the classified piece, but what does it mean that 
China is pursuing the digital yuan?
    What does it mean for them and what does it mean for us?
    Ms. Corless. Senator, thank you for that question. I think 
there are some legitimate concerns with respect to the digital 
yuan. It is a new technology and so I think I would caveat my 
forthcoming remarks by saying that technological innovation in 
and of itself is not a bad thing. It is impressed that the U.S. 
Government and the Federal Reserve is also exploring digital 
currency as well, too.
    So I think there's still a lot to be learned, but certainly 
with respect to China's efforts with the digital yuan, I think 
there is concern about the potential that it creates a new 
opportunity for surveillance, more collection of data of U.S. 
persons or people around the world, the extent to which it is 
adopted more beyond China's borders. So I think it's something 
that we need to pay extremely close attention to.
    I know that they are planning to use the Beijing Olympics 
as an opportunity to roll that out and it is something the 
community and certainly other colleagues across the policy 
interagency are watching very closely, as you all know.
    Senator Sasse. Yes. I appreciate the distinction you drew 
there because obviously the world has benefited, the U.S. has 
benefited, but the world has benefited that the dollar has 
remained the reserve currency of the world for the whole post-
World War II global order. It has been a positive-sum game that 
nations that allied with us, nations that believe in human 
rights, free trade, open navigation to seaways, transparent 
contracts, et cetera, have benefited. It has been a positive-
sum game, not a zero or a negative-sum game as the CCP wants, 
going back to Vice Chairman Rubio's questions.
    So there's all sorts of threat to the U.S. as the global 
reserve currency, but in addition, there's all this exported 
surveillance State powers that the CCP continues to offer to 
autocracies around the world that they can track. They could 
potentially track all payments denominated in that digital 
currency in real time, both their citizens and the citizens of 
other countries that governments are scared of and want to hold 
down.
    What do you think the role of OIA should be in preventing 
strategic surprise, not just for Treasury, but also for the 
Federal Reserve more broadly?
    Ms. Corless. Thank you very much for that question, 
Senator. I think to sort of sum up your points, I think we can 
easily say that the financial system is undergoing some 
substantial changes right now with the arrival of digital 
assets, to include cryptocurrencies and to include digital 
currencies as well. How the financial system evolves will 
affect the departments as a whole. It will affect their work 
across both licit economic and illicit finance portfolios.
    So if confirmed as the assistant secretary for OIA, I will 
ensure that OIA is tracking these developments very carefully 
through engagements with colleagues across the department, 
counterparts in the Federal Reserve, and others across the 
interagency to understand what's going on, make sure that the 
workforce is able to provide expert level advice to Secretary 
Yellen and others across the government.
    Senator Sasse. We're basically out of time for me, so I'll 
be brief on this one, but thinking of the office, not to which 
you've been nominated, but the one you're departing from, and 
the coordinating responsibilities of ODNI across CIA and other 
agencies in particular, do you think we have the right human 
capital right now to do that kind of high level of financial/
intel integration work?
    Ms. Corless. That's an excellent question. I think what I 
would say is that these are issues that elements of the IC have 
been studying for a long time. Generally speaking, they tend to 
be sort of smaller groups, I think, vis-a-vis the level of 
importance that is being placed on the issues today. So I think 
we have an opportunity here, thanks to the interest--the 
recognition of our senior IC leadership, and the importance of 
these issues with respect to countering China and Russia and 
other competitors, as well. They recognize the importance, they 
recognize the need to invest in human capital. And certainly 
we've had some good opportunities with the committee staff to 
look at opportunities to how we can better invest. So I think 
we are in a good place. However, we have a ways to go, 
particularly given the complexity of the issues which we are 
facing today.
    Senator Sasse. Thanks for being frank.
    Chairman Warner. Very good job. I want to follow-up on two 
things that Senator Sasse said, then I've got just a learning 
question on my part.
    One, I do think your--Senator Sasse's last comment--we've 
got a lot of bright people in the intel community, but the kind 
of basic financial knowledge that you get in the first couple 
years at a McKinsey or at a Goldman or I think back to some of 
my      times--. Very smart folks on trying to sort through 
Chinese tech firms. And again, I think we need to always make 
clear our beef is with the Communist Party of China, not the 
Chinese people. The CCP manipulating these tech firms. There 
was an enormous lack of knowledge of that--again, a first-year 
or second-year associate in investment firms would know how to 
get that information--and I don't know whether part of that is 
because there's a reluctance to look at American assets that 
comes from the intelligence side. But where that fits? And is 
that going to be your job if we're going to ask, all right, how 
many of the American private equity firms that candidly have 
refused to take a classified briefing from this committee on 
the challenges presented by China, how many of these private 
equity firms have major investments in Baidu, Tencent, Alibaba, 
TikTok? The list goes on and on.
    Where should I go to try to get that question from somebody 
in the IC or USG? Would it be your office?
    Ms. Corless. That is a good question, Senator, I think one 
that I would have to explore in more detail and take back. I 
think it is possible that that information is available through 
a couple of different locations within the government and 
certainly to the extent that that information is available in 
terms of who is investing where, OIA, in partnership with other 
IC partners, including those at the FBI, would certainly 
welcome the opportunity to engage with those . . .
    [Crosstalk.]
    Chairman Warner. Some of this is public, you know--a lot of 
this is public information that you could get from the SEC or 
if you just look at the filing reports. I worry--again echoing 
what Senator Sasse said and indirectly what Senator Gillibrand 
said--that we may not have the skill set that has that 
background as it's more than just kind of technically follow 
the money, but look at the analysis of investment patterns. 
It's one reason why so many of us on this committee think In-Q-
Tel is a very valuable asset. But I would hope this would be 
something you think about.
    Let me take another question that Senator Sasse raised and 
we've had some spirited discussions with the IC about the 
digital yuan and the movement within the financial community to 
more digital assets. I think there's a lot of upside there, but 
there's also some challenges. One of the theories that have 
been said is that the ubiquity of Chinese mobile payment 
systems, which will be, as you said, rolled out at the Olympics 
and then, God willing, we'll see the demise of COVID and 
tourism return, Chinese tourists in Europe.
    And if those global payment systems get picked up as the de 
facto payment system the currency that backs, most consumers 
won't care. Could be the digital yuan. I do think we could get 
to where Senator Sasse was headed on his questions about 
ultimately the dollar's reserve currency. If we were looking at 
that and trying to get the answers and monitor that and follow 
that, where should I ask that question? To whom in USG? Would 
it be OIA or would it be somebody in the traditional IC 
community?
    Ms. Corless. Certainly, Senator. I think OIA would probably 
be one of the first places to go based on my understanding of 
how they are looking at this activity, but certainly there are 
other organizations within the IC that would be very well 
positioned to discuss this as well.
    Chairman Warner. Well, sitting there from your current 
position at ODNI, when you list that mouthful title that you've 
got, are you, in your current role, supposed to be coordinating 
all that activity? I mean, like one of the things I worry 
about--we've got lots and lots of expertise in the IC and I'm 
still not sure that we're bringing it all together in one spot. 
But you've done a great job, you've got a committee that's 
obviously very, very supportive. I'm not trying to do a gotcha 
here, but where should that be taking place?
    Ms. Corless. Senator Warner, it's a valid question. I think 
in my current role right now, our emphasis, I would say, is 
two-fold. First, we work to ensure that the DNI and the 
principal deputy and other leadership are prepared to engage 
with--with their cabinet level counterparts and IC meetings 
downtown and with respect to their engagements with the White 
House, as well.
    But the other part of my role is ensuring that the IC has 
the resources that it needs to focus on issues such as this. So 
I would say while we are responsible to a degree in my current 
role for having some of that insight and expertise. Really, 
where the work is done is out in the IC and so it is my current 
job to ensure that we've got our collection and analytic 
priorities in place and that we are working with IC agencies to 
ensure that they have additional resources----
    Chairman Warner. But does that mean, you bring in CIA 
analysts? I know ODNI's got some of their own analysts. Do you 
bring in OIA? You know, do you bring in--can you tap resources 
of folks at the Fed? I mean, how do we make sure all this 
information, particularly in new technology, emerging spaces 
around finances that we're tapping into all that expertise?
    Ms. Corless. Sure. It's less about bringing the resources 
to ODNI from CIA and as much as it is--or other agencies as--
and as much as it is ensuring that they have the resources and 
then we work with all the agencies to help coordinate the 
production that is done so that we can take advantage of 
whatever unique expertise resides in each agency. So that we 
minimize redundancies and that we are providing a more complete 
picture of the challenge to our various policy customers.
    Chairman Warner. I think we've still got some room for 
improvement there. Let me ask you--this will be my last 
question. When Senator Burr and I and this committee took on 
the Russia investigation, we spent some time with FinCEN which 
was, you know--I think actually while the administration did 
some good reforms there, but it's still pretty opaque to me.
    At OIA, do you have the ability to garner data from FinCEN 
or how do you get this trove of information that FinCEN--or 
would you have to go through law enforcement? How would you 
access some of that information?
    Ms. Corless. Senator, thank you for that question. I offer 
this without yet being confirmed for the position. As I 
understand it, there is a good working relationship between the 
two organizations and they are working through appropriate ways 
for how to share information between the two organizations. If 
confirmed, that's certainly something that I'd want to continue 
to work on--and resolve--and certainly work with your staff as 
appropriate.
    Chairman Warner. Well, I think, again, that would be 
something we found a not a very productive relationship from 
the committee to FinCEN and I sit on the Banking Committee and 
the Finance Committee, so I've followed this in a variety of 
ways and, again, I think some of the people--. But I think when 
we're thinking about--echoing a bit of Senator Wyden's concerns 
around the privacy issue--but still getting at--that data to be 
able to          follow--.
    I again, coming back to something I read today about the 
very aspect of everything this Committee's been trying to 
prevent in terms of China potentially, you know, not stealing 
through cyber, but through direct investment into a struggling 
American semiconductor facility that's at the cutting edge. I 
mean, it was a little bit of a--holy heck, I mean, how is this 
even still popping up? Where are the warning signals supposed 
to come from? And I'm not really sure that I'm still clear, 
even as much time as I've spent on this, whose responsibility 
is it inside the American government? It may even be pre-actual 
investment, which then might still go through FIRRMA. But, you 
know, if this is floating out there, whose responsibility is it 
to go, you know, tell the company beware? Is it FBI? Is it OIA?
    Do you have a sense on that or any advice to give me?
    Ms. Corless. Certainly, Senator. So I think it's a 
reflection of the complexity of the environment that we're in 
these days and the, I would say, sort of almost meteoric rise 
of the use of economic and financial tools as a way to counter 
these challenges. So there's a little bit of catch up that I 
think the intelligence community in general, and maybe to some 
extent, you could argue, the U.S. Government more broadly, is 
going through right now to contend with the use of these very 
powerful and effective tools when implemented correctly.
    So I think while there is room for the IC to play a role in 
this conversation, certainly I think the FBI is a critical 
partner in engaging industry as well, with these challenges.
    Chairman Warner. Well, it's something, you know you clearly 
have a lot of support sitting around this committee and helping 
us think it through and helping us find these answers with the 
broad background that my friend Senator Burr talked about that 
you bring to this job, we hope to engage with you. And then, 
again, I guess final, final comment is: Declan, your mom did 
really good and, Linda, your daughter did really good.
    So we will remind the staff that if you've got questions 
for the record, please get them in by 5 p.m. on Thursday. We 
look forward to trying to move this nomination as quickly as 
possible.
    Any other questions?
    [No response.]
    This hearing is adjourned.
    [Whereupon the hearing was adjourned at 3:47 p.m.]

                         Supplemental Material
                         
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]