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Transcript:  DIA Deputy Director participates in panel discussion on Secrets and Security: Intelligence Today

Office of the Director of National Intelligence

Secrets and Security:  Intelligence Today

Welcome:
Andrea White,
Director of Events,
Government Executive Media Group

Diane Reineke,
Vice President for Business Development, Intelligence Systems,
Northrop Grumman

Introduction:
Ellen McCarthy,
President,
Intelligence and National Security Alliance

Moderator:
Timothy B. Clark,
Editor at Large,
Government Executive

Speakers:
David Shedd,
Deputy Director,
Defense Intelligence Agency

John McLaughlin,
Former Acting Director and Former Deputy Director,
Central Intelligence Agency

Wednesday, August 17, 2011
7:30 a.m.
Washington, D.C.

Transcript by
Federal News Service
Washington, D.C.

 

ANDREA WHITE:  Good morning, everyone.  Good morning, everyone.  Good morning.  My name is Andrea White, and I’m director of events at Government Executive Media Group.  It’s my pleasure to welcome you to today’s event, “Secrets & Security:  Intelligence Today.” 

We’re pleased to be a partner with INSA, the Intelligence and National Security Alliance, to bring you an inside look at the key role of intelligence in today’s tumultuous world.

Before our program begins, I have a few housekeeping items.  If you have not already done so, please turn off or mute your cellphones.  At your chair, you’ll find the latest issue of Government Executive, an evaluation form for you to provide us with feedback on the event, and newsletter and magazine subscription forms.

Great events like these would not be possible without the support of our underwriter, so I’d like to recognize Northrop Grumman, the exclusive underwriter of today’s briefing.  Northrop Grumman is a leading global security company providing innovative systems, products and solutions in aerospace, electronics, information systems and technical services to government and commercial customers worldwide.  Please visit northropgrumman.com for more information.

With us today from Northrop Grumman is Diane Reineke.  Diane is vice president of business development for Northrop Grumman’s intelligence systems division.  Please join me in welcoming Diane to the stage for a few brief remarks.  (Applause.)

DIANE REINEKE:  Good morning, and thanks for attending the Government Executive Intelligence Series in partnership with the Intelligence and National Security Alliance.  I’m pleased to be here and honored that we can serve as host for this timely discussion.

I’m looking forward to hearing what recommendations our distinguished panel will offer to ensure that the intelligence community, national policymakers and our military commanders have the essential information they need to make critical and timely decisions that affect our national security.

Northrop Grumman is a global leader and a premier supplier and integrator of critical information systems and services to customers throughout the intelligence community, the armed forces, civilian space and aviation programs, and homeland security.  Our solutions cross multiple domains and address the cybersecurity and ISR spectrum in U.S. and international markets from command and control to multi-INT collection and processing, through dissemination and information-sharing, to analysis and decision support.

Intelligence is vital to our national security, and its complexity continues to increase exponentially.  So I’m looking forward, as I’m sure you all are, to a lively discussion with today’s distinguished panelists.  I’ll now turn the podium over to Ellen McCarthy, president of the Intelligence and National Security Alliance, for a few remarks on this topic.

Ellen leads INSA in a number of initiatives that support government policy and program development relating to cybersecurity, counterintelligence and acquisition.  Prior to joining INSA in 2009, Ellen was director of the human capital management office and the acting director of security within the Office of the Undersecretary of Defense for Intelligence.  She also served as director of intelligence operations, strategy and policy for the U.S. Coast Guard, and in various positions within the Navy and the U.S. Atlantic Command.

Welcome, Ellen.  (Applause.)

ELLEN MCCARTHY:  It’s so good to see so many familiar faces.  And we are so excited at INSA to be partnering with Government Executive. 

As Diane mentioned, I spent a couple years in the government.  And I’ll say, as a government employee, I did come to Government Executive events.  I found them just a great opportunity for networking.  So I’m really happy that we can be working with Government Executive now that I’m in the private sector to bring together such esteemed speakers to talk to you about issues that are relevant and critical to our national security.

I also want to thank Northrop.  You are president members at INSA, and so it’s very – thank you so much for your support.  Without your support, we couldn’t do events like this.  But before I say anything else, I want to congratulate the Shedds on 30 years of marriage.  I understand they celebrated their anniversary this weekend.  And David, you actually owe her, so for your 35th wedding anniversary, you may want to think about doing something else, but – (chuckles, applause).

But in all honesty, I am not surprised.  I mean, people who work in the intelligence community – and I talk to my interns about this all the time – it is a passion, it is a vocation, it is your life.  It’s in your blood.  And so I’m not at all surprised.  And your wife – you know, you’re part of the family.  So I’m not surprised that you’re here today.  But congratulations, and thank you very much.

For those of you who don’t know what INSA is, the Intelligence and National Security Alliance is a not-for-profit.  We’ve been around for about 30 years.  And our focus is bringing together the public and private sector to talk about and deal with critical policy issues.  We also throw great parties; you may have heard the Baker award, which is an award every year that is given to somebody who has spent a lifetime supporting, working for this country’s national security.  So it is – it is a great party.

But we’re not only party-givers.  We do deal with some pretty substantive issues.  In your folder – we do bring gifts – you’ll see some fliers that identify some of the big events that we’re hosting here in the next month or so.  One is our September 7th symposium that we’re co-hosting with CSIS, which is focusing on homeland security intelligence.  That’s the culmination of a year-long focus on where is this country, where is the government, where is the private sector in supporting domestic and law-enforcement operations from the perspective of the intelligence community.

On September 22nd, we’re hosting an event at the University of Maryland.  Though it’s at the University of Maryland, we’re working with all the local colleges.  The title of this event is “Cyber Jobs for America.”  This event is really focusing on bringing the public-private sector and academia together to really identify if we are training our young people to move into a sector that is probably the most critical to our national security right now.

And then, last – I mentioned we throw a good party – we are actually hosting for the Defense Intelligence Agency their 50th anniversary ball.  We’re very excited about that, because who doesn’t love a party?  And this is a huge celebration of what the Defense Intelligence Agency has done for not only our defense policymakers but for our operators.  And at a time when we’ve spent a lot of time engaged in military operations, we owe DIA a lot.  So we’re very honored to be able to do this for the Defense Intelligence Agency.

I did say “lastly,” but I actually have one more – while we do give an award to somebody who has spent a lifetime supporting the intelligence community, we also have a new award series, which we just started last year, which recognizes young, upcoming leaders in the intelligence community, in the private sector and in academia.  That’s the Achievement awards; we used to call them the “baby Baker” awards, but we changed the name.

And so again, if you have some young GS-13, O-3, O-4 level – or in the private sector, an equivalent – please go to our website and nominate that person.  It really is a great event.

With that, I’d like to thank our esteemed speakers, David, John and Tim, who is the editor at large for Government Executive.  And Tim, I’m going to turn the microphone over to you.  Thank you.

TIMOTHY B. CLARK:  Thank you.  Thank you very much, Ellen, and let me say what a pleasure it is to be working with INSA on this series.  This is the first of the series; more to come.  But I think as demonstrated by the large turnout here today, we will – we’re going to have a hard time generating more star power than we have here on the stage today.  And many thanks to John and David for being with us.

Topic of today is a broad topic:  “Secrets and Security:  Intelligence Today.”  So we’re going to a kind of a tour of the horizon of what are the issues, the current hot topics in intelligence.  We’re going to talk a little bit about the reforms that have been undertaken in the intelligence community over the last few years.

Both of these gentlemen are highly experienced in that.  They’ve been through that and helped shape it.  I thought it might be useful to start with a little bit of an introduction of our panelists.  You have their bios at your place, but nonetheless, I thought it would be worth highlighting from the stage some of their really impressive experience.

Let me start with John McLaughlin.  He is former deputy director of the CIA and also former acting director of the CIA.  He spent more than 30 years in the CIA, starting in 1972 with a focus on European, Russian and Eurasian issues in the directorate of intelligence.  He held a variety of senior positions in the CIA before becoming deputy director for intelligence from ’97 to 2000, heading up the agency’s analytical core.

While deputy director for intelligence, he showed – I thought it was interesting that he showed a lot of concern about the health of the workforce and about bringing in the next generation, making sure that they were well-situated in the intelligence community.  So he created the Senior Analytic Service, a CIA career track that allows senior analysts to rise to a very senior rank and pay and stature without having to actually go into management rank, which is obviously a salutary initiative.

And he also created the Sherman Kent School for Intelligence Analysis.  And he also created the Sherman Kent School for Intelligence Analysis, an institution that teaches the history and the mission and essential skills of the analytical profession to new CIA employees.

During the closing months of the Clinton administration and the beginning of the Bush administration, John served as deputy director, acting director and then again deputy director of the CIA until retiring in late 2004.  He’s now a senior fellow and distinguished practitioner in residence at the Phillip Merrill Center for Strategic Studies at the Paul Nitze School of Advanced International Studies – SAIS – in Washington, D.C.  He’s been appointed by the director of national intelligence to serve – to head up a group of national security experts to investigate various intelligence failures, if you will, and to make recommendations for possible fixes.

He’s an accomplished magician, and he’s lectured on magic before big conventions of magicians.  If I’d only thought to ask him to do a magic trick before we got onstage here, he would have done one.  But now I think he’s not prepared to do one that all of you can see, and he tells me that – (chuckles) – that it’s – that it’s important that you be able to see it.  Cameras might be able to see it, but anyway, we’ll leave that to the Q&A.  (Chuckles.)

David Shedd was named deputy director of the Defense Intelligence Agency in August 2010.  He helps manage a workforce of 16,500 military and civilian employees worldwide and leads what is called the Defense Intelligence Enterprise at the defense – all of the defense intelligence community organizations within the Department of Defense.  I heard him describe his career as follows, just to sum it up:  27 years as a CIA officer, 4.5 years on the National Security Council staff, and then – and then a period of years at the very top of the ODNI, the Office of the Director of National Intelligence, helping to shape that institution before moving to his current posting at DIA.

These little bios are subject to correction by you gentlemen after – (chuckles) – but he served as – from May 2007 to August 2010 as the director of national intelligence for policy – deputy director for policy, plans and requirements, responsible for overseeing formulation and implementation of major intelligence community policies across the full spectrum of issues, from information sharing and intelligence community authorities to analytic standards and more.  In particular, he led the review of Executive Order 12333, the foundational U.S. intelligence policy, which was revised by President Bush in July 2008.  He developed and then implemented the National Intelligence Strategy, published in August 2009, for the intelligence community and led all strategic planning efforts to determine future intelligence priorities for the community and the nation.

So we have two highly experienced people here who know all the ins and outs of the intelligence community.  And I thought we might start by asking them a broad question about the intelligence community, let them talk a little bit about how they see the intelligence community today in light of the reforms that have come, especially since the ODNI – Office of the Director of National Intelligence – came on the scene.  And David, perhaps in your remarks you might tell us if the National Intelligence Strategy you developed and published I guess about two years ago is holding up in light of developments since then.

So why don’t we start with – since you’re closest to me, why don’t we start with you, John, if that’s OK?

JOHN MCLAUGHLIN:  OK, thank you, Tim.

Well, first let me say it’s a pleasure to be here, not only with this great audience from across the government, but also with my former colleague and good friend Dave Shedd.  Just to elaborate on the introduction you heard from Tim about Dave, I would tell you it’s rare to find an individual – very rare to find an individual who’s worked at so many different places at senior levels – White House, military intelligence, civilian intelligence – at the very top of the community working with the DNI.  So David’s experience is quite vast here.

Tim’s opening question is one that could be answered many different ways, and we could take the entire time answering it.  But let me just make three very quick points.  First, I think that what you think about intelligence depends a little bit on how you think about intelligence.  I actually don’t use, personally, the word “reform.”  I talk about it having been transformed rather than reformed.  And my experience was that – well, let me put it this way:  I tend to look at it in the long term historically.

And a major point I would make to you is that intelligence as a discipline in national security is relatively new in the United States compared to other countries.  If you look at China, for example, Sun Tzu, their – the military strategist, was writing about all the things that we talk about here in very sophisticated ways in the sixth century B.C.  Yeah, we’ve been doing this since 1947, OK?  When I say that, I say that’s when the CIA was created, and we were the last major country to actually create a national intelligence service.  We had intelligence before then, but largely in pockets of the military and so forth.

In fact, you could divide the history of intelligence here into some eras.  I would say era of innocence is roughly from the Revolution up to World War II.  We just didn’t pay much attention to the whole field of intelligence then.  World War II is the era of transformation.  We learn about all the classic disciplines of intelligence from the British, basically, and from our experience of fighting a worldwide struggle against two other powers.  In that period of time we invent imagery from space, after World War II up to the Berlin Wall falling and so forth – that period is a period of great transformation.  We develop signals intelligence, we deepen our understanding of classic human espionage – things we hadn’t done much with in the past.  And then we enter the 1990s, where there is a sort of dip in interest, kind of the era of uncertainty.  Many of you work in the government, so you’ll remember we were cut pretty dramatically across the government, particularly in national security in the ’90s.  And then 9/11 happens, and we enter another era not – it doesn’t have a name particularly, but I’d say kind of another transformation.  So – and that transformation is accelerated by the restructuring that occurred in 2004, the creation of the DNI.  But my point to you is that intelligence here has been – has been – it’s, first, relatively new and has been in a state of transformation for the last couple of decades.

I guess the second point I’d make about the big restructuring that occurred in 2004 – complicated, but fundamentally, I should confess I started off as an opponent of this because essentially it moved the leadership of the intelligence community from the position I held, the DCI – acting DCI, deputy central – director of central intelligence, to another office that was created then, the director of national intelligence.  Over the five or six years since that has happened – six – close to six now, I think I’ve come to view it as a positive thing, in part because of what it liberates the CIA to do.  Very hard to run an entire community of 16, 17 – depending on how you count – agencies when you’re also running a global agency, one that has worldwide responsibilities.  It’s now possible for a CIA director to focus very intensely on those things that he or she is personally responsible for, and the DNI can drive things that no one else can do:  integration of sourcing, integration of effort, common standards for many different things across the community.

So I think – we can say more about it, but I think fundamentally, while – what people often say about that office now is it’s a work in progress, meaning it’s still being defined.  We are on our fourth DNI.  Each DNI brings a new kind of a twist to it.  Jim Clapper, the current director of national intelligence, is emphasizing integration of effort and analysis and collection, basically.  But my sense is that that is progressing pretty well, and David can elaborate on that if he wishes.

The final point I’d make is that judging intelligence is hard.  Judging – if you ask how are we doing, my answer is, pretty well.  But it depends a bit, as a friend of mine says, on whether you think – intelligence is essentially a competitive game, right?  You’re competing in the world with adversaries who are seeking to deceive you, deny you information.  This is not classic research.  This is a – this is a contact sport.  And whether you think of intelligence as basketball or baseball, is what my friend says – (chuckles) – helps you to think about how you judge it, you know.  If you’re in basketball, you have to hit about 85, 90 percent of your shots – foul shooter –
if you’re a foul shooter, right, or you’re out, you’re not succeeding.  If you’re playing baseball, you can actually get into the All-Star Game with a .300 batting average.  It’s something about the difficulty – the different difficulty of those two endeavors.

Think how tough intelligence is.  And you’re working against an adversary who’s seeking to deceive you.  You’re working in an atmosphere where the information is hard to come by.  So I wouldn’t put a grade on it, but I would say you always want to be over at the 90-percent end of the scale, of course, and you can’t – the other thing that makes it very hard is intelligence succeeds when nothing happens.  You know, an embassy doesn’t blow up.  I can remember instances, say in the summer before 9/11, when I would call the deputy secretary of state and say you need to evacuate an embassy in a certain part of the world because we have a report that indicates there’s an attack planned on it.  And we were very confident of that.  Retrospectively I know those reports were accurate.  Well, the embassy wasn’t attacked.  It didn’t blow up.  The plot was disrupted.  No one hears about that.

Intelligence also succeeds when it’s kind of woven into the fabric of a successful policy, something like the Balkans in the 1990s, for example.  Intelligence – very active there.  It’s seen as a policy success.  But the intelligence role was quite invisible.  It’s an old joke in my former profession that says there are only two kinds of outcomes in the world:  operational successes and intelligence failures.  So – (laughter) – (chuckles) – so I’m not to say that intelligence doesn’t fail sometimes because it clearly does, and we can talk more about that.

But my point is simply that – I would just leave it at that and say I think overall the endeavor is going pretty well.  America has a very good intelligence enterprise.  Another friend of mine used to say on our very worst day, we’re still better than everyone else in the world, and on our very best day, we’re still not as good as we need to be.  And I – that tension between those two things kind of defines the nature of the discipline, I think.  So I’d stop there.

MR. CLARK.  Terrific.

David, would you add to John’s remarks, please?

DAVID SHEDD:  Thanks, Tim.

Diane, Ellen, thank you for this event.

It is indeed an honor to be here and next to John, whom I’ve admired for many, many years, worked side by side with him and then had the opportunity, with the – several DNIs to do reviews that have paid high dividends.  Let me just build off of what John has said.  As I look over a 30-year career, I – I won’t start with George Washington, as John did.  (Laughter.)

MR. MCLAUGHLIN:  I’m older.

MR. SHEDD:  He is.  But in those 30 years, just how dramatic the changes have been.  And let me put them in three categories:  mission, people and now, again, the budget because it’s all in that context as well that we need to look at intelligence.

The people are one of the greatest contributors to the craft of intelligence for fulfilling the mission.  But the mission itself has changed dramatically.  When I think of who do we produce for, I think of my first 20 years, very much pre-9/11, thinking almost exclusively of support to the president – the national security establishment, the NSC as we know it through the statute, not the NSC staff that supports it, but the NSC itself – and providing that intelligence with the objective or the goal of creating decision advantage with decision confidence.  And I’ll talk about that a little more.

And then post-9/11, the dramatic increase of the intelligence demand from the combatant commanders, the war fighters, and in that category in where we have seen a meld of integrating tactical with national intelligence, national intelligence with tactical – and increasingly indistinguishable in terms of trying to measure the net contribution of one over the other, that’s a dramatic change in the mission.

The third category beyond that NSC, combatant commander, is state, local, tribal law enforcement, the Fusion Centers, the DHS mandate through intelligence and analysis in the office there that Caryn Wagner runs.  When I think of intelligence and what we have instituted, still imperfectly – but writing for release, writing for below a tear-line concept so that you give that law enforcement community that decision advantage with a confidence advantage to understanding what value that information has in terms of taking action on it.  Still within that mission – dramatic change over the past decade – is a much greater demand for actionable information than I certainly remember from my first 20 years or so.

The people.  We are, at DIA, somewhere in the 65- to 70-percent range – and I think it’s very close to that throughout the intelligence community – of hires that have come in post the 9/11 period.  Obviously now it’s a decade, and that isn’t far off.  But you have to also look in the first five years.  It was already at 45 or 50 percent.  So it was a dramatic change in the makeup of your workforce.  It is said that at any given time our workforce has four generations in it.  And as we look at the challenges, any of you who are parents of teenagers or perhaps in their early 20s, compared to how you see the world and how they see it.  I call it the PDA world.  They’re literally in their world of virtual space before they go into physical contact with friends in a way that they think differently about the world that they’re in.  In many ways I consider it a world that the adversary also in that generation sees as having no boundaries.  Physical boundaries as we have known them are dropped dramatically as a result of the cyberspace and the social network that they reside in.  So how we look at the intelligence business and how they view the world in that Gen X, Gen Y, millennials and so forth is very important to me as a leader inside DIA, but is as well for my colleagues across the 16 agencies, 17 agencies with the DNI’s office.

Finally, the budget.  What we are trying to do under the direction – or the leadership, I should say – of Jim Clapper as the director of national intelligence is to really look at lessons learned from the 1990s.  I think, judging from most of the ages in this room, you’ll remember very clearly the so-called peace dividend that we thought we were able to harvest in terms of the fall of the wall and the fall of the Soviet Union.  That is not the case today in terms of the demand signal for intelligence against those three big, broad categories that we support.  But within those categories the demand is increasing at a time that the budget is shrinking.  That drives me naturally toward an idea that perhaps in many ways foreshadowed in 2004 this idea of a DNI, relieving the DCIA or the DCI to run CIA as DCIA today and having this full-time responsibility actually put on the shoulders of a director of national intelligence by any other name, but that – the creation of that person.

Because now as we go into these – this fiscal environment that we’re in – and I tend to remind our people as well at DIA often, we’ve always been resource-constrained.  We’re simply going into a much more resource-constrained environment, and where I think that – as that demand for intelligence either flattens or increases – and I would say it’s the latter – we have to have a different formulation as to how we’re going to work together.  And that will drive us toward greater integration.  Duplication of effort will collapse around single efforts of where agencies will do more together.  If you think of the spectrum of coordination – and I believe as an intelligence community we graduated from that a long time ago – we coordinate pretty well.  That doesn’t mean there aren’t occasions where that falls through between a CIA and an FBI or an NSA with an NGA and so forth, that whole alphabet soup.  But by and large we do that and have been doing that well for many, many years.

It’s a collaboration, moving toward that center.  Again, I think the past decade, we’ve shown adroitness at collaborating a whole lot better.  That is, simply, two parts coming together and saying, what’s the task at hand?  What’s the challenge we’re facing?  Let’s work together toward it.  I’ll put in my pieces; you put in your pieces.

I’m talking about a different model at integration – not on every – not on every single subject, not on every effort, but where it makes sense.  You bring the human capabilities integrated against that same target set in terms of what the defense HUMINT effort is with the national clandestine service, as one example.

Where cyber is concerned, you integrate to focus on that problem set rather than having it separate and still collaborating.

So I think I’ve given you a bit of a sense of where I think we’re going while still giving you an idea of where I think we’ve come from over the past decade in particular as we look at this very broad and capable intelligence community, simply building on what John already said.

MR. CLARK:  Thank you, David.

Let me follow up on one thing you said.  You talked about the dramatic change that has national intelligence melding with tactical intelligence to support the warfighter.  And it brought to mind an experience I had when I went out to Al Udeid Air Force Base in Kuwait (sic).  And they showed us there a video of a use of a Predator with an Army tactical squad in Baghdad a block away from an apartment building.  And the Predator was there and taking a picture of the apartment building where there was a sniper.  And so it had a cursor that was focused on one level of the apartment building.  And the squad radioed their commanders and said, no, this is – you need to move over, you know, two apartments and down two levels.  And that was communicated somehow by satellite, et cetera, to the operator of the Predator who was sitting in a trailer in Las Vegas who then made the adjustment to the targeting and blew the sniper out of the apartment building.

Now, that’s amazing melding of technology and tactics, et cetera.  I don’t know whether that’s classic intelligence, but that’s one little anecdote.  Can you tell us – give us a little color, if you will, about how that operates on the ground now?  That’s one – I gave you one instance, but I know there are many others.

MR. SHEDD:  I often recount the story about Zarqawi and his demise in Iraq where he was clearly the emir for al-Qaida-Iraq, at the time, attacking our troops, our men and women – in Anbar in particular but Baghdad and so forth.

And the questions asked of me, which intelligence discipline was the one responsible?  Which tradecraft was applicable to his demise?  And the answer, simply, to me, that I give back is, I don’t know.  And that’s actually a very good answer in this particular case.

The reason is because the melding of intelligence, both tactical and national, in that case – and by the way, including open source – I include that in terms of information that contributed to his takedown – is that I’m not here to give more weight to one over the other.  What I am here to tell you is that our intelligence analysts who were working that target on the ground were able to meld intelligence in real time at network speed in order to take him down.  And that is the story of Zarqawi’s end.

And that is being repeated in the battlefield time and time again.  And I think that is testament to the fact that our intelligence disciplines are incredibly important as disciplines in terms of the capabilities of those analysts who do – who understand imagery and the GEOINT or understand the signals intelligence product for what it is, but then melding it, fusing it together in order to be able to take action on the battlefield in the example that you gave or in the example of Zarqawi.

I believe the same model, the same template is actually applicable for national policy as well, and that the all-source analyst then has the benefit of looking at all that information because sometimes it’s not intelligence – it’s certainly not classical intelligence – that enables him or her to be able to make that judgment.

Tim, let me go back to a question that you asked about the strategy at the outset.  By developing this strategy, I think one of the tests of time is always, will it survive one particular leadership – and this would have been Admiral Blair as DNI when it was – when it was developed and promulgated as a strategy – to another DNI, in this case, because it’s the national strategy for intelligence?

And it has.  And it has survived that particular relatively short test of time with four DNIs in a relatively short period of time.  But it is important that it went beyond the boundaries of one particular DNI in terms of its focus.

The second thing is that it does now serve as a very good road map for the intelligence community to go and develop as DIA has, as NGA is doing and so forth in developing their strategies.  What are those primary goals?  What are the objectives under those goals?  And it allows you to move from that national level for national intelligence to where it’s applicable to your particular agency or element of the intelligence community, also informed by the National Security Strategy that is – that has been issued ,as well as the quadrennial reports and so forth – other documents that help inform it – but since you had asked specifically about the National Intelligence Strategy of 2009, that applied there, too.

MR. CLARK:  Thank you.

John, let’s talk a little bit about the explosion of information and how that affects our conduct of intelligence gathering and analysis.  Everybody knows that there’s been an exponential explosion of information with cellphones and the Web and so on.

My question has to do with, what is proving to be most difficult and most valuable in gathering and assessing intelligence on key issues?  Perhaps you could talk a little bit about the role of human intelligence, the question of monitoring these huge flows of data, the capability of high-tech satellite and airborne imagery – all of those are important, but is there – where is the emphasis falling as between those various activities as we seek to improve our intelligence capabilities?

MR. MCLAUGHLIN:  This, actually, I think, is the major question of our times on intelligence because much of what David just talked about and what Tim asked in the previous question having to do with the integration of – practically every intelligence success I can think of depends on the integration of various sources of intelligence.

And what’s made that more dramatic and more effective is technology, really, because now – you’ve done that forever, of course, but now you can do it more rapidly because you can move information so rapidly.  You can move it visually; you can move it electronically; you can move it on a screen in front of you.  So technology is our friend, but in some respects, it’s also a challenge and an adversary.  And I think it is really the main story of our times when it comes to intelligence.

You know, if you went back to 1952 – that’s the year the National Security Agency was created, that’s the agency that intercepts messages – there were only 5,000 computers in the world, OK?  Today, we have an Internet population of over 1 billion going to Lord knows how many sites.  The last count I saw – it depends on how you count – 3 billion or so.  Computing power is doubling every 18 months.  The miniaturization of circuitry is the untold story behind much of this.  If you looked at a microprocessor – for example, the sort of thing you got in your cellphones right now – going back to 1980, there were in that microprocessor about 29(,000), 30,000 transistors.  Today there are more than a billion, OK?

So that’s why we now have in our hands the computing power that, if you are as old as I am, you remember once housed – was housed in a big building and we all did punch cards and waited for the error message overnight.  (Laughter.)  It’s the miniaturization of circuitry.  It’s the untold story of our times, when it comes to technology, that allows us to do all of this stuff.

So that creates a (void ?).  So this is our friend, all right, because if you went back to before the invention of the telegraph in 1844 or thereabouts, we didn’t move information invisibly.  Once the telegraph was invented, we began to move information invisibly.  And that’s where intelligence began to change.  And then, through World War I and World War II, we developed techniques – everyone did – for trying to grab that information that was being moved invisibly.

And now, we’re very, very good at it.  But we’re too good at it, in a way.  The National Security Agency can scoop up – it doesn’t do this every day, but it can – it has the capability to scoop up within three or four hours the equivalent in bits and bytes of what’s in the Library of Congress.

And so when I did the study that Tim referred to for the DNI about a year and a half ago, one of the things I discovered, looking back at the attempted bombing of an airliner over Detroit in Christmas 2009 – recall that?  The so-called “underwear bomber” – what a great metaphor.  (Laughter.)  It failed, but the only thing that failed was basically the detonation.  Had it worked, a lot of people would have died and that would be a different story.

But the question was, why was it so hard for us to detect this in advance?  And that’s a long story that I can elaborate on, but one of the reasons is that the volume of material that the average person had – the average analyst had to go through to anticipate such a thing had grown dramatically from, let’s say, a couple hundred to multiples of thousands.  And so it becomes increasingly difficult for an analyst to remember that on, you know, January 3rd, I saw a piece of paper or a image on my screen which resonates with what I’m seeing today, four months later, from another source that adds to that.

That, then requires – so the challenge for intelligence today, on this score – and David will be more current on what is currently being done – but my sense is, we’re still not where we need to be in terms of analytic tools – basically, software tools that allow us to, as an intelligence community with this vast volume of information, to do what you do when you go and order a book on Amazon.  You know, you ask for a book and Amazon says, you might also be interested in – (laughter) – OK?

So in intelligence terms, that means, I have a report that says, you know, a guy from – I’ll make up a country – a guy from Elbonia (ph) – that’s my favorite made-up country – (laughter) – has just visited a very bad extremist in Yemen.  And I would want my computer, then, to say, you might also be interested in – (laughter).  Well, David will – I think – no more than I do on this, but I suspect we’re getting better with that.  But we’re probably not where we, ideally, would want to be on that score.

And it isn’t a matter of not trying; it’s a matter of, it’s hard when you’re also balancing the two requirements.  Here again is a way in which intelligence is different than what I do now; I work in the academic community and we do research.  You don’t have to worry, in that world, about balancing two things:  the need to share the information and the need to protect it.  Obviously, you need to protect it for a whole variety of reasons having to do with operational – imagine if we hadn’t protected the information that was gathered before the bin Laden operation.  Very few people knew about that and that’s one of the major reasons it succeeded.  At the same time, it had to be shared among a lot of people because, as David pointed out – taking that operation as an example – every conceivable (intel ?) agency was involved at some level in putting that operation together.  So the tension between those two things is what makes information technology management so difficult in the intelligence business.

So I just stop there on that score, but just emphasize – again, I think this question Tim raised is probably the core question about intelligence today.  I’d add one thought to that, and that is that – because basically, my point is, we’re in the middle of the greatest technological revolution that I think we can document in modern history.  I suppose, if you went back to the invention of the wheel, they would’ve said the same thing, but in modern history, I can’t – there is no time that we have – that I have lived through where technology is changing faster than we can come up with names for it, OK?  Kids are doing that for us.

But for intelligence, what this means is, we have the potential now to break out of the paradigms that we developed in that age of transformation I talked about from, say, World War II up through the fall of the Berlin Wall, when we developed most of the techniques we currently use – taking pictures from space, listening to intercepted communications and so forth.

We have the potential through technology to break out of those paradigms or elaborate on them in ways  that, frankly, the average person can hardly imagine because intelligence always has to be technologically ahead of everyone else.  Why?  Because your adversary has everything that’s available.  So you’ve always got to be better than them, technologically.  And I think, without going into the details, the intelligence community is.  But the challenge is, technology is changing so quickly that you’ve really got to be quick and fast and agile, and there’s no time to waste.

MR. CLARK:  David, part of my question had to do with the role of human intelligence.  You talked about the 70-percent turnover in the ranks of the CIA in the past decade.  Many of those people – new people who were brought in were from ethnic communities and foreign language speakers and so on to change the face of the CIA a bit so that we could more easily integrate with the communities that we need to be gathering intelligence from.

What is the – could you talk a little bit about the importance of human intelligence in a context that John has just so well laid out, where you’re also trying to monitor, you know, huge amount of data flows, et cetera?  How important is human intelligence today?

MR. SHEDD:  Well, Tim, human intelligence remains absolutely critical to an understanding of the plans and intentions at the core.  The difficulty that I’ve seen over the years in the pursuit of the tradecraft of human intelligence is knowing what to go after and how to pursue that so that you are investing that very precious resource against the highest payoff.  And that requires – it’s back to thinking of all-source information in order to be informed about what you have to collect and where that secret resides that you would get through a human penetration.

The other high value for human intelligence is that it’s also an enabler to the technological collection or the technology collection.  In other words, it points the finger at the right place for the National Security Agency to pursue something as opposed to, as John described purely theoretically, the capability of NSA to simply gather all that information in the – in the volume that he referred to.  And by having that human penetration, that human individual that’s sitting in the place next to the right server, the right switch and so forth, allows, then, the effort to be far more targeted as well.

Finally, that human source is one who will give – and I promise to come back to this – this decision advantage that gives something the machine does not generally give, which is the atmospherics around a situation.  So as a human source that’s in a circle of influence or a circle of power that we’re interested in, that individual is able to give the sense of the environment as well as just as the facts.

An enormous amount of effort has to then go into the vetting of that source, the weighing of that information properly, weighed against the value of other information collected on that environment as well.  But that becomes very, very important to the decision-maker.  So by that decision advantage and then that confidence advantage, let me tell you what I’m talking about. 

The decision advantage is being one step ahead of the adversary in terms of that collection objective that gives the decision-maker on our end that ability to make choices that he or she otherwise would not have.  That could be the president, that could be the combatant commander, it could be the warfighter down in the Humvee or the law enforcement community, you know, chief of police and Ray Kelly in New York or in Los Angeles, wherever it might be in the local law enforcement environment. 

The decision confidence is a way to think about counterintelligence:  It’s the weight that you give that information.  And for those familiar with the human intelligence reporting, there’s a source description:  you know, say, an individual, an official with close, good access, with close ties to this reporting, judged to be fairly reliable.  That “fairly reliable” has to go with a definition that really is a definition of a counterintelligence message to the reader:  says, on balance, he’s fair to middlin’, but be careful; he’s not a generally reliable source yet.  The vetting hasn’t gone into it, that needs to go into it.  And in time, it may get there; it may not, depending on the situation of that – of that source. 

So your decision advantage is married up together with decision confidence and, to me, it’s a very critical combination and one that, if you look back on the intelligence challenges that we’ve had to outright failures, it’s been in the balance of those two things, that decision advantage that you are bringing to the decision-maker with that confidence level.  If the analysts don’t know that, for source protection, you’ve changed that source description three or four times, but it’s still the same source, you won’t be able to have that decision confidence balanced properly to the decision advantage that you’re trying to give that reader. 

So human intelligence remains critical.  It is not obviated by technology; it is, in fact, enabled by technology.  And in reverse, the human operations can actually serve to drive focused technology operations. 

MR. CLARK:  I think we would be remiss if we didn’t follow up that – these two answers with – by talking a little bit about the hunt for bin Laden and, of course, that – there was – there’s been a lot of writing about this.  There was a terrific piece in The New Yorker just a week or two ago about the hunt for bin Laden, and it talked about satellite imagery, airborne photography; you know, I believe we had people on the ground in a nearby building in  Abbottabad.  And so – and it also reflected – this article did – on levels of cooperation between various parts of the U.S. government as we went – as we looked for bin Laden. 

So let me just throw out a general question – maybe you could start, John – on how you see the role of intelligence and the components of intelligence, if you will, as operating as we sought to find bin Laden.

MR. MCLAUGHLIN:  Well, I think the first thing to say is that the successful outcome there was the result of literally years of effort that accelerated in the last several years.  Now, bear in mind, I’m not in the government; so I was not part of that.  David was – will have a fresher and more informed perspective on that. 

But what I do know is that the information collected over many years helped us to get there.  I would go back almost 15 years because it’s in 1996 that the CIA begins to focus intensely on bin Laden and on al-Qaida; 1996, when he moves from Sudan to Afghanistan, the CIA notices this is a financier of intelligence who’s also getting into operations.  And you know the story from there on:  the embassy bombings in 1998, the attack on the USS Cole warship in October 2000, 9/11 itself. 

And so throughout that period, the CIA was, even the 9/11 commission will acknowledge, the agency that focused most intensely on bin Laden and al-Qaida with some success before 9/11 and obviously a big setback on 9/11, a huge loss which will be commented on extensively in the next couple of weeks, I’m sure.  But, in that period of time, the agency and the rest of the intelligence community began to develop a picture of al-Qaida.  This accelerated dramatically after 9/11. 

If you recall those days, and many people do, from roughly 2001 to 2005 or so, the community – I think led principally by the agency in that period of time – essentially took down the 9/11-era leadership of al-Qaida.  And in the years since then, that has accelerated in terms of attacking the infrastructure of that organization and those – by attacking, I mean killing and capturing – and the data that came out of those operations, in terms of captured electronic media, the detention program that produced many, many reports about the nature of the business, the nature of the al-Qaida organization and so forth, the technical intelligence collected – all came together in a way that brought us the result we saw with an accelerated development of intelligence in the last two to three years. 

And you – there’s no point in me repeating what’s been in the press here.  You know that the focus was on a courier, once the agency had figured out that bin Laden relied principally on couriers for communication.  The focus then was on a particular courier, who eventually came to be known as the one most close to bin Laden.  And that’s what you do in intelligence:  You focus in on this clue, and you start peeling away the layers of the unknowns until you figure out who is that courier, what’s that courier’s real name, where does that courier live, what does that courier do all day long, how does that courier communicate, how does that courier drive, and so forth.  And eventually you get to the compound that you now all know about. 

What I can tell you with some confidence is at the point when all of that information came together – technical intelligence, human intelligence, open source intelligence, layers of it from years of collection – the agency was still – and let me say, everyone was involved in this:  the National Security Agency, the National Geospatial Intelligence Agency, the Defense Intelligence Agency.  Everyone who has intelligence in their title was somehow in this.  Putting that all together, the confidence level was still not 100 percent that he was there.  But it was the best case that anyone was able to make up to that point. 

And I understand now, when I reflect on something Leon Panetta said, because he said something publicly that I think tells me why the president in part – why the president decided to go ahead.  The case that his – he was there was strong enough that, had he not been there – that this is what Leon said – you could present that case in public and defend it.  In other words, the public would understand why you acted on this; the case was that strong.  But it wasn’t a hundred percent, and that is almost always the case in intelligence.

I don’t know what I would add beyond that. 

MR. CLARK:  David, do you have a – thoughts on this?

MR. SHEDD:  Sure.  One of the things I look forward to is being out of government and – (laughter) – and being able to say what he said.  (Laughter.)  But I still want my job tomorrow.  (Laughter.) 

MR. MCLAUGHLIN:  But I gave you no classified information.

MR. SHEDD:  No, no, no.  But coming from me, I would be – I would be confirming that – the details of The New Yorker and elsewhere that’s been in the press.  I will say this:  I’m actually a critic about how much has come out in the press.

MR. MCLAUGHLIN (?):  Yeah.

MR. SHEDD:  Our –

MR. MCLAUGHLIN:  So am I, by the way.

MR. SHEDD:  I know, John. 

I think that – no, I know – I can drop “I think” – I know that our tools are limited, by definition, and with as much exposure, across the whole ambit of counterterrorism, in what comes out in the media really does hurt our ability to fight the next iteration of the war on the terror. 

I will say this, and I will come back to this time and time again:  You could not have mounted the 1 May operation without the integration of the information and intelligence as John described it.  That I will say categorically. 

And time and time again, as John has alluded to, the successes that we have had in the intelligence community – many by unsung heroes in the background, because they aren’t revealed in terms of the disruptions – occur as a result of integrating those efforts in terms of the collection capabilities and the analytic coming together with the collection that’s been enabled by great men and women.

And I would just –

MR. MCLAUGHLIN:  (And ?) – let me just add to what David said about – I, too, am distressed by how much has been revealed about the operation.  Well, what I said here was not particularly sensitive, I don’t think; but all of that comes from information that’s been officially put out there, I think.  Here’s why I worry about it a little bit. 

In my very first comments, I said, intelligence is very new to the United States, OK?  One reason I said is that we still don’t know how to deal with it.  We really don’t.  We’re an open – and I – in my course, I have a whole section that I do – a day that I do, in the teaching I do now, called, “Intelligence in an Open and Free Society.”  And there is – there is a tension here between the obvious values we hold as American citizens, which I of course fully support, and the fact that we need to have a secret intelligence organization – organizations in order to manage our affairs in the world. 

We have more trouble with that than any other country that I’m aware of – any other major country. 

MR. SHEDD (?):  Yeah.

MR. MCLAUGHLIN:  And the – with the tension between those two things – and here’s the bottom line:  For our adversaries, who aren’t as strong we are – OK? – either conventionally, technologically or otherwise, they have to seek advantages that are – to use the term everyone employs these days – “asymmetric”:  that is, things they can do that help them overcome our great power.  And you know one of the things they can do?  Keep secrets. 

Secrecy is a tool they use, as an asymmetric tool, to overcome our great advantage, and I don’t think we’ve figured that out.

MR. CLARK:  I would follow that up a little bit by observing – and maybe asking you to comment further, John – the accounts in the media are accounts that portray this operation as highly successful.  That is, you know, the sources for this were people in the government (and then ?) – some of whom anyway, and perhaps many of whom, who wanted that information to come out, so – because it portrayed, you know, the success that could be attributed to the White House decisiveness, et cetera, et cetera.  Right? 

MR. MCLAUGHLIN:  I don’t know that that’s the case, but it may very well be.  I’m sure David can’t comment on this.

MR. SHEDD:  OK.  That’s – (laughter).  I want to –

MR. MCLAUGHLIN:  I’m just trying to take care of you here. 

MR. SHEDD:  (Inaudible.)  Ah, yes.  So I –

(MR. CLARK ?):  Yeah.

MR. MCLAUGHLIN:  Well, but – no, that’s – but that’s natural, and let me say, first off, that I can say these things.  (Laughter.)  And I worked for how many?  Seven, eight administrations, Republican and Democrat. 

Generally when an intelligence success occurs, people like to talk about it. 

MR.     :  Yeah.

MR. MCLAUGHLIN:  It’s not – it’s not confined to one political party or one political season.  But, generally, if there’s a big intelligence success, people tend to talk about it.  Now, that’s not true of every intelligence success because most of them are incremental on – and not spectacular like this one.  But it’s just a tendency we have as a country, and I would say it’s one we need to think hard about.

MR. SHEDD:  Tim, I –

MR. CLARK:  Yes, sir.

MR. SHEDD:  – let me just add:  Because of terrorism and counterterrorism – I’m referring to international terrorism in this case – has taken on such a public –

MR. MCLAUGHLIN:  Yeah.

MR. SHEDD:  – profile in terms of the political stance that one takes on counterterrorism, all the way down to the local district, obviously at the state level and at the national level, that my concern goes well beyond what’s been said publicly about the events of 1 May.  It’s on counterterrorism more generally, and it is the rush to the microphones and the cameras to tell the story even if it’s a half-baked story on the counterterrorism success, that being a disruption.

And that very quickly leads to the second and third iteration of questions that come from it.  How did you know?  How did you disrupt it?  Who was involved?  What governments, friendly allies who might have supported it?  That’s what I’m referring to, to the larger cost of the public debate, and all I would – I would submit is that there is a tension between how much is put out publicly in the interest of the American people, knowing obviously that our representatives are actively engaged on the topic, and protecting the secrets that enable the very success that they’re talking about.  That – that’s really the context of my comments.

MR. CLARK:  Thank you.

I’d like to open the microphones to questions from the audience. 

We have two people with mics, and I see John Palguta there, who has a question, and there may be others.  So, John, stand up, and they’ll bring a mic – someone will bring a mic to you.  At least I thought there were.

Q:  Or I can talk loud.

MR. CLARK:  All right. 

Q:  John Palguta, the Partnership for Public Service and, first, thank you very much for you (guys’ ?) comments, and thank you (for the service you’ve ?) – provided to the country.

MS.     :  (Great ?).

Q:  I want to just get back to the workforce issue one more time.  (Off mic) – (in the next year ?) will be under (great ?) pressure to reduce spending – (off mic).  (What does he need to do ?) – what does the U.S. government need to do to make sure, going forward, that we are able to still recruit and hire the type of talent we need in the intelligence community, that we invest in that talent, in the growth and development of that talent, that we could retain the workforce that we need in the intelligence (communities ?)?  What is your advice?

(MR. CLARK ?):  Why don’t you repeat the question a little bit for the benefit of the cameras, among other things?

MR. SHEDD:  Sure.  What would be our views in terms of the workforce makeup and attracting the talent that we – that we need in the intelligence community against a fiscally constrained environment?  To put it succinctly.

At the top of our intelligence community list of things to not do as we did in the 1980 – 1990s, with the peace dividend, is to protect our people and keeping the hiring active during this period that we’re currently going into or already find ourselves in and certainly going forward, and that, at all costs, you continue to attract the talent. 

One of the things – and I believe I speak for John, when I say – that is so incredibly encouraging are – is the caliber of the applicants that we are getting in the intelligence community today, and I see no diminution of that – of that talent that’s coming forward.  It’s driven by a desire for service; it is driven by a desire to give back to their country; and, frankly, I believe it’s driven by a wonderful curiosity about intelligence, and I think that’s a wonderful thing to tap into. 

I am – I am a huge proponent, though, of one thing that has to change dramatically, and it’s starting to; but it needs to change far more in the intelligence community when it comes to its personnel.  And that is, we need to, over a period of 20 to 30 years, offer viable entry and exit ramps to our personnel. 

When I think back over 30 years, if I had left the government at year – pick any year – 15 – I would have been branded as someone who – OK, good-bye; have a good life.  You left the service.  I think we need to change that dramatically. 

And I think the demographics tell us in our society today that the average young person will have four or five careers.  The intelligence community has to be able to adapt and adjust to that and bring that talent back in at various stages as he or she has gone off to do something different, and bring that back into the community by way of experience, and not brand them as somehow – with a little d – disloyal in terms of their commitment to the intelligence work. 

And we need to tap that.  And so at DIA that is one of my initiatives, to design a process in which the individual keeps an active clearance while they’re gone, and comes back two to five years later – welcome back – comes back, there’s a place for them not only – not where they left off but perhaps an advancement – that’s fine.  And so that’s another aspect, John, to your question in terms of not only the recruiting end of it and the need to protect the people – we have to design through creative ways how not only do we retain individuals, but offer these other opportunities.

MR. MCLAUGHLIN:  David said it perfectly.  I would only add one thought.  I’m a big fan of increasing the diversity within the intelligence community.  Not as a feel-good idea – it is that, of course – but because it’s a business imperative.  One of the things you have to do in intelligence is have people who have different perspectives because you’re examining questions for which the answers are, usually, elusive.  So you want a lot of different perspectives brought to bear on it.

Also, you know, we need to blend in in parts of the world.  So our new recruits, some of them, I hope, look like me, but most of them shouldn’t.  And most of them don’t these days.

MR. CLARK:  Yeah, most of them don’t.  (Laughter.)

MR. MCLAUGHLIN:  In many ways.  I blend in in Ireland, that’s it.  (Laughter.)  Doesn’t help you.  Doesn’t help you.  So – but that’s – so ethnically and linguistically it’s important to have that diversity.  People who speak many languages and who blend in the world and who bring – come from different environments and therefore bring different perspectives formed in a different way to problems that are hard to answer. 

MR. CLARK:  Do we have a question on this side of the room?  Could you identify yourself, please?

Q:  Kristin Core (ph) with – (inaudible) – HUMINT.   Limited to HUMINT, I’m hoping that you might comment both, on the priority lent to determining and balancing – you mentioned the need to know versus the responsibility to protect – with regard to meaningful, deliberate, targeted burden-sharing with foreign partners.  Thank you. 

MR. CLARK:  With foreign partners?  I –

MR. MCLAUGHLIN:  So the question is, how to balance our collection of HUMINT – and – OK.

Q:  (Off mic.) (Inaudible) – responsibility to protect – (inaudible) – foreign partner – (inaudible) –

MR. MCLAUGHLIN:  Right.

Q:  (Inaudible.)

MR. MCLAUGHLIN:  Well, I would just say, first you have to have foreign partners.  I mean, that’s – there are many people who will argue that, well, why doesn’t the American intelligence community just do it itself?  You need foreign partners because there are parts of the world where you need to be able to pick up the phone and say to a foreign intelligence service:  I need you to go to a certain place in your country, if you would please, and look for someone –
I’ll give you the photograph of the person we’re looking for – or look for a transaction that we’re trying to track, and so forth.  And they can do that, whereas we would be noticed doing it.  So you need them.  And that’s just one example.  But you need them. 

And David will want to comment on this, I’m sure, because he had a career – part of his career in this classic espionage essentially.  But it seems to me, one of the things you have to do is build trust with foreign intelligence services.  And you do that by doing joint operations with them.  You – just reading the papers, you know we have some problems with some foreign intelligence services now.  But – you’ve read about all the tensions with Pakistan, for example. 

But nonetheless, I would bet if I were still in the community I would discover that we still have people within the Pakistani service that we can trust, because you build trust with a certain number of people in these services that you – with whom you do joint operations.  And once you’ve kind of put your hand in the fire together on something of great consequence, and you both performed well, it’s like everything else in life, you test people in your partnerships and you find out who you can trust, and then you work closely with those people. 

And it’s not neat and tidy.  But and it’s – it requires – again referring to something David said about human intelligence, it requires an awful lot of exquisite judgment about people.  But it must be done.  And I think it’s done pretty darn well right now. 

MR. SHEDD:  Three comments to your – to your question.  The first is, given the transnational aspects of our adversaries and the topics – that being counterterrorism, as we’ve discussed; we haven’t mentioned WMD, weapons of mass destruction, as an issue; the whole cyber arena – tells me that our dependencies and co-dependencies on partnerships with allies is critical. 

My second comment is:  I don’t think we ought to be constrained by how we define those relationships.  Some will be transactional.  And the relationship will be because that service – that other country provides a comparative advantage against the issue that we’re looking at.  Others – and it’s well-known our relationship with our British colleagues, our Canadian colleagues, Australians, the New Zealanders, is one where it is a much more comprehensive relationship.

My third comment is, I am concerned about each of these countries to one degree or another, but certainly led by the U.K., that is undergoing fiscal constraints itself, and the burden-sharing portion.  That is of now desire of those services, so this isn’t reflect – I’m talking about the country itself and the impact that that will have.  And so we’re working very closely with all our allies and friends and partners against the austerity aspects of this as well. 

As we look at a world in a post-Arab Spring environment, where you look at a surge that begins in earnest at the early part of this year that will probably – in steady state will be far closer to the surge numbers than where we were in December or in mid-January of 2011—and then how do you work with your partners on those kinds of issues as well?  And that would be on the collections side as well as analysis. 

MR. CLARK:  Thank you.  Do we have another question from the audience?  Right here.

Q:  Good morning.  I’m Joe Greaney from Northrop Grumman.  I have a question for David.  If we look to the next three to five years and a lot of the changes that we anticipate in intelligence and defense, as a contractor, do you have any specific comments on how you might utilize a contractor’s capabilities and workforce differently?  And if so, what types of changes can we expect?  And what could we get better at to support your mission?

MR. SHEDD:  OK.  It’s a great question, Joe.  One big word:  Innovation.  Speaking for DIA, but I know from my colleagues across the community, this is a critical area.  Somewhere in the 1984-to-’86 period the private sector, and I will throw in the international private sector, overtook government in the R&D area.  And it is nearly a vertical curve today – we’ve mentioned in terms of technology. 

And our ability to quote-unquote, “catch up” with that is zero, and we shouldn’t even attempt it.  That’s not what government ought to be doing.  But rather, it needs to be tapping into the capabilities of the private sector, through the contractor community, to bring innovation into government and adapt that innovation to the requirements.  So I would put that, if not at the top of my list in terms of the contractor community, I would put it very close to it. 

The second view of the future that I have is we need to continue to identify with our overseers in Congress – obviously, vitally important to us – where it makes more sense to continue to rely on the contractors.  I think there is a big hand out there just says, you know, contractors – it merged after the 9/11 events and they haven’t gone home.  And now we’re absolutely reliant on them.  The answer is, yes, and for some very good reasons. 

If I look at IT, for example, for us to recreate that internally with the fast-changing pace that John described of every 18 months in terms of computing power and that is – that makes no sense.  But then we have to articulate exactly how we’re going to use contractors for the needs and services of the next several years in the context of where there is a, at times, a presumption that we’re too contractor dependent.  So I would put that in.

Some of that overlaps with what I said about innovation, but some of it is goods and services that are better provided by the contractor community.  And I’m absolutely fine with that.  It’s my job and the job of the leadership of the IC and Director Clapper to articulate back to our congressional overseers as to where those areas are.

MR. CLARK:  Another question?  Right here. 

Q:  Terry Balmond (ph) in the Air Force.  There’ve been a couple of comments today about the need for collaboration and perspectives and stuff.  And one of the things that we struggle with in the Air Force, in our research community in particular, is that tension between wanting to protect our technological edge, but the vital importance of information sharing and collaboration to actually do good research and foster innovation. 

So the question I’m asking is – it’s sort of a – maybe it’s a counterintelligence question –
is, I’m just looking for perspective on our – are there ways for us to judge whether we’re striking that right balance?  We always worry about giving away too much information, but it’s hard to know what you’ve given away.  And I’m just interested, since you guys are in this business, is there some way to judge how much the bad guys are getting from us?  Or are there things we could use to judge that we’re doing this well or not? 

I understand that’s a tough question to ask, but I didn’t want to pass on the opportunity take advantage of what you guys know. 

MR. MCLAUGHLIN:  Well –

MR.     :  I guess, yes, as in – that they get too much, is that not –

MR. MCLAUGHLIN:  I would just – well, here’s what I would say –

Q:  (Inaudible) – and say here’s our – (inaudible) – Russians and lookalikes, right?  (Inaudible.)

MR. MCLAUGHLIN:  Well, the one thing you can be certain of is that counterintelligence has been with us, you know – and spying – has been with us since biblical times.  So people are always trying to gain the secret information we have.  And the people change from decade to decade and era to era. 

So there’s a huge effort within the intelligence community, and specialists who spend their time working on counterintelligence – that is, trying to detect, and often successfully detecting, penetrations of our systems.  Now, this is changing for all the technological reasons that I talked about earlier.  It used to be that it was spy upon spy.  If you went back to 1960, ’70, ’80, you know, the stories you’ll remember were, you know, America being PNG-ed from Russia for spying, the Russians being PNG-ed – that is declared Persona Non Grata and sent home – from the United States for spying and so forth. 

Classic spying still goes on.  But now you have the additional layer of information technology and with it the whole issue of cybersecurity – that is, the capacity to get our information without ever – more by a keystroke than by a human agent.  So the whole field of counterintelligence has become more difficult and complex.  And about all I can tell you without, you know, going into the innards of that business is that there is a constant ongoing effort at very senior levels, supported by substantial staff, in places like, particularly, the FBI and the CIA and parts of the U.S. military to detect unwarranted penetrations of our systems by human agents or by cyber. 

And I would just say it’s getting harder.  And this is also facilitated by the openness about our secrets that I think David and I have both lamented – you don’t have to work as hard to learn things about us as we have to work to learn things about some of our adversaries.

MR. CLARK:  Let me – let me follow up a little bit on that by asking you, both maybe, to talk a little bit more about cybersecurity.  We didn’t bring it up as a topic specifically, but there’s huge concern there are penetrations of military – of the Defense Department every day, hundreds and hundreds of them – and of defense contractors.  What’s intelligence – what is the role of intelligence – a lot of people working on this problem.  What is the role of – the key role of intelligence in combating this problem?  Is it identifying – is it trying to identify who the cyberattackers are?  Is that the main role or is there some other role?

MR. MCLAUGHLIN:  I could do it if you want –

MR. SHEDD:  I can start it and pick up from there.  I believe a significant step was taken in the creation of the subunit – the subunified command under General Keith Alexander at NSA in giving him the dual hat for looking at cybersecurity as a mission set under Strategic Command.  The reason I believe that’s so significant is our ability to defend is directly proportionate to the ability to detect what the adversary is doing in cyberspace. 

And by building then the partnership of the National Security Agency/Cyber Command with the Department of Homeland Security for that, which is cyber inside the United States, I think we have a roadmap – far from having arrived at our destination – but a roadmap for how to share the information of what our adversaries are doing to us and then protecting inside the homeland through the DHS avenue. 

But intelligence is at the core of understanding what our adversary is doing in cyberspace because our ability to detect in that arena is predicated on our ability to see and do peer review, shall we say, with what the adversary is doing. 

MR. MCLAUGHLIN:  Can I – let me add a point to that.  I just came back from the Aspen Security Forum, and there was an interesting session there on cybersecurity.  And everyone’s talking about it these days.  It’s a big, complicated field.  A couple of ideas here – first, we haven’t had a cyber-Pearl Harbor yet.  We all imagine what it might look like – you know, all of our ATMs being taken down or whatever, or an attack on our electrical grid.  We haven’t had that.  And we may never have it.

But in the absence of such an event, just as 9/11 crystalized terrorism for people – I would say prior to 9/11 in much of the world there was climate of disbelief about the idea that terrorism could be spectacular in that sense – 9/11 crystalized that.  We haven’t had a crystalizing event – there’ve been incidents in Georgia and parts of the Baltic states and so forth that we can talk about.  But we haven’t had that incident that throws it all into bold relief for everyone.  I hope we never do.

Second thing is that – David, I think, was alluding to this – you’ve got the public/private dimension of this.  So you’ve got what we can do as intelligence within the government to secure military systems, systems you work on, intelligence systems.  Then you have the whole private sector where much of the information that adversaries want is actually in the private sector.  

What did we talk about earlier? Technology innovations – where is that occurring?  Mostly in the private sector.  That’s where a lot of our adversaries are going to go for that information.  But does the private sector want NSA mucking about in its business?  Maybe.  Maybe not.  But those are things that are still being sorted through.

Now here’s the most interesting idea I heard at the Aspen Security Forum is – among the cyberspecialists was this – it’s a cultural idea.  As we go forward we have a whole generation of people coming along who don’t care much about privacy.  (Chuckles.)  It’s an interesting idea that – I’m thinking of, you know, my kids and others who – well, let’s leave my kids out of it; this might be on television.  (Laughter.)  But we have, you know, a generation of young people who are throwing a lot of stuff out there on Facebook and LinkedIn and everything else without the kind of concerns about privacy that my generation grew up with and (that’s ?) sort of rubbed into us.

So when we look ahead, it’s not that we don’t want to protect vital information, but the whole idea of – basically, Americans like government when their security is threatened.  They don’t like government when their privacy is threatened or when their communications are threatened.  So just going forward, that’s an interesting thing to think about that culturally we may be evolving into a society or a world where a lot of people don’t particularly care if you’re tromping about in their cyberspace.

MR. CLARK:  So let me see – I should note that Government Executive has just published a special issue on cybersecurity, and that our terrific technology website, nex.gov.com, has a lot of other information in addition to what was published in print on that topic.

I think we have run out of time.  There is so much more we could talk about.  But we’ve covered some very interesting territory, I think.  And so let me thank John and David for being with us here today, and please join me in giving them a round of applause.  (Applause.) 

MR.     :  Thank you – (inaudible).

(END)

 

 

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