Transcript

Senate Armed Services Committee Holds Hearing on Worldwide Threats to U.S. National Security

February 16, 2012

LEVIN:

OK. Good morning, everybody.Let me start by welcoming our witnesses for today's hearing on current and longer-term threats and challenges around the world.

We're glad to have the director of national intelligence, James Clapper, and DIA director General Ron Burgess as our witnesses. We thank you both for your long and continued service to our nation on behalf of our troops to whom we all owe so much.

This committee has a special responsibility to the men and women of our armed forces to be vigilant about intelligence programs because the safety of our troops, decisions on whether or not to use military force and the planning for military operations depend so heavily on intelligence.

LEVIN:

The security situation in Afghanistan remains one of our highest priority threats for our intelligence community. In the last year there are clear signs of progress. African security -- excuse me, Afghan security forces are in the lead in providing security in Kabul including during the gathering of over 2,000 Afghan leaders for the recent Loya Jirga last November. The Afghan army and police are in charge of security in former Taliban strongholds in southern Afghanistan. In addition, Ministry of Interior, Ministry of Defense planners have developed a plan for the ministries combined team operations for 2012 and 2013.

The Afghan army is widely respected and even the Afghan police, traditionally lagging far behind in that virtue, are gaining increasing respect among the Afghan people. Nevertheless, security remains fragile. A key to progress on security in Afghanistan is the process of transitioning the lead for securing the Afghan people from coalition forces to the Afghan Security Forces. The transition process is underway and continues at pace with the Afghan army and police assuming the security lead in more and more areas throughout the country.

We heard on Tuesday from the Chairman of the Joint Chiefs of Staff, General Dempsey, that the transition process is on track to meet the goal of having the Afghan Security Forces take the lead throughout Afghanistan by 2014. Successful transition is going to depend on a number of factors, including the growth in the capabilities of the Afghan army and police and their readiness to take the security lead, the nature of the insurgency and progress on reconciliation talks.

We'd be interested in hearing our witnesses assessment of the current security situation in Afghanistan and their views on the progress, both in terms of providing security and of transition and the possibilities for reconciliation with the Taliban. I'm concerned by recent news reports that the latest National Intelligence Estimate, or NIE, reflects a difference of views between the intelligence community and our military commanders over the security situation in Afghanistan.

According to these news reports, the NIE contains a set of additional comments endorsed by coalition commander, General Allen, Ambassador Crocker, Central Command Commander, General Mattis and European Command Commander, Admiral Stavridis disagreeing with the NIE's assessment relative to the sustainability of security gains, particularly in the south. I hope our witnesses will address this alleged difference of views in the recent NIE. Security in Afghanistan is going to remain in jeopardy so long as there continues to be sanctuary in Pakistan for insurgents conducting cross-border attacks against U.S. coalition and Afghan forces, and against the Afghan people.

Pakistan's refusal to go after the safe havens of the Haqqani Network in North Waziristan and of the Afghan Taliban Shura in Quetta, belies Pakistan's assertions that it is committed to peace and security in the region. Pakistan's support to the Haqqani Network, which former Chairman of the Joint Chiefs of Staff, Admiral Mullen called, a quote "Veritable arm of the ISI" Pakistan's Intelligence Agency is a major cause for U.S./Pakistan relations reaching a low point. Where they're going to remain until the Pakistan military ends its ties to these extremists carrying out cross-border attacks.

And we need to understand the intelligence community's assessment of Pakistan's strategy with respect to these insurgent groups and the reconciliation process as to Pakistan's power to determine -- and as to Pakistan's power to determine outcomes. The U.S. campaign against the global Jihadist movement, as Director Clapper's opening statement calls it, had a number of significant successes in the last year, notably operations against Osama bin Laden and Anwar al-Awlaki. These successes struck major blows to Al Qaida's senior leadership and to one of its most active affiliates.

As a result of these operations and sustained pressure in Pakistan, Yemen, Somalia and North Africa, Al Qaida and its affiliates are showing strength. We'd be interested in the intelligence community's assessment of last weeks announcement of a merger between Al Qaida and al-Shabaab and whether it signals an increased threat to the United States and our interests from Somalia -- in Somalia. Excuse me.

Last August, the president issued Presidential Study Directive 10 which identifies the prevention of mass atrocities and genocide as a core national security interest and moral responsibility of the United States. I'm pleased to see Director Clapper has included in his testimony, a discussion of the importance of the prevention of mass atrocities and the need for the intelligence community to report on these incidents rapidly so as to inform policy-makers of these deeply concerning events. Over the past year, the international community has acted to prevent a mass atrocity in Libya, but we're currently witnessing a mass atrocity in Syria.

These tragedies have resulted in deaths of many civilians seeking their universal freedoms and destabilized a sensitive region that is critical to the United States and our allies. Not relative to Iran, which is obviously a major topic. Excuse me. There is a strong, bipartisan determination on this committee and in this Congress to do all that we can to counter the threat posed by Iran and in particular, to stop Iran from acquiring nuclear weapons. In the most recent Defense Authorization Act, we made a major breakthrough with respect to Iran's sanctions by requiring foreign financial institutions to choose between maintaining ties with the U.S. financial system, or doing business with the Central Bank of Iran, especially relative to the purchase of Iranian petroleum and related products.

President Obama has appropriately focused considerable and determined diplomatic effort, quote "To prevent Iran from getting a nuclear weapon" and he has repeatedly said there are, quote "No options off the table to achieve that goal." The American people are entitled to a clear, intelligence community estimate about the length of time it would take Iran to construct a usable nuclear weapon if and when they decide to produce one and how likely is it that they will decide to do so?

An additional matter of concern with regard to Iran was raised in a recent report discussing Iran's apparent willingness to host and support senior Al Qaida leaders and facilitators. This is a matter that has not received a great deal of attention in recent years. However if true, Iran's sanctuary of an -- of Al Qaida could preserve some of the group's most senior leaders and potentially provide Iran with a dangerous proxy. The committee looks forward to the director's testimony on that matter as well.

On Syria, the recent veto by Russia and China of the Arab League drafted resolution at the United Nations Security Council has bolstered the Assad regime and has regrettably demonstrated the willingness of China and Russia to support regimes seeking to crush individuals who are seeking a better and a freer life. We hope that the directors here will share with the committee what we know about the individuals seeking to overthrow the Assad regime. What do we know about who is supplying the Assad regimen with weapons?

What the regimen's intentions are and what we know about the willingness of the Syrian military to continue to kill and maim their own countrymen. Relative to Iraq, despite the political, economic and security challenges that confront Iraq, the government's leaders appear to be willing to work generally together to resolve issues politically rather than through violence. While there is much this new democracy needs to do, to build a new and truly pluralistic, stable and sovereign nation, we'd like to hear our witnesses' views on the Iraqi's progress to date, their outlook for stability and political compromise.

We also would be interested in the risk of unchecked Iranian influence in Iraq and what is the Iraqi government's commitment and capability to deal with that influence or their willingness to deal with that influence. I'm going to put my comments relative to China and the Asia Pacific in general, in the record -- the record and end with just a comment on cybersecurity. Director Clapper's prepared statement indicates that the intelligence community places the cybersecurity threat to our country and our economy in the top tier or threats, alongside of terrorism and the proliferation of weapons of mass destruction.

And that's surely where that cyber threat belongs. A recent report from the National Counterintelligence Executive stated that entities operating from within China and Russia are responsible for the massive and routine theft of U.S. commercial and military technology and that could threaten our national security and our prosperity. It is important to know what our intelligence community regards this economic espionage as.

Whether it is a significant national security threat and also whether that view is shared by our policy-makers and whether China would believe that we are just bluffing if we talk about ending normal trade relations if the economic espionage and counterfeiting and theft of our intellectual property do not end. Before turning to Senator McCain for his opening remarks and to our witnesses for their testimony, we have arranged for a closed session in Room SVC-217, the Office of Senate Security following this open session in the event that such a closed session is necessary.

Senator McCain?

MCCAIN:

Thank you, Mr. Chairman. And let me join you in welcoming General Clapper and General Burgess and thanking them for their many years of distinguished service.

MCCAIN:

I also want to take this opportunity to express our enormous gratitude to the men and women of our intelligence community. It is a truism that intelligence often fails publicly, but succeeds privately. I only wish the American people could know the full extent of what our intelligence community does to keep us safe.

Today's hearing is a fitting companion to the one this committee held on Tuesday to review the president's annual budget request for the Department of Defense, as well as his broader proposal to cut $487 billion in defense spending over 10 years.

As Secretary of Defense Panetta, the chairman of the Joint of Staff, told this committee on Tuesday, the administration's plans, reductions in defense spending would entail greater risk to our military, to our missions, and to our national security. This stands to reason, but what does not is why we would choose to increase the already growing risk to our national security at this time.

Just consider the scale and scope of these risks. Despite the remarkable damage inflicted on Al Qaida's core leadership by our military and intelligence professionals, Al Qaida officials -- affiliates -- in Iraq, the Horn of Africa, and the Maghreb are growing stronger, more independent, more diffuse, and more willing to attack American interests.

As evidenced by their plot to assassinate the Saudi ambassador in a Washington restaurant, the rulers in Iran clearly pose a more direct threat to us than many would have assumed just a year ago. And that is on top of the hostile actions in which Iran has been engaging for years, including killing Americans in Ira and Afghanistan, supporting terrorist groups across the Middle East, destabilizing Arab countries, propping up and re-arming the Assad regime in Syria, and continuing their undeterred pursuit of a nuclear weapons capability.

The threat posed by the Iranian regime could soon bring the Middle East to the brink of war, if it's not there already. North Korea is in the midst of a potentially dangerous and destabilizing transition. An inexperienced 29-year-old is now in charge of a government that continues to produce nuclear weapons, develop ever- more sophisticated ballistic missiles, threaten our ally in the Republic of Korea, and administer the most brutal apparatus of state oppression of any country on Earth.

The chances of increased conflict and miscalculations are as real as ever before. The Peoples Republic of China continues with a non- transparent buildup of its military forces, while engaging in provocative acts against its neighbors in international waters. Indeed, tensions in the South China Sea have rarely been higher.

At the same time, the number and sophistication of cyber attacks on American targets by Chinese actors, likely with Chinese government involvement in many cases, is growing increasingly severe and damaging.

Indeed, as last year's report from the Office of the National Counterintelligence Executive makes clear, quote, "Chinese actors are the world's most active and persistent perpetuator -- perpetrators -- of economic espionage."

In Afghanistan, the Taliban insurgency is damaged, but not broken. And regrettably, the will to stay in the fight against the international coalition and our Afghan partners has only been increased by the administration's repeated public commitments to certain dates for withdrawing down our military forces, regardless of conditions on the ground.

Meanwhile, Pakistan remains as fragile and combustible as ever, and as our witnesses' statements make clear, Pakistan's intelligence service continues to support terrorist elements in side Afghanistan that are attacking and killing Americans.

In Iraq, the fragile stability of democratic gains that Iraqis have been able to forge thanks to the surge now seems to be unraveling. Prime Minister Maliki appears to be consolidating his power at the expense of the other political blocks. Violence is up significantly since the departure of U.S. troops.

Al Qaida in Iraq and violent Shia extremist groups are still very much active and threatening to Iraq's stability. It is increasingly difficult to argue that Iraq, to use the president's words, is, quote, " ... stable and self-reliant."

One year into the Arab Spring the situation remains fluid, uncertain, and in places, very troubling. From Tunisia and Libya to Egypt, Yemen and Bahrain, countries are undergoing monumental changes, and the outcome of those changes are still far from clear.

And the there is Syria, where the conflict appears to be entering a new phase. More than 6,000 lives have been lost and there appears to be no end in site. The bloodshed must be stopped, and we should rule out no option that could help save lives.

We must consider, among other actions, providing opposition groups inside Syria, both political and military, with better means to organize their activities, to care for the wounded, to find safe havens, to communicate securely, to defend themselves and to fight back against Assad's forces. The time has come when all options must be on the table to end the killing and force Assad to leave power.

We should -- we could continue for some time listing a myriad of other threats facing our nation, and I'm confident we'll cover most of them in today's hearing. What should be clear is that by no objective assessment are the threats to our national security decreasing. To the contrary, they are increasing, as the prepared testimonies of our witnesses make vividly clear.

So the question that members of Congress and the members of this committee in particular need to think long and hard about is this. Why in an international environment of growing uncertainty, risk and threat would we choose to add to those risks by making large and misguided cuts to our national defense budget? Cuts that by themselves will not significantly reduce our national debt, the real driver of which is our domestic entitlement programs. I don't see a compelling answer to this question at this time, and I imagine today's hearing will underscore that point.

Thank you, Mr. Chairman.

LEVIN:

Thank you so much, Senator McCain.

Director Clapper?

CLAPPER:

Thank you, Chairman Levin, Ranking Member McCain, distinguished members of the committee for inviting us to present the 2012 worldwide threat assessment. I have observed you've probably already given it for us.

I am joined today by the director of the Defense Intelligence Agency, my friend and colleague of longstanding, Lieutenant General Ron Burgess.

These remarks and our statement for the record reflect the collective insights of the extraordinary men and women of the United States intelligence community whom you've recognized, and we most appreciate that, and whom it is our privilege and honor to lead. And we're most appreciative of your acknowledgement of the work, sometimes under very hazardous conditions, that are done by the men and women of the community around the world.

We won't attempt to cover the full scope of worldwide threats in these brief oral remarks, so I would like to highlight some of the issues that we identify for the coming year, some of which you've already done for us, as I said.

Earlier this month was the 51st anniversary of my enlistment in the Marine Corps. And during my subsequent entire career I don't recall a more complex and interdependent array of challenges than we face today.

The capabilities, technologies, know-how, communications and environmental forces aren't confined by borders and can trigger transnational disruptions with astonishing speed. And never before has the intelligence community been called upon to master such complexity on so many issues in such a resource-constrained environment.

We're rising to the challenge by continuing to integrate the intelligence, taking advantage of new technologies, implementing new efficiencies, and as always, simply working hard. But candidly, maintaining the world's premier intelligence enterprise in the face of our shrinking budgets will be a challenge.

We will be accepting and managing risks more so than we've had to do in the last decade. And when I say 'we,' I mean both the legislative and the executive. We begin our threat assessment, as we did last year, with the global issues of terrorism and proliferation. The intelligence community sees the next two to three years as a critical transition phase for the terrorist threat, particularly for Al Qaida and like-minded groups.

With Osama bin Laden's death the global jihadist movement lost its most iconic and inspirational leader. The new Al Qaida commander is less charismatic, and the death or capture of prominent Al Qaida has shrunk the group's top leadership layer. However, even with its degraded capabilities and its focus on small, simpler plots, Al Qaida remains a threat.

As long as we sustain the pressure, we judge that core Al Qaida will be of largely symbolic importance to the global jihadist movement. But regional affiliates, and to a lesser extent, small cells and individuals will drive the global jihad agenda.

Proliferation, that is, efforts to develop, acquire, or spread weapons of mass destruction is also a major global strategic threat. Among nation-states, as you've alluded, Iran's technical advances, particularly in uranium enrichment, strengthen our assessment that Iran is more than capable of producing enough highly enrichment uranium for a weapon if its political leaders, specifically the supreme leader himself, chooses to do so.

North Korea's export of ballistic missiles and associated materiels to several countries, including Iran and Syria, illustrate the reach of the North's proliferation activities. We don't expect that Kim Jong Un, North Korea's new, young leader, to change Pyongyang's policy of attempting to export most of its weapons systems.

I note that in this year's statement of the record, as you've noted yourselves, that we elevated our discussion of cyber threats to follow terrorism and proliferation. And perhaps in something of a "Coals to Newcastle," just to affirm the cyber threat is one of the most challenging ones we face.

We perceive a cyber environment in which emerging technologies are developed and implemented before security responses can be put in place. Among state actors, we're particularly concerned about entities within China and Russia conducting into U.S. computer networks and stealing U.S. data. And the growing role that non-state actors are playing in cyberspace is a great example of the easy access to potentially disruptive and even lethal technology and know-how by such groups.

Two of our greatest strategic cyber challenges are, first, definitive real-time attribution of cyber attacks, that is, knowing who carried such attacks and where perpetrators are located. And second, managing the enormous vulnerabilities within the I.T. supply chain for U.S. networks.

CLAPPER:

In this regard, a cybersecurity bill was introduced recently introduced by Senators Lieberman, Collins, Rockefeller and Feinstein. It addresses the core Homeland Security requirements that would improve cybersecurity for the American people, for our nation's critical infrastructure, and for the federal government's own networks and computers.

Intelligence community considers such legislative steps essential to addressing our nation's critical infrastructure vulnerabilities which pose serious national and economic security risks.

Briefly looking geographically around the world, in Afghanistan, and General Burgess will have more to say about this. During the past year, the Taliban lost some ground but that was mainly in places where the International Security Assistance Forces, of ISAF, were concentrated and Taliban senior leaders continued to enjoy safe haven in Pakistan.

ISAF's efforts to partner with Afghan national security forces are encouraging but corruption and governance challenges continue to threaten the Afghan forces operational effectiveness.

Most provinces have established basic governance structures, but they still don't provide essential services.

The International Security Assistance Forces and the support of Afghanistan's neighbors notably and particularly Pakistan will remain essential to sustain the gains that have been achieved.

And although there's broad international political support for the Afghan government, there are doubts in many capitals, particularly in Europe about how to fund the Afghanistan initiatives after 2014.

In Iraq, violence and sporadic high profile attacks continue. Prime Minister Maliki's recent aggressive moves against Sunni political leaders have heightened political tensions. But for now, we believe the Sunni's continue to view the political process as the best venue to pursue change.

Elsewhere across the Middle East and North Africa, those pushing for change are confronting ruling elites, sectarian, ethnic and tribal divisions, lack of experience with democracies, stalled economic development, military insecurity force resistance and regional power initiatives.

These are fluid political environments that offer openings for extremists to participate more assertively in political life.

States where authoritarian leaders have been toppled such as Tunisia, Egypt and Libya have to construct or reconstruct their political systems through complex negotiations among competing factions. And no where is this transition, I believe more important than in Egypt, which I think will be a (inaudible) and the course is so strategically important because of its size, its location and of course the peace treaty that it now has with -- with Israel.

In Syria, regime intransigence and social divisions are prolonging internal struggles and could potentially turn domestic upheavals into regional crises.

In Yemen, although a political transition is underway, the security situation continues to be marred by violence and fragmentation of the country is a real possibility.

As the ancient Roman historian Tacitus once observed, the best day after a bad emperor is the first. And after that, I would add things get very problematic.

Intelligence community is also paying close attention to development across the African continent throughout the Western Hemisphere, Europe and across Asia. And here too, few issues are self contained.

Virtually every region has a bearing on our key concerns and terrorism proliferation, cybersecurity and instability and throughout the globe, where ever there are environmental stresses on water, food and natural resources as well as health threats, economic crises and organized crime, we see ripple effects around the world and impacts on U.S. interests.

Amidst these extraordinary challenges, it's important to remind this distinguished body and the American people and in all of our work, the U.S. intelligence community strives to exemplify American values. We carry out our -- our missions with respect for the rule of law and the protection of (inaudible) and privacy. That pledge leaves me to mention our highest legislative priority this year and it requires the support of both Houses of Congress. I refer specifically to the Foreign Intelligence Surveillance Act -- Amendment's Act of FAA, which is set to expire at the end of 2012.

Title VII of FISA allows the intelligence community to collect vital information about international terrorists and other important targets overseas. This law authorizes surveillance of non-U.S. persons located overseas who are of foreign intelligence importance, meaning they have a connection to or information about threats such as terrorism or proliferation.

It also provides for comprehensive oversight by all three branches of government to protect the privacy and civil liberties of U.S. persons.

The Department of Justice and my office conducted extensive oversight reviews of these activities and we report to Congress on implementation and compliance twice a year.

Intelligence collection under FISA produces crucial intelligence that's vital to protect a nation against international terrorism and other threats.

We're always considering whether there are changes that could be made to improve the law, but our first priority is reauthorization of these authorities in their current form.

We look forward to the speedy enactment of the legislation reauthorized in the FISA amendments and acts so there can be no interruption in our ability to use these authorizes to protect the American people.

So I'll end this brief statement where I began and then turn it over to -- to General Burgess.

The fiscal environment we face as a nation and in our intelligence community will require careful identification and management of the challenges the I.C. focuses on and the risk we must mutually assume.

With that, I thank you and the members of the committee for your dedication to the security of our nation, your support for our men and women of the intelligence community and your attention here today.

So with that, I'll stop and turn it over to General Burgess.

LEVIN:

Thank you, Director Clapper.

General Burgess?

BURGESS:

Chairman Levin, Ranking Member McCain and other members of the committee, I want to thank you for the opportunity to join my longtime friend and professional colleague, Director Clapper.

I am representing the men and women of the United States intelligence community.

I would like to begin with current military operations in Afghanistan where we assess that endemic corruption and persistent qualitative deficiencies in the Army and police forces undermined efforts to extend effective governance and security.

The Afghan army remains reliant on ISAF for key combat support, such as logistics, intelligence and transport.

While Afghan Army performance improved in some operations when partnered with ISAF units, additional gains will require sustained mentoring and support.

Despite successful coalition targeting, the Taliban remains resilient and able to replace leadership losses while also competing to provide governance at the local level.

From it's Pakistani safe havens, the Taliban leadership remains confident of eventual victory.

To the West, Iran remains committed to threatening U.S. interest in the region through it's support to terrorists and militant groups, including in Iraq and Afghanistan while it remains committed to strengthening its naval, nuclear and missile capabilities.

Iran can close the Straits of Hormuz, at least temporarily and may launch missiles against United States forces and our allies in the region if it is attacked.

Iran could also attempt to employ terrorists surrogates worldwide. However, the agency assesses Iran is unlikely to initiate or intentionally provoke a conflict.

Iranian ballistic missiles in development could range across the region and Central Europe. Iran's new space launch vehicle demonstrates progress toward a potential ICBM. Iran today has the technical, scientific and industrial capability to eventually produce nuclear weapons.

While international pressure against Iran has increased, including through sanctions, we assess that Tehran is not close to agreeing to abandoning its nuclear program.

In Iraq, DIA assesses that Baghdad security forces probably can maintain current security levels this year despite manning shortages and overly centralized command and control.

Despite perceptions of sectarian bias and a need for logistics, intelligence and tactical communications training, Iraq security forces are putting forces on the street, they are securing high profile sites and they are conducting intelligence driven targeting. However, Sunni insurgents and Shia militant groups likely will remain serious challenges for Iraq and remaining U.S. personnel until more comprehensive political reconciliation reduces lingering tensions among religious and tribal constituencies.

More broadly across the region, the popular forces sweeping the Middle East and North Africa are demonstrating the potential to reorder longstanding assumptions, relationships and alliances in a way that invites risk and opportunities for the United States and our allies.

Armed domestic opponents pose an unprecedented challenge to the Al-Assad regime in Syria and it's collapse would have serious implications for Iran, Hezbollah, Hamas and Lebanon.

Turning to Asia, North Korea's third generation leadership transition is underway. Improving the economy and regime survival remain enduring leadership priorities. Pyongyang's nuclear and missile programs provide strategic deterrents, international prestige and leverage to extract economic and political concessions.

While North Korea may abandon portions of its nuclear program for better relations with the United States, it is unlikely to surrender its nuclear weapons. Pyongyang's forward position military can attack South Korea with little or no strategic warning but it suffers from logistic shortages, aging equipment and poor training. Pyongyang likely knows it cannot reunite the peninsula by force and is unlikely to attack on a scale that would risk it's own survival.

We see no sign that the leadership transition has changed the regime's calculus regarding nuclear weapons and the defense intelligence agency retains continued focus on the peninsula to provide warning against additional attacks from the North.

China continues to build a more modern military to defend its core interests which are territorial sovereignty, national unity and sustained access to economic resources.

Countering U.S. forces in a Taiwan or a South China sea contingency remains a top Chinese military priority.

Investments in naval, anti-air and anti-ship capabilities are designed to achieve periodic and local sea and air superiority to include the islands closest to the mainland.

BURGESS:

Once focused on territorial defense, China's air force is developing off-shore strike, air and missile defense, strategic mobility and early warning and reconnaissance capabilities.

China may incorporate new capabilities and novel ways that present challenges for U.S. forces. Last year's first flight of a fifth generation fighter and launch of China's first aircraft carrier underscore the breadth and quality of China's military modernization program.

However, a lack of modern combat experience is but one example that steps remain before China achieves the full potential of its new technologies, platforms and military personnel.

Regarding cyber-threats, we continue to see daily attempts to gain access to our nation's government and business computer networks including our own secure systems. This threat is large and growing in scale and sophistication.

Finally, Al Qaida losses in 2011 have focused the core group and its affiliates in Yemen, Somalia and North Africa on self-preservation and reconstitution.

Though damaged, the group and its affiliates remain committed to transnational attacks in Europe and against the United States. Al Qaida in the lands of the Maghreb, or AQUIM, acquired weapons from Libya this year, kidnapped Westerners and continues its support to Nigeria-based Boko Haram.

While we have made important gains Al Qaida and its affiliates, we remain in a race against their ability to evolve, regenerate leadership and launch attacks.

Self-radicalization or lone wolf individuals including within the United States and even within our own ranks remain an enduring concern.

I would like to close by noting how honored am I to represent the men and women of the Defense Intelligence Agency. We remain acutely aware that while much of what we do is secret, our work is always a public trust.

On their behalf, I would like to thank the members of this committee for your continued support and confidence in our work. Thank you.

LEVIN:

Thank you very much, General Burgess.

Let's try seven minutes for a first round. I hope that there will be time for a second round.

Director Clapper's prepared statement said the following in terms of the intelligence community's assessment about Iran's nuclear program, quote, "We assess Iran is keeping open the option to develop nuclear weapons should it choose to do so. We do not know, however, if Iran will eventually decide to build nuclear weapons."

And his statement also said that, "We judge Iran's nuclear decision making as guided a cost-benefit approach, which offers the international community opportunities to influence Tehran."

General Burgess, do you agree with that statement of Director Clapper in his prepared statement?

BURGESS:

Yes, sir. And I, sir, I think it would be very consistent with what the vice chairman of the joint chiefs and myself along with a couple of other witnesses stated before this committee almost a year and a half ago.

LEVIN:

And, Director Clapper, I understand then that what you have said and that now General Burgess agrees with, is that they have -- that Iran has not yet decided to develop nuclear weapons. Is that correct? Is that still your assessment?

CLAPPER:

That is the -- sir, that is the intelligence community's assessment that that is an option that is still held out by the Iranians. And we believe that the decision would be made by the Supreme Leader himself and he would base that on a cost-benefit analysis in terms of I don't think he'd want a nuclear weapon at any price.

So that I think plays to the value of sanctions particularly the recent ratcheting up of more sanctions and -- and anticipation that that will induce a change in their -- their policy and behavior.

LEVIN:

And -- and it's the intelligence community's assessment that sanctions and other international pressure could, not will necessarily, but could influence Iran and its decision as to whether to proceed?

CLAPPER:

Absolutely, sir. And of course the -- the impacts that the sanctions have -- are already having on the Iranian economy, the devaluation of their currency, the difficulty that they're having in engaging in banking transactions, which will of course increase with the recent provisions in the National Defense Authorization Act.

And so to the extent that the Iranian population becomes restive and if the regime then feels threatened in terms of its stability and -- and tenure, you know, the thought is that that could change -- change their policy.

I think it's interesting that they have apparently asked the E.U. for resumption of the Five Plus One dialogue. And of course there's another meeting coming up with another engagement with the International Atomic Energy Administration.

So we'll see whether that's, you know, the Iranians may be changing their mind.

LEVIN:

Well, I must tell you I'm skeptical about putting any significance in that. But nonetheless, it's not my testimony that we're here to hear. It's your testimony and it's obviously important testimony.

Director Clapper, in a recent interview Defense Secretary Panetta said that if Iran decides to pursue a nuclear weapon capability, quote, "It would probably take them about a year to be able to produce a bomb and then possibly another one or two years in order to put it on a deliverable vehicle of some sort in order to deliver that weapon."

Do you disagree with the Defense Secretary Panetta's assessment?

CLAPPER:

No, sir. I don't disagree. And particularly with respect to the year, that's, I think, technically feasible but practically not likely.

There are all kinds of combinations and permutations that could affect how long it might take the Iranians to make a decision to pursue a nuclear weapon.

How long that might take I think the details of that are best -- it's rather complex and arcane and -- and sensitive because of how we know this are best left to a closed session discussion.

LEVIN:

But when you say it's -- that the year is perhaps right but it's more likely that it would take longer, was that the implication of your...

CLAPPER:

Yes, sir.

LEVIN:

OK. Now, a Washington Post columnist recently wrote that a senior administration official believes that an Israeli strike against Iran was likely this spring.

General Burgess, in the view of the intelligence community has Israel decided to attack Iran?

BURGESS:

Sir, to the best of our knowledge Israel has not decided to attack Iran.

LEVIN:

I was concerned, as I indicated in my opening statement, Director Clapper, by recent news reports that the latest National Intelligence Estimate reflects a difference of views between the intelligence community and our military commanders over the security situation in Afghanistan.

And I made reference to who signed up to that -- that difference of views, including General Allen, Ambassador Crocker -- not including, these are the ones who signed the difference, General Allen, Ambassador Crocker, General Mattis and Admiral Stavridis.

Can you tell us whether those news reports are accurate that there is a difference of views on that matter?

CLAPPER:

Without going into the specifics of classified national intelligence estimates, I -- I can certainly confirm that they took issue with -- with the NIE on -- on three counts having to do with the assumptions that were made about the force structure, didn't feel that we gave sufficient weight to Pakistan as -- and its impact as a safe haven and generally felt that the NIE was pessimistic.

I have to say...

LEVIN:

About that or about -- about other matters as well?

CLAPPER:

Just generally it was pessimistic.

LEVIN:

About the situation in...

CLAPPER:

In Afghanistan.

LEVIN:

And it's...

CLAPPER:

And the prospects for post-2014. And that -- that by the way was the timeframe. It was -- it was after -- after 2014.

If you'll forgive a little history, sir, I served as an analyst briefer for General Westmoreland in Vietnam in 1966. I kinda lost my professional innocence a little bit then when I found out that operational commanders sometimes don't agree with their view of the success of their campaign as -- and as compared to and contrasted with that perspective displayed by intelligence.

Fast forward about 25 years or so and I served as the chief of Air Force intelligence during Desert Storm. General Schwarzkopf protested long and loud all during the war and after the war about the accuracy of the intelligence in fact that didn't comport with his view.

Classically, intelligence is supposedly in the portion of the glass that's half empty and operational commanders and policy-makers for that matter are often in the portion of the glass that's half full.

Probably the truth is somewhere in the -- at the water line. So I don't find it a bad thing, in fact I think it's healthy that there is a contrast between what the operational commanders believe and what the intelligence community assesses.

LEVIN:

Thank you very much.

Senator McCain?

MCCAIN:

I want to follow up on the chairman's question. So you believe that post-2014 Afghanistan faces extremely difficult challenges?

CLAPPER:

Yes, sir, I do. I think in terms of governance and the ability of the ANSF, which we're, you know, striving hard to train -- train up.

There are some indications that that's having success. But I think the -- the -- the Afghan government will -- will continue to require assistance from the West. And of course another issue is the extent to which we and other coalition members will be able to sustain that support.

Importantly as well is the achievement of a strategic partnership agreement with the Afghan government, which would premise, be a preface for our continued presence in some form to -- to advise and assist and perhaps to conduct -- assist with, particularly with counterterrorism.

MCCAIN:

And there has been no change in the ISI relationship with the Haqqani Network who are killing Americans in Afghanistan?

CLAPPER:

Yes, sir. You know, with -- with respect to the Pakistani government and ISI as kind of a micro chasm of the larger government, their existential threat is India. And they view everything -- and they focus on -- on that as...

(CROSSTALK)

MCCAIN:

I understand that.

(CROSSTALK)

CLAPPER:

Their concern is, of course, sustaining influence and presence in Afghanistan and they -- they will probably continue to do that through proxy militias.

MCCAIN:

So our relationship with Pakistan must be based on the realistic assessment that ISI's relationship with the Haqqani Network and other organizations will probably not change?

CLAPPER:

Yes, sir. I mean there are cases where our interests converge. I -- you know, government to government and that relationship and that factoid is reflected in the relationship with ISI.

MCCAIN:

Secretary Panetta publicly stated that Israel will decide in April, May or June whether to attack Iran's nuclear facilities or not. Do you agree with that?

CLAPPER:

Well I think he was -- that was quoted by a columnist. I -- I think General Burgess answered that question. We -- we don't believe at this point that they've made a decision to do that. Would could have given rise to this, is simply the fact that the weather becomes better obviously in the -- in the spring and that could be conducive to an attack. But, to reemphasize what General Burgess said, we do not believe they've made a -- such a decision.

MCCAIN:

We're seeing a very intriguing kind of situation evolve here. There have been, what is believed to be, Iranian attacks or attempts to attack worldwide. In the United States in the case of the Saudi ambassador, Georgia, India, the explosions there. Now today we read about Thailand. Does this tell us a number of things including the extent of the Iranian worldwide terrorist network? And does this also tell us that there is a covert conflict or war going on between Israel and Iran?

CLAPPER:

Well, I think Iran is -- well there are two dimensions to this. I think on the one count, they feel somewhat under siege and on the other hand they are sort of feeling their oats. Through the Iranian lens, they probably view Arab Spring as a good thing and opportunity -- opportunities for them to exploit, which thus far have not worked to their favor. So, they, through their proxy's, the IRGC particularly, decided -- made a conscious judgment to reach out against primarily Israeli and secondarily against U.S. interests.

MCCAIN:

And that...

(CROSSTALK)

CLAPPER:

... pointed out...

(CROSSTALK)

MCCAIN:

... displaying -- they're displaying some capabilities.

CLAPPER:

Well, yes, sir to a certain extent. They, even though the attacks that you reference were not successful. In one case they blew one of their own up, but they regard those as successful because of the psychological impacts they -- they have on each -- in each one of the countries.

MCCAIN:

Quickly, is -- in the situation in Mexico, do you believe that -- as you know 50,000 Mexicans have lost their lives as a result of drug related violence. Is your assessment that these violent criminal organizations pose a threat to the United States, including states along the border?

CLAPPER:

Yes, sir they do. There -- there is always the prospect of spillover and that's one reason why we were working closely with the Mexican government and that's particularly true with respect to intelligence initiatives that we're working with them, which I can -- happy to discuss in closed session. But there is a profound threat to both countries.

MCCAIN:

Have you seen any indication that the top candidates vying to succeed President Calderon will alter the way the Mexican government addresses the threat of the cartels?

CLAPPER:

I believe, sir that -- I can't do a one by one assessment, but I believe that the -- no matter who succeeds President Calderon, they -- they will be committed to continue this -- this campaign.

MCCAIN:

Well, I suggest you look a little more carefully because I think that may not be the case, at least with one of the candidates. If the status quo remains in Syria with increasing Iranian, Russian arms and equipment, Iranian presence and assistance to Assad, what -- what's the outlook as far as the situation in Syria is concerned? And what in your view do we and the Arab League and other like minded countries need to do to alter that equation, if it is an apparent stalemate with the massacre continuing?

CLAPPER:

Well in -- there are four, as we call them, or characterize them, four pillars of -- of the Assad regime. The continued effectiveness of military and support, his own military which is quite large. There have been desertions but for the most part. And they've engaged about 80 percent of their maneuver units in assaults on the civilian population. The economy is another pillar that has really taken some hits. The price of gas has doubled since September. The price of food has gone sky high.

They have periodic electrical interruptions. So that is -- the economy is -- is going south. The state of the opposition, which is quite fragmented. It's very localized. The -- the Syrian National Council really doesn't only control command and control -- these opposition's groups. The Free Syrian Army is a separate organization, not connected to the Syrian National Council. And of course, the other is the cohesion of the elites. And while we've seen signs of some of the seniors in the Assad regime making contingency plans to evacuate, move families, move financial resources, to this point they've held together.

Assad himself probably because of his psychological need to emulate his father, sees no other option, but to continue to try to crush the opposition.

MCCAIN:

I guess my question, sir was, unless something changes as far as assistance from the outside, do you see a continued stalemate in Syria?

CLAPPER:

I do, sir. I think it will just continue. We don't see any -- short of a -- of a coup or something like that, Assad will hang in there and continue to do as he's done.

MCCAIN:

And the massacre continues?

CLAPPER:

Yup.

MCCAIN:

I thank you Mr. Chairman. I thank the witnesses. It's been very helpful.

LEVIN:

Thank you Senator McCain. Senator Lieberman?

LIEBERMAN:

Thanks Mr. Chairman. Director Clapper, General Burgess, thanks for your really extraordinary leadership of the intelligence community all you do to protect our security. Director Clapper, I want to just go back to Iran for a couple of minutes quickly. You said this morning that it's your assessment, or the I.C.'s assessment that Iran has not made a decision to build a nuclear weapon. But -- but I assume you also believe, based on International Atomic Energy Agency reports and information that the intelligence community has, that Iran has taken steps to put them in a position to make a decision to break out and build a nuclear weapon?

CLAPPER:

Yes, sir. That's a good characterization.

LIEBERMAN:

OK. I...

(CROSSTALK)

CLAPPER:

There also are certain things they have not yet done...

LIEBERMAN:

Right.

CLAPPER:

... which I'd be happy to discuss in closed session, that would be key indicators that they have made such a decision.

LIEBERMAN:

Yeah. And that -- but they have done things, is it fair to say, that are inconsistent with just wanting to have peaceful nuclear energy capacity?

CLAPPER:

Well, the -- obviously the -- the issue here is the extent to which they produce a highly enriched uranium.

LIEBERMAN:

Right.

CLAPPER:

And, you know, they've -- had produced small amounts of highly -- of 20 percent highly enriched uranium which ostensibly could be used for legitimate, peaceful purposes. So if they go beyond that, obviously, that would be, you know, not a -- a -- a negative indicator, I'll put it that way.

LIEBERMAN:

Right. General Burgess, you want to add to that?

BURGESS:

Well, sir I would just -- I would agree with what Director Clapper said, sir. I would agree with your characterization because of the movement from the 3.5 to the 20 percent enrichment. That is already a leap. It is not that much of a bigger leap to the bigger, 90 percent that they would need to go to.

LIEBERMAN:

Right. Thank you. And do you both agree that, or is it your assessment that if Iran makes a decision to build a nuclear weapons capability and in fact achieves it, that it is likely to set off a -- a nuclear arms race within the region. In other words, that other countries, Saudi Arabia for instance, will want to also have nuclear weapons capacity?

CLAPPER:

Well it's certainly a possibility, sir. Absolutely.

LIEBERMAN:

And is it also fair to say, and we've talked about the Iranian sponsorship of terrorism that if they did have nuclear weapons capability, it might well embolden them in their use of terrorism against regional opponents and even the United States?

CLAPPER:

Yes, sir. It would serve as -- as a deterrent. Even I think to a certain extent the ambiguity exists now, serves as a deterrent and does serve to help embolden them.

LIEBERMAN:

OK, thanks.

I -- let me go over to cybersecurity. I thank you very much Director Clapper for your statement of support for the legislation that Senators Collins and Rockefeller and Feinstein and I introduced. The -- the main intention of the legislation -- it does a lot of things, but -- is to create a system where the federal government through the Department of Homeland Security, advised and supported, if you will by the NSA, can work with the private sector to make sure that the private sector is defending itself and our country against cyber attack.

I mean to me -- we've spent a lot of time on this. Right now because of the remarkable capacities of cyber attackers and -- and the extent to which they can attack privately owned and operated cyber- infrastructure for either economic gains or -- or -- or to literally attack our country, that we -- we need to ask the private sector to make investments to defend themselves and us that I'm afraid a lot of them are not yet making.

Is -- is that your general impression? In other words, bottom line do we have a vulnerability at this moment? Does -- does the privately owned and operated cyber-infrastructure of America have a vulnerability to both economic thievery and perhaps and -- and strategic attack?

CLAPPER:

Well, sir, and -- and you, both the chairman and the ranking member cited the National Counterintelligence Executive Report that we issued in -- in October, which called out both China and Russia as our primary concerns with -- and particularly with respect to the Chinese and their theft of intellectual property, of course, which occurs, much of occurs in the private sector.

I know the -- the bill is quite lengthy, some 270 pages. I have not read it all. The important thing for me was the precepts that it addresses, which is, you know, delineates roles of the various components of the government and include the Department of Homeland Security, which I believe has an important role to play here.

It defines a -- what I feel is a good balance of -- and a relationship with the private sector and how intrusive the government is going to be, which is a -- certainly an issue and most importantly protects civil liberties and -- and privacy.

I'm sure there are other provisions in the bill that other -- some might take issue with but the precepts, I think, are important in terms of the balance between protection and freedom.

LIEBERMAN:

OK. I -- I -- I appreciate very much what -- what you've just said.

Part of the problem here as we go forward I think is that so much of the vulnerability we have and even the attacks that are occurring, or the exploitation occurring, are largely invisible to the public.

So am -- am I right in this regard that there's -- there -- there is as well and -- and the report you just cited said it. There -- there is extensive ongoing theft of intellectual property of American businesses, which in fact enables competition from abroad that actually costs us jobs here at home and -- and diminishes our economic prosperity at home.

CLAPPER:

Absolutely, sir. It -- it -- one of the downsides of this, profound downsides for the United States of course is particularly when people are robbing our tech -- robbing us of our technology, which of course saves them the investment in R&D.

And so that's...

LIEBERMAN:

Right.

CLAPPER:

... almost a double whammy, if you will.

And I -- I think there is a -- a difficulty for some in something you can't see, feel or touch...

LIEBERMAN:

Right.

CLAPPER:

... since it is a passive theft and you don't directly see immediately the negative impacts of that.

Unlike an attack, which obviously is by its nature active, in which you -- you would feel the effect of a seizure of the banking system or the stopping of our electrical grid or some other egregious effect like that.

LIEBERMAN:

And -- and would you agree finally that -- that, with General Burgess, that right now we're not -- our privately owned and operated cyber-infrastructure, electric grid, banking system, transportation, even water supply and dams are not adequately defended against such an attack?

CLAPPER:

That's probably true and it's, you know, it's -- it's uneven. Some -- some parts of the infrastructure are -- are reasonably well protected.

LIEBERMAN:

I agree.

CLAPPER:

But it's not -- it's not complete. And of course, you're kind of in the, you know, the weakest link proposition here is the vulnerability.

LIEBERMAN:

General Burgess, do you want to add something?

BURGESS:

Sir, I was just going to say and I'm, like Director Clapper, I have not read the whole thing but from my days when I was in the Director of National Intelligence and took on the issue with Mike McConnell of cyber-security, I think what you have put on the table, sir, is -- is a great first step.

And as an American citizen, thank you to the Senate for doing that. It -- it is a good first step. It is progress.

Change is generally evolutionary...

LIEBERMAN:

Right.

BURGESS:

... as opposed to revolutionary. And I would say this is evolutionary, in my humble opinion.

If I had one thing that I would poke a little on as -- as I think I understand, there's not a requirement to share some information, is encouraged.

I always tell people when I speak publicly we're a nation separated by a common language. We all define words a little differently. So in terms of economic attack (inaudible) some entities may not want folks to know about what has been taken. And they're not required to divulge that.

So, sir, just a comment from -- from the peanut gallery.

LIEBERMAN:

I take that seriously. It's a good comment. It's a -- it's a thoughtful poke and thank you for your -- your words.

Thank you, Mr. Chairman.

LEVIN:

Thank you, Senator Lieberman.

Senator Inhofe?

INHOFE:

Thank you, Mr. Chairman.

I -- I -- I really think this is one of the better hearings that we've had and the straightforward responses and I -- I appreciate that very much. I -- and your comment about language, I'm gonna get that for the record and use that later on.

LEVIN:

I just wrote it down.

INHOFE:

Oh, you did?

LEVIN:

Yeah.

INHOFE:

That was a good one, in general.

I -- I think we've pretty much decided on this 20 percent, getting back to Iran now, that it certainly has either achieved or is being achieved as we talk.

And, General Burgess, you said we have the scientific, technical and industrial capabilities of producing a weapon but we didn't really talk about when. When is the big issue.

I -- I -- I remember what -- what Secretary Panetta said just the other day about -- we've repeated that several times, several of the questioners have, and I think that's consistent. That's consistent.

Back in the debate where we had a difference of opinion as to whether or not we should continue with the ground-based interceptor in Poland, at that time the unclassified date was actually 2015. So this is -- this is pretty consistent.

One thing I don't understand and I -- I think are a lot of people who don't and I -- I'd like to get the clarification. We -- we do know in terms of the percentage necessary for the production of power. We're talking about from 3.5 to 5 percent enrichment. Is that pretty well something that's been used?

CLAPPER:

I think so, sir. I'd have to clarify for...

INHOFE:

Well, the...

CLAPPER:

... power generation. I don't know what the percentage is but I think that's right.

INHOFE:

All right. But 20 -- it's something less than the 20 percent that apparently is where they are right now?

CLAPPER:

That -- yes, sir, I would guess.

INHOFE:

This morning in the -- today's Early Bird, they talked about Iran has invoked the medical reactor to justify its enrichment of uranium to 20 percent, the higher level of refinement that nuclear power systems require. The higher enriched material also enables Iran to potentially move more quickly.

So it talks about something that I have heard and I assume that's correct that the difficulty is getting up to the 20 percentage. The time between reaching that level and reaching the 90 percent that we have been concerned about goes much rapidly, more rapidly than it would be to get up to 20 percent.

Is this -- is -- is this accurate?

CLAPPER:

That's generally true, sir. But there are a number of factors that would affect the pace and volume, which would frankly be best left to a closed discussion. Be happy to do that with you.

INHOFE:

Yeah. Sure. Well, that -- and that's good but I have heard this. These are things that we assume, we've talked about and -- and my concern has been when we, you know, can -- do end up getting to that point.

The -- it's been reported by the president that he's weighing the options of cutting down our -- our nuclear arsenal unilaterally by up to 80 percent. And that's something that I'm very much concerned about.

And there are a lot of us who actually back during the new -- when the treaty, the new START Treaty was debated were concerned about these things and I -- and I still am.

It's my understanding and I remember and I'm gonna read a quote by the president. When the president was trying to get the additional Senators on board to -- to pass the treaty he made some commitments. He said, "I recognize that nuclear modernization requires investment in the long term. It's my commitment to the Congress that my administration will pursue these programs and capabilities for as long as I am president."

And yet the fiscal year '13 budget is decreasing that amount by -- by $347 million and actually delaying the system of modernization. I have a quote that I've used recently by -- by Gates that talks about -- I can't find it right here.

But it talks about the fact that we have some 30 other countries that depend on our nuclear umbrella here. And I -- do you have, either one of you have any comments to make about this, which is not a proposal yet but it is a discussion of reduction of -- by -- of some 80 percent?

CLAPPER:

Well, sir, that's -- that's news to me. And I -- that's, you know, whether or to what extent we may reduce or not our nuclear arsenal is certainly not an intelligence goal.

But I can assure you that the intelligence community will be a participant in such deliberations and would certainly convey, you know, the threat dimensions of this particularly with respect to our primary nuclear -- the nations of primary nuclear concern, which of course are Russia and -- and -- and China.

INHOFE:

Well, the -- yeah, you -- you said it's news to you but this was released yesterday. And maybe you were preparing for this hearing and didn't get that.

The -- let me just mention something about North Korea. Many years -- I've always...

CLAPPER:

What I meant was news to me, sir, was reducing that to that extent.

INHOFE:

OK. Well, that was in the release yesterday.

The -- in the area of North Korea I've always been concerned about the accuracy of our -- our intelligence there. And I -- I've told the story of going back to 1998 when we made -- I made the request as to when North Korea would have the capability.

And it -- at that time, this was a multistage rocket. At that time they talked about three to five years. And it was seven days later in 1998, August 31st, that they actually fired one.

I'd just like to know how -- how confident you, the two of you are, on the quality of the intelligence we have on North Korea.

CLAPPER:

Sir, I've followed North Korea for a long time. I served as the director of intelligence to U.S. forces Korea in the '80s.

And I will tell you that North Korea is one of the toughest intelligence targets we have and has long been. A very, very secretive society, very controlled society. So I -- and there is ambiguity about our insight into North Korea nuclear capabilities and their intentions. And there is -- there are some promising developments, which I'd be happy to discuss with you in closed session with respect to enhancing the quality of our intelligence insights.

INHOFE:
I appreciate that very much. Thank you Mr. Chairman.

LEVIN:
Thank you very much Senator Inhofe. The -- Senator Webb is next.

WEBB:
Thank you Mr. Chairman and -- Mr. Chairman and Senator Inhofe both actually, the writer in me has to say this, before you used that quote from General Burgess, I believe the first person who made that statement was Winston Churchill when he said that the United States and Britain were two countries separated by a common language. So, you know, I didn't want to out you General Burgess, but somebody was going to do it sooner or later.

(CROSSTALK)

LEVIN:
Well I appreciate that.

WEBB:
And it -- it actually goes to one of the points that I need to make this morning and -- and to ask both of you for -- for your -- your advice on and that's, words do count. And I also sit on the Foreign Relations Committee and the last few days we've been trying to put together a resolution with respect to Syria. And first I would -- I would say, Director that your -- your comments -- your testimony and your comments were very helpful today. And -- and you can hear the frustration from people like Senator McCain on the fact that people -- people up here think they need to do something, but we have to be careful what we do.

And we have to be careful about the statements that we made as a Senate. And I have had a number of occasions since I've been here to -- to attempt to look at some of these statements that are well meaning, but hastily drawn and then sometimes overly conclusive in their tone. And -- and yet are not really complete in the detail. And it -- these things are pulled into the media and they, you know, say the Senate unanimously made this particular conclusion about -- about one event or another.

We had General Dempsey up here two days ago. I asked him a question about the nature of the opposition in Syria. Not a question -- going not to what the Assad regime would be capable of doing, which by the way Director I thought you laid out very -- in very understandable specifics. But really what is on the other side of the picket line? Who are they? How -- how much of this is domestic? How much of it is foreign? What is the regional dynamic? And he made a -- one comment, I'm going to give you a partial quote and he said that "Syria is a much different situation that we collectively saw in Libya. It presents a very different challenge in which we also know that the other regional actors are providing support as a part of a Sunni majority rebelling against a repressive regime."

We all know this. I think you -- you made some comments about this as well. I -- I asked him about the reports in the media last week that al-Qaeda was involved in some of the assassination attempts in Syria. He -- he would not reject it out of hand. He said he didn't know. But one of the things that General Dempsey was very clear about was they were still attempting to analyze the intelligence information to -- to come to some sort of conclusions. And so this is sort of an opportune time for me to ask both of you, what are your -- your thoughts on the nature of the opposition that is active on the ground in Syria right now?

CLAPPER:
Let me take a stab at that and then I'll ask General Burgess to amplify or correct, as the case may be. As I indicated earlier, the opposition is very fractionated. There is not a national movement, even though there is a -- a title of -- the Syrian National Council, but a lot of that is from external, exiles and the like. But there is not a unitary connected opposition force. It's very local. It's on a community by community basis. In fact in some communities, the opposition is actually providing municipal services as though it's running the community and -- and trying to defend itself against attacks from the Syrian regime controlled military.

The Free Syrian Army, which is kind of a blanket, generic name that's sort of applied to the collection of oppositionists, is itself not unified. There's an internal feud about who's going to lead it. Complicating this as you implied, of course are sort of the neighborhood dynamics. The Iranians, very, very concerned about propping up Assad so they have sent help in terms of trainers, advisers and equipment, mostly riot suppression equipment, that sort of thing. AQ -- another disturbing phenomenon that we've seen recently apparently is the presence of extremists who have infiltrated the opposition groups.

The opposition groups in many cases may not be aware they are there. We've had the two attacks that you eluded to, the two bombings in Damascus in December I think it was and then the two additional bombings in Aleppo, both of which were targeted against security and intelligence buildings and had all the earmarks of an al-Qaeda like attack. And so we believe that al-Qaeda in Iraq is extending its reach into Syria. Complicating all of this is -- and this is another contrast with Libya, where we had one or two or three sites that had chemical warfare components, it is a much more complex issue in Syria, which has an extensive network of such installations.

Although to this point, they -- and we're watching these very carefully, they appear to be secure. So many complexities here involving the opposition, which I'm sure will affect any discussion about coming to some assistance.

BURGESS:
Sir, I -- there's not a whole lot I can add to what Director Clapper laid out. The only other comment that I would make is in regards to what we have seen referencing the al-Qaeda like events. As we try and look at some of that, it appears to be those elements that may already be in country. But what we haven't seen so far and what we have not assessed yet, is whether there would be what I would call, a clarion call to outsiders coming in, to augment. We haven't seen much of that up to this time, so basically the team that's on the ground is playing with what it has.

WEBB:
Thank you. I would just -- my time is up, but I would like to read very briefly from a piece that was just published by Leslie Gelb, who needs no introduction as a foreign policy expert in our country, saying "When interventionists become avenging angels, they blind themselves and the nation and run dangerously a muck. They plunge in with no plans, with half-baked plans, with demands to supply arms to rebels they know nothing about, with ideas for no-fly zones and bombing. Their good intentions could pave the road to hell for Syrians. Preserving lives today, but sacrificing many more later."

And again I hope members of this body will -- will keep this in mind as we develop policies. Thank you Mr. Chairman.

LEVIN:
Thank you Senator Webb. Senator Ayotte?

AYOTTE:
Thank you Mr. Chairman. Director Clapper, General Burgess, thank -- thank you so much for being here today and for your service. Director Clapper, I believe you've previously testified that the re-engagement rate from those who have been released from Guantanamo Bay was 27 percent. What is the current re-engagement rate of terrorists who have been released from Guantanamo and has it gone up again from the 27 percent?

CLAPPER:
I think the next assessment will reflect a very small, less than a percentage point increase.

AYOTTE:
So the next assessment will reflect perhaps a percentage increase? So from 27 percent to 28 percent?

CLAPPER:
Somewhere in that neighborhood.

AYOTTE:
Certainly anyone being released from there and getting back into fighting our soldiers is one too many, isn't it?

CLAPPER:
Yes.

AYOTTE:
I wanted to ask you about -- there's been reports from the administration about the potential of exchanging, and I -- I asked Secretary Panetta about this the other day, of -- of five detainees to Qatar in exchange for gestures of goodwill from the Taliban in Afghanistan. As I understand, these five detainees that have been reported by both the Washington Post and the Wall Street Journal, they have been previously assessed by the administration in 2010 to present a high risk of returning to the fight. Has the designation for these five detainees changed by the administration?

CLAPPER:
No, Ma'am, they have not. And I -- I -- I hasten to add that of course negotiations have always been a part of any winding down of combat hostilities and that's the case here. This is a case of exploring the option to see what sort of reaction we might get from the Taliban. But a couple points I would make here is that I don't think anyone harbors any illusions about these five Taliban members and what they might -- might do if they were transferred.

Part and parcel of this discussion would be their transfer to a third country, such as Qatar and then the conditions under which they would be surveilled and monitored. I also want to add that under the provisions of the National Defense Authorization Act of FY '12, the secretary of defense has to certify his view on whether or not anyone can be transferred with respect to their recidivism. And I can tell you from personal encounters with Secretary Panetta, he treats that authority with the gravity that it deserves.

So...

AYOTTE:
And I...

CLAPPER:
... this is something we will - I think the administration will do very deliberately.

AYOTTE:
Well, and I appreciate that, and I appreciate what the secretary had to say about his responsibilities the other. And I know that he takes these very seriously. But I want people to understand very clearly, these individuals were designated by the administration in 2010 to be high risk. Nothing's changed about that assessment.

And the notion that we can monitor them or surveil them, we've tried that in the past with releasing people that have come from Guantanamo, terrorists, to third party countries with a - now we think it may go up to a 20 percent reengagement rate for what I understand the administration has described as goodwill from the Taliban.

I think this is an unacceptable risk. I think that we're - unless we're going to get them to lay them to lay down their arms, I don't know why we would do this to our military men and women and to our allies. So I appreciate what you are saying. I just see this as a huge risk in terms of safety for our troops and our allies.

I wanted to ask you briefly about Iran. I know that you've gotten many, many questions, both of you, about Iran. I just want to clarify a couple of issues. Does the Iranian regime continue to support Hezbollah? What kind of threat does Hezbollah pose to our ally, Israel? Is Iran supporting Hamas in the Gaza Strip? And General Burgess, is Iran supporting insurgents in Afghanistan? And what role is Iran playing in Iraq?

CLAPPER:
I didn't quite write down all those questions.

AYOTTE:
So basically, do they continue to support Hezbollah?

CLAPPER:
Yes, they do.

AYOTTE:
Hamas?

CLAPPER:
There is a very close relationship between particularly the IRGC, the Republican Guard Corps Quds Force, which is the organization responsible for operations around the world, and Hezbollah. It is kind of a partnership arrangement with the Iranians as the senior partner.

AYOTTE:
And is Hezbollah not a terrorist group that threatens our close ally, Israel?

CLAPPER:
Yes.

AYOTTE:
Does Iran continue to support Hamas in the Gaza Strip?

CLAPPER:
Indirectly, yes.

AYOTTE:
OK.

Are they not a threat also to Israel and also to the peace process?

CLAPPER:
Hamas? Is that...

AYOTTE:
Yes.

CLAPPER:
Yes.

AYOTTE:
General Burgess, is Iran supporting the insurgence in Iraq - I mean, excuse me - in Afghanistan?

BURGESS:
Yes, ma'am.

AYOTTE:
OK.

And what type of role are they playing in Afghanistan?

BURGESS:
Well, they have provided arms. They have been caught - I mean, we have found Iranian arms in Afghanistan. So, I mean, they are working a what we would call a dual-track strategy as they work not only to work against U.S. and coalition desires in there. But while at the same time they want to put forward the government of Afghanistan, so they're walking a very fine line.

AYOTTE:
But they're clearly supporting our enemies and trying to kill our soldiers?

BURGESS:
Yes, ma'am.

AYOTTE:
And in Iraq, what role are they playing right now that we've withdrawn? And how would you describe their role there?

BURGESS:
I would describe their role in much the same way as I did in Afghanistan as a very dual-track. They, you know, Iran does not want a strong Iraq on their border, but at the same time they also want to, you know, encourage us out of there totally. So again, they're walking both sides of the fence.

AYOTTE:
So again, they're working contrary to a stable Iraq, and they're also working contrary to our national security interests.

BURGESS:
I would not disagree with that statement.

CLAPPER:
They would like to have a cooperative Shi'a-dominated government in Iraq, which they have. But that's not to say that the Iraqi government, particularly Prime Minister Maliki, is necessarily a complete satellite of Iran. He has his issues with the Iranians as well.

AYOTTE:
But clearly, their efforts are continuing to fuel sectarian violence?

CLAPPER:
Absolutely. The three principle Shi'a militant groups that Iran has supported in the past, some of which were directly responsible for attacks on U.S. forces. Of course, the issue is whether, you know, they will turn their ire against the Iraqi government, or simply become part of the political process, remains to be seen.

AYOTTE:
And when you throw on top of it, of course, their efforts to acquire nuclear weapons, no question they're a grave threat to our national security and to that of our allies?

CLAPPER:
That's true. Iran is a big problem.

AYOTTE:
Thank you.

LEVIN:
Thank you, Senator Ayotte.

Senator Blumenthal?

BLUMENTHAL:
Thank you, Mr. Chairman.

And I join with other members of the committee in thanking you for your service and for your excellent testimony here this morning.

Focusing on Afghanistan and the roadside bombs, or IEDs. As you know, members of this committee and the United States Senate consider the role of Pakistan in providing ingredients used to make those roadside bombs as a great threat to this nation.

In the 2012 Defense Authorization Act, the $700 million in aid to Pakistan is frozen until they, and I'm quoting, " ... demonstrate significant efforts toward implementation of a strategy to counter improvised explosive devices."

I've heard nothing, I've seen nothing, that indicates they are making that kind of significant effort. Am I misinformed? Could you shed some light on that issue?

CLAPPER:
Do you want to take that?

BURGESS:
Sir, I would tell you that, yes, that IED usage in Afghanistan is up by 15 percent. And most of the precursors and components for those IEDs, while they are assembled in Afghanistan, come through Pakistan.

BLUMENTHAL:
And that could not be happening if Pakistan were making significant efforts to stem the flow of ammonium calcium nitrate and fertilizer, the components of those roadside bombs. Am I correct in that?

CLAPPER:
Yes, sir, that's correct. They have two of the major companies that produce this material are located in Pakistan. There is an extensive network from Pakistan into Afghanistan to move these materials.

BLUMENTHAL:
We know where those plants are, do we not?

CLAPPER:
Yes, sir, we do.

BLUMENTHAL:
And in fact, the Congressional delegation that I joined as recently as August, met with at least one of the owners of those plants, who indicated that their production is ongoing and the Pakistanis have the wherewithal to stop the flow of those ingredients into Afghanistan, do they not, sir?

CLAPPER:
Well, that's a good question, sir, is how much the Pakistani government controls anything in the Fatah - in the Fatah regions which border Afghanistan. So - but it's clear they could probably do more than they have to this point.

BLUMENTHAL:
So they're really, again, to come to the bottom line here, they've really made no significant effort so far?

CLAPPER:
Not that I'm aware of, no, sir.

BLUMENTHAL:
Turning to another area of inquiry, could you shed some light on the talks that are in progress, if there are such talks, as Mr. Karzai has acknowledged in the past few days there are apparently, involving the three parties, the Taliban, the United States and Afghanistan?

CLAPPER:
Yes, sir, there have been - I don't think either General Burgess and I are kind of the authorities on the negotiations with the Taliban. And I'm sure the Special Representative for Afghanistan, Marc Grossman, is far better informed of that. But I'm sure there have been dialogue. I know I'm sure President Karzai is, through directly or through intermediaries, has been discussing reconciliation issues with the Taliban.

BLUMENTHAL:
But you're aware that such talks are ongoing?

CLAPPER:
Yes, sir, I believe they are.

BLUMENTHAL:
What would be the need then for releasing these currently-incarcerated Taliban insurgents if those talks are ongoing at the moment?

CLAPPER:
This, sir, this is a part of a confidence-building. I think that started as kind of a separate track, and there are some reciprocity considerations, which I prefer to talk about in closed session.

BLUMENTHAL:
Well, I appreciate that. I would just say I would see no need for that kind of release if in fact the talks are ongoing. And in fact, if our adversaries have an interest - a self-interest - in talking, I personally would question the need for any such release. Apart from the security issues that have been raised by my colleague from New Hampshire, Senator Ayotte, and others previously.

Let me ask you, if I may, a general question. And I understand you may be reluctant to go into details in this setting. But if you could characterize whether there are differences in the threat assessments from our intelligence about the Iranian nuclear capability and the potential response to Israeli intervention there, and the Israelis' intelligence assessments? If you understand my question, which calls for a sort of a general answer? I'm not asking for the details.

CLAPPER:
If your question is, just to make sure I understand it, do we and the Israelis largely agree? And the answer is yes.

BLUMENTHAL:
Do you agree, General Burgess?

BURGESS:
Sir, I do. And we've been in these discussions for many years. I've personally been involved in them in both my previous life and in this life. And sir, generally speaking our assessments track with each other. They comport.

BLUMENTHAL:
Thank you.

And let me ask a final question -- and you may not think it is directly relevant to all the questions that you've had so far, but we have been in discussions with -- as recently as a couple of days ago, with Secretary Panetta and General Dempsey about the overall budget of the Department of Defense and the platforms that exist.

In terms of platforms for intelligence gathering, are there particular areas where you think the expenditure of resources poses a threat? In other words, to put it more simply, where diminished funding impedes or imperils intelligence gathering by the United States?

CLAPPER:
Well, sir, we're going through our own cuts in the intelligence community since a large portion of the national intelligence program is embedded in the DOD budget. So we were kind of given the same reduction targets on a proportionate basis. So we are in the -- in the mode for the first time in 10 years of cutting intelligence resources. We've been on a steady upwards slope for the whole decade and that's going to come to a halt and so we will have less capability then -- then we've had in the last 10 years.

That said, I -- I've been through this before when I served in -- in -- as Director DIA (ph) in the early '90s and we had to reap the peace dividend after the fall of the wall and we did some profound cutting in the intelligence community and didn't do it very well.

So we try to profit from that experience and place stock in those capabilities that make us resilient and agile so we can respond as we need to where ever hot spots or crises occur in the world. So as the Department of Defense, for example pivots to the Far East or the Pacific, we will do that as well and, obviously, a major equity for us and in the intelligence community is a support to the military.

Where we're affected, I think, to get to your question is, for example, as we draw down in Iraq, obviously, we are going to have a much, much reduced footprint across the board to include intelligence, that will affect our -- the fidelity of the intelligence that we've previously had on -- on -- on Iraq.

And I anticipate when we draw down in Afghanistan and intelligence resources are drawn down proportionately, that we will also not have the fidelity that we -- we have today.

So in that context, yes, we'll lose some capability, but the premise of the intelligence community and, you know, one of the organizing principles I've tried to push as a result of my experience 20 years ago, is a -- those capabilities that enable global coverage to include for denied areas such as Russia and China and enable us to adapt and be resilient, depending on what the crisis of the day is.

BLUMENTHAL:
Thank you very, again thank you both for answering my questions and for -- for being so forthcoming to our committee, thank you.

LEVIN:
Thank you very much, Senator Blumenthal.

Senator Brown?

BROWN:
Thank you, Mr. Chairman.

I won't belabor the point that my colleagues have made in reference to Iran, but I -- and I agree with most of what was said, but I -- I just want to emphasize how important it is that we ensure that Israel has everything it needs from us to close any intelligence capability gaps it has with respect to Iran.

Do -- do both of you agree with that recommendation or suggestion?

CLAPPER:
Yes, sir. And I think both of us have been proponents for sharing intelligence with Israelis, I'll be going there next week to engage with the Israeli intelligence officials to discuss that very point.

BROWN:
Great. Thank you.

And Director, also, just to add on a little bit more, my colleagues have already mentioned Syria and how the people are enduring serious attacks from Assad.

Earlier this week the head of Al Qaida released a video calling on all Muslims to -- and the countries surrounding Syria to join the fight against the Assad regime. And given that the president and the administration officials continue to say it's not a matter of if but when will -- will fail and fall, are we prepared for the situation of a possible failed state where Al Qaida enjoys a safe harbor and refuge and from which to coordinate attacks, i.e., like what -- what's the plan if Syria falls?

CLAPPER:
Well, that's a great question, sir, because what would succeed, who would succeed or what would succeed, Assad is a -- is a mystery and we -- we certainly don't know -- I don't -- what -- what would ensue and as I -- a quote that I read in my -- my oral remarks here at the outset of the testimony, quoting the Roman historian Tacitus when he said, you know, the best day a bad emperor is the first day and after that, I would add it kind of goes downhill.

And we don't -- there is no identifiable group that would succeed him and so there would be kind of a vacuum that would lend itself to extremists operating in Syria which is particularly troublesome in light of the large network of chemical warfare, CBW, weapon storage facilities and other related facilities that there are in Syria.

BROWN:
I -- I -- I agree and, you know, I have a concern that Al Qaida in Iraq is moving toward Syria and consolidating themselves there now. Do you have any evidence of that?

CLAPPER:
Yes, sir, we do. we've seen evidence of extremist -- Sunni extremists, so I'm not -- can't label them specifically as Al Qaida but similar ilk who are infiltrating the oppositionist groups, in many cases probably unbeknownst to those opposition groups.

BROWN:
And just to shift gears a little bit. The Fort Hood shooting, I know that there were some recommendations made regarding information sharing. What's the status of that and -- and can you tell me about -- a little bit about the counterintelligence community and what they're doing to help the leaders on the ground identify potential breakdowns like the one we saw at Fort Hood?

CLAPPER:
I'm not sure what you're...

BROWN:
Well in the wake of the reforms have yet to be completed particularly in the area of information sharing which continues, I think, to put our -- our nation at risk for homegrown terrorism and insider threats.

Are you getting all the information you need from U.S. agencies to adequately address our domestic threats, do you think?

CLAPPER
Well, sir, I think -- I'll put it this way, I think we've come a long way in the last 10 years in information sharing. It's a big focus for me, for the Office of the Director of National Intelligence sharing vertically across the agencies as well as -- or horizontally and vertically as well with federal, state, local, tribal and private sector.

There's been a lot of work done towards that. it's an emphasis area for me and I do think we've made -- we've made great improvements. But at the same time, of course, we've had episodes like Wikileaks, which reminds of the need to balance, you know, sharing and -- and -- and security. So we always have that fine line to draw between those two, but I -- I think we've improved but there's always more to -- more to do.

BROWN:
Very well, thank you both.

LEVIN:
Thank you very much, Senator Brown.

Senator Udall?

UDALL:
Mr. Chairman, if it's all right I'd like to yield to Mr. Manchin. I know he's got some -- a scheduling conflict, but I'd like to keep my place in the queue.

LEVIN:
We always appreciate...

(UNKNOWN)
We're just flip-flopping, Mr. Chairman. Thank you.

LEVIN:
We always appreciate those kind of courtesies.

Senator Manchin.

MANCHIN:
Thank you so much, Mr. Chairman.

And Director Clapper, I'm reading a book, finishing up, it's called "The Coming Jobs War" by Jim Clifton, I'd recommend it if -- if -- if y'all haven't seen it. And what proceeds in it, it says basically the coming jobs war's going to be the biggest war that we have facing this world, who's fighting for what jobs and it basically breaks it down 7 billion citizens -- human beings on this great planet Earth, 5 billion over the age of 15, 3 billion seeking a job of some sort or working, only 1.2 billion formal jobs in the world today, so we can see the mammoth problem that we're facing.

With that I -- I think what I'm asking is when you conduct intelligent estimates, do you consider the impact of unemployment and what it'll have on the stability of the population and how that increases the likelihood of unrest and terrorism?

CLAPPER:
Absolutely, sir. I haven't read the book, but I'll get it. But I think the point, even more basic than jobs is if you project out in the future what the world's supply of food and water is going to be in the face of the growing population. If you project up what the population of the Earth is going to be in the face of declining resources.

And, yes, absolutely we do account for that in doing any kind of intelligence assessments. And indelible illustration of that, of course, was Arab Spring because of the conditions which actually still exist. The population bulge of high numbers of young unemployed people, rising economic difficulties and depravation, the lack of political freedom of expressION and, of course, one of our major insights into that is in social media, which has become a -- a -- a major bellwether for the attitudes of people.

So to sort of answer your question, sir, is absolutely, we do consider that in assessing the potential for disruption.

MANCHIN:
Thank you.

And General, following up on that, when I read this book and I was thinking, our involvement and the amount of money that we have spent in Afghanistan, knowing that when we leave, they have no economy. They've had no economy. The only economy they have is us.

Knowing that the unrest, instability, terrorism or the ability to foster terrorism will be the same and I have a hard -- very, very hard time understanding why we're still there and -- and -- and I -- I know I've talked to everybody and I just -- I feel very strong about it.

What I will say in this, sir, North Korea, it's reported that North Korea and Iran have possession of U.S. drones that crashed in December and will likely try to reverse engineer them so they would have them at their disposal.

Why in -- on Earth did we not design or request a design of destruction when those -- when we lost those drones under any circumstance that we could have destroyed them so they could not have been copied and reproduced back to use against us?

CLAPPER:
I'd be happy to discuss that with in closed session, sir.

MANCHIN:
Gotcha.

And, General Burgess, this would be for you.

What is the succession of Kim Jong Un mean for the security of the Korea Peninsula and what does it mean for North Korean nuclear program and the six-party talks that are going on.

BURGESS:
Sir, what I'd tell you so far is as we've watched the succession, it's -- it's unfolding as we had thought it would. It's actually moving as -- as has been designated and at this time we see no change to any of their policies and we've actually seen no impact on the way they're going about conducting business at the present time.

MANCHIN:
And concerning Al Qaida, al-Shabaab, the terrorist insurgent group in Somalia formerly joined Al Qaida this past week. Some Somali-Americans have traveled from the U.S. to join al-Shabaab and fight the transitional government in Somalia. And I'd like to know from you, sir, what is the -- what are we going to be doing to respond to this threat?

CLAPPER:
Well both -- first of all I would -- I would play down a bit the significance of this union between al-Shabaab and Al Qaida. I think these are two -- two -- core Al Qaida is an organization under siege and is in decline. Al-Shabaab for its part, is under pressure from the -- by virtue of both the Ethiopian and Kenyan incursions into Somalia. They've lost territory and are under -- under the gun. So I don't -- I think we'll continue to do what we've -- we've always done with these two organizations.

Al-Shabaab for its part has been largely focused on regional issues. That is, within -- within the Horn of Africa as opposed to projecting out a homeland threat. What is bothersome about al-Shabaab of course are the number of foreign fighter recruits that they bring in -- and -- and train and then fight.

MANCHIN:
Finally and General, to both of you all. On Tuesday, General Dempsey testified that the military government in Egypt is aware that they stand to lose $1.3 billion of aid from the United States and we've been a solid partner. According to press reports, the same government general -- the same government General Dempsey spoke of is losing power to anti-American factions. Some of these factions are campaigned to end the U.S. aid to Egypt. Based on your intelligence assessments, would we be able to rely on a future Egyptian government to uphold the 1979 peace treaty with Israel?

CLAPPER:
That's an excellent question, sir. And I think that will depend very much on the continuation of the transitional process in Egypt, particularly when they write their constitution and what the constitution may or may not say about the treaty with Israel. I think under any circumstance -- under -- I can't foresee a circumstance with any government that emerges -- civilian government that emerges after the SCAF transition or hands-off in June, that there won't at least be a review of the treaty. But how -- how that will come out, I -- we don't know.

MANCHIN:
Let me -- let me just say thank you to both of you for your outstanding service to this country of ours. And with that I want to thank my gracious colleague, most generous colleague from -- from Colorado.

LEVIN:
Thank you Senator Manchin. Senator Graham?

GRAHAM:
Thank you Mr. Chairman. Thank you both for your -- for service to our country. I think it was mentioned that the intelligence budget is sort of wrapped up in the Department of Defense budget. There is -- Secretary Panetta said that if we did sequestration, if we took another $500 billion to $600 billion on top of the $487 billion being planned, it would be devastating, it would be irresponsible on the Department of Defense side. Would it have the same effect, Director Clapper, on the intelligence side?

CLAPPER:
Absolutely, sir. It would...

(CROSSTALK)

GRAHAM:
And would you agree with me that if -- if America every needed a -- a smart intelligence network, it's now because the enemies we're fighting really don't care if they die, they just want you to go with them?

CLAPPER:
That and other reasons yes, sir. And if I may add, the provisions as they pertain to intelligence are actually even more onerous because we would not have any latitude to move or pick and choose where we would reduce. It is stipulated for us that every single program within intelligence would have to take a proportional hit. So we would be faced with the prospect of RIFing a lot of employees, which would have a devastating effect, not only on them but the employees who weren't. As well as it would effect virtually very major acquisition system we have in the intelligence community because they would all be wounded. So it would be a disaster.

(CROSSTALK)

GRAHAM:
Are you saying it would result in destroying the ability of the intelligence community to adequately defend this country?

CLAPPER:
It would have -- well, sir I would have a hard time saying that as the director of National Intelligence, that I could face a group like this and say I have any degree of confidence that I can provide adequate intelligence for the safety and welfare of this nation if that happened.

GRAHAM:
In many ways, America would go blind in terms of intelligence gathering?

CLAPPER:
It would, sir. Over time.

GRAHAM:
Over time. The -- the -- OK. Let's go to Iran. Keep this at 30,000 foot view, the regime's goal don't you think is survival? Right?

CLAPPER:
Ultimately.

(CROSSTALK)

CLAPPER:
Yes, sir.

GRAHAM:
OK. Do you think they have made a decision that maybe the best way to survive is to develop a nuclear weapon?

CLAPPER:
Well, sir we've said consistently that they will base this on a cost-benefit analysis and...

(CROSSTALK)

GRAHAM:
Do you think -- do you think they're trying to develop a nuclear weapon? Do you think that's their goal?

CLAPPER:
They are putting themselves -- they're sustaining the industrial infrastructure to enable them, if the elect, if that make that decision. Yes, sir.

GRAHAM:
Do you think they're building these power plants for peaceful, nuclear power generation purposes?

CLAPPER:
That remains to be seen.

GRAHAM:
You have doubt about the Iranian's intention when it comes to making a nuclear weapon?

CLAPPER:
I do. I -- I -- I...

(CROSSTALK)

GRAHAM:
You're not so sure they are trying to make a bomb?

CLAPPER:
I'm sorry?

GRAHAM:
Are you -- you -- you doubt whether or not they're trying to create a nuclear bomb?

CLAPPER:
I think they're -- they are keeping themselves in a position to make that decision. But there are certain things they have not yet done and have not done for some time.

GRAHAM:
How would we know when they have made that decision?

CLAPPER:
I'd be happy to discuss that with you in closed session.

GRAHAM:
OK. Well I guess my point is that I have -- take a different view. I -- I'm very convinced that they're going down the road of developing a nuclear weapon. I can't read anyone's mind, but it seems logical to me that they believe they get a nuclear weapon, they'll become North Korea and nobody's really in the future going to bother them. Let's talk about nuclear capability in the hands of the Iranians. Is that a good outcome for the United States national security interest, if they were able to achieve nuclear capability?

CLAPPER:
Obviously not.

GRAHAM:
OK.

CLAPPER:
If they have a nuclear weapon and the...

GRAHAM:
Right.

CLAPPER:
... the means of -- and the means of delivering it.

GRAHAM:
Right. The reason being, it would create a nuclear arms race, most likely in the Mideast.

CLAPPER:
That's certainly a -- a -- a potential and likely outcome.

GRAHAM:
Arab Sunni states would not take kindly to Persian Shiites having a nuclear trump card.

CLAPPER:
Correct.

GRAHAM:
And the likelihood of a terrorist organization being able to access nuclear materials in the hands of the Iranian Ayatollahs would be greater, not less wouldn't you think?

CLAPPER:
Probably so and of course that's the -- the nexus of, you know -- a terrorist group and weapons of mass destruction is...

(CROSSTALK)

GRAHAM:
When President Obama says it's unacceptable for the Iranians to achieve nuclear capability, do you agree with that?

CLAPPER:
Yes, sir I do.

GRAHAM:
The Congress is about to introduce a resolution that says containment of a nuclear capable Iran is -- is -- is not a good national security strategy so we're going to be backing up the president and I'm glad to hear you agree with that proposition that we should not as a nation, try to contain a nuclear capable Iran, we should try to prevent it. And as you said, sanctions may work. I hope they do. I -- I am not in the camp of believing that all is lost. Do you also believe that all options should remain on the table when it comes to stopping them from getting a nuclear capability?

CLAPPER:
Well, sir that's a personal view not -- that's not the intelligence community's -- you know, we don't...

(CROSSTALK)

GRAHAM:
Just personally, you...

(CROSSTALK)

CLAPPER:
... policy, but certainly I do.

GRAHAM:
Yeah, that's what the president said. I certainly agree with him. Now, let's get back to Iraq. Has the security environment deteriorated since we left Iraq? Militarily?

CLAPPER:
I think it's about the same. We've recently done an assessment on -- on the prospects in Iraq for the next 18 months and I think the -- the view is that while there are challenges and uncertainties, we believe the -- at least for the next year or so, that the Iraqi government will continue. It -- it appears that the Sunnis, at this point believe that their best prospect for protecting their interest is -- is to participate in the government.

GRAHAM:
So do you believe that us, withdrawing all of our forces from Iraq has really had no effect on the Iraqi security environment?

CLAPPER:
I wouldn't say no effect. Obviously...

(CROSSTALK)

GRAHAM:
Would you say minimal effect?

CLAPPER:
Well I think there are certain enabler capabilities that they no longer have by virtue of our absence, but at the same time, as General Burgess indicated in his statement, they've -- they've done reasonably well and they have a -- a -- a reasonably capable C.T. force.

GRAHAM:
Do you know why the vice president al-Hashemi is Sunni vice president? Why they tried to indict him days after we left and not before?

CLAPPER:
I do not know why, the timing.

GRAHAM:
OK.

CLAPPER:
Other than, I guess the implication would be that our presence there, although we were doing all we could diplomatically, I -- I don't know why the timing.

GRAHAM:
Is it generally viewed by the Sunnis and the Kurds that when America left Iraq, that was a -- that was a boon to Iranian influence?

CLAPPER:
I -- Sir I don't really know how...

GRAHAM:
Have you talked to the Sunnis and Kurds...

CLAPPER:
I have not.

GRAHAM:
... about this? OK. I would suggest that you do. Now, when it comes to Afghanistan...

CLAPPER:
My -- there's no question they're concerned about...

(CROSSTALK)

GRAHAM:
I would suggest you sit down with some leading Sunnis and Kurds and have a discussion about what they thinks happening in Iraq. Now, Afghanistan. The Strategic Partnership Agreement is really the last card to be played in many ways, isn't that correct? The Afghanistan...

CLAPPER:
I'm not sure what you mean by last card. That's certainly a -- an important...

(CROSSTALK)

GRAHAM:
Mr. Chairman just if I could have 30 additional seconds here, I know I'm -- I'll be quick. The bottom line is if we have an American military presence post 2014 at the request of the Afghan government and people, that would allow a counter terrorism capability, American air power, that would always give the edge to the Afghan Security Forces and probably be the end of the Taliban militarily. Do you agree with that construct?

CLAPPER:
I do. I think that would be a very positive thing, not only in Afghanistan, but regionally.

GRAHAM:
And the best way to negotiate with the Taliban, saying you're never going to take this country back over militarily, you need to get involved in the political system.

CLAPPER:
Well, at a minimum that the Taliban would not provide a reservoir or harbor or safe haven for the likes of Al Qaida.

GRAHAM:
Thank you.

LEVIN:
Thank you, Senator Graham.

Senator Udall?

UDALL:
Mr. Chairman, I'm again going to yield to a colleague, Senator Hagan, who chairs the Emerging Threats Subcommittee, has to preside on the floor in a few minutes, so if I might I'd yield to her...

LEVIN:
Of course. Senator Hagan?

UDALL:
... and maintain my...

LEVIN:
You got no competition left at the moment.

Senator Hagan?

HAGAN:
Thank you, Mr. Chairman, and certainly thank you, Senator Udall.

I wanted to follow up on Senator Graham's question concerning on Iraq. But I also wanted to state how much I appreciate both of you being here today testifying but in addition, your leadership and long- term security interest in our country. So thank you.

 

Director Clapper, in your prepared testimony you state, "Al Qaida in Iraq, despite its weakened capabilities, remains capable of high- profile attacks and some Shia militant groups will continue targeting U.S. interests including diplomatic personnel."

What's the intelligence community's assessment of the capabilities of Iraqi counterterrorism forces to continue similar operations against Al Qaida in Iraq in the absence of our U.S. forces?

General Burgess?

BURGESS:
Yeah. I mean, I would tell you that our assessment is that the C.T. force that was left there is a capable force but also AQI is a capable and formidable foe.

So there -- while the Iraqis have some capability, there are certainly some things that we are still looking at doing to help them from an intelligence standpoint and some others with some (inaudible) forces left...

HAGAN:
How about protecting our diplomatic forces?

BURGESS:
Ma'am, we put a lot of resources against that as the U.S. and we work with our Iraqi friends.

HAGAN:
Thank you.

Let me leap to -- to Libya and the proliferation of their weapons stockpiles. When Gadhafi's regime fell, it was discovered he had undeclared stocks of chemical weapons as well as large quantities of conventional weapons.

Can you tell the committee if the chemical weapons are secured?

CLAPPER:
Yes, they are.

HAGAN:
Were these weapons produced by Libya or whether they had help in -- in producing these weapons?

CLAPPER:
We don't know and -- and have not been able to determine that.

HAGAN:
What about your assessment of what happened to all the stockpiles of conventional weapons such as missiles and -- and artillery?

CLAPPER:
Well, the principal area of concern, of course, are the so-called MANPADS, or shoulder fired weapon -- anti-aircraft weapons and the estimate was going into the upheavals there of about 20,000 MANPADS.

In fact, Libya had more MANPADS than any non-producing country in the world. There's been an active and aggressive program run by the State Department to recover MANPADS.

And they've -- through that program the estimate -- recovered about a quarter of them, about 5,000 MANPADS.

There are some number of others that were probably destroyed in -- in the course of the air campaign that were in depots and other storage places. But the truth is that the MANPADS and other weapons are distributed all over the place, in homes, in factories, in schoolhouses and -- and it's -- it's all over.

So there is -- there is a concern, obviously about recovery of these -- of these weapons.

I'd say though that the transitional government in -- in Libya is on schedule and is moving towards elections and reforming the government. Their oil refinery capacity has recovered faster than we anticipated. They're up to about one -- we estimate about one million barrels a day and their pre-upheaval level was about 1.6 million.

So there are problems there but there is, I mean, there is some room for optimism.

HAGAN:
How did you estimate 20,000 MANPADS and then 5,000 recovered?

CLAPPER:
Well, the 5,000 recovered is...

HAGAN:
Right, that's...

CLAPPER:
... by count.

HAGAN:
Right.

CLAPPER:
And that was the best intelligence assessment that we had based on all-source analysis of the number of MANPADS they had before the demonstrations and the like started.

HAGAN:
In recent weeks we've seen a spike in violent attacks by the Boko Haram in Nigeria. Are some of these weapons getting into Nigeria, especially the MANPADS that you're discussing?

CLAPPER:
We do not have any evidence of a direct relationship between weapons in Libya, if that's your question...

HAGAN:
Yes.

CLAPPER:
And -- and -- and Nigeria, no.

HAGAN:
According to press reports, Al Qaida in the Arabian Peninsula, partially as a result of the ongoing political crisis in Yemen, in Yemen's capital, continues to gain territory in the southern region of Yemen.

Al Qaida in the Arabian Peninsula's gains are a cause for concern obviously for many reasons including the fact that it potentially creates a sanctuary for planning of external operations.

My -- my question is what's the intelligent community's assessment of AQAP's territorial gains in southern Yemen and has it provided planning and training space for the potential AQAP external operations?

CLAPPER:
Well, obviously we're very concerned about that particularly to the extent it would provide a haven for training facilities.

HAGAN:
Right.

CLAPPER:
And we are monitoring that very carefully. And -- and also watching -- I -- I think it interesting when a terrorist group like Al Qaida, AQAP, all the sudden has municipal responsibilities and just how they deal with that and whether that will be a distraction to their foreign plotting.

I think AQAP though as one of the Al Qaida franchises is probably the organization that we are most concerned about in terms of potential threats to Europe or the homeland.

HAGAN:
What's your assessment of the ability of the Yemeni security service to confront AQAP and regain the government's control of this space?

CLAPPER:
To this point we continue to have good cooperation with the Yemeni intelligence and security organizations. And hopefully that will be sustained even as the government transitions.

HAGAN:
Thank you, Mr. Chairman.

Thank you, gentlemen.

LEVIN:
Thank you very much, Senator Hagan.

Senator Cornyn?

CORNYN:
Thank you, Mr. Chairman.

Thank you for your service, gentlemen. You have our respect and admiration. And I just have a few questions I want to ask you about the economy.

And Director Clapper, you, on page 28 you -- you -- as part of your prepared remarks talk about the challenges to the global economy and also to energy.

And I want to specifically ask you about the red lines that Secretary Panetta identified with regard to blockades of the Strait of Hormuz.

Which I don't think it takes a fertile imagination to see if there was some sort of action by Israel against Iran because of concern about their nuclear capability that there would be retaliation.

And part of that could well be a blockade of the Strait of Hormuz, which I'm confident we could ultimately -- we could -- we could break that blockade.

But I just want to ask you when 20 percent of the world's oil supply transits the Straits of Hormuz, what is the impact on -- on oil prices, of the -- the -- the geopolitical issues that we see in the Middle East?

In other words, does -- does the threat of a possible action by Israel against Iran and possible retaliation, which would include a blockade of the Strait of Hormuz, does that affect worldwide oil prices?

CLAPPER:
Well, yes sir, it does.

And of course for the reasons you cite, if -- if the Strait were blocked, you know, that would have profound impact not only in the region but -- but in the -- the rest of the world would have great impact on -- obviously on -- on the price of oil.

And of course that's one thing we have to manage very carefully with the NDA (ph) provisions on imposing more sanctions on Iran so that we don't end up in the -- the worst of both worlds.

So -- but you're quite right it's a -- it's a very delicate balance here and clearly would have impacts on -- on the price of oil and world -- and world economy.

CORNYN:
And a blockade to the Straits of Hormuz because of the blockade of -- of the oil trade, would you see that that would have a negative impact not only on -- on the global economy in terms of the projections of growth?

And what I'm getting at is obviously we're coming out of a very tough patch and projections by the Congressional Budget Office and the Federal Reserve are for a very -- relatively slow rate of growth and higher unemployment here for the next several years.

And -- and I just would like to get your impressions of the -- the possibility of -- of a blockade, what that would do in terms of the rate of expected growth of our economy here and -- and -- and related topics.

CLAPPER:
Well, sir, I'd -- I'd have to take that one under advisement. I -- I'm -- I'm not an economist.

And I'd want the experts to, if there is a -- the possibility for projecting what the impacts would be globally on the economy and individually for a country and it would vary from country to country depending on how dependent they are on oil that -- that transits the Strait.

But I think the general answer is it's hard to see a good effect on -- for any number of reasons if -- if a blockade were allowed to stand.

CORNYN:
We've been debating a payroll tax holiday that an estimate is it would provide an extra $20 a week for a person making $50,000 a year.

But in 2011 the average family spent more than $4,000 in gasoline. So my concern is, in terms of our economy, the geopolitical uncertainty that we've talking about and what impact that would have on families here in the United States and what impact it would have to perhaps dampen if not wipe out our economic recovery.

And I -- I know you don't -- that's sort of what -- the direction I was heading in.

Let me ask you, because I'm from Texas obviously Mexico's our southern neighbor. Senator McCain had some questions about Mexico and obviously it's a matter of continual concern.

CORNYN:
The -- the Department of Justice and more -- more particularly the Bureau of Alcohol, Tobacco and Firearms had a -- a program called Fast and Furious that you're aware of, whereby 2,000, approximately, weapons were allowed to walk from gun dealers in the United States by the Bureau of Alcohol, Tobacco and Firearms.

And I believe the last estimate I saw is that roughly only about a quarter of those weapons have actually been recovered. And of course, one of them or two of them actually were found at the scene of the death of U.S. Border Patrol Agent Brian Terry.

Could you shed any light or do you have any opinion on what the impact of the transit of those firearms would have on the cartels and the violence and the crime that we might see as a result?

CLAPPER:
Well, sir, I -- this is not an intelligence issue and fortunately, it's one aspect that I don't have any responsibility for. It's -- it's a very, very unfortunate incident. Obviously guns, whether in a case like this or by any other means that find their way from the United States into Mexico certainly don't help the situation.

CORNYN:
Do you know, either General Burgess or Director Clapper whether Mexico, I'm -- I'm advised Mexico government officials were not advised by the Department of Justice or the Bureau, Tobacco, Firearms about this Fast and Furious program.

Do you have any -- anything you can tell us about their reaction to -- to this diplomatic breakdown?

(UNKNOWN)
No, I can't, sir. I -- I -- again it wasn't an issue conducted in intelligence channels so I don't know anything about it.

(UNKNOWN)
Thank you very much. Thank you, Mr. Chairman.

LEVIN:
Thank you, Senator Cornyn.

Senator Udall.

UDALL:
Thank you -- thank you, Mr. Chairman. Gentlemen, good morning to you, thanks for the credible breadth and depth of your work and the tour that you've taken us on touching on many of the hotspots in the world. I also want to thank you for your -- for your service, which included many, many years.

Let me turn to a comment that Secretary Gates made at West Point. He said, quote, "I must tell you, when it comes to predicting the nature and location of our next military engagements since Vietnam, our record has been perfect. We have never once gotten it right, from Mayaguez (ph) to Grenada, Panama, Somalia, the Balkans, Haiti, Kuwait, Iraq and more. We had no idea a year before any of these missions that we would be so engaged."

Do you agree with Secretary Gates on this point and if so, what can we do and what can you do to address that failing?

Well, I guess I presupposed Director, you'd agree with me and Secretary Gates, but if you disagree, please feel free to do so.

CLAPPER:
I am a great fan of Secretary Gates. We're good friends and known each other, so I'm -- I loathe disagree with him.

I will say that, you know, as far as our obligation, our responsibility is, you know, is -- is to provide as much insight for decision makers and policy makers which we are not. And you know, what the implications are, what the threat situation is, what kind of a situation we're getting ourselves into for any military operation overseas.

UDALL:
General Burgess, you care to comment? And particularly there are thoughts (inaudible) changes, additional resources?

BURGESS:
No, sir, I wouldn't ...

UDALL:
... that we (inaudible).

BURGESS:
Like -- like Director Clapper, I would -- I -- I would probably never publically disagree with Secretary Gates.

But having said that, I mean, it says we have discussed even last year in front of this committee, having this same discussion as we looked at the Arab Spring as it was called then.

I am one of those that think that the intelligence community did in fact paint the picture of the environment and the situation and things that were going on.

Did we make the tactical call in some cases? No, sir. Can we be faulted for that? Sure, because there is intelligence failure and operational successes, we say, so.

UDALL:
Yeah, and I think it's important to note that Secretary Gates said the -- we -- we have a perfect record, I'm paraphrasing, when it comes to predicting the nature and location of our next military engagement, he didn't necessarily imply that our intelligence didn't give us some indication or that we weren't prepared with some understanding of those -- those cultures and societies.

Let me -- let me piggyback on your comment about the Arab Spring, direct the question to both of you -- (inaudible) ask, I'd be interested to see what you have to say.

What have we -- the intelligence community learned in the wake of the Arab Spring?

CLAPPER:
Well, we've -- we've learned that in our focus on counterterrorism where we were in many of these countries engaged with local liaison services on that subject and maybe weren't paying as much attention to the backyard that we were in at the time. So there's that lesson.

Certainly the, you know, we put a lot of emphasis on the use of social media as an indicator. It's not a panacea, it's not the cure- all and it's not clairvoyant, but it certain is a great indicator of the general attitudes and tenor of citizenry. That, as well as how a host government may try to suppress that social media. So that's -- that is somewhat kind of a new thing for us, which I think was brought home to us very clearly as a result of Arab Spring.

UDALL:
General, do you have any thoughts to add?

BURGESS
No.

UDALL:
I -- I read a real interest in -- I'm slightly loath to even mention it here, but I -- but it's in the general information (inaudible), that North Korea's citizens now have more access, General Clapper, to new media technologies.

CLAPPER
Well not much. There are certain elite that have access to that sort of the thing, but the general citizenry, unless it's smuggled in from the outside do not. And that's one of the -- and of course, the North Korean regime realizes that and what social media means in terms of freedom and the outside world and freedom of information.

UDALL:
There -- there's an opportunity there but also fraught with danger for their citizens, obviously.

Let me turn to Pakistan. We know that it's a fractious environment there, there's a -- it's a regime divided. Who determines there the level of cooperation on counterterrorism and on counterinsurgency efforts?

CLAPPER
Well, as you may know, sir, the Pakistani government is in the throws of kind of reexamining perhaps a reset, if I can use that term, of just what the relationship will be with the United States. That's a subject their parliament is going to take up and so we'll await the outcome of that.

UDALL:
How do you assess the current economic situation in Pakistan?

CLAPPER
Well they have their challenges. It's a tough situation there for them.

UDALL:
Another question on Pakistan. Your assessment, General and Director Clapper, on the likelihood of another military coup in Pakistan over the next year to two years?

CLAPPER
Well ...

UDALL:
Is that a closed session?

CLAPPER
It's not, you know, the history has been that never had an administration that saw the completion of its whole term. I am moderately optimistic that this one may succeed it despite all its current challenges and the court proceeding that's going on -- on there now, but I -- I don't -- I don't think it's the -- the inclination of the current Army leadership, specifically General Kayani, who I think is very sensitive to the independence of the military and -- and not doing that.

UDALL:
So I see Senator Shaheen is here, let me ask one last question.

Would you describe, and I know you speak in plain English but I'll -- I'll put it that way as well of the -- the magnitude of the cyber threat facing the country, we were privy to some important briefings as you all participated in these last few weeks on the Senate side.

CLAPPER
Well, sir, we discussed this quite a bit and both of us have spoken to it in our -- our written testimony and it's quite profound. In my oral remarks, I just highlighted the fact that counterterrorism, proliferation and cyber are -- are three major concerns that we highlighted in the oral testimony, the National Counterintelligence Executive, which is part of my staff, issued a report on the impact of economic espionage in this country which was put out in October, which called out both Russia and China, particularly China, because of the grand theft of intellectual property in this country. So it is quite a profound threat and that's one reason why we're supportive of the Lieberman, Collins, Rockefeller, Feinstein bill.

UDALL:
So you -- you included it in your three central threats that --

(UNKNOWN)
I did.

UDALL:
-- we really (inaudible).

Well thank you, again. Thanks for your service and thank you for spending all morning with us. I appreciate it. Thank you.

LEVIN:
Thank you, Senator Udall.

Senator Shaheen?

SHAHEEN:
Thank you, Mr. Chairman. And thank you Director Clapper and General Burgess for being here.

I'm -- I hate to keep to keep you past the noon hour, so I will try and be quick.

Last year in the midst of the Libyan operation, Senator Collins and I wrote to the administration expressing our concerns that I know you share about Libya's vast arsenal of unsecured manned portable air defense systems, MANPADS. And considering that these pose a continuing threat and there are an estimated 20,000 still out there, I -- I'm not going to ask you to speak to that because we ask that the intelligence committee give us a report as part of the NDAA authorization. And I just wanted to say that I look forward to hearing from you about that subject because it is clearly going to continue to be a concern.

CLAPPER
It is a concern. The -- and you're quite right about the -- the estimate that -- the all source estimate we had before the anti-Kaddafi demonstration started that we -- of -- of -- if about 20,000 MANPADS in Libya.

The State Department is managing a aggressive program to recover MANPADS and to this point, they've recovered about 25 percent of them, about 5000.

There are many others that we are certain, although we can't count them all, but we're certain that were destroyed by virtue of the fact they were in ammo depos and bunkers and this sort of thing that were destroyed during the -- either the contest between the opposition and the regime or the NATO airstrikes.

That said, there are a large number that are unlocated and -- and will be very problematic in recovering since they have them all over the place. Libya was a wash in -- in weaponry. So we'll continue with the program to do what we can to either account for the ones destroyed or damaged during the demonstrations and -- and encounters. And as well, continue I would -- would guess, continue with the recovery program that this --- the State Department team is running.

SHAHEEN:
And how -- how often are we seeing these come up with the militias in Libya as there's continuing conflicts there?

CLAPPER:
Well there is -- many of the Libyan militias have not folded under a central government yet and many of them are keeping their weapons for one reason or another. So that -- that too is another agenda -- another issue that we're trying to watch.

SHAHEEN:
I want to pick up on Senator Udall's questioning about Pakistan, which I believe continues to be one of the most dangerous parts of the world and especially given the continued back and forth in our relationship with Pakistan. Can you talk about what the current vulnerabilities are of their nuclear program? And the potential to lead to proliferation of sensitive technology or material?

CLAPPER:
I'd be pleased to discuss that with you in closed session.

SHAHEEN:
I thought that's what you might say, but -- but can you talk about how confident you are that the Pakistani nuclear program has the appropriate safeguards and protections?

CLAPPER:
I'm reasonably confident they do.

SHAHEEN:
And given -- are -- are we also feeling like the next level of military leadership down from General Kayani also shares the same commitment to safeguarding that arsenal that we've seen from the top leadership in the military?

CLAPPER:
I believe they do.

SHAHEEN:
Thank you. Obviously the relations -- Pakistan's relations with India plays a role in their defense plans and operations. There's been some small good news in terms of potential for a thaw in that relationship in the last year or so. Can you talk about how you assess the potential for improved ties between the two countries? And how that might effect stability in that region?

CLAPPER:
Well, obviously from Pakistan's standpoint, they view India as an existential threat. But as you eluded there have been some encouraging breaks here in light -- in -- in the context of dialogue between the two countries. And I know from having traveled and dialogue with, certainly the Indians would -- would be very interested as well in relaxing tensions. But there are longstanding, fundamental issues there that I think will be hard to overcome.

Obviously if -- if they did reach some agreement, it would be -- it would be huge. But there are lots of countervailing factors, I think -- that again best left for discussion in closed session, that I think are going to make that difficult.

SHAHEEN:
Have -- when we were there last summer, I was there with Chairman Levin -- Levin and this issue came up and the political leadership was quick to reassure us that they were taking measures to try and thaw relations. Do you -- is our assessment that there is a commitment at the top levels in both India and Pakistan to -- to try and address this longstanding conflict that's existed between the two countries?

CLAPPER:
I think that's probably a fair assessment. I think at the -- at the top levels they would both see advantages to that -- both -- mutual -- mutual advantages.

SHAHEEN:
Thank you. General Burgess, for nearly two decades, submarine force is a major priority and it's military modernization has been something that we've seen from China. To what extent do those ongoing modernization efforts and it's focus on expanding it's submarine force, raise concerns with our navy and our ability to respond to that Chinese build up?

BURGESS:
Well I think across the board, the Chinese are making modernization improvements. Whether it be in their air force, in their navy and other aspects of what they're doing. They're taking a very holistic approach. Submarines are a part of that. We in defense intelligence, along with the navy and others are watching that very carefully. And we continue to watch their developments.

SHAHEEN:
Thank you. Director Clapper, I want to go back to Russia as I chair the European Affairs subcommittee in the Foreign Relations Committee and so we've been watching very closely what's happening in Russia right now. The protests, the reaction to Putin's announcement that he would switch from being prime minister to being president again. And you talked in your January testimony about Putin's return to the presidency as resulting in more continuity than change. Can you talk about how we view, first of all the -- the impact of demonstrations in Russia and what change that might affect as we're looking at a changeover in Putin's role there?

CLAPPER:
Well, I think -- I find this evolution in Russia very interesting. Its -- and again this is another manifestation of the impact of social media and I think the Russian government, the Russian elite, are finding real challenges in putting that free information flow via social media genie back in the bottle. And I often wonder whether Mr. Putin will rue the day he decided to come back. He might have been better served to quit while he was ahead. I think he comes from kind of the old school and I don't think the old order is going to -- is going to work in -- in -- in Russia.

And I think when the number -- the thousands of people willing to turn out in a bitter, bitter Moscow cold in -- in -- in January or February is -- is a great testament to some profound change I believe is going on in Russia.

SHAHEEN:
Thank you both very much.

LEVIN:
Thank you very much Senator Shaheen. I have a few questions which may be the beginning of the end of round two, depending if any other Senators arrive. First, in response to a question about how long an Israeli attack on Iran would postpone Iran getting a bomb, Secretary of Defense Panetta said that, quote "It might" -- no, excuse me that "At best, it might postpone it maybe one, possibly two years." Does the intelligence community agree with that?

CLAPPER:
Well I don't disagree with it, but I think there is a lot of factors that, you know, that -- that could play here. How effective such an attack was. What the targets were. What the rate of recovery might be. So, there's a lot of imponderables there that could effect a guesstimate and that's all it is about how long it would take to -- to resume.

LEVIN:
Have you -- has the intelligence community made an estimate of that issue? How long it would take to resume after an Israeli military attack?

CLAPPER:
We have not come up with a single number for the reasons I just kind of eluded to. It would -- it's -- it would be hard to come up with a number because it would have -- have to be in assessment as well as how -- how well the Iranians could recover and how much damage -- how -- how effective the attack was.

LEVIN:
OK. Now you indicated that our intelligence community and the Israeli intelligence community are aligned on issues relative to Iran. Do the Israeli's agree with you that Iran has not made a decision as to whether or not to have a nuclear weapon? Do they agree with that?

CLAPPER:
I'm happy to discuss that with you in closed session, Sir.

LEVIN:
Thank you. And by the way, I don't believe there's going to be a need today for that closed session to give us all hope for lunch. Director Clapper, what is the intelligence community's assessment of the performance of the Afghan Security Forces in providing security in those areas where they've assumed the lead?

CLAPPER:
Well, I think so far so good. The -- the areas that have been turned over on the initial traunch have been -- I think have performed reasonably well. But let me ask General Burgess if he wants to add to that?

LEVIN:
Thank you. General?

BURGESS:
No, Sir. I think the intelligence community would agree with the -- with what you just stated and in fact this is one of the places where the intelligence community is in agreement with the commanders on the ground in terms of how the Afghan forces are performing.

LEVIN:
And that is that they're performing...

BURGESS:
They are performing well. When they are backed by enablers from ISAF.

LEVIN:
OK thank you. In a DOD press briefing recently, Lieutenant General Scapparotti, commander of the ISAF Joint Command, who's in charge of operations in Afghanistan described some signs of progress by the Afghan Security Forces. He indicated that he gave a positive view of the progress to build the capabilities of the Afghan army and the Afghan police. And I think General Burgess, you have indicated you just basically share that view and I think also Director Clapper indicated pretty much the same thing. This is my question, to you, General, do you share General Dempsey's assessment?

And that was just a couple days ago at -- that the Afghan Security Forces are on track to assume the lead for providing security throughout Afghanistan by 2014 while still requiring support from coalition forces for key enablers like intelligence and lift?

BURGESS:
Yes, Sir. I would be in agreement.

LEVIN:
The -- a question on Pakistan, according to news reports a leaked NATO report entitled, quote, "State of the Taliban in 2012," included claims by Taliban detainees that Pakistan is providing support to the insurgency.

And it reportedly also portrayed, though, a strained and a distrustful relationship between the Pakistani intelligence, the ISI, and key insurgence group -- insurgent groups including the Haqqani Network.

And this is what the report -- the document reportedly stated, quote, "There is a widespread assumption that Pakistan will never allow the Taliban the chance to become independent of ISI control."

Do you share that same assumption that Pakistan will never allow the Taliban the chance to become independent of ISI control?

Director?

CLAPPER:
I don't -- I haven't seen this report, sir.

I -- I think the Pakistanis via the ISI would want to maintain visibility and influence. Not sure I'd go so far as to say that they would insist on dominance.

But they certainly want to have insight and influence in Afghanistan particularly in the post-2014 context, remembering that their primary interest is India.

LEVIN:
General, in your assessment does the Pakistan military have the intention to take steps to stop the Haqqani's use of the Fatah or the K.P. Province as a safe haven for conducting cross-border attacks into Afghanistan?

CLAPPER:
Well, the Pakistani army is -- has within its capabilities and in -- in light of its other obligations has done a lot in the Fatah and has lost a lot of soldiers in that process.

LEVIN:
My question though is whether they have the intention to take steps to stop the Haqqanis.

CLAPPER:
I don't -- I don't think so.

BURGESS:
And, sir, I would -- I would agree with that. And if you look at what the Pakistan army has done, they've actually cut forces from 2010 to now in terms of the number of brigades that are in there because they have a sustainment issue.

LEVIN:
OK. Relative to the reconciliation talks, Director, what are the Taliban's motivations for participating in the reconciliation talks?

CLAPPER:
Well, that's a -- a great question, sir. I -- I think they -- they want to I believe achieve some legitimacy. They want to be players in a -- in -- in -- in some form in the government of -- of -- of Afghanistan.

And of course they -- they obviously see us as a key to that -- that end.

LEVIN:
OK. Thank you.

Senator Portman?

PORTMAN:
Thank you, Mr. Chairman.

Gentlemen, I will not prolong this because it looks like I may be between you and a much-deserved break for lunch.

First of all, thank you for your testimony today. I had two other hearings so I've bounced around a little but I got to hear some of the opening.

And I also listened to Senator McCain and his opening. He talked a little about the increasing reports of a link between al-Qaeda and Iran.

And, Director Clapper, last year the Treasury Department designated a number of high-ranking members of al-Qaeda who operate a facilitation network from inside of Iran, I -- there's a press release announcing the designations from David Cohen, the undersecretary.

He says, and I quote, "Iran is the leading sponsor of state -- o state sponsored terrorism in the world today. By exposing Iran's secret deal with al-Qaeda and allowing it to funnel funds and operatives through its territory, we are illuminating yet another aspect of Iran's unmatched support for terrorism."

That's a pretty troubling statement. What's your understanding of this secret deal, so-called, between Iran and al-Qaeda?

CLAPPER:
Iran and al-Qaeda have had sort of a -- to a certain extent, a shotgun marriage.

I think the -- Iran has harbored al-Qaeda leaders, facilitators, but under house arrest conditions, remembering of course that Iran is a Shia state and al-Qaeda is Sunni so they don't agree ideologically in the first place.

I think Iran was, of course, pays attention to our pursuit of al- Qaeda, what we've done in Afghanistan and -- and Iraq, next-door neighbors to them. So on the one hand they -- they have -- they have had this sort of standoff arrangement with the al-Qaeda, allowing them to exist there.

But not -- not to foment any operations directly from -- from Iran because they're very sensitive about maybe we might come after them there as well.

So there's been this longstanding, as I say, kind of shotgun marriage or a marriage of convenience. They probably -- the -- the Iranians may think that they might use perhaps al-Qaeda in the future as -- as a surrogate or proxy.

PORTMAN:
Would they think, Mr. Director, that they might use them as a hedge against an attack from the West?

CLAPPER:
That's what I meant. They may have that in -- in mind for future use but I think for now and the -- and the history has been that they have not allowed them to operate freely in -- in Iran.

PORTMAN:
And you think they have not allowed them to conduct operations using Iran as a platform?

CLAPPER:
I don't think they have, sir, not directly.

PORTMAN:
On -- on al-Qaeda generally...

CLAPPER:
Not -- not in the sense that they've, say, from core -- by core al-Qaeda in Pakistan.

PORTMAN:
Speaking of core al-Qaeda and core al-Qaeda leadership, it seems as though some significant progress has been made.

Your statements today say that there's a diminishing operational importance of the core al-Qaeda leadership and that they play an increasingly symbolic role.

CLAPPER:
That assumes that we sustain the pressure on them, though.

PORTMAN:
OK. That's one of my questions. Having dedicated a lot of resources to that effort over the years to go after the core leadership and we have had success in attriting their numbers and -- and their role.

What do you think our resource level needs to be going forward? And what happens to the low-level al-Qaeda in Pakistan if the final elements of the core leadership are taken out?

CLAPPER:
Well, and they're -- they're about down to that. I think what we have to ensure is that they don't regenerate, that they don't recruit and continue to -- to operate there.

So we'll -- we will always have to be vigilant to -- to prevent a recurrence or regeneration of al-Qaeda leadership centering its planning and operational -- operational planning from -- from the safe haven in Pakistan.

PORTMAN:
If we are successful in the -- the continued effort, how would you prioritize resources that we are currently using targeting the core?

Would you think those resources would have to continue to be devoted to the al-Qaeda threat or would you...

CLAPPER:
Well, yes, sir, because of the franchises so-called, normally AQAP, which currently I -- I -- we view as the primary threat to the homeland because of their planning and -- and intent to attack either in Europe or homeland United States.

Then there are the -- the variance in AQIM in -- in Africa. So as these franchises emerge, drawing on the ideology of al-Qaeda wherever they are, I think we -- we'll always be in the mode of being vigilant to their reemergence.

PORTMAN:
I -- I thank you.

And -- and, General Burgess, thank you for your leadership with NASIC and all the other intel work that your folks are -- are doing to provide us with the information that we need as a country to be able to respond to these threats.

As a ranking member of Emerging Threats Subcommittee, I'm continually impressed by the -- the good work of your folks so thank you for that.

And, Mr. Chairman, I'm gonna allow these witnesses who have spent a lot of time here today the opportunity now to take a much-deserved break. Thank you.

LEVIN:
Well, I know you want to allow it but I'm gonna ask two more -- two more questions. So despite your good suggestion, Senator Portman, I'm gonna just finish up with a couple of questions.

My last question had to do with the motivation of the Taliban. My next question relating to the reconciliation talks that they're apparently engaging in has to do not with their motivation, which you addressed, but what your assessment is of the prospects of success in any degree of those talks.

CLAPPER:
Sir, I don't -- I don't know. And I -- we won't know until we actually engage.

LEVIN:
Do you have an assessment?

CLAPPER:
No, I don't. I -- I honestly don't know. I do know that the Taliban objectives...

LEVIN:
I'm talking about prospects. Do you think they're likely to advance the cause of some kind of a positive success in Afghanistan? You make...

CLAPPER:
It could and I believe that's the reason that -- that -- that such negotiations are being pursued, to see whether there's a -- a path there that may buttress or support a reconciliation and resolution.

LEVIN:
Like a number of other members of the committee, I've expressed some real concern that the reports that the administration is considering transferring some Taliban detainees from Guantanamo to Qatar. And I've expressed those both publicly and to the administration privately.

It seems to me that such transfers would be premature and should only be considered after the Taliban is engaged in positive discussions on reconciliation.

I think you heard at least one or maybe more of our members express similar concerns this morning. And I just want to let you know that there's some real concern by many members of this committee about such a transfer in the absence of some real progress and real showing of good faith in meeting some of the other conditions.

And we are aware that the secretary of defense has to certify certain things before that takes place. But in addition to that certification, there's some real feeling that the people who would be released, even though they may be contained in Qatar, nonetheless could have an effect on the battle some control, by some propaganda that they might utilize, and in other ways. So I want you to be aware of that feeling on the part of many members of this committee. I don't know if all of us feel that way, but there's been so much expression that you should be aware of it.

And my question now has to do with this. Has the decision been made regarding the transfer of detainees to Guantanamo?

CLAPPER:
No, sir.

LEVIN:
OK.

Now, Director, you stated that there's been about a decade of funding increases to the intelligence community. And now, as part of the defense budget, cuts that have been mandated by the law that was passed by Congress, that there's now going to be a reduction in the defense Department budget, and that includes in the intelligence community budget as well. And that that could or would reduce some capability.

And my question is whether you are able to administer the cut in a way that any reduction in capability is manageable and acceptable?

CLAPPER:
Yes, sir, we can. Now that's - just to be clear - that's under the Budget Control Act. If we were to go to sequestration, that's quite a different...

LEVIN:
Yes.

CLAPPER:
... matter.

LEVIN:
No, my question was the Budget Control Act. Under the 2013 budget request, which does follow the Budget Control Act that came in from the administration a few days ago, that request, including the request relative to your budget and any reduction in the budget, has your support?

CLAPPER:
Yes, sir, it does.

LEVIN:
Senator Portman? Would you like to - so you can take some of the brunt for delaying their lunch? After all your good instincts and your sensitivity, I took that on myself.

Thank you both for your fine testimony, your service to our nation, for all of the people who work with you in the intelligence community, for the great work that they do.

We are - we frequently talk about our troops, and we consider people in the intelligence community to be very much like our troops, with the dedication that they show, the risks that many of them take.

So we are thankful to you and to them and to their families, because families need to support your community, as they do our troops.

And we will stand adjourned.

CLAPPER:
Thank you, sir.

CQ Transcriptions, Feb. 16, 2012
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List of Panel Members and Witnesses
PANEL MEMBERS:
SEN. CARL LEVIN, D-MICH. CHAIRMAN

SEN. JACK REED, D-R.I.

SEN. DANIEL K. AKAKA, D-HAWAII

SEN. BEN NELSON, D-NEB.

SEN. JIM WEBB, D-VA.

SEN. CLAIRE MCCASKILL, D-MO.

SEN. KAY HAGAN, D-N.C.

SEN. MARK UDALL, D-COLO.

SEN. MARK BEGICH, D-ALASKA

SEN. JOE MANCHIN III, D-W.VA.

SEN. JEANNE SHAHEEN, D-N.H.

SEN. KIRSTEN GILLIBRAND, D-N.Y.

SEN. RICHARD BLUMENTHAL, D-CONN.

SEN. JOSEPH I. LIEBERMAN, I-CONN.

SEN. JOHN MCCAIN, R-ARIZ. RANKING MEMBER

SEN. JAMES M. INHOFE, R-OKLA.

SEN. JEFF SESSIONS, R-ALA.

SEN. SAXBY CHAMBLISS, R-GA.

SEN. ROGER WICKER, R-MISS.

SEN. SCOTT P. BROWN, R-MASS.

SEN. ROB PORTMAN, R-OHIO

SEN. KELLY AYOTTE, R-N.H.

SEN. SUSAN COLLINS, R-MAINE

SEN. LINDSEY GRAHAM, R-S.C.

SEN. JOHN CORNYN, R-TEXAS

SEN. DAVID VITTER, R-LA.

WITNESSES:
JAMES R. CLAPPER JR., DIRECTOR OF NATIONAL INTELLIGENCE

LIEUTENANT GENERAL RONALD BURGESS (USA), DIRECTOR, DEFENSE INTELLIGENCE AGENCY