HEARING OF THE SENATE ARMED SERVICES COMMITTEE

            SUBJECT:  THREATS TO U.S. NATIONAL SECURITY

              CHAIRED BY:  SENATOR JOHN WARNER (R-VA)

                 WITNESSES:  PORTER GOSS, DIRECTOR,
                    CENTRAL INTELLIGENCE AGENCY;
             AND VICE ADMIRAL LOWELL JACOBY, DIRECTOR,
                    DEFENSE INTELLIGENCE AGENCY

  LOCATION:  106 DIRKSEN SENATE OFFICE BUILDING, WASHINGTON, D.C.

                        TIME:  9:34 A.M. EST
                  DATE:  THURSDAY, MARCH 17, 2005


.STX

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    THIS IS A RUSH TRANSCRIPT.
-------------------------
    SEN. WARNER:  The very distinguished director of Central
Intelligence, and the director of the Defense Intelligence, Admiral
Jacoby.  We welcome.

    There are few, if any, precedents for the challenges our
intelligence community faces in this post-9/11 world.  The security of
our nation and the success of our armed forces of the United States
and their security themselves is so dependent on the hard work of
thousands and thousands of civilians and uniform persons who are proud
to say they are professionals and comprise the overall U.S.
intelligence system.  We salute them and we thank them.
    We're entering an important new era for our intelligence
community.  Last fall, the Congress passed and the president signed
into law the Intelligence Reform Act of 2004.  Ambassador Negroponte
has been nominated to be the first director of National Intelligence,
and we've been fortunate as American citizens to have the continuing
services, public services, of Director Goss.

    During this time of transition, it is of utmost importance that
critical intelligence support our national leadership as well as our
battlefield commanders.  Indeed, intelligence support should continue
to improve.  At the same time, it's important that all elements of our
intelligence community -- or approximately 15 departments and agencies
-- seize the opportunity to improve our intelligence capabilities as
best they can.
    In a time of war, we tend to focus on current military
operations, and we do ask both of our witnesses to give us their best
estimate regarding the threats our forces are facing in Iraq and
Afghanistan and elsewhere in the world, and their assessment of the
political process in this region, particularly Afghanistan and Iraq,
and how that political process lends into not only intelligence
gathering, but also the security of our forces.

    We must not lose sight of the other threats, as I say, around the
world.  It's a complex one and an ever-changing one.  Indeed, the
Korean peninsula, Iran, proliferation of weapons of mass destruction
and weapon technologies, accelerating military buildup underway in
China -- these are trends which bear on our current security situation
and future.
    Of special interest to the committee is the evolving situation in
the Middle East.  After years of violence and hopelessness that has
fueled terrorism and discontent throughout the region and, indeed,
throughout the world, there are signs of change and hope:  free
elections in Iraq; a call for democracy and an end to the Syrian
occupation in Lebanon; free elections in the Palestine territories and
a promising commitment to peace by President Abbas; electoral reform
in Egypt, Saudi Arabia and elsewhere, and the list goes on.  I would
hope our witnesses would comment on that.

    Again, I thank you for your service.
    Senator Levin.

    SEN. CARL LEVIN (D-MI):  Mr. Chairman, thank you.  And let me
first join you in welcoming our witnesses to our committee this
morning and to this hearing on the threats facing the United States.
    We need to have credible intelligence to wisely address these
threats.  The intelligence community's massive intelligence failures
before the Iraq war, set forth in the 500-page report of the Senate
Select Committee on Intelligence, understandably raise questions about

the reliability of intelligence assessments.  Making decisions based
on faulty intelligence risks the lives of our men and women in the
armed forces.  Decisions based on erroneous intelligence relative to
Iran and North Korea, for instance, could be life-and-death decisions
for millions and, indeed, for nations.  Faulty intelligence plays into
the hands of those in the world who bear us ill will.

    Because our credibility globally has been harmed by the
intelligence failure in Iraq, there is less support from people and
nations around the world for the United States and for the war on
terrorism.  As Admiral Jacoby says in his prepared statement, multiple
polls show favorable ratings for the United States in the Muslim world
at all-time lows.  While there are a number of reasons for the
situation to which that statement refers, I believe that having been
so wrong on our intelligence assessments before the Iraq war was a
significant contributor to this negative view of the United States.
Harmful consequences to our security follow from such a situation
because we depend on other people and other nations to provide us with
valuable tips and information, i.e., intelligence.  When we face
future international security crises based on our intelligence
community's assessment that there is a threat, we will undoubtedly
seek the support and cooperation of the international community.  It
will be harder to secure that cooperation if our intelligence is not
viewed as credible and objective.
    Admiral Jacoby also notes in his opening statement that, quote,
"Most Iraqis see coalition forces as occupiers and as a major cause of
the insurgency."  Close quote.

    I hope that the new Iraqi government will, as a matter of the
highest priority, invite the international community, including the
United States, to have military forces in Iraq.  I believe that such
an invitation could help to change the perception that we are an
occupying force to one of an invited partner working with the Iraqi
security forces to bring stability to Iraq.  Such an explicit
invitation from the new Iraqi government could also lead more
countries, including Muslim countries, to provide troops, training,
equipment and other resources to Iraq.
    MORE


    x x x Iraq.

Such a change in perception could facilitate a greater willingness of
the Iraqi people to provide intelligence on the insurgents, could
reduce the numbers of deaths and injuries among coalition forces,
could lead to an earlier takeover of security by Iraqis and to our
earlier departure.
    Finally, I would note that since this time last year, Congress
passed the Intelligence Reform and Terrorism Prevention Act of 2004.
I hope that the reforms that are under way will improve our ability to
deal with threats to our nation and to our people, and I'd be
interested in hearing what our witnesses could tell us about whatever
progress may have been made in implementing intelligence community
reforms to this point.

    This committee has a special responsibility to the men and women
of our armed forces to be vigilant on intelligence programs, because
decisions to use military force and planning for military operations
depend so heavily on intelligence.  Our witnesses are keenly aware of
their heavy responsibility, and we look forward to their testimony.
    SEN. WARNER:  Thank you, Senator Levin.

    Director Goss, we're prepared to have your statement.  We welcome
you before this committee.
    MR. GOSS:  Thank you, Chairman Warner and Vice Chairman Levin.
Thank you for the opportunity to be here today.

    I would ask unanimous consent that my full statement could be
made part of the record, so I could abbreviate my statement, sir.
    SEN. WARNER:  Without objection, and that will likewise apply to
Admiral Jacoby,

    MR. GOSS:  Mr. Chairman, Mr. Vice Chairman, thank you so much for
the opportunity to be here today.  I hope to accomplish a number of
things during this time.
    I want to briefly share with you my thoughts relative to the
threats, of course, that are facing the United States in the coming
years.  But by virtue of the unclassified nature of this setting, I'm
not going to go into a great deal of detail, and I do look forward to
a more in-depth discussion of the threats with the committee in our
closed session.

    I also want to discuss the broader issue of capability the
intelligence community requires to face these threats.  The
capabilities issue is one that fundamentally impacts the way we
support policymakers and warfighters, and of course we need your help
with the capabilities question.

    The war on terrorism has presented the intelligence community
with challenges unlike any before.  In response, we have changed some
of the ways we gather secrets.  We are facing small groups of
terrorists and extremists, rather than standing armies.  They operate
out of homes and caves, rather than military bases and government
entities.  They don't necessarily wear uniforms, they don't always use
conventional ordnance, and they don't observe norms and standards of
civilized society.  Only a few individuals may know the complete plan
of any given terrorist plot.
    Professional interrogation has become a very useful and necessary
way to obtain information to save innocent lives, to disrupt terrorist
schemes and to protect our combat forces.  The United States
government has had documented success protecting people and capturing
terrorists with such information.  And as I have publicly said before,
the United States government does not engage in or condone torture.

    We'll continue to be successful and take terrorists and
extremists off the battlefield.  But these are risky activities we
undertake, and I'll be asking the men and women of the CIA to take
even more risks, justifiable risks, in the months and days to come.
I'd much rather explain why we did something than why we did nothing,
and I'm asking your support in that endeavor.
    The volume and scope of information that the intelligence
community collects, processes and provides to the policymakers and
warfighters has grown tremendously.  We face several issues here.
First, I believe we have made great strides in improving the
information flow between analysts at CIA, FBI and the Department of
Homeland Security and others.

    We still face challenges.  We all understand this, and we're
working hard to improve the information-sharing in all directions,
horizontal and vertical.  And those are some of the implementations
that Senator Levin was referring to in his opening remark.
    Secondly, as we continually vet sources of threat information, we
need to do better at discerning what is a real threat and what is just
wishful thinking, and to establish a threshold for devoting analytical
and operational resources, which are precious, to track down a lead.

    MORE

    x x x lead.

Establishing this threshold is also critical to our ability to provide
intelligence on options for strategic decisions and to give the
American public an accurate assessment of the actual threat facing
this country.
    And third, for all the successes we've had and the advances we've
made, serious and unnecessary damage has been caused by media leaks.
Unauthorized disclosure of classified information threatens the
survivability of the sources and methods that we depend upon.  We have
lost opportunity, if not capability, because of irresponsible leaks,
and this has made it easier for our enemies.

    Collecting secrets and keeping them secret is only half the
battle.  Having intelligence that is actionable and is acted upon
through clearly defined mechanisms is just as critical.  Terrorists
brought the war to our soil.  We have taken the war to them.
Sometimes this requires what we euphemistically call a kinetic
solution on foreign soil.  We have to be able to use all the tools at
our disposal and understand the consequences of how we use them.
Dealing successfully with dangerous terrorists requires rapid
application of proper capabilities, whether the U.S. government is
conducting planned strikes or exploiting targets of opportunity.
    I welcome the president's directive to increase CIA's HUMINT and
analytical capabilities by nearly half.  The good news is that smart,
eager and talented people are applying for work in record numbers.
Recruiting, training, equipping and retaining the new, more diverse
workforce will be a growing endeavor, and it's one we have under way.

    To do so, I want to help establish a national university of
intelligence, not just for the CIA but for all agencies within the
intelligence community.  This will be one initiative I will bring to
the DNI when he gets started.  This will help define a new
intelligence community culture, better coordinate the way we do
business across government, and enhance a willing cooperation among
all.
    I look forward to a DNI's confirmation and leadership in bringing
together the collective efforts of our intelligence community.  He
will be faced with decisions about how information is collected,
prepared and delivered to the president and to other senior leaders
and customers.  I'm ready to help a DNI marshal the efforts and
resources of the domestic and international operations of intelligence
community agencies, not just in the war on terror, but also in our
other necessary global endeavors.

    As I turn over the DCI responsibilities for the intelligence
community, I'm confident that the 15 agencies in the intelligence
community will rally around the DNI and bring their unique abilities
to bear on the joint mission of making America safer.

    Now, turning to those specific threats other than terrorism, I'll
not attempt to cover everything that could go wrong in the year ahead.
That would be a very long list.  We must and do concentrate our
efforts, experience and expertise on matters that are most pressing.
Obviously, defeating terrorism is one; protecting the homeland goes
with that; stopping proliferation of weapons of mass destruction; and,
of course, the proliferation of drugs.  More people are killed every
year from illegal use of drugs in this country than by terrorism.
Fostering stability, freedom and peace in the most troubled regions of
the world, obviously at the top of our list as well.
    Mr. Chairman, defeating terrorism will remain our top objective,
(and must ?), as widely dispersed terrorist networks present real
danger to U.S. national security interests at home and abroad, as you
know.  Our reporting indicates al Qaeda is intent on finding ways to
circumvent U.S. security enhancements to strike Americans and our
homeland.

    MORE

    x x x homeland.

Their intent, perhaps their passion, to harm us for being who we are,
is just as vital as it ever was.
    Our reporting that al Qaeda or another group wants to use
chemical, biological, radiological and/or nuclear weapons cannot be
ignored.  The threat from the Sunni jihadist movement is broad.  We
have witnessed this in Madrid, Bali, the Philippines, Saudi Arabia,
and of course many other places.  And it is worth noting that other
groups in Pakistan, Southeast Asia, Central Asia, East Africa and
Europe also pose a significant threat to our security and interests.

    In Iraq, Zarqawi merged his organization with al Qaeda last year,
seeking to bring about the final victory in his version of Islam over
the infidels and apostates.
    Under proliferation, let me begin with Libya, a good-news story,
and one that shows that with patient perseverance the intelligence
community can tackle and achieve remarkable things.  In 2004, Tripoli
followed through with a range of steps to disarm itself of WMD and
ballistic missiles.  The U.S. continues to work with Libya to clarify
some discrepancies in that declaration.  But all in all we are seeing
some very helpful cooperation from Tripoli these days.

    Looking at North Korea and Iran, we have different issues.
Pyongyang has announced it has a nuclear weapon capability.  Concern
remains that Iran could utilize the uranium enrichment technology it
is pursuing to achieve a nuclear weapon.
    In other areas of concern more traditionally we go to the
countries.

    In China, Beijing's military modernization and military buildup,
which I know have not gone unnoticed by this committee, are posing new
questions for us.  Improved Chinese capabilities seemingly threaten
U.S. forces in the region.  China's recent legislation on anti-
secession speaks for itself.
    In Russia, the attitudes and actions of the former KGB associates
that President Putin has placed in positions of power throughout the
Russian government, may be critical determinants of the course Putin
will pursue in the year ahead.

    In the Middle East, the election of Palestinian President Mahmud
Abbas of course marks a very welcomed step forward.  There

nevertheless are real hurdles ahead as the Palestinian leadership
tries to rebuild the Palestinian Authority and to counter terrorist
groups that could destabilize the current calm and derail talks.  They
have apparently not lost their desire to do that.
    In Southeast Asia, the Philippines is struggling with prolonged
radical Islamic and communist rebellion and the presence of terrorists
seeking safe haven and training bases.  Thailand is plagued with an
increasingly volatile separatist threat in its southeastern provinces
and the risk of escalation remains there.

    In Africa, chronic instability in countries such as the Sudan and
Nigeria, and in areas such as the Horn of Africa, will continue to
hamper counterterrorism efforts and offer potential sanctuary for
terrorists.
    In Latin America, the region is entering a major electoral cycle
in 2005-2006, when Brazil, Colombia, Costa Rica, Ecuador, Mexico,
Nicaragua, Peru, Venezuela, and now Bolivia, are scheduled to hold
presidential elections.  Several key countries in the hemisphere are
potential flashpoints in 2005, including Venezuela, Haiti, Colombia
and Cuba.

    Mr. Chairman and Senator Levin, again I want to thank you for the
opportunity.  There are an awful lot of sore spots out there on this
globe.  We of course are trying to stay on top of them, so we are well
informed, can keep you informed, so that we all can take the
appropriate actions on behalf of the United States of America.
    To help your committee do this exercise will be invaluable to us.
I thank you for the opportunity to be here to say that, to answer the
questions you may have for me, and I would be very happy to expand on
assessments as you suggested, Mr. Chairman, on the situations, the
opportunities ahead of us in Afghanistan and Iraq, should you so
desire.

    SEN. WARNER:  Thank you, Director Goss.  That's a very excellent
and comprehensive statement.
    We'll have a closed session in S-219, the intelligence room,
immediately following the completion of our questioning here.  So
there may be issues which require you to withhold full answers at this
session and await the closed.

    Admiral Jacoby.
    MORE

    x x x Jacoby.

    ADM. JACOBY:  Good morning, Mr. Chairman, Mr. Vice Chairman,
members of the committee.  It's my honor and privilege to represent
the dedicated men and women of Defense Intelligence, and to take this
opportunity to thank this committee for its long-standing and
continued support for their efforts.
    In my short opening comments here I'd like to talk about a few
developments over the past year.  Let me begin in the war on
terrorism.

    The primary threat for the foreseeable future remains a
transnational network of Islamic extremists who are hostile to the
U.S. and our interests.  That movement has changed in the last 12
months away from one that was centrally directed by al Qaeda
leadership to one that we now term an "al Qaeda-associated movement."
This is a movement of likeminded Sunni Islamic groups who interact,
share resources, and work to achieve shared goals.  We judge that the
terrorist groups, particularly al Qaeda, remain interested in
chemical, biological, radiological and nuclear weapons, and they have
a stated intention to conduct an attack exceeding the destruction of
9/11.
    Underlying the rise of extremism are political and socioeconomic
conditions that leave mostly young male adults alienated.  I've spoken
in previous years about the failing education systems in many Islamic
states that contribute to the appeal of extremism.  And groups like al
Qaeda certainly capitalize on the economic and political
disenfranchisement.

    Many historical local conflicts, as the DCI has mentioned, such
as those in Indonesia, the Philippines and Thailand, are generating
new support for al Qaeda and present new al Qaeda-like threats as part
of the Sunni movement.
    Turning to Iraq, insurgents continue to demonstrate an ability to
increase their attacks around key events.  But I would also notice
that yesterday, with the stand-up of the new government, that the
Iraqi security forces were very successful in conducting a day of
high-level activity with low-level of attacks.  But since the 30
January election, I believe we see some changes.  Attacks have
averaged about 60 per day, in the last two weeks have dropped to
approximately 50, and appear to be dropping still further, which
brings them considerably below the high level of activity that existed
last November.  Also, the attacks are basically confined to four

provinces that are in the Sunni heartland and the vicinity around
Baghdad, and in recent weeks actually have concentrated on Baghdad and
three cities in that same four-province area.  So there may in fact be
a change in the character of the insurgency in their attack planning,
but I would also hasten to add, it's too early to say whether this is
a trend, and we need to be watchful and assess these changes as we see
them evolve.

    We believe that the Sunni Arabs, dominated by the Ba'athists and
the former regime elements, comprise the core of the insurgency.
There are foreign jihadists, most notably those that have sworn their
allegiance to an operative by the name of Zarqawi.  They account for a
fraction of the overall violence, however, the level of destruction
that their attacks cause and the amount of publicity that they
generate gives them disproportionate kind of impact on events inside
Iraq.
    The keys to success in Iraq remain improving security with an
Iraqi lead; rebuilding civil infrastructure and the economy; and
creating a political process that all ethnic groups see as legitimate.

    MORE

    x x x legitimate.

    Shifting to WMD and missile proliferation, this is the second
most immediate and significant threat to our nation and to
international stability.  The efforts in Iran to continue a nuclear
weapons-related effort and their efforts in the area of missile
development remain worrisome.  North Korea considers nuclear weapons
to be critical to its survival.  Its recent declaration just
highlights that fact.  And they continue with missile programs, also.
Many nations are modernizing and expanding their ballistic missile
systems, and they are a key part of China's military modernization
program.  But as Senator Levin said in his opening comments, China
continues to modernize its forces across a broad range of conventional
and missile capabilities.  And also those kinds of capabilities that
allow them to coordinate the efforts of their military in a more
sophisticated way than previously existed remains a concern also.
    This committee has asked me in the past what keeps me awake at
night, and I was thinking about that as I was preparing for this
testimony.  Senator Inhofe, I believe you've asked that on occasion.
My answer this year for you is what keeps me awake is that we're
facing a variety of sophisticated global threats of increasing
complexity and lethality.  And these are threats to the U.S., to our
allies, and also to our friends.  At the same time, we're sustaining
very high operating tempo with our people and our capabilities.  So
we're in the situation of simultaneously executing operations at a
very high operating tempo and reforming and transforming at the same
time.  And so what keeps me awake at night is we have very weighty
decisions to make in terms of priority in the way ahead, and I hope
that we are making good decisions as we move forward.

    In response to Senator Levin's question about what are we doing
today, we are focusing more resources and capabilities on assessing
the Islamic world so we can better understand the drivers for
extremism.  We need greater collection and more analysts devoted to
key countries.  We're making those shifts as part of our plan.
    In the area of proliferation of weapons of mass destruction and
missiles, the key there is achieving true penetrating collection and
an all-source analytical effort that allows us to see inside these
very complex and very well-hidden programs.  Those are absolutely
critical to improving our understanding.

    And we must not divert our focus and attention from the numerous
interests -- nations of interest.  Military intelligence disciplines
must remain robust if we're to provide for our national security

policymakers, defense planners and war-fighters' decisions and provide
them the information they need to successfully execute their missions.
More collection and analysis is needed to provide adequate warning of
attack, and more complete understanding of the military capabilities,
doctrine, war plans and intentions of numerous countries will be
required in this more sophisticated set of challenges that we face.
    Finally, I believe this committee knows the focus that we've put
in defense intelligence on truly operating in an all-source
information environment and operating with the smart networks that
were so specifically called out in the 9/11 commission report as
fundamentals for transformation of the way we do intelligence within
the United States.  We will remain  those outspoken advocates for both
all-source information access and the smart networks.

    Thank you, Mr. Chairman, Mr. Vice Chairman, for the opportunity
to be here today and the opportunity to respond to your questions.
    SEN. WARNER:  Thank you very much, Admiral, for a very fine
statement.

    We'll now go to a six-minute round of questions.  And I lead off,
Director Goss, with -- Admiral Jacoby summarized briefly what he
perceives as some diminution in the number of insurgent attacks in
Iraq on our coalition forces.  It coincides with two events: the
historic elections, followed by yesterday's convening of the 275-
member legislative body.
    MORE

    x x x body.

Can you expand on your views with regard to the pace at which this new
government is coming into being, whether or not this new government
does reflect a change of thinking throughout the Iraqi population,
which could result in increased enlistments in the army and other
security forces such that we can continue a buildup of their security
system with the expectation when it reaches a certain crossover point
the coalition forces can look at the possibility of reducing their own
structure?
    I had hoped that this government would move along at a bit faster
pace -- that's just giving you my own personal opinion.  Nevertheless,
the events of yesterday may portend a pickup in their pace of putting
this government together, because you've got to remember it's an
interim government.  The permanent government doesn't come into being
until December.

    And I and I think all Americans are concerned about the
continuing loss of life and limb of our forces and other coalition
forces as this somewhat gradual process of evolution of a new
government takes place.  So I'd be quite interested, as the committee
would be, in your views regarding this new government.
    MR. GOSS:  Mr. Chairman, thank you very much.  First of all, I
think that I agree with everything Admiral Jacoby said, and would be
very happy to try and expand on it a little bit, while understanding
that my mandate is not to make policy.  I have been reminded of that
occasionally.

    But I do think it is fair to go forward and talk about how we are
doing there, because there are intelligence aspects of that that are
very important relative to the national security.
    Of course I am optimistic, because I am looking back at what we
started with and where we are now.  And I think we all should be
extremely proud of what has been accomplished.  I do believe that we
are going to have to be a little patient in the process of letting the
Iraqis figure out their own future.  And I think that even though I
may have hopes for a pace that is a little quicker or a little
different, it's up to the Iraqis now.  We have given them the
opportunity, and they seem to be seizing it very well.

    Very clearly there are reasons -- historical, cultural,
political, evolutionary reasons in Iraq why they had not achieved an
opportunity that they have today sooner in their history.  It is a

very complicated society.  And I think all of the aspects of this
society need to be provided for and accommodated some way or another
to have a full government with proper representation.  And I think
that is going to take some time.
    I do believe, however, that the process is working well as we go
into this transitional -- the next transitional phase.  Very clearly,
they should be able to set up the government under the formula that
they have to follow.  They have a very excellent map of what they are
going to do.  They have a time line on that map.   My view is there is
a change of thinking in the country.  There is a huge wellspring of
good feeling that this is the way to go, and that they are happy to
have that opportunity.  That is manifest on the streets there.  It is
clear in the courage that the people showed -- displayed when they
went out and voted.  And I would say that there was as much pride
there as there was in our country that voting day that we helped give
them that opportunity.

    MORE

    x x x body.

Can you expand on your views with regard to the pace at which this new
government is coming into being, whether or not this new government
does reflect a change of thinking throughout the Iraqi population,
which could result in increased enlistments in the army and other
security forces such that we can continue a buildup of their security
system with the expectation when it reaches a certain crossover point
the coalition forces can look at the possibility of reducing their own
structure?
    I had hoped that this government would move along at a bit faster
pace -- that's just giving you my own personal opinion.  Nevertheless,
the events of yesterday may portend a pickup in their pace of putting
this government together, because you've got to remember it's an
interim government.  The permanent government doesn't come into being
until December.

    And I and I think all Americans are concerned about the
continuing loss of life and limb of our forces and other coalition
forces as this somewhat gradual process of evolution of a new
government takes place.  So I'd be quite interested, as the committee
would be, in your views regarding this new government.
    MR. GOSS:  Mr. Chairman, thank you very much.  First of all, I
think that I agree with everything Admiral Jacoby said, and would be
very happy to try and expand on it a little bit, while understanding
that my mandate is not to make policy.  I have been reminded of that
occasionally.

    But I do think it is fair to go forward and talk about how we are
doing there, because there are intelligence aspects of that that are
very important relative to the national security.
    Of course I am optimistic, because I am looking back at what we
started with and where we are now.  And I think we all should be
extremely proud of what has been accomplished.  I do believe that we
are going to have to be a little patient in the process of letting the
Iraqis figure out their own future.  And I think that even though I
may have hopes for a pace that is a little quicker or a little
different, it's up to the Iraqis now.  We have given them the
opportunity, and they seem to be seizing it very well.

    Very clearly there are reasons -- historical, cultural,
political, evolutionary reasons in Iraq why they had not achieved an
opportunity that they have today sooner in their history.  It is a

very complicated society.  And I think all of the aspects of this
society need to be provided for and accommodated some way or another
to have a full government with proper representation.  And I think
that is going to take some time.
    I do believe, however, that the process is working well as we go
into this transitional -- the next transitional phase.  Very clearly,
they should be able to set up the government under the formula that
they have to follow.  They have a very excellent map of what they are
going to do.  They have a time line on that map.   My view is there is
a change of thinking in the country.  There is a huge wellspring of
good feeling that this is the way to go, and that they are happy to
have that opportunity that is manifest on the streets there.  It is
clear in the courage that the people showed -- displayed when they
went out and voted.  And I would say that there was as much pride
there as there was in our country that voting day that we helped give
them that opportunity.

    MORE
    x x x opportunity.

I know darn well they risked a lot, a lot of those folks, to go out.
    There is -- nevertheless, having said all that, there is no
misjudging the fact that there is still intimidation, willful
intimidation, primarily not aimed at our forces as much as innocent
people and the newly being stood up Iraqi security and police forces.
And that is, of course, intentional by the terrorists.  The longer
they can create instability, the more they think they can defeat the
people's expressions of democracy.  Of course they're mistaken, and we
are doing very well in assisting the stand-up of the troops, the
appropriate kinds of organizations to provide for the security in that
country.  But that, in the end, will be an Iraqi decision as well on
how they do that.

    So put me down as optimistic and patient and watching closely.
We will continue to help where we can, and where our help is no longer
needed, speed them on their way.
    SEN. WARNER:  That's very encouraging.  The measure of success
that we can anticipate as each month goes along is largely dependent
on the level of cooperation, really, of the Iraqi people and their
enthusiasm to move towards the goals of achieving freedom and
establishing a security force which will enable them to pursue those
goals.  Collection of intelligence is essential during this process.

    MR. GOSS:  Yes, sir.
    SEN. WARNER:  Your agency has had a very distinguished record of
achievements in that region.  You have a considerable number of
individuals working.  Can you, in open session, to the extent you can,
express your views as to the level of cooperation that may be
forthcoming now from the Iraqi people to enhance intelligence
gathering, the ability to gain more HUMINT access to information.

    MR. GOSS:  Yes, sir.  I can tell you that we have had, I think, a
very important role, and I'm very proud of the men and women in the
intelligence community and what they've done to help enable the
situation in Iraq today.
    Obviously, the missions of force protection are very much on our
mind.  The missions of our traditional business, of understanding
what's going on out and about in the community is part of it.  And
then that extra-special area of expertise that we've been asked to
help in in terms of helping the Iraq people stand up an appropriate,

properly safeguarded, properly overseen intelligence service that can
serve the country and serve the people, rather than work against the
people, which is so often the case in the type of regimes that used to
be there.  Now, I think that we have done well.  I think that once the
political situation settles down that we will be continuing to take
advantage of the opportunities and the goodwill we have built up
there.  And I, frankly, am very optimistic about our capabilities to
help them get on their way and to necessarily have what we need to
have to protect our own interests as well.

    SEN. WARNER:  There have been some extraordinary developments, as
we all know, with regard to Syria.  And we there have seen a measure
of courage by the people of Syria and that is in, quite frankly,
viewing these steps by the people of Lebanon as a manifest of courage
to take over their own government.
    Now, Syria has been a haven for many of the troublemakers flowing
across the border from Iraq into Syria, and Syria into Iraq.  To what
extent have the recent events in Lebanon, and Syria's recognition, I
hope, they will withdraw, affected that cross-border troublemaking?

    MR. GOSS:  It is difficult for me to make a firm prediction, Mr.
Chairman, on that subject.  And there are some aspects of that I'd
prefer to answer in closed session.
    I will tell you this; that despite a lot of very well-intentioned
and persistent efforts to try and get more cooperation from the Syrian
regime, we have not had the success I wish I could report.

    MORE

    x x x report.

How events will affect that -- those efforts to achieve further
cooperation remains to be seen in the future.
    Obviously, we are well aware of the problems that you are
suggesting, what that has meant in Iraq, what that has frankly meant
in the -- for the people of Syria and what it has meant in Lebanon.
And there are things afoot.  There are changes happening as we speak.

    It's hard to know where they'll come down.  In the end, I cannot
believe that we are not going to be better off than where we have been
    SEN. WARNER:  Thank you.

    Quickly turning to Iran, to what extent are they trying to
influence events in Iraq, be it in the elections, the formation of the
government and the like?  And overall, what continuing threat does
Iran pose to that region, particularly in the complexity of its
weapons programs?
    MR. GOSS:  Mr. Chairman, again, in open session, I want to be a
little reserved.  But I think it's fair to say that just about
everybody who's been watching understands that Iran has been meddling
in the affairs of Iraq, in the interests of Iran.

    I would also say that how that is going to work out in the future
is a matter of some concern, will be attended to.
    I would also say that Iran, in my view, is one of the few very
obvious sponsors of state terrorism.  I would say Hezbollah is a
funded terrorist organization by the sovereign state of Iran, and they
ought to stop it.

    I also would say that their lack of candor, their lack of
transparency on the subject of their nuclear program causes people to
have reasonable doubt about what is actually their intent and what
actually -- the capabilities they have.  That is extremely worrisome
from the point of view of proliferation.  I believe there are good
efforts going forward, proper diplomatic efforts to achieve more
transparency and more verifiability.  On the other hand, I am not
prepared to accept that we have gotten anywhere need (sic) -- the
level we need to be in terms of assurance about what is going on and
where it's going.
    SEN. WARNER:  I thank you very much.

    Senator Levin.

    SEN. LEVIN:  Thank you, Mr. Chairman.
    Relative to that issue, first, is there an assessment by the
intelligence community as to whether or not there are circumstances
under which Iran would give up its ability to produce nuclear weapons?

    MR. GOSS:  Senator, I believe that any such assessments the
intelligence community would have would be classified.  But I would
say that the negotiations that are ongoing now probably clearly point
the way to what the problems are.  If you read about -- read in the
newspapers what is going on with the European 3 in the negotiations, I
think you've got a pretty good idea that the Iranians don't seem to
want to be very open and candid.  They want to say what they're doing,
but they don't want to prove what they're doing.
    SEN. LEVIN:  Putting aside what might be in the assessment, is
there an assessment as to whether or not there are circumstances under
which Iran would give up its ambitions?  Do we have such an
assessment?  I'm not asking what the contents are, but is there one?

    MR. GOSS:  I would say that we have a great deal of assessment --
    SEN. LEVIN:  On that subject?

    MR. GOSS:  On the subject of Iran and nuclear matters.
    SEN. LEVIN:  You indicated you didn't want to peak in public
session about some Iranian efforts at influence in Iraq.

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    x x x Iraq.

My question perhaps is a little different -- you may be able to answer
it.  But can you tell us whether or not the Iraqi Shi'ia leadership
has -- particularly those that are seeking to attain powerful
positions in the assembly -- have strong connections and loyalty to
Iran, those specific people, can you tell us?
    MR. GOSS:  Senator, again, I am well aware that the Iraqis are in
the middle of forming a government, and that anything I said could
possibly affect that, so I want to be very, very careful.

    SEN. LEVIN:  Thank you.
    MR. GOSS:  I would say, however, that there are probably some
Shi'ia who are closer to Iran than others.  But I don't think that you
can just put a single definition down and come to a comprehensive
conclusion on that.  You'd have to take it one by one.

    SEN. LEVIN:  Okay, both Director Goss and Admiral Jacoby, is
there -- does the intelligence community have an assessment as to the
size of the insurgency in Iraq, either a specific range of numbers,
also the percentage of insurgents approximately who are Iraqis and who
are foreigners?  Either one -- or actually both of you, let me ask you
that:  Is there a range of --
    MR. GOSS:  No, sir, I don't think that we have an assessment that
gives exact -- or even ranges of numbers.

    SEN. LEVIN:  All right.  Admiral?
    ADM. JACOBY:  On this point, sir, we obviously are in a situation
where we are supporting General Abizaid and General Casey as part of
their effort, and so the ranges of numbers that they've cited -- I
believe General Abizaid less than 20,000 and -- is the range that
we're working with.

    SEN. LEVIN:  Less than 20,000 -- does that mean from 15 to 20
(thousand), 10 to 20 (thousand), 5 to 20 (thousand or 1 to 20
(thousand)?  Less than 20 is a pretty -- that's not a range.
    ADM. JACOBY:  I understand.  It's in the, you know, 12 to 20, 15
to 20 (thousand) range.

    SEN. LEVIN:  All right.  And are most of those folks Iraqis or
from outside of Iraq?

    ADM. JACOBY:  Sir, our insights there basically are in terms of
the people that have been detained, and a very small percentage, in
the single-digit percentage, are non-Iraqis.

    SEN. LEVIN:  Thank you.
    Director Goss, is it your assessment that Mr. Abbas will take on
the Palestinian groups that engage in terror?  Is that his intention?

    MR. GOSS:  I think, Senator, based on the open evidence that
we've seen, that he's making very strong efforts to get under control
the problems in the Authority.
    SEN. LEVIN:  All right, switching quickly to North Korea, back in
2002 there was an assessment that said, quote, "We assess that North
Korea has produced enough plutonium for at least one and possibly two
nuclear weapons."  That was the open January '02 assessment.  It's now
three years later.  We're told they have a greater amount of
plutonium.  But do you have an unclassified estimate as to how many --
how much plutonium has been - is in their hands?  It was one, and
possibly two, three years ago.  Can you give us the current
assessment?

    MR. GOSS:  Senator, on the -- that's a subject for closed
session.  I can give you certainly a range on the estimate, the
various views on nuclear weapons that we think.
    SEN. LEVIN:  Okay.

    MR. GOSS:  As to plutonium versus uranium and those kinds of
details --
    SEN. LEVIN:  In open session?  Can you give us --

    MR. GOSS:  Absolutely not.
    SEN. LEVIN:  Okay.  Do you have an assessment as to whether or
not North Korea would be willing under certain circumstances,
including a guarantee by the United States not to forcibly attempt to
change North Korea's government, to give up its nuclear programs?  Do
you have an assessment as to whether they would be wiling under the
certain circumstances to give up its nuclear programs?

    MR. GOSS:  No, sir, I couldn't discuss any assessments we have on
something like that, for two reasons:  one, it would be classified;
and, two, I wouldn't even want to begin to characterize the work we do
when we are talking about the very delicate diplomatic efforts that
are being made now.
    SEN. LEVIN:  All right.  Do you believe that North Korea has the
ability to arm a missile with a nuclear device?


    MORE
    x x x device?

    MR. GOSS:  I'd like to leave that for closed session as well.
    SEN. LEVIN:  All right.

    Is it possible, in your judgment, that North Korea actually fears
the possibility of a U.S. military attack and is trying to maximize a
deterrent effect to prevent such an attack by convincing us that they
have nuclear weapons?
    MR. GOSS:  In my -- if you're asking my opinion do I think they
fear that --

    SEN. LEVIN:  No; is it possible that they fear an attack and that
they -
    MR. GOSS:  Yeah, I think that's certainly possible, certainly in
my view.

    SEN. LEVIN:  Thank you.
    There's been a lot of public press coverage over the issues of
detainee abuses and rendition.  I'm wondering whether or not you have
a policy relative to rendition and, if so, you could tell us what that
policy is.

    MR. GOSS:  The issue of -- widely reported -- of so-called
renditions in the press gets into areas of sources and methods, which
I would prefer to answer in closed as well, I think.
    SEN. LEVIN:  When you receive complaints from -- or evidence of
torture by people against whom rendition has been used, do you follow
up, since it's not our policy, the president said it's not our policy
to engage in rendition of people for purposes of torture, the
president has said that publicly -- but where there is evidence or
claims of torture, do we follow up with the countries that have
represented to us that they would not torture individuals whom we sent
to those countries?  Do you know whether we followed up ever with
those countries with that evidence?

    MR. GOSS:  If you're asking about the intelligence community,
again, this is the kind of question that is complicated and would need
to be answered in closed session.  But I can assure you that I know of
no instances where the intelligence community is outside the law on
this, where they've complied.  And as I said publicly before and I

know for a fact, that torture is not -- it's not productive.  That's
not professional interrogation.  We don't do torture.
    I can also tell you that it is my understanding and my experience
that any allegations -- serious allegations, and I'm not just talking
about some press speculation or something -- that have ever been
brought to the attention of the proper authorities have been referred
properly for investigation.

    SEN. LEVIN:  My last question has to do with the inspector
general's report.  You have an inspector general who's reviewing
detainee abuses and allegations thereof by members of the intelligence
community.  How much longer are we going to have to wait for the
inspector general's report on potential detainee abuse by members of
the intelligence community?
    MR. GOSS:  Senator, as I understand, the inspector general is the
proper place to refer any allegations that come along.  And I do know
that he has such allegations and is proceeding on them.  I do also
know that he has briefed the appropriate oversight committee, which I
think you're also a member of, recently; I'm told that there was
fulsome briefing on aspects that you're referring to in your
questions; and that he is in a better position than I am to tell you
the status of those investigations.  But I know of no matters that
have not been referred to him.

    SEN. LEVIN:  But you don't have an estimate as to when he will
finish these investigations?
    MR. GOSS:  No, sir.  He is sort of an independent person, as you
know, in our organization.

    SEN. LEVIN:  Thanks.
    SEN. WARNER:  Well, I'd have to observe here that in the course
of this tragic chapter of the prisoner abuse, the Department of
Defense, and specifically the Department of the Army, has completed
about six different investigations.  Consequently, I think it's
reasonable to -- and I join the colleague in urging that you make some
assessment of the time within which this report could be completed.

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    x x x completed.

    MR. GOSS:  Yes, sir.  I --
    SEN. WARNER:  Perhaps we can do that in closed session.  And it's
certainly in the domain of the Intelligence Committee.

    Senator McCain.
    SEN. JOHN MCCAIN (R-AZ):  Thank you, Mr. Chairman, and thank the
witnesses.

    Director Goss, just to follow up on Senator Levin's questions.
The thing that bothers a lot of us is that we don't seem to have a
clear policy on treatment of prisoners which could then be translated
into specific instructions for those who are in charge of
interrogations; recognizing that it is complicated by the fact that we
now have two different kinds of prisoners.  One is those who are
eligible for the Geneva Conventions on the treatment of prisoners of
war, and others are outright terrorists, who have none of those
protections but still have protections by international treaties such
as the torture treaty and others.
    I wonder how you feel about that view, because when I look at
these cases of abuse, I think that perhaps there wasn't sufficient
training, but maybe more importantly or as importantly, there was not
specific policy guidelines issued to those people who are the ones who
are interfacing with the prisoners.  Do you have a view on that?

    MR. GOSS:  Yes, sir, I do.  And I'd like to ask -- I'd like to
make a distinction if I could.  We started talking about transfers of
people, alleged renditions and so forth, and then we switched to
prisoner treatment.  And I want to make a distinction between the two
and answer both questions, and obviously, more candidly in closed
session.
    I believe that there is policy, and I believe that it is very
well understood at this point.  I am not speaking for the military
side and I'm not going to go to all those investigations and reviews
and so forth.  I'm going to just go to what I understand are the
intelligence community's orders on how we use the tools that have been
given to us lawfully and how we stay within bounds.

    As I say, I believe that if you go back and you take a look about
transfers of -- helping other countries deal with terrorists, you will
find this is a process that's been going on for more than 20 years.

We actually got in the terrorist business back in the early '80s,
starting, as you know, with Beirut.  And so I would tell you that I
think there have been always procedures and processes and policies in
place to deal with these and they've been understood.  And there
sometimes --
    SEN. MCCAIN:  Well, some of those policies at one time were to
make one have the prisoner feel that they were drowning.

    MR. GOSS:  You're getting into, again, an area of what I will
call professional interrogation techniques, and I would like --
    SEN. MCCAIN:  That's the area that I'm concerned about, because
I'm not sure that the interrogators are fully aware of a -- specific
policies as to what they can and cannot do when interrogating a
prisoner.  And that's my point.  But -- go ahead.

    MR. GOSS:  Thank you, sir.  That is a clarification.  If you're
going to talk about the techniques as well and add that dimension to
it, and not just how people are held, then I would take the statement
even further, to say that there has been in that case some
uncertainty.  There has been attempt to determine what those policies
are.  I think that uncertainty is largely resolved.  And in the
meantime, I can assure you that, pending any uncertainties, that
anything that would be happening would be erring on the side of
caution.
    SEN. MCCAIN:  Thank you.

    Switching gears, still the greatest threat we face is a terrorist
attack within the United States of America; right?
    MR. GOSS:  Yes, sir.

    SEN. MCCAIN:  And we also know that the only way we're going to
eliminate the terrorist threat is to go where it's bred; right?
    MR. GOSS:  I believe it's the best way.

    SEN. MCCAIN:  And we have some reason for hope, given some of the
recent events in the Middle East towards democracy.
    I'm worried about our border.  We have now hundreds of thousands,
if not millions, of people who are crossing illegally every year, and
we are now seeing a larger number of people cross our southern border
who are from countries of interest as opposed to just Latin American.
And I'm also told they've found some papers that are written in
Arabic.  And it's a matter of conjecture as to anyone has crossed our
border, but isn't it likely that someone who wanted to do something
bad inside the United States would come across our border?

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    x x x border?

How serious do you think this problem is from a national security
standpoint?
    MR. GOSS:  I think that's a very serious problem, and I think
it's not just our southern border.  It's any border.

    SEN. MCCAIN:  Yes.  Right.
    MR. GOSS:  And it is part of the debate we have to have in our
country about how does a free, democratic, open society go about the
business of protecting itself from people who want to do us damage,
who are not willing to play by any rules of society?  It is a very
difficult question.

    SEN. MCCAIN:  Do you think we should increase our efforts for
overall immigration reform as a way of trying to address this issue?
    MR. GOSS:  Sir, I would have to leave that to you.  I took that
hat off when I took this job.  But I would certainly tell you that I
believe my job is to get as much information possible to inform you to
make the right decisions on the question you've just asked me.

    SEN. MCCAIN:  And to assess threats.
    MR. GOSS:  Sir, of course.

    SEN. MCCAIN:  And I'm asking for your assessment of how serious a
threat is the fact that --
    MR. GOSS:  Serious.

    SEN. MCCAIN:  Pardon me?
    MR. GOSS:  Serious.

    SEN. MCCAIN:  And then I'd like to just talk a little more about
our own hemisphere.  As we worry, understandably, about the Middle
East and other parts of the world, we see Mr. Chavez in Venezuela
getting closer and closer to Castro.  We see governments in state of
instability in places like Bolivia, Ecuador, Peru.  Central America
has regressed, in some ways, as far as corruption and other problems
are concerned.  We now see that Mr. Noriega (sic) is back as a viable
candidate for president of Nicaragua.

    Would you talk a little bit about our own hemisphere and the
problems that failed states would pose and how serious you think in
particular Mr. Chavez's behavior is -- President Chavez's behavior is?
    MR. GOSS:  Yes, sir.  I -- if you heard my opening remarks, I did
refer, somewhat atypically, in my warning spots to Latin America.
Usually we don't do that.  I did that specifically for a reason,
because I agree with everything you've just said.  I think we need to
be much more focused on a global basis to what's going on, and I think
we ought to start in our backyard.

    Certainly that's not where most of the terrorists are being bred
and doing their plotting.  That is true.
    But a destabilization or a backslide away from the democratic
principles, the deals, the progress that's been made in the last 50 or
60 years south of the border would not be helpful to our interests and
would be probably threatening to our security in the long run.

    There are certain players that are very clearly causing mischief
for us, and you have pointed out that President Chavez had said some
things that are very hard to reconcile with friendly interests towards
the United States and has associated in ways with Fidel Castro that
would again indicate that he is not taking actions that are friendly
to the United States or its interests.
    I am aware that the matters in Central America -- there are some
concerns.  You've read about potential weapons left over from the
other days of Nicaragua, coming back to bear, some of the same players
coming back.  And I've pointed out that we have some presidential
elections coming where we could see some trouble to the democratic
process, the stabilized democratic process in Latin America.  I think
it behooves us to pay attention to that and to try and provide you the
best information possible we can on what's going on, so that the
policymakers can form the policies and the programs to deal with those
issues.

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    x x x issues.

We're aware of that, and that's why I mentioned it.  We are trying to
cover that area for you.
    SEN. MCCAIN:  Thank you very much.

    Thank you, Mr. Chairman.
    SEN. WARNER:  Thank you, Senator McCain.

    Senator Dayton.
    SEN. MARK DAYTON (D-MN):  Thank you, Mr. Chairman.  Mr. Chairman,
I just would note, a follow-up to the hearing you had last week on the
Church report, that The New York Times yesterday reported that at
least 26 prisoners have died in American custody in Iraq -- I'm
quoting here -- and Afghanistan since 2002 in what Army and Navy
investigators have concluded or suspect were acts of criminal
homicide, according to military officials.  The Church report, sent to
Congress last week, cited only six prisoner deaths caused by abuse.

    And I know, because I read that report, that the qualifications
that were put on that report in terms of time parameters and the like,
but it's still -- and I commend you, Mr. Chairman, for your persistent
effort to try to get to the full facts involved in these unfortunate
incidents.  But the fact that what was, I believe, supposed to be the
definitive report provided by the Pentagon last week cited only six
deaths, and a week later a news report cites Army and Navy officials
pegging the figure at 26, I find distressing.  And it underscores
again the difficulty in getting a full disclosure of these incidents.
    Another report two months ago in The Washington Post cited
Pentagon officials regarding intelligence -- notification of Congress
on intelligence activities, asserted that -- and quoting again --
"Asserted that Defense Intelligence missions are subject to fewer
legal constraints than Secretary Rumsfeld's predecessor's believed.
That assertion involves new interpretations of Title 10 of the U.S.
Code which governs the Armed Services, and Title 50, which governs,
among other things, foreign intelligence."

    I wonder if I could ask each of you in turn, are you aware of any
reinterpretations of existing law that have resulted in fewer
constraints or notification of Congress for intelligence activities?
    MR. GOSS:  Senator, I take very seriously our responsibilities to
report to our oversight committees.  And I'm not aware that we have

not done anything except totally and fully, forthright and spent hours
in numbers of briefings trying to inform the members of the committee
and respond to any questions they have.  So I know of no impedance to
that process whatsoever.  I think it's working well.
    SEN. DAYTON:  It probably seems like more hours when you're on
that side of the aisle than -- dais than this one.

    MR. GOSS:  Well, it's part of the job, and it's a necessary part
of the job, and it's one we want to honor faithfully and fully.  Our
problem, of course, in dealing with some subjects in the intelligence
world is that we have to do it in closed session and we have to follow
those rules.  I have a statutory obligation to protect sources and
methods.  I take it seriously.
    SEN. DAYTON:  Admiral?

    ADM. JACOBY:  Senator, there have been no reinterpretations that
affected the Defense Intelligence Agency either in our notification
responsibilities or our guidance and coordination mechanisms between
us and Central Intelligence Agency.
    SEN. DAYTON:  Thank you.

    The 9/11 commission quotes Secretary Rumsfeld in October of 2003,
reflecting on progress after two years of waging the global war on
terrorism, Defense Secretary Rumsfeld asked his advisers, quote, "Are
we capturing, killing or deterring and dissuading more terrorists
every day than the madrassas and the radical clerics are recruiting,
training and deploying against us?  Does the U.S. need to fashion a
broad integrated plan to stop the next generation of terrorists?  The
U.S. is putting relatively little effort into a long-range plan, but
we are putting a great deal of effort into trying to stop terrorists.
    MORE


    x x x terrorists.

The cost-benefit ratio is against us.  Our cost is billions against
the terrorists' cost of millions."  The commission goes on to say
those are the right questions.  I wonder if you, either of you, have
answers to regarding that need for a long-range plan, and whether we
have one in place, whether you think we're starting to make progress
in that equation of winning the hearts and minds and bodies of --
    MR. GOSS:  Yes, sir, I'll answer that question positively.  I
think we are.  And I think you're seeing the results in places like
Afghanistan and Iraq, where you're having elections -- in Palestine --
that things are happening.  So I do feel that there is sort of a new
wave going through Islam, and they are at a junction point.  And the
people who are espousing the radical way, I think are having a harder
go of it today, because we have stepped up and tried to go to the
question of, What actually are being taught in those madrassas?  Is
Wahabism really what should be in the textbooks in Saudi Arabia? --
and so forth.

    I believe those efforts are out there.  Of course they're more
than just intelligence and they're more than just military.  They get
into the diplomatic and the whole cultural and society energies, so we
have many agencies in this government that I think are committed to
that proposition.  I think we well understand it now.  I'm not sure we
did some years ago, but I think we're way ahead on that.  And I think
we're doing good things.
    As for terrorism, I think that you do need to always take into
the equation there will be a need for law enforcement, if I can use
the term.  Just like we tolerate a certain amount of crime and we have
law enforcement to deal with that in society, even though we wish we
had none -- we tolerate some.  I'm afraid it's going to be that way
with terrorism.  But we've got to get it to the tolerable level first,
and we're a long way from that.  So I think we are engaged globally on
all the fronts we need to be, but not to the degree we need to be yet.

    SEN. DAYTON:  Okay, thank you.  Admiral?
    ADM. JACOBY:  Senator Dayton, we spent quite a bit of time in my
testimony talking about those underlying factors.  I believe your
question properly characterizes them.  It also I think points to the
fact that this is going to have to be a multifaceted set of solutions,
and it's going to involve a lot of players.  It's not an issue only of
the United States.


    SEN. DAYTON:  Thank you.
    Director Goss, I was intrigued by your suggestion about a
university for --

    MR. GOSS:  Thank you.
    SEN. DAYTON:  As the parent of two sons who just went through the
teenage years, I think the teenager years are a natural training
ground for covert activity -- it's my experience.  (Laughter.)  I
wonder if you could fill that in a little bit more.  Would you see
this as something like one of the service academies or something that
would be more dispersed?  And where in Minnesota would you like to
locate such an entity?  (Laughter.)

    MR. GOSS: Thank you, sir.  I appreciate you taking up my idea,
and I'd be happy to come out to Minnesota and look for appropriate
places.
    I was thinking more along the lines of the National Defense
University when I started -- a place where people can come together.
And we started looking at what our needs were across the board in the
community.  And there are -- we have a need to share some common
things in the intelligence community.  We have wonderful esprit in our
individual agencies, and real purpose and focus of mission, which is a
great thing.  But it's not as good a thing as it could be if you have
stovepipes and you don't share with anybody else.  So I started that,
at looking at what are my needs.  I need people, and I need people who
are internationalists.  I need language capability I don't indeed have
-- I don't have.  I need cultural experience and background I don't
have.  I need more diversification.  I started thinking about mixing
experience with new energies and new thinking when we got into
analysis, and I said, You know, they already invented this -- it's
called the university.  Why don't we apply the idea?  So that's really
where it's coming from, and I hope to share it with the DNI.

    SEN. DAYTON:  I hope you will.
    Thank you, Mr. Chairman.

    MORE
    x x x Chairman.

    SEN. WARNER:  Thank you very much.  I'm glad you asked that
question.  I helped the secretary of Defense with some encouragement
over three years to start a scholarship program to train young people
in cybersecurity.  We're up to about 10 now getting those
scholarships.
    But I really believe, Mr. Director and Admiral Jacoby, that our
country has got to begin to redirect more of its assets towards
training our young people to fill the gaps that we desperately need
not only in the area of security, but just math and sciences and other
occupations.

    Senator Inhofe.
    SEN. JAMES INHOFE (R-OK):  Thank you, Mr. Chairman.

    First of all, Admiral Jacoby and Director Goss, we have the
utmost respect for you.  And I've enjoyed our long friendship serving
together, Director Goss.
    There are a few statements you made or some references you made
in your opening statement about China.  And our -- Chairman Warner
made a couple of comments.  We haven't really talked very much about
it.

    I would like to kind of come in the back door, Admiral Jacoby, on
something that you said in your statement and kind of work around it
here.
    First of all, recently, Chavez said -- and this is a quote -- he
said, "Iran has every right to develop atomic energy.  All over the
world there is a clamor for equality and profound rejection of
imperialist desires of the United States government.  Faced with the
threat of the U.S. government against our brother, people in Iran
count on us for all our support."

    Then, in the -- bringing this into -- later on he made the
statement, he said, "We have invaded the United States not with
weapons but with our oil."  He intends to use oil to fight American
influence.  He visited China in December and signed trade pacts for
oil and gas.
    Now, if you -- in the U.S.-China Commission's report, 2004
report, it states, "One of Beijing's stated goals is to reduce what it

considers U.S. superpower dominance in favor of a multipolar global
power structure in which China attains superpower status on a par with
the United States."

    Your statement in your opening statement was -- Admiral Jacoby,
you said, "Beijing may also think it has an opportunity to improve
diplomatic and economic relations, to include access to energy sources
with other countries distrustful or resentful to the United States
policy."
    And I agree with you, and I'd like to have you expand a little
bit on how you think this -- what kind of a threat do you think this
poses, and maybe bring some proliferation into it.

    ADM. JACOBY:  Thank you, Senator.  I could go into details in
closed session.  But in this session, Iran and China have a
relationship for the sale of military equipment and technologies.
There is an underlying basis there for a partnership because China's
rapidly expanding economy is -- you know, right now is still a very
heavily coal-fueled economy.  Obviously, demand for petroleum access
is great.  Iran, isolated in some ways in the commercial arms market,
an antiquated military in need of technology, you can end up with
those kinds of relationships.  You end up with relationships like you
pointed out -- Venezuela and China potential relationship.
    So I think maybe those two countries sort of categorize places
where they may be a mutual interest in the kinds of things that we
should be expecting to see in the upcoming years.

    SEN. INHOFE:  Yeah, I'm getting to -- their demand for petroleum
products is growing so rapidly right now.  And in the case of
Venezuela, we're right now purchasing 60 percent of their production,
which only constitutes around 12 to 13 percent of what we are
importing.  But nonetheless, when they state that they would cut us
off in favor of China, it's something that is concerning.
    ADM. JACOBY:  Yes, sir.

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    x x x sir.

    SEN. INHOFE:  Director Goss, I was preparing -- I'm trying to
find some time today to get on the floor to give my third China speech
in the last three years.  In that I mention that China is not looking
only to build a bluewater navy to control the sea lanes, but also to
develop undersea mines and missile capabilities to determine the
potential disruption of its energy supplies from potential threats,
including the U.S. Navy, especially in the case of the conflict with
Taiwan.
    The weapons China is investing in include:  cruise missiles,
submarines, long-range target acquisition systems, specifically
cutting-edge satellites, unmanned aerial vehicles, the advanced SU-
30s, and 35s -- and I've always applauded General John Jumper who very
courageously exposed back in 1998 that the Russian SU-30s and SU-35s
are better than our best strike vehicles in many ways.  And at that
time we knew that China had bought some 240 of those.  Now I'm looking
at reports saying that they have -- it looks like they've bought 400
more.  This would be the SU-35s, because of delivery in 2006, along
with everything else that they're doing.  So it's a huge, huge
military buildup.

    You couple that with the fact that we don't know -- and I'm sure
that you know much more -- and I'm not sure whether it's something you
can share in an open session -- but with their stated official
military budget growing by 12.6 percent this year to $30 billion, that
leaves out a lot of things such as new weapons purchases and others --
and we think -- I've heard figures doubling this $30 billion.  So it's
a huge -- it's a huge, huge buildup, and I'd just like to have you,
Director Goss, talk a little bit about what you think, number one, how
accurate our information is on what China is doing in terms of its
military budget and its buildup, and then how you'd see that as a
threat.
    MR. GOSS:  Senator, thank you.  I'm not sure what you're using
your sourcing for your speech this afternoon, but I assure you I think
I'm going to be very interested in your speech, and I will read it
very closely.

    I think you've put your finger definitely on an area where this
committee, your committee, needs to be working.  It's of concern.  I
mentioned China primarily -- again, I'm not in the policy business --
that's an area I'm not supposed to be -- but I think it is my job to
point out that the modernization and the expenditures that are going
on in the military, as we understand it, are something that seemingly

threaten our forces and our interests, and that is something that
policymakers should definitely be attuned so.  So I am very pleased
for your interest in this.
    SEN. INHOFE:  Well, you know, we talk a lot about the various
countries that may not have much of a conventional buildup but pose a
threat -- weapons of mass destruction and all that.  But in the case
of China you've got both, and it's something that's been very
concerning to me.  Thank you very much.

    SEN. WARNER:  Thank you very much, Senator Inhofe.  And as
chairman I'm considering the role of this committee in further
bringing to the attention of the public the dramatic changes in
China's policy towards its weapons program, particularly in light of
the very disturbing developments with regard to the EU and their
desire to lift this embargo which I, and I think yourself and many
others, are very much opposed to that action in its present proposal
of the EU.
    We'll now turn to Senator Lieberman.

    SEN. JOSEPH LIEBERMAN (D-CT):  Thank you, Mr. Chairman.  Director
Goss, Admiral Jacoby, thanks for your testimony, for your service.
    Director Goss, you described the employees of the CIA as an
"organization of dedicated, patriotic people."  I agree.

    MORE

    x x x agree.

It's true of the -- those who work with you, Admiral Jacoby, and I
thank and salute them.
    I want to talk to both of you first about Iraq.  We have a lot to
feel good about in Iraq.  Saddam Hussein is gone.  The Iraqis, in the
face of terrorist threats, came out, eight million plus, to vote; the
government was stood up yesterday.  But there remains this terrorist
insurgent enemy there, killers willing to strike at vulnerable
targets, as we all know, undefended targets.  And they're going to go
on.  Hopefully they'll diminish as the Iraqi government stands up and
takes charge of its destiny, but they're a committed, vicious enemy.
And here's my concern -- and I must say that I found the exchange you
had with Senator Levin in this regard disappointing this morning.

    I worry that we don't know as much as we should today about this
enemy.  We're not even sure from the testimony today about how many
there are.  And I understand it's not like counting troops on an open
battlefield.  It's -- this is at the heart of the evil in the enemy
that we're facing today.  I worry also because intelligence is so
critical when you're facing an enemy like this whether we have
adequate intelligence on them, because clearly, if somebody's willing
to drive into a bunch of Iraqi citizens signing up to become security
officers and blow themself -- blow himself up as well as them, the
only way to stop it, really, or the best way to stop it is to know
he's coming, through intelligence.
    So I present that challenge to you, if you will.  Over time --
and Senator Levin has focused on this -- we've heard varying estimates
of the numbers in the insurgency.  Then we compare that to the number
arrested, and you'd think that the number of insurgents would go down,
but it keeps going up.  So that's my question.  What we are doing?
What can we do to help you to know more about the enemy we and the
Iraqis face today and the Iraqis and we will face in years to come?
And I don't have to tell you, this enemy has the blood of Americans on
its hands.  And we ought to do everything we can to know where they
are and stop them before they strike again.  So, please give me your
response to that.

    MR. GOSS:  Senator, thank you.  That is a, you know, very, very
perceptive analysis of the conundrum we face there.  I guess the way
I'd answer some of the question is, one of the things we have to do --
and this is not necessarily intelligence -- is we have to give the
guy, the young guy who gets up in the morning in Iraq a better choice
than he's got now of going out and pick up his AD-47 and go and
shooting us.  That's one of the things that's got to happen.
    SEN. LIEBERMAN:  Right.

    MR. GOSS:  That may be mental, it may be ideological, it may be
economic.  All of those factors come in.  I --
    SEN. LIEBERMAN:  Right.  And what we hope is the Iraqi government
stands up will give more of those young people that path to a better
future than becoming killers.

    MR. GOSS:  Yes.  Well, as Admiral Jacoby said, we -- you know,
you got to have the economic opportunity, you got to have a judiciary
system, you've got to have stabilizing force.  I mean, all of those
things are part of the fabric of society.  And I think that our
intelligence mission will get easier as that part of the
infrastructure and those institutions of society come into play.  But
right now, if you ask me how many insurgents, I don't like to answer
that question because literally, a person may make a decision between
going to a job, if one's available, or going out and being involved in
some kind of --
    SEN. LIEBERMAN:  You mean on a given day.

    MR. GOSS:  On a given day.  We're not talking about what I would
call a nice, organized network that we can go penetrate.  This is a
lot of individual inspiration, or two or three guys getting together.
Now, some of it is obviously stroked; this guy Zarqawi is pretty good
at that.  But we're not talking with anything that is conventional in
our way of thinking.
    SEN. LIEBERMAN:  Don't we -- I'm sorry.  Don't we also believe or
have reason to believe that elements of the former Saddam Hussein
regime fell back and coordinating these attacks against us, perhaps
with funding from outside in places like Syria?

    MR. GOSS:  Yes, sir, some.  Some.  Yes, that's a factor.  That is
definitely a factor.  It's not the only factor, and it may not be the
major factor.  There are many, many factors.  This is complicated, as
you have pointed out.
    You ask me is our information adequate?  No.  It will never be
fully adequate.  But the more we have, the better we do.

    We seem to have success from a number of ways.
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    x x x ways.

There are two or three threads that have worked out spectacularly for
us in dealing with terrorists in the act of terrorism or about to be
in the act of terrorism.  We're getting good at that, and I'll do that
in closed session for you.
    SEN. LIEBERMAN:  Okay.

    MR. GOSS:  But I will tell you, in -- generally speaking, it's
the question of all of the ways you can think a terrorist can disrupt
a free, democratic, open society are there, and in some cases, they're
being incited there more than in other places.  So you are going to
see this.  In some ways it's good, because we are concentrating our
target, in a way.
    It is true that there are -- others are coming from foreign
countries.  There are known intelligence routes of where they're
coming from and people who are supplying them and supporting them and
getting the logistics to make this happen.  And we understand a great
deal about that.

    But if those people weren't going to Iraq, would they still be
back in Country X, plotting and planning against the embassy or so
forth?  The answer is apparently yes.
    SEN. LIEBERMAN:  Thank you.

    Let me ask Admiral Jacoby to answer the general question.  And if
you can, let us know to what extent we are now being able to bring to
bear our considerable technological intelligence capacity and human
intelligence.  I mean, in some ways, these seem like -- these
terrorists seem like gangs on the street who are willing to kill
anybody.  And you know, I know from -- in the cities of America, the
best tool that the police have to stop that kind of activity is
infiltrating the gang and frankly buying intelligence from people who
are on the street, information to go after the killers.  Are we
improving our capacity to do that against a terrorist enemy?
    ADM. JACOBY:  Senator Lieberman, first, let me join the DCI in
the fact that your question gets to the heart of a very -- it reflects
the complexity of the situation.

    The key to working the problem is really about tactical-level
HUMINT, being able to work with the population and having the
population get to sort of a tipping point where they willingly come

forward to either a coalition authority or more likely, as Iraqi
authorities stand up and security forces and police are in
neighborhoods -- and willingly come forward and say, "I am choosing to
turn this person in and take the potential risk to my family that
could transpire, rather than allowing this to happen in my
neighborhood and standing by."  There's been an awful lot of
intimidation and standing by kind of circumstances.
    When, you know, we call it tactical HUMINT sources -- the person
walks in and willingly shares information or may share it for small
payment -- I mean, if that's the motivation -- we get to that
situation, that's the way to take on an insurgency more successfully
than we've been able to do today.

    So it -- the situation does have all the characteristics that
you're talking about.  It has former regime elements who are organized
to some level and potentially orchestrating efforts to some level.  It
has the characteristics of disgruntled individuals.  It has foreign
fighters who have come in, who are probably not going to be dissuaded
by anything other than either a change in circumstance or in fact
having the -- you know, the population turn against them.  And then
there are literally criminal elements and people who sell their time
on, you know, a daily or hourly wage to, you know, put various devices
in place.
    So the complexity is there, and the local Iraqis who will not put
up with this any longer become the key element in changing, you know,
the face of the insurgency.

    SEN. LIEBERMAN:  Well, I thank you.  My time's up.  I just want
to conclude by saying that personally I can't think of anything more
important to our long-term success in Iraq -- and more important than
that, the long-term success of a self-governing Iraq -- than our
intelligence about the enemy.
    MORE


    x x x enemy.

I mean, right now this is a relatively small group of people that's
attempting to disrupt the will, clear will, of a majority, of 25, 26
million people to have a better future.
    I thank you.

    SEN. WARNER:  Thank you, Senator Lieberman.
    I'd have to say, Admiral, I'm glad you touched on that.  Citizen
participation is so important to the intelligence collection.  In my
opening comments with Director Goss I mentioned that and asked, is
there any perceptible level of increase in that cooperation, and is
that not a challenge for this new government to meet.

    ADM. JACOBY:  I can't pin down perceptible change in
participation.  But very clearly, in polling and the sense of our
people on the ground, the Iraqi population is much more hopeful about
their future, much more concerned about the stability element than
they were prior to the elections.
    And so, Senator Lieberman, I am hopefully optimistic that the
kinds of trends that you and I are talking about are beginning to
show.  And, hopefully, these polling kinds of flavors will turn into
action on the part of the Iraqis.  And then, obviously, Mr. Chairman,
the goal of many of these efforts is very specifically to defeat
stability and progress, and so it is a very focused effort.  And
stability and progress is also the way to defeat the insurgency.

    MR. GOSS:  Mr. Chairman?
    SEN. WARNER:  Did you wish to add something, Director Goss?

    MR. GOSS:  Yes, sir.  It is so critically important.  And I do
believe that's the reason that the terrorists well understand this,
they do understand this tipping point that you've brought up and that
Senator Lieberman's brought up that we're talking about here of
capturing the hearts and minds, if you will.  That's why the focus of
the terrorist attacks is not as strenuously against the U.S. forces as
it is against the innocents and the people trying to stand up the
intelligence and security organizations in Iraq today.  They
understand that, and they're using the tool of intimidation.  And we
are trying to get stability and use that as our card against
intimidation.  It's going to be a horse race.

    SEN. WARNER:  Thank you.  But I bet that -- I hope that new
government enters into this horse race and shows some strong
leadership.
    The distinguished chairman of the Senate Intelligence Committee,
the senator from Kansas.

    SEN. PAT ROBERTS (R-KS):  I thank the chairman.  I apologize to
the chair and the committee.  I have a cold that would even challenge
the worries of Howard Hughes.  And I will do the best that I can.
    Let me say that in response to Senator Dayton's question and the
chairman, that we do have a program called the PRISP program -- P-R-I-
S-P is the acronym.  We have funded 150 people within the agency to
continue their education along the lines of the criteria that the
director has indicated.  It is authorized, and in a miracle, it has
also been appropriated and is in the budget.  And so I hope we can
expand that.

    Mr. Chairman, I would like to quote, under the banner of
terrorist interrogation, somebody by the name of Bob Steele who wrote
a book on intelligence.  And he said, "Terrorism may be defined as a
nongovernmental, nonconventional dynamic, random, nonlinear with no
constraints or predictable doctrine, almost impossible to predict in
advance."  And yet, we are trying very hard and are succeeding in
regards to terrorist interrogation to save lives and to stop attacks
on the homeland.
    Ralph Peters in his book, "Fighting For the Future:  Will America
Triumph?" said, "A terrorist is not the trained, disciplined soldier
we have most frequently encountered, he is a morally savage, unruly
killer."

    This is not -- in our efforts to try to protect our troops and
the lives of Iraqis and the lives of our troops and to protect against
an attack on our homeland, this is not your normal breed of military
adversary.  Nevertheless, in hearing after hearing in the Intelligence
Committee we learn, and it is clear, our most potent, our most potent
intelligence tools to fight terrorism is the interrogation of captured
terrorists.  I always ask when we have hearings -- What is your most
important tool in terms of intelligence? -- and that is what comes
back.
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    x x x back.

    So, Director Goss and Admiral Jacoby, your agencies and your
officers play a most difficult but yet very critical role in those
interrogations.  I want to thank you and I want you to thank them for
us.
    Congress -- in answer to some of the questions raised by members,
some of whom who here serve on the Intelligence Committee -- has been
fully informed of what the CIA is doing in terms of interrogating
captured terrorists.  We continue our ongoing briefings with staff and
members as the classification does permit, and more with the chairman
and the vice chairman, and that's with our CIA officers and the
inspector general -- and also Director Goss will appear before the
committee April 7.

    The Senate Intelligence Committee has and will insist that the
CIA and the Department of Defense and the Department of Justice will
continue to thoroughly investigate all allegations of abuse.  We are
now and we'll continue to review the results of those investigations.
Any findings of criminal misconduct have been and will be referred to
the Justice Department for prosecution.  I have several examples.  I
won't go into those right now.
    I have met with met with the inspector general.  The reason that
he has not reported back as soon as possible, as many members would
like, including this one, is that his investigations are ongoing.  I
met with him for over two and a half hours.  I went into every abuse
that has been reported in the press and asked him for a response, and
he was most forthcoming.  So that is an ongoing effort by the
inspector general, and we set it up that way in Congress.  I mean, we
passed the legislation in order to get this done.

    Mr. Chairman, I'm a little worried about something called risk
aversion.  How many of us on this dais have talked about how
Congress's actions prior to 9/11 actually contributed to risk aversion
that still burdens the IC, the intelligence community?  It seems to me
we have badgered our intelligence officers to get serious and tough --
I've done that -- and then we sacrifice them on the altar of a
different criteria when it gets a little hot in the kitchen.  I hope
we don't really forget these lessons.
    Now, I'm not for one minute suggesting that allegations of abuse
should be ignored or that we should shy away from our important
oversight duties.  There are many important aspects of detention and
also interrogation that must continually be overseen, checked, and
aggressively examined.

    But what I am saying is we should continue to examine and oversee
these issues in the same discreet, judicious and, when necessary,
aggressive manner that we've used up to this point.  But I don't think
we should be in the business of prosecuting our troops and
intelligence officers in the media in the midst of their work to save
lives and to prevent another attack on the homeland.

    I think we have to work every day to ensure that our
interrogators do not violate our laws and our regulations.  But I have
to tell you I am losing a little patience with what appears to me to
be an almost pathological obsession with calling into question the
actions of the men and women who are on the front lines of the war on
terror.  They travel to the other side of the world in the service of
their country, with a reasonable expectation that their country does
support them.  At times they make mistakes -- sometimes very serious
mistakes for which they must be held accountable, and also rightfully
so.
    MORE

    x x x so.

But Mr. Chairman, as we sit here, in relatively safety and comfort, I
can't help but think that some of us have lost our perspective.  Our
first and foremost duty is to support our troops and our intelligence
officers at home and abroad.  Again, as Ralph Peters (sp) so aptly
stated, a terrorist is not the trained disciplined soldier we have
most frequently encountered, he is a morally savage unruly killer.
And I don't think we should do any harm to our ability to keep the
most potent source of intelligence -- the most importance source of
intelligence -- that we have to save lives and to protect our
homeland.  And the doing of this, it should not be a choice between
our commitment to follow our laws and what our country stands for an
our obligation to better protect our military and the Iraqi people and
our national security.  We can and should do both.  And I think we
can.
    But in the end -- in the end result, I want you to know, Admiral,
and also to the director, I'm with our troops, doing a most difficult
and necessary job.  I'm already over time, but I am worried about risk
aversion with all of the attention now being paid to the numerous
investigations and prosecutions, et cetera, et cetera, and yet another
call for an independent investigation.  I am worried about -- I don't
know who'd want to do this job over there, with all of that, without
having the fear of being dragged back into an investigation or
something of this nature.  Can you tell me very quickly, since I'm
over time, where are we with risk aversion in regards to the people
who are doing a very, very difficult job with some very savage
killers?

    MR. GOSS:  Mr. Chairman, thank you.  Your words are very welcome
to me, and I'm sure to the men and women of the intelligence
community.  I will assure you that there is every effort made to make
sure that whatever actions we take are proper and within bounds in the
intelligence community, in any aspect of the use of any of the tools
in our toolbox.  That is very certain, and we demand that in
management, you demand it in oversight, and I think we have good
transparency and good mutual trust and confidence between the doers
and the overseers.
    I don't think that it causes us to, in the short term, have any
less enthusiasm or apply our skills in our jobs, but when there is
perpetual uncertainty and perpetual doubt about whether or not there
is going to be full support for the mission, I don't -- it would be
hard to argue that it's not going to impact morale and it's not going
to impact performance eventually.  I sincerely hope that is not the

case.  I know we have too many good men and women out there, and I
think they understand that we try and run interference as best we can,
all of us, in the legislative, judicial and executive branches, to
help them get the very dangerous work done that they have to get done.
And then we may from time to time have to, in a free, democratic, open
society, check, are we doing this the right way.  And I think we are
doing that.

    But I do think you're right.  We run the risk, if we persist in
allegations that are unfounded because it's becoming a feeding frenzy
or the subject of talk shows that need time to fill air, or something
like that, I think we do run the risk of doing ourselves damage.
    SEN. WARNER:  Thank you very much.

    SEN. ROBERTS:  Thank you for your statement.
    And Mr. Chairman, I have a much fuller statement which I spared
the committee.  I would ask that it be inserted at this point.

    SEN. WARNER:  Without objection.  We'll insert it in the record.
    I must say, I think this committee pursues its responsibility
with full recognition of trying to defend the men and women in uniform
particularly, and to the extent our men and women work with your fine
team at the agency, in giving them every support we can.

    What I interpreted your remarks this morning, Mr. Director, as
conveying to the committee, and the public at large, this hearing,
that you're able to perform the duties of the mission of the Central
Intelligence Agency and collect that intelligence and do so in --
consistent with the -- what this nation stands for, the rule of law.
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    x x x law.

Am I not correct in that?
    MR. GOSS:  You are correct, sir.

    SEN. WARNER:  And I thank you, sir.
    Senator Ben Nelson.

    SEN. BEN NELSON (D-NE):  Thank you, Mr. Chairman.
    I might note that Senator Roberts always seems to be hoarse after
K State doesn't have such a spectacular basketball season.  So I don't
know whether there's any correlation or not -- (laughter) -- but --

    SEN. ROBERTS:  Hell, that's been 15 years.  (Laughter.)
    SEN. BEN NELSON:  Well, thank you very much, Director Goss and
Admiral Jacoby.  I appreciate your being here today.

    I want to associate myself with Senator Roberts' remarks about
supporting and pushing for the high morale of our men and women in
uniform and those who are involved in intel.  It's critical that we
continue to do that.  And I think we all understand that when the
effort's made in good faith, with -- toward competence, perfection is
never possible but certainly a good job is what we're seeking to get.
And we support them.
    It's always difficult when there's some sort of failure of
effort, and it makes it very difficult for everybody.  But I think we
can discern the difference between those situations, which are
apparently very rare, compared to the competence.

    One of the things, going back to Senator Lieberman's area of
concern about terrorism, that I've not heard much about recently is
following the money trail, recognizing that shutting down cash flow
very often degrades, interferes with the capacity of the terrorists to
be able to continue their efforts.  I think as we look at the whole
area of terrorism, not just limited to what we're facing in Iraq but
overall, is there anything within the context of this open session
that you might be able to tell us on the progress we're making on
following the money trail?
    MR. GOSS:  Senator, I would be excited to tell you about progress
on that in closed session.

    SEN. BEN NELSON:  Okay.  Then also, turning to Pakistan for just
a minute, obviously we've viewed Pakistan as an ally since September
the 11th, but with a little bit of initial unease because of their
prior association with the Taliban.

    Last November, together with some of my colleagues, I visited
Pakistan, and at that time, we heard what turned out, fortunately, to
be an erroneous news report that the Pakistani military would cease
their search on the border for Osama bin Laden.  Now it obviously
caused concern.
    This week the news reports indicate that Pakistan is maintaining
its nuclear black market channels and are attempting to procure
nuclear components to upgrade their capabilities.  Yet the Pakistanis
deny this.  Is there anything that you can tell us in open session
here regarding that potential effort or reported effort to upgrade
their nuclear program?

    MR. GOSS:  There is nothing that I can tell you in open session
about that, sir.
    SEN. BEN NELSON:  Well, that's strike two for me.  I'll see if I
can go to something else.

    The -- in your testimony, Director Goss, you mention that Iran
continues to hold in secret important members of al Qaeda.  Now I
think we all would be concerned that that is the case.  Do we know
whether or not that's the case, that they are assisting in providing
any kind of sanctuary to al Qaeda members?
    MR. GOSS:  Sir, the answer I can give you is -- intelligence in
which I have high confidence in is that they in fact have several
high-level al Qaeda people in Iran.  What -- the condition they are
in, in Iran, is a matter I'd rather discuss with you in private.  But
in fact those people are in Iran.

    SEN. BEN NELSON:  Can you tell us anything here in open session
about the reform movement in Iran?
    MORE


    x x x Iran?

Obviously, it appears from reports that the conservative group seemed
to be the stronger of the reform and the conservative group.  So is
there any likelihood that the reform movement can survive in that
environment?
    MR. GOSS:  The answer to your question I would suggest is that
your observation is correct, that the conservative elements at the
moment would appear to be rather dominant.  What that means for the
future of reform in Iran is subject to a lot of assessment.  And I'd
be happy to give you the community's views in closed session.

    SEN. BEN NELSON:  Okay.  And finally, as it relates to the area
of Taiwan and the People's Republic of China and the efforts that are
going on there, can you give us your assessment of how much more
likely it is that a People's Republic move would be, now, that they
have -- since they have adopted a war-authorizing act?  Or is that
something also for a closed session?
    MR. GOSS:  Probably the Taiwan Straits issue is as delicate a
political issue -- or one of the top five in the world that have
consequences.  And as I found out in my previous hearing in front of
another committee not so long ago, what I thought were perfectly
reasonably remarks were not taken as such.  (Chuckles.)  So I would
rather defer that one as well until closed session.

    SEN. BEN NELSON:  I thought that only happened to us, so I'm --
I'm not relieved that it's happened to you, but maybe it gives me some
comfort.
    MR. GOSS:  Thank you, sir.

    SEN. BEN NELSON:  Thank you, Mr. Chairman.
    SEN. WARNER:  Thank you very much.

    Senator Cornyn.
    SEN. JOHN CORNYN (R-TX):  Thank you, Mr. Chairman.

    My questions have to do really with -- from our Southern border
down in Central America -- Mexico, Central America and South America.
I've heard our nation's policy, while we've been consumed with other
more immediate urgent causes in the Middle East, described as a policy
of benign neglect towards our southern neighbors.  And I'm afraid that

that -- if that's an accurate description, that that neglect may come
back and bite us badly at some point.
    And my specific concerns are -- one has to do with Chinese
investment and military -- possible follow-on military-to-military
cooperation, certainly with Castro's involvement in South America, and
increasing belligerence of South American leaders toward the United
States, along with the prohibition on our ability to enter into
military-to-military cooperative agreements unless there's a bilateral
agreement that exempts our servicemembers from prosecution before the
International Criminal Court.  And I want to ask -- I'd like to ask
Admiral Jacoby about that in a minute.

    But first, Director Goss, the State Department's "Patterns of
Global Terrorism 2003," notes that although there continued to be
reports in 2003 of an al Qaeda presence in the tri-border area -- that
is the area of Argentina, Brazil and Paraguay, as you know -- these
reports remain uncorroborated by intelligence and law enforcement
officials.
    But it's no secret, even if that specific activity is
uncorroborated, given our porous southern borders, and given the
difficulty that Mexico has controlling its borders, given the activity
of all sorts of lawless activity, whether it's human smuggling,
trafficking in persons, money laundering, or illegal drug activity --
are you satisfied that we are committing the appropriate level of
resources to protect ourselves from threats emanating from the south?

    MR. GOSS:  In terms of information collection, Senator, is that
where you're -- is that the thrust of your question?
    SEN. CORNYN:  Well, it would start certainly -- yes, let's start
there.  But certainly, I guess if we had information there was a
danger, we would actually -- we'd do something about it.  But let's
start with that, please, sir.

    MR. GOSS:  No, I'm not satisfied that we have sufficient coverage
of our backyard at all.  We, very clearly, have over the years -- and
this has been going on for some time, actually, have been stripping
down, and perhaps enjoyed a peace dividend, as some would maybe
characterize it.  But we have -- we phased out a lot of activities
that we wish we hadn't at this point.
    MORE


    x x x point.

    We're strong in some areas, we're better in some areas.
Narcotrafficking is an area we actually are pretty attentive to.  Some
of the other kinds of things that are going on down there which we
could be better informed on which would help us clearly are the kinds
of things I was speaking of.  And most particularly perhaps the main
threat is exactly the movement of people or the trafficking of weapons
or materials that could be of value to terrorists or others who have
other agendas.  And those are areas where you want as much information
as you can get all the time, and I think areas that need building up.
    SEN. CORNYN:  Well, I very much appreciate your candor more than
I could say, because it seems elf-evident to me, as coming from Texas
and spending a fair amount of time along our border region -- just
recently I flew with a Border Patrol helicopter down the Rio Grande
River around Laredo, and we do a pretty good job of controlling
movement across our international bridges, in places where at least
people ostensibly try to comply with legal requirements.  But between
the bridges it's wide open, and unfortunately I disagree with you that
there's a lot of opportunity there for people who want to hurt us to
come through there.

    Admiral Jacoby, let me ask you about the Chinese and other
government investment and activity in South America, and particularly
the limitations that apply in terms of our ability to -- unless
someone signs an Article 98 agreement to exempt U.S. service persons
from prosecution before the International Criminal Court -- what kind
of hindrances and problems do you see there that perhaps we need to
pay more attention to that would limit the ability of other nations to
get very much involved, particularly on a military level in South
America?
    ADM. JACOBY:  Senator, you can appreciate I don't follow the
Article 98 you know sort of policy implication thing closely as part
of my responsibilities.

    From our standpoint as defense intelligence, we have not had
inhibitions in terms of the kinds of relationships and our activities
of our defense attaches and so forth as a result of this.  But
obviously when you get into the training and some of the other actions
and activities,  clearly that Article 98 gets to be a major player.
    Your observation about Chinese investment in the hemisphere is
very accurate.  I'm thinking back to my days as director of naval
intelligence when the Chinese companies were very active with the

Panama Canal companies and as an investment opportunity.  Sir, that
continues in the hemisphere, and frankly continues globally, and it
wouldn't be at all a surprise that a booming domestic economy and a
worldwide China presence would open those kinds of opportunities for
Chinese investment.  Central America is one key area.

    SEN CORNYN:  Well, I worry about not just Chinese investment, but
of course then given the inhibitions -- or perhaps prohibition, I
should say -- on military-to-military cooperation that we have -- and
I'm not suggesting I know the answer to that yet, but just that it's a
problem we need to pay attention to, that those investments will
follow on with military involvement and cooperation between the South
American and Central American governments that we're precluded from
interacting with on that same basis.  And certainly we know that Fidel
Castro is uninhibited in his activities with some of the countries of
South America that are natural-resource rich, and that China and other
nations want to have access to for their own economic survival and
vitality.
    My time is up.  Thank you very much, gentlemen.

    SEN. WARNER:  Thank you very much, Senator.
    MORE

    x x x Senator.

    Senator Kennedy?
    SEN. EDWARD M. KENNEDY (D-MA):  Thank you very much.  And I
apologize to the witnesses.  We've got the budget over on the floor,
and our amendments come up at different times.  And I regret that I
missed the earlier parts of the testimony.

    Did -- Admiral Jacoby, did you -- or Director Goss, did you tell
us -- and I apologize if you have -- about the number of Iraqis that
are being trained currently?  The numbers?  Do we have the numbers and
what the flow line is in terms of output from them in Iraq?
    MR. GOSS:  Senator Kennedy, it didn't come up.  And frankly, I
don't have those kinds of numbers.  We'd have to work with the
department --

    SEN. KENNEDY:  Okay.  Okay.  All right.  Good.  Very good.  Let
me -- and I know you've gone through this a little bit, but I'd like
to come back to this policy of rendition.  And I know, I've been
informed by staff that there's been some comments about this, and a
desire to get into the -- into a secure session for it.  But I'd like
to ask that -- a little bit more about some parts of it that I think
ought to be able to be answered.
    Yesterday the president said we send the detainees back to their
country of origin with a promise that they won't be tortured.  And
last month, Mr. Goss, you said that we have an accountability program
to make sure the promises are kept.  But since 9/11, the U.S. has
flown a hundred, 150 suspects to countries like Egypt, Saudi Arabia,
Syria and Jordan, countries that we know engage in the torture, and
not always the detainee's country of origin.  We turned over a
Canadian to Syria, where allegedly he was tortured for nearly a year
until the Syrians concluded he had to ties to al Qaeda and released
him.  We detained an Arab German and flew him to Afghanistan, where he
was drugged, beaten and then released five months later.  We captured
an Arab citizen of Australia and flew him into Egypt -- says he was
given intense electric shocks, hung from metal hooks, beaten and
almost drowned.  The U.S. eventually released him from Guantanamo.  If
we're sending them back to the countries of origin, how do we explain
the fact that we're sending many of these people to other countries?
Mr. Goss.

    MR. GOSS:  Senator, on the -- thank you for -- on the subject of
transferring dangerous terrorists and how that all comes about, there

are obviously a number of equities involved.  We have liaison sources,
we have our other government agencies.  The idea of moving people
around, transferring people for criminal or other reasons, by
government agencies is not new.  For us in the intelligence business,
the idea of helping out dealing with terrorists has been around for
about 20 years.  And we do have policies and programs on how to do it.
We also have liaison partners who make requests of us, and we try to
respect not only the sovereign rights of other countries, but all of
the conventions and our own laws and, of course, the Constitution.
And as far as I know, we do that.  And in cases where we don't or
there's a problem, there are ways to bring it to the attention of
people like our inspector general.  And that system does work.
    SEN. KENNEDY:  Well, you mentioned about other times.  I mean,
during the Clinton administration they had used rendition.  They used
it, as I understand it, limited purposes, to return terrorist suspects
for criminal prosecution.  It required an interagency groups to
review.  Do you require interagency groups to review?  And also to
approve each request to transfer.  Do you have those kinds of
safeguards?  Do you -- did you maintain that process?

    MR. GOSS:  Sir, we have for the -- I won't -- can only speak for
the intelligence community --
    SEN. KENNEDY:  Well, that's what I'm asking.  That's exactly what
I'm asking.  Those were in place during the previous administration.
I'm asking to you whether those kinds of protections still exist.

    MR. GOSS:  I actually believe that since 9/11 and since we've
understood the value of how to deal with the terrorist threat that we
have more safeguards and more oversight in place than we did before.
    SEN. KENNEDY:  Well, there are many that believe that the -- if
we abuse prisoners in ways, we don't undermine al Qaeda, we strengthen
them and make it easier to recruit -- easier to recruit terrorists.
We create a backlash hatred against us.

    MORE

    x x x us.

    Let me ask you, moving on to the Bybee memoranda, we've had --
went into this in very great detail in the Judiciary Committee at the
time of Mr. Gonzales's hearings.  And I'm wondering whether you can
confirm that the CIA is no longer using the legal guidance contained
in the August 2002 Bybee memorandum.  That's the earlier memorandum,
just to refresh your recollection.  That was in place for two and a
half years, and it basically -- the evidence is that it was initially
requested by the CIA to get Mr. Gonzales to request OLC to get them a
memoranda that would permit them a lot more latitude in terms of
dealing with prisoners, at least -- and now that has been repealed --
just to try to refresh your recollection.  But I want to know whether
you can confirm that the CIA has conformed its conduct to -- as
redefined in the December 2004 OLC memorandum.
    MR. GOSS:  Senator, I'm obviously not as informed on the exact
memorandum as you are or as your Judiciary Committee would be --

    SEN. KENNEDY:  Okay --
    MR. GOSS:  Let me say that I know that the CIA has done
everything it can to find out what the rules are, get them as clear as
possible, and give those instructions to the men and women in the
intelligence community in the field.

    SEN. KENNEDY:  Well, I had asked --
    MR. GOSS:  -- that's happening.

    SEN. KENNEDY:  -- Mr. Gonzales specifically whether he had given
the new memorandum to the CIA, and he said it had been distributed to
the Defense Department, and he assumed -- presumed that it had been to
the CIA.  And if you'd be good enough -- those are guidelines on
torture, and I think it's important to know.  If you'd like to --
    MR. GOSS:   Excuse me, sir.  I thought you were talking about the
transfer of --

    SEN. KENNEDY:  No, I --
    MR. GOSS:  These memos go to the treatment now you're talking --

    SEN. KENNEDY:  That's right.
    MR. GOSS:  Sir, there has -- as we've talked about earlier --
been some discussion about what are the right policy guidelines that

are completely understood by everybody, both military and civilian.  I
think that there is clarity on that now.  And I can tell you -- I will
not say in open session, but I can tell you absolutely as I testified
to the intelligence oversight committee, that at this time there are
no "techniques," if I could say, that are being employed that are in
any way against the law or would meet -- would be considered torture
or anything like that.
    SEN. KENNEDY:  All right.  The -- just my time is up, Mr.
Chairman.  If you could, when you go back to the office, if you could
look at the December 20th OLC -- Office of Legal Counsel -- memorandum
which overrode the initial Bybee memorandum that was wide open in
terms of permitting - and I think was really the basis of a lot of the
abuses that took place.  And my question would be to you whether you
could give us the assurances that the agency is -- all of its
instructions to its field organizations and to anyone that's coming
under its kind of control -- that those particular provisions outlined
in the legal counsel are being respected throughout the intelligence
agencies.  That would be -- if you could submit that to me, I'd
appreciate it very much.

    MR. GOSS:  Yes, sir.  Just to make sure I understand, December
20, '04 guidelines you wish to make sure that we are adhering to?
    SEN. KENNEDY:  Yes.

    MR. GOSS:  Yes, sir, I will get --
    SEN. KENNEDY:  And I'm -- I don't want to take the additional
time -- there's a dramatic, dramatic difference between what was
permitted for two and a half years under the Bybee memoranda and then
what was changed.  And what was changed was sent up just at the time
that Mr. Gonzales' nomination came up here.  And Mr. Gonzales then
testified that those were the rules.

    MORE
    x x x rules.

And he had indicated that those -- the changed rules went to the
Defense Department, and he presumed that they went to the intelligence
-- CIA, but he did not know that, I think it's fair to say.  And I'd
like to know.  And he indicated -- and later, the secretary of Defense
has indicated that that's what's guiding now DOD.
    My question is, does the agency sort of know about it, and are
you complying?  Can you give us the assurance that those are the
instructions that are being used out in the field?

    MR. GOSS:  I will do that, sir.
    SEN. KENNEDY:  Good.  I thank you.

    I thank the chair.
    SEN. WARNER:  I thank the senator.

    Senator Sessions.
    SEN. JEFF SESSIONS (R-AL):  Well, the Bybee memorandum was
recalled and altered somewhat, but fundamentally it was an accurate
statement of the ultimate powers of a president to defend the United
States.  And -- but the important point is that this was an Office of
Legal Counsel memorandum to the president and executive branch, at
their request, on what the powers of the president were -- the
executive branch, including the military, what powers they had.
However, the military never had a policy to execute or carry out all
those powers.  In fact, their policies were much more restrictive and
have been more restrictive than may have been allowed under the
broadest interpretation of the law, as I understand the way that went
down.  We've been on this on Judiciary Committee -- Senator Kennedy
and I have -- for some time.  And we've had lawyers and cases and
arguments.

    But I would just want to say that that was an advice given by the
Office of Legal Counsel of the U.S. Department of Justice empowered to
render such opinions, and they rendered an opinion.  And the military
never executed -- never developed or carried out a policy, to my
knowledge, and to any of the hearings that we've seen, that would have
gone beyond the law and even carry out the full powers of that
memorandum.
    I would just also note, I know, Admiral Jacoby and Director Goss,
how frustrating and difficult your task is.  I think about those

people that we've been called on to release them; they've got to be
released, we can't hold them in Guantanamo -- these unlawful
combatants.  They're not prisoners of war.  They have less protections
than prisoners of war.  They're unlawful combatants who sneak into a
country with the idea of killing people surreptitiously, not wearing
uniforms, not openly a part of a nation state, as prisoners of war
are.  So we got this, we have to release them.  So we release a bunch
of them, and now we see that the newspapers are reporting at least 12
have been rearrested in the theater attacking coalition forces.
    So it's not an easy task.  Nothing you do is going to make people
happy.  If you release them improperly to some foreign country and
they release them and they kill somebody, they'll blame you for
letting them go.  And if you hold them, they'll continue to blame you
for that.

    But the traditional rule of warfare is that a person that's
captured during the course of war is held until the war is over.
That's the way we do.
    Let me ask both of you this, it's a matter that I have -- and
just in my experience as United States Attorney, working with a host
of different federal agencies, I came to realize just how hard that
is, how hard it is to achieve cooperation and partnership and unity.
Now we've got -- we passed the Intelligence Reform Act last December.
The president has signed it.  We'll soon be having confirmation
hearings for Ambassador Negroponte, who will be the new DNI.

    And so let me ask you, how is this expected to affect your
agencies and your relationships with one another?
    MORE

    x x x another?

And have you made changes and taken actions now in preparation for
that that can help make this a success?  I'm not sure it was a
brilliant plan, if you want to know my opinion.  But we've done it.
And it could work and could be successful.
    So let me ask you, have you got any thoughts?  And I would just
say this:  If you need any further legislation to make this thing work
better, I hope you will let the Congress know.

    Director Goss?
    MR. GOSS:  Thank you very much, Senator.  I appreciate your
observations on the Judicial Committee's proceedings.

    And I am prepared, Senator Kennedy, to tell you that we have seen
the December 4th LLC memo and fully comply with its guidance, I am so
informed.  And I appreciate that if you have further guidance on that
matter, we are always -- welcome it.  We want to be sure we're doing
the right things.
    On the question of the DNI, this is legislation that we are doing
our best to implement.  That is our job and we will do our best to
implement it.  And it's up to you-all to determine if there will be
further changes, but if we have suggestions, we will certainly be
forthcoming.

    I have started the process, as the DCI, of how I would turn over
the responsibilities that would be community-wide to the DNI.  That
process is in effect right now.  We have begun already.  We have, of
course, set up a national counterterrorism center, the NCTC, which is
also provided for.  The steps are under way.
    I have tried to reserve for the DNI all of the decisions that
would be appropriately the prerogatives of the DNI.  So we are
treading water a little bit in a few places, but we have the
foundation stones in place for a DNI to come in, make the decisions
and launch rather rapidly, in my view.

    Frankly, I think it's going to work out fine, because we're
dealing with people who have worked together for a long time, who are
trying to do the best they can for our country, our men and women in
uniform overseas, clearly in harm's way, plus our men and women in the
intelligence community who are also taking huge risks.

    So I don't think there's any question about that.  There will be
some question about how we straighten out some of the working
relationships.  That's an inevitability.  I think that's what we're
expected to do in our jobs, and we'll do it.
    SEN. SESSIONS:  Admiral Jacoby?

    ADM. JACOBY:  Senator, we're looking forward, obviously, to the
confirmation and moving ahead.  In the meantime, we're not treading
water either.  We've put considerable amount of time and attention,
through last fall and into this year, in strengthening defense
capabilities and the integration within defense intelligence so that
when we are part of this national community, we bring the best
possible capabilities we can to this DNI for his employment.
    Obviously, we are active in the transition team planning that
Director Goss has put in place, and we also have not slowed down or
wavered from our course to strengthen our relationship with other
intel community partners, most specifically CIA in the analysis and
HUMINT area, and very specifically our involvement and long-term
engagement within the NCTC.

    So I think I can assure you that we're not sitting and waiting;
we're preparing and ready to move out.
    SEN. SESSIONS:  Well, I'm glad to hear that.  I would just say I
know that as a direct result of President Bush's very strong
leadership, every agency reached a new level of sharing of information
and cooperation, and a lot of it was done on a personal basis.  People
met at the proper levels and started sharing information to an
incredible degree.  We need to be sure that this new reorganization
does not upset that, really, and could even be a setback without
everybody's determined effort to make sure we don't, in our
formalization of these procedures, don't drift back into the
bureaucratic mind-set rather than the personal, immediate sharing of
relevant and important information.

    I know that you will work toward that.  And I would just want to
say, Director Goss, that I so much respect your agents.  I know that
the CIA has been blamed for this and that, and we want to see some
changes, and I salute you and support you in making changes that you
feel are necessary to really empower that agency to reach its fullest
potential.  But having been around the world and visiting with CIA
agents in dangerous countries, that they work seven days a week, 12
hours a day, nobody knows their names, they could be targets of
terrorists at any time, their families, in these countries, cannot
join them.  They are serving as much as any soldier in the field, and
we need to remember and value their contribution to this republic.
    MR. GOSS:  Thank you for recognizing that, Senator.

    SEN. WARNER:  Thank you, Senator.

    Senator Bill Nelson.
    SEN. BILL NELSON (D-FL):  Thank you, Mr. Chairman.   Good
morning.

    Venezuela.  Bolivia.  The Venezuelan-Colombian border.  FARC.
I'd like both of your comments.
    MR. GOSS:  Emerging troublesome areas that demand close coverage
and probably some policy formation and perhaps some execution before
we get through.  And we understand the real intent and the real
motives of some of the things that are going on.  We clearly are
talking about some political activities.  We are talking about some
illegal activities with narcotraffickers.  We are talking illegal arms
smuggling and a bunch of other things.

    MORE

    x x x things.

We are talking about meddling in sovereign affairs of different
countries by state actors.  So there's quite a bit on the plate to
cover and a lot of decisions to be made, policy-wise, about what steps
to take, and we should be ready to help take those steps when we're
required to.
    SEN. BILL NELSON:  Chairman Lugar of Foreign Relations is doing
an investigation right now with regard to the implications of the
cutoff of oil from Venezuela, were that to become the case.  I think
we'd have some warning, because there aren't any refineries other than
ours right now that can refine that grade of crude.  So we would have
some -- but we need to be mindful of that.

    And we also need to be mindful of where is an opportunity,
despite Chavez's rhetoric, of where we can start bringing him
together.  Now my sense is, he thinks the CIA was behind the coup that
tried to take him out and thus he doesn't have much dealings with the
CIA at all.
    But there is government-to-government contact with regard to our
FBI, and there's still military-to-military contacts there.  And I
think we ought to continue to encourage those, at least to encourage,
if not with him, moderation within that society as much as we can.

    Admiral, do you have anything more to report to us on the search
for Scott Speicher?
    ADM. JACOBY:  Senator, let me just sort of recap.  We have, as
we've talked previously, no information to suggest that Captain
Speicher was ever held by the former Iraqi government.  We continue
our search for information by having it be a high-end requirement for
any detainees.  We are positioned and prepared to put our team back on
the ground in Iraq if any new leads develop, but right now there are
really no active leads.  And we're in the process of preparing a
report for the secretary of the Navy of the work that was done on the
ground, so that we pull all that together and put the source reporting
together all in one document for his consideration.

    SEN. BILL NELSON:  I was under the impression that that report
was supposed to be ready months ago.  What's holding it up?
    ADM. JACOBY:  Sir, we -- it came to me.  I didn't find it to be
as complete as I thought it needed to be.  Recognizing that it is an
interim report, in the sense that the search for information

continues, and I remanded it back to the drafters and the team that
had been on the ground in Iraq to fill in some areas that I thought
were too -- were not definitive enough in the finding.

    SEN. BILL NELSON:  Well, one thing that I want to thank you about
is that when Pat Roberts and I started agitating on this about a
couple of years ago, you-all formed that special Speicher unit, which
was formed before we went into Iraq.
    ADM. JACOBY:  Sir.

    SEN. BILL NELSON:  And we're grateful for that, and we're
grateful for the dedication of the people that were on that particular
unit, because they worked very hard.
    ADM. JACOBY:  They did, sir, and I'll relay that to them.

    SEN. BILL NELSON:  And we thought -- we first thought they were
going to find him, and then we thought we might be able to find the
evidence, so that family could have closure.
    ADM. JACOBY:  Yes, sir.

    SEN. BILL NELSON:  So thank you for that.  But I wish you'd speed
up that report.  We're kind of getting tired of waiting for it.
    ADM. JACOBY:  It's about to be finalized, sir.

    SEN. BILL NELSON:  Mr. Director, in your testimony regarding
Haiti, you state that the outlook is very cloudy for legitimate,
timely elections in November '05, even with substantial international
support.
    MORE


    x x x support.

What in the world are we going to do if there are no timely elections?
What impact is that going to have on the internal security situation?
    MR. GOSS:  Senator, I think its the internal security situation
that is actually impacting the capacity to have the elections at this
point.  So I'm hoping that we will, through the efforts that are being
made there, are now, I think, being led perhaps by the Brazilians -- I
may have that wrong -- but they are --

    SEN. BILL NELSON:  They are part of it.
    MR. GOSS:  Good leadership, they are trying to work their way
through the countryside to create stability.  And when we see the
opportunity for an electoral council to get up again and there to be
what I will call a more normal process, I'll be more encouraged, and I
won't -- it won't be such a cloudy forecast.  But right now we just
are not at that level of stability or opportunity in Haiti,
regrettably.  I wish it were not so, but it is.

    SEN. BILL NELSON:  Does that suggest that one possibility is that
we don't have a substantial enough international security force to
stabilize the country?
    MR. GOSS:  In my estimate, they could beef up the international
security force a little bit, and it probably would have a benign
effect.  That is correct.  But I still think that there are some
matters among Haitians which are going to need to be settled.  And I
think that that has historically been a difficult proposition.  One
hopes to keep providing the opportunity for them to work it out.
We've done that a number of times, and so far we haven't had the
success we'd hoped.

    SEN. BILL NELSON:  Well, thank you both for your public service.
    MR. GOSS:  Thank you, Senator.

    SEN. WARNER:  Thank you, Senator Nelson.
    I'd like to inform members of the committee -- and many of them
are participating in the debate on the floor -- that it's the
intention of the chair and the ranking member to reconvene in 219 at
approximately 12:10 to continue the closed session.  So we'll now have
the participation and the question period by our colleague, Senator
Clinton --

    SEN. HILLARY RODHAM CLINTON (D-NY):  Thank you.

    SEN. WARNER:  -- and then we may have a housekeeping, or another
matter you wish to bring up --
    SEN. LEVIN:  A couple questions.

    SEN. WARNER:  All right.  Thank you.
    Senator Clinton.

    SEN. CLINTON:  Thank you, Mr. Chairman.  And welcome, Director
Goss and Admiral Jacoby.  I thank you both for your service and for
being here to respond to our questions.
    The Department of Homeland Security has been trying to focus the
antiterrorism spending that it has jurisdiction over in a more
strategic, risk-based manner.  And through their analysis they've
identified a number of possible attacks that it views as most
plausible or devastating, including the detonation of a nuclear device
in a major city, the release of sarin nerve agent in office buildings,
and a truck bombing of a sports arena.  I'd like to ask you both, what
role if any did the CIA and the DIA have in working with the
Department of Homeland Security in generating this analysis and list?

    MR. GOSS:  Senator, I don't believe that CIA had much role in
that at all.  The breakdown in DHS between domestic and foreign, as
you know, is very critical, and -- because Americans don't spy on
Americans, and we keep our foreign intelligence program overseas.
However, we do provide information.  That's -- that is the place where
come together.  And so, the degree of information that might have gone
into some estimates on that, it's very possible, and probably likely,
that some CIA sources are -- some of our channels were used in -- to
making estimates about the likelihood of a chem/bio attack or so
forth.  But as to sitting down and assessing directly where the risks
are in the homeland, that'd be a little bit out of our lane.
    SEN. CLINTON:  Admiral?

    ADM. JACOBY:  Senator, the same.  Clearly, the discussion about
the potential threats goes on in a community forum.  But we would not
have participated in Homeland Security's internal prioritization
ordering of the threats.
    SEN. CLINTON:  We know at several hearings by this committee I've
ask about the level of coordination between DOD, the intelligence
community, and the Department of Homeland Security, because I'm
concerned that we may not have the appropriate level of information
sharing and coordination.

    MORE


    x x x coordination.

    For example, I was struck by the comments in the newspapers today
about the anthrax scare at the DOD facility, and the either failure to
or inability to better coordinate with the public health response
mechanism and the like.  So I appreciate greatly the wall between the
different and appropriate roles that each of you have between domestic
and international, but I am not yet persuaded that we have as
sufficient a coordination as we need.  Now, I know that the DIA and
how that is stood up will perhaps play some role in that.  But I think
it would be useful to again think more closely, because if you look at
the -- if you look at the list that DHS has put forth -- you know,
nuclear detonation, sarin nerve agent, truck bombing -- it's almost
impossible to imagine that there isn't quite a bit of overlap in
trying to make those assessments between what we know, what the
information is we're gathering abroad.  Obviously much of this list is
based on DHS's assessments of the intelligence it's receiving and how
it's evaluating it.
    So I'm hoping that we can continue to improve the flow of
information and the coordination.  And I would look forward to hearing
any ideas you might have on that.

    Secondly, I read this week that General Musharraf said the
Pakistani army might have come close to capturing bin Laden near the
Afghan border in late spring or early summer of last year.  Could each
of you enlighten us on the status of the hunt for bin Laden?
    MR. GOSS:  Senator, thank you.  For the first part of the
question, I totally agree:  the level of coordination is a constant
job.  We always have to be working at that.  It's not just the
cooperation; it's moving the information, it's needing to share it
with those who need to know it.  And that takes some doing.  We're
dealing with horizontal integration as well as vertical, down to the
state, local and so forth, and the municipal.

    Some of this is sort of new for some people, and it's actually
happening.  It's perhaps not happening as fast as we'd like, but it is
happening and it will continue to happen, because the thrust is all
that way.  So I think that I would agree with your surmise that the
info-sharing is not sufficient yet.  But the trend lines are good, and
the momentum and the push we're giving it is right.  I think we have
the right direction.
    As for talking about some of the information, we do have a
problem, candidly, between what sometimes -- we pick things up

somewhere around the world in the many ways we do it -- we're not
really sure whether it's real.  I mean, and even if it's a wonderful
source, we're not sure whether the source got it -- whether it's
wishful thinking or coffee house chatter or something else.  So what's
a real plot and where somebody says trucking industry or big building
or something somewhere, is that a real plot or is it wishful thinking?
Those kinds of fine filter are a new kind of analysis for us.  We're
doing better at it, and room for improvement still.

    In terms of the hunt for bin Laden, I would like to reserve some
of that for the closed session.  I could simply say it goes on.  It is
very informed, and I would agree that there are times when we have
been closer than not.
    SEN. CLINTON:  Admiral?

    ADM. JACOBY:  I join the DCI, and I would like to follow up in
closed also, please.
    SEN. CLINTON:  Director Goss, in the last 10 days or so, former
Senator Sam Nunn gave a very thorough and somewhat disheartening
speech about the status of nonproliferation efforts at the National
Press Club.  And the thrust seemed to be that we are losing ground and
perhaps opportunities to dismantle and prevent the potential misuse of
nuclear materiel and weaponry, particularly out of the former Soviet
Union.

    MORE

    x x x Union.

Have you had a chance to read Senator Nunn's speech?
    MR. GOSS:  I have not.

    SEN. CLINTON:  Have you, Admiral Jacoby?
    ADM. JACOBY:  I have not, no, ma'am.

    SEN. CLINTON:  Well, obviously I have a very high regard for
Senator Nunn, for his experience in this area.  And perhaps, if I
could, Mr. Chairman, I would appreciate getting some response with
respect to the specific points Senator Nunn made from both of our
witnesses at some future point.
    SEN. WARNER:  Yes, I think that is very much an issue before this
committee, and if each of you would provide for the record at your
convenience a response to Senator Clinton's question.

    SEN. CLINTON:  Thank you.
    SEN. WARNER:  I thank the senator from New York.

    Now, Senator Levin, you had one or two items --
    SEN. LEVIN:  Just a couple of questions --

    SEN. WARNER:  -- and then we'll proceed to the closed session.
    SEN. LEVIN:  -- and then a housekeeping issue.

    I want to get back into the question of torture and abuse,
because there's been some suggestions here which I think have to be
clarified by our witnesses.
    First of all, I think everybody agrees that interrogation does,
if properly held, produce useful intelligence at times.  But we've
also been told that torture or abusive interrogation does not produce
reliable intelligence.  Would you agree with that, Director?

    MR. GOSS:  I would agree that torture is not proper
interrogation, and it doesn't give you the results that professional
interrogation would bring you.
    SEN. LEVIN:  Does that -- in other words, it does not give us
credible or reliable intelligence if it's tortured out of somebody?

    MR. GOSS:  I can't say in every circumstance.  I'd just simply
say that professional interrogators will tell you that torture is not
the best way to get good interrogation properly done.  I can't say in
every instance that somebody who is tortured gives you good or bad
information.

    SEN. LEVIN:  But there's a lot of reasons that we don't engage in
torture.  Number one, it's opposed to our laws and our values, right?
    MR. GOSS:  It's opposed to our laws and our values.

    SEN. LEVIN:  But as a general matter, it does not produce
reliable intelligence -- would that be accurate, as a general matter?
    MR. GOSS:  I would guess so.

    SEN. LEVIN:  Okay.  And it also jeopardizes our men and women,
does it not, who are wearing our uniform, who might be captured some
day -- Admiral, would you agree with that?
    ADM. JACOBY:  I would, yes, sir.

    SEN. LEVIN:  I think we have to be very, very careful with some
of the suggestions that are made here.  We all want interrogation of
people who are captured.  We want the intelligence which we can get
form them, and we want it to be reliable.  But we also want to protect
the men and women who are representing this nation, and that is not
advanced if we engage in torture or abusive practices.  We've been
told that over and over again by our military, by the CIA, and it
seems to me we need you to clearly reaffirm that for us here this
morning.
    MR. GOSS:  I reaffirm that.

    SEN. LEVIN:  All right.
    MR. GOSS:  It's too important a tool to lose.  Therefore it must
be done professionally, and we must have careful oversight.

    SEN. LEVIN:  All right.  Now, the Church Report, Director, said
that approximately 30 ghost detainees held were held at DOD facilities
in Iraq, were unregistered, and that was at the request of the CIA.
That's what the Church Report tells us. Do you agree with that?
    MR. GOSS:  If we are going to talk about the findings of the
methods of how the intelligence community works, sir, could we do that
in the next session?  I'd be happy to answer --

    SEN. LEVIN:  Well, except that he told us that in an unclassified
session, and that's in his unclassified report, that approximately 30
ghost detainees held unregistered at DOD facilities in Iraq at the
request of the CIA.  That's --

    MR. GOSS:  I have no doubt that that's his report, that's his
finding.

    SEN. LEVIN:  Are you able to -- if he can say that publicly, why
can't you?
    MR. GOSS:  Sir, I don't know about the details of the report, how
he came to that conclusion or not.  And the question here was
registering.  Your question was some numbers were apparently not
registered.  I don't know what the time lines for registering are, I
don't know what the definition of "ghost employees" are --

    SEN. LEVIN:  Detainees.  Ghost detainees.
    MR. GOSS:  Oh, excuse me, detainees.

    SEN. LEVIN:  You've also made reference, Director, to the
inspector general of the CIA having briefed us, or briefed -- excuse
me, briefed the Intelligence Committee, and I think the chairman
clarified that, it was not the Intelligence Committee.  He said,
accurately I believe, that it was the chair and vice chair of the
Intelligence Committee that he talked to.  However, that's not my
question.
    My question is:  Have you checked with the IG at the CIA on the
status of his investigation?  Do you keep yourself informed on that?

    MR. GOSS:  Yes.
    SEN. LEVIN:  All right, so you know the status of the
investigation?

    MR. GOSS:  I know generally the status.  I don't know each and
every detail, and I don't get an update every day.  I do ask him how
he's proceeding.  I ask him if he has problems.  I know about the
workload that he has on it.
MORE

    x x x it.

I know that he has referred some cases.  He tells me when he refers a
case to DOJ.  He keeps me informed, actually, more than I ask him.
    SEN. LEVIN:  Well, I would hope he would give you some idea as to
when we're going to get a report, number one.  I -- this is a huge
missing piece.  There's a lot of missing pieces in terms of detainees
and the handling of detainees.  There's been no responsibility which
has been in any way directed at the people whose policies were in
conflict.  There's been no assessment of that responsibility.  We have
nothing in terms of the intelligence community's role in these
practices.  We can't get it.  We get the FBI memos.  These now are
declassified, they're out there on the web, they've been released as
they're -- as a response to a request for information under FOIA.  We
know that -- we are told that at these Guantanamo interrogations that
there are representatives of unnamed agencies.  We presume they're
from the CIA, but we can't find out, and have had no assessment in
terms of the intelligence community's role in improper detainee
interrogations.  It's essential that that piece be filled in,
Director, and that we have some idea as to when that report's going to
be forthcoming.

    MR. GOSS:  Senator, I would agree with you that it is essential
that that piece not only be filled in, but be filled in regularly and
timely.  And I think the difference of our understandings is that my
understanding is that the oversight is being done by the intelligence
community at least under the system that has been carved out by your
rules, not by ours, and how they would like to have that done.
    SEN. LEVIN:  Well, but my question relates to your oversight,
your IG's report and the importance of getting that report completed.
And I would hope that you'd have some idea as the head of the agency
as to when your IG is going to complete that report.

    MR. GOSS:  Sir, I can assure that in one case he has completed
action on one and a prosecution has taken place, a case in North
Carolina.
    SEN. LEVIN:  No, I'm talking about the role generally of the
agency and the rules that were followed or not followed by the Agency.
That's what we're talking about.

    MR. GOSS:  That was a report that was asked by my predecessor,
and it's a report that has a number of recommendations I have referred
to in testimony, I have certainly shared with the Intelligence

Committee.  I believe that the, certainly the chairman and ranking
member -- or, vice chairman and the -- and I know some of the staff
have been briefed in on the aspects of the transfer, the detention,
the interrogation and the techniques.  And as far as I know, there has
been no question that has been asked that has not been answered to the
committee.
    SEN. LEVIN:  Is that a -- is that a report that you are willing
to share with this committee?  Since -- since there's the intelligence
community and the defense community overlapped in terms of
interrogation, will you share that report with this committee?

    MR. GOSS:  I would be very happy to share the materials that come
from the community with the oversight -- with the overseers that have
been designated for those matters.
    SEN. LEVIN:  I think that means no.

    MR. GOSS:  Well, sir, we're being as cooperative as we can to do
that by the rules we're given to work with.
    SEN. WARNER:  Let me at some point just make a comment.  Are you
through?

    SEN. LEVIN:  No.  Just one other question.
    You said, Mr. Director, there are no techniques this morning, no
techniques being used by the intelligence community now that are
against the law.  Now, the Biden memo and the rules that were provided
in that memo were in effect for about two years.  Are you able to tell
us today that there were no techniques being used by the intelligence
community that were against the law during that period of time up to
the end of 2004?

    MR. GOSS:  I am not able to tell you that.  I am able to discuss
some of the matters in closed session.
    SEN. LEVIN:  Okay.  My last request is a housekeeping request.
And you very forcefully this morning assured us that you're going to
provide information to the oversight committees, that you want to
cooperate with Congress, and I can't tell you how welcome that is,
that assurance.  There is, however, a host of information and
questions which have been outstanding for about a year, information
which has been due from the CIA to this committee for about a year.
There's four answers for the record a year which have not been
forthcoming, questions for the record which have not been answered.

    MORE
    x x x it.

I know that he has referred some cases.  He tells me when he refers a
case to DOJ.  He keeps me informed, actually, more than I ask him.
    SEN. LEVIN:  Well, I would hope he would give you some idea as to
when we're going to get a report, number one.  I -- this is a huge
missing piece.  There's a lot of missing pieces in terms of detainees
and the handling of detainees.  There's been no responsibility which
has been in any way directed at the people whose policies were in
conflict.  There's been no assessment of that responsibility.  We have
nothing in terms of the intelligence community's role in these
practices.  We can't get it.  We get the FBI memos.  These now are
declassified, they're out there on the web, they've been released as
they're -- as a response to a request for information under FOIA.  We
know that -- we are told that at these Guantanamo interrogations that
there are representatives of unnamed agencies.  We presume they're
from the CIA, but we can't find out, and have had no assessment in
terms of the intelligence community's role in improper detainee
interrogations.  It's essential that that piece be filled in,
Director, and that we have some idea as to when that report's going to
be forthcoming.

    MR. GOSS:  Senator, I would agree with you that it is essential
that that piece not only be filled in, but be filled in regularly and
timely.  And I think the difference of our understandings is that my
understanding is that the oversight is being done by the intelligence
community at least under the system that has been carved out by your
rules, not by ours, and how they would like to have that done.
    SEN. LEVIN:  Well, but my question relates to your oversight,
your IG's report and the importance of getting that report completed.
And I would hope that you'd have some idea as the head of the agency
as to when your IG is going to complete that report.

    MR. GOSS:  Sir, I can assure that in one case he has completed
action on one and a prosecution has taken place, a case in North
Carolina.
    SEN. LEVIN:  No, I'm talking about the role generally of the
agency and the rules that were followed or not followed by the Agency.
That's what we're talking about.

    MR. GOSS:  That was a report that was asked by my predecessor,
and it's a report that has a number of recommendations I have referred
to in testimony, I have certainly shared with the Intelligence

Committee.  I believe that the, certainly the chairman and ranking
member -- or, vice chairman and the -- and I know some of the staff
have been briefed in on the aspects of the transfer, the detention,
the interrogation and the techniques.  And as far as I know, there has
been no question that has been asked that has not been answered to the
committee.
    SEN. LEVIN:  Is that a -- is that a report that you are willing
to share with this committee?  Since -- since there's the intelligence
community and the defense community overlapped in terms of
interrogation, will you share that report with this committee?

    MR. GOSS:  I would be very happy to share the materials that come
from the community with the oversight -- with the overseers that have
been designated for those matters.
    SEN. LEVIN:  I think that means no.

    MR. GOSS:  Well, sir, we're being as cooperative as we can to do
that by the rules we're given to work with.
    SEN. WARNER:  Let me at some point just make a comment.  Are you
through?

    SEN. LEVIN:  No.  Just one other question.
    You said, Mr. Director, there are no techniques this morning, no
techniques being used by the intelligence community now that are
against the law.  Now, the Bybee memo and the rules that were provided
in that memo were in effect for about two years.  Are you able to tell
us today that there were no techniques being used by the intelligence
community that were against the law during that period of time up to
the end of 2004?

    MR. GOSS:  I am not able to tell you that.  I am able to discuss
some of the matters in closed session.
    SEN. LEVIN:  Okay.  My last request is a housekeeping request.
And you very forcefully this morning assured us that you're going to
provide information to the oversight committees, that you want to
cooperate with Congress, and I can't tell you how welcome that is,
that assurance.  There is, however, a host of information and
questions which have been outstanding for about a year, information
which has been due from the CIA to this committee for about a year.
There's four answers for the record a year which have not been
forthcoming, questions for the record which have not been answered.

    MORE

    x x x answered.

One of those is from Senator Dole, one from Senator Akaka -- excuse
me, two from Senator Dole, one from Senator Akaka, one from me.  There
have been document requests:  April 9th, 2004, April 29th, 2004, June
29th, 2004.  We've been assured that the material and the answers
would be forthcoming over and over and over again.  This is a year
that that's now -- this is before you were the director.  So I'm not
going to hold you responsible, obviously, for those failures and those
broken promises for documents.  But I would ask you, sir, if you would
take this list from me this morning.  It sets out all the questions
which have not been answered to this committee, and all the documents
which have been promised, and if you would promptly address yourself
to responding to those questions and providing those documents.
    MR. GOSS:  Senator, first of all, let me apologize to you for the
lack of response, and to the committee and to the people involved in
that.  I don't know the circumstances.  You have my assurance I will
receive that, and we will --

    (Audio break.)
    SEN. WARNER:  Yes, I'll just --

    Let me address the issues procedurally of the work being done by
the Senate Intelligence Committee, in which I am not ex officio a
member, and in the previous Congress I was a member and the ranking
member.  There are times when, under the rules of procedure for that
committee, the agency briefs only the chairman and ranking member.
And in consultation with Senator Roberts, I'm satisfied that that
process is going forward and will continue to go forward in a
satisfactory manner on the issues, many of them raised by Senator
Levin, with regard to this prisoner issue.  And there is some overlap
with the jurisdiction of this committee, and Senator Roberts and I
have no difficulty ever trying to resolve the sphere and scope of the
activities of our respective committees.
    MR. GOSS:  Thank you, sir.

    SEN. WARNER:  The --
    SEN. SESSIONS:  Mr. Chairman?

    SEN. WARNER:  Yes?
    SEN. SESSIONS:  (Off mike) -- feel strongly that -- let me say
one brief thing.  We've been through these issues in the Judiciary

Committee.  In my view, the Bybee memo states the ultimate power of
the presidency to defend America, the parts of it that were most
controversial were withdrawn, but I don't believe -- I am not at all
certain that if the Bybee memo were followed by CIA they violated any
international law.
    Number two, the Red Cross under the Geneva Convention does have
ability to identify prisoners, but these prisoners don't qualify under
the Geneva Conventions because they are unlawful combatants.  They are
terrorists -- they don't wear a uniform, they don't represent a state,
they're out to kill anybody.  They don't qualify.  But the president
has said, we will treat them humanely in any case.  And matters have
been raised that suggest that our soldiers and our intelligence
officers have carried out torture by -- when the U.S. Congress has
defined torture.  And "torture" by this Congress was defined --
Senator Kennedy and others voted for the statute, and it says
"substantial pain and psychological distress".  So the idea that
somebody can be treated better who cooperates and somebody who's not
cooperating gets less well treatment is not torture.  And I think a
lot of the actions that have been carried out have been within the law
and should not be defined as "torture" because it is not torture under
the statute.

    SEN. WARNER:  I thank my colleague.  We have to shorten our
session so that we can do a closed session, and then the Senate has an
extensive calendar of votes coming up.
    It's been a very good hearing, Director Goss --

    MR. GOSS:  Thank you.
    SEN. WARNER:  -- and I welcome you for your, really, first
official appearance before this committee.

    MR. GOSS:  Thank you.
    SEN. WARNER:  And Admiral Jacoby, the same.  And we will continue
now in room 219, the Intel Committee spaces.  (Gavels.)

####
                                END