Dan Coats Contradicts Trump on Threats From ISIS, Russia

BURR:
I’d like to call this hearing to order. I’d like to welcome our witnesses today, Director of National Intelligence, Dan Coats; Director of the Central Intelligence Agency, Gina Haspel; Director of the Defense Intelligence Agency, General Robert Ashley; Director of the Federal Bureau of Investigation, Chris Wray; Director of the National Security Agency, General Paul Nakasone; and Director of the National Geospatial-Intelligence Agency, Robert Cardillo.

I thank all of you for being here this morning. I’d also like to welcome the committee’s new–two newest members, who in typical Senate fashion, are not here yet,

(LAUGHTER)

Senator Ben Sasse of Nebraska and Senator Michael Bennet of Colorado. They’re both great additions, and I look forward to working with them and with you to fulfill the committee’s critical oversight mandates.

Before I go to my formal remarks, I want to extend my condolences of this committee to General Ashley and his workforce at the Defense Intelligence Agency, as well as General Nakasone and his workforce at NSA. On January 16th a DIA employee and a naval chief cryptology technician were killed in Northern Syria alongside two other Americans. This is a stark and sobering reminder of the dangerous work that the men and women of the intelligence community do around the world on the behalf of the country every single day, often with no public acknowledgment. We thank you for your leadership of this community, and more importantly, for what your officers do and the sacrifices they make on behalf of our nation.

This committee has met in open forum to discuss the security threats facing the United States since 1995. The nature, scale and scope of those threats have evolved greatly over the last 25 years. Hostile nation states, terrorist organizations, malign cyber actors and even infectious disease and natural disasters at different times have been the focus of the intelligence community’s efforts. Our intelligence officers have repeatedly proven themselves equal to the task of refocusing, reconfiguring and relearning the business of intelligence to keep pace with a threat landscape that’s never static. When this nation was attacked on September 11th, counterterrorism rightly became our nation’s security focus, and the intelligence community responded by shifting resources and attention. We learned the ways of our new enemy, and we learned how to defeat it.

We’re now living in yet another new age, a time characterized by hybrid warfare, weaponized disinformation, all occurring within the context of a world producing more data than mankind has ever seen. Tomorrow it’s going to be deep fakes, artificial intelligence, a 5G-enabled internet of things with billions of internet connections on consumer devices. What I hope to get out of this morning is a sense of how well-prepared the intelligence community is to take on this new generation of technologically advanced security threats. Countering these threats requires making information available to those who can act, and doing so with speed and agility. Sometimes the key actors will be the federal government. Other times it will be a city. Many times it will be a social media company, or a startup, or a biotech firm.

I see a world where greater collaboration been between government and the private sector is necessary, while still protecting sensitive sources and methods. We have to share what we can, trust who we can and collaborate because we must. The objective of our enemies has not changed. They want to see the United States weakened, if not destroyed. They want to see us abandon our friends and our allies. They want to see us lessen our global presence. They want to see us squabble and divide. But their tools are different.

I don’t need to remind anyone in the room when this country’s democracy was attacked in 2016 it wasn’t with a bomb, or a missile or a plane. It was with social media accounts that any 13-year-old can establish for free. The enemies of this country aren’t going to take us on a straight up fight because they know they’d lose. They’re going to keep finding new ways of attacking us, ways that exploit the openness of our society and slip through the seams of a national security architecture designed for the Cold War. What this means is that we can’t afford to get complacent. We can’t find comfort in being good at doing the same things that we’ve been doing for 50 years. Those who would seek to harm this nation are creative, adaptive and resolute. They’re creating a new battlefield, and we have to–we have–we’ve been playing catch-up. Defeating them demands that we, as members of your oversight committee, make sure you have the resources and the authorities you need to win.

Director Coats, I’d appreciate your perspective on how to best strike the balance between satisfying existing intelligence requirements and preparing the IC to take on the technological challenge of the future. I’d like to recognize that this will be Director Cardillo’s last appearance before the committee. Robert, since 2014 you’ve served as the consummate ambassador for NGA, and this committee thanks you for your more than 35 years of honorable service to NGA, the intelligence community and, more importantly, to the country.

I’ll close here because we have a lot of ground to cover today, but I want to thank you again, and more importantly your officers, for the selfless sacrifices that help keep this nation safe. Yours is an exceptional mission in that so few will ever truly know how much you do in the service of so–of so many. Before turning to the distinguished vice chairman, I’d like to highlight for my colleagues at the committee, we’ll be convening again at 1:00 p.m. this afternoon, promptly, for the afternoon for a classified continuation of this hearing. Please reserve any questions that delve into classified matters until then, and don’t take it offensive if our witnesses find the need to delay their answers to questions that might be on the fringe for the closed session.

With that, I turn to the vice chairman.

WARNER:
Well, thank you, Mr. Chairman. And let me also welcome our witnesses. Let me extend my condolences, as well, for their loss. Let me also echo what the chairman has said, Robert, about your service. Your leadership at NGA, your willingness to always push, push, push, and your recognition that in many ways we need to change our models and how we make sure we use–better use of our commercial and other partners.

Today’s open hearing comes at an important time for our nation and the world. As I look over the witnesses’ statements for the record, I’m struck by the multiplicity of threats our nation continues to face, from new threats like cyber and online influence, to those that we’re more familiar with, like terrorism, extremism, proliferation of WMD, and rogue actors like Iran, North Korea and regional instability.

We’ve also seen, and see on a regular basis, daily basis with some of the news yesterday, an increasingly adversarial stance of major powers like Russia and China. At the forefront of our nation’s defenses against these threats stand the professional men and women of the intelligence committee whom you represent. It is, I believe, unconscionable that some of these men and women, and in particular the FBI, Department of Homeland Security, State Department and others, were forced to work without pay for five weeks because of the government shutdown. This is no way to run a country. We count on the intelligence and law enforcement professionals to protect us. We cannot ask them to do so with no pay and facing threats of eviction or losing their health insurance. The method of running government via shutdown brinkmanship must come to an end.

The myriad threats we face must also be faced–must also be faced in tandem with our allies and partners around the world. As former Secretary of Defense Mattis wrote in his resignation letter, quote, while the U.S. remains the indispensable nation in the free world, we cannot protect our interests or serve the role effectively without maintaining strong alliances and showing respect to those allies, unquote. I think that is a lesson we all need to take to heart.

Of the multiple threats we face, I would (INAUDIBLE), too, that I hope we can especially dive into. First, Russia’s use of social media to amplify divisions in our society and to influence our democratic process. This is an area that I know was highlighted in our worldwide threat hearing last year, and the concern that we and the IC that Russia would continue its malign activities to try to influence the 2018 elections. While we did see Russia continue to try to divide Americans on social media, and we saw cyber activities by unknown actors targeting our election infrastructure in 2018, the good news is, in particular General Nakasone, I commend you. I think we did a much better job. The question, though, is how do we prepare ourselves for 2020? How do we make sure that we’re fully organized? What is the IC’s role in fighting this disinformation threat? And how can we build upon public-private partnerships with online social media companies in a way that works for both sides? This is a problem, as the chairman’s mentioned, with the question around deep fakes and other areas that technology is only going to make more difficult.

WARNER:
The second issue I’d hope that you would all address today is the threat from China, particularly in the field of technology. I think we all saw the Justice Department announcement yesterday about Huawei. I have to say as a former entrepreneur and venture capitalist I long held the view that an economically advanced China would eventually become a responsible global citizen that would join the World Trade Organization and whose system would ultimately be liberalized by market-based economies.

Unfortunately what we’ve seen particularly in the last two or three years is the opposite. With the consolidation of p–power by the Communist Chinese party and with President Xi emphasizing nationalistic tendencies and an aggressive posture towards those nations on China’s periphery and an economic policy that seeks by hook or by crook to catch up and to surpass the United States economically especially in the areas of technology like AI, machine learning, biotech, 5G and other related areas. Especially concerning have been the efforts of big Chinese tech companies which are beholden to the Communist Chinese party to acquire sensitive technology, replicate it and undermine the market share of U.S. firms with the help of the Chinese state.

I want to thank DNI Director Coats and FBI Director Wray as well as DHS for working with the committee to take seriously the threat from China’s whole of society approach to technology acquisition and to jointly reach out to our business community with whom we must work in partnership to begin to address these issues. Unfortunately we’ve still got a long way to go and while Director Coats particularly you, we’ve gone on some of these roadshows together with the chairman, I think we need much more of those going forward.

I want to ensure that the IC is tracking the direction of China’s tech giants and to make sure that we counter those efforts particularly as so many of them are beholden to the Chinese government. The truth is this is a challenge that will only continue to grow. I also in closing want to thank not only you but all of the men and women who stand behind your organizations, who work day in and day out to keep our nation safe. I look forward to this public hearing.

Thank you, Mr. Chairman. I yield.

BURR:
I thank the vice chairman. Before I recognize Director Coats for his testimony let me say to our witnesses a number of the members of this committee have competing committees meeting right now on very important thing so members are going to be in and out. Please don’t take that as a sign of any disinterest in your testimony or your answers but there are a lot of things going on on the Hill today that are priorities from the standpoint of legislative activity.

Director Coats, it is my understanding you are going to give one opening statement for the entire group and then we’ll move to questions?

COATS:
Yes, sir.

BURR:
The floor is yours.

COATS:
Mr. Chairman and Mr. Vice Chairman, members of the committee, we are here today and I’m here today with these exceptional people who I have the privilege to work with. We are a team that works together in making sure that we can do everything we possibly can to bring the intelligence necessary to our policymakers, to this committee, and others relative to what decisions they might have to make given this ever-changing world that we are facing right now.

During my tenure as DNI now two years and I have told our workforce over and over that our mission was to seek the truth and speak the truth and we work to enhance–to agree with and enforce that mission on a daily basis. I want our people to get up in the morning to work to think that this is what our job is despite the swirl of politics that swirls around on only the Capitol but the world our mission is to keep our heads down, our focus on the mission that we have to achieve in order to keep American people safe and our policy makers aware of what’s happening.

So truly the efforts of people sitting here at this table and all of their employees and all of our components is not really public for the–released for the public to know well about but we continue to value our relationship with this committee in terms of how we share information, how we respond to your legitimate questions that you bring to us and tasks for us and we value very much the relationship that we have with this committee.

My goal today is to responsibly convey to you and the American people in this unclassified hearing the true nature of the current environment and in the interest of time I’d also like to refer you to my statement for the record for a more complete threat picture. As I stated in my recent remarks during the release of the National Intelligence Strategy, we face significant changes in the domestic and global environment that have resulted in an increasingly complex and uncertain world and we must be ready; we must be ready to meet 21st-century challenges and recognize the emerging threats.

The composition of the current threats we face is a toxic m–mix of strategic competitors, regional powers, weak or failed states and nonstate actors using a variety of tools in overt and subtle ways to achieve their goals. The scale and scope of the various threats facing the United States and our immediate interest worldwide is likely to further intensify this year. It is increasingly a challenge to prioritize which threats are of greatest importance.

I first would like to mention election security. This has been and will continue to be a top priority for the intelligence community. We assess that foreign actors will view the 2020 U.S. elections as an opportunity to advance their interests. We expect them to refine their capabilities and add new tactics as they learn from each other’s experiences and efforts in previous elections. On the heels of our successful efforts to protect the integrity of the 2018 midterm elections we are now focused on incorporating lessons learned in preparation for the 2020 elections.

I would now like to turn to the variety of threats that currently exist and may materialize in the coming year. I would like to begin with remarks on what I would describe as the big four China, Russia, North Korea and Iran all of which pose unique threats to the United States and our partners. China’s actions reflect a long-term strategy to achieve global superiority. Beijing’s global ambition continues to restrict the personal freedoms of its citizens while strictly enforcing obedience to Chinese leadership with very few remaining checks on President Xi’s power.

In its efforts to diminish U.S. influence and extend its own economic political and military reach Beijing will seek to tout a distinctly Chinese fusion of strongman autocracy and a form of Western-style capitalism as a development model and implicit alternative to democratic values and institutions. These efforts will include the use of its intelligence and influence apparatus to shape international views and gain advantages over its competitors including especially the United States.

China’s pursuit of intellectual property, sensitive research and development plans, and the U.S. person data remains a significant threat to the United States’ government and the private sector. China’s military capabilities and reach will continue to grow as it invests heavily in developing and fielding advanced weapons and Beijing will use its military clout to expand its footprint and complement its broadening political and economic influence as we have seen with its One Belt One Road Initiative. As part of this trend we anticipate China will attempt to further solidify and increase its control within is the immediate sphere of influence in the South China Sea and its global presence further abroad.

Whereas with China we must be concerned about the me–methodological and long-term efforts to capitalize on its past decade of a growing economy and to match or overtake our superior global capabilities, Russia’s approach relies on misdirection and obscuration as it seeks to destabilize and diminish our standing in the world.

Even as Russia faces a weakening economy the Kremlin is stepping up its campaign to divide Western political and security institutions and undermine the post-World War II international order. We expect Russia will continue to wage its information war against democracies and to use social media to attempt to divide our societies. Russia’s attack against Ukrainian naval vessels in November is just the latest example of the Kremlin’s willingness to violate international norms, to coerce its neighbors and accomplish its goals.

We also expect Russia will use cyber techniques to influence Ukraine’s upcoming presidential election. The Kremlin has aligned Russia with repressive regimes in Cuba, Iran, North Korea, Syria and Venezuela. And Moscow’s relationship with Beijing is closer than it has been in many decades.

COATS:
The Kremlin is also stepping up its engagement in the Middle East, Africa, and Southeast Asia, using weapons sales, private security firms, and energy deals to advance its global influence. Regarding North Korea, the regime has halted its provocative behavior related to its WMD program. North Korea has not conducted any nuclear capable missile or nuclear tests in more than a year and it has dismantled some of its nuclear infrastructure. As well, Kim Jong-Un continues to demonstrate openness to the denuclearization and of the Korean Peninsula.

Having said that, we currently assess that North Korea will seek to retain its WMD capabilities and is unlikely to completely give up its nuclear weapons and production capabilities because it’s leaders ultimately view nuclear weapons as critical to regime survival. Our assessment is bolstered by our observations of some activity that is inconsistent with full denuclearization. While we assess that sanctions and exports have been effective and largely maintained, North Korea seeks to mitigate the effects of the U.S.-led pressure campaign through diplomatic engagement, counter pressure against the sanction’s regime, and direct sanctions evasion.

Now let me discuss Iran. The Iranian regime will continue pursuing regional ambitions and improved military capabilities, even while its own economy is weakening by the day. Domestically, regime hardliners will be more emboldened to challenge rivals’ interests and we expect more unrest in Iran in recent months. Tehran continues to sponsor terrorism as the recent European arrests of Iranian operatives plotting attacks in Europe demonstrate. We expect Iran will continue supporting the Houthis in Yemen and Shia militants in Iraq while developing indigenous military capabilities that threaten U.S. forces and allies in the region.

Iran maintains the largest inventory of ballistic missiles in the Middle East. And while we do not believe Iran is currently undertaking activities we judge necessary to produce a nuclear device, Iranian officials have publicly threatened to push the boundaries of (INAUDIBLE) restrictions if Iran does not gain the tangible financial benefits it expected from the deal. Iran’s efforts to consolidate its influence in Syria and arm Hezbollah have prompted Israeli airstrikes. These actions underscore our concerns for a long-term trajectory of Iranian influence in the region and the risk of conflict escalation.

All four of these states that I’ve just mentioned, China, Russia, North Korea, and Iran are advancing their cyber capabilities which are relatively low-cost and growing in patency and severity. This includes threatening both minds and machines in an expanding number of ways such as stealing information, attending to influence populations, or developing ways to disrupt critical infrastructures. As the world becomes increasingly interconnected, we expect these actors and others to rely more and more on cyber capabilities when seeking to gain political, economic, and military advantages over the United States and its allies and partners.

Now that I’ve covered the big four, I’ll quickly hit on some regional and transnational threats. In the Middle East, President Bashar al-Assad has largely defeated the opposition and is now seeking to regain control over all of Syrian territory. Remaining pockets of ISIS and opposition fighters will continue, we agree–we assess to stoke–to stoke violence as we have seen in incidents happening in the Idlib province of Syria. The regime will focus on retaking territory while seeking to avoid conflict with Israel and Turkey.

And with respect to Turkey, we assess it is in the midst of a transformation of its political and national identity that will make Washington’s relations with Ankara increasingly difficult to manage during the next five years. Turkey will continue to see the PKK and related Kurdish groups as the main threat to their sovereignty. Under President Erdogan, U.S.-Turkey relations will be important but not necessarily decisive for Ankara.

In Iraq, the underlying political and economic factors that facilitated the rise of ISIS persist and Iraqi Shia militants attempts to further entrench their role in the state with the assistance of Iran will increase the threat to U.S. personnel. In Yemen, where 75 percent of the population is reliant on foreign assistance, neither side of the conflict seems committed to end the fighting and the humanitarian impact of the conflict in 2019 will further compound already acute problems.

In Saudi Arabia, public support for the royal family appears to remain high, even in the wake of the murder of journalist Jamal Khashoggi and the kingdom’s continued involvement in the Yemen conflict that has generated global pushback. In South Asia, the focus of the region will be centered on the potential turmoil surrounding Afghanistan’s upcoming presidential election, ongoing negotiations with the Taliban, and the Taliban’s large-scale recent attacks.

We assess neither the Afghan government nor the Taliban will be able to gain a strategic advantage in the Afghan war in the coming war year, even if coalitions support remains at current levels. However, current efforts to achieve an agreement with the Taliban and decisions on a possible withdrawal of U.S. troops could play a key role in shaping the direction of the country in the coming years. Militant groups supported by Pakistan will continue to take advantage of their safe haven in Pakistan to plan and conduct attacks in neighboring countries and possibly beyond, and we remain concerned about Pakistan’s continued development and control of nuclear weapons.

In Africa, several countries are facing significant challenges that threaten their stability, which could reverberate throughout the region. Libya remains unstable in various groups–and various groups continue to be supported by a variety of foreign actors and competing goals. In the Democratic Republic of Congo, a new government will be challenged to deal with ongoing violence by multiple armed groups and the outbreak of your Ebola in the east of the country. And instability is growing in Sudan, where the population is angry at the country’s direction and the present–and President Bashir’s leadership.

In Europe, political, economic, and social trends will increase political uncertainty and complicate efforts to push back against some autocratic tendencies. Meanwhile, the possibility of a no deal Brexit, in which the UK exits the EU without an agreement, remains. This would cause economic disruptions that could substantially weaken the UK and Europe. We anticipate that the evolving landscape in Europe will lead to additional challenges to U.S. interests as Russia and China intensify their efforts to build influence in there at the expense of the United States.

In the Western Hemisphere, flagging economies migrant flows–migration flows, corruption, narcotics, trafficking, and anti-U.S. autocrats will challenge U.S. interests. Venezuela is at a crossroads as its economy faces further cratering and political leaders invited for control, all of which are likely to contribute to the unprecedented migration of Venezuelans. We expect the attempts by Cuba, Russia, and to some extent China to prop up the Maduro regime’s security or financing will lead to additional efforts to exploit the situation and exchange for access, mostly to Venezuelan oil.

We assessed that Mexico, under new leadership, will pursue cooperation with the United States as it tries to reduce violence and address socioeconomic issues, but authorities still do not have the capability to fully address the reduction, the flow, and trafficking of the drug cartels. High crime rates and weak job markets will continue to spur U.S. bound migrants from El Salvador, Guatemala, and Honduras.

To close my remarks, I would like to address several challenges that span the globe. I already mentioned the increase use of cyber capabilities by nefarious actors, but we must be mindful of the proliferation of other threats beginning with weapons of mass destruction. In addition to nuclear weapons, we have heightened concerns about chemical and biological weapons. We assess that North Korea, Russia, Syria, and ISIS have all used chemical weapons over the past two years, which threatens international norms and may portend future use.

The threat from biological weapons has become more diverse as they can be employed in a variety of ways and their development is made easier by dual use technologies. We expect foreign governments to expand their use of space-based reconnaissance, communications, and navigation systems, and China and Russia will continue training and equipping their military space forces and fielding new antisatellite weapons to hold U.S. and allied space services at risk. Space has become the new global frontier with competition from numerous nations.

Terrorism remains a persistent threat and, in some ways, is positioned to increase in 2019. The conflicts in Iraq and Syria have generated a large pool of skilled and battle-hardened fighters who remained dispersed throughout the region.

While ISIS is nearing territorial defeat in Iraq and Syria, the group has returned to its guerrilla warfare roots while continuing to plot attacks and direct its supporters worldwide. ISIS is intent on resurging and still commands thousands of fighters in Iraq and Syria. Meanwhile, al-Qaeda is showing signs of confidence as its leaders work to strengthen their networks and encourage attacks against Western interests. We saw this most recently in Kenya as Al-Shabaab attacked a hotel frequented by tourists and Westerners.

Lastly, the speed and adapt–excuse me–talking too fast. Lastly, and this is important because both the chairman and vice chairman have stated this, and it’s something that I think is a challenge to the IC and to the American people. The speed and adaptation of new technology will continue to drive the world in which we live in ways we have yet to fully understand. Advances in areas such as artificial intelligence, communication technologies, biotechnology and materials sciences are changing our way of life, but our adversaries are also investing heavily into these technologies, and they are likely to create new and unforeseen challenges to our health, economy and security.

Mr. Chairman and Mr. Vice Chairman and members of the committee, this becomes a major challenge to the IC community to stay ahead of the game and to have the resources directed toward how we need to address these threats to the United States. We look forward to spending more time discussing this issue as both of you have raised. With that, I’ll leave it there. We look forward to answering your questions about these and other unmentioned threats.

BURR:
Director Coats, thank you for that very thorough testimony. Every year this hearing has geographically increased, and I think this year you have left no region of the world untouched with the concern that we might have. And this year, especially the threat landscape, continues to increase from a standpoint of the tools used. I’m sure that much of that will be the subject of questions, both this morning and this afternoon.

I want to acknowledge that we have a distinguished group with us, joining us this morning from Austria who come from their government, and I’m not going to ask them to stand or anything, not to distinguish them out of the group, but we’re delighted to have them with us being part of the United States Senate today.

I want to notice members that you will be recognized by seniority for five minutes. We intend to do one round, and I would say sorry to Senator Sasse and Senator Bennet because they will be last, and had they been here on time, they would have heard the great comments that I made about their addition to the committee.

(LAUGHTER)

WARNER:
Of course they still would have been last on questioning.

(LAUGHTER)

BURR:
With that the chair would recognize himself for five minutes. And General Nakasone, this is probably directed at you. This committee requested independent third-party researchers to produce two reports that comprehensively detail the leveraging of U.S. social media companies by Russia with based actors to conduct a disinformation and influence campaign in the 2016 election. Without speaking to sources and methods, under your current authorities would the IC be able to conduct the same analysis and produce comparable finished intelligence?

NAKASONE:
Mr. Chairman, thank you very much for the question, and thank you for your recognition of Chief Petty Officer Kent. In terms of the work that was done by the two organizations that the Senate Select Committee on Intelligence had asked, they looked at an internal study with a number of social media groups, which is something, as you know, is outside our authorities, but was very, very effective for us. As we prepared for the 2018 midterm, we took a very, very close look at the information that was provided there. We understood our adversary very well, and we understood where their vulnerabilities also lie.

BURR:
Good. This to Director Wray and to yourself, General Nakasone, is–is it the IC’s assessment that this country’s adversaries continue to use U.S. social media platforms as a vehicle for weaponizing disinformation and spreading foreign influence in the United States? Director Wray?

WRAY:
Yes, that’s certainly the FBI’s assessment, not only the Russians continued to do it in 2018, but we’ve seen indication that they’re continuing to adapt their model and that other countries are taking a very interested eye in that approach.

BURR:
General Nakasone?

NAKASONE:
It is certainly NSA’s assessment as well, Mr. Chairman.

BURR:
An area of increasing concern for this committee is how the production, storage and usage of data is a national security issue. In 2013, IBM estimated that we were producing 2.5 billion GB of data every day, and that data growth has not been linear. IBM similarly reported that 90 percent of the world’s data had been created in the last two years. That data is now being aggregated, curated and traffic–trafficked to enable and enhance data-hungry artificial intelligence algorithms. How much of a concern should we have about protecting data from foreign adversaries? I’ll probably turn it to Director Wray and General Nakasone on this again.

WRAY:
Well, I think it’s a great concern. Certainly we see strong interest from a computer intrusion dimension, both from nation states, but also from criminal hackers, and increasingly the two in a blended threat way. So we see nation states enlisting the help of criminal hackers, which just as a form of outsourcing that makes it even more of a menace. So it’s something that we’re extremely focused on and should be a high priority.

BURR:
General?

NAKASONE:
Mr. Chairman, I concur with the importance of data. It’s the coin of the realm today. If you think the power of data, not only for information that it can provide us, but also, as you indicated, the weaponization of it. We see our adversaries very interested in being able to procure data. And obviously as Director Wray mentioned, this is something that we’re very, very focused on, as well, as the National Security Agency.

BURR:
I’ll throw out to whoever would like to answer, what applications of big data by foreign adversaries have you most concerned today?

COATS:
Well, certainly China has the capacity and the resources to be able to do a lot, but that has not deterred other major nations like Russia and others to be aggressive in doing this. You have identified this as a significant threat. We are awash in data. We have to understand how our adversaries use that data against our interest, and how we can prevent that from happening, as well as use it for our own purposes relative to know what is going on around the world and what influence efforts are being thrown at the United States. So that was why we are–hold as a very, very high priority, as you mentioned in your opening statement, in terms of how we resource our community, intelligence community, with the kind of tools and weapons needed to address this issue.

BURR:
Director?

WRAY:
I was just going to add that as the challenges of encryption become bigger and bigger on the SIGINT side, we’re more and more dependent on human sources, and the more big data can be exploited by our adversaries, the harder it is to recruit and retain human sources. And I suspect Director Haspel may have a view on that, as well.

BURR:
Director Haspel?

HASPEL:
I think Director Wray captured that exactly, and I would just add from the CIA perspective that a big focus for us is finding out how our adversaries are using big data against us and sharing that with our partners.

BURR:
I’m going to exercise the chair for just a second for one last question, and this is your opportunity to recruit. Your agencies do cutting-edge research on every technology you could imagine, from classic spy craft like disguising to communications technology that would blow James Bond and Q Branch away. What pitch would you make to those in school now, or perhaps those working in tech, and looking to serve a greater purpose that they should come apply their engineering degrees, coding skills and creativity and work in the IC? Director Wray?

WRAY:
So I would say there is nothing more rewarding than protecting the American people. And we’ve seen with some of our smartest high-tech folks–I can think of one office in particular where two of our brightest stars with great talent briefly left for what they thought would be greener pastures in the private sector, and I was very pleased to see them both independently come back only about eight months later when they realized the grass was browner.

WRAY:
If I could Mr. Chairman, I would have probably ask you to release the tape of what you just said in terms of really how innovative and how creative and the opportunities that the folks in the IC get a chance to engage in far strip anything that you see in a Hollywood movie. And the other thing I would add to that is imagine when you get up every morning that your task, your responsibility is to defend the hopes and dreams of 320 million Americans and that’s something that we relish the opportunity to do that every single day and people would want to join that team.

NAKASONE:
Mr. Chairman, our mission sells itself when we talk to our people. I would offer as we talk to young people at the National Security Agency, I saw a big data, artificial intelligence, machine learning, cloud computing in places like Baghdad and Kabul in support of our forces long before we ever called it that. That’s the–the selling point that we emphasize to our–our people because if it’s cutting-edge we will be doing it at the National Security Agency.

BURR:
Robert?

ASHLEY:
Mr. Chairman, we are proud of the–our ability to recruit some of the talent you just described. We don’t do it often on fiscal terms, we do it on psychic terms and so serving something greater than oneself for a cause to protect the nation and our interests is one that both attracts and retains the lifeblood of our agency which is our people.

BURR:
Director Haspel, do you want to take a shot at selling something that not many people know about?

HASPEL:
Well, like my colleagues CIA officers come to Langley for the mission and they stay because of the mission and it’s really about being something–part of something that’s bigger than yourself. And in terms of advanced technologies it’s a chance to be on the cutting edge and make a difference.

BURR:
Well, let me just conclude by saying the disciplines that come out of higher education and community colleges today, all of those disciplines are applicable to the agencies that sit before us today. There should be no student that doesn’t look at this as a way to apply what they’ve learned or the degree that they have. That didn’t used to be the case. It was all specialized but now it applies to everything. Director Coats?

COATS:
Well, Mr. Chairman, as somewhat of an older generation here who has to turn to his grandson to get the TV on to the right channel, I’m continually amazed as I get around the country talking to colleges and graduates and–and people that are in these STEM positions and studying of their incredible talent. They bring those kind of talents and skills to our agencies as you have heard.

And it is extremely rewarding to see the young people who know they could have a better financial deal, a more settled lifestyle, easier and so forth and so on, they want to serve this country and they see this as meaningful and it exceeds what financial gains they could get on the outside and plus they are able to do some really cool stuff in all of these agencies which we can’t talk about here but it is attractive to it. But their commitment to the country and commitment to the mission as has been demonstrated here is pretty–is awfully rewording when you go out and see what these young people have and what they are willing to do for their country.

BURR:
I thank all of you. Vice chairman?

WARNER:
Well, thank you, Mr. Chairman. And I agree that the people who work with all of you are extraordinarily special Americans and the mission is critically important. I would personally add one other item, that if they work for the United States government they actually ought to be paid on time.

And I question–I have seen the number of federal employees who on five weeks plus without pay. I’m not sure many folks in the private sector would show up five weeks plus without pay on an ongoing basis. And while I’m appreciative of the fact that particularly the FBI, that your agents will be reimbursed, I do worry; the FBI has a number of contractors. Under our current setting they will come out of this five week plus, 35-day shutdown with nothing to show.

And if we cannot guarantee that people that work for the United States government are going to be not used as hostages for either side of the political debate then I think our ability to recruit and retain will go down dramatically. I don’t know if Director Wray, if you want to make any comments on that or maybe just punt. But it is something I saw FBI agents, I saw Homeland Security agents, I saw air traffic controllers working double shifts and then going and driving an Uber. I’m not sure I want somebody showing up maintaining the safety of our airway with the four hours of sleep. But I’d be happy to take your comment there.

WRAY:
Well, Mr. Vice Chairman needless to say we are still assessing the overall operational impact of the shutdown but what’s quite clear is that it was incredibly negative and painful for the 37,000 men and women of the FBI and their families. But I will also say that I could not be more proud of their professionalism and their dedication to not let balls drop but to keep charging ahead across all of our various program areas during that time.

Certainly when you talk about contractors, we are very dependent just like every government agency on contractors for a whole range of services and you know we would want to make sure that that aspect of our operations doesn’t get disrupted.

WARNER:
And my hope would be that folks from both sides of the aisle will look at how we might make sure particularly some of those low-priced contractors often times the folks who clean the bathrooms or serve the food don’t have to come out of this 35-day shutdown with absolutely no compensation at all.

Let me start my first question Director Wray and Director Coats and this is–the chairman has alluded to it, we’ve all talk to about it, this emerging challenge around social media particularly the fact whether it’s Russians or other foreign entities that try to masquerade as Americans. They built large followings, create fake accounts. I think this problem is going to get exponentially harder as we move into deep fake technology. A lot of policy implications.

How do we sort through that? How do we work with our social media partners to put Americans on alert about the volume of foreign-based activity, bots, and others who are masquerading as Americans going forward so as they are not able to further manipulate not just our election process but actually to build social divisions?

WRAY:
Well, Mr. Vice Chairman this is a particularly vexing and challenging problem. I think it’s going to require a holistic response certainly at the FBI through the Foreign Influence Task Force and all of our field offices. We are trying to work much more closely not just with our intelligence community partners especially General Nakasone and the NSA but also as you say with the private sector.

And I will say that one of the bright spots between 2016 and 2018 is how much more cooperatively we are working with the social media companies because there’s an awful lot that really has to be done by them in this space and there were a number of success stories only some of which we could really ever share where the social media companies based on tips that we provided were able to take action much more effectively, much more quickly to block and prevent some of the information warfare that the Russians were engaged in. And I think we are going to need to see more and more of that but now that we’ve got some momentum, we are looking forward to growing that partnership.

WARNER:
And I think you would agree some companies have done well, some have not done as well. I think we are going to need to continue to explore this and just basic notional ideas of where I think we don’t get into First Amendment challenges where Americans ought to have the right to know whether they are being communicated with by a machine or a bot versus an actual human being. And some of the research done by some of the folks we looked at in a way it may be a more positive, it says that the vast volume of traffic on the far left and the far right in terms of political discourse in social media is actually not Americans but foreign-based bots. There may not be as many crazies out there as it seems, editorial comment. But I do think we’ve still got a long way to go. Thank you, Mr. Chairman.

COATS:
Mr. Chairman, if I could just add one thing to support Director Wray’s remarks. Having served on the committee and gone through the frustrations of the interaction and information sharing with private social media companies we’ve seen a significant progress with that. Many of us have sat down eyeball to eyeball with it leaders. Our tech teams are working with their tech teams.

I can’t say that’s worked with every social media company but it’s significantly better because there is information, we can provide them that’s in their benefit and of course we always stress the fact that we are working–we need to work together to protect our people from the influence activities from abroad and threats to the American people. So I’m encouraged having made some trips to several of these companies, encouraged with the openness and willingness to see what we can do while protecting privacy rights but also ensuring security.

BURR:
Senator Risch.

RISCH:
Thank you very much. First of all, let me say that I’m always astounded in this committee and the Foreign Relations Committee with the volume of issues that we have to deal with. I think your–your opening statement, Director Coats, indicated how–how difficult this is to–to process all of this and to deal with all this. In your statement for the record, that all of you joined in, again lays this out for us and tells us the kind of volume that we have to deal with.

And we’re certainly only going to scratch the surface here today, but I want to–I want to focus on something that doesn’t get as much focus as I think it should. We–we see these days, every time we pick up media or turn on TV they’re talking about Russia and Russia’s ham-handed efforts to affect things in the world. And certainly it’s a concern, but in my judgment, I think many others the–the real concern is China.

We’re approaching the end of the first fifth of the 21st century and, if we’ve learned anything, it’s the–the last few decades have convinced us that China, in the 21st century, as we proceed through it, is going to be a major competitor of ours in–in every way that there is. Obviously, economically, militarily, culturally and in every other way. And look, this is going to happen. We are–we’re living of the 21st century. Communications and transportation are so different from what they were and we, as the United States, are going to wind up having to compete like we never have before with a gorilla that’s starting to get to be about the same size we are and, as a result of that, we’re going to have to learn to deal with that.

The thing I really want to focus on is how we’re going to do with that. We–we are Americans. We’ve always competed. We can compete, we innovate, we create, we manufacture, we do the great things that we do that have really led the world, but we can only do it if we are operating under a rule of law and–and that is something that is greatly missing at the present time as China tries to compete with us.

The poster child for me is a local company we have an Idaho, Micron Technology. Most of you have heard of them. They’re the second largest manufacturer of–of memory in the–in the world. And they have had a recent case where Chinese nationals stole intellectual property and then took it back to China and are now suing Micron in China in a–through a state-owned entity and a state-owned court in front of a state-owned judge. And this is the kind of thing that we just can’t have.

I had a spirited discussion with the Chinese ambassador about this as he attempted to defend the undependable and his suggestion was that, well, things aren’t as advanced in China as they are here. Well I get that. They are–they’ve come a long, long, long ways in–in a few decades, but if we’re going to–if we’re going to do this and keep the world order in–right side up, China is going to have to develop their rule of law and live by it much better than what they have recently.

We just saw again the–the indictments against the Huawei official and–and in defense of the Department of Justice, Department of Treasury and others, they’ve indicted these Chinese people that have affected Micron. And the question I have for you is after listening to the Chinese ambassador, I’m not wholly convinced that their efforts are going to be as robust as they need to be to get China right-side up when it comes to the rule of law. And when I’m talking about the rule of law, I don’t mean just covert theft, but I mean the what I call overt theft, and that is where they require businesses, as we all know, to divulge their information before they can do business in China and then having to the kind of restrictions they have on them in China. And all of this causes us real difficulties as we–as we attempt to compete.

Director Coats, I wonder if you could address that or–or assign it to somebody there at your panel. I–I’m looking for what do we see in the future, number one, number two, how can we try to get our arms around this to do something about it?

COATS:
Well, I’ll start it, but I’d like to turn it to Director Wray. And relative to what was just released yesterday and–and–which pointed, I think, in the direction of what you were talking about, but frankly, while we were sleeping in the last decade and a half, China had remarkable rise in capabilities that are stunning. A lot of that was achieved, a significant amount of that was achieved by stealing information from our companies, by inserting Chinese in certain of our labs or bringing back technological stolen properties, which China engaged.

You can talk to any number of everything from automobile manufacturers to sophisticated software as well as R&D for military, and I think General Ashley can speak to that on the military side. I think we could go down the panel here and discuss for a significant amount of time the kind of actions China has taken to gain–to become a competitor, but also to gain superiority and what they’re doing and how they’re spreading around the world through their Belt and Road Initiative and a number of other initiatives. It is a serious issue that has to be dealt with. You are right on target in terms of saying that rule of law and international norms and fairness in–in trade and engagements is not the Chinese model.

And to counter it, we have to expose it. It was exposed yesterday and a significant way relative to telecommunications and Director Wray can talk about that. We have alerted our allies. They are now second-guessing and questioning their initial responses to China. Oh, it’s a great market, we need to get over there. Don’t worry about anything else except selling a product. They’re now finding that their product has been duplicated by the Chinese and sold for half the price because they didn’t have to spend as much money on research and development.

So it is–we are working with the chairman, vice-chairman, and with the committee, actually, to try to be as transparent as possible with our company heads. We been traveling around the United States meeting with CEOs and others. We are dialing up a program with the–I think I ought to stop right there and–and the rest of this ought to go into a secure setting in terms of how we are dealing with this. But I’d love to turn to Director Wray relative to what they are doing.

WRAY:
Senator, I–I completely share your observations and I would just say that one of the things of the American people I think are now sort of waking up to understand is that the Chinese government, the lines between the Chinese government and the Chinese Communist Party are blurred, if not totally erased. The lines between the Chinese government and Chinese state-owned enterprises, the same. The line between the Chinese government and ostensibly private companies, for all the reasons you described, and especially the line between lawful behavior and fair competition and lying and hacking and cheating and stealing.

And one of the things that I’ve been most encouraged about an in an otherwise bleak landscape is the degree to which, as Director Coats was alluding to, American companies are waking up, American universities are waking up, our foreign partners are waking up and it’s one of the few issues that I find when I engage in the interagency and up on the hill covering from one of the spectrum to the other, there seems to be actually more consensus than I’ve ever seen before in my career. And I think that’s a positive and we need to build on that.

BURR:
Do either of the generals have–General Ashley?

ASHLEY:
Yes sir. Sir–sir, you laid out the problem set very well and what’s been highlighted, this isn’t just a U.S. issue, this is a global issue. When you think about the Internet of Things, when you think about the nature of global business and how corporations are integrated. And if it touches a company in Australia who may have a relationship with company in the U.S., then we become connected. From a military standpoint, when you look at major acquisition from a Defense Intelligence Agency, one of the things we put against this is Supply Chain Risk Management Threat Analysis Center.

So when DoD looks for major acquisition, we do the due diligence and research against those companies, but that challenge is getting more and more obligated because you think they either buy it, they steal it, or they can build it, but the nature of that business, you have things like white labeling where you don’t necessarily have to disclose the relationship where you could sell a semiconductor, chip, piece of software that ostensibly it is from your company, when in fact it may have been manufactured by a Chinese company. So that’s a due diligence that we have to apply to look at the supply chain across all acquisition. And we got to bring all our partners and illuminate the challenge and make sure they’re doing the same due diligence, whether it’s through CFIUS or other–other protocols.

BURR:
Senator Heinrich?

HEINRICH:
Thank you, chairman. Director Coats, in this hearing last year, you testified that you would recommend minimal access to classified documents to anyone without a permanent security clearance. You made that statement with regard to reports of multiple holders of interim security clearances in the White House. And now we are seeing published reports that dozens of times the White House has overruled the career FBI experts responsible for adjudicating security clearances, granting top-secret clearances to White House officials. Would you still recommend minimal access to classified documents to those White House officials since FBI experts recommended that they not be given those top-secret clearances?

COATS:
I do support the–providing all the information necessary for not only the White House, but for all of our branches relative to providing security clearance. They have those–the authority to do that. We issue guidelines in terms of what–

HEINRICH:
I understand they have the authority.

COATS:
–ought to be adhered to.

HEINRICH:
I want to know, do you think that the White House should take seriously the recommendations of those FBI experts?

COATS:
To my knowledge they do take seriously. It is their decision based on a whole number of factors. We’ve seen every administration issue clearances based on how they assess what is provided. Our job is to provide them the best information we have relative to security clearance processes so that they have the full picture in front of them when they make that decision.

HEINRICH:
Speaking of the full picture, last year we passed the SECRET Act. As the director of National Intelligence, do you think it’s problematic that the administration has not complied with the portion of that law requiring the White House to report on its process for conducting security clearance investigations?

COATS:
I’m not aware that that has happened. I’d be happy to look into that.

HEINRICH:
I would appreciate that. Director Wray, as I mentioned, we’re seeing public published reports that numerous times the White House has simply overruled career FBI experts responsible for adjudicating those clearances. In your view, were there valid reasons given for why the FBI’s expert advice was overruled so many times?

WRAY:
Senator, I think there may be some confusion about the way the process actually works. The FBI is, in the context of providing background investigations for people other than its own employees, is what’s called an ISP, or the investigative service provider. So we essentially do it at the request of whoever the requesting entity is. In this instance it would be the White House. And I think where the confusion is, is what we do is we assemble the information, we provide the factual information. We do not actually make recommendations one way or the other about the clearances. The decision about what to do based on those facts is entrusted by long-standing process to the requesting entity. So we provide the information, but then they make the call.

HEINRICH:
Thank you, director. Director Coats, I want to come back to you for a moment. Your office issued a statement recently announcing that you had submitted the intelligence community’s report assessing threats to the 2018 midterm elections to the president and to appropriate executive agencies. Our committee has not seen this report. And despite committee requests following the election that the ODNI briefed the committee on any identified threats, it took ODNI two months for us to get a simple oral briefing, and no written assessment has yet to be provided. Can you explain to me why we haven’t been kept more fully and currently informed about those Russian activities in the 2018 election?

BURR:
Director Coats, before you respond, let me just acknowledge to the members that the vice chairman and I have both been briefed on the report, and it’s my understanding that the report at some point will be available.

COATS:
Yeah, the process that we’re going through were two 45-day periods, one for the IC to assess whether there was anything that resulted in a change of the vote or tampering with machines, what the influence efforts were and so forth. So we collected all of that, and then the second 45 days, which we then provided to the chairman and vice chairman, and the second 45 days now is with DHS looking–and DOJ–looking at whether there is information enough there to take what–to determine what kind of response that they might take. We’re waiting for that final information to come in.

HEINRICH:
So the rest of us can look forward to–

COATS:
So that will be coming, coming shortly.

HEINRICH:
–to reading–the rest of us can look forward to reading that report?

COATS:
I think we will be informing the chairman and the vice chairman of that, yes, of their decisions.

HEINRICH:
That’s not what I asked. Will the rest of the committee have access to that report, Mr. Chairman? Chairman Burr?

BURR:
Well, let me say to members we’re sort of in uncharted ground, but I’d make the same commitment I always do, that anything that the vice chairman and myself were exposed to, we’ll make every request to open the aperture so that all members can see it. I think it’s vitally important, especially on this one. We’re not to a point where we’ve been denied, or we’re not to a point that negotiations need to start. So it’s my hope that once the final 45-day window is up that is a report that will be made available probably to members only.

HEINRICH:
That would be my hope as well.

BURR:
Senator Rubio.

RUBIO:
Thank you. Director Wray, as we keep talking about China–and this takes off on what Senator Risch has already asked–at the ac–using the academic community and the universities, commercial espionage, the forced transfer intellectual property, embedding themselves in the potential (INAUDIBLE) the supply chain, obviously the traditional counterintelligence work that they do and the like, is it not fair to say that China today poses–just looking at the scale and scope of the threat, that China today poses the most significant counterintelligence threat this nation has faced, perhaps in its history but certainly in the last quarter to century?

WRAY:
Well, I’d hesitate to speak, you know, categorically about the entire course of history, but I certainly would–

RUBIO:
Well let’s limit it to 25 years. How–

WRAY:
But I would certainly agree with you, senator, that as I look at the landscape today and over the course of my career–I still think of myself as a little bit young–that the Chinese counterintelligence threat is more deep, more diverse, more vexing, more challenging, more comprehensive and more concerning than any counterintelligence threat I can think of.

RUBIO:
And in that realm, would it not make sense–and perhaps this is for you, Director Coats–that we would have a more coordinated approach to educate and prepare all the departments and agencies of government, as well as businesses, universities–I mean just the scale and comprehensive nature of the threat–would it not make sense to have some high-level coordination or coordinated approach to be able to prepare all these different entities in our economy and society to deal with this threat?

COATS:
We are working carefully with the committee. Particularly Senator Warner and Senator Burr both have engaged with us in terms of putting a program together to do just that. I’d turn to General Ashley for his comments on it also.

ASHLEY:
So the fact that we’re having this discussion and that you’ve (INAUDIBLE) that, even last year we talk about the Confucius Institutes. You know, that word gets out. Since 2014 13 universities have closed down the Confucius Institutes. U.S.-wide I think the number is about 100. But again, my previous comment in terms of this is a global issue, while we’ve closed down about 13 in the U.S., there’s been about a 23 percent increase globally in Asia, Europe and other places, and there’s probably about 320-plus institutes that exist globally. So the education is getting out from a U.S. standpoint, and it’s trending the right way slowly, but again, it is a global problem, and we’re as weak as the relationships with some of those partners subject to influence.

RUBIO:
This is now where I make the obligatory pitch. Senator Warner and I have filed a bill that creates an office of critical technologies to help coordinate the response to this threat across the board, and so–and I know everybody on this committee is interested in this topic.

I want to switch gears for a moment and maybe ask you this, Director Coats, as well, if we look at the situation in Venezuela, which usually I raise in this committee, and people know it’s important, but now it’s really topical, so we’ve had 3 million migrants flow primarily into Colombia, Peru and Ecuador. It’s projected to be 5 million if current trends continue by the end of this year, rivaling–that would be a rival number to what we’ve seen in the Syria situation, and it most certainly has had a destabilizing effect on Colombia and other neighboring countries to the point where some of these nations–very few nations could take in 1 million migrants in one shot, not to mention that quickly. Imagine 2 million and the impact it’s having on their government budgets, their healthcare systems and the like. We know from Department of Justice filings and sanctions from treasury that their government doesn’t just tolerate drug trafficking, they give it the protection of government, and many high-level officials are active participants in narco-trafficking. We know that they have a relationship, long-standing relationship, with Iran and with Hezbollah. We know they have openly and repeatedly–at least Maduro has–invited the Russians and Putin to establish either a rotational or permanent presence somewhere in Venezuela, thereby creating a Russian military presence in the Western Hemisphere. In fact, they flew, about three weeks ago or a month ago, two Russian nuclear capable bombers into the Caribbean Sea.

Seeing all these factors, what’s happening in Venezuela–we care a lot about democracy, we care a lot about freedom, we care a lot about human rights, but when you add all these things together, the migratory impact on regional partners and how that spills over into the United States, their relationship with Iran and Hezbollah, the drug trafficking–because all that cocaine is destined to come into our streets–the invitation to the Russians to potentially have a military base, whether it’s rotational or permanent, in our hemisphere, is it not in the national interest of the United States of America that the Maduro regime fall and be replaced by a democratic and more responsible government?

COATS:
Well, I think everything you said has been very open to the American public relative to the situation that exist in Venezuela. Our job as an intelligence community is to provide all of the relevant information that you just talked about in terms of what the impact of what’s happening in Venezuela and then throughout the region and the threat that evolves from that.

The decision as how to, you know, how to address that obviously is a decision by the executive branch and by the president ultimately with the support of the National Security Council. So we do obviously face a dire situation that has enormous consequences. I think nobody’s more aware of that than you. You’ve been the person we turn to for–almost ready to invite you into the intelligence community given the information that you can provide for us given your interests.

I was remiss in not naming you as someone relative to China who’s taken a forward effort on the part of the committee and joining us in a number of ways to talk to CEOs and others around the country relative to the Chinese threat.

With Venezuela it’s a very tenuous situation right now as you know. We have taken steps in terms of recognition of the opposition as the legitimate president of Venezuela. Yesterday the Treasury Department announced oil sanctions against Venezuelan oil company. They are a major company that we do business with here also. So steps are being taken and we have a lot of support from a lot of our allies.

So as I said it’s a very fluid situation that I think hopefully will be successfully resolved with the support of Venezuelan people and but we do assess and I’ll turn to General Ashley here, the influence of the military on that decision I think Venezuelan military on that decision probably is key to what direction we might go in.

ASHLEY:
So I would say that everything you laid out is correct. We expect to see another 2 million refugees leave to add to the 3 million that will go into the region. The relationship that they have with Russia, China, Iran is a long-standing one, pre-existing.

The reference you made to the Tu-160 blackjacks that flew those strategic bombers, third iteration of that first time was in ’08 and then ’14 and we’ve seen it again. As far as presence on the ground we can talk a little bit more detail in a closed session about where we see Russia and China going with that greater instability. But in the open press what you’ve seen thus far really is nothing more than just vocal support that’s coming out of Moscow and that’s coming out of China as well. But there is a relationship there from a military standpoint in the way of training. Lots of Venezuelan officers go to Russia for training and there is a reciprocal relationship for equipping them as well.

KING:
Thank you, Mr. Chair. In light of Senator Rubio’s comments I’d just like note of caution. He listed refugee flows, human rights abuses and corruption. There are lots of countries in the world that meet that description and our right or responsibility to generate regime change in a situation like that I think is a slippery slope and I have a–I have some real caution about what our vital interest are and whether it’s our right or responsibility to take action to try to change the government of another sovereign country. That same description would have led us into a much more active involvement in Syria for example 5 or six years ago, other parts of the country. I just wanted to note that.

Senator Burr, I loved your opening statement. It was very thoughtful and you came up with a wonderful formulation for I think a mission of this committee and also the intelligence community of creative adaptive and resolute and I must say it reminded me immediately of my old high school football coach who put it somewhat less elegantly. He said he wanted us to be agile, mobile and hostile. I think that may be a less elegant way to put it but the same principle.

On Huawei, it seems to me they have to decide they are either going to be a worldwide telecommunications company or an agent of the Chinese government. They can’t be both and right now they are trying to be both and I think the world’s customers which the Chinese are certainly sensitive to are the best enforcers of that principle.

Director Haspel, one quick I think a yes or no question and I think Sen–I almost said Senator Coats–Director Coats referred to this in his opening testimony. Is Iran currently abiding by the terms of the JCPOA in terms of their nuclear activities?

HASPEL:
Senator King, I think the most recent information is the Iranians are considering taking steps that would lessen their adherence to JCPOA as they seek to pressure the Europeans to come through with the investment and trade benefits that Iran hoped to gain from the deal.

KING:
But–but since our departure from the deal they have abided by the terms. You’re saying they are considering but at the current moment they’re in compliance?

HASPEL:
Yes, they are making some preparations that would increase their ability to take a step back if they make that decision. So at the moment technically they are in compliance but we do see them debating amongst themselves as they’ve failed to realize the economic benefits they hoped for from the deal.

KING:
Thank you. Director Haspel and General Ashley, Mr. Khalilzad, our envoy to Afghanistan, has said that part of the basis of the current talks with the Taliban is that they would prevent Afghanistan from ever becoming a platform for international terrorist groups and of course that was the basis of our original intervention.

Do we believe them? Are they capable of that? Did they learn something from having given safe haven to Osama bin Laden? Do we believe that there is a mindset change that that could be an enforceable or at least a reasonable expectation? Go to Director Haspel.

HASPEL:
Yes, senator, and you are referring to very recent and fresh news that has come out of Ambassador Khalilzad’s very intensive efforts over many months now but particularly over the last eight days in Doha where he has been engaged in talks with the Taliban to seek to achieve a framework under which we can conduct–

KING:
Can we believe that the Taliban will do?

HASPEL:
Well, because we have inflicted severe damage on al-Qaeda in the AfPak theater I think however that all of us at this table would agree that it’s very important that we maintain pressure on the terrorist groups that are there and so if there were an eventual peace agreement a very robust monitoring regime would be critical and we would still need to retain the capability to act in our national interests if we needed to.

KING:
Thank you. Another note. Director Coats you mentioned I wouldn’t say almost in passing but it was just a sentence of your introduction which I think is a very important point and maybe the big news of right now what’s going on, increased cooperation between Russia and China.

For a generation that hasn’t been the case. That could turn out to be a very big deal on the horizon in terms of the United States. If those two countries begin to work together systematically that could be a big problem for us. One more quick question. Director Wray, you are doing a lot of monitoring and working with–working on the intervention in our election process. One thing we are worried about is deep fake which we’ve used but not–not defined.

That’s when they use technology to create essentially a false reality of an apparent speech by a candidate where different words are coming out of their mouth than what they actually said. Here’s my question. If in the next two years and particularly in the year preceding the next election your agency determines that this is happening and that it’s sponsored by a foreign entity, will you inform the candidates that are the victims of this, the committees?

My concern is it’s one thing for the intelligence committee to know that this is happening but if they don’t inform the people who are being victimized, who are being attacked in this way I think that really blunts the effectiveness of the availability of the intelligence.

WRAY:
Senator, we have a fairly established protocol that we work through to try to determine whether or not we have information that is reliable enough and immediate enough and actionable enough to be able to notify a victim. The Department of Justice has a set of guidelines that goes through that. They’ve recently been expanded to provide us more flexibility in the foreign influence or maligned influence arena which this would be a permutation of and we would expect to follow that process.

KING:
I hope you’ll review that process because telling the world of a maligned influence a month after the election doesn’t–doesn’t do anybody any good. So I hope that could be reviewed and thought about in terms of letting people know as soon as possible when there’s credible evidence of a foreign deep fake or other kind of cyberattack on a campaign.

WRAY:
Just to be clear I wasn’t referring to the sort of postelection process.

KING:
No, I understand.

WRAY:
Yeah, the protocol that I’m talking about is that’s where the actionable piece of it comes into play, right? Obviously, the ability to be able to contact just like we do in the cyber arena.

KING:
I just want to be sure our policies keep pace with the magnitude and accelerated nature of the threat.

WRAY:
Well, we clearly need to be to your point about agility, we clearly need to be able to adapt as the technology adapts and as Director Coats said in his opening, we would expect our foreign adversaries in the maligned influence space to keep adapting as well which is a source of concern.

KING:
We want you to be agile and mobile, maybe not hostile. Thank you.

COATS:
Mr. Chair, General Ashley has a comment he would like to–

ASHLEY:
(INAUDIBLE) if I go back to your comment on Huawei, you know, Huawei needing to make a decision about the direction that they want to take with regards to how do they support the Chinese government, or as an independent business. The challenge in which we’ve laid out in part of the dialogue is that decision does not lie with Huawei. It lies with the CCP. It lies with Xi Jinping and the way that they are starting to centralize greater the management of those businesses. So therein lies the challenge where you see a decentralization and execution of capitalism, but really you have this kind of authoritarian capitalism in the way that the government provides oversight and puts very strict rules in place. It makes it very problematic for all of those businessmen to operate without providing that information back to Beijing.

KING:
And I think the market has to tell them that’s not acceptable. Thank you.

ASHLEY:
Agree.

BURR:
Senator Collins.

COLLINS:
Director Haspel, Director Coats described this morning a Russia that is aggressive across all fronts. Does–did the CIA have any concerns about the Treasury’s actions to ease sanctions on companies associated with the close Putin ally, Oleg Deripaska, in terms of his ability to retain some informal control? This isn’t a typical American company that we’re dealing with.

HASPEL:
Senator Collins, I don’t think I’m expert enough to comment on Treasury’s decision, but what I will say is that we work very hard to make sure that every agency, and all of our senior agency leaders, understand Putin’s methodologies and what he will do to try and achieve what he perceives as Russia’s place in the world and as a great power status. They–Moscow continues to grapple with the effect of western sanctions. There have been very severe sanctions placed on them. I’m also, I think as an intelligence community, both Director Wray and I were very pleased with the decision to expel 61 Russian intelligence officer that has a tremendous impact on their ability to hurt us in our own homeland. So our job is to make sure that everybody understands Putin’s efforts to influence globally and to enhance Russia’s power status in the world, and we will continue to support Treasury as they look to impose sanctions. I think Treasury has been very, very aggressive on the sanctions.

COLLINS:
But did–did the CIA raise any concerns about the Treasury plan?

HASPEL:
No, I don’t believe we raised any concerns, but we provided all the supporting intelligence about the oligarch in question versus the aluminum company that you’re referring to.

COLLINS:
Let me switch to a different issue, and that is Syria. Let’s assume that after we depart from Syria the Assad regime takes control of Northwest Syria and Eastern Syria, which I think is a reasonable scenario. Should this happen, what kind of threat would the United States and its allies expect from the thousands of extremists who are still currently fighting in those areas of Syria, such as ISIS?

HASPEL:
Senator Collins, to start with the last part of your question, everyone at this table is working very hard to make sure that we can finish the Defeat ISIS Campaign, and also that we understand the foreign fighter picture in Eastern Syria and that we don’t allow the foreign fighters that have been captured to return to the battlefield. It is, of course, accurate that ISIS has suffered significant leadership losses and near total loss of territorial control. But of course they’re still a dangerous, which is your point, and they’re the largest Sunni terrorist group, and they still command thousands of fighters in Iraq and Syria. So I think the stance in the administration and supported by the IC is that we’re going to work very hard to finish that mission and that we–that’s another example of where we must maintain a very robust monitoring regime and retain the ability to project into Syria should we need to.

COLLINS:
Director Coats, you looked like you wanted to add to that.

COATS:
Well, just to make the point that while we have defeated the caliphate with a couple of little villages left, it would be–we should not underestimate the ability of terrorist groups, particularly ISIS and affiliated groups with al-Qaeda and other terrorist groups, that they are operating not simply on what takes place on the battlefield that gives them strength or weakness, but they are operating on the basis of a theocracy, a theology, an ideology that we will continue to see for perhaps years ahead in various places of the world. So we see–we see those that were engaged in Syria moving to other ungoverned spaces. We see the tentacles of ISIS and–ISIS and al-Qaeda tactics in different places in the world, North Africa, Philippines. We’ve just seen that take place, ISIS claiming credit for that. So ISIS will continue to be a threat to the United States, and we’re going to have to continue, as Director Haspel said, to keep our eyes on that and our interest in the realization that this terrorism threat is going to continue for some time.

COLLINS:
Thank you.

BURR:
Senator Bennet.

BENNET:
Thank you, Mr. Chairman. Thank you for your welcoming me to the committee. I apologize for being late, but I also want to say what a privilege it is to hear your testimony this morning and to know that you and agents and officers who work with you are at their posts keeping this democracy safe, and it is a reminder to me what’s at stake when our partisan politics can’t even keep our government open, and you guys are still doing your work, and it’s an inspiration to me, and I hope to the people that–whoever is watching this at home. And in that spirit actually, Director Coats, I wanted to start with something that you ended with, which was an observation about concerns that the IC has about political uncertainty in Europe and the ability for European democracies to push back on what you described as autocratic tendencies. Could you say a little bit more about that?

COATS:
Clearly Europe has seen Russian aggression in hybrid ways. Significant cyber incidents, trying to influence not only their view of our alliance, but their own view of their own alliance within Europe, seeking to sew divisions between countries and between Europe and the United States. It’s interesting that some time ago at a meeting with NATO intelligence officials the question was raised by the director, did any of the 29 countries of Europe not see Russian influence in their countries and particularly in the political processes of those countries? Not one person raised their hand and said I have not seen that. All 29 have seen some type of influence from the Russians. So it’s a persistent threat and a pervasive threat that the EU needs to address, and we address with them through our NATO coordination. But I think the warning is there. I think the nations are aware of the threat. We see some issues that threaten some of the alliance coalition. Turkey is a member of NATO, and yet we’re having some issues with Turkey. They’re at a very geostrategic point in the world, and we’ve been happy to have them with NATO, so we’d like to keep them there. I don’t know if I’m directly answering your question.

BENNET:
(INAUDIBLE) You are. What about within the domestic politics of those countries, the autocratic impulses, you know, whether aligned with Russia or not aligned with Russia?

COATS:
Well, I–I think there’s a lot of wariness about aligning with Russia whether you’re authoritarian leadership or not. We have seen some–some countries leaning in that direction, raising issues as to the strength of the alliance. A lot of that is related to the economy, to trade matters, to a number of issues beyond just–just the military.

BENNET:
In the minute I have left director, if it’s okay I wanted to switch to potential dual use capabilities that China may attain through its One Road and–One Belt and One Road Initiative. Recently there were reports that China may press Pakistan for military access.

As Pakistan falls more and more into China’s debt, I’m concerned about data access China may control through digital infrastructure projects in countries around the world. What is the IC’s assessment of potential dual use aspects of China’s Belt and Road Initiative and what threats do they pose to U.S. interests?

COATS:
Well, I’d like to also–

BENNET:
And–and where I would say?

COATS:
Well, you can look at the globe. It’s called One Belt, One Road and its global and you can look at the map and see a lot of strategic places where China has real interest in perhaps a dual effort to not only provide infrastructure support, loan support for ports, airports, roads, a lot of infrastructure loans to help with their economy but also interest in placing strategic military positions.

We’ve seen that take place off the Horn of Africa. We’ve seen China looking at different–and if you look at the spots where they’re–they are engaging and you see some geopolitical and military aspects and with that so it is dual and I’d like to turn to general Ashley to give you better detail of what that looks like.

ASHLEY:
So we can talk in a classified session about the nature of the relationship with Pakistan and I think that we can eliminate what you are seeking there. In terms of dual use technologies there is a multitude of things out there and it’s not necessarily germane to the Belt and Road Initiative. It’s where they are investing and part of that investment is how they are garnering intellectual capital globally but think about quantum from a communication standpoint, from a computing standpoint, from a sensing standpoint what those advanced sensors could do.

If you look at genetics, bioengineering. So there is a multitude of things whether it gets into human engineering, it gets into how do you cure diseases but at the same time there’s kind of the flipside nefarious aspect of that and so there is a plus and a negative side to the risk in the middle. There is agricultural aspects of that which are very positive but could have a negative impact as well.

So there’s a number of things in terms of advanced technologies where they are there investing that have dual use capabilities that will really mature over the course of the next decade.

BURR:
Senator Blunt.

BLUNT:
Thank you, chairman. Thanks to all of you. I want to join everybody in thanking you for what you do and the important service that you provide in securing our freedom and the freedom of lots of other people.

General Ashley, I know we lost a St. Louisan in Syria as part of your defense intelligence operation and certainly reach out to their family and to the families of all who serve who put themselves at that level of risk.

Director Cardillo, in the–actually I saw 60 Minutes over the weekend talked about small satellite data, about all of the commercial imagery available. I think if there’s as you come for what is your last likely appearance in this job before this committee if there’s a legacy that you’re leaving it’s bringing the commercial data community in in a way that we are taking advantage of what’s out there that we don’t have to produce ourselves.

But as we do that what concerns do you have about cyber activity that might in some way impact that data or the data that we get in other places? What’s–how would you describe your concerns about cyber as it relates to commercial data that you’ve made great steps in using and the other geospatial that we produce ourselves that may be disrupted before it gets analyzed with information that’s not really there?

CARDILLO:
Thanks, senator, for the question. I don’t think there’s a more important issue on my desk or I would offer the desk of my colleagues here and that is at the heart of our profession is integrity and credibility, reliability. That’s how we get invited to meetings. That’s how we get invited back to meetings to provide a sense of confidence to those that we serve to help them make decisions.

What you just described as both an opportunity, that’s the connection with new partners, nontraditional sources, small and large companies and universities, etc. Every one of those connections is also a threat or a risk because if I’m now plugged into this new source, to gain benefit and understanding coherence I’m also plugging into every aspect of vulnerability that they have. So we work on this very, very hard.

I obviously count on the experts at NSA and FBI on the digital domain and the hygiene that’s necessary. I will also say because it was brought up before, this issue of deep fake. As that technology advances and it will I do worry about as a community that needs to seek the truth and then speak the truth, in a world in which we can’t agree on what’s true our job becomes much more difficult and so go back to your question.

We have to do a better job at protecting what we do so that when we do show up you have the confidence, you know where it came from, you know how we handled it, you know who did or didn’t affect or manipulate it and so again it’s an issue that’s in the center of my desk and all of our concerns.

BLUNT:
In–in your plans one more question for you, director. In your plans for geospatial, western, the development of that new facility replacing a 75-year-old facility in St. Louis which is fully redundant with what happens in Springfield, Virginia. The difference you’re looking at their I think 40 percent of the space in that plan is unclassified.

How does–how does IC you work in an unclassified environment and how would you calculate success in your future view of how that works and why would it work that way in plowing some new ground in unclassified space in a classified facility?

CARDILLO:
The short answer is very carefully. I will expand. So some four years ago when I stepped into this privileged position, I challenged our team to think differently about our value proposition in a world that is much more open now and which there’s many more sources of information, some good and some not so good.

And so I coined a phrase that we need to succeed in the open. I modified that a few months later with some help my teammates I said what we really need to do is succeed with the open. And to your point about our new campus in St. Louis which we couldn’t be more excited about by the way the infrastructure is closer to 100 years old. But this is much more than an infrastructure project. I think of this as a new canvas.

It’s almost 100 acres, we can reimagine our profession on that campus, part of that re-imagination needs to be engagement with that open community in a way that’s protected and that’s knowing about who and what we are plugging into. So we couldn’t be more excited about the ability to take the opportunity that we have in St. Louis now, to redefine that value proposition in a more open world, in a more connected world, in a world in which we are taking on sources that we know and sources that we need to double and triple check. And so the 40 percent that you referenced is just an estimate that we have now but we just want to build into that infrastructure knowing that we’re going to have to work not just in but with the open and so that’s why we’ve laid out that marker at the beginning.

BLUNT:
And General Nakasone, how does this fit into what you do, the whole idea of (INAUDIBLE) of individual personal geography, all of the things that we didn’t used to have access to that we have access to now not only using it but using it with confidence?

NAKASONE:
Senator, I think your initial question with regards to the data security is a very important one in the terms of how do we ensure the integrity and assurance of the data that Director Cardillo and the men and women of the NJA (SP) have to be able to leverage every single day in support of a number of different requirements whether or not it’s policy makers, it’s forward forces deployed. Our job is to assist in that and to make sure that that data is well-protected and we can rest assured that when we leverage it it’s the right time at the right place and at the right data that we need to be able to utilize it.

BLUNT:
Thank you. Thank you, chairman.

BURR:
Senator Harris.

COATS:
Mr. Chairman, if I could just add something here. Robert Cardillo is finishing up a 30+ year career of working with the intelligence community. He’s just one of our crown jewels and we hate to see him moving on to maybe greener pastures and easier times. But he’s just been a terrific partner with this team and I just wanted to recognize his contributions have just been exceptional and he won the best dressed of any of us on the panel award this morning.