Demonstratedatedly the ability to reach our homeland. Antiterrorneed an strategy that stretches from morocco to southeast asia. At the same time our adversaries are becoming more diverse. Throughout the next decade the u. S. Must be able to check chinese ambition in china. How does the president respond to these challenges question mark challenges . He failed to prevent russia from dictator syrian assad. Themselvesten find and their problems downplayed by the administration. They cannot rally around American Leadership while they not understand the positions of the u. S. Particular information this year on preserving capabilities of the next president. Because the Intelligent Community is being stretched thin, we must prioritize throughout the community. Our mission is to protect the American People by providing sight in order to additionally, amid the growing it is critically important that we ensure the Intelligence Community act as careful stewards of taxpayer dollars. Over the next year, our committee will focus on making progress in the following five areas where it first, encouraging efficient investment andreas such as space technical aspects including to management and cloud security. Secondly, reassessing the effectiveness of the human intelligence enterprise, especially at a time when several agencies are and limiting legalization and reorganization. Third, producing objective and unbiased intelligent analysis. Especially, the department of defense. It is vital that this committee ready d seriously expect that the department of defense will provide these and all other relative dr. Myths to the committee. The efficiencyng of the Intelligence Community to combat the manse. It is alarming that this has that more than 300 million in unneeded construction disguised as basic foundation. In total, this is 1. 5 billion for one saving one project. Receivednse we have from the menstruation can only be described as to lay, denial, and deception. Delay, denial, and deception. Furthermore, whistleblowers have provided this committee with doctrine tatian showing that this department of defense has provided false information to congress. Finally, we have asked for data on all intelligence personnel and major support contractors at the combatant commands. The request was made in. Ecember in december. Defensertment of civilians and contractors. This brings in the question hundreds of millions of dollars. Fifth, migrating Cyber Threats in light of the rapid in technological change printed to address these problems, the we neede packed the to ensure that the new law is a moment of properly and eight the new center operate effectively. Additionally, the latest challenges the government has an in gaining access to iphone use by one of the San Bernardino terrace. I looke need to forward to hearing what they witnesses have to contribute on these five focus areas. With that, i would like to recognize mr. Schiff. Thank you, mr. Chairman. I want to thank you in joining our witnesses. We are very grateful for your reference, and for those of the men and women of the Intelligence Community. The threats we face today are incredibly diverse and daunting, from cyber terrorism, to russian aggression, to threats from space, to threats from below the sea. We are living in a dangerous world. Because of technology, some of these threats are new. The internet of things presents unique vulnerabilities to the advanced nations like us, as does the rise of artificial intelligence. Other threats are more traditional, but still potentially devastating. North Koreas Nuclear test and recent space launch, russias interventions and ukraine, syria, and its threat to the baltic states, chinas activity in the south china sea, and Regional Power struggles in the middle east, are a reminder that statebased threats have not gone down, they are getting worse. Still, other threats are shifting. Even as Coalition Bombing has halted the groups expansion in iraq and syria, isis is expanded into places like libya, and has sought to incite attacks in europe, and to incite attacks in the United States, as we saw in San Bernardino. Many of these threats are also interrelated. Isis is compounded by its use of technology, particularly social media and encryption. Russia and china possible designs are supported by a desire to confront the u. S. Lost dominance in space. Our greatest Cyber Security are also our greatest vulnerabilities. To navigate through these treacherous shoals, we look the i. C. To sound the alarms and to find solutions. After the hearing earlier this month, many were saying that the world was going to hell in a handbasket, and i can understand why given the myriad of the challenges we face, but i want to emphasize that we are highlighting these threats so we can discuss how to best counter them. To that end, we have begun reviewing and receiving budget submissions. We look forward to more sessions with you to ensure you have what you need, and to do so in a way that is lawful, cost effective, and keeping with the highest of american values. Some solutions are not going to come easily. The simple fact is exemplified by the case involving apple. One thing is clear, the courts ruling will have ripple effects , will significantly impact the Law Enforcement community, the Intelligence Community, the business community, and all of us individually. This case and others like it implicate policy questions that cannot be decided by the courts alone. Congress, through discussions with the public, the global community, the Law Enforcement, the Intelligence Community, and the white house, must weigh the policy considerations and arrive at sensible solutions. As a first step, we need facts. Thats why sheriff nunez and i asked the National Academy of science to report on this issue, which will be completed this year. Its also why i supported a commission on encryption and the president s broader Cyber Security commission. A broader debate would move us further from abstractions in towards solutions. As a second step, we need to a knowledge of and not engage in absolutes, as this community has shown in its leadership on surveillance reform, privacy, and liberty can and must coexist. There is no doubt that the terrorists are exploiting cheap Encryption Technology to do us harm, and they will continue. At the same time, there is no doubt that Cyber Security and privacy are under relentless attack from nationstates and hackers, and encryption provides a key defense. We can agree that Law Enforcement and the Intelligence Community have an obligation to solve crimes. There is also no doubt that companies have an agreement with their shareholders to maximize profit, and with their customers to ensure privacy. It is our job to draw lines. I am not advocating a broad mandate on decryption, nor do i favor a world where Law Enforcement is completely shut out of illicit communications when they have a court warrant. What i am advocating is for a cooperative, factbased approach to solving this problem. Congress can pose a solution if it must, but it will be far better for us to arrive at a solution with the negotiation of all stakeholders, that will set best practices that we can champion around the world. Yes, we are living in a dangerous world, as well as a complex world. But it is also a world of great opportunity. Some of the challenges we have today are born with incredible talent, creativity, and innovation of american businesses that are solving problems every day. We also have the best Intelligence Community in the world working tirelessly to ensure these advances are not being used to propagate hate and terror for channels beyond our reach. The challenges and the answers lie in Funding Solutions together. I thank you, mr. Chairman. I yield back. Mr. Clapper, you have an opening statement. I think you will speak for the entire panel . Thats right. I want to again thank you for your 55 years of service. I dont know if this is your last hearing, but if it is, i am sure you are happy. [laughter] with that, you are recognized. Yes i am. We are here to update you on some of the pressing National Security issues facing our nation. To save you time, mine will be the only opening statement. We will be back next week. I will be back on the third of march to address the budget and Management Issues that you raised, chairman nunez. As i said last year, unpredictable and stability has become the new normal, and this trend will continue, we think, for the first table future. Violent extremists are acted in about 40 countries. Seven countries are experiencing a collapse of Government Authority, and 14 others face regime threatening, violent instability, or both. More than 59 countries face significant risk of instability through 2016. The record level of migrants is likely to grow further this year. Migration displacement will strain countries in europe, africa, asia, and the americas. Some 60 Million People are considered displaced globally since the end of world war ii, when the United States started keeping such records. Extreme weather climate change, environmental degradation, Foreign Policy decisions, and inadequate infrastructure will magnetize that instability. Infectious diseases and vulnerabilities to the Global Supply chain will continue to pose threats. For example, the zika virus, first detected in the western hemisphere in 2014, has reached the United States and is projected to cause up to 4 million cases in this hemisphere. On that premise, i want to briefly comment on technology and cyber. Technological innovation during the next few years will have an even more Significant Impact on our way of life. Central totion is our economic prosperity, but it will bring new security. The internet of things will connect billions of devices that could be exploited. Artificial intelligence will enable computers to make autonomous decisions about data and physical systems, potentially disrupt labor markets. Russia and china continue to have the most sophisticated cyber programs. China has continued espionage with the United States, and its economic espionage remains to be seen. Iran and north korea continue to conduct Cyber Espionage. Nonstate actors also posed Cyber Threats. Isil has used Cyber Threats to their greatest advantage, not only for recruitment, but to release information. Cyber criminals remain the most pervasive cyber threat to the u. S. Financial sector. They used cyber to conduct theft, extortion, and other criminal activities. There are now more sunni violent extremist groups and members of safe havens and in a time in history. The rate of foreign fighters driving the conflict zones is without precedent. At least 38,200 foreign fighters, including at least 6900 from western countries, have traveled from syria to at least 120 countries since 2012. As we have seen, returning fighters pose a dangerous operational threat. Isil has demonstrated sophisticated trade tactics, as we saw. Isil has become the preeminent global terrorist threat. Isil has attempted scores of attacks outside syria and iraq in the past 15 months. Isils estimated strength and now exceeds that globally of al qaeda. Isils leader seems to strike the u. S. Homeland, beyond inspiring attacks, although the u. S. Is a harder target in than europe, isil operations remain a critical factor in 2016. Al qaedas affiliates also have proven resilient. Despite counterterrorism that is largely decimated the core leadership in afghanistan and pakistan, al qaeda affiliates are positioned to make gains in 2016. The al qaeda peninsula and the al nusra front of the two most capable al qaeda branches. Mobilebased Technology Enables terrorist actors, and serves to undercut Law Enforcement efforts. Iran continues to be the foremost state sponsor of terrorism and exerts its influence in regional crises in the middle east during the Islamic Revolutionary Guard Corps Quds force, its terrorist partner hezbollah, and proxy groups. We saw firsthand the threat posed in the United States by homegrown extremists in the july attack in chattanooga and the attack in San Bernardino. In 2014, the fbi arrested nine isil supporters. In 2015, the number increased more than fivefold. Moving toward what was a mass discretion, north korea continues to conduct terrorist activities. They claim that a satellite was successfully placed in orbit. Additionally, in january north korea carried out its Fourth Nuclear test, claiming it was a hydrogen bomb, but the yield was too low for it to be successful. Pyongyang continues to develop missile material. It is also committed to developing a longrange Nuclear Armed missile that is capable of posing a direct threat to the United States, although the system has not been supplied. Despite these economic challenges, russia continues its aggressive military modernization program. It has the largest and most capable Nuclear Armed Ballistic Missile force. It has developed a missile that violates the imf treaty. China continues to modernize its Nuclear Missile force and is striving for secure a second strike capability. It continues to profess a no first use doctrine. The joint plan of action provides us Greater Transparency into irans material production. It increases the time the iranians would need to produce a Nuclear Weapon from a few months to about a year. Iran probably views jcpoa as a means of removing sections. Its perception of how the jcpoa strives to achieve its goals will dictate its level of adherence. Thus far the iranians appear to , be in compliance. Chemical weapons continue to pose a threat in syria and iraq. Isil has also used toxic chemicals in iraq and syria, including the blister agent sulfur mustard, the first time a Chemical Warfare agent has been used in an attack since 1995. In the space and Counter Space realm, many countries are engaged in the space domain. Russia and china understand how our military fights are, and how we rely on space. They are each pursuing destructive satellite systems. China continues to make progress on its antisatellite missile program. Moving to counterintelligence, it is persistent, complex, and evolving. Targeting u. S. Information by Foreign Intelligence Services continue unabated. Russia and china pose the greatest threat, followed by iran and cuba on a lesser scale. As well as the threat of insiders taking advantage of their access to collect and remove sensitive National Security information will remain a persistent challenge. With respect to transnational organized crime, i do want to touch on one prime issue, specifically drug trafficking. Southwest border seizures of herrmann in the United States have doubled since 2010. Over 10,000 people died of heroine overdoses in 2014, much of it 30 to 50 times more potent. In that same year, more than 20,000 died from opiate overdoses. Cocaine production in colombia has increased significantly. Let me quickly move through a few regional issues. In east asia, chinas leaders are pursuing an active Foreign Policy while dealing with much slower economic growth. Chinese leaders have also embarked on the most ambitious military forms in its history. Regional tension will continue as china pursues instruction of construction of its outpost in the south china sea. Russia has demonstrated its military capabilities to project itself as a global power, command respect for the west, in and advance russian interests globally. Moscows objectives in ukraine will probably remain unchanged, including maintaining longterm influence and frustrating its attempt to integrate into western institutions. Putin is the first leader since stalin to expand its territory. Moscows military venture into syria marks its first use since the foray into afghanistan of significant Expeditionary Combat power outside the postsoviet space. There interventions difference demonstrate improvements in russian capabilities and the kremlins confidence in using them. Moscow faces the reality of economic recession driven in large part by Falling Oil Prices as well as sanctions. Gdpias nearly 4 contraction last year will probably extend into 2016. In the middle east and south asia there are more crossborder military operations underway in the middle east at any time since the 1973 arabisraeli war. In iraq forces will probably make incremental gains through the spring, some of those made in by ge and remodel he the past few months. Their territory and manpower are shrinking but they remain a formidable threat. In syria proregime forces have the initiative having made advances in the north, as well as in southern syria. Manpower shortages will continue to undermine their ability to accomplish strategic battlefield objectives. The opposition has less equipment and fire pyre firepower in their groups lack unity with competing battlefield interests and fighting among themselves. Two hundred 50,000 have been killed as the war has dragged on. Which is probably a low side estimate. Meanwhile the humanitarian situation in syria continues to deteriorate as of last month there were 4. 4 million syrian and other internally displaced persons that represent about half of their preconflict population. In libya despite the december despite attempts to establish authority and security across the country it will be difficult with hundreds of militia groups operating throughout the country. They have developed their most developed branch outside iraq thelibya in other areas of country. The yemeni conflict will probably remain stalemated through it least mid2016. Conflict exploited the in the collapse of Government Authority to recruit and expand territorial control. The economic and humanitarian situation continues to worsen. Iran deepened at some its involvement in the conflicts in 2015. They also increased military cooperation with russia is highlighted by battlefield alliance. The Supreme Leader continues to view the United States as a threat and we assess that the views have not changed since the implementation of the jc 08. In south asia afghanistan is at serious risk of a political breakdown in 2016. Waiting for political cohesion and powerbrokers with financial shortfalls and sustained countrywide caliban attacks eroding stability. Needless to say there are many more threats worldwide that we can address, most of which are covered in our statement for the record, but i will stop the litany of doom and we will address your questions. Thank you, director. First im going to go to director kohmi. The has been a lot in the news involving the iphone that was owned by the San Bernardino shooter. You askingly, are apple to do . How does this differ from the other times you have asked apple lawful you obtain communications . they have ordered the maker of the phone to do two things. Disable the auto erase function on the phone so that if the fbi is trying to guess the passcode to the phone that it doesnt automatically delete the , essentially, after the 10th try, and second two the late the between try function so that it doesnt take years and years to guess the code but instead we are able to do it in minutes or hours and to do that through the remote pulsing of codes to the phone. That is what the order is about. I dont know whether this particular relief has been sought in another proceeding. I dont think so. Given the nature of this phone and its operating system, its possible but im not aware of it. Representative im sure that you will be getting more questions from this committee and i know the you will be testifying next week before the Judiciary Committee and i know that this is an ongoing debate. I want to switch over to director stuart. They wrote a long report titled top spy on skewed intel. Shortly afterward we were contacted and briefed on the survey results that indicated that over 30 of the analysts at centcom found problems with analytic integrity and processes. With troops and war fighters all waitis it appropriate to 18 months or longer for the Inspector General report before we even begin to rectify these problems . Mr. Chairman, i have no control over the pace at which the dod does its investigation. While it would be good for all involved to get closure on the extent of this allegation, we have no control over that process. I probably wont comment any further on the investigation. But the survey itself represents 16,000 plusf the members in the enterprise in which we put very strict measures to ensure that we comply with those standards and ensure that we have a process that those who believe that they are not being heard through sampling of our products, we think we have in place a pretty good standard and approach to look at the quality of our analysis and the integrity of our analysis. I will leave it at that. Appears thatt there was at least a process in place to get input from the analyst. It seems like the 40 of analysts that are concerned at centcom, thats just something that cant be ignored, regardless of the investigation that i know will take place. If you have 40 of the analysts, i dont know if there is a way that you can go back in and pull them again or is this an annual process that the od and i goes through, but what changes can be the in the short term with i guess for lack of a better term, the unhappiness of the analyst . Annualeward this is an process. We will continue to look at ways to develop training. Done that already. Weve had request whether have been disputes where we sent the on button there to look at it and look at the different views. Process,ue to do this even as the investigation goes on. Rep. Nunes would you consider 40 to be unusual . Or is this normal . Dir. Steward we would consider that unusually high, yes, mr. Chairman. Rep. Nunes mr. Schiff . i wantedtive schiff to ask you about the case as well. The facts in the case are pretty compelling in terms of wanting to know whats on that phone. While that application, as you have pointed out, is focused solely on that phone, when i read the emotion the motion in the support of the application i dont see a limiting principle. By that i mean if that argument is excepted by the court in this case, one that lead others around the country to make the same argument in their cases . Some of those may be compelling. I think he pointed to a pregnant woman who was murdered i think in arkansas over the phone may be the only key to her killer . Application that may be good in misdemeanor cases involving nonviolent offenses. So, while the result may only affect this phone, the precedent will be there for many others. I guess what i would like to ask you is is there a limiting principle here . Is there a way through negotiation that we can arrive at cases where it is imperfect to seek this relief and cases where its not . Broadernowledge the policy implications of the uniform application under the act . I realize that this may be moot by the next generation operating system that may not allow this kind of relief, but nonetheless it is technologically feasible, even with the next generation operating system for apple to help with the opening of a phone, it seems to me that the argument you are making in this case would apply to those new systems as well. Is there a limiting principle here . Is there any way to resolve this through negotiation . At least the initial positions neede parties are we access when we have a legal warrant and the other side is saying we can never provide access because of we do it here, we have to do it everywhere. Dir. Steward thank you. You. Mr. Comey thank i very much agree with the way you phrased it in your opening statement. Here is a broader policy that is more important than any individual case. To the case, the answer would best come from a technical expert and a good lawyer. Im neither of those, but i will take a shot at it. I do think that it is potentially, whatever the decision in california, which im sure it will be appealed the matter how it ends up, it will be instructive for other courts and their fate very well very well may be other cases that involve the same kind of phone and operating system. The experts have told me that the combination heres where i get out of my depth that this operating system is sufficiently unusual that it is unlikely to be a trailblazer because of technology being the limiting principle. But sure, a decision by a judge, there is a decide there is a judge weighing this decision in brooklyn right now, they will all guide how they handle similar requests. Its a tool that i used as a young prosecutor. We have used it for numbers of years so the courts can have their orders given effect. How the judge determines that in a particular jurisdiction is not binding but it will be important , so i think thats fair to say. I do think of the larger question will not be answered in the courts, but it is about who it will be how we want to govern ourselves. Regarding this question from the perspective of the bureau, can Law Enforcement with with a policy that says violentcertain cases, crimes or other very serious cases, terrorism related, that we would allow under the act . That congress could specify to which purposes the act or a would apply . A is that something that the Law Enforcement or Intelligence Community, you think, could negotiate with privacy stakeholders and the Technology Sector . I think conversation and negotiation is the key to resolving this. This is the hardest question i have seen in government and it will require negotiation and conversation. But im very keen to keep the bureau out of the policymaking business. We have two roles in this context. One, the cases. We must do a competent investigation following this murder. We will, and we will use areever lawful tools available to us. But in the larger conversation the goal is to make sure the folks understand the costs associated with moving to a world of universal strong encryption. There are tons of benefits. I love encryption, i love privacy. When i hear them say that we will take you to a world where no one can look at your stuff, part of me thinks thats great, i dont want anyone looking at my step my stuff. But then i step back and say Law Enforcement really does save the lives of people. Rescue kids, rescue people from terrorists, and we do it a whole lot through search warrants of mobile devices. We are going to move to a world where that is not possible anymore . The world will not end, but it will be a different world from where we are today and where we were in 2014. We have to make sure that the bureau explains the folks what the costs are so that people dont look at us five years from now and say where were you guys when this happened . This is too important to have the drift. We need a factual input for robust conversation. Rep. Schiff thank you. One other matter i wanted to raise, the subject of libya. Im deeply concerned that as the in syria andumor iraq the creases that we are seeing a growth of a new malignancy in libya. Be a concern with taking more aggressive military action against isis in libya, that it would somehow interfere ending, ongoing, never it seems, negotiation to get the two Political Parties together and form a common government. From an intelligence perspective, do you think that we could take more aggressive military action against isis in parallel with political negotiations . Or do you think we have to choose between them . Over the pace of the seemingly endless negotiations where we waved where we make it to the point where they are so firmly we may have to embark on the same multiyear project that we are undertaking in a rack in syria. I will start that, others can contribute. Aptlyk you have characterized the dilemma here in terms of a more robust military intervention in libya and the potential jeopardy that that then poses to a fragile, evolving political process. There is great hope for this new government in the national court. We would like Nothing Better than to have a government in place with whom we could work and from whom we could gain militarily engaging in libya. That is a subject of active discussion, as i speak. John, do you have anything . John there was a relationship between the government buildings, trying to get this off the ground, and Counterterrorism Operations and havessions that jim and i been in. Recognizing that sometimes what you do in one environment affects the other. You cannot put off Counterterrorism Operations as this long process of government building takes place. To drill down further on that, do either of the factions take issue with the process city of military action against isis . Im trying to understand why in an effort that i hope will be more fully integrated with a moren leadership aggressive approach would somehow interfere with political negotiations. The two competing governments , neither of them are monolithic. There are a spectrum of political views within each one of those. So, i think that there is, to the extent that there can be in libya, a fair amount of agreement that isil poses a nationstatebya as a and i think there is sentiment among most parties, but not all, that this represents a threat to the country. Not, and thats the difficulty here, there are a wide range of views in the political spectrum in libya. Rep. Schiff thank you, i your back. Yield back. Mr. Miller . Representative miller there is a lot of education that is going to be taking place. If you would,er, in this open session, please elaborate briefly, if you will, how important section 702 is to your respective agencies . We all have mr. Odni i will start. 702 has an important capability for all of us. In the the provision Foreign Intelligence Surveillance Act that governs nonsurveillance persons overseas. The current law expires in december of 2017. On we have already embarked a kind of Education Campaign in the congress to make sure people understand what a vital tool this is. I agree that it is a vital tool for our intelligence efforts against valid foreign intelligence targets, nonus persons who are overseas. It does not permit the targeting of these persons. That would require a separate court order to do that. In the course of conducting 702, ifon under section the u. S. Person is in contact with a valid intelligence target, there are minimizations included to minimize the retention and disclosure of the identity of that person because it is not a foreign intelligence value. Those are reviewed annually by the court. 702 dir. Important for operational activities, whether they are on the counter proliferation, counterterrorism front, or others. There have been numerous incidences over the years where it has been instrumental in our ability to uncover and disrupt activities that are a threat to our National Security interests. Itsu can imagine, difficult to go into some of those, but let me mention this one. Late in 2014 a longtime libyan extremist operative was arrested by local authorities in europe following several trips into syria and libya. While he met with senior extremist operatives. At the time of his arrest the he was involved in external operational planning and they provided this information from section 702 collection to assist local governments in their investigation that led to the arrest of that individual. Think, the academy in 70 twospects of how intelligence is used by cia, working frugally in concert with partners around the world to disrupt these activities. The own the thing i would add is that reasonable people argued how important a telephone metadata collection was, but this is not a close call. If we lost this tool it would be a very bad things for us and it is important to have this conversation early. Thank you for the question. The gentleman yields back. Mr. Heinz . Gentlemen, thank you for being here. Director, i want to pick up the line of questioning on the apple fbi. Some of the issues, as you have acknowledged, are novel and challenging. It is this body that should be determining the answer to the questions that you ask in that the will be answered in judiciary. Of course, we will once again shirked our constitutional duty as we have on military force, as we are preparing to do on the Supreme Court nominee, which we will on this issue, which is sad. Questions me to two about the thinking of the fbi. The first is a followon to mr. Schiffs. It is my understanding that the position of the fbi is a narrow one. The request of apple pertains only to this device in this instance. There is a legitimate worry that a decision in favor of the fbi could be the narrow end of a very wide wedge. They asked about the narrow domain into which this might apply. I want to ask about the authority. The fbi, if they prevail at apple will be required to write the code at the behest of government. My question is where does this authority to mark is it the position of the fbi that they have the authority to compel the inclusion of code into a new device . Can you paint a very bright line for us with respect to where you think that authority might end that might reassure those people say where does it end . Mr. James i dont think i can by virtue of my role. The lawyers are best suited to do this. Inges on both coasts and many other places will have to determine the meaning of the act and reasonable assistance and i am really not someone qualified to offer you a good answer to that one. Rep. Himes ok. Time it is point in not a believe of the fbi that the authority could go beyond what it has requested in this particular case . I actually have not thought of it. Heres how i think of it the case, case, case, and ive said it because its true, the San Bernardino litigation is not about us trying to establish some precedent. It really isnt. It is about trying to become the competent in investigating something that is an active investigation. I dont know how lawyers and judges will think about the limiting principles on the legal side. I just am no. Rep. Himes ok, my second question is a different way to think about this. Right now we are talking primarily in terms of the tension between privacy and security, but there is a different tension, security versus security. If you prevail, if this code is written, presumably it will be the subject of other requests for Law Enforcement. This code will exist on a server at apple. That creates a very substantial threat. Exists, it will presumably become the target of our sovereign adversaries, of criminal enterprises and terrorists. You dont need to think hard to spin some ugly scenarios if it gets out into the wild. Now a terrorist entity might know my precise location, gets photos of my children. Can you give us a sense, in taking the position the fbi has, how did you think about the tradeoff between the very compelling desire to get the information on this particular San Bernardino case with the risks that would be posed by the it exist of it should and ultimately perhaps get out into the wild . Again, i think thats something that the court will set out. Not aning to because im expert but what the experts have told me, and im sure this will be sorted out by the judge, it works only on this one phone. The idea of it getting out in the wild, the experts taught me, is not real thing. The second thing is that the code will be at apple, which i think is done a darn good job protecting its codes. Before 2014 they were able to unlock any phone. I dont remember anything getting out that let that ability loose upon the land, but again im not an expert in that is something the judge will have to sort out. Thank you. In my limited time, i wanted to thank you for raising the issue my limited ready in testimony. Agreements were made when the chinese president visited our president and i wondered if you could characterize it those of an effective in reducing the amount of Cyber Espionage and activity we have seen from china. Dir. Odni we did go into more detail in a closed session. As i indicated in my oral remarks, the jury is out. I dont think we are in a position at this point to say whether they are in strict compliance. We can go into more detail in a closed session. You, mr. S thank chairman. Gentleman yields back. Mr. King. Mr. King representative king one, were there any negotiations between the fbi and apple leading up to the Court Proceeding . Dir. Odni yes, plenty. They were very helpful, by the way. They have been very cooperative, i want to be clear, we just got to a point where we cannot offer what the government they cannot offer what the government has been asking for. Rep. King several people in the media are saying that the fbi could do this if they wanted to. That the project rep. Himes thats the product of mr. James thats the product of people watching too many tv shows. We are not as talented or technologically innovative as we appear on tv. Diving a little deeper into ukraine and russia i dont know who wants to comment on this first, but some sense of their strategic goals here. Obviously the impact of sanctions is pretty dramatic to their economy. Is this, i guess, a frozen conflict . What else can we anticipate . What has had the greatest impact on the russian economy has been the precipitate drop in the price of oil. Running around 37 to 38, if that, per barrel. The planning factor that the russians are consistently using in their budgeting is 50 per barrel. Sanctions have certainly contributed to that, but the major impact has been the oil. I think that the russians consider ukraine little russia. Think it is deeply steeped in their history and culture. To they are going to attempt attempt to sustain influence basically in the two separatist republics. Obviously what they most fear hisare most concerned about ukraine gravitating towards the west more than it already has. Becoming a part of the european union, or worse, nato. Will continue to, through proxies, separatists, sustain their influence in ukraine in that manner. Rep. Quigley do you see the status continuing the way that it is . Obviously there is renewed conflict at different times, but no dramatic change recently. Thats right. For now i think they will be maintaining and a lot of the issues that are occurring along the line has been drawn via the minsk agreement are occasioned by upstart separatists who russians do not completely control. John, you want to add to that . Dir. Brennan there has been movement as far as the agreement, but there are still shortcomings. But your characterization, i think there is still uncertainty about how the russians themselves will extricate themselves from this, which is taking a toll, the oil prices, because of the sanctions. Given the economy and the two conflicts they are most involved with, do you sense that putin has his hands full, or do you have concerns about efforts to destabilize the baltic region . Director clapper there are concerns about that, but that is more in the soft arena. Rather than Hard Military assault on the baltics. That does not seem to be in the cards right now. I do think that the russians are preoccupied right now with syria, and they have put a lot into that. They are confronting the possibility, or considering whether they will put more ground forces. Of course, i think the constraining factor for them is the memory of afghanistan. Getting into kind of a bottomless pit, and i think that does affect russian thinking and is one of the reasons why i think there is an apparent interest in the cessation of hostilities. Thank you, gentlemen. The gentleman yields back. Mr. Westmoreland is recognized. Director comey, this warrant that you went to the court to get, it was really no different in process than what you do for any other warrant that you would want to get to check on evidence. I mean, you were just trying to get to where you could get into the phone, not do anything else, is that correct . Dir. Comey that is correct. If you want to search, go to a federal judge, make a showing of probable cause that there is evidence on the device, and get a search warrant from the court for the device. What happened here, because the device was unable to be opened, the judge issued a separate order under this thing called the all writs act to try to give effect. To me, just from a common man, i would think its different if youve got two people who have killed 14 other folks in a terrorist attack, and you are just trying to get through the Security Code to get into the device, versus some divorce lawyer trying to figure out what a philandering husband may have been talking to, so i think there is a difference. I think the American People sense that. These are people who have committed a crime. The next thing i wanted to ask is, we have been going through a lot of the iran nuclear deal, and we have given them a large sum of money, different varying figures of that, but i know that a lot of your agencies take part in monitoring the financing of isil, whether that is in libya, iraq, or syria, and how are we monitoring what the iranians are able to do, or are doing its an open question, any of you can jump in, as far as what these are, because to me it gives the perfect opportunity, within going to france and other places in making these large purchases, another great opportunity to launder the money. Director clapper we could go into detail in a closed session. I would say here that, of the money that was released or freed up by the virtue of the jcpoa, much of it is encumbered for debt or domestic needs of the iranian economy. The organization we worry the most about is the quds force some money has flowed to them, but not nearly as much as they wanted. I think as far as how tracking finances and Financial Data goes, the details of that would be best left to a closed session. Thank you, sir. I yield back. The gentleman yields back, ms. Sewall . Thank you. Director clapper, i want to turn back to Cyber Security and see if you could talk a little bit about what you think your assessment is of the the Intelligence Communitys ability to counter Cyber Threats, and what you see is future threats that we would face, and whether or not we were able to meet those challenges . Director clapper the intelligence committees role pertains to intelligence, which is to collect and analyze threats in the cyber domain, and in support of others who are more directly responsible for either planning attacks or for defense. In our forthcoming budget, which i will speak to next week, as to what we are actually asking for in 2017, i think the general threat environment is quite daunting, both from the standpoint of the capability of the nationstates, prime among them russia and china, and nonstate actors. There is an inverse relationship between the capabilities that countries have, china and russia being the most formidable, perhaps less threatening in terms of their intent. Whereas you have secondtier countries like iran and north korea what is, how would you assess our ability to counter those threats . Director clapper countering them, and one dimension, is our ability to defend, which is not just a government thing, but the private sector as well, so when you say defend, that is a big domain. I think our concern, our responsibility, and our intent is that they have the adequate intelligence to bring to bear. With respect to the space sector, could you tell us a little bit about it . I know you have more detail in your report, but about our ability to counter some of the russia and chinese antisatellite this is a subject that is best left for a closed session, but i will say that both the russians and chinese have embarked on a very aggressive and versatile, and diverse, set of capabilities in the space domain, and this has prompted a lot of attention on the part of the department of defense as well as the Intelligence Community to provide an array of defenses and resilience, and reconstitution if necessary, should we lose our valuable space assets. This is a commentary on russian and chinese inside on how heavily the United States depends on space for a variety of needs. Thank you, i yield back. Thank you, mr. Chairman. Director comey, not to beat the apple issue to death, but one quick question. Has apple clearly articulated what their reasons are to not cooperate to the extent that you have requested . Is it the slippery slope, fourth amendment, civil liberties, or is it more of an economic issue, where their cooperation in showing the world that they might be able to accomplish what is requested makes their product less desirable, and therefore they lose market share . Dir. Comey i dont know if that is a question i can answer. I obviously dont want to talk about our private conversations of this investigation. There has been a lot of discussion in the press, and they will explain in Court Tomorrow why they do not think it is appropriate, so i will leave it at that. I yield back. Mr. Carson . Rep. Carson thank you, mr. Chair. Director comey, can you describe how the fbi makes the decision to determine which communities warrant proactive outreach and engagement to prevent radicalization . Dir. Comey i think so. Any community where we believe there is a risk of people turning towards violence, and sometimes that is an ethnic community, and immigrant community, sometimes it is a particular community with a particular flavor of antigovernment sentiments, young people who may turn to violence, from there we try to engage with the community. Rep. Carson is there more of a holistic approach by not only bringing and community leaders, but educators and psychologists within the community, to prevent the kind of self radicalization that is taking place . Dir. Comey yes, sir. It has to be an entire community thing. They cannot be Law Enforcement or religious institutions, it has to be parents, educators, physicians, social workers. One of the things the bureau is trying to do as part of our countering violent extremism effort is bringing together talented people from all different perspectives in the community, especially if we are dealing with a young person, there is a prospect of a group coming together and redirecting that person, but there has to be a whole lot of folks besides us. Rep. Carson has the Citizens Academy been an effective tool and creating some kind of buy and what those communities . Dir. Comey yes. The Citizens Academy is run in all of our field offices. We invite people in from all walks of life to see how we do our work, ask us hard questions, and stay involved to give us feedback on how we are doing, and to connect us to parts of the community, so it is a vital tool. Rep. Carson thank you, mr. Chairman. Dr. Winthrop is recognized. Thank you, mr. Chairman. And i do want to thank all of you for being here and as dr. Hecht said, what you represent and the work you do, i have a question more for later in closed session. But one thing that i think we cant ignore as we sit here on the side of congress, admiral mullen spoke years ago about our debt being a threat to our National Security. And so i want to ask you, director clapper, you know, as we face all these increased external threats to our nation, how does this basically an internal threat of our debt affect our capabilities in the work that you do . Well, its it affects us, if to the extent that has inhibition on our resources. Meaning our funding. So thats why weve been very concerned about the impacts of sequestration which were not through yet. So in that respect, it it is a concern. I have to say that thanks to the congress, weve done reasonably well in our funding requests. And i hope the same is true in 2017. Certainly i would just say as a citizen, i do worry about our debt. And as a country. And so i worry about it from that respect. In the line of National Security, i think that we need to continue to address your needs and helpful to us when you discuss whether you have the appropriate wherewithal to do your job. And as we make decisions here. I thank you for that input and i yield back. The gentleman yields back. Mr. Stewart. Is recognized. Thank you, mr. Chairman. And to you, gentlemen, i express my appreciation and gratitude and sincerely on behalf of millions of americans who may or may not recognize the really wonderful work that your organizations do and the many dedicated men and women who sacrifice to do that. Thank you. I will like to i suppose i could ask this question to nearly all of you all, though. Director brennan, and perhaps mr. Comey as well, you might be best suited although mr. I would appreciate your opinion as well. In this conversation with apple, which is taking a fair amount of our time here, the longer term problem, and weve had opportunities to talk about this with all of you, is the prospect of within a few short years, we may be to use the phrase dark with heavy encryption that doesnt allow us to use Law Enforcement mechanisms or National Security tools. And im wondering if you would elaborate on what that really means. Could we help the American People understand that the encryption which we may not control, they may not be u. S. Companies that are developing this encryption, that its becoming widely available, and how thats going to make it more difficult for you to keep us as we expect, to keep American People safe . Director comey, yes. This is a problem that all of us in the Intelligence Community have been talking about to sound an alarm. Because we see increasingly in our National Security work, and the bureau has significant criminal responsibilities in our criminal investigative work, increasing situations where we cannot with lawful court orders read the communications of terrorists, gang bangers, pedophiles, all different kinds of bad people. And with the and lawful court orders and search warrants are increasingly unable to make that search warrant effective. And enter a device with a courts permission and get whats on there. That affects all of our work. Youve seen it. This committee has obviously knows a lot about it. Most prominently in the counterterrorism side with isil trying to motivate people either to come to their socalled cal iphate or kill in the United States and when they find someone they think will either come or kill, they move them to a mobile messaging app thats end to end encrypted that we cant read with court orders. And that is a big problem for us. There are substitutes around the edges of it. People talk about meta data, the information about who contacted whom and thats useful but no substitute for knowing what theyre talking about. Sometimes physical surveillance is useful. Sometimes informants are useful. But there really is no substitute. Anybody who knows our work will tell you this. Theres no substitute for being able to have a judge order access to the content. So our job is not to tell the American People what to do about it. Were just here to tell you there is a big problem and that darkness is going to grow and grow and grow. And change our world. And change our world. Victor brennan, would you or mr. Legend elaborate on that from an International Perspective and the work where trying to do overseas and the encryption and how that affects that . Ill start and i know rick will have some comments. One of the most Important Missions for c. I. A. Is the collection of foreign intelligence. And increasingly, the cost of the because of the terrorist threat we face we need to get the intelligence that resides within intelligence organizations. The ability of these terrorists to communicate with one another and manners that make it very difficult for us to uncover, it has been increasing. And it is very frustrating. But also very concerning. Because they follow the press. They follow these discussions. They are very sophisticated. A lot of them have grown up in an era of technological revolution. And theyve been able to take advantage of that. And so it has made our challenges very difficult. So from my perspective, on the foreign intelligence front, the more intelligence that we can obtain through our lawful authorities the better able we are to protect the American People. Rick. Yes, thank you, sir. I agree with both director comey and director brennan on the importance of this. And the impact it has. We track when our foreign intelligence targets talk about the communication or the security of their communications, and we see a growing number of them because of the the information thats in the press about the value of encryption moving toward that in a way that inhibits our ability to understand what theyre doing and what director comey said about the difference between meta data and content is hugely important. And often overlooked. Its one thing to know that a person is in a particular place at a particular time. Its Something Else entirely and necessary to understand the in defeating terrorist plots to know what the target is, what the timing is, how the attack is going to develop. In conclusion, i would just say this. I appreciate your conversation with apple. And director comey, you, i think, stated it well. This is a conversation that i think the American People need to have. We talked a little bit about 702 and the pathway forward with that as well. But it seems to me that technologically some of these conversations may become moot. Because we may not have access to that information regardless. Just because Technology Makes it impossible for us. In the future. And how we grapple with that is something i think we should consider as well. But mr. Chairman, thank you, and i yield back. The gentleman yields back. I want to thank the panel for the open session portion of the worldwide threats hearing. We will hopefully reconvene about 10 30 down in the classified spaces. Today, donald trump speaks at a Campaign Rally in huntsville, alabama. Live coverage begins at 5 00 p. M. Eastern on cspan. Senate republicans voiced their opposition to a confirmation hearing for president obamas expected Supreme Court nominee. They spoke with reporters on tuesday following their weekly policy lunch for about 15 minutes. Senator mcconnell good afternoon everyone. The most significant occurrence during the previous recess was the death of Justice Scalia. Many of us had our own interaction with Justice Scalia over the years. In my own case, i was a young staffer in the Justice Department during the Ford Administration and i would go to Staff Meetings where i kept my mouth shut because i was in the presence of robert bork. And Lawrence Silverman who was the Deputy Attorney general and Justice Scalia, three of the most brilliant conservative lawyers of our time. And silverman was on the d. C. Circuit and scalia on the Supreme Court and bork nominated. I was on the Judiciary Committee when scalia was nominated. And like a lot of conservatives, this was this was an extraordinary individual and great loss for the country. The question immediately becomes whats the way forward. I have the view and expressed it early on that the next president should make this nomination. That certainly is supported by precedent. You would have to go back to 1888 when Grover Cleveland was in the white house to find the last time a senate of a Different Party from the president confirmed a nominee for the Supreme Court in an election year. In 1988, Justice Kennedy was confirmed but that was a vacancy created before that which bork was nominated and was defeated and the vacancy existed quite some time prior to the president ial election. So the question is who should make the decision. And my view and i can confidently say the view shared by everybody in my conference is that the nomination should be made by the president
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