Transcripts For CSPAN2 Capital News Today 20101210

enormously important different spending than students, reciting the poll tax. the difference is most people don't care the tax affected every family. students -- these are middle class people. >> people are very eloquently talking about the future of their own education and brothers and sisters education and do you think fundamentally what universities have to offer for educational change as a result of this? >> absolutely. today marks a very profound shift and the parliament was given little time to discuss this profound move which we are going to have because of the nature of the cuts, because the nature of the state funding for all sorts of subjects, the humanities being taken to task social sciences, and as a result of that, the cost in total laid upon the graduates, and david wrote some interesting books and had interesting thoughts about his generation, the baby boom generation effectively stealing the money from the younger generation. we thought it was a critique. we now know the manifesto strategy, and what we see today i think is a remarkable assault on the english university and the post war settlement of education. >> can i just come back to some of these points? first, the taxpayer funding is not being taken away, and if i may say so, the presentation before, the tax payer funding will go by the student. and then as people graduate they will pay it back but the public money, and the teaching ground is going to go through the students. there is no decision to take teaching away from humanities whatever. it is all going to the student. the only thing to be made is the extra delivering. this is not -- this is not an attack. i keep students will continue and actually what we call learning. i have to say a lot of people go to the university -- there's a significant number of people that universities are in all its range of institutions getting qualification which will have security. that is what you need to do. it is not the only university. they're also people going to the university because they want to because they love them and their worthwhile and that can carry on. we will provide them with the funds to do that. we're not saying that somehow that should be -- >> you expect you didn't exactly know what she wanted to do at 18. >> you don't have to know that. there's honestly no reason. what i hope you do know about is exactly how many seminars will i be able to attend? exactly how many essays will i be expected to write? how well equipped with a lad p.? at the kind of information -- >> before we go on to talk about the actual transactions between sunni university, speak at david starkey's point, stuck in that the chief of degrees i would've thought of condescension. but is there a danger that people are worried about debt will offer the shorter decree that will lead them further onepass? >> there is a cohost of different issues. i was a fantastic university the other day which used the furniture industry. what they do is upholstery,, study history a furniture design. it is the kind of university that it very much expect will have stronger links with businesses. they want to do those in two years rather than three. that's all going to be part of it. >> we're been absolutely, unbelievably concentrate on this. you raise a point about how do we protect research. had we protect the humanity? .. looking at their humanities courses, looking at their social science courses and enjoying a great deal of -- i think students will continue to choose and when they choose a subject -- >> 20 seconds for you. >> even if we bring the american system what we are not allowing is the scholarships, all of the assistance -- >> we are launching a as well. >> thank you very much indeed. i wish we had another hour. the bbc has a new picture of the attack of prince charles tonight and you can see more of that on the news channel but of course it dominates the front pages after today's protest. the picture of the times is in shock attack after tuition fees, how could they get it wrong again is the story on the telegraph. on the independent there are pictures of the protestors and finally on the daily mail, pure terror, charles and camilla's cars attack by student be mauled. that's all tonight given at least two of two nights a relative who wrote the early editions we thought we would leave you with a scene from the 50 years ago on its 50th birthday. good night. >> tuition fees for the main topics of discussion during this week's prime minister's questions. we will bring it to you sunday night at nine eastern and pacific time on c-span. the senate banking committee today held a hearing on the state of credit unions. the main witness was national credit union administrator chairwoman deborah matz. her agency is responsible for monitoring and regulating credit unions. this is 50 minutes. >> [inaudible] [inaudible] an imrtant -- opportunities to explore the credit union industry as we emerge from the financial crisis and recovery and growth. i want to welcome and thank the chairman of deborah matz for being here today. the ncua has taken unprecedented steps over the years to save lives to the credit system as the troubled culprits fall capital out of natural forem has unions. the system has also cheered many of the same challenges as the fdic and these steps have taken a significant impact in several credit unions across the country and i am pleased that we can have a serious conversation about the current state of the e credit union institute and thent impact of increasing assessmentd and credit unions that searchs millions of americans across have country. frhave heard concerns from constituents about this matter. this is not the first and first certainly not the last hearing ofthis financial condition conn the specific sectors of our financial services and history. the financial crisis took a toll the financial crisis took a toll and the legislation >> it is important for these hearings to become a common occurrence. i look forward to your testimony, chairman, >> thank you, mr. chairman. i will try to be brief here today. this is a very important hearing. like other financial institutions, credit unions have faced unprecedented challenges from the financial crisis and are weak economy. five of the largest corporate credit union suffered substantial losses on mortgage- backed securities and had to be placed into conservatorship by the national credit union administration. the ncua had to take extraordinary action to prevent the failure of these credit unions. given these events occurred more than one year ago, an examination i believe is long overdue. i hope that today's hearing will shed light on the reasons for the failure of the corporate credit unions spread the adequacy of the national credit union rescue plan and why -- and whether these failures pose any risk to our taxpayers. i also want to hear their assessment of what steps need to be taken to prevent large-scale failures from happening again. there are a number of legislative measures that had been proposed by the national credit union administration. this hearing will provide us with an opportunity to discuss their merits and whether they should be enacted into law. because credit unions place a valuable role in providing loans to american consumers, a strong and vibrant credit union industry will be an important participant in any economic recovery in the future. we can failing credit unions will only further erode our nation's already struggling economy and prolonged unprecedented levels of unemployment. thank you for calling this hearing. >> i want to thank you for calling the hearing and then look forward to the witnesses. >> thank you, mr. chairman. i, too, appreciate that she is here to talk about the state of credit unions. i would just say that i think that the ncua has done a great job with not burdening taxpayers would help for the credit unions. i want to hear what she says about the assessments and the cost of the credit unions of those assessments because we do not want to work their capability to be solvent and successful. >> mr. chairman, my time here today is somewhat limited so i think i will just offer that if i have anything in terms of an opening, i will submit it in writing. we will get right to the witness. >> she has a distinguished public and private career. she served in the department of agriculture where she was deputy assistant secretary and also chaired the the tax force, which was charged with the responsibility of resolving over $1 billion. prior to your service, she was an economist with the economic committee of congress. she served as a board member of ncua. in the private sector, she was the executive vice president and chief operating officer of the large credit union. she was confirmed as chairman in august 2009. before you begin, please be assured that your read this statement will be part of the record. if you could confine your remarks to 5-8 minutes, that would be greatly appreciated. any other materials that we have received will also be added to the record. you can begin your statement. >> thank you, mr. chairman, for inviting me to appear before this committee. >> i will update you on major developments. as with other sectors of the industry, the credit union industry faced unprecedented threats to stability in 2008 and 2009. when the housing bubble burst and the value of mortgage-backed securities plummeted, several of the largest credit unions were in danger of insolvency. this posed a grave threat to the industry, because corporate credit unions provide needed liquidity for 70 to 100 credit unions. five corporate credit unions held extremely high concentrations of what were once highly rated mortgage-backed securities. when the market for those securities dried up, it froze their liquidity and threaten their operations. if these corporates had not beeenforced to sell their asset, $30 billion in losses would have flowed through the system, causing thousands of consumer credit unions to fail. from the onset of this crisis, ncua worked in consultation with congress, treasury, and the fed to design a comprehensive plan to stabilize, result, and reform the corporate system. on behalf of the board, i sincerely think this committee for the instrumental role you played in creating the temporary corporate credit union stabilization fund in 2009. the stabilization fund permitted ncua to stabilize credit unions an. with concurrence from tim geithner, [unintelligible] this means credit unions will reimburse the funds for an additional seven to $9 billion in the next 10 years. let me emphasize this point. these losses were being paid for entirely by credit unions. throughout fall of 2010, we have taken aggressive actions to remove long-term threats. we can served corporates that were no longer viable. least -- seized control of impaired securities and began an orderly disposition. we securitized cash flows from those impaired securities to raise billions of dollars in liquidity. we created four corporates to -- with no interruption in service to consumers. we finalized a new rule to ensure that remaining corporates operate with much stronger stand -- soundness. our actions made the strategic objectives we set from the beginning of the crisis. we prevented any disruption in service to 7400 consumer credit unions and 90 million consumers. we preserved credit confidence in the credit union system. we resolve the problem at the lowest long-term cost consistent with sound public policy, and we facilitated an orderly transition to a new regulatory regime. even as we managed the corporate resolution, we have been working to protect the safety and soundness of consumer credit unions. despite the challenging economy, america's credit unions remain strong overall. total assets are over $900 billion. net worth is holding steady. delinquencies are showing signs of moderating. charge-offs have inched lower. credit unions have not escape the effects of the economic downturn. millions of credit union members are suffering from falling home values, business failures, and implement, and bankruptcy. some balance sheets reflect their members struggles. this has caused us to reevaluate our research needs and examination procedures. since 2009 kamala we have hired more than 100 examiners. to be effective, the field staff needed to be reinforced by more frequent exams. we have examined credit unions at least annually. by conducting more frequent exams and increasing offsites supervision, we are identifying issues earlier. to this end, ncua enhanced are early warning system to resolve issues before they come material concerns. examiners are reviewing credit union did of sight. when the find them holding high concentrations of fixed-rate mortgages, they follow up with immediate corrective action. we are taking these actions in an effort to save as many credit unions as possible. ncua's increased supervision has contributed to the credit unions' ability to withstand the extraordinary economic shocks over the past two years. our experience demonstrates the value of rigorous regulation, diligent oversight, and a healthy insurance fund. equity in the national credit insurance fund is up to 9.2%, near the high end of its normal operating range trade to improve the tools for surprising and injuring credit unions, we have a package of three technical amendments that would clarify provisions and the stabilization fund. the first amendment would strengthen the ability of ncua to complete [unintelligible] as a result, the troubled credit union has to be liquidated. we are requesting ncua assistance be counted as capital by the surviving credit union as in the past. this would reduce the cost to the insurance fund and provide members of a troubled credit unions with services from healthy credit unions. the second would prevent credit unions from the assessed premiums. the language clarifies the equity ratio of the insurance fund is based on its own and consolidated financial statements. this would eliminate any confusion about whether the insurance fund is required to consolidate statements with the stabilization fund or with credit unions under conservatorship. it would ensure that independent accounting would be consistent with the original congressional intent. the third amendment would allow us the option of repaying expenditures from the stabilization fund without having to borrow from treasury. current statute requires us to borrow from treasury before making assessments. we are requesting a modification to permit us to assess -- assist credit unions when necessary to satisfy the stabilization funds obligation. avoiding the cost of interest payments. with this legislation, america's credit unions will be better positioned to help consumers take advantage of opportunities that are recovering -- a recovering economy will offer. i appreciate this opportunity to come before you and look forward to answering your questions. >> if you have additionaquons, t them for the record and by asking, chairman matz to respond in a timely manner. churn and matz, as you have noted in your testimony timely . as you have noted, losses by some corporate credit unions have led to conservatorship sand also to significant losses to the national credit union insurance fund. one is the extent of the losses to the shared insurance fund in 2010, and how did this compare to previous years? also, to what extent do the losses result from corporate [unintelligible] >> the losses to the -- that have occurred in the corporate sector have been separated from the shared insurance fund and those are reflected in the stabilization funds. the losses to the fund this year, is $250 million. it is not far off from what we had last year. we realized the losses from the credit unions. we expec the losses to total $50 billion. credit unions have paid in about $7 billion of that through the was in the corporate and through assessments that totaled $1.30 billion. over the next 10 years, credit unions will be assessed between $7,000,000,000.410061593 dollars. >> what new steps is ncua taking to ensure that credit unions do not accumulate a concentration of high risk [unintelligible] ? >> in terms of corporates were there was a problem, i should indicate that when we passed the previous corporate ruling, i voted against the rule. it did not contain limits on concentration risks. the board approved a new rule which brings limits on concentration limits by sector, satisfy that issue going forward. as far as consumer credit unions, we are currently working on a proposal that will probably address concentration risks in natural credit unions. we have put out guidance to credit unions and to examiners dealing with that issue. >> what will be the ultimate cost to federally insured credit unions [unintelligible] >> the ultimate cost is between $7,000,000,000.410061593 dollars over 10 years. >> you indicate in your written testimony that ncua has shortened the examination cycle from 12 months to the previous 18 month cycle in order to stay ahead of developing problems at credit unions. as -- has the agency taken any other steps to detect problems in the credit unions in a rapid or effective manner? >> excuse me. yes. we have hired 100 additional examiners in the past two years and are intending to hire 61 more examiners this year. in addition to doing the annual exams and federally targeted credit unions, we are going to be examining all state credit unions over $250 million every year. we have also enhanced our red flag alert system. reviewing thener's called reports of credit unions, and those are the reports that require all financial data for credit unions. if they see any aberration, a sharp increase in delinquencies or some other red flag that catches their right, they will not wait for the next exam. there will go in and address the problem. -- they will go in and address the problem. i learned there were some credit unions that were repeatedly being cited for the same infraction. the most benign section is a document of resolution. there were getting the same document of resolution over and over again and stopped last year at this time. our examiners were given guidance and told that the credit union gets one shot at addressing a document of resolution. they're going back within 90 or 120 days. they will escalate the administrative action. the we're working very diligently to address problems as early as possible and to keep costs to the system as low as possible. >> the october ncua inspector general report said that credit union management actions greatly contributed to the 10 largest credit union failures. specifically, there were significant actions that management was either unwilling or unable to effectively manage or mitigate. that exposed these credit unions to significant amounts of risk. the ig identified several shortcomings related to ncua efforts. deficiencies in quality control and examination procedures. had problems been identified sooner, the losses could have been stopped or mitigated. do you think this assessment is accurate? >> i do. >> second, what is the ncua doing to address management and risk management within the credit unions and efficiency and examination? >> i would like to point out that the ig provides material loss reviews on an institution that incurs losses of more than $10 million. to put in perspective, over the. that was studied, there were 10 such institutions out of 7500 credit unions. i wanted to put that into perspective. it is a small number of credit unions that caused material losses. we are working closely to address those issues. i wanted to point out that the 10 credit unions are federally insured. only four of them are federally charted. the others are state-chartered. their primary supervisor is the state supervisor. i wanted to make that distinction. the ig pointed out the management overall in the credit union like strategic thinking. there was fraud in several instances. as far as the examiner supervision, they felt we should be improving our examination and regs as related to concentration risks, in terms of third-party vendors, our quality-control reviews, our examination of new business strategies, and we should step but administration actions when documents of resolution have been issued. we have begun to address all these issues, as i indicated before. we have put guidance on concentration risks and are working on a new reg to address that issue. we do not have authority to examine third-party vendors, as all the other agencies have. we work with the credit unions to get the data we need. if we find a problem or suspect areas, we can only request that credit union stop doing business with that third party vendor. we do not have control over the third party vendor. we are working to improve our quality control reviews. those are reviews we do of examinations to make sure they're being done properly and they have sufficient supporting documentation. staff has been working on reviewing all the national standards, and that should be in effect relatively soon. again, the ig commented and we believe that our annual exams will help catch any problems that develop with new lines of business. we are pleased we have such a good relationship with the ig. >> thank you. i try not to replicate plight just want to read into the record part of the report, and it said, and i am quoting ork moreexaminers acted more aggressively in their supervision actions over theseve critical issues, but looming fety a and soundness concerns on inere present early on and nearly every field institution could have been identified sooner, and the eventual losses to the national credit unions could have been stopped or mitigated. i will ask you again. do you agree with that assessment? you indicated you did. that is important. what steps specifically have you taken? it has been over year. what steps have you taken to identify the problems will be corrected? we will not go down this road again. perhaps will never visit the taxpayer, so to speak. >> the biggest change we have made is going from an 18 month xm cycle to an annual exam cycle. we get into the credit union every 12 months and can catch problems earlier. that is the single biggest change we have made. not allowing credit unions to receive and repeat the administrative sanctions. complying with administrative sanctions is not optional. they get one shot to comply and if they do not within 90 or 120 days, we take more aggressive action. those actions in and of themselves will go a long way to preventing any of these problems. in addition, we are in the process of overhauling our quality control review process that should be done soon. that will make sure that the actions have the same standards for verifying the accuracy. we will be putting out a new reg on credit unions. >> aren't they getting more into commercial loans and small business loans and so forth? that is the trend? >> there are more credit unions making business loans than there were several years ago. >> is that dangerous to you? from your perspective? and many of the banks have gotten in trouble with lack of supervision and lack of control and quality control and so forth. >> all lending is risky. >> we know that. >> from your perspective, to protect that fund. >> i do -- think it is more important how they manage the risk. business lending is an extremely important service to credit unions to offer their members. the average credit union business loan is about $250,000 which is a small loan. those are loans to people who do not have access to capital from other institutions. it might be to open a car repair shop or a small boutique. it is an important service they provide. it needs to be done carefully. >> scarlotta these loans you make to small businesses, are they what we would call covered loans? do you do that with part of your capital? use of these loans, or what do you do? >> some of them are sold. some are not. >> what percentage kenya fresh that for the record? >> i can. ? you talked about the assessment as part of the plan to resolve the corporate credit union debacle. you intend to impose assessments on credit unions to pay for the losses. you expect to suffer on $50 billion in troubled mortgage- backed assets. you stated the national credit union administration expects a libby, approximately $8 billion in assessment which is a good bit of money. what impact will these assessments have on credit unions? can they still be viable? >> yes. the credit union industry is well capitalized. they have capital and that is under 10%. i do feel that there are some credit unions -- no doubt the a burden.s are the corporate stabilization fund -- we appreciate your support. it allowed us to spread out the costs to the credit unions. it will affect the roa of some credit unions. we feel because of the significant capital, credit unions have, there will be able to meet those assessments. >> your insurance fund, what is the value of it today? >> it is about $800 billion. >> you have $800 billion in hand. that would be a lot more money than the fdic ever had. >> $8 billion. >> that $8 billion in shares how many -- the value of your accounts today. the first of december. >> the assets are bad. $800 million. >> it insures the credit, the integrity of $800 billion. you think that is adequate? >> i do. >> especially in today's world? >> i do. >> ok. is that $8 billion shrinking or growing? or are they remaining constant? >> it has been constant. >> ok. my last area, and i appreciate the chairman's indulgence. the national credit union regulationsion government governing credit unions rely heavily on the use of credit ratings. specifically, the regulations allow corporate credit unions to invest in securities rated aaa or aa by credit rating agencies. we know now the credit ratings were deeply flawed on mortgage- backed securities. the dodd-frank act requires agencies to review and modify regulations to review and remove any reference to a requirement of reliance on credit ratings and to substitute a standard of credit worthiness. what steps are you and your administration taking to ensure that credit unions do their own due diligence, so to speak. when evaluating investments to make them creditworthy rather than investment based on the opinion or the reading of an agency which we now is flawed? >> when we voted on the role on september 24, it had been put out for comment and finalized before it was consistent with when the act passed. the language in the corporate rule says the credit unions need to get ratings from multiple agencies and -- >> say that again? you are going to get ratings from the agencies that are flawed? >> we are modifying that role. >> are you going to do your own due diligence? >> we do not have the proposed rule out yet. >> a you thinking about doing that? are you thinking about doing that? looking at financial institutions that have weathered the recent debacle. they did their own due diligence, they are viable, no bailout. you -- it is important to you to do your own due diligence. that is my message. that was a message of this legislation. do you disagree? >> i do not disagree. we are in the process of drafting a revision. >> do you have or will you have the personnel in frustration to evaluate the credit worthiness of your investment? you have been -- a lot of people have been relying on the credit ,ating agencies, moody's, s&p fitch. we know the history of that. are you going to have the proper people to do that? this is important. that you have personnel that can do this in lieu of outsourcing bid to somewhere we know is a dead-end. >> it means, i do not have an answer to your question. >> will you let us know in committee? we want the credit unions to remain viable and strong and not ever come up here for problems. >> i appreciate that. we will get back to you on that. >> thank you. s of problem credit unions similar tt the fdic in their watchlist? and if so, how many of these institutions are on your list?s >> we do have a list list of crt unions we watched. i am guessing there are institutions -- 50 institutions on the list. we have 7500 institutions we insure. >> is there any geographical concentration or business model concentration that is more prone on this list? >> credit unions that are located in the states that are most distressed. florida, california, arizona, and nevada. they have been hit the worst. >> let me ask a question that parallels some of the comments made by the chairman and ranking member. in your testimony, you indicate there is a growing level of member business loans that are delinquent. they are a primary or secondary contributing factor. the first question, are you concerned with this increasing number of business loan delinquencies? >> i am concerned but it is a relatively low number. >> would be your view of these proposed legislative actions? i support that. >> given the indication there are increasing, not as yet decisive, but increasing delinquencies? >> i believe it is a small number of credit unions. there is 2200 credit unions that make member business loans and there are 270 that fall into the category where they are troubled. the business lending is the reason for their being there. it is a manageable number. we do not like to have credit unions in that category, period. we feel that business lending, done properly, is really an important tool for credit unions to have at their disposal to serve their members. also, in terms of the legislation, if they get listed, we would anticipate coming through with rigor is regulations. it is not an opening of the flood gates. it would have to demonstrate their ability to make low level of loans. once they demonstrate that, we would increase it by a small amount and keep working with them, supervising them and let them gradually increase to a higher level. >> do have a notion of the number of credit unions that have reached their limit? is this a situation where a huge majority of the credit unions have no extra capacity? is this a few members or concentrated in a few areas? >> it is a small number. that are at their cap. >> that have reached their cap. is there any area of the country where this has reached or is this disbursed somewhat -- dispersed some randomly? >> i will get back to you on that. >> there's another aspect want to explore. the only regulator subject that does not have the authority to examine vendors. now with the increasing role of management systems, computer systems that are provided to vendors, and concerns about money laundering, i do not have to tell you about the concerns. are you concerned this lack of authority affects your ability to fully implement your statutory responsibilities? >> absolutely. >> you would like to have that authority in place? >> i think we could do a better job if we had that authority. >> i think we will get the same answer. are there instances where you have seen significant problems at credit unions causing you to step in and because of the contracts and other arrangements, that you might have been upset about or could take no effective steps until the institution became insolvent? >> yes. >> would that apply to the corporate credit unions as well? >> correct. >> thank you. >> thank you. let me get a little perspective. the institutions that went into conservatorship, their problem was real-estate lending, would that be the case? >> the corporate credit unions? >> yes. >> it wasn't overconcentration of mortgage-backed securities. >> it was real estate related? >> yes. >> when you look at the other issues that you were talking about, the commercial lending, you said that was a relatively small number of credit unions out there that were dealing with that. let me ask your opinion on something. would you describe that as something that normally you would go through in a recession, that is what you are saying? are you saying something bigger and greater and more problematic than that description? >> with the business lending? >> yes. >> it might be -- it is probably somewhat larger, higher than it would ordinarily have been. some of the loans were collateralized by real estate. >> yes. and again, we get back to that problem everyone has dealt with. the ranking member read into the record and ig report that basically said, if i could summarize it. if there have been better oversight kamala of these problems would not have occurred. you agreed with that assessment. >> yes. >> i'm going to offer an observation that if the system, whether it is banks or credit unions, whenever, if there had been better oversight, we would have avoided a lot of these problems. do you kind of agree with that? >> b.i.t. was addressing these 10 credit unions. i agreed with that in terms of the 10 credit unions. i think in terms of the consumer credit unions, i think we have done an adequate job. no one could have foreseen the significant drop in the value of the real-estate and the havoc that has created. certainly in terms of those, we could have done a better job. >> as i talked to small businesses that i interface with, we have had small business round tables and a host of efforts to be attuned to challenges they're facing, one of the things i hear and i am sure every member is hearing it. that is that credit is still very tough for a small business. i was just in a small business over thanksgiving. that was the message, i can i get credit. i see your efforts and i do not disagree with them. you are trying to make sure that your fund is stable. i think you are trying to do those things to rebuild from what was a fairly disastrous situation. it does occur to me that as we pulled that capital into whatever fund or tried to minimize risk by requiring margin and so forth, that capital is not available to be lent. does that appear problematic to you? >> we encourage credit unions that are interested in making business loans to make sure they have commercial lending staff that can do solid underwriting. we also are concerned that credit unions reserve for losses adequately. that does protect the share insurance fund. if it could prevent losses, it also prevents additional assessments, ultimately. we do make sure that credit unions are adequately allowing for potential losses. >> as we should. that is -- that describes what small businesses are struggling with. they are struggling to find somebody who will be their lender. because the system quickly became risk adverse. would you agree? >> credit unions have always been conservative and perhaps they are being more conservative now. i do believe that credit unions are still making business loans. i think business lending might have gone up in the last quarter. of course, there are only 2200 credit unions making business loans. it is not a lot of capital out there. in the communities they serve, they make an important difference to the small businesses. >> just to wrap up in this vein. just for my education and may be other members would also be interested. i would like to see what ever charts or analysis you have available of what happened over the last two or three years, relative to lending. again, that would be good information just in terms of trying to work with small businesses who are continuing to describe this problem of getting access to capital. g> are you iereste .. general or small business lending? >> whatever you provide will be helpful. >> credit union lending has grown over the lot -- past few years, despite the downturn, expect for their most recent quarter were it has leveled off. that is not specific to business lending. >> i would be interested in business lending if those numbers can be extracted from the hole. >> we will get that for you. >> thank you. >> i would like to thank you for testifying. to accommodate the senators, we -- senator burr and senator conference on terrorism and national security discusses all qaeda. >> now part of a forum on u.s. security on terrorism. we will hear from georgetown foreign-policy professor bruce hoffman followed by a panel on al qaeda. this forum was hosted by the jamestown foundation and national security think-tank. it is an hour, 45 minutes. >> i think we are found a ready get started. it is a great pleasure that everyone is here again for our fourth annual terrorism conference. this has become an annual thing for the jamestown foundation and we are just excited everyone is here today. we have a full program ahead of us and we have a lot of exciting discussions and -- in store for the day and we are going to give you a whole, kind of a glimpse of many regions of the world. we felt that it is always very appropriate to begin each conference with kind of a strategic overview of of the state of al qaeda and i think that's there is probably no one better in washington to do that than roos hoffman. my name is glenn howard, and we will have an exciting program today. usually we have one keynote speaker. we are lucky we have two keynote speakers today and we have all the way from afghanistan -- so we are a busy doing a transition here with the conference and so he is getting ready for his presentation at noon, and then he will be followed by the former director of cia general hayden at 4:15. is going to be great time and we are happy that everyone is here, and we are going to be videotaping this event arts of it will be available after the conference. i think first off we need -- mad bruce hoffman needs no introduction. he will be speaking on al qaeda strategy. i think the most important about bruce is he has a new forthcoming book called anonymous soldiers, the jewish underground, the british army and the rise of israel which is a history of political science at palestine between 1917 and 1947 and it is going be published in 2012 i alfred knopf so we will look forward to this book but bruce is also, you know many of you have probably read his book inside terrorism which remains one of the standard books today on understanding terrorism and so on that note, i would like to go ahead and introduce bruce hoffman to you and also note that he is also a member of the jamestown board, so bruce. [applause] >> thank you, glenn for the very kind introduction. welcome to everyone who is here today. i promised glenn i would only speak for 20 minutes so i'm going to move rather quickly. let me they'll begin by saying you know i have been studying terrorism literally for 34 years since i went to graduate school in 1976 and i have to say really one of the neglected areas in this field both in academe and also in government research and analysis is an understanding of what a terrorist organization or a terrorist movement strategy is. i think too often we all tend to focus too much on the individual tactics or targets of terrorist attacks rather than stepping back and trying to understand what is the strategy, what is the broader plan that animates and motivates, that enables a terrorist group quite simply to survive and in that case in this respect what we can see is that al qaeda is surviving. if i had been invited to years ago to give the same presentation to this audience i would have shown a map for example of an al qaeda network or an al qaeda universe that had about eight separate entities or eight separate networks are theaters of operation throughout the world. one al qaeda and the far east would be the real success story, the one area where al qaeda has really faltered but i think remarkably over the past 12 years, while the rest of the world is undergoing a very depressing and melancholy process of financial and economic retrenchment, declining budgets, the shrinking of personnel, nonetheless what we have seen is that al qaeda movement that astonishes -- astonishingly has been able to expand its network by more than 50% for eight entity since 2008 to 11 today. of course two of them have been prominently in the news for the past year. al shabaab in somalia and al qaeda in the arabian peninsula based out of yemen. and in fact, the current director of central intelligence agency has said that these two entities have become as threatening if not more threatening than al qaeda central, so that alone i think is evidence of the viability of the al qaeda message and the resonance it continues to have throughout the world. fleecy expansion is well with al qaeda returning to the sudan establishing at least an embryonic operation in khartoum and then even more astonishingly one has to say al qaeda has put into place a very small miniscule perhaps, but nonetheless viable means of. routing and radicalizing individuals, american citizens and american residents in this country. that was rather bold i have to say to put up there on the slide al qaeda in the usa as one of these networks but i feel on fairly solid ground because when general petraeus was in washington last april and gave a public address at the woodrow wilson center he had his own slide that he called the star slide that had the al qaeda network throughout the world and general petraeus had a few usa on it so general petraeus says that i feel i'm on firm ground in including it as well. the point is what we see today is all qaeda has created a transnational, and networks transnational movement. al qaeda is no longer a single entity in one place to be destroyed but rather what we see of many al qaeda's. each of them with different capabilities, different resources and also each of them presenting very different and often very unique challenges to the particular countries in which they are situated and the governments that they are against. so what this means is at a time when we are enmeshed in tremendous economic retrenchment is that any hope for a one-size-fits-all strategy to counter al qaeda really is inappropriate given the different strengths and the capabilities of these other al qaeda's throughout the world. how has so cut it shaped the. even though it is under immense pressure not least because of the drug program in pakistan and also i don't want to paint a picture of a resurgent al qaeda orbit al qaeda that one might argue it's as powerful as it was on 9/11. is completely incorrect. in fact the current al qaeda want to emphasize is just a shadow of its former self but what what we see as a shadow that is demonstrated remarkably formidable ability to adjust and adapt to even the most consequential countermeasures directed against it and to survive and i would argue a movement like al qaeda that is under the intense pressure, it has been in recent years, can only survive if in fact it is embraced the strategy in my view that strategy is six critical components. first and quite simply is the strategy of all the insurgents throughout history to wage war of attrition in essence, to exhaust one's adversaries and in this respect verse and foremost what al qaeda attempts to do today and also link urges its allies and associates throughout the world to do is to overwhelm, distract and exhaust its adversaries and there are two dimensions to the strategy. one that is economic. al qaeda has never claimed that it would defeat the united states militarily. they are smart enough in fact to know they can never defeat the united states on the battlefield. rather, their strategy is to wear us down. and also the forethought to spend more money on domestic security and prolong our overseas military commitments to the greatest extent possible. so in other words during the cold war adversaries and the soviet union, we could have takeda khrushchev visiting the united nations taking off his shoe and dramatically banging it on the table and threatening to bury us. that is not al qaeda strategy. al qaeda acts accident is repeatedly stated in its propaganda in the last significant public appearance on october 31, 2004 before the presidential election. they intend to bankrupt us. i'm not saying there is necessarily any firm anchor between reality and their strategy but all terrorists live in a fantasy world. they all believe their own propaganda. they have to otherwise how could they sustain themselves? but in this case al qaeda finds that this message which had i would argue dubious credibility, dubious resonance when they first tried it out in the summer of 2002 when the economy was growing great guns than when our allen's of payment deficit was not what it was today when her gdp was much longer no one paid attention to it. however today as divorced as it may be from reality, al qaeda repeatedly per in ariely claims, takes responsibility for the economic travails of the united states and the west is suffering and promises its followers that if they are just patient, if they just stay with the struggle, eventually they will topple the united states much as the mujahedin toppled, defeated the red army, toppled topple toppled the soviet union and destroyed communism in the 1980s. again, the propaganda doesn't have to be through to be believed. it just has to be believed and this is a message today that al qaeda, the message of al qaeda today that has greater resonance than ever. secondly there is an operational dimension i would argue where al qaeda seeks to flood already overstressed intelligence agencies, information inundated intelligence agencies and law-enforcement departments with noise, with low-level threats from lone wolves or self radicalized individuals. another was the low-hanging fruit of terrorism that has to consume the attention of the authorities but nonetheless what i think al qaeda's goal is a low-cost manner to engage in widespread radicalization and come encourage self-radicalization, flood the system with this noise in hopes of distracting us. in hopes of fixating us on these low-level threats so a more serious al qaeda threat can sneak under the radar and deliver what they hope will be a devastating to us at least psychologically. second, al qaeda seeks to create fishers of divisions. this is one of the reasons that southern afghanistan, al qaeda's allies have concentrated on the tax on the united states's closest allies in isaf and the canadian contingent, the british contingent, the french italians and dutch as well. they believe the strategy is succeeding. why? because just last summer the dutch parliament decided to pull out the dutch contingent from the peacekeeping force precipitated the collapse and fall of the government that was then in and power of the netherlands and they see their ability to focus on our allies is not only succeeding but is gradually not only isolating the united states at imposing even more burden on the united states in terms of military personnel, deployed overseas and financial spending. third, al qaeda if anything has so it's been as opportunistic as it is instrumental seeking to take advantage of opportunities in failed or failing states or in other states where they have close allies and supporters and sympathizers to establish a foothold or gain a toehold. here we see al qaeda deliberately supporting and encouraging local campaigns of subversion and the destabilization in arenas it describes in his key or it regards as key operational theaters and this is afghanistan, pakistan, yemen and somalia. fourth, al qaeda works behind the scenes. al qaeda deliberately does not put an arab face on its support to any of these entities or indeed in its on its presence in these countries. al qaeda one could argue has learned its lessons from the 1990s when it was front and center in sudan when it was prominent in afghanistan and impact when it became the controlling force arguably behind the taliban. today it is very different. the al qaeda does not have that strength and it doesn't have the numbers but nonetheless al qaeda operatives played a key force multiplying rolled in strengthening or posting up the capabilities of its allies and associates elsewhere. just as we and our allies embed officers and ncos with host nation forces to train them up and strengthen their command capabilities to provide them with additional training and intelligence and so on, that is exactly what al qaeda does. but interestingly i'll qaeda's focus in improving the capabilities of its allies and associates isn't just restricted to kinetics. they play a very extremely important non-kinetic role in improving information operations and psychological operations, the propaganda capabilities of its allies and associates and al shabaab and somalia i think is the perfect case in point that demonstrates both of these but as i said this is across the board. on the one hand we know a senior al qaeda commander indicted in u.s. federal court for his role in the 1998 coming up u.s. embassy in nairobi subsequently went on to play a command role in the 2003 attack on to israeli targets in kenya was in somalia training not only members of the al shabaab militia but also many of the young somali americans who left this country who radicalized and recruited in minnesota and departed to be trained in somalia where it was training among other things suicide terrorist tactics. in fact it was a somali american had committed the first known terrorist attack by a u.s. citizen already now over two years ago in october of 2008. so it was that important kinetic role but at the same time al qaeda was advising and helping al shabaab to develop its information operations and we see this in the appearance two years ago of the faith of abraham. al shabaab's on line magazine, swats jihad and so on. and they see this replicated in pakistan as well as the pakistani taliban, afghanistan as well as the afghan taliban. adversaries who 10 years ago we dismissed as technophobes or technological luddites now have multiple on line magazines, multiple web sites and one has to say too very slick pr operations that in some cases trump our own efforts in those respects. fifth, al qaeda continues to seek to obtain the access to citizens of enemy countries who possess quote"mack clean passports or what the media describes as clean skins. they are invaluable in two respects. first because they can navigate within those societies that they have lived and worked in so can provide strategic intelligence and planning and secondly because they have no prior experience in no prior background in terrorism or sometimes in any form of lawlessness. they too can more easily state in a few radar and avoid detection. this is why such a tremendous emphasis is placed by al qaeda on the recruitment of conference. their passports air the birth name, not necessarily the name they have chosen when they have converted and we can see in recent years how this focus has shifted from europe to the united states as well. they have included trained operatives like nazi bullets ozzie, key sleeper agents like david headley who changed his mind -- name from gillani motivated recruits like a somali americans are just described and faisal shahzad the times square palmer and then the panoply of lone wolf said hangers on like nidal hasan and four ex-convicts implicated in the bronx doubtless i would say the individual arrested yesterday in maryland plotting an attack against the military facilities. these are the self-selected self radicalized individuals that have been motivated, inspired and animated by al qaeda propaganda to engage in violence themselves in hopes of furthering al qaeda's cause if you who are not part of al qaeda's command and control apparatus. and finally, we see as a just described al qaeda existing and surviving because it has always had -- in opportunistic. this is a movement that asides been able to take advantage of opportunities simply by continuing to monitor, identify and exploit gaps in our defense. this has been one of the keys to al qaeda's success. we tend to look at al qaeda's media arm for its output mission, dissemination of propaganda. from its conception 22 years agy important input capability. strategic intelligence of its allies and to give you two brief examples, we know for a fact that al qaeda has downloaded the web sites of every major think-tank in the united states and in some cases multiple times and especially those that have particular focuses or interest in terrorism and homeland security. secondly we know for a fact that al qaeda regularly monitors congressional testimony and hearings especially those hearings by the homeland security committees in the senate and house, the armed services committee, judiciary committee and so on, obviously the select committee on terrorism meets in open session. they monitor the testimony and of course for them it is a matter from heaven. e. of the heads of departments sitting on a panel often subjected to withering questioning, scrutiny by congressman or senators. they are asked to explain their mission. their assessment of how successful they have been in their mission and their metrics of success, how sufficient their budgets are, what their plans are and so on. this is all information that al qaeda gathers to facilitate its operations. so what we can see is that al qaeda arguably is achieving each of its strategic objectives and again the fundamental -- throughout history of all terrorist insurgent groups is to avoid losing, and that i think is what al qaeda believes it is doing. it may not be winning but it is also not losing. it still exists and eventually they believe time is on their side in that they will be triumphant. they believe that they are engaged in a divinely ordained struggle that they can't lose and also they are very convinced about the power of their own historical narrative. again, doesn't necessarily have to be true or anchor to reality. just has to be believed by their followers and their narrative as i mentioned briefly before is that they believe that they successfully defeated then one of the world's two superpowers, the red army in afghanistan and they themselves precipitated the collapse of the soviet union and the demise of communism and they argue the secret was because of the week soviet economy at the time that they forced into bankruptcy and it is their belief that the united states, west is poised on the same economic precipice of collapse that the force and ardor of the jihadi's one-out push the united states and the west over the edge. so in conclusion let me wrap up. i think if 9/11 taught us anything it is that al qaeda and also its allies and associates are most dangerous when they have a sanctuary or a safe haven and this as we see al qaeda has in many places now. accordingly the highest priority for us must be to concentrate our attention on al qaeda as a networked mobile phenomena. not as we have done too often in the war on terrorism as one enemy in one place at one time whether it was in afghanistan during operation enduring freedom, whether it was in iraq during operation iraqi freedom or more recently just in afghanistan and pakistan. this requires continued operations in both those countries, exactly the places where al qaeda began to collapse in 2001 but is now patently is if not regrouped at least survived, but also we need to be more effective in expansion to failed and failing states and stopping al qaeda before it gains a foothold in these places. this focus will also require recognizing that al qaeda cannot be defeated by military means alone. rather, success will require a dual strategy, systematically destroyed weakening capabilities that is continuing to kill and capture al qaeda leaders but also doing what we have proven ourselves not terribly able to do in the past, breaking the cycle of terrorist recruitment that sustains the movement and allows it to repeatedly regenerate. so how do we then managed the jihadi thread? firstly we have two of course continue to kill and capture al qaeda leaders. secondly we have to do much better at watering down the al qaeda brand and better countering the radicalization and recruitment by communicating more effectively to the core demographic from which al qaeda draws its strength. we need to be -- i'll a look at the one click example. the voice of america and the united states dedicates over 90% of its budget to traditional communications, newspaper radio and television. nothing wrong with that but that only reaches elites. and that reaches people my age in their 50s who are only in the deployment world who takes its daily newspaper in its physical form yet only 6% of the budget is dedicated to the internet. there are more than 7000 terrorists on insurgent internet sites to repeatedly communicate to exactly the core demographic of terrorist movement. young people who don't read newspapers and don't want television news and don't listen to radio but get all their information from the internet yet we persist in our effort in not targeting this very important demographic. we also have to be more effective in assisting and abetting efforts to isolate al qaeda intellectually and theologically and here i think we have a history of missed opportunities. one key opportunity to give you a quick example is to harness the power of the victims of terrorism throughout the world and especially muslim victims of terrorism. i know of no government agencies anywhere that are doing any kind of organized and systematic racist. in fact my knowledge a young woman from washington d.c. in her mid-30s who tragically lost her mother on september 11 to herself created a film nominated for an oscar in the name of that not only puts the victim's perspective of terrorism front and center using victims from jordan, indonesia and other countries, but also uses these victims to confront radical clerics on camera, to confront radicalized recruiters and thereby to show up, demonstrate their ideology and their clarion call to battle. yes we have to continue to put pressure on al qaeda finances but the front page of "the new york times" show the other day and fortunately we are supporting many of the people to support terrorist groups and i think tom friedman was exactly right in his op-ed that we have to break our dependency on overseas oil. finally we have to develop more expansive but tailored local initiatives in concert with hope nations -- host nations to destroy the al qaeda entities that have taken root in yemen, somalia and elsewhere. and finally we have to recognize that only by destroying the organization's leadership, which i think we are doing an effective job of doing, but unfortunately that is only one dimension are one side of the coin. what we have to do with equal capacity, with similar resources and with similar priorities is also disrupt the continued resonance of al qaeda's message. only by doing both of those things will we be triumphant against this enemy. thank you very much. [applause] >> thank you very much for his. we are now going to move to the next panel and the panels will come up and i encourage you during a coffee break if you have questions for bruce to try to grab him and talk to him for that excellent presentation and we will try to have all of this available to you later after the congress and -- conference in the form of a write up. we ask the panelists to please come up. [inaudible conversations] >> good morning and a second welcome. my name is michael ryan and i am an associate of jamestown. i joined jamestown after both retiring from the federal government after longer and retiring from another think-tano work on projects unhindered and work with an organization that is not a political bias or point of view but looks at deep analysis to try to portray some of the basic albums that confront us on security and otherwise. i think this panel today emphasizes that deep knowledge of all the panelists in their own way have that and i think the most important thing is to get right to them. the first of course is known probably to most if not all of you, general el haq from pakistan has a very distinguished and long career in the pakistani military, rising through many many time i could take up all his time talking about all of his accomplishments, his awards and many things, but basically working with president musharraf as the chairman of the joint chiefs of staff and being very much involved in the policies that are most important to us today as with regards to pakistan and pakistan security. i have seen general el haq and talk to general el haq this morning and he says he is happy now that he is not handling policy and he can speak from the heart and speak frankly and he looks forward to your questions. so i'm going to give them that opportunity and challenge you when you do ask questions, to ask a question please do not do what i'm doing now in making a speech. and also, because general el haq was kind enough to fit a sin in an opportunity he had this morning in a schedule, he has an appointment he has to make right afterward so i'm going to break with tradition and i'm going to have to jentleson make his presentation and then we will break for questions at that point and the general is going to have to leave. so i will reintroduce them. thank you very much. general el haq. >> this is indeed a privilege to have an opportunity to share my thoughts at this distinguished form. and i speak on two points. first, i will briefly talk about the situation in pakistan and the challenges that we face as well as how we proceed with the relationship between al qaeda and the taliban. as you are aware, pakistan has been confronted with overlapping crises extended over a long period of time, located at the crossroads of south, central, asia and the persian gulf middle east. middle east. it has been severely impacted by the continuing strife in afghanistan and the presidents of foreign forces there. it is unrelenting and may i add magnifying hegemonic aspirations of india and the unresolved status of kashmir. as well as the strategic objectives of world powers, superpowers in our part of the world. the effective this adversarial impairment has created a complex security situation with both external and internal dimensions of existential proportions. the situation is further accentuated by pakistan's unstable political system, although we have transferred its democracy and we have -- it has been welcome. and fortunately it hasn't been able to provide a stable political or expectations rose on governance or a demonstrated capacity to manage the serious challenges facing pakistan. as you are well aware, pakistan has been a victim as well as it has been in the front lines against the scourge of terrorism over the last nine years, pakistan has bombed the main front of al qaeda affiliated terrorism. besides terrorists in public places and places of worship, it has caused immense suffering and heavy loss of human life. our national leadership, security forces and intelligence services have been repeatedly targeted to undermine our resolve and the targeting has not only been of them individually but their families as well. already, the number of casualties suffered has succeeded 10 times the number that were caused on on the day of 9/11. of these, over 10,000 or military casualties including 2700 fatalities. even the most unfairly maligned isi, which i had the honor after the events of 9/11, suffered almost 350 casualties per, twice as any as at mumbai and more than the cia would have suffered in its entire history. therefore, terrorism may be an issue of vital concern for the world it is a life and death issue for us in pakistan. let me assure you that no matter how unacknowledged it may be, it may have been by the international community, our grievous sufferings have not undermined a resolve of the courageous and resilient people and armed forces of pakistan. extremism and terrorism is a complicated phenomenon of and warrants a holistic approach. pakistan has been implementing a multipronged strategy to eliminate terrorism and deny the use of military, political and developmental measures. dialogue, development and deterrence. within this overarching framework, pakistan security forces have followed a strategy which may be more familiar, almost 160,000 troops have been employed to implement the military prong of the strategy. well clear prongs of the strategy have been successfully achieved in south waziristan and other parts of fata and they k. p. k. words have been apparent in the -- this leaves the potential for relapse of the process and the clear areas, a risk which pakistan and the world at large can ill afford. pakistan's counterterrorism strategy with serious capacity issues. there is a need for adopting a unified state approach rather than -- in approach encompassing short and long-term objectives and strategy. a national counterterrorism authority has been formulated but has not yet been fully functional. political cleavages, adverse effects of the drone attacks which i feel are severely straining political consensus on our counterism strategy. capacity of police and other law enforcement agencies have been clearly highlighted. moreover, there has been a serious lack of capacity to train the terrorists financial and logistic support. and finally, there hasn't been adequate focus on the ideological aspect of extremism and terrorism both internationally and in pakistan and in my view, a center of gravity of terrorism and extremism resides in its ideology rather than its leadership. although the leadership is being targeted to drone attacks, unfortunately work on developing an alternate narrative to defeat the ideology of hate has not been very prominent. now i shall briefly dilate on the relationship between al qaeda and the taliban. this is a fundamental question with strategic connotations for several reasons. firstly, because it was a perceived allegiance of the taliban to al qaeda before 9/11 and mullah amar's refusal that ostensibly led to the invasion of afghanistan. secondly, as the united states and nato readjusted its strategies in accordance with the prevailing realities curtails its objectives and focuses on seeking solutions, is essential to have a more incisive determination of the enemy of the text and nature of al qaeda, taliban is vital in this context. and thirdly, this is a critical question for us in the region particularly in pakistan. al qaeda is an -- phenomena within the international agenda which has had no hesitation in targeting the state of pakistan. there has been extensive media coverage and we just heard dr. hoffman's talk on it and the analogies of the exact nature of the relationship between al qaeda and taliban. both studies in my view have provided comprehensive details of the affinities and differences in the worldview, ideology and traditional interpretation of the koran, social and ethnic composition, operational and approach to combat as well as the dynamics of leadership personalities. all thanks to the current debate on the u.s. strategy on pakistan and afghanistan and global terrorism extremism will find a trove of references to extend their particular specific arguments. so i shall not delve into the details which you may address if you have any questions and will only submit some salience based on discussion. first, despite distinct differences of ethnic and cultural backgrounds and political ideological agenda, al qaeda did find a base in afghanistan and was not given up at the taliban in the wake of 9/11. however, there are now more and more voices highlighting redemptions between mullah amar and osama bin laden at that time and war could then averted and the lyrical solutions may have been possible. secondly, a common existential threat and the comradeship of combat over the last nine years have enhanced trust, enter dependability and of course the fact al qaeda continues to recognize mullah omar as the commander of the faithful. it is a clear manifestation of that. whether this sort of integration or this sort of close relationship over the last nine years will lead to a new generation of taliban with a more international agenda is not clear so far due to diversity in the ranks of the taliban. on the other hand, despite these profound experiences, there has been no clear integration or amalgamation of the two distinctly retaining their identities and there are reports of continuing rift and tensions. we keep hearing the al qaeda linkage. fees in itself are indicative that there is no consensus on the issue amongst the taliban. moreover, the taliban have jealously safeguarded their exclusivity of the right to governance and al qaeda on the other hand continues to have entirely a nonregional hierarchy despite operating in afghanistan and pakistan. you will not see an afghani or pakistani face amongst them. whether it is at the local level or continues to remain an arab phenomena, does not accept local integration, that is something for you to discuss. the debate on whether a qaeda and the taliban can be separated in my view is invariably conducted in the context of military centric counterinsurgency strategies. it is quite unrealistic, and i may say naïveté to think that the two can be divided as long as there are hostilities on the way. only a credible, political track that offers realistic prospects of these and that ensures the participation of the core taliban leadership will put the taliban al qaeda nexus -- in the face of decreasing rival alternative options, that may well become a necessity. i thank you. [applause] >> yes it is life. i am going to call for questions in a moment. i wanted to take the privilege of asking the first two questions together. and they are definitely related. the first is the general question that gets at repressor hoffman's presentation this morning and that is do you have a personal view over the years of a consistent strategy for pakistan that al qaeda has that is separate from its international agenda? and second they report that came out, i read it on six december, that al qaeda representatives have been saying that they are planning for a summertime offensive in swat and they are doing training now and they want to tie down the army in pakistan. i think you have further reports. >> i think those are very excellent questions. please sir, dr. hoffman permit me to disagree on one aspect. i remember hearing this room i had spoken on the site couple of years back, two or three years back and we had been seeing this since 2001. and i will be frank here. i took over the -- on the day of the bombing in afghanistan started and i don't have any intelligence background. normally at the leadership level you don't require that. and i heard the term al qaeda and what it actually meant after 9/11, and yes, it was fair but i guess it was more in the realm of intelligence operatives discussing it. and right there in 2001, i remember telling my counterparts in the united states and elsewhere that the way we have started projecting al qaeda and the way we have started describing objectives and capabilities and structures to which it is not a multinational franchise in every country now but it will be a self-fulfilling prophecy because we are projecting it that way and that is exactly what has happened over the last nine years. if you look back in 2001, you didn't have an al qaeda in arab peninsula and you didn't have it in so many other places but we really predicted it and started making afghanistan treaties and started saying this is operations and mrs. so-and-so, they started picking up. we monitored what we were saying and particularly over them and started structuring themselves in organizing themselves accordingly and today we have an al qaeda which we conceived it to be in 2001. my view is that it is far more diffuse. it has been far more disorganized in many ways, yes. a common linkage has been ideology and that is what i mentioned last night, that death is where the center of gravity were sides and that is why all the successes that we have had against picking up al qaeda leadership and most were picked up by the isi and we still continue to malign them. almost every one of them was picked up by the isi. unfortunately we still have question marks raised on the isi. now, despite using all of their leadership, continues to thrive because we haven't done anything about the ideology. the alternate narrative has not happened. when it comes to pakistan, again, i feel on the one hand we are saying that al qaeda is down to less than 100 in afghanistan and a couple hundred and pakistan and yes we ascribe to them, capabilities and objectives and missions which are very well organized, military structure and they failed to work out for itself. now i see there have been activities in our part of the world, specifically in pakistan but to say that al qaeda is a clear-cut agent, i think it is of a little more diffused than that. with regards to your information on swat valley, because i just heard it. i didn't know it. i did mention that we have the pakistani armed forces have had tremendous success in pakistan particularly swat is a stunning example of successful military operation in a difficult environment in one's own country has done a good job of securing the area. but, they are holding it very well but there are lapses because of resource constraints and because our civilian machinery hasn't been able to come up to the expectation and the base with which they should've taken over now by the military and stabilized so the possibility of a lapse is fair but i think it would be very exaggerated to think that al qaeda is going to resurrect, you know, the insurgency in swat. i don't think that is possible. >> if we could open up the floor for questions and again i would ask you to pose a question or kill anyone have a question at this time? yes, sir. >> i am sorry, the microphone is coming. >> general el haq. >> can you give your name please? >> my name is -- is that good enough? al qaeda is not able to, or does not want to connect with the locals. there is then an external force. >> the extra regional force. not even a force. when i say an extra regional phenomenon, imagine they have been in our part of the world for the last maybe 20 years and yet, through their hierarchy, their own air of us from egypt and from south arabia and more tommy a gander should have been some punjabis and flashdance and tajiks and those guys who have been there. the past chance should have been there. they are not there. >> thank you for clarifying this if i may ask you, if they are an external phenomenon and they are not putting roots down in different regions, then two things are possible that they will not eat as widespread and easy to single out and also it will be easier to extinguish them and why it has not been possible? >> yes, i will answer that question for you. is there another part of the question? [inaudible] >> you now, first of all i am speaking out of conviction on this, that the center of gravity is their ideology and they find enormous attraction anywhere in the muslim world. unfortunately, the policies of the west have been the best recruiting force for them to find routes, to find support in any part of the muslim world. you must understand that. secondly, they have been intimately involved in the jihad starting from 1979 and many of them, are most of them, you know have been debtors from their jihad said they quickly settled down and very quickly mix around. many of them have even married in part -- that part of the world. they have pashtun wives or pakistani wives and children and families are there so they have been able to integrate that way with the local populace. there is a certain arrogance and a certain reflection of the difference in what we would call a set. they are not prepared to accept anybody from afghanistan or pakistan to really go into that hierarchy. it continues to be dominated or exclusively hindered by arabs. this is what i wanted to explain. so, given this integration, given this experience that they have gained in their part of the world over the last 20 years, it is not easy to segregate them and target them. >> we have time for i think one more question. yes, sir. wait for the microphone please, sir. and if you could identify yourself. >> just another professor of the subject. general el haq i wonder if you could enlighten us as to your outlook for lashkar gah and its various offshoots and reincarnations. i know it is a little bit off-topic for you but given that al qaeda in your estimation may not constitute the existential threat in pakistan give it its insularity, its cultural isolation in that small numbers, and as you've indicated the upper hand that the military seems to be gaining, what about lashkar gah's. >> i will have to first of all of course, i don't like being ascribe certain words and i said that al qaeda is not -- i said they never hesitated. that is one thing. it is a threat. al qaeda may not have that sort of capability to pose an existential threat. when you say lashkar gah mycenae mean lashkar-e-taiba. because there are so many lashkar gah's and let me tell you the lashkar gah's which are more viciously hitting us is not the lashkar gah you are referring to. it is unfortunate that in places lashkar-e-taiba which has been more than one incident, the mumbai incident so when it hits the headlines in jamestown, and it is coming from somewhere else. unfortunately, but let me tell you the lashkar-e-taiba, it has been in existence right from the afghan jihad days. i don't know, the names have been going up and down, and they have switched into the peshmerga you freedom struggle after that. they were banned by the government of pakistan in 2001. .. .. i'm telling you this because the total lack of awareness of the situation and are part of the world. it has been involved in only one incident, while we were told we are supporting for not taking any action against them. this is a very valid question. a country like pakistan, which i told you have suffered 30,000 casualties in the last 10 years. we have been going through a 9/11 every year, more than that. we have to prioritize. we have 160,000 troops deployed in counterterrorism and 170,000. given the silo of pakistan of the 600,000, that means those of us from a military background would know that it is a system of relief and rotation. now when there's a system of relief and rotation with 160,000 aircon 160,000 have come out as 160,000 preparing to move in and that takes care of the entire armed forces of pakistan. sometimes we're asked to do more of a look at the casualty list. allelic at our commitment commitment of forces and we also look at her successes, we certainly aren't amused. so with that sort of environment, with that sort of a commitment, we have to prioritize. and we don't mind. i'll be very blunt. you have to prioritize in the united states, despite the fact we have far more resources. you have al qaeda with gender, which was hitting a man, you would prioritize with al qaeda in the presentation before me. why? because you're prioritizing. he prioritize. you will first tackle the one who is hitting you and not the one who's hitting iran. give us every two prioritize and pakistan also. we must prioritize first to tackle those who are getting us and then go for those who are not getting this, but are terrorists. that is how we view our terrorist organizations. they are a terrorist organization, but we have to prioritize first given the resources that they. >> thank you very much. appreciate it. [applause] >> our next speaker is muhammad tahir. muhammad tahir as a journalist with over 12 years of experience, symbolic of the kind of person that we like to have talk about in depth, indigenous view of the situation. he served turkish television and if i may say, turkmen is fluent in all the regional languages. and today he's going to talk about the taliban moved north, situation in northern afghan. thank you. >> thank you very much for the kind introduction and we have heard lots of ideas in many definitions about al qaeda. if it is not the situation in afghanistan, it's also very hard understanding complex. everyone has therefore an idea of what the subject in the country will take my opinion as one of them. however, i will try to look at the situation in the light of what it seemed in my recent trip to northern afghanistan, namely konduz province. i am from the region and i have grown up witnessing race with the taliban. and professionally speaking, situated a fantastic organization, i was working for the turkish television in the region and therefore i frequently travel to the regions in afghanistan and different parts in afghanistan. and besides, i have longed for the region and a generalist during the past 12 years i have been to each region, and therefore a claim from time to time but the entire region is my playground. but in recent trip, i choose to travel to konduz province in northern afghanistan because while an south, east and western parts we have the situation in afghanistan. recently it seems things also began to change in northern afghanistan. so by being there and of course konduz is at the center of the situation. so by being there, i have tried to understand how it is in the north. i was there in september partially to correct the election process in afghanistan. but at this time, i could only make the konduz province in northern afghanistan and extremely difficult circumstances. because when i shared my idea to konduz my colleagues told me it was the 16th idea especially because of the situation in the region. since air traffic was already suspended between konduz and kabul, i had to make this trip by road to kabul and the konduz highway come which also connects by the way to kabul. while my colleagues were in kabul also told me that it's very common that the taliban and stops cars. they may search, so if it would have been to my car, the following steps would take me away. in a few days -- after a few days of torture, they put me in front of the camera and president of the cia agent because of my assimilation with the organization pleading guilty of some thing, then at least, you know, put this recording on youtube, which as i understand recently the television is good using as a method to pressure against the western countries. so while my colleagues refuse to join me in this trip, i decided to go ahead with a guy who would take me in his own car. due to a dramatically changed situation, he said to make me there, he would need to hide me and play some tricks to make it happen. and part of the plan was for we were past between kabul and again we decided to go in the second day, which is the period of high mobilization in an attempt by afghanistan. so other than not, he also said that he will take his family in the same car because he understood that when there is a female inside the car, the taliban will unlikely stop them. he put me in the back to hide. so we met to conduce in this way. just a little compress them before i go into detail. i was there last year. on that time i travel to the region, not only can do this pakistan. i sat down with the people, each with uncovered and drink green tea also and she northern afghanistan. nobody stopped me, nobody said anything. but at this time, i was not enjoying the freedom in the region. and then while my colleagues and kabul were also riding, saying this is on the way i see everything but the security. i saw people with a similar appearance like the taliban, openly working with their ak-47s on konduz highway. i passed through checkpoints along the way. then i saw freshly attacked oil tankers throughout way. so again, it's an area in many of you might remember were highly highlighted with the issue we have had in konduz province. this was -- this is involving some of kabul's taliban who accuse them and brought them into their own justice system and they found them guilty of loving each other. and so, they put them to death. so when a country like afghanistan can run attacks it's a few probably to organize by highly mobile. because, you know, it takes a little planning, a little operation. but when you look at the case of the stoning in that region, it gives you an idea how comfortable the taliban came in because first this issue was reported to the taliban. then, they convened court and later passed verdict. some of the convicts had been scheduled to execution and executed to their plan at the public ceremony, which is attended by about 200 people. and this is an area which afghan gosen claims. so it shows how the taliban becomes confident in the region. besides the afghan forces there, we have 5000 who are representing in the north. so when i said i went to the north to be able to understand, this is what i mean because if we consider the taliban a militant and also cash to majority group, if we take the ethnic affiliation might have helped them to expand themselves. and how they settle down in the north. this is the big question. there are questions in the north, but in a very little minor. they are not in a position to help the taliban because of the possible consequences they might face in the future. that means that the taliban do not have the passion to play in afghanistan. despite that in recent months are increasingly expanding their presence in the north time a billion konduz province. therefore i focused my micro study to this province, where government authority last four districts -- seven districts in the taliban. in konduz city itself became a very dangerous place to live today. while pashun is not there, people of the north are not isolated us in the south. so what are the elements of the taliban? mine were completely than the ethnic idea. they were somewhat logical and purely practical, which were hoping taliban and expand. for example come the lack of security was on those elements. because it was the lack of security, which led to the stoning of what happened in konduz. it was the lack of security which made traveling to konduz but dangerous. and it was lack of efficient security when they conduce into taliban hands because on the taliban began chewing their muscle in the district, there were not enough security forces. so when the taliban gathered five people in any region, the next thing they do is they send them to put the police station on file and that is the signal which also shows who is the lord of the town. in the next thing that happens is they shut down the score there. as i mentioned earlier that prisons of militants has always been the case in konduz province, based on stories i had on this trip, the situation hasn't changed very much in the north. because they are still the driving force behind the taliban are. in addition for a period of taliban, now today crossing borders with tajikistan and afghanistan. so among those militants are continuing to be tajiks today, people from southern russia on the middle eastern, pakistanis, some turkish i heard, some westerners out there still and some african nations. the problem with this type of militants are that they are not in ordinary taliban or ordinary insurgents because first of all they have nowhere to go as they were driven out from other parts of the country or from waziristan and pakistan. you know, at the moment they are seeking any place to hide. so lack or cap of security in northern afghanistan will move them. so at the moment, they are northern afghanistan. so again, one other problem with these guys are as i mentioned that they don't have -- they don't have any other place to go. not the same time, they are not even welcomed by their families, so they fight till death. so while germans are ineffective in the region, afghan forces are weak. feel police officers present in the region are nowhere to make the determination when it comes to fighting. so that's how they are expanding taliban and expanding their muscle in the region. the other issue that i came across, which is hoping in a different way to the taliban as the corruption among government officials in afghanistan. i don't know whether it's as popular in other parts of afghanistan, but whenever he talked about the rush in northern afghanistan, people might imagine one joke which involves president karzai. they say it's told like this that when few foreign delegates went to president karzai and cities got to stop this corruption. and he said, okay, i will do that, but how much are you ready to pay for me to do that? i accept this, but again when it goes to the grassroots level, its impact is disastrous. in case of other issues in konduz, it's called a monkey. this is ononkey. this is one district not different from anyone and afghanistan. so in afghanistan u.s. have this used between plants, between neighbors. this dispute has always been there. so whenever you have the kind of shift of power, these are reemerged because they never took them back. so after the taliban was a security guard, again, we had the situation of the north. but there'll some police guys there representing government. but in that case, even they played canada negative role there because they were putting fire on these disputes. a flashing parties would keep going to their favor. so you know, it is something that people would like to -- people would like to start. and who that someone at the moment is the taliban. so the corruption of either aspect of the top of the taliban, but the economists are unaffected, which is helping the taliban because i've been in the north and konduz have been there several times, but i don't see anything as changing there. people do not feel a comically change to the government. they are not seen anything change. so this got to have some sense of attachment. when you look at the economists situation of afghanistan as one of the poorest nations on earth come you can understand the importance of the economy, which is not happening at the moment. but while i'm just going to conclude with two remarks here. so in a situation in the article is that i mentioned is in situations that it's not fun to read in an environment where you don't know what the next day is going to bring you. so people have no luxury to think about democracy, human rights or free elections in all these. therefore, it is not a surprise that if some people do not support the taliban, they also do not oppose the taliban. because of the simple fact the given today television provides at least what is most needed, better than government in an area where controls, which is security -- sense of security, since the justice. and having said this, i cannot think the taliban is a better option, of course. but the taliban has to be defeated, which they must be defeated if you want to a stable in afghanistan. but then, what is needed is government which is supported by the international community at the ship performed better than taliban. thank you very much. [applause] >> were going to go directly into my next presentation and have questions at the end of those too. i think our next speaker is also well known to us here. imtiaz gul is in islamabad for research studies, which is your information tells you is focused on the second book, which is al qaeda connection in tribal areas. i hope are going to hear a lot about today and worth waziristan and the new tinderbox. >> good morning. thank you, michael. first my gratitude to the jamestown foundation for having me over here. it's almost difficult to keep the audience engaged, particularly when three speakers of urdu spoken and to bring them out of the slump that they have been listened to for more than an hour. before i launch myself into my presentation, i would like to leave a thought with you. a few months ago i was sitting in islamabad is to swiss ambassadors, former ambassadors. and they had arranged one of the opinions here at the state department in early may 1888 and 1 of the ambassadors at that time -- when was the reporting officer. together with the ambassador and he had just come back from afghanistan to pakistan with some refugee camps in the area to look at the curricula that the afghan children were being taught. so the ambassador octaves intraocular here. you know, i too look at the curricula is very alarming. is american occupants said you know, we are teaching them something with the help of which they will be freshened. so what we are discussing today is the aftermath of what we have embarked upon in the early 1980s, the cia, the isi to gather a sort of a joint project that we watch today on how to get rid of this modern hate. so let me -- this is what i was just talking about. the america versus al qaeda. this is what we are down to. and if you look at those, our tribal areas, fatwa, which is being a very microscopic scrutiny, just because of north waziristan up there on ndebele. and this is something that general petraeus considers also very, very critical to any success in afghanistan. we -- we released a tinderbox today because of the calling of the crusaders of the past, which are being treated as kerry said today. so this is the major question confronting us all today. if you look at how this militants complex has developed a north waziristan, in particular over the last nine years, i'd have to have a qaeda. we don't know whether osama bin laden is alive at all or not, but probably swahili is very much around. we do here is audio messages coming out of this region. now, it is not -- i would say not waziristan alone. it's the back tia region and paktika, which borders south and north waziristan. north waziristan alone is about 5000 square commoners, where is the greater petticoat region is more than 70,000 square kilometers and most of it is inaccessible to the coalition forces as to the afghan forces. but we really have to keep that in mind when we are questioning ourselves as to why the afghan army is not succeeding and why they are not moving against them. if you look at al qaeda, then this is the inspiration, the prime inspiration that comes from this organization. i'm not inspiration before the try quadrille insurgencies, which musharraf is the taliban has with the haqqani network. now, if you look at what is happening there, you would have jihads. there are many organizations that emerged meanwhile. the mujahedin, which used to fight in kashmir. it was very closely ranked. and then you have washed our islam, which is the same strain, but located in the agency. if you look at north waziristan, then you have this constellation of like-minded groups under the haqqani network that is the big led by waziristan, but the real man behind it -- being led by mohammed, was in a de facto peace deal with the pakistani government. then you have a 10 week taliban high k-kilo mehsud is considered to be the current theater. we don't know whether he's in still life. some people believe that he is dead as a result of an attack -- drone attack of january of this year. now come the i name you is also reportedly located there because the former leader was killed in a drone strike a year ago and was apparently the new leader that is leading with magnificence. then, you have flash card be shied away. i'm not going to retreat to the state of denial at the rate he tried to because there are certain realities -- stark realities that we have to live with. i think there's a splintering splintering of lush cargo. i think these are some of the leaders you all be familiar with them. in the center, you see ilias kashmiri. he is the alias behind what i now consider to be leading operations for north waziristan. mullah omar, everybody knows. economists had i just mentioned. he's the deputy who used to be the trainer. he is reportedly also dead as a result of the drum strikes. we are a almost 100 tron strikes this year so far. this is again basically what i just explained. the last point -- the second point, the i.e. meal i just mention and the losses there is the arabs, chechens and also criminal games. what has happened over the years as the collusion between militancy is a crime has also emerged. and this is i think what has kept us destabilized. as well, if you look at the khyber agency or if you look at the other tribal areas, crime or criminal gangs have devised themselves as taliban, as militants and are indulging in criminal activities like abductions for ransom. in the shower, for instance, we have 172 cases of abductions. the police is pursuing. and we presumed that most of these objections, most of the groups are being protected by lush carries on as the hygiene montauban, which you can see on your. now, this is -- i just spoke about pushcart bjp which is splintered into smaller groups. one of course is being led by -- and in baluchistan and in baluchistan and the police have invested to major gangs that belonged to the last cart. probably some of you might have heard about the execution of a former isi operator who the asian tigers basically claimed responsibility for that. this is an organization that was born out of the red mosque corp. in july 2007. that operation, which probably killed about 120 plus people in the mosque in the heart of islamabad gave birth to the force. it was a force that also emerged -- if all its basically revenge on the pakistani army as well as other security apparatus for having killed their people inside the mosque aired it was the 10th of july i guess. now this is just a description of how lashkar-e-taiba has devolved. four or five groups around it. and i think it becomes easier for them because you defuse the command and control structures so they get -- they have a joint common agenda, but they can operate from different pocket. now, i just mentioned this collusion of militants -- militancy and crying. there is one group operating in north waziristan. we have heard there using the army fatigues and they are involved in extortion since smuggling and also an abductions for ransom. this is about a wise chancellor of one of the universities, a relative of the chief minister of the province has been intent to beauty for the past almost at least three months. the university closed down to basically demand his release or recovery, but obviously apparently the government is also helpless. there've been many high-profile abductions and may eventually have to be relieved after payment of huge ransoms. this is one regular source of funding for the militant groups besides smuggling and besides trade -- a legal trade i would say. so some of the pictures leaked the response of the militants to the war on terror that we've seen come the militants have continuously attacked symbols of functional state. they've attacked police, the army. they've attacked shrines. you see on the right to shine that was attacked with several dozen people killed. on the left is the horror, which is the symbol of the unity of the horror. it is basically the sunni saint. they were buried here and thousands of people basically calm. i'm an objective probably was to discourage people from coming there. it's typical al qaeda tactic because they don't like shines. they don't like mausoleums. then we had also on october 5th, 1 big attack outside killing several dozen people. to have been harmed so far basically which are emanating out of north waziristan and south waziristan region by the people who are hiding out there and at least 50 suicide bombings we've seen this year so far. now, i say that the moscow corporation in july 2007 was a game changer because it gave birth to the rossi force. then the palace and emerson 2007 and then boom by 2007 attack. these are the game changer subdivided to the complexities of the security environment in pakistan and afghanistan and i think posing a big challenge to other stakeholders. now, they think bruce was talking about the draft national militants. these are some of the groups which i think share a common narrative, basically comes from outside. and then we have local auxiliaries. i called invention into terrorism. the ambassador called it a force multiplier. i called and the al qaeda accelerates because they are operating on the same ideology. now it's pakistan of what to do, go after the people in north waziristan or all of those who are held up or just wait and allow cancer to spread. there is a big dilemma right now i'm frankly the pakistani authorities because they fear the bloody blowback from the people who have tentacles all across the country. so keeping in view one question as to whether or not some of the people in north waziristan are strategic assets or they are cacti and very deadly creeper, which is an closer graduate and extending its tentacles are opposing an existence threat to pakistan and to the rest of the world. so i think this is a big dilemma right now that pakistan currently faces. the short-term fears versus the long-term strategic social political interest of pakistan i would say she'll have to find middle ground to take on these people, neutralize them and inspire their domain impact in society. thank you very much. [applause] >> i believe we're running a bit late, but we can take questions for a period of about five minutes. so i'd ask you to keep the questions short and you can direct them either to the panel in general or to an individual and start right now. in the back, if you could identify yourselves and wait for the -- wait for the microphone. >> this is a question. i am from pakistan, working here as an attorney. my question is that it is a true that lashkar-e-taiba is a religious group that belongs to the faith of pakistan, where is lashkar-e-taiba, which is basically the group that is working in pashley, but also has international page and a. and how is this adequate lashkar-e-taiba could lashkar-e-taiba is basically under steve's right now. and they are protect unit. >> is that it? teaneck for the question. i think they operated the same tactical and political levels because they share the same ideology, as long as it is any action, any against the united states of america and its allies. they operate, they cooperate and they try to inflict as much casualty, as much knowledge as possible to all those who basically are the collaborators that the united states of america. >> gentleman here. >> i work for the voice of america, but i don't resent voice of america here. i'm originally from qatar in pakistan. my question is we have 100,000 pakistani troops in the intelligence agencies and police in qatar. the guitar is a city of no more than 1 million people. we have this quite sure -- they are obviously controlling the whole taliban movement in pakistan. and they are giving -- i mean, they are the center of taliban afghanistan, in charge of the whole war from condos to herat. in the presence of 100,000 troop plus the intelligence agency -- i mean, they are searching people from house to house, how is it possible that the shura still operate? and after 10 years, not a single member has been caught? >> thank you very much. if this question came from an american or european, i wouldn't be surprised. but i am surprised when it comes from you. i was actually in qatar three days before coming here. i spent three days. i looked around. there are plenty of pakistani american and former officials. the american office of the defense representative has also been functional they are. officially it was announced a few weeks ago here in washington, but it has been functional for quite some time, so it is announced sbi, cia representation in qatar i must say. and the way the issue has been protect that i think is a little mind-boggling. even pakistanis when common pakistanis visit qatar from islamabad and lahore, so common cash tunes going to the desires, they were coming across because they wear the same dress. they were the same turbines. 99% of the people are bearded. the way this is being projected is not correct. yes, afghanistan -- baluchistan at 12 shares about 1300 kilometers of border with afghanistan. there have been cross-border relationships, friendships, businesses, business contacts. that's why people keep coming and going. if you say the taliban leaders are coming to pakistan, coming to qatar, it is quite possible and probably they are coming and going most probably. but if one were to say there is a regular commanded control structure in the presence of the american and a six isi and farmers in the network of intelligence operators, then i think i really have basically questioned the intentions of those questions that there is a command-and-control structure. if khalid sheikh mohammed could have been arrested from behind the general headquarters pakistan army, if others they are could have been arrested pretty close to a police colony, why can't mullah omar and other people be arrested if they are living in qatar? so for me it is a very simple question. yeah? sure. >> i have to thank you. at the last word. thank you very much. think the panelists and thank you well. >> we're going to take a 15 minute break. [applause] before we break, i would like to encourage you, there is a fishbowl outside. we have two tickets or for tickets to the army navy game this weekend. these are club level street ticket. will have your business card in the fishbowl out front and will have a raffle later today to give way to set the ticket to the army navy game. these come if you're interested in these tickets and you really want them, so each person that will wind will get two tickets. so just put it outside him a break and turnabout teen minute. [inaudible conversations] [inaudible conversations] >> with the finance in the last days of the 111th congress, several retiring senators gave their final speeches on the senate floor. we'll hear from kentucky public can, jim bunning, who is then and since 1987. first, democrat byron dorgan was first elected to the house in 1880 and the senate in 1990. this is an hour. >> mr. president, those of us who are living the congress at the end of this year are givenpt the opportunity to make a to farewell speech, but more it's an opportunity to see thank you to a lot of people we owe thankt you to them to colleagues, to senate and on our stats and the people of north dakota in this case it gave me the opportunityr to m serve, it's the opportunity for me to see thank you.r one of my colleagues the otherus day talkeden about the number of people who served in the unitedn states senate at the beginning of our country there've been sid 1918 people who have served in - the united states senate. when i o signed and underlined i was number 1802 and there've hae been 212 senators with whom ie i have served in the years i'veit been in the senate. and i it is hard to get here and it's also hard to leave here. but all of us to leave in theouo senate always continues. and when finally you do leave, e you understand that this is thew morost unique legislative body n the world. 30 year now i arrived here 30 years agoa in congress. day, and that we all show up, the im, first day we feel so important and we believe that the weight g of the world press on our fr shoulders and then we be gettine mail from home. and i have one described a letter that was sort of sent to- me by a schoolteacher early on after i arrived here in her class was to do a project towrin write to dorgan and washington d.c. udents a i paged through the 20 lesher s, fourth-grade students. i'm one of them said, dear mr. dorgan, i know you are. wats i see on television sometimes. does he my dad washes you on television, too. boy does he get bad.o [laughter] and so i knew in the interest of public service, of trying tory. mstisfy all of the very interest in our to country, it is importt to seems to me that we do the as right thing as best we can and is thus we see it. i died from the other shut up a good many of my meetings over the years i think. the didn't introduce himself, but ie most cases the people i represented over these manyks years were people that ordinarye folks, who left their country, raised their families, pay their bills and right thing for her country'sinr future. now i have a lot of really interesting memories from havins served here. twelve years in the u.s. house . and 18 years in the u.s. senate. the first week i came tostoppede washington and the u.s. house, i stopped to see the oldest number of the house, claude pepper. euve read so much about them, ms went to meet them. in walked into his office and his office was like a museum with ai lot of little things than it really interesting things. he had been here for a long, long time. i'd never forgot what i sawthe behind his chair. two photographs.h the first photograph was a right of december 17, 1903, making the first airplane flight signed to congressman claude pepper withgn admiration, or go away. and beneath it a photograph of f neil armstrong, stepping on the surface of the moon, signed to congressman pepper with regards, neil armstrong. he's a liv anything to myself, there is a living america in one lifetimeeo of the person who learned to fight and the person who flew to the moon.progressn think of the unbelievable progress in a lifetime. arning and what is the distance between learning to fly and flying to thet moon?those well, it was was a measure that. will interest some of those those those photographs are only four or five inches apart. it's measured in education, knowledge and unprecedented century.le in ssthis country has been enormously blessed during this period. a hallmark, it seems to me of the century that we just sen completed was self-sacrificing country, common purpose, a sense of community, commitment to country and especially, especially leadership.so in america, leadership has been so important in this governmentl recall self-government. and there's aoh book written by tion o wcola about john adams. and john adams described the question of leadership. he would travel in europe, represented in this new countrys and he would write letters backk to abigail. quest would ask a question, where will the leadership come from for this new country were s startins who will become the leaders? nation? ask, he would again ask, where were the leadership come from? and then he would say, there's o only us. really only us. there's me, there's georgewashms washington. there's than franklin. there's thomas jefferson. and as hamilton, mason and madison,a but there is only us who plaintively say to abigail. in the rearview mirror of history of course, the only usth of some of theum greatest humanb talent probablyly ever assemblea but it is intteresting to me tht every generation has asked the same question that john adams l come from for this country? who will be the leaders? and the answer to that question now is here in this room. it's always been in this room. my colleagues, men and women, tested by the rigors of ariggerf campaign, chosen by citizens of their state to say, you lead. country. now, for all the criticism about this chamber and those who serve in this chamber, for all of our criticism, i say that the most talented men and women with whom i have ever worked by the mend and women of the united state senate, both sides of the sale. they live in glass houses. their mistakes are obvious and painful. they fight, they disagree, then bakery. they dance around issues,lay, bt posture, delay. but always, always there is thag moment, the moment of being part of something big, consequential, importune. the moment took been something bigger than yourself. and at that moment, for all of t us at different times, there is this eacute awareness of why we were sent here and the role of the u.s. senate plays in the kn, depth of this country. you know, sun is often called the most exclusive club in the world. i wonder really if it is so exclusive that someone from a townople of 300 people in a high school senior class of two namel can travel from a desk in that n small school to a desk on the floor of the united states senate. i think it more like a quilt work of all of us americans, of all the experiences in our country that allows someone from a small town with big ideas totb seven this chamber among the desks that were occupied byclay, henry clay, daniel webster, heery truman, lyndon johnson ine so many more in feel like you lf-gov belong.er self-government.a year at now i announced about a year agn that i would not seek reelection after serving your 30 years. the twelve and u.s. house and 18 inm the u.s. senate. senator i am repeatedly asked, as is my, colleague senator dodd insured was leaving a the end ofle thist year, what is your most unwind proud of so many things they've done legislatively, the answer is not legislative. the i've always answered it by saying, well, the first month is was here 30 years ago next month, i stepped into an elevator on the ground floor of the cannon office building of tt the u.s. house ofanged my life. representatives. that step into the elevator changedn my life.th between the ground floor and the fourth floor, i got her name. and that's a pretty significant accomplishment for luther norwegian. our and this year we celebrated our 25th wedding anniversary. so e my life has been so enriched by my wife can and children's thoughts and shelley and brendan and haley, grandchildren and a sin and mason. they served, to. families are committed, to, inte this life of public service, weekends alone. and i am forever grateful to the commitment and sacrifice of myat family. wel and i wanl.t to say a few things about some other people as well. all ofbu us would probably say,v but of ecourse i say with much greater credibility, i have the. finest staff in the united states senate. i've been so enormously blessede i am so proud of all of them. this country and i've been blessed to work with most of may them for many, many years. and then i want to f say to thes floor staff of the united states senate, i come nearest to my colleagues and to get involved in the debate and that has such an unbelievable job.e the over tonime, we believe there still year. they're the ones that turn out the lights. want they refrain from rolling their eyes when they know they want tf during these debates, but boyhem are they professional. and all of us owe them just such a great debt of gratitude. and to my colleagues, i just -- there's nobody in here. i feel like will rogers. nobody in here i don't like. it's a great place with some wit essentially especially senator kent conrad. ig've been friends for 40 yearsf forty years we've been involved in the political sites,or political battles in north dakota. a great senator. and i said last night at a sen reception, the best u.s. senatoe in the united states senate come january.but iuld [laughter] i sort of sad right now.es aat you cannot get in senator makes a great contribution to this country. and congressman pomeroy with whom i served the other team oft north who worked on campaigns 4s dakota and then for 18 yearscons became three members -- the onl. three members of north dakota's congressionalit delegation. and

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