for the education cren potentias for the education credit. as demand for taxpayer services continue to rise, researchers have affected the quality of customer service that the irs was able to provide. in september of 2012, it was reported that an increase in limited resources continue to adversely affect the level of service of the irs with its toll-free telephone lines. continued enforcement remains important more than these executives that are eligible for retirement. within five fiscal years, nearly 70% of all irs executives and nearly one half of the managers are projected to be eligible for retirement. overall, 40% of the irs employees will be retirement eligible within five fiscal years. finally, madam chair, as you requested information on, it includes mitigating risks associated with security over taxpayer data and employees and procurement and the tax gap, and human capital challenges confronting both the irs and in addition to responding to growing number of threats against irs employees, we will continue to put that as a priority. including an efficient use of resources concerning wireless computer services and library use. smart phones and shortcomings with the improper payments and the elimination recovery act and the way that we refer and recognized indications. furthermore, determining that the irs could develop or improve processes that will increase the ability to protect and prevent fraudulent refunds resulting from identity theft. madam chairwoman, ranking member, senator udall, thank you for the opportunity to share my views. i'm happy to address any questions that you may have. >> that is a very content rich presentation. >> gentlemen, thank you for being here. having worked with an inspector general and i have great respect for what you folks do. i enjoyed the meetings with the inspector general, but the oversight was very positive and it challenges the departments to be better. at the first of the year, there is a mandate that goes and placed under the act, basically to say that thou shall have shalt have this, or if you don't, you get penalized. it upheld the validity and said this is a tax and i guess that means the irs is now involved. so let's say that you have thousands or maybe millions of people out there that aren't compliant with the act. taxpayers. i am assuming that the inspector general or the commissioner, the normal rules of collecting a tax apply. is that a safe assumption? >> well, i will start, senator. it includes a $95 tax the collection rules are different and a lighter tax is required with respect to 5000 individuals >> could you withhold this? commissioner? >> i was just going to say th commissioner? >> i was just going to say that i agree with what mr. miller stated. and i think you are alluding to this. it would be in the ability of the irs to withhold a refund from the noncompliant taxpayer, and that is the way they would enforce this penalty. >> that's right, i am not suggesting that this is to start selling houses across america. but if you owe the irs money, one of the ways you have of collecting that is you are on the positive side in terms of your refund for the next year. that can be seized and effect, and applied to the penalty. my assumption is you would have every intention of doing that to taxpayers. they owe the money, you hold the refund. >> i think that the offset rules do apply. it will be a topic of some it will be a topic of some discussion. we will have to take a good hard look at exactly how we do that. we are talking about filing seasons and talking 15 in terms of that decision-making. >> there is always a day of reckoning with the irs. there will be a day where you collect whatever penalty is a vote if they have a refund. >> i would assume with any other provision of law that it will be enforced. >> okay. in terms of the law itself, complicated legislation, the regulation and the pictures of this that has been from ewell dated by folks implementing this law. in terms of the irs. it seems to me that willing or unwilling, you are a major player in how this law works. and you have to determine a bunch of things about taxpayers to see if they qualify for the premium assistance. you have to determine do they have the appropriate policies, should they be penalized. you have businesses out there that maybe choose not to provide insurance that should be providing insurance. they have to be penalized. it just kind of goes on and on and i'm not even mentioning half of it. do your systems today have the information and plays where whatever effective date you are dealing with, you hit the switch and you are ready to go. >> let me walk you through that. divide the world into two pieces. the first piece of the world begins in october of this year when the health exchange includes state and federal partnerships. it includes respect to the exchanges or the federal government. our job with respect to the op tober timeframe is to make sure that the information is available to make a reasonable decision is as to whether that advanced premium credit is available or not. we are not really involved other than providing information. and that has been worked on and i believe that we will be ready. the second piece is are we set up to do the matching and 2015 for the year 2014 when these things come into play. to answer that question is that we are not yet ready for that. we are working on it. part of the budget request goes to that. we are working on that and i have no doubt that we will be ready. but that is how we will build systems and how we will receive exchange with the insurance companies and employers. that is not completely done yet. >> as you are well aware, there are aspects of this in effect. this includes a number of other provisions and the ultimate implementation of this is over a number of years. we have conducted a few reviews of the irs is progress in implementing the laws. it will require approximately 50 changes to the tax code, very complicated in many respects. the irs has a huge responsibility to inform the american taxpayers, taxpayers and businesses and individuals and what have you of the new requirements under the law. thus far, the assessment has been that they have done a sufficient job. but it's just the beginning and there is a lot more that needs to be done. really, the bottom line is with limited resources, whether sequestration or what have you, the irs is going to have to be in enforcement, customer service, we have this huge responsibility. but i always referred refer to the acting commissioner to respond further. >> i will wrap up there. i have used up all my time. that is why i like the inspector general's. they are straight shooters and they don't try to color this. this is a different kind of problem in a difficult one that you have. i can't imagine how you get from point a to point be and i appreciate the candor of your response. thank you. >> madam chair? >> we hear this that is unvarnished and independent. that is why we say it shows the complexity of the affordable care act and in order to implement the affordable care act, we have other things that will derail a policy that is now part of the law. that is what i'm concerned about. we have no averted 39 times to repeal it. i would hope if we go through our regular order, we don't have the appropriations subcommittees to go after it. so mr. miller has a day job and also, one of which is the certainty of his appropriations with the president and also the impact of sequester on implementing not only that, but other laws. i will be clear on the request. the president has requested for the treasury department, $14,177,000,000. in that there is a request for the irs. and that includes 12,861,000,000. is that correct? >> yes. >> then when we enact this, fiscal 13, finally on march 20 evan, with incredible bipartisan support, we would able to pass the continuing funding resolution. that was bad 11,793,000,000, i believe. but sequester is 594 million and then because you are a big agency -- don't we have across-the-board cuts? is that what we are talking about? >> that sounds right. okay, $620 billion coming out of the irs with technological challenges. one is cybersecurity and the other is technological and modernization in ordering you to receive data and do the job we ask you to do. then you have personnel. from what i gather, your personnel is a highly talented one because it requires people with business and accounting and other technical skills. am i correct in that? >> the vast majority of our folks are very professional in dealing with different aspects of it. >> okay, so it's not on the person answering the phone who has to know everything about everything, and turbotax is sometimes not as turbo as we would like it to be. and the people who actually have to do all of this, so how is the morale? very talented businesspeople. i would think that they are highly desirable in the private sector. >> yes, i am quite sure that morale is not what we would like it to be an employee that will not be getting the opportunity that they might have expected. that we have an incredibly highly dedicated workforce and i would like to think they are dedicated to public service. so while morale is not what i would like it to be, we are dedicated we will get the job done. >> okay, suppose you were given so-called flexibility. were you are our to cut, if you have flexibility, will that solve your problem? >> are not quite sure what flexibilities we are talking about, whether it is the integrity cap worn -- i'm not sure what we are speaking of here. >> well, what i am saying is that giving management flexibility as a substitute for money for some. >> i think management flexibility will help, but will only go so far. i think it will get us part of the way but not all of the way. >> okay, a couple of other issues. i am so honored that the irs is headquartered i don't exactly join the dance party on friday night, but i am out there at a worship service or some of the others in our community. the irs employees are apprehensive. they signed up for a government career. they learned that tax code, implemented that tax code, they make sure that if you filed a return, you get it and you get in a timely way and if you call, you get it answered. and by the way, let's go after those crooks in prison that are even trying to make things more complicated or comply with the va mandate. so i think that this is not about research, i think it's about us, and we really need to come to grips with these issues and i know that we want them to have certainty and i am for that. i am for regulatory certainty. i am also for federal employees having certainty. but if they work hard, that they have a job, that they are doing jobs and meeting performance standards, where they are going after fraud or they are doing the job that they should, we should be shaking their hand. so i am pretty firm about this. now, standing up for the little guy, small business and a problem that i have come across. i come from a family of small business. my father was a small neighborhood grocer, when you go to businesses like that, it could be a home-improvement agency, the person who is maybe a florist, they often turn to what they call a funeral service provider in order to meet compliance. they are giving them the money to pay their taxes and they think they are signing up for their taxes to be paid. well, we have a company whose name i will not mention that just disappeared. you know what disappeared? they disappeared and the money that these businesses, like those in others paid and, thinking that they have paid their taxes, it also disappeared. what is now happening is that the irs is coming to them and so they feel that they are going to double pay and then they are getting penalties and fees and so on. some want to talk about this, but i was pretty jazzed when i heard about this situation. businesses, the irs has seen these types of problems before what reforms will you make to deal with this? i want to look at prevention and also make sure that these small businesses don't have to double pay. can you tell me how you see this problem and what you see to correct this problem? >> okay, in general, it is a horrible situation. i have people that don't necessarily know that they have been taken advantage of area and you do have the tax liability unpaid. so in these cases, and we need to get better about this, we need to ensure that there is some way that people have received the notices that we send out. because they are not receiving taxes. we will try to contact people and there are occasions when things happen but that doesn't go to the right place and we need to get better about that. >> not just better, but it has to be solved and i will leave pretty firm about this. they didn't get these notices. the company was supposed to send the money to you. that company gave them the wrong address, so they never got a notice. so it has to be pretty much near-perfect. >> again, i will agree with you that that is a problem that we need to solve. and we will work on not with you as well. >> what resources would you need? is this a lack of why hasn't this been dealt with? is it a lack of resources? >> part of this hits too close to the individual pay. i'm more than willing to talk to you about it. >> years ago, the company sold millions of dollars. this has been one thing that has come about other kinds the market has. >> so are the yellow flashing lights to have dealt with this -- is not important? >> i think all the cases are a little different. i am not as familiar with that individual case. but all of the cases are a little bit different and it does happen. there are times when taxpayers are absolutely unknowingly involved and times when they are a part of this more than not. what i will tell you is that in these cases we will work with the taxpayer to try to leave as much stress and liability as we possibly can with respect to penalties. it is not difficult. with respect interest, it is a little bit more difficult. with taxes it is very difficult. >> right now, does the irs notify taxpayers for these business addresses? >> i don't think so. >> canisius that would constitute the reform? >> it's one of the areas that i agree with you. >> that the irs notify taxpayers >> the one i do not know. >> these go to systemic reform. i know every case is different, but then we would never have one. in the prosecution of these cases, do you seek restitution? >> i would have to defer to the department department of justice. i do believe there is some restitution aspects of it. but i'm not familiar enough that i would have come back in a investigation of these cases, how does that were? >> the irs will investigate, make a recommendation to the department of justice. and they will prosecute. >> i do not disagree with most of what mr. miller stated. but i would elaborate on the following. that we do have some responsibility investigating those types of incidents, especially when it involves third-party preparers. they play an integral role in the overall system of tax administration. you are exactly right, madam, that the irs has to get a closer look and we have done work that has shown many irs employees wear multiple hats. the time sometimes they are answering phone calls for the average taxpayer and sometimes individuals have been victims of tax fraud and that has a little bit more and clarity, as well as for the internal revenue service itself. there are so many aspects and thank you for raising it. it is not limited solely to tax preparers, such as the one that you have talked about earlier in your statement, senator. but also again, individual taxpayers in terms of there is some complicity, as mr. miller alluded to, that people know that they are under investigation for alleged tax impropriety. and they will immediately claim. >> okay, have to stick to the ring. what troubles me about your answers, you are treating this as a cluster of individual cases. and that is a nationwide problem. we are seeing this differently. i see this as a nationwide problem. most of these cable agencies are honest people in small to medium-sized business and must be relied upon in order to meet all rules and requirements they could never learn working all by themselves. but do you see this as a nationwide problem? do you see this as each case is different? >> it is a recurring problem, whether it is a nationwide problem, we would agree with you absolutely that there is systemic ways to solve it. >> i would really like you to take a look at this and truly identify over the last five years in the complaint have you gone like this. so you actually know what you got. i invite frannie datsun knossos and recommendations that you have. and in going through this process. .. let's work on reform. to see some and it's been going on for 10 years. acknowledging that could be both. i'm telling you, i've got a real problem. it's not that i have a problem, only at people who really worked hard. senator udall. >> thank you, madam chair. very good line of questioning and very much of who she have any of those here. as you noted in your comments over for the the irs is critically in part that is good is to the questioning of government. in your testimony, you spoke about identity act and refund fraud. i know these issues and my state, every true constituents claimed by someone who is one identity to cases where refunds are sent directly to another account and the filer numbers these any of it. these problems are prevalent in rural areas, target limited proficiency speakers and native american communities and share more about what the irs is doing his top identity theft and refund fraud in these communities. >> i think were doing a much better job identity theft and that would include rural communities as well. we have quite a few new filters that stuff about return from coming through. we are not where we need to be yet, but a $20 billion, we are so much better than they were. but there's no question about it. the individual would have to authenticate there or they say they are, whether it is through something like that. yes he knows where he lives in the 295 and the return would come in and cut down on the tremendous amount of this word occur through our filters. the second piece is any ticket so much better it happens to the second individual who comes in. the real taxpayer because the person hit the wall and has to fire the paper was with an affidavit insert room what is often five valleys, not just two, but five. that has buried us quite frankly we are digging our way out. what i have 400,000. we are well on their end getting past that we should be stopping the witches very need to be and get the technology to have them prove who they are at that time and let it go through. we are starting to do that now a pilot faces. re/max senator udall. no, sir, i need to excuse myself and i ask you to take over the hearing and go as long as you want as long as miller and george can get and close it out. i want to thank out to you for your participation. we need your advice on an ongoing basis for some difficult challenges around protecting zero. >> thank you, madam chair. >> commissioner miller come my next question is an issue that affects native american communities come in the welfare exception. as you know, the general welfare exception allows indian tribal government to provide social benefit programs to promote general welfare. there have been some incidents where field examiners have not had the proper chain guidance of how it should be applied in native american communities. i understand the irs and i'm pleased you take steps to ensure proper application of the exemption. >> scheuer, senator. in december 2012 it had a draft revenue procedures that he not a whole series of safe harbors under general welfare doctrine with respect to travel payment. covering different areas. we did that after extensive consultation with tribes and we are now adhering to that. the time for comments ends in june and we will then consult again with the tribes and see where we are. so far we've heard it's going rather well. we have a limited number of examinations outside the safe harbors. essentially its management, people are training and airing a much better place to my work on the senator. >> commissioner miller come to some people have a different opinion, but i agree with testimony and i think our federal please are real important resource. the iris is a large diverse technical resource. could you share about education level coming years of service, value they provide the federal government? >> it probably makes sense to follow up with more detailed information but in general reflector community in terms of diversity and a genius of service. if you look at your service, it is fairly flat. generally if you look at zero to five, five to 10, it's roughly the same percentage of our workforce. that becomes a little parmentier dramatic and received on the holes and that's an issue because at some point people would've moved into management. what else is we we are generally reflect to and the communities we of. >> thank you very much. i would ask if any of the subjects i cover it with the commissioner, do you have any comments on this? >> briefly, yes, sender. stimulates the i.d. fraud issue, it is very complicated. it is somewhat perverse some ways because that is who files first gets it entrenched in the overall situation. so it's petty thief bioassay falls tax return, he or she has that damage in the irs processing paying whatever refund is owed to him or her that the added complication is the address is put into the iris system and that is the way the irs communicate with the alleged person is supposed to the actual taxpayer whose subsequent to file the legitimate tax return and then encounters -- i won't say this maze, but unusual system. the irs is making progress, but it's still extraordinarily frustrating for the reasons i stated before that not a single iris employee is assigned to a case permanently is tossed around to various irs employees. the irs contact the term, repeatedly asking for identification of the victim has nice extra airily press treating. for the system itself, ultimately the irs will hopefully resolve for the legitimate taxpayer, but then collect money from the fraudster is so problematic in a search of mr. miller was that they actually go after them. i'm not going to reveal any information that might encourage that behavior, but it's an extraordinarily frustrating system. something definitely needs to be done. it's a vastly growing problem. if not only domestic. it's international in nature and and electronic communications that occurs, technology used, this is a major problem the irs has to address commissary. >> if you want to say a few words on that. >> inspector general care picture is interesting of the system. that may be a reflection of the past and not the president. i'm happy to supply more information for the record that will clarify our process. >> we very much appreciate my thank you post today. if there's no further questions, senator may submit the official hearing by the close of business on friday, may the 10th peer b. request treasury irs responses within 30 days. i understand the subcommittee has been frustrated in the past it's unacceptable delay in receipt of responses from the treasury department. i urge responses via a timely manner this year. the subcommittee stands adjourned. thank you. >> the house oversight hearing on the const.benghazi attack that killed four americans included exchange between elinor holmes norton and acting secretary of state, mark thompson. you can see the entire hearing on linux east and out of work. >> one report i found indicated to believe secretary clinton and ambassador kennedy and according from this report, tried to cut the counterterrorism euro out of the loop as they and other upon administration officials weighed how to respond to a care to rise the benghazi attacks. that the end of that quote. mr. thompson, i'm asking you, is that quarter. it that you believe the counterterrorism bureau was intentionally kept out of the loop for political reasons? >> it is not. i indicated the portion of the counterterrorism bill that response to crises i.e. part of the office was pushed out of that session. the counterterrorism bureau is represented in subsequent meetings after the night of 9/11. >> do you believe your account up for political reasons? >> i do not politicize my job, not him. i served under three presidents starting with president clinton. icier -- it's a mac i was just quoting the quote. the quote is an entirely accurate then. >> correct. >> that's very important that they were not out of the loop for a political reason. this week, this quote caused your former bus in the counterterrorism. the state department speaking now of ambassador in particular quote he said and i'm not quoting him, it has been alleged to state department's counterterrorism bureau was cut out of the discussion and decision-making in the aftermath of the benghazi attacks. i can say with certainty as the former coordinator for counterterrorism is simply untrue. do you agree with ambassador benjamin? >> i agree that counterterrorism is included but is a distinction with respect to the portion of the counterterrorism bureau would be most effect in the aftermath. >> all of this is under ambassador benjamin. he didn't say one portion or the other. although the pair was represented, somehow some portions were not for resentment. how is that? >> s. would have, man. >> the bureau he says is essential participant in the interagency discussion about the longer-term respond to benghazi. at no time does the bureau finalized threadbare coat and carrying out its task. this seems to directly contradict your testimony here today. you say you are good, but somehow the other -- some part of it was not in. >> no other part of the counterterrorism bureau is responsible for responding to a crisis. my office is not involved in the subsequent readings. other members of the officer, very professional people and i'm sure they did their best at those meetings. >> readouts want to get involved in her down the chain of the wind gets consulted, that the ambassador says that if the attack the first question been appalled though is that there is support should be deployed. the question of deployment and decided it when that was to pose the question and decision was a correct one. were you aware superiors were consulted about the decisions not to employ emergency support team? >> you can go ahead and answer that. >> oversold as secretary of management staff is the normal process for deploying the team at the assistant secretary security group, those options are discussed. at that csg come in that is recommended are not recommended to the deputy. it is not a state department function or authority to launch the emergency support team even though we are one part of it. >> the "washington journal" focused on the "smithsonian magazine" article in federal spending for scientific research. this is 45 minutes. >> host: in our last hour or of the "washington journal" part of our spotlight on magazine series this week as the recent addition of "smithsonian magazine." here is the cover. inside is a piece by richard conniff who is joining from new haven, connecticut. the piece is called the body -- "the body eclectic." letter microbes? >> guest: so, microbes or the back area, fungi, viruses do live in everything, but in particular all around her body is in our bodies and they've never known you for what they do or how they affect us except in one way with no day caused his defense that we tend to think of them as the enemy and that's changed. >> host: how many do humans have? what information do they hold? >> guest: well so, people have started to research over the last 10 years and it's startling because it changes their idea of what it means to be human. we have about 10 trillion cells certifiably human cells, but then we have 100 trillion microbial cells. we have 21,000 genes that are human genes, but we have 8 million microbial genes in male have functions. to help us digest food. they tweet the immune system. they affect all kinds of ways of never understood before. >> you call a big science in your article. is that. >> guest: what happened in the late 1990s this research develop is a good thing to elegy that enabled them to identify every microbe for the first time. before that, they only identify the ones that happen to be happy in a petri dish and suddenly they could list them all. your looking at thousands of species in the body all at the same time. all of them with multiple genes and trying to make sense of act and how they interact with each other so the data that comes out is overwhelming. it's hard to deal with. each individual is different. that's a lot to digest. >> host: who was doing the research? what groups? >> guest: to think that is made at a hot topic at the moment is five years ago the national institutes of health became something called the human maker biome project and this was a collaboration at 80 universities and institutions around the country. about 400 scientists in a budget of $173 million. the idea was to study 300 volunteers to look at different parts of their bodies and find out but microbes lived there. they looked at that basic areas. the nose, the scan, the guts, the urogenital area. have i missed one? the skin. and they created a baseline of what is normal and human at the same time they also let that the connections to human health and disease. >> host: you read also that goes beyond universities and this venture capitalists getting involved via serial companies. why? >> guest: so, the idea to research and that the government was hoping to do, what the nih was hoping to do was bring the role of the maker biome to general public and the pharmaceutical industry and venture capitalists that they would take this a step further and application in everyday human medicine. >> host: for what purpose? what are they trying to achieve? >> guest: well so, once you understand what these microbes to come you can tweet them in all kinds of ways and get them to do things you want them to do or prevent them from doing other things you don't want them to do. even if you just understand what they are coming you can use them at diagnosis. a standard problem now is that mom will take her kid to the doctor for some sort of skin rash and the doctor will prescribe an antibiotic. the doctor basically has to guess which one will work enemy take two or three different antibiotics to get to the right one. meanwhile, the kiddie suffering and annoyed and lack of compliance because they don't trust antibiotics. if you identify what microbes cause a problem from the start, the dog or can get the right antibiotic at the right time and get results much more quickly. >> host: interesting fact. majority of the cells in your body are not human at other microbial species. >> guest: yeah, that is definitely true. there's about 10,000 microbial species in the human body. they are weirdly distributed. i think about 140 different pcs with behind the ear. why? i don't know. 440 inside the elbow. the majority live in the human gut and are therefore the immune system, but altogether they weigh about his match -- microbes altogether way as much the human brain, about three pounds. >> host: used in the article this return around 150 years of medical thinking. why is that? >> guest: the germ theory has dominated medical thinking since the 1880s and not the idea pathogens make us sick and therefore all microbes are the enemy and we need to be answered but uriel and given this idea of the world and now we realize that they are the enemy. they are essential allies and we have to learn to live in balance with them in control throughout, but also encourage. >> host: what is the role of antibiotics? >> guest: it's not just antibiotics. it's the antibacterial things, putting on the hand motion every tablet what down the hallway to kill microbes. one of the most interesting things is an understanding note antibiotics. receive antibiotics for the last 60 years since world war ii. you understand because they destabilize from incredibly destructive diseases. when i was a kid, every mom worried about lead poisoning. people don't think about lead poisoning anymore. it's like it never happened. but the problem is we've become so dependent on antibiotics and tend to think of them as a remedy for everything we use all the time and the effective schema to the district is. the average kid in a developing country gets 10 to 20 courses of antibiotics by the time they reach 18. we used tank -- your kid was sick and screaming. the nano that might be bad for society over the long-term because it would encourage antibiotic resistance. you want to have your kid feel good tonight to get at what we didn't realize the state could harm now because what happens is they destroyed the bodies microbial life can be don't just bounce back. when you get this 10 or 20 doses over the course of a childhood come you may seriously impair the maker biome and the result can be affect in our health and always he didn't suspect before. >> host: according to your article, the most recent research has found infants exposed to animatics in the first six months or 22% buy likely to be overweight as top players and the lack of normal gut microbes early might disturb central nervous systems in rodents may do the same for humans than starving children lack the right digestive microorganisms to fix non-attrition. >> guest: yes, that is a study done in africa and published this year. the twins. these kids live in the same household and raise exactly the same diet. one kid had a disease, which is malnutrition. they said they restored it diet you give kids who are starting indicated that it has -- he would do fine but then go back to being malnourished. if you manipulate the micro biome and they have a much better chance of recovering from non-attrition. >> host: or attack it microbe research with richard conniff. his piece in the "smithsonian magazine," "the body eclectic." europe first. >> caller: good morning. >> host: good morning, charlie, go ahead. >> caller: i was curious to how does the body pickup its microbes? if we are dead by her dna, do we carry dna to make these microbes? >> guest: so we picked the microbes up from the world around us right from the start. one of the most interesting studies pasadena cesarean earths. 30% of kids are born a cesarean. kids born that way have a completely different maker biome in the early stages of life. they picked up microbes from the birth canal and turn out to be healthier because the rich micro biome in life is essential to things including development of the immune system, development of the brain. there possibly other medical conditions. >> host: lack of certain microbe germs is associated with allergies and probably a autoimmune diseases as well. >> guest: that's right. in the research by the nih, they didn't say x causes y. difficult to say the lack of a particular microbe causes a condition, but they found lots of correlation with children lacking certain micro biome search of manhood through certain great a check discovery about earth and butterflies and monkeys and that's the thing. i was hearing about the micro biome at the time realized i was describing this whole world of astonishing discovery and yet i was completely ignoring this other microbial world, this invisible world. as a parent of discovering the last 10 years; for quite a while that is as astonishing as discovering arose in the night is century. at finding new worlds inside of us. it's amazing that complex and changes of who we are. it's great stuff. >> host: richard conniff has a blog, strange behaviors.com for those interested about his writing. bowhead on twitter as well at@ richard conniff. helping help me with name of your town, patricia. >> guest: ticonderoga. >> host: go ahead. >> caller: hi, richard. it is comforting to me as well to understand various complexities that we have complexities of human beans. i am not an advocate of taking antibiotics and a perp realty. i've never taken any over my life. a few here and there. this morning, there is a report on the news about the leaf of lower back pain through the use of a 100 day course of antibiotics. i do not know what rabin is and it is an interesting figure. there reflects the complexity of the engineering we have to do with these microbes. i wonder if you could comment on that. >> host: i haven't seen this daddy, so i can't comment on that. what is promising in the maker biome is the idea about eight to go into antibiotics and they will understand how to encourage beneficial bacteria to bring about a balance between the good and bad bacteria in the québec. will often be able to control and minimize the effect of the bad ones and that will be much more successful unless destructive way of handling. an epidemic condition now called quest to dreamt of for so is a gut microbe. when you give a person repeated doses of antibiotics, it can wipe out the normal microbial life of the cut. this one to start the back road starts to take over and it causes release of the, unpleasant conditions. chronic and they try to cheat it with other antibiotics and that often makes it worse. there is a treatment now this sounds incredibly disgusting and yet it seems to work and that is transplant. they take donor material from a relative and injected into the persons: period and tried to picture to say that and that seems to work with antibiotics no longer do. >> host: i read autism may be lack of good god abn hairiest and innocuous results. >> guest: not think anybody knows that. mom shouldn't feel guilty about having taken antibiotics. we have to wait a long time before people get conclusive results about what role microbes may play in autism. it's way too soon. >> host: brings up a point in the article, promising too much too soon. >> guest: yeah, researchers at university of california university of california davis have issues the make or buy in the word. they're so excited about the incredible implications that they promise all kinds of things. microbes prevent stroke quirkier autism are doing a number of things. all we had in our correlations. we have interesting connections between changes in the micro biome in a person's health. that doesn't mean x causes y. getting to that point takes a lot of work and you get to the point we cannot take that scientific work can apply to make people healthier is a big step is going to take a while. >> host: what about the probiotic industry? he set aside 22% from last year. what is said and what are they promising? >> guest: probiotics contain buyback area. people have taken probiotics pretty much forever. they are generally harmless. people also tend now to think because the micro biome is good and you want to have a rich diverse community that taken probiotics to be the answer to everything. they are not typically carefully regulated at the government. it's not clear what effect it's going to have any idea as one of the scientists put it come in the adsm a cure-all probably means it's a cure for nothing. putting too much confidence in probiotics can be dangerous. on the other hand, as people understand how microbes work and develop beneficial microbes targeted to specific conditions at some point in the future will have probiotics you apply to specific medical conditions can make a real difference. we are not there yet. >> host: we are talking to richard conniff, contributor to train nine. mr. conniff writes about a blog. he's written books as well. most recent, the species weaker, hero schools in that pursuit of life on earth as well as domain with iran is the eating time. another recent book by eric s. this morning, richard conniff. gene in ohio treats and mathematical person i'm outraged mps refuse to do your culture before giving a antibiotics. >> caller: hi, thank you for taking my call. my question is this. over the years we've seen a large rise in corporate farming and then we see the sustainable growth, organic movement for the soils are filled with microbes and filled with life quite frankly. so my question is, is this going to lead to a more sustainable life for as the sustainable farming? >> guest: let's talk about the corporate site affirming. they are one of the areas where antibiotics are useless heavily and indiscriminately. we know that 80% of antibiotics in the country go back to medical purposes, not to human medical purposes, the food animals that we eat and they promote growth, but more particularly enable animals to stay healthy and much more crowded conditions. the result is we have much cheaper meet then we would otherwise be the result is we have antibiotic resistant criteria i'm ultimately buy in the supermarket. in addition to medical overuse, we are coming to recognize the agricultural overuse is extremely disturbed to and that's going to change pretty quickly. consumers are react so strongly against a meat that is tainted with antibiotic resistant bacteria. >> host: what about microbes we got from other people? he talked about it earlier, organic from what we eat? >> guest: well, so it depends how you cook the food. but there's antibiotic resistant salmonella and e. coli and back area -- bacteria among the supermarket meat you get the standard industrial production methods. you have to cook it thoroughly so you don't feel consequences of that. even handling the meat inhabited around the kitchen means to pick up antibiotic resistant bacteria in the. the dispute did. instead of passing on capacity to aspirin the way we do, they can swap site decided with microbes around them. this one up antibiotic resistance within our bodies and the consequences of that are frightening to think about. one of the reasons it is such a problem is they have bacteria that resists treatment here but just can't do it them. you had standard tract infections often untreatable or difficult to treat because they have multiple antibiotic resistance. deadly e. coli infections kill it, doesn't people worldwide. you have a crisis in this country that the number is 63,000 people a year die as a result of antibiotic resistant infections in this country. those are pretty big consequences from those giddiness we've had about antibiotics over the last 60 years. >> host: richard conniff, "the body eclectic." we're talking about microbes in your house. republican caller, go ahead. >> host: i have a 21 -month-old child and i wonder if there's any type of testing they can currently be done on this? >> guest: i don't think they are doing much testing for purpose of treating individual patients at this point. the one thing people say to me repeatedly is what your kid play in the dirt. let your kid be a kid. open the windows, go out i. don't try to lucky kid up in a sanitized world because the consequences could be more serious than you imagine. >> host: sydney -- sonya and howard, ohio, republican caller. go ahead. >> caller: good morning. i think it's great the subject pitcher going on is very important. i had a question regarding microbes inside the body and the resolve to kay. i was wondering if the cells that are alive and regenerating, do they feed off of that in any way? the main question is in the blood, the white blood cells distorted -- i can't think of the word and i sound like an. they destroy the bad cells coming in now, does that make you sick? i wonder if any rate they feed off of that to regenerate themselves that way like our body does? >> host: and on the line. i will have richard respond. >> guest: it seems to me arrest team whether they back kerry feed off each other all the time within the body and whether that helps control but that bacteria. honestly i don't know that. one.yours control when they do transplants come in the interview spec area to occupy the spaces within the body. i'm not a great person to answer the question. >> host: did the pre-penicillin compounds have the same negative effects on good microbes? >> guest: and on all that is first antibiotics came in 1935 and they were the only thing available until 1944 and i don't golf they produce the same resistance. as soon as penicillin came in, by 1945 years the antibiotic resistant because of heavy use of the antibiotic. it was being heavily used because it has such great effects. but in world war ii to save tens of thousands of soldiers lives because antibiotics prevented these horrible infections from one so people didn't daydream, they didn't die. so is a great game. you can understand why it is a great thing to use antibiotics everywhere. people discuss into the atmosphere to control microbes, to control enemies. we realize they are also allies. >> democratic holler. >> caller: i was calling because of my daughter this time, her appendix burst. she was treated with 12 days of triple antibiotics and then discharge, who returned 10 days later because of an infection. i often wonder because it took her a long time to recover her strength and she often does still to this day seemed tired, more tired than my other daughter who never went through that. i often wondered if there's any long-term effect? >> guest: i don't know that. i know it's incredibly debilitating when it happened sometimes feel, but i don't know how it affects over the long-term. >> host: router brand says the percentage of bacteria can be cultured and wanted locations for health does this have? >> guest: is a pretty small percentage that could survive in a peachtree day should be studied. when they started to do the dna sequencing is it the rest of the things going on, it opened it at a big new world emerges finding out what the effects are on our bodies. >> host: we have about 10 minutes left here. what is next in this research? but will we hear about? >> guest: first of all, the nih has completed the initial program. $172 million on a pilot program with the idea of the microbiota to the attention of the pharmaceutical industry, medical community and they really did or not to everybody's attention said the research has now taken off. the nih will continue with a $15 million program over the next three years and they'll be looking not something specific microbes can do and how to manipulate them. the start to see that filtering and everyday lives. you stated that his office is. we have drug companies researching microbial treatment for diabetes, obesity, allergies. those things come on the market within maybe five years. you also have an addition to that $15 million that nih is now spent name on the human microbiota project, other parts of the institute of health regard to ramp up research and they spend $180 million a year. so that's going to bear fruit in show at in all kinds of ways. the first thing we are going to see as people move away from antibiotics because they understand how destructive they are get beyond that, it's hard to predict. >> host: you talk about two days companies doing research on this. why is that? >> guest: there are 700 or so and maybe up to a thousand different microbes in the mouse. is a question of establishing a balance of the ones who cause cavities are outcompeted are the ones that are beneficial. toothpaste companies are looking to see if they can take advantage to make their product more effective. >> host: do we know how much money is put into this research of the private site? >> guest: i don't have the numbers on venture capital investment. one particular company adding california is looking to put a product of the market for ulcerative colitis and how to get into clinical testing within the next three to five years. they have a $10 million budget in three or four other companies working on the microbiota. s. is that there's a lot more going on but i just didn't run across in my research. >> host: kevin, republican caller, go ahead. >> caller: hi, thanks for taking my call. i'm a little concerned in the beginning of this process the nih and the other folks want to thank products and applications. the nih do anything to protect the ip out there for this? >> guest: what the nih that have to do is create a template for how to do this work so they wanted to create protocols for how you do sampling protocol is to analyze data. computer programs big enough to handle the data. you know, if you're asking whether people start patenting microbes and trying to privatize them, i'll think that is the nih's valley lake. that is a question for the chorus and i don't know what's going to happen with that. >> host: bakersfield, california online for independent. doug is there. good morning. >> caller: good morning. i would like to ask if he's aware of omaha used. they aredia to meet meat so they do not have the problem of e. coli ever getting to the customer. >> guest: i don't buy that particular company, but those in the companies that raise their food animals by more old-fashioned means, without relying on antibiotics can get away from this problem pretty easily. it's not inevitable we have meat contaminated with antibiotic resistant but area. pitches seems that way because that's out in their interest rate sensitive at the moment. >> caller: in your wildlife studies, d.c. a new species of microbes mutated species are releasing pieces of microbes? >> guest: wheelies pcs have been around hotties. one of the thing most alarming coats and disappearing hypothesis is the idea developed countries using antibiotics heavily, the overall diverse and microbes and it got has steadily gone down over the past 60 years and this may be having lots of negative consequences in terms of allergies and digestive disorders and other things we were discussing earlier. so there is a pause about ecological crisis within around hotties that's a real source of concern. >> host: can our guest comment on got the area to knit and motivation? >> guest: there's been a lot of studies that suggest certain back area can affect mood. the study of brad suggested rats that don't have a rich diverse microbiota in the early stages of life cannot alteration of serotonin levels in the brain any alteration may be per minute for life. so that scary stuff that needs to be studied. but we can do now, how we can change our lives is not known. still needs to be researched. >> host: donna new mexico, independent caller. >> caller: good morning. >> host: hi, you're on the air. >> guest: >> caller: mary roach has written a new book which justified the justices to them and how works. are you familiar with that work? in the second question is based in a recent study done on children who pacifiers and the way the mothers deal with pacifiers, when they dropped a ground but that they picked them and give them to the child or whether they put them in their mouths and then get into the child and introduce bacteria to their children. are you familiar with the study? >> guest: yeah, that was in "the new york times" the other day. this is a classic case of split personalities. the normal impulses to take the pacifier and put it under hot water immediately and clean it up and it may be healthier to put it in your mouth and rips it off and so this idea of the mom and child exchange and microbes early on to develop its diversity -- had a sister named this way, all of them talk about how important it is to have a rich and diverse microbiota. they would all have the spirit of dispensers for handset tick washing of hands. they had to split personality we have to get back and learn to think of microbes is a much more subtle and nuanced team that away in in the past. >> host: independent caller, europe next. >> caller: hello, richard. my question is about probiotics. the adapter as good with me. she gets me away was getting off of them because they get all the side effects. i put myself in a mess about on this probiotics and introduce from the bacteria in the system. can you protect yourself by doing this because there's so many out there 10 years ago i came upon a book worst pills, best pills and sidney wolfe is one of the contributors. i call up my bible. i don't have access right now, but i have to get another one. every certain ones that cause antibiotics that begins with the sea, but can cause different things like tendinitis -- tendinitis and different things and i'm very leery of antibiotics. i put myself on probiotics and wonder if people take one of those and introduce that every day, would that be helpful? >> host: richard conniff come if i could add to that because there's an e-mail that says in there any validity to taking probiotics replaces good bacteria in the human god provided manufactured and preserved, refrigerated and in case to protect it in maybe three oil. >> guest: i don't know about omega-3 oils at all. you're not going to hurt yourself by taking probiotics, but i don't think you can expect to to cure you of things either. in the article i describe the microbiota menses in any. all these different parts played together and adding appropriate actors playing the piano solo with your elbow. on the other hand, it's like when the piano solo with a two by four. you're doing damage and destruction. avoiding that is a good thing if you can. when you can you should be made well you're not going hurt yourself with probiotics and eventually there will be prayer that i could behold. >> host: to learn more about the research being done, richard conniff piece is "the body eclectic" and the most recent edition of "smithsonian magazine." let me show you the cover. it is the future is here. thank you for talking to reverse this morning. appreciate it. >> guest: thank you, credit. >> if things continue to deteriorate coming of this outstanding service record. things began to deteriorate even more. as i read transcripts, it seems to me it came to a head in phone calls duron with lawyers from the department of state prior to congressman shays said coming to visit in libya. is that accurate? .. >> yes, sir, that is true. >> tell me about what happened with jason chaffetz. what happened after that? >> the lawyer was excluded from the meeting because his clearance was not high enough and the delegation was specific to the briefing not be limited. >> to be try to get in that briefing? >> yes, he did read after the classified briefing. >> you had another conversation with cheryl mills. who is she? >> she was part of the staff of secretary clinton. >> so she took the phone call? >> yes. >> associates as close as you can get to secretary clinton. is that accurate? >> guest thomas are mentally about that phone call. >> the phone call is generally speaking good news. >> what you have to say to you? >> she demanded a report on a visit. >> was she upset about this they be sitter or whoever -- was she upset about not being in a classified briefing? >> yes, she was. >> this is the person next to secretary clinton? >> you. >> here is a guy with 22 years of outstanding service to our country. twenty years. outstanding service, praised by everybody, the president come in the secretary, everyone in it now, because he won't help them cover this up, he is an honorable man, now he is getting treatment from the very people who save him before. >> in a few moments, federal government and private industry on cybersecurity. in two hours from, a hearing on the president's budget cut with the treasury department and internal revenue service. and navy secretary on the use of alternative fuels and the military. >> live coverage on c-span networks tomorrow morning include house homeland security committee holding a hearing on the law enforcement response to boston marathon bombing and how local officials share information. that is on c-span3 at 9:00 a.m. eastern. shortly after that, the senate judiciary committee marks up the border security bill. you can see that online at c-span.org at 9:30 a.m. >> the gangsters in general whose main business was to supply illegal alcohol, became important cultural figures. they were very violent, they organize with other gangs and gangsters and then on the streets of chicago and detroit and new york including other major cities. the business generated $16 million annually, which is equivalent to oh, about $405 million today. the payroll included no less than a thousand who killed at least 250 competitors of his in chicago are easy complicated fellow he is a family man he several children. most people heard and believed that he was faithful to his wife. he hosted annual block parties. he wore and 11-carat diamond ring, he liked to consumer twine and excellent food, excellent french food as well. >> revisiting the whirling 20th lectures in history, saturday night at eight eastern on c-span3 american history tv. >> members of the senate judiciary subcommittee today examined what the government and private industry are doing to enhance cybersecurity. government officials and business leaders said chavez is being made, but on computers remain vulnerable. this is a little less than two hours. >> good morning. we will call this hearing to order. i believe that senator graham will be joining us in the interest of getting underway on time, we have been cleared to proceed during the course of the hearing. i would like to note that today's hearing will consider cyberthreats, law enforcement, and private sector responses. press reports indicate this is an extremely important and timely topic and i would like to add without objection to the record of this proceeding, two pages from the department of defense annual report to congress that just came out, saying among other things that china is using its computer network exploitation capabilities to support intelligence collection against the u.s. telematic economic and defense based sectors support u.s. defense programs. obviously there is a lot more to this issue than just that. but it's an indication of the timeliness and importance of our concern here. technology continues to expand into every area of modern life. our power stations, our dams, and our defense industrial base are all online. even everyday items like our cars and our home alarm systems, even our refrigerators are increasingly connected to the internet or you don't actually come of these innovations have been accompanied by new threats to our prosperity, to our privacy, to our intellectual property. to our very national security. the subcommittee has heard about hackers have taken over the webcams of unsuspecting american computers. we have heard about chapter this using distributed denial of service attacks against financial institutions. we have heard about criminal rings but use botnets send spearfishing to engage in fraud schemes and finally, we have heard about those who have allowed foreign entities to steal an enormous quantities of american electoral property and to warm their way into our american critical infrastructure. this hearing will consider our law enforcement response to these threats. our first panel will include witnesses from the department of justice and the fear federal bureau of investigation and we will consider their strategy is as a combat a broad array of threats and the resources they have brought to bear to execute those strategies. the second panel will discuss the private sector's role in responding to these threats. it will consider a recent report based solely on public information that indicates that members of the chinese military have sponsored or have been engaged in sophisticated and expensive cyberespionage, including industrial espionage. and it will value it the role of the private sector in investigating and preventing interest running through such crimes and intrusions. i would start this discussion by noting that the justice department and the fbi have done important work to address the cyberthreats facing our nation. in march of 2012, for example, charges were against the former head of the activist group and the four other members and another hacking group. earlier this year the justice department secured the conviction of a 25-year-old russian who has operated and controlled this botnet. in april 2011, the fbi and the justice department engaged in a civil lawsuit to bring down this botnet. the justice department also have developed the fbi's national cyberinvestigative joint task force and the justice department's national security cyberspecialist network. i am glad that the department and the fbi have taken each of these important steps. much more, much more needs to be done. i was disappointed to learn that the team that took down the botnet was not kept together for the purpose of taking down other comparable botnets. the four-star general heading the command has said that our country is on the losing end of the greatest transport of wealth in history. it is all well and good to complain about such diplomatic channels, but at some point you need to stop complaining and start indicting. the justice department has not indicted to my knowledge a single person for purely cyber-based trade secret that. i'm i am sympathetic with the justice department and the fbi lacks adequate resources to respond to the severe cyberthreat includes a request for cyberagents and 16 new cyberattorneys and the national security division and nine new cyberattorneys in the criminal division. as welcome as this request is too to many of us, we must also ensure that the resources are deployed widely. accordingly, i will be inquiring today of appropriate structures, including centers of excellence and if they are being employed, whether attorneys and agents are properly dedicated to cyberwork, not just carrying the badge of a cyberattorney and listening to the conference call on mute while they do their other work. whether they are tasked with goals achievable scope and whether the attorneys and agents are properly evaluated and recognized for that work. i will close my opening remark by adding that a law enforcement frustration, a frustration that has affected this very hearing, is the unwillingness of many corporations to cooperate for fear of offending the chinese government and suffering economic retaliation. the shadow of china's heavy hand darkens the corporate world and has even shadowed this hearing. i look forward to an important discussion on our nation's response to the cyberthreats that we face and i think all the witnesses who are here to participate today and i will call the first panel right now, i will introduce both now so that they can move from the testimony of one to the testimony of the next and we will begin with jenny durkin. she is the united states attorney for the united states if washington. she is on the she is the chair of the aga subcommittee on cybercrime and intellectual property enforcement. prior to beginning her service in 2009, she was in private practice representing civil and criminal litigation. she received her law degree from the university of washington. with her today is the assistant director of the cyberdivision of the federal bureau of investigation. in that role, he manages over 600 employees dedicated to the investigation of national security and criminal computer intrusions. he joined the fbi's special agent in 1988 and has there been a number of roles, including as a s.w.a.t. team leader in the new york division has shift commander and as assistant director of the international operations division. i welcome both of the witnesses here. before we ask you to begin your testimony, i will also welcome intends interest and the gentleman who would like to make any opening remarks, if you'd like to. >> most of what i know about the cybersecurity threat comes from senator whitehouse, which is an indictment to him. [laughter] but i have really enjoyed working with our chairman here, who i think understands the threat as well as anyone in the congress when it comes to the private sector, of trying to get the pilot doctor to hold two best business practices, and i'm looking forward to hearing. >> please proceed with your testimony, obviously we will put your entire comprehensive statement into the record of this proceeding. but if you could keep your oral statement to about five minutes, that would be helpful to conversation afterwards and leave time for the next panel. >> thank you. good morning, mr. chairman. i think you for the opportunity to testify on behalf of the crew department of justice regarding investigation and cyberthreats and the resources required to do so. i think each of you for your leadership in this area are it shows your great grasp of the array of threats that we face. as a united states attorney, i see the full range of threats that our communities and nations face red two things are as sobering as the daily threats briefings that i receive. technology is changing our lives. we have witnessed rapid growth of businesses, life-saving technologies, and new ways to connect our society. unfortunately, the good guys are not the only innovators. we have also seen significant growth in the numbers and sophistication of those exploiting new technology. seeking profit, large quantities of personal data have been taken and have been used to disrupt our computer systems. organized criminals have demonstrated the desire and the capability to steal sensitive data, trade secrets and intellectual property. one area of concern is everyday criminals who hunt for personal and financial data which they used to commit other frauds or sold to criminals. as you will hear from the next panel, the potential victims range in the tens of millions. the national security landscape has undergone a dramatic evolution in recent years. although we have not experienced a devastating terrorist attack of cyberproportions attest our defenses, and threatens our nation's security. there can be no doubt that this proposes risk to our communities and our economic interests. addressing these complex threats requires a unified approach that incorporates criminal investigative tools, civil and national security authorities, diplomatic efforts, public and private partnerships, and international cooperation. criminal prosecutions, whether in the united states or abroad, play a central and critical role in these average. we need to ensure that throughout the country, the department of justice and investigators and prosecutors have the capability that they need to meet this evolving threat and we thank this think this committee for its support in those efforts. the department of justice has organized itself to make sure that we are in a position to meet this threat. the criminal division's cybercrime works for the nationwide network and is designated as property prosecutors. mr. chairman, they are doing the work in the field. the department's national security division, through a variety of needs, including counter espionage and counterterrorism prosecution. recognizing the diversity of the threat, last year we did form this network that brings together the departments full range of expertise in this area including experts from the national purity division, the criminal division, and other components. there is a national security specialist that is designated in every attorney office across the country. these combined efforts have led to great successes and i hope to address some of them later here today. despite these successes, the number of intrusions continue red because of the very serious nature of cyberthreats and the need to respond, the administration is asking for enhancement to target its critical program. most of the his address with the fbi so that we can do more ground research and additional request of the $92.6 million of national security division because we must address is increasing national security threat mr. chairman, ranking member, thank you for the opportunity to testify today. on the country is at risk, there is a lot to be done. but we look forward to working with your committee. we thank you. >> thank you. >> thank you, mr. chairman. members of the committee. i am pleased to appear before you today to discuss cyberthreat. this includes devastating consequences. these intrusions into our networks, our government systems, such attacks pose an urgent threat to our nation's security and we face these challenges in our efforts to address and investigate threats and we are prioritizing our immediate needs for strategic development in order to best position ourselves for the future. we have made great progress. we have seen the value of the partnerships and we have worked tirelessly to support and improve them. it demands cooperation and cybervulnerabilities are magnified one we significantly increased analyst and computer cyberspecialists in key global location and affecting the u.s., we are pleased to report the progress and we recognize that we must be proactive in order to effectively address the threats that we face. information about cyberintrusion, and yet headquarters, and throughout our 56 agencies and with the intelligence community and law enforcement partners, both domestically and overseas. implementation is focused in four areas. first, the national joint task force in virginia. a key part of the governmental effort is the fbi led joint task force. the formulation in 2008, it has made significant progress in developing new capabilities and coordination as well as expanding leadership and increased personnel from 19 agencies in five key agencies. the second element is cybertask forces which emulate the successful task force model in our counterterrorism division. just last year, the fbi has established a cybertask force in each of our field offices, staffed by agents and analysts and other agency participants. in the future, this is a nationally developed system and expanding membership with a key focus to add additional local participants. the fbi is committing to advancing the capability of our work force and supporting the enterprise infrastructure. establishing our training, high-tech initiatives and special agents. this in proves informational analysis and the fbi has expanded the source of cyberactivity to increase cyberintelligence reporting. and the fbi is working to strengthen local and national information sharing to create success. to support this, we have adopted a collaboration system used successfully by our this includes efficient manner to the fbi and we are leveraging intelligence to effectively notify cybervictims. we look forward to working with the committee and congress to determinate success in addressing cyberthreats. we are more than happy to take any questions that you may have heard. >> triptych we appreciate your work. this is something that we should all be very proud of. sir, you have been working this for a while. nobody has more passion for it in you. i am a little bit preaching to the choir. i but i do want to give both of the organizations the chance to be a little bit more forward on this issue. one of the ways that you measure legal outcomes is your testimony. we have talked about prosecution as a deterrent and a punishment. yet the level of actual legal activity does not seem to be all that great. the core botnet was taken down over a year ago. i'm glad that they were recognize for their very important piece of work. as i understand it, this was a group that was cobbled together from a variety of options and they were allowed to disappear to the original offices. rather than continue the process of cleaning up and attacking botnet and microsoft, they have been released for i can think of, civil cases to go to court and get an order to clear botnets out of the system, so it's not impossible for the justice department to have done more than one. on the side of intellectual property theft, we have, i think, primarily the chinese attacking vigorously, not only are national defense, but to hack into things like how our guidance systems work, so that they can impair our military in the events that we were to end up in a military conflict with them read they are also trying to steal stuff so they can give it to their companies so they can build it without inventing in order paying for the intellectual property rights. that has been described as the biggest transfer of wealth in the history of humankind. to my knowledge, the department has done exactly zero cases involving a cyberintrusion to steal intellectual property and back out. they have done some intellectual property theft cases where someone left with a tv in their pocket, but they haven't done many cases outside of that yet. the results are a little bit -- they don't send a note that we are where we need to be. when you try to look at the structure, it's not clear that the structure is firmly in place for this. this has been an issue for some time, and yet, the department of justice, the department is developing that focus and it is a wonderful effort. i think the people who are there are doing great work. my impression of it is that they are working so hard out there to figure out who is trying to keep track of them and warn businesses in the system that there really hasn't been the capability to sit down and take that information and turn it into a prosecution package and put it into play in the u.s. attorney's office and don't put someone on the business end of an indictment. i'm not even aware of any grand juries that are active in this area at this point. so i would like to applaud -- and i'm sure that it's thanks to the leadership, both the u.s. attorney's office, the department of justice, and the fbi, they are raised thinking the structure that needs to deploy this effectively. if this really is a security threat, if this really is the biggest transfer of wealth in the history of humankind, we are still under resourced for when you put it up against the dea just to deal with narcotics. we have the atf just for alcohol and tobacco and firearms. where are we in terms of what are we doing about this new threat. so i want to applaud you for your own personal commitment to this issue. and i really do want to continue to push the department and the bureau to resources up, we will do everything we can to for your efforts to enhance the resources in the way the budget request, and i definitely will. to firm up the structure so it's clear that the people who are on the list -- that they are in fact doing cyberwork and i know the drill. someone has to get on the phone, so there is someone across the country listening to the call and that is not the way to fight this battle. we shouldn't be counting those. it is a valuable function, we shouldn't be counting on it that is the sum of what they are doing. sir, why don't you go ahead, first. >> thank you, senator. first, let me say that the results of the grand jury. in the last three years, i have been able to serve in this role. this threat has evolved enormously. but so has the department's response and a forward-looking nature no one department can fix it alone. as the gentleman said, we have to have one team approach so that every aspect of government is working together and we have to work with private sectors. so in my district, we have a very strong outreach to the private enterprise to see what they are doing, to the the threats that they are seeing and what we can address. we can prosecute someone, believe me, we will do it, we have done it. the results actually have been very good, and i will use my own district as an example. even in the areas, we had a center of a botnet investigation and it was one of the largest districts. it was, as you know, a very resource intensive investigation. ever wired multiple agents in multiple districts in multiple countries. we were able to work with our international partners across law enforcement, secret service, fbi, we took down the entire botnet system at the same time in america and several european countries and people were arrested in several countries and we were able to extradite one of those to my district and put them in jail. we have had successes and we will continue to have successes are ergo we also understand that in order to meet this threat, we will not be able to prosecute our way out of it. we have to have technology. we have to have the department of defense, and all across government from the top down. i think every agency is committed to addressing the threat. it's a big threat and i think that we have great successes to report. i am proud that we do. >> let me ask senator graham to jump in because he has to step out were a moment and make a phone call. >> thank you. you can continue to answer the question. from a layperson's point of view, we have a pretty robust system to deal with bank robbers. is that right, sir? >> yes, sir. do you have any idea how many bank robberies there were last year that the guy was involved in? >> probably hundreds? >> hundreds. >> okay, so thousands if not hundreds of thousands per year? >> yes, sir. okay, there are two ways you can have money taken. you have a guy that comes in the me your money or someone who can hack in to the bank and still your money. how many people have been prosecuted for hacking into the bank? >> actually, many. let me use an example from our district are and what we saw was a spike in where people will put devices and take millions of dollars for many customers. we put together a task force and we were able to break down a romanian bring. we prosecuted those people. we had great success and for a period of time, we drove down this almost virtually zero. we did it not just for the prosecution's by working with the banking industry. i think there were -- ought to give you the exact number, but the entire ring responsible for this group. so it was more than a dozen. >> okay, the point i'm trying to make is that i know you're all doing a good job by trying to up the game. but the resources that we have provided over time to deal with bank robberies, compare that to the resources that we have provided over time with cybertheft. how would you equate the two? >> well, the thread is currently always changing. we have allocated resources in which we have programs internally. significantly, we have talked about structure and the chairman's questions and headquarters of national platforms and also cybertask forces. >> you have the resources necessary to deal with this, what appears to be read but that problem? >> we are making do with what we have today. >> we are saying let's treat this better. national bank robberies during the depression, that really started the guy. that was part of the reason for being and existence. that kind of focus -- you know, crime in the 20s and '30s. do we have that kind of focus? >> i describe it as a buggy whip moment. i'm used to happen on the street and it is moving now down the line. we have our minds set, people are being targeted. we are addressing that threat. but we still have a brick-and-mortar threat that we have to address on the streets, which we are doing. at the time that we have to realign ourselves. we have done it, we need to do more, with the help of the committee and congress -- >> we need changes in the laws make it more effective. >> yes, we have proposed some changes. i think there are other changes that the senators have proposed that we are working with them and your staff to see that we address everything. >> we have fundamentally changed the role of the government's involvement in crimes that were committed across state lines and really created these types of groups. maybe it's not a good analogy, but we seem to be having a new emerging crime here. when it comes to resources and legal infrastructure. would you say on a a-f rating, what would you say in terms of legal implications? >> i think we are much better off than they were three years ago. i think we have aligned ourselves and have had successes, but i think we have to keep working and making sure that we have private industry aligned with us. >> can you give them a grade and give law-enforcement raid. >> i always give congress an eight grade >> i think today, we are still facing what we have 10 and 20 years ago. even over the past, i think we will get there quicker. if you have hundreds of bank robberies using force, using cybertechnology, we are probably not where we should be. >> senator graham has to jump out for a moment. >> you guys are good and don't go beyond what they allow you in the budget. but we have to have a serious discussion and sit down and figure out what the plan is for dealing with this. and have we really resources are not. i have been trying to get the department together so that they can have this discussion without you guys being accused without all and the mayor and vice versa. so i hope to do that. the senator and i came very close to having a bipartisan agreement on a cyberbill and it a part of the last-minute for reasons beyond both of our control. executive order emerged and now that that is out and the landscape has been changed by that executive order, we are reengaged in trying to do what needs to be done legislatively. please work with us on this. >> you don't have to be flinching from saying what your real needs are. it is very clear to me that when you put the privacy and the criminal law of all of our individual credit card and personal information that is being held out of the internet and being marketed on crooked websites where they can actually go and buy personal information, you stack that and put that on top of the theft of so many companies, secret, special, confidential information that they use to protect themselves and build their products with their own intellectual property, it has both private and national security connotation. and on top of that, the viruses and worms in the programs that have been inserted into our critical infrastructure so that the grid could be taken down, bank records could be compromised, dams could be open, geeks and pipelines could be open, all of those things that can take place. if you stack all of that up, that is the date problem. i don't want to get you in trouble for saying any more than you are authorized to, one measure that will be when we see some significant indictment on this industrial espionage piece related to what the defense department said and what the company has said is being done and all of that. i will give you a chance to respond to all of those dots. we are having a bit of a back-and-forth here. but i really want to push you on that. as wonderful as the work is that you have done, we aren't there yet, we need to make sure that we get there i will continue this going on. >> we have a sincere and strong interest. [inaudible] it is in terms of coming up with a structure for dealing with a cyberthreats were nation my own home state, is actually has judiciary repercussions. at the outset, let me ask a few questions. if you would help me understand in the run-up to some of his legislative work, a great deal was made about art military capability to defend the united states in cyberspace and their advantages over other agencies in government. especially in terms of capabilities and capacities. what unique advantages to civilian agencies or the companies of the next panel represented in the realm of cybersecurity? >> one unique ability we have is jail. we are trying to do that more. but i think that our ability to investigate forms a couple of important things. we deter further activity. when we are able to extradite someone who is a foreign national in a different jurisdiction and we arrest them and put them in jail, it sends a message read we also try to disrupt trade because we don't have the capabilities to put all of those people in jail. the third is we have to hold people accountable, which we are trying to do more and more. i think that some of the capabilities that we have is in our system we have the ability through the grand jury process and investigative tools, to get information that others don't have red again, looking at the department of defense, we have to use a government approach. senator whitehouse is exactly right that the nature of the threat simply cannot be overstated. but it cannot be answered by anyone part of government were government alone. it has to be private and public sector partnership and our civilian efforts to prosecute people. >> the fbi is uniquely positioned and so it is a program that we have within the fbi that looks across criminal counterintelligence and also counterterrorism. we are able to incorporate the subject matter expertise in those divisions and looking at the various threats. not just one area, but as a broad array. dod plays a key role along with an essay including law enforcement and homeland security. >> thank you for those answers, and i agree with you, particularly in facing what is a widely distributed threat. the origins are not completely clear, it is not always attributable. cybercrime and threats come from a very wide range of sources and they manifest in our country in every wide range of impact and the defense capabilities with agencies that have large jurisdictions and the capability to investigate and to seek compensation for victims, it is a different response than one gets from the defense department. i just want to comment, if i could, but when it comes to doing comparably broad things that deal with oath domestic or natural disaster or natural threats, the national guard has a broad range of capabilities and across as legal authorization and it is a tactical capability and a strategic role and a broad range of capabilities. a number of senators have introduced this, which among other things would give governors the capability to order and support and train local one forstmann and leverage the expertise that they have from military training and their civilian careers. my home state happens to have a very capable network which allows us to tap into the skills and abilities of the sophisticated data centers operated by the advanced elements of the financial services communities and have them also with the nsa and be hopeful. i think this function and authorization would be helpful for doj as well. because it can help them have more capable prepared state partners. i appreciate the law enforcement caucus event in this particular event and i am grateful for the chance to contribute to this hearing this morning. i think you. >> thank you, senator. we also have the rhode island guard. i look forward to working with you on your legislation and i think it's a very valuable thought. it is important to reflect that when you move from the local guard and reserve capabilities to our military and from there into our intelligence services, there are increasing restrictions and concerns about taking action within the united states, particularly where it involves companies and individuals. i think that is a particular reason why our law enforcement look at this domestically. we are joined by a former prosecutor and we are delighted to recognize her. >> thank you, mr. chairman. thank you to our witnesses. i was listening to senator coons and thinking about that. one crime was officers who didn't have the training, we have cases where they would go into a room and turn on a computer and erase everything on it because that is what they were rigged to do. it happened a number of times and then several fortune 500 companies, and backed by u.s. bank and other companies. so i can see how challenging that this situation is that we simply didn't have the resources and how to handle some of those cases when they would come our way. it would be handled by the u.s. attorney's office. so i thank you for your good work. it is how you have coordinated with local prosecutors and what he think is the best model of how we go forward in how we get them trained. >> that is an actual question. the partnership is critical to our success is, working both with the secret service task force and the fbi task force. we have great successes in that field. the key to it is training and we have worked to make sure that we have not just task force offices, but friends are people that can handle this and education to the public. an example is we had a very small family restaurant that was hacked by someone who is in maryland and he stole money credit cards. he stole them from someone who is in romania, who then posted them to a site and they were purchased by a gang affiliated group in los angeles or it with our investigation, we were able to arrest the person in romania and get the person in los angeles. we got all three levels of that. we did it with our local law enforcement task force and secret service and the fbi who all played a part on those and other investigation. it is a critical part of it. also looking at our training for lawyers, we work to make sure that not just our lawyers are trained in cyberactivities, but other lawyers have experience and we have a national advocacy center in south carolina and one of the conferences even in this difficult time, we make sure it was our cyberconference because we have to make sure that her prosecutors are trained, local one forstmann is trained and the public is educated. >> i think that is part of it. especially with small businesses. you know that they won't have the resources. so i think more outreach to them would be a good idea. i think they are starting to be victims as well and they are don't have the resources. >> that is right. if the small business would not have come forward, we would not have had that. it has allowed us to do our job. >> okay, my next question is how computing in our cases are becoming more and more sophisticated. as you know, digital evidence that separates a lot quicker than a paper trail, making it difficult for law enforcement to investigate the crime. another challenge is that it's incriminating information, i had a bill floating out there as we try to deal with some of the cyberbills that i think are important. could you comment on the challenges of cybersecurity crimes and the possibility that the evidence could be outside the jurisdiction of the united states? >> yes, as you have pointed out, it presents many challenges. depending on the country, the investigative agencies as well. so we have several challenges on that front. >> would be the best way to try to get attic? agreements with other countries? is there something that we could put in law to create a structure of those agreements? >> i think the agreements as far as what other changes we could put into place can better the circumstances in working with our partners. >> is all of the above, senator, that you have mentioned. we have asked for additional prosecutors overseas, we have seen more and more of these cases arrived. our partnerships with foreign nations and europe have increased, but we need more people there. we also have the budapest convention which is having more partners to make sure we can get the evidence abroad that we need to prosecute people here. so we have to do all of those things. >> we have increased our footprint overseas to be just short of a dozen this coming year in key locations throughout the globe. >> thank you. we appreciate it. >> senator graham has his time interrupted. let me turn to him and give him a fresh start. >> people stealing our property, intellectual property, dealing our money and anything else of value in cybercrime. on the national security counterterrorism, are there clear rules of engagement that this would allow the the i and the department of the defense to engage in a nationstate who has committed a cyberattack under the laws of the war? >> there has been a lot of discussion and coordination. >> does that mean no? >> i'm sorry, are there any rules of engagement. has anyone sat down and said that this event would be considered a nationstate cyberattack, allowing us to respond out i'd of the law-enforcement model? our friends seem to be hell-bent on stealing anything they can get their hands on here in america or it other than developing it in their own time. i am more worried about other nations, not just china. .. >> it could be both. >> if they disrupt military operations? >> i am not sure, sir. >> would you like to take a crack at that? >> if you look at the range with is what keeps me up that night. part of these questions have to go to a general alexander but if you look at the range anything with intelligence you have everything from state actors to criminal organizations and people who work to get that done. that is why private security and mechanisms and going back to robbing banks when they were set up they did not all have cars, cameras and a lot of defenses now companies are determining technology also to provide the solution is. >> with a law enforcement model to go after the bad actors, are you familiar with the counter terrorism threat? >> tsr properly spee bechtel would you rate our infrastructure and national security to protect us who want to do more damage? >> based on the tragic losses of 511 with the response to that it is a much more developed a model the you can see the community has to have counterterrorism. >> i think we are further down the road. >> absolutely. we will get their senator. >> the national security seidler specialist that we realize with the national security if there is a siberian venture who do recall? to recall this cyber lawyer with security clearance? to recall the anti-terrorism lawyers? we knew we had to marry those. return to make sure we have the right appropriate people in every office and to have the best expertise to give to the field to. >> before i release you but me ask you to things. one, could you, in a supplemental fashion to the testimony you have provided provided, make a little more of a detailed case as to the conclusion you described in both of your testimony is about how complicated, complex, resour ces, , etc.. as much as you can without revealing things that can be revealed, try to put tangible fax to that discussion. then that will help both senator graham andrew self with my colleagues if we have more than a statement that these are complex forensic capabilities that are unusual to lay out the bits of a case study or example of something that makes the case further that would be helpful as we try to proceed. the second thing is we have a discussion about resources and structure and budget and i look forward to continue that discussion with the new omb director and your department a and o. but separate from that, i think we can make progress on your capabilities and authorities and a safe cord -- safeguard to take out the bought a net and i would ask your commitment to work with us to draft appropriate legislation that will allow you to have more authority and a proper safeguards as you go after future offenders. would you do that? >> absolutely. >> let me thank you both for your service and passion in this area. i am pleased people like you are in our government service and if you detect a note of impatience from myself for senator graham is the recognition that you are part of a very, very large proxy that does not always move with great alacrity in sometimes it is our job to give patients of the does not reflect on you but it is being done very impressively. thank you very much. we will take a minute to call up the new panel. [inaudible conversations] let me think our private sector representatives for herb being here. mr. mandia the ceo of his corporation founded in 2004 also private organizations to respond and contain computer intrusions when you find out and do you have been hacked who are you going to call? ghostbusters. that is what mr. mandia does beginning his career in the u.s. air force. and in which he served as a computer security officer and but graduated from george washington and has also talked there and at mellon university's and i will just stop there to call on kevin but let me also backed an hour earlier legislative process senator graham and mikulski and others organized a series of classified briefings for senators to bring them more into awareness what is going on in this field did you were gracious enough to make one of those presentations and it was very effective and i thank you for that. proceed with your testimony that i will introduce the other witnesses as they are called up, a mr. mandia. >> thank you, mr. chairman and ranking member. today american companies will be under siege by criminal attacks, economic espionage, and today when i will talk about is as sophisticated economic espionage. while many are trying to counter the threats at the end of the day there is a security gap that we need to close. so i would like to talk about three things why the gap exists, with the private sector is doing about it and how law enforcement can help in regards to that status. first the reason of the security gaps in misheard chartered we would be very successful so i looked at the ultimate fighting champion mugging my grandmother it is the imbalance of battlefield. we did that in february this year we released a report to the public that clearly shows there are members of the pla targeting the private sector period the united states. the second reason there is a gap in cyber security for the first time in history that i am aware of when they're used to be when systems were targeted, and nobody knew how to use the system, but today was cyber security attacks there are human targets and we also show that in our report that the pla is recruiting english-speaking people, not to u.s. looking e-mail's that have a confirmation and purport to be from someone they are not from our conference rising systems so we have not figured out technically how to patch things human trust in the third reason is the government entities that we see compromising u.s. private sector are also affecting the supply chain so those that have a rather mature security program so if that is bolstered and starts rejecting a tax they go down the supply chain with smaller organizations literally have hundreds of folks that no posture that is tough to defend in the fourth reason with a security gap is because there is the imbalance italy takes one attacker can do the work of hundreds of thousands of offenders it is just the imbalance of the expertise required. another reason there is no repercussions to been packed into infrastructures such as a safe haven which is china, north korea, iran korea, iran, russia, countri es that can hack our resources with impunity and not fear repercussions. all i could go on but in short technology and the adoption of it vastly lps is our ability to secure it. water companies doing about it? i have noticed two things some are whether compromised and doing or adopting technology in hiring the expertise and senator you mentioned were i am willing to oppose china i would say in my experience and most of the private sector taken very seriously when they have had a breach from trade and -- china to bolster the safeguard and the fear and unwillingness based on the fear of shareholder value repercussions and at the same time simply that economic gains could be so great. it is a tough issue but make no mistake on cyber security side folks are doing a lot. when they are aware of the breach to have the resources to do something about it. then there are companies and then to have the defense to safeguard. those are beholden to standard regulations to create a security posture and it is my experience that if your sole driver for security is some kind of compliance, that usually does not prevent the attacks we see. what can we do about of what can of law-enforcement do to help? we already have reached by those who are compromised than two-thirds of the breach his first by a third party. if we do what we can, it could be the dod, the intel community but i have seen the communications, from the fbi and we can eliminate the impact and consequence of preaches. of private industry will not always win the battle, if we share that information in a timely manner, what you will see is limites impact of the breaches, limit the consequences to share that information and law enforcement can do that. by establishing a system where the private sector shares practically america will build a cyber defense that is an expert but nobody is getting any smarter today. so that i would like to thank you for that opportunity to share. >> thank you mr. mandia. our next guest is mr. baker from 2005 to 2009 the first circuit -- assistant secretary for policy of the of the stages of department of romance security. and intelligence lawyer also general counsel to the national security agency and the commission that investigated weapons of mass destruction intelligence failures prior to the iraq war. thank you. >> and then turned to the question of the role of the fbi and justice department could be slashed should be. i will let spent too much time as kevin demonstrated the are not likely to defend our way out of this problem. defenses play an important role with the legislation but is as though we try to solve the street crime problem by a telling pedestrians to buy a better body armor. we have to find the criminals and teacher them. i don't have to preach to either of you of the importance of that. but, in thinking about back, how can we best reach the threats that are most troubling to americans today which is the government protected attackers? and it seems to me both the justice department and the fbi suffer from a lack of imagination and with respect to resources. with respect to the authorities the idea of prosecuting most of the people who are protecting us is deeply of likely and we need to find additional mechanisms to detour that activity the administration is doing naming and shaming which is a good thing that we should use our peace the authority to say if you purchase a pate or trade hackers in the country or higher hawker's after they finished their tour of duty in the government you have to cooperate you and i get a visa to come to the united states the same thing is true for the treasury department that designates nationals with whom we will not do business we will not do business with people who are battered human rights in russia or belarus or people engage with conflict diamond the transactions. i think we should take at least as much care to protect against people who are abusing human rights for a year by breaking into the computers of dissidents and ordinary citizens. we should use those tools as well. i see that senator mccain and senator rockefeller have just introduced a bill that goes down this road to look for tools to do ditcher government sponsored accounts. just the names give me hope and i think the approach to detour the of espionage is worth pursuing. let me turn to the question of resources that is likely not solvable with the current budget situation. to talk about that atf that notifies people of attacks on their networks. it is effective because many people do not know they have been exploited for months. but at the end of the day and i have worked with clients who have this experience, that fbi's role basically is to figure of someone that has been compromised to tell them and maybe they can give a vice but frankly it is like somebody tell you your bicycle has been stolen you'll not get a lot of help because they don't have enough cops to do it and the fbi would not be able to help all the company's that they notify in fact, after they put out a few person person-- in to that investigation with the notice the company is largely on its own then they hire area and they begin the process of spending to get the attackers out of the network to figure out who is attacking them. reid know from that have enormous volumes of information and who is attacking the particular client. we should be working but then to detour the aztec shares by out being them. even though those resources are well known and will focus with particular attacks, we do know that the individuals who are under attack, or the people they have hired go beyond looking around their network for a few networks that will cooperate voluntarily inside the united states. i am not calling for herb vigilantes' or a lynch mob but we need to find a way to the firms that are doing these investigations for authorities to go beyond the network so they're not doing harm to the networks they are investigating but can go back to the networks where the hackers are storing all the stolen data and to gather enough information to prosecute. but to put money into this at this position is there idea is to pour cold water on it to say it is bad policy and probably illegal so they are deterring companies that want to investigate the people who are attacking them and but we could indict you instead of the hacker and that is the wrong the answer. we need to provide the oversight that is necessary so we're not just letting people wander around shooting in the dark but people who know what they're doing, i can carry out these investigations, and pursue attackers back to a picture in the thinking is their safe haven in another country. if we don't do that we will not get to the bottom of most of these attacks. >> finally ms. -- ms. mcguire from symantec and thank you for all you have done to be helpful and to get to legislation. your microphone needs to be turned on. >> chairman and ranking member it is my pleasure to testify today. i am v. >> i should have done a more complete introduction she's served in various capacities at the department of homeland security including acting director and deputy director of the national cyber security division so she comes not only with her experience with symantec and i am sorry i omitted that. please proceed. >> symantec is the global leader of security software and three have all over with information and management technology. we have employees in more than 50 countries but in particular i like to mention our'' intelligence networks that has been dealing with more then 601 negative 600,000 that gives us incredible insight into the threat of landscape and in addition reprocess more than 3 billion e-mail messages that and whether point* four at web request. visa the sources said allow us to give us a view of the internet landscape with threats. the key findings from our reporter ever like to share include that in 2012 we saw 42% rise of targeted tax tax, 93 million identity's exposed through hacking, theft and simple error. in addition misestimate there were 3.four baht or is on the computer's rolled wide and one that of seven were actually located in the united states. we also saw 52% rise to the mobile devices watering hole attacks are so that to attack a legitimate web sites of every customer is affected and then they install malicious software that locks the user's computer to display the fake fbi warning and willis or money in return for unlocking the computer which by the way it does not get unlocked even after they paid the extortion. some intact participates in numerous industry organizations as part of our global commitment as well as public-private partnerships in the u.s. and abroad to address these and other cyber threats. just a few of these successful partnerships include the norton severs security institute and the training alliance and the fbi in for guard and the secret service and electronic crimes and interpol and i have provided more of these in my written testimony but i do want to highlight a few. two years ago reestablish the norton blood negative store and cyber security institute to address the shortage of those adequately trained to handle high cyber security cases. response to technical training for law enforcement globally. we also published the annual gordon cyberporn report one of the largest cyber crime studies and interviewing more than 15,000 globally over 30 countries. another example is the trading alliance that has 80 industry partners to provide members with realtime cyber threat intelligence to identify threats and their actors which is a key player in the fight against some financial sector intrusions that have occurred recently. these partnerships have led to notable successes one is the takedown of the tea to that compromise many of computers for click fraud and it was a culmination of a multi-year investigation and many say it takes far too long to complete these investigations and to talk with the private industry and law-enforcement joined forces to go after cyber crime and i have detailed a similar success and what you have been mentioned earlier but these examples show how much needs to be done so well we have seen successful prosecutions and did take down, there are larger and more criminal greens today. of because the government does not want to pursue them or because they are not out there and we have found he was caught but to require a technical understanding how computers operate as well as the deep but simply there are not enough investigators or prosecutors or judges to keep up with the criminals and as you have heard there is a lobar for deterrence. at semantic we are committed to improving online security to critical of the most infrastructure as well as data across the globe and we will see we will work collaboratively with ways to do so. >> let me thank all the witnesses for the helpful testimony i will turn immediately to senator graham as his schedule is starting to tug at him. i am here to the end. >> thank you very much for being the ranking member and the intensity of. >> enjoy the easy energy question period because she will be back. i have learned a lot but to keep the data 30,000-foot level, do you both agree but to have been to the u.s. data base, of banks, stealing intellectual property, is that a fair statement? >> yes. i would agree. >> could you both give me two pages of why you say yes and i will take it to the chinese ambassador and asked him to give me a response. >> i will give you about 100 pages. >> which will be consolidated at two. [laughter] >> absolutely. kevin's company has done the most. >> russia? >> it is harder to identify as a country. >> to identify bad actors, china is number one? >> china is the reason my country -- company doubles in size every year. >> china by far in terms of volume is the most aggressive so you will see middle eastern organizations emerging because china first and russia's second but it is my opinion the rules of engagement if we see the russians generally the government only tax the government if we see them they tend to go away but the chinese are like a tank through the corn field. there is the enormous gap of china first and russia second but second hat is competition and we will start to see attacks coming out of the middle east. >> the top five i will get with the senator to do something about this to put nation states on notice if you continue to do this you will pay a price. and and maybe the immigration bill is a good opportunity to do that. we have to think outside the box. dnssec. . . . .

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