1996 Congressional Hearings
Intelligence and Security








10:26. A.M. EDT


GREGG: (Strikes gavel.) Well, we'll get started. I certainly appreciate the attorney general's arrival -- in fact, early arrival. And Senator Hollings also is always early. So we'll get started and take advantage of the time.

First, I want to thank the attorney general for coming to speak with us on the issue of terrorism. This is obviously a critical issue confronting our nation today, and I know that, in her hectic schedule, to give us time in this area is very much appreciated by the committee.

There are obviously a lot of different issues surrounding the general question of how we respond to the terrorist threat that confronts our nation. And we have pending, of course, three instances which appear to have significant terrorist overtones: Saudi Arabia, TWA flight, and the Atlanta situation, as specific instances pending.

More importantly, I think this committee is interested in hearing from the attorney general as to the approach, in terms of a long- range, strategic strategy for a cooperative and coordinated effort by all functions of the federal government and state governments, to anticipate and try to sidetrack any terrorist actions in the future.

The committee has recognized the threat in a budget, which -- in a bill, which, due to spending restraints, found itself approximately $4 billion below the president's request and approximately $650 million below the House bill. We were still able to increase our commitment in the area of counter-terrorism by approximately $150 million. This was the result of a joint effort by myself and Senator Hollings because we consider this to be an area of absolute priority. We have moved account funds where we think they can be most effectively used to respond to the terrorists' threat, which our country is confronting. Obviously, the FBI is on the front line of this issue, but there are a lot of other agencies that are involved in this question. And we'd like to get the attorney general's thoughts on how we can coordinate those agencies using these funds.

The White House has, just in the last few days, sent up another proposal on spending for terrorism activity. It's a $1.1-billion proposal approximately, of which about 300 and -- I think -- 50 million (dollars) or something like that is directed at airport security, and the balance is directed at general terrorism issues, including a large chunk that's Defense spending. Of the accounts which are applicable to this committee, approximately $330 million is applicable to spending which would be under our jurisdiction.

And the priorities that the White House has outlined in its proposal are essentially the same as the priorities which this committee identified earlier in our bill, which bill received strong bipartisan support, and it was reported out of both the subcommittee and the full committee unanimously. So we're on the same wavelength as to where we think we should be going as far as spending money.

I would note that, to the extent we are going to increase spending over the $150 million which we put forward and go further down the road towards the $300 million which the White House is now requesting, we would as a committee, or I as chairman at least, would insist that we have some offsets and that we not simply apply that increase to the deficit, but rather we set priorities and find places where we can move money to respond to the increased dollars that the White House has asked for.

With that as an opening statement, I'd turn to my ranking member, who has also been a strong force on this issue and whose support I very much appreciated as we put together our counterterrorism initiative in the committee.

HOLLINGS: Well thank you, Mr. Chairman. You've been the leader. Back in June and July, under the leadership of Chairman Gregg, what we did was add another $152 million for the anti-terrorism effort on behalf of the government. And it was a studied allocation, and we did cut other budgets in order to confront this particular threat.

So, I appreciate Senator Gregg calling the meeting and getting us even deeper into this particular effort.

I welcome Janet Reno. The attorney general is our five-star general in this war on terrorism. And the credibility, General Reno, that we have for law enforcement generally in the government is due in large measure to your leadership. So I welcome you, and I'm delighted -- I'll put this opening statement in the record.

Now, my figures show that you and I added about $152 million. We put in additional agents for terrorism, we put in accelerated treatment for criminal aliens, we put in more money for the labs and those kind of things. And you used the figure 330; maybe it's 330 -- it's 313. That's what we want to do is get straight the exact amounts and wherein you're embellishing Senator Gregg's amounts that he's put in here for the '97 budget. So --

GREGG: Thank you. And if we could get an update on the specific instances in Atlanta, the TWA instance and the Saudi instance, and your general thoughts on the overall strategy relative to approaching the terrorism issue.

I must say that my concern is that although I think the Defense Department, the CIA, Justice Department, the State Department are all obviously fully engaged in this issue, I'm not sure that I sense that there is a coordinated strategy for anticipation. I believe there's a very strong -- and has been a very effective coordinated strategy when there's been an event and a reactive approach. But I would like to get your thoughts on a coordinated strategy for anticipation.

RENO: Thank you. And I want to thank you both, I think, Mr. Chairman, and Senator Hollings, with the initiative that you undertook, the Gregg-Hollings initiative. I think it speaks so well of the bipartisan approach that is necessary in fighting what is one of this nation's most critical issues, and I just appreciate it. I appreciate your support on law enforcement issues; it's been thoughtful and very helpful. And your staff has been a pleasure to work with as we try to address these issues and try to be as fiscally responsible as possible, being accountable for what we do.

I would ask that my prepared testimony be made part of the record, and I will briefly summarize that testimony now and then would be happy to answer any specific questions later, as we can.

As you know, many of the details of our counter-terrorism efforts are classified for security reasons and therefore we cannot discuss them in open hearing.

GREGG: I would note that -- for the audience that we will adjourn to a classified hearing after the attorney general has made her comments that she feels are appropriate in the public and questions have been asked.

RENO: Thank you.

The protection of our nation and its people against the threat of terrorism, both at home and abroad, is one of this administration's top priorities. American citizens and interests are the target of choice for international terrorists, and the threat of terrorism from domestic groups is also growing.

The bombings of the World Trade Center in New York and the Murrah Federal Building in Oklahoma City illustrate the deadly consequences of terrorist attacks. As weapons of mass destruction become more accessible, we face the potential of even more catastrophic acts. And as our society has become more dependent on computer networks for commerce and communication, we've become more vulnerable to cyber- attacks on the information infrastructure that could cause massive disruption or destruction.

Our main goal, as yours, Mr. Chairman, is combatting -- in combatting terrorism is to prevent it in the first place. Given the magnitude of the threat, prevention requires a coordinated, comprehensive strategy involving many agencies in government. It requires reduction of our vulnerabilities to terrorist attacks, the development of intelligence regarding the plans and activities of terrorist groups, the pursuit of diplomacy to end state sponsorship of terrorism, the threat or use of military force to deter terrorist attacks or destroy terrorist capabilities, and the pursuit of criminal investigations and prosecutions when information is developed about ongoing terrorist activity, but before the event happens.

We've had some notable successes in preventing terrorist attacks. I cannot talk about them in detail in this open session, but I've listed some of them in my classified testimony. W've had some notable successes in preventing attacks. I cannot talk about them in detail in this open session, but I've listed some of them in my classified testimony.

Two recent cases, however, which resulted in successful prosecutions illustrate our efforts. For example, in mid-1993, the FBI was successful in detecting and preventing a conspiracy to bomb the George Washington Bridge, the Lincoln and Holland tunnels, the United Nations building and the FBI building in Manhattan. These acts, had they been completed, would have had catastrophic consequences. And in January 1995, a Manila-based conspiracy was foiled, which included plan to bomb in a 48-hour period approximately a dozen U.S. jumbo jet commercial flights in the Asia Pacific region. Both cases resulted in convictions of several co-conspirators.

But we must understand that it is impossible to prevent all terrorist acts. The individual rights and liberties that are a fundamental part of our constitutional order constrain our ability to detect and disrupt terrorist plots within the United States, and the world is simply too big for us to expect the intelligence community to detect every terrorist plot abroad. We, therefore, must be prepared to respond vigorously and forcefully when terrorist acts do occur, to apprehend the perpetrators wherever they are found and to punish them and their sponsors.

The counterterrorism directive issued by the president last year sets out the counterterrorism strategy in full, and it is discussed in my prepared remarks. Let me just say here that the strategy has four main prongs: first, reducing our vulnerabilities by improving security measures at government installations, airports and other transportation facilities and by monitoring the activities of terrorist groups; secondly, by deterring terrorism through public diplomacy, military force and effective law enforcement; third, by responding to terrorism by apprehending perpetrators and punishing them, and by managing the consequences of terrorist acts; and four, by dealing with the increased threat posed by weapons of mass destruction.

In addition to implementing the strategy, the administration has undertaken several other initiatives to reduce and prevent terrorism. First, the president in July issued Executive Order 13010 regarding protection of our critical infrastructures. This order creates a presidential commission that will formulate policy recommendations to the president on measures to protect the nation's critical infrastructures from terrorists and other forms of attack, including both physical attack such as bombings and computer-based cyber- attacks. The infrastructures to be protected include telecommunications, electric power systems, gas and oil supplies, banking and finance, transportation, the water supply, emergency services, and government operations. The commission's work should be completed in one year. In the interim an interagency task force headed by the FBI has responsibility for preventing and responding to attacks on the infrastructure until the commission's recommendations can be implemented.

The second major initiative is the White House commission on aviation safety and security headed by Vice President Gore. On September the 9th the Gore commission issued interim recommendations on how to improve civil aviation security by deploying advance technology to detect explosives.

The third major initiative is our effort to strengthen the ability of the international community to prevent acts of terrorism. Following up on the June summit of the G-7/P-8 leaders in Lyons, including President Clinton, concerning terrorism, I met in Paris in July with the ministers from those countries to urge agreement on specific counter-terrorism measures. The ministers agreed on several important steps, including tougher international standards for security at airports, stronger investigative tools, development of a new international convention on terrorist bombings, the development of a means to ensure lawful government access to encrypted communications of terrorists and other criminals, domestic legislation to outlaw the use of biological weapons, and mechanisms to prevent terrorist fund- raising and to deny asylum to terrorist fugitives.

The fourth initiative I want to mention is the implementation of the provisions of the Anti-Terrorism and Effective Death Penalty Act of 1996. That act provides several useful tools to combat terrorism. In particular we are presently working with other agencies to implement the act's provisions that allow us to end terrorist ability to raise funds within the United States and to deport alien terrorists expeditiously. Notably, the anti-terrorism act did not contain several measures that the president had requested, and they are extremely important to our effort to prevent terrorism within the United States.

We are asking Congress once again to act on these proposals. These measures include authority for multi-point and emergency wiretaps in terrorism cases; authority for (PIN ?) register and trap- and-trace devices in foreign counter-intelligence, including terrorism investigations; authority for administrative request for common carrier and public accommodation records in foreign counter- intelligence, including terrorism investigations; and expanded predicates for wiretap orders to include any felony where there is a nexus to terrorist activity.

Within the Department of Justice, we have taken several steps to enhance our counter-terrorism capabilities. First, we are in the process of standing up the Counter-terrorism Branch at the FBI. This entity, which will bring together representatives from other law enforcement agencies and from the intelligence community, will allow us to combine the special expertise and skills and defuse the information from all of the relevant agencies, including state and local law enforcement agencies, regarding terrorist plots within the United States.

The FBI has also recently expanded its systems to spread warnings about terrorist threats to other federal agencies, as well as to state and local governments. It also recently established the ANSIR, the Awareness of National Security Issues and Response programs, which allows it to provide education, threat, and warning information to key private sector industries.

This brings me to the president's counter-terrorism budget amendment, which the president announced on September the 9th. Again, I thank you both, and Senator Domenici, for your efforts in this regard. I appreciate your foresight. Because both the House and Senate have supported our initial request for a net addition of 191 agents to our counter-terrorism program for fiscal year 1997, the department has notified the committee of our plan to begin to shift experienced agents into our counter-terrorism effort on a permanent basis. If the 1997 appropriations act is enacted timely, this action would merely execute quickly the plan sanctioned by the committee.

If on the other hand, the department is funded early in fiscal year 1997 on a long-term continuing resolution at the 1996 funding level, the department will submit an immediate reprogramming to accommodate the shift of almost 200 agents into our counter-terrorism effort in 1997.

But given the terrorist events that we have recently witnessed, and in light of other information that I can discuss in more detail in the closed session, it is apparent that our original fiscal year 1997 request and the Gregg-Hollings initiative do not go far enough in addressing our needs. For that reason, the president has proposed a $1.1 billion amendment to the fiscal year 1997 budget, to fund critical terrorism measures. This money would fund the recommendations of the Gore commission, as well as other counter- terrorism initiatives of federal agencies.

Approximately $250 million and 1,100 new positions are included in the president's fiscal year 1997 counter-terrorism budget amendment to support Department of Justice initiatives. These initiatives focus on the deterrence and prevention of terrorist acts, the swift investigation and prosecution of terrorist activities, and beefed-up physical security at federal buildings both here and abroad. In particular, this money would allow us to double on a permanent basis the number of FBI street agents assigned to counter-terrorism investigations; establish an FBI capability to investigate and respond to cases involving weapons of mass destruction; to create an FBI capability to help protect key elements of our critical infrastructures from sabotage; to establish an FBI computer- investigations and threat-assessment center to prevent and investigate illegal electronic intrusion into computer networks; increase the number of FBI translators needed to translate the communications of foreign terrorists; improve the FBI's forensic and crisis-management capabilities; improve the INS's ability to identify, detain, and deport alien terrorists; increase our training of state and local agencies to improve their counter-terrorism preparedness; increase the number of assistant United States attorneys responsible for investigating and prosecuting terrorism cases and for implementing the new prosecutorial provisions of the Anti-Terrorism and Effective Death Penalty Act of 1996; and improve security of Justice Department facilities around the country.

All of these measures are critical to enhancing our ability to prevent terrorist acts before they occur, to improving our own security, and to investigating and prosecuting terrorists when acts do occur. The American people expect and have the right to expect that the Department of Justice and the government as a whole is doing everything within its authority to combat terrorism. This mission is simply too important for us to shortchange it. I therefore urge the committee to support this budget amendment.

With respect to the three pending matters:

In Atlanta, that matter is an ongoing investigation. I have nothing that I can report except that we are continuing to pursue every lead and will do everything we can to see that the person responsible is brought to justice.

With respect to TWA, that continues to be an investigation as to what happened. We cannot make any -- have not been able to reach any conclusions at this point. The National Transportation Safety Board and the FBI continue to work together. I can say that approximately 80 percent of the plane has been obtained -- has been recovered, and we are going to continue to do everything we can using every expertise available to determine the cause of that crash.

With respect to El Khobar, we have been cooperating through Director Freeh's initiatives with the Saudi government and will continue to do everything we can working with the Saudi government to see that the people responsible are brought to justice.

GREGG: Thank you, Madam Attorney General. To follow up on those three items, is there a time -- do you have a time frame for when you expect to reach a conclusion on the TWA flight? Or at least a preliminary conclusion?

RENO: I've heard people say now for some six weeks "It will be two weeks," "It will be two weeks." One of the things that I learned as a prosecutor in Miami is that you can't tell what you're going to find and when you're going to find it. We are putting every resource we can apply to finding just what happened, and we hope to do it as soon as possible. But when I look at the history of Pan Am 103, my recollection is that it took three years before indictments could be returned in that case. We will not give up.

GREGG: And then in the Saudi instance do you expect a written report in conjunction with the Saudi government or is there such a report in the process of being developed?

RENO: I think we will be working with the Saudi government. I do not know exactly in what form it will take. But what is most important is that we share information and we will continue to pursue those efforts.

GREGG: And the Atlanta situation, you don't have the time frame on that, either, I presume.

RENO: I don't have a time frame. On all of these, we want to do it as thoroughly and as completely as possible and do everything we can to see that the people are brought to justice as soon as possible, but consistent with a thorough investigation that will support a prosecution.

GREGG: Now, you mentioned three initiatives, three major initiatives that involved presidential action. I guess my question is, how are the -- well first let me ask, I presume you don't feel that there should be a new agency created to address terrorism, such as we did with drugs. The drug czar concept created a czar, but I'm not sure a great deal of action.

My view is that you, as attorney general, have the authority and the portfolio to manage the terrorism issue, but that there are obviously a lot of agencies that are involved in this, including Defense, of course, and the CIA and State.

I'm just wondering, first, do you believe there should be some sort of overriding coordinator, new terrorism czar, which I don't -- am not endorsing and, in fact, would resist, unless you had some good arguments for it.

And secondly, assuming that there is not going to be such an individual, can you tell us how actually physically you are coordinating with these other major departments that have significant responsibility in the intelligence side and in the protection side in the area of your state, especially protecting their people on the issue of terrorism?

RENO: I can go into more detail with you to discuss the presidential directive and how it has structured our effort. But I can tell you that when I took office, one of the things that I recognized is that all the agencies involved in focusing on terrorism -- the Department of Defense, State, the intelligence community, the FBI, prosecutors -- all must work together because each has an essential part in the whole initiative that must be undertaken.

I reached out and they reached out to me at about the same time, and I think we've developed an excellent working relationship. The principals meet when necessary to address issues. The deputies have regular meetings to implement the suggestion -- the directives of PDD- 39. And importantly, we have a group -- a sub-group of the deputies meeting that meet regularly to address any issue of critical -- that is critical on issues of terrorism.

I think it has been an excellent working relationship. We've worked hard to forge strong, cooperative efforts, recognizing the individual roles that each of these institutions play; making sure that we don't mix up the roles of the intelligence community and the law enforcement community.

We've worked with the State Department I think in establishing an excellent partnership to deal with issues abroad as we develop information.

I think it has been an excellent working relationship, and based on the structure that the president has directed, I don't think that there is a need for somebody -- for a czar.

GREGG: Do you ever have meetings where you, the president, the secretary of Defense, secretary of State and the director of CIA meet purely on the issue of structuring and strategy relative to terrorism?

RENO: We have had meetings leading up to the preparation of the presidential directive. The way it's structured, again, sub-groups will meet, then the deputies groups meet, then the principals meet. And we have, I think in almost every instance, had -- been able to resolve issues so that we can present it to the president. We have had meetings on the issues -- of specific issues, but not one meeting that was necessary to address the whole problem because we --

GREGG: Who does the presentation to the president? Is that -- does it flow through you or does it flow through each secretariat or director whose arena that happens to be in?

RENO: It flows through the National Security Council.

GREGG: Now -- I've got lots of questions, so I'm going to turn to Senator Hollings, let him and Senator Domenici ask some questions then I'll come back.

But just on one specific area before we move on. What order of priority do you put on a variety of international threats, such as chemical, biological, nuclear? And to what extent are we tooled-up to respond to a chemical, biological threat?

RENO: I can go into more detail with you a little bit later. But one of the things that we have focused on, and has become even clearer with the subway attack in Japan, is that nuclear, biological and chemical attacks are a reality; that we must learn from the information that the Department of Defense has developed. We must recognize that we can work together with the Department of Defense, but it is imperative that the FBI have a capacity with people who are experienced in developing information necessary for evidence in a prosecution to have this skill as well. And we are working with the Department of Defense to enhance that capability.

With respect to another major threat which I think we are all coming to recognize as significant is the whole instance -- when you look at what one hacker can do in hacking into somebody's computer and then recognize the vulnerability of our entire information infrastructure, I think it is imperative that we respond as part of the presidential directive. It directed me to pursue this. And one of the things that I did was immediately pull together a subgroup. We met, made recommendations, and the president issued an executive order creating the commission to which I alluded. And that commission is in the process of making long-range recommendations. Meanwhile, the FBI is chairing the interim effort in which all the agencies are involved using the expertise of all the agencies to take whatever step possible to prevent a cyber attack.

I am no expert on this, but as I get more and more into it, just the description of how the information and the communication systems of this country, both the military, the public, and the private sectors are connected through switching mechanisms of our telecommunications industry, it makes clear that we must work with the private sector to develop the capacity to prevent attacks on this critical information infrastructure. On all of these issues we recognize and are responding, I think, in an orderly way with as much speed as possible consistent with developing the best mechanisms possible.

GREGG: Do you -- do you consider these to be mostly individual threats, or is there a state-sponsored concern here?

RENO: I think we have got to be prepared. For many years people thought of state-sponsored concerns. I think they -- that continues to be a concern, and we cannot relax our vigilance in that regard. At the same time I think we have seen the development both domestically and internationally of individuals and small groups who are involved as well. That makes it more difficult in some respects because there are so many. And we are trying to make sure that we have the intelligence, that we have the knowledge that can provide appropriate preventative mechanisms.

GREGG: Senator Hollings?

HOLLINGS: Thank you, Mr. Chairman. Mr. Chairman, once again I was asked coming into this hearing about the DEA -- that's hit the headlines. And I would ask consent that we include in the record the presidential requests over the last nine years and the actual amount appropriated over the last nine years. And it's very little. It's just about on target. For example, in this present year budget, the president asks for $857 million, we gave him $856 (million). And for next year we had already marked up an additional -- from one billion nine we gave him one billion thirteen, or four million more. So for the past nine years it was requested $6.648 billion, and Congress provided $6.672 billion, or over the nine years a $24 million difference. So we have been responding and working at this committee to make sure that we really responded to the DEA and generally speaking, of course, more than responded to the Justice Department, which brings me to the first question, general.

Under Chairman Domenici we had $4.6 -- $4-1/2 billion for Justice. This is a State-Justice-Commerce subcommittee of appropriations. And we had a $4.5 billion budget for Justice. Now under big spenders Gregg and Hollings we are up to $18.5 billion.

GREGG: We're the problem. (Laughter.)

HOLLINGS: Growth -- growth. We're the problem. (Laughter.) Where are we going to take care -- I want you to tell this subcommittee where we're going to get this 330 or 313, whichever is the correct figure that you're asking for, because we're not going to be able to take it out of Commerce. We've been closing things down there. We've been closing in State various embassies and everything else. Hell, with the end of the cold war the State Department is front-line troops, and we haven't paid our dues to the United Nations in Lord-knows-when, and Chairman Domenici as well as Chairman Gregg know this particular problem. So it's seemingly with that kind of growth over the past nine to 10 years that we can find some 300-and some million for your request here on this emergency basis.

Specifically, I commend you for the requested reprogramming of 191 agents over into terrorism. I'm ready to approve that with our distinguished chairman.

GREGG: We have it right here. We'll approve it today.

HOLLINGS: And we'll approve that today -- Chairman Gregg will.

So, I want you to tell the subcommittee where you're going to get this money you're asking for in your budget.

RENO: We have been in conversation with OMB, and they are obviously directing this analysis. They have not suggested at this point that it come from our budget. And they, I anticipate, will be working with Congress to address that issue.

HOLLINGS: Well, I'd like for you to address it because I can't depend on OMB. Ye gads!

RENO: I will continue to --

HOLLINGS: They don't even have a director over there now, do they?

DOMENICI: We just got him.

HOLLINGS: You just got him?

DOMENICI: We just cleared him.

HOLLINGS: Wonderful, Pete. That's good.

Find out, though, where you're going to get the money. You've got a better judgment of your overall, having been in it 3-1/2, almost four years now, where we can really -- like you're reassigning the 191 agents, you can reassign monies also.

Advise us, because we're going to work together in a bipartisan fashion. And I think the administration, or specifically the attorney general in charge, should tell us her suggestion as to where --

RENO: I will -- I will work with you and the chairman and Mr. Taylor and try to keep you as advised as I can on just how we will do this, sir.

HOLLINGS: Very good.

Now, with respect to the so-called security, which is the greatest threat is that to the airline industry, I find a tremendous gap with respect to the safety in passenger and cargo treatment. Specifically, we assign to the government the controllers in the tower. We wouldn't dare privatize that. Nor would we privatize our Customs agents, our Border Patrol. But here, the greatest gap in the line is the safety of what goes on the plane itself. And here we come in responding with multi-million dollar machines, machines, whereby we know, from what we call company-operated packages in ValuJet, it can just go on. It doesn't have to go through any scanner. And they say, "Well, if it's improperly labeled." Whether I'm labeled honest or dishonest, I've got to go through a scanner, but the package doesn't.

And in essence, what we've done is commercialize the safety, and it goes to the lowest possible bidder. And every little town, including mine, in America has now carried on in the last few months a bomb, a makeshift bomb, to show how they did it. (It ?) ran on TV down in Charleston, South Carolina, how they easily got through. Why? Because there is no training, there is no standards, there's no check.

Now I understand the Gore commission would come with some kind of standards and a little bit of training. But the bureaucracy to check it is again -- the cost -- I'd just as soon take the cost and take on the responsibility, like we do the controllers, like we do the Border Patrol, like we do the Customs agents. Put them through drug tests. You can't get a job out here as a Capitol policeman unless you take a lie detector test. Why can't we do it?

And (wherein does ?) the Justice Department -- let's assume you've got Terrorist X out of the Mideast, and Terrorist X is going to come, we know, and he's been assigned to put a bomb on a plane in New York. Do you follow him, or do you call up the FAA and say, "By the way, (they're ?) out at Kennedy airport, we know Terrorist X has been given this assignment"? Do you turn that over to the FAA, or do you keep following him? Do you have FBI agents in the airport building, checking the security? Or what happens? This is where the problem is.

It's not so much with the machines, because I could go out there to Kennedy and palm that fellow $1,000 cash and say, "Here, son, put this package on right this minute." And I bet your boots, for a thousand bucks, he'll put it on the plane and blow the durn thing up. And we're talking about big machines and how we're going to coordinate and how we're going to do this and do that. What we've failed to do is really professionalize the safety of packages and passengers.

RENO: Let me take it in two parts.

First, with respect to the immediate cargo area, as you -- you made reference to the vice president's commission's report. And one of its recommendations is to require criminal background checks and FBI fingerprint checks for all screeners and all airport and airline employees with access to secure areas. That is recommendation number three of this interim report that has been prepared by the vice president and the commission.

With respect to the second issue, let us just talk as a hypothetical -- I don't want to get into the specifics of what the FBI would do, but I can assure you that the FBI would be with them every step of the way and would be working with the others concerned -- the FAA and people who are on site at the airplane -- in surveilling this person, in making sure that that bomb was never delivered.

If we --

HOLLINGS: Now that's the expression -- "working with the FAA on site" -- that scares me, because that's where the gap in the line is.

RENO: I don't think so, sir. But why don't we get into it in a little bit --

HOLLINGS: When last have you been on a plane? Come on! I walked out here to National and you feel like you're leaving Tehran or something. I mean, they look at you and every other darn thing. Come on! You don't call that secure.

RENO: I am not suggesting to you, sir, that the FBI would abdicate its surveillance at that point, but it would be working with the FAA to ensure that any expertise or any capacity that the FAA had that might be helpful would be considered. But I can assure you, if we had information that somebody was bringing a bomb, we would make sure that there was appropriate surveillance and that everything was done to prevent the tragedy from happening.

HOLLINGS: And you would not turn it over to the FAA on site? That's the only way to do that, under the present circumstances.

RENO: Again, I think we can work with everybody in that particular situation. But let me make sure that I address your issue specifically in the later session.

HOLLINGS: Very good. I think in the secure session we can get what I want.

Thank you, Mr. Chairman.

GREGG: Let me note, just so that we're -- it's hard to compare completely the oranges that the administration sent up with the tangerines that we put into our bill. They aren't that different, but there are differences.

But I sense that there is some overlap in this money; in other words, that the administration money, which they're requesting relative to your department and to the State Department, overlaps the money which we have as part of our initiatives, because basically they're basically taking our initiatives and putting more money into them. So I'm not sure what the difference is. I think it's probably more in the range, on a gross number, of somewhere around 200, probably 220, 200 million (dollars); and relative to your department, probably on a gross range, probably 100 million (dollars). But I don't know that yet. We haven't figured that out.

RENO: What I would like to do is commend you both on your foresight again.

GREGG: (Chuckles.) Well --

RENO: And what I think we can do, I will ask Mr. Colgate to work with Mr. Taylor, because I think we've tried to compare them, so that they are not apples and oranges and that we have a clear understanding. And with your permission perhaps can do it.

GREGG: Well, I'm sure we can to a specific comparative here, and when we do that we'll know how much we have to come up with in order to meet your additional request. But to the extent that we have to come up with more to meet those requests to the extent that the committee determines that those are legitimate -- and, for example, one of your major items is to add more FBI agents, which I happen to support. But we didn't have the money for it. We are going to require that there be money found somewhere to do it. We're going to add it to the deficit. We're going to have to figure out some way to pay for it. And whenever I use the word "deficit", of course, trying to pay for it, the next phrase that comes to mind is Senator Domenici. (Laughter.)

DOMENICI: Actually, thank you very much, Mr. Chairman. And thank you, Fritz -- Senator Hollings, for -- .

Well, I guess I want to raise a few issues with you about how we pay for this. Let me indicate that you might suspect as bipartisan, as nonpartisan as one wants to be with reference to this issue it is very suspect when after all these months when everybody knew about this problem three weeks before Congress is scheduled to go out we get a request for $1.1 billion in new money. I would hope the administration would suggest how we're going to pay for it from within the budget that we've all been working on. On the other hand, I might say that if I were other there I might be tempted to try to not pay for it. And I know of only two ways, and I just want to put them on the table.

One, you could seek emergency treatment. And I wouldn't doubt that somebody over in OMB or in the White House is thinking about that. I don't want to pass judgment on it right now, but I think that's kind of a stretch. I mean, what we had to -- for emergency treatment, Senator Hollings, was a tornado or a flood or a hurricane, and that would permit you to exceed the budget and not ever have to pay for it. I can't -- and while this is an emergency and it's a tough one, I don't know that it fits the definition.

The other way is to just ask Congress to break the budget, and that means that you -- it's not too difficult. It'd be unheard of for the past, but you could just ask for 60 votes and spend more money than is permitted.

So let me just say, when was the president's order, that you referred to in your early part of your testimony -- (through the chairman ?) -- when was that order or directive issued?

RENO: I will get you the specific date. It was in 1995, sir.

DOMENICI: And that, as I understood from you, set the direction for an evolving American policy with reference to terrorism.

RENO: June 21st, 1995.

DOMENICI: And did that set the framework for an evolving new policy with reference to how we ought to be conducting ourselves?

RENO: That set the framework for how we would do it, sir.

DOMENICI: So from June of 1995 until last week, no plans were developed that required any extraordinary new monies from the Congress?

RENO: What I would like to do, Senator, is during the closed session I'd like to give you as much information as I can that will describe the basis for it. I would point out that we met in late July in a bipartisan meeting with the president and congressional leaders, talked then about the issues that we were facing. And I'd like to give you as much information as I could in our next session, if I might.

DOMENICI: Mr. Chairman, I just have two remaining ideas or lines of thought.

Are we now changing the previous policy with reference to how much of airport-type terrorism potential, how much of that should be borne by the airports and airlines and how much should be borne by us?

RENO: I think the vice president's report -- and I would -- I think it speaks for itself. But as I understand it from our discussions and in our meetings, that he points out that historically there has been a problem in how we address airport security because of the question of who pays for it. And what he tries to do here is explain how we must develop a partnership with the private sector. I think that's true whether it's with respect to airport security, with respect to the security of our information infrastructure, we are going to have to, as we move into the next century, be prepared to figure out how we fund it both privately and publicly.

DOMENICI: I would just like to state for the record -- I'm not sure that either of my colleagues knows this, but when the president went to Princeton to deliver a speech on education he carried with him a commitment to have a new program for middle income Americans with reference to their children going to college. That was some kind of a new tax credit for them. It might surprise you as to how the president was going to pay for that. Five point four billion dollars of its cost, Senator Hollings, was going to come from an increase in international airport fees. It would seem to me that with the problems we've got we ought to leave international airport fees to airport problems.

I understand why the president would make such an announcement. Nobody's going to object to international airport fees, and that was a nice way to pay for a very popular education tax credit. I do believe it's incumbent upon us to study carefully whether there is a new relationship being created as to general taxpayers' money going into airport safety, and I'm not suggesting I know the answer. But obviously when you have something like international airport fees being recommended going to some kind of student tax credit, you begin to wonder what -- where the proper priority is with the administration.

Let me close by just saying that I hope -- I hope we are not going to catch ourselves, get ourselves caught in a situation between the Congress and the White House that will not permit us to get our appropriation bills done because of this billion-two hundred or billion-one hundred million dollar increase, because I think it's very important that we get this work done in the next two or three weeks. And I will say I'll do my part working with this committee to see what we can do. But I don't take all of these recommendations and all of this money that's thrown out here three weeks before an election. I'm -- I mean, I'm not saying when I say I'm going to cooperate that I have agreed with all of that. I think we ought to look at it very carefully. We have it to live another day, and there's another budget coming down the line. So, thank you very much.

RENO: Senator, I -- I can't address the broader issues, but I just -- I have appreciated the opportunity to work with you over these three and a half years, and in these next weeks we will work together and work with staff in every way we can to provide the information that you need to make the best judgment possible.

GREGG: There are a couple other questions I'd like to ask while we're in open session, then we'll have to adjourn to a classified session. But basically if you could give me a comment on whether or not you feel we have a(n) adequate assessment at this time of those countries which are undertaking international terrorism, do we know what they -- which countries are doing it and to what extent they are doing it in general terms?

RENO: I think in general terms we can answer your question yes, but in specific terms I'd rather wait 'til the next session.

GREGG: I understand that. And secondly, I read -- and maybe this was inaccurate -- that the nation of India has rejected our request that we station FBI agents there for the purposes of being on- site communicators with the Indian police forces and the other agencies of the Indian government who we would want to communicate with relative to criminal activity that might be related to domestic crime here in the United States.

Now, the stationing overseas of FBI agents has been an issue of some discussion. I happen to support it. I think it makes a lot of sense. There are obviously tremendous relationships between ourselves and India that are both commercial and, at least in my part of the country, a tremendous number of students coming into this country from India. And I presume that having FBI agents on the ground in India would be of considerable assistance to us in anticipating and addressing criminal activity. I'm wondering if that -- if you're familiar with that instance, or if that was just a news report that was inaccurate?

RENO: Senator, what I would suggest is I think there may be some confusion on this. And rather than do something that might be -- talk about something that might be classified, if we could address this just in a -- in a few minutes I think we could get it cleared up.

GREGG: Okay. If you could, then, generally comment on the need for FBI agents overseas.

RENO: I think it is so vitally important. Not a day goes by that I don't have some issue brought to my desk about how we are working on a mutual legal assistance problem, the need for a contact in a foreign country. It is, I think, critical in the development of information and the development of contacts that will allow us to in the terrorist area identify it before it happens and prevent it.

It's also critical, as I have talked to you about before, in just how international crime has become when a man can sit in a kitchen in Saint Petersburg, Russia and steal from a bank in Chicago. We've got to have the capacity, working with state and local -- I mean state and local officials here, and with foreign governments and foreign police forces to bring these people to justice. When we look at the whole impact of drugs internationally, our ability to deal with the drug trafficking in its different forms --

GREGG: And have you reached an adequate protocol with the director, the CIA director?

RENO: I think we have; not just with the director of the CIA, but with the State Department. Because we've worked, again, not to thrust ourselves on other people, but to develop a true partnership that recognizes how the agencies can work together, recognizes the respective roles. And I think we are in agreement.

GREGG: Senator Hollings did you have anything further to ask?

HOLLINGS: Yes. General Reno, let me make it on the record that I have always opposed the Budget Committee -- which the distinguished chairman is here; I formerly chaired it -- going into the airport and airways improvement fund and using those monies for any and everything but airport and airways improvement.

I've been now almost 30 years on that Commerce Committee and with the FAA. I've watched it, I've asked for it, I've demanded of every FAA administrator to give me a program of improvements -- not in my own backyard, any and everywhere else. But the administrations and the Congress never allow them to do it.

I think there's about $4 billion in the fund now. So when I recommend -- I object to anybody trying to get educational vouchers or college scholarships, and so forth, out of the airport and airways -- international or otherwise -- fund.

And right to the point, when I talk about beefing up the security by taking over the responsibility, federalizing the personnel checking the packages and passengers; that the money's there in the airport and airways; just don't call it improvement, call it Safety and Improvement Fund. We can use the same fees that are being used now. So that's a matter of record. And I've been struggling with that over the many years.

Let me specifically get in the record on the open session with respect to the taggants and the roving wiretapping. Why do we have to have it? I've -- we've got it in this bill of '97, of a study for gunpowder. We've got the provision in there for roving wiretaps. But as the attorney general of the United States, would you state for the record the need?

RENO: It is so important in terms of the roving wiretaps because they can go from phone to phone or use a different phone. Under existing law, if I wanted to have a microphone follow them place to place, not knowing where they were going, all I would need to do is show that it was impracticable to use a one-point order. That's for a microphone following somebody.

But if it is for a roving telephone if you will -- a multipoint system -- I would have to show that they are -- that the -- it requires a demonstration of probable cause that the subject is attempting to evade surveillance by changing telephone devices. And based on the evidence that was available for a court, because we are again talking about court orders, I might not be able to prove that he was -- whether he was trying to evade us or whether he was just trying to cheat the telephone company out of money.

And so it is giving to investigators, in a terrorist situation and in other situations, the capacity to do the same thing with the multipoint wiretap as it would with a roving microphone that was court-ordered.

With respect to the taggants; it is important there -- the identification taggants are microscopic particles, which are added to explosives, and they're designed to survive explosions. By varying their composition, it is possible to trace the explosive back to its legal sale.

We authorized -- or you authorized in the 1996 act to study taggants, but it expressly barred the study of taggants with respect to their use in black powder. This study just could be very helpful and -- providing an understanding of whether this could not serve as an additional tool.

HOLLINGS: Twenty-five percent of bombs have gunpowders we need to have included and studied and, obviously, included. Is that correct?

RENO: Well, I think --

HOLLINGS: That's the NRA. They object to gunpowder. Do you know what I mean? Let's identify the opposition there.

RENO: I think the taggants are an extremely useful tool, and I certainly think that this issue should be studied. There's just no reason that it should not be studied so we have a firm understanding of just how useful the taggants can be.

HOLLINGS: Very good. Thank you, Mr. Chairman.

GREGG: Pete, did you have any further questions?

Thank you very much. We're going to adjourn now to Hart 219 for a classified briefing from the attorney general. I appreciate the attorney general's participation in this open hearing.

(end transcript)