1996 Congressional Hearings
Intelligence and Security

Intelligence Analysis on the Long-Range Missile Threat to the United States

U.S. Senate Select Committee on Intelligence

December 4, 1996

SEN. SPECTER: We have an unusually important hearing today on the threat of nuclear missiles and other weapons of mass destruction, the threat to the United States of America. And we have an extraordinarily distinguished panel of witnesses here, including two former directors of the Central Intelligence Agency.

About a year ago the United States intelligence community published a National Intelligence Estimate entitled, quote, "Emerging Missile Threats to North America During the Next 15 Years," and that report was used as the basis for some in the administration to defer a missile defense system in our country. And the conclusions were controversial and subject to disagreement. And among those who were in disagreement, some contended that there was politicization in the report and that there was a political motivation for the conclusions of the report.

The director of Central Intelligence, Dr. Deutch, commissioned a panel of independent experts to study the report and to give an evaluation of it. The controversies on the missile defense problem have been with us for a very, very long period of time. After the anti-ballistic missile treaty in 1972, it has been the subject of controversy over the intervening two decades; in the late 1980s a lot of controversy over the narrow versus the broad interpretation of the anti-ballistic missile treaty, as to what our nuclear defenses should be. With the demise of the Soviet Union, there is a lessening, perhaps a lessening of the threat from the Soviet Union but always a threat from other countries - Iraq, Iran, other rogue countries - so that the issue of nuclear defense is one which is always very, very hotly debated.

The Intelligence Committee undertook an investigation on the issue and a report has been prepared, and the committee decided, after Senator Kerrey, the vice chairman, and I consulted on the matter to defer the release of that report until after the election. We had a couple of hot potatoes. One was the issue of the sale of Iranian arms to Bosnia and this issue about politicization.

And as we near the end of the 104th Congress and the end of my tenure as chairman, I again thank Senator Kerrey and the entire committee for cooperation in our work. And we have worked hard and I think successfully to keep this a nonpartisan, bipartisan committee - something that is very important and regretfully something that is not done in the Congress all too frequently. And we're about to set out, not this committee, but an important investigation on campaign financing, and it is my hope and I will be on that committee, that we will do that in a nonpartisan, bipartisan basis as we have run this committee. But I make reference to the fact that we deferred release of the committee report until after the election, along with the release of the issue of the Bosnian sale of arms to - Iranian sale of arms to Bosnia.

And we pick up this subject today at a time when there are many senators in town, with the reorganization of the Senate yesterday. And Director Deutch has deferred coming here today and instead has sent Mr. John E. McLaughlin, who is the vice chairman for estimates, National Intelligence Council, to review the report. Just two days ago on Monday, December 2nd, this committee received a report on the independent group appointed by Director Deutch, and this group is headed by former Director of Central Intelligence Robert Gates.

And at the moment we have a declassified - we have a report which has not been declassified. There are portions which are unclassified and we're able to refer to those today. And yesterday I talked to Director Deutch about having the full report declassified and he said he would do that as soon as he could. Director Deutch will testify before this committee on December 18th, two weeks from today, and will be discussing this report and other matters.

But there is a fair amount of the report which is unclassified, and it is a very - a very telling report. The question of whether there was politicization is obviously a question of great importance, but I think of even greater importance is what is the nuclear threat to the United States, and that is a matter of survival. Nothing is more important than that question - even more important than U.S. politics.

And the report that former DCI Director Gates will testify to today has some really very, very important conclusions beyond the politicization issue -- characterizing the report as not being politicized but being na ve, going into some important subjects about motivations, which are important as these analyses are made, touching on the question of whether weapons are terror weapons as opposed to weapons which are militarily useful, a terror weapon is defined there being one which is developed, has enormous potential, probably never tested, but to terrorize the opposing country to encourage or induce them to do something that they might not otherwise want to do; raising the issue as to bankruptcy of the Soviet Union in the 1980s, trying to keep up with the rearmament of America at that time. President Reagan said that the Soviets loved the arms race as long as they were the only ones in it. And then the United States picked it up in the 80s and the Soviets tried to keep up, and as we all know, went bankrupt in the process.

And the essential conclusion is a very interesting one, I think subject to challenge, subject at least to discussion, about no major threat in the next 15 years, although the report concedes that 15 years is a very long time to make any analyses because there could be a change in policy in Russia and China, and there's always a possibility of a rogue country, Iran, Iraq, other countries developing a nuclear threat.

On the question of both the nuclear threat and the question of politicization and candid testimony, there's an important story on the front page of today's newspaper about a speech which former Air Force General George Lee Butler will give today. And according to the press report, General Butler is, quote, "slated to give a lunch-time speech in Washington in which he will make a dramatic departure from the views he publicly espoused as commander-in-chief of America's nuclear arsenal. When he was in command for many years, he articulated one point of view, and now he's about to say that it's, quote, "fundamentally irrational" - our policy.

And I wonder, when we see speeches like this, and I'm certainly glad he's making a speech to express what is on his mind, why we don't have candid statements at a much earlier stage, for the Congress and for the American people. He's in the chain of command. We very frequently get information around (Robin Hood's ?) -(word inaudible) -- we can't get it through the administration, and secretaries come talk to us behind closed doors to find out what they really think because they can't tell us openly.

But when it comes to an issue like the nuclear threat, it would be very gratifying if the Congress knew what the honest views were of people in high positions. We shouldn't have to wait until they're retired and making a lunch-time speech in Washington to find out what they really think. And that's not politicization in the sense of trying to gain political advantage, but it certainly keeps from the Congress important information that we ought to have at an early stage. And this is a matter of overwhelming importance.

Shortly before we started, I told Mr. Gates that I was going to discuss with him this chart prepared by my office on the issue of the way the government responds to the nuclear threat. There are 96 boxes here, separate agencies. And Bob Gates told me something I didn't know, he had a similar chart like this in 1992. And I didn't see his chart, he saw mine. And as part of our Intelligence Committee report bill this year, we provided for a commission to try to streamline the way the government works in this very, very important area.

So there's a lot we have to talk about today, and I'd like to yield now to my distinguished vice chairman, Senator Kerrey.

SEN. BOB KERREY (D-NE): Thank you very much, Mr. Chairman. I just say to Senator Glenn, as far as Lee Butler's giving his speech, that I've seen some of our former colleagues do the same thing tell the truth after they leave office.

Mr. Chairman, first of all, I very much appreciate your calling this hearing on something that I think is a very essential or very crucial national security subject. This NIE that we're discussing today may be a year old, but its topic, which is the missile threat facing the country, will demand our concentration for years to come.

And may I also say at the outset that I appreciate as well the efforts of our colleague, Senator Kyl, to keep us focused on this matter.

I think we, as a committee, as a Senate, stand together on at least one fundamental point involving missile defense, and that is that we want the intelligence community to do its job so the administration and the Congress have the information they need to protect the independence of our country and the lives of our people. It's inevitable the National Intelligence Estimate in question, this NIE 95-19, would be controversial. Any meaningful pronouncement on a topic at the center of our defense debates would generate controversy. For some people, having to recognize the near-term potential ballistic-missile threat is to admit profound disappointment that the need for complex, sophisticated defenses did not disappear with the Soviet Union. For others, for trying anything more distant than a near-term threat is to provide a false basis for wasting precious time rather than preparing the defenses they believe we will need.

With this kind of division, simply stated of course, there's not - it's not going to be possible for an estimate like this to please everyone, let alone anyone. And the intelligence community is not in the business of trying to please us. Their business is to try to give us the honest and best estimate of the threat and the threat to our country, and our business as an oversight committee is to try to determine if they have done so.

Historically, one of the greatest threats to the legitimacy of intelligence analysis has been the politicization of that analysis. The fact or even perception that analysts have skewed their conclusions to please their political or bureaucratic masters is not good. If intelligence is not seen as completely objective, it has no value, despite all the human and technical investment the government made to produce it. That's why this committee reacts with vigor whenever politicization is raised in connection with a particular piece of intelligence.

When a member of this committee, as he said on the floor concerning this estimate, quote, "I think that this National Intelligence Estimate was dramatically influenced by the White House," end of quote, and when another member of the committee declared on the floor regarding this estimate, quote, "Either the intelligence community has adopted a new methodology to determine the extent of a threat or outside, maybe even political influences are at play," end of quote, then this committee would have been derelict if it had not immediately inquired into whether politicization occurred.

Let me be clear, Mr. Chairman. The members who stated their concerns about the politicization of this estimate were entirely within their rights to do so. They made appropriate points about an estimate which has attracted considerable criticism from other sources, including former Director Jim Woolsey, who is prepared to testify this morning, and one of the customers who had - as well as one of the customers who requested the estimate, Lieutenant General Malcolm O'Neill of the Ballistic Missile Defense Organization.

So the members who raise these concerns were in good company. And I might point out that maybe tomorrow that I will raise similar complaints about some estimate that I might not like, or that I might believe has been politicized in the production of the report.

The staff report that has been complete for - has been complete for months, but unfortunately and perhaps understandably, some of our members - some of our members object to its publication. They have raised procedural objections and objections on the grounds that staff were not authorized to conduct an inquiry. But again, I say frankly that I think their principal concern is that they simply don't agree with the report's conclusion that the estimate was not politicized, and I believe in fact had the report found rampant politicization they might have been more eager to see it broadly circulated.

Again, I support - support it, and I support publishing our staff report, because I believe public statements about politicization require public answers. I also support the chairman's request to delay discussion of this until we've had a hearing. And I look - as I said, I do look forward to the testimony.

Fortunately, the defense authorization bill required another nonpartisan, objective analysis of this estimate by a panel headed by another distinguished former DCI, Mr. Gates. The Gates report is complete in draft form. The Gates panel took a broad approach. It looked not only at politicization but at all the criticism of the estimate. The Gates report is approved by Director Deutch, and if it can be largely declassified it might obviate the need for a complete report on the same topic. There's no question the draft Gates report contains more data to inform and educate the public on this threat than does the more narrow staff inquiry of this committee.

Mr. Chairman, as we hear the testimony on this report, I hope that the committee will consider a course of action that might have us releasing the Gates report as our report and that -- in order to get the best nonpartisan information before the American public.

Again, I thank you, Mr. Chairman, for holding this hearing, and I look forward to the testimony.

SEN. SPECTER: Thank you, Senator Kerrey. The course which you suggest is under consideration as to what ought o be done with our staff report, and when we have a chance to study in detail the full Gates report and we have this hearing, then we'll be in a position to move ahead on that subject.

We have scheduling problems because Mr. Gates must leave here by 11:30. We have good attendance so far and I expect more members to be present. We're going to lead with Mr. McLaughlin since he will outline the basic report, the one that we are talking about. And we're going to hold the questions on Mr. McLaughlin until after we've heard from Mr. Gates and have a chance to question Mr. Gates, so that we can do our best to get him out on time because he has a lot of other commitments.

SEN. JOHN GLENN (D-OH): Are we going to have other opening statements, Mr. Chairman?

SEN. SPECTER: I didn't plan to. Do you want to say something?

SEN. GLENN: Very briefly.

SEN. SPECTER: Senator Glenn.

SEN. GLENN: Very briefly, open statement. I want to associate myself completely with Senator Kerrey's statement. I think that was complete. It laid it out very carefully. (Brief audio break) - very, very serious charges made in the open on the Senate floor, and I think the burden of proof is on those who made those charges on the Senate floor. We had the staff, it is a bipartisan staff here and they work on a bipartisan basis, they don't work as Republicans and Democrats, and they investigated all this and came out with their report. It was a good a report. We've had months to look into this thing. And so I associate myself with Senator Kerrey and I think the burden of proof is on those who made those charges.

I'd rather these things were made privately within the committee. I think that's how we should operate. I don't think we should be out on these things unless we absolutely have to have hearings on it. But that was the decision. So, very serious charges, and I'm glad we're looking into them and I hope we consider these things before we made decision - before we make public statements out of this committee on the Senate floor in the future.

Thank you, Mr. Chairman.

SEN. SPECTER: Well, Senator Glenn has raised some important points. And if we're going to get into it, and we are going to get into it, we'll discuss it, and in a moment I'll call on Senator Kyl for a comment.

SEN. JON KYL (R-AZ): Thank you. Mr. Chairman -

SEN. SPECTER: Wait just - I'm going to call on you in a moment.

SEN. KYL: Oh, I'm sorry.

SEN. SPECTER: First I'm going to make a comment. We're in a very delicate area here, as to who says what and when. And my own view is that it's up to each senator to make that decision for himself. Those who claim politicization may be wrong. But I think they have a right to speak out on it. And if they're wrong I think they ought to be challenged on it. And when the statements were made, they were disagreed with, but others were free to take to the Senate floor and disagree with them. And then we conducted an inquiry. And we do have a nonpartisan staff, and we've run this committee in a nonpartisan way. And it was a tough call as to how we were going to deal with our own report. And Senator Kerrey and I worked on that long and hard and made a judgment on it and submitted it to the rest of the committee, and that was the committee decision. And I respect what Senator Glenn has said, but I also respect what Senator Kyl has said. And it's your return for rebuttal, Senator Kyl.

SEN. KYL: Well, thank you, Mr. Chairman. I won't take that opportunity, because I know that we have witnesses here who have important things to say. I would like unanimous - I would like an agreement that I could insert a statement for the record and just make this point.

While I wasn't one of the people who alleged that the report was politicized, I did ask a question on the floor of the Senate, given the fact that the facts did not appear to have been changed, suggested that the methodology in the 1995 report must have changed from the 1993 report. And I did ask a question whether or it might have been politicized. We now have two very competent reports, both from the GAO and the special DCI panel called the Gates panel. And I am pleased in a way that the conclusion of the Gates panel is that while there was no politicization in the normal sense that we would think of the term, the document was politically na ve, but that the methodology was deeply flawed, and that's the part that's not so pleasing.

So there clearly was a difference between the 1993 and the 1995 report. It's not due to politicization, apparently, but due to flawed methodology. That should not please us in the sense that we still came out with a bad product.

And Mr. Chairman, I agree with you, the issue is no longer politicization, it's the degree of the threat of weapons of mass destruction. And I appreciate the work that you have done, that Senator Kerrey has done and that we will continue to do to try to ensure that we have the best information and that the administration has the best information about the degree of that threat. That's the critical issue. And anything that gets in the way of that, whether it be politicization or flawed analysis or flawed methodology, is bad. And I'm hoping that when this is all over with, we can provide some constructive, positive suggestions to the DCI and to the administration about how to avoid this unfortunate result in the future.

Thank you, Mr. Chairman.

SEN. SPECTER: I'd like to move ahead with the witnesses, but I see Senator Shelby wants to make a comment and I don't want to cut off any of my colleagues.

SEN. RICHARD SHELBY (R-AL): Mr. Chairman, I will be real brief. I would like for my opening statement to be made part of the record -

SEN. SPECTER: Without objection, so ordered.

SEN. SHELBY: -- and I would like to say this, Mr. Chairman, that I commend you for holding this hearing. I think it's very, very important. But we have to keep in mind, what is an estimate? An estimate is a prediction of future. And the - as Senator Kyl has brought up, if the methodology -I just raise it rhetorically - if the methodology is flawed or questionable, what is the estimate - you know, that brings into call what is the estimate; is it wrong? I don't know. But I think we need to find out. And that's why you're getting into these hearings. W e want to hear what people are going to say about this. We already know some of it but we need to hear it.

Thank you.

SEN. SPECTER: Well, we will inquire in detail as to methodology beyond any question -

SEN. SHELBY: Absolutely.

SEN. SPECTER: -- because the nature of the threat and what the facts are is really number one. The politicization question is important, but it's obviously number two in this context.

SEN. BAUCUS: Mr. Chairman?

SEN. SPECTER: Senator Baucus.

SEN. BAUCUS: Mr. Chairman, I will not take the committee's time. I know we have witnesses here we want to hear from. I must say, though, I do not like the drift that this committee is tending toward that is more partisan rather than nonpartisan. And I think we should all be reminded -- all of us, myself included -- that this is -- we do a lot better in serving the public interest and serving the country the more this committee is truly nonpartisan or bipartisan in its approach. And I urge all of us to keep that in mind, not only today but in future respects.

SEN. SPECTER: Well, Senator Baucus, I agree with you. The committee ought to be nonpartisan. But I think the committee has been nonpartisan. We're all entitled to our own opinions.

Mr. McLaughlin, we welcome you here. You come today with an extraordinarily distinguished record, having been with the Central Intelligence Agency since 1972, had worldwide experience, director of European analysis, director of Slavic and Eurasian analysis, concentrating on political-economic-military issues in Russia and the 14 new states. And since July of last year you have served as vice chairman for Estimates, National Intelligence Council and are in a position to give us the first line of testimony on the intelligence report which is subject to analysis here, National Intelligence Estimate 95-19, "Emerging Missile Threats to North America During the Next 15 Years." The committee had asked Director Deutch to be here, and he has deferred to you. And as I said earlier, he will be before the committee two weeks from today, and I think at that time we'll have the full report declassified.

Your full statement will be made a part of the record. To the extent you can limit your comments to five minutes, we would appreciate it. If you need to go somewhat over, we'll understand that. But the bulk of your testimony will doubtless occur during the dialogue Q&A following. So the floor is yours, Mr. McLaughlin.

MR. MCLAUGHLIN: Senator Specter, Senator Kerrey, other members of the committee, thank you. I will limit my comments to a summary of the written statement that we submitted.

SEN. SPECTER: Thank you.

MR. MCLAUGHLIN: Serious issues are on the table today. As you note, Senator Specter, the subject of the estimate in question, our vulnerability to missile attack, is of supreme importance to the country. But it is also not inconsequential that the findings of this estimate have come under sharp attack, along with the motives of those who prepared it.

I intend to address all of these by focusing on three areas in these brief remarks: What the estimate actually says, the process by which it was produced, and then I would like to respond briefly to some of the criticism it has received.

By way of preface, I would say that after a year of criticism, we still regard this estimate as a sound intelligence product, one that reports clearly the results of analytic work in response to the questions of those who've requested it.

Now, what does this estimate say? What is it about? It seeks to gauge the threat to North America, including Canada and all 50 of our states, from emerging missile forces in the world. Because Russia and China are extensively covered in other intelligence publications, we do not go into detail on their missile forces in this estimate, other than to note two things: First, that unauthorized launch of Chinese or Russian missiles remains, in our view, a remote possibility; and second, that we would become more concerned about this in the event of a severe internal crisis in either country. And as with all national intelligence estimates, this one sought to project events over a period of time, as Senator Shelby pointed out, in this case 15 years.

Now, what does it conclude? Just to briefly review what it actually says, first, among the countries potentially hostile to the United States, North Korea has the most advanced ballistic missile program. We've identified a missile in development that we call the Taepodong-II. And it may become capable of reaching Alaska and the westernmost portion of the Hawaiian island chain.

Second, no country other than the declared nuclear powers will develop or otherwise acquire ballistic missiles capable of reaching the contiguous 48 states or Canada by 2010. North Korea is the only potentially hostile country capable of developing a ballistic missile threat to any part of the United States by 2010.

Third, the estimate goes on, we are confident that we would detect and identify flight testing of any country's developmental ICBM at least five years before deployment and probably detect other additional indicators years before flight testing.

Fourth, while the factor of foreign assistance introduces some uncertainty into our predictions of developmental time lines, our assessments do include the range of reasonable possibilities. We expect no country that currently has ICBMs will sell them, partly out of concern that the missile might be turned against them.

Fifth, we also noted that in the next 15 years, countries may obtain land-attack cruise missiles to support regional military goals. Adopting these relatively short-range missiles to launch from ships would be easier and less detectable than an ICBM program, but we judge this an unlikely course.

Finally, a very important point: The fact that we project out 15 years does not mean that we can safely dismiss this subject until well into the next century. We are not complacent. This is one of the highest priorities of the intelligence community. Our analytic work will continue. We will monitor developments. We will pursue collection and bring to the attention of the president and the Congress new information and analysis on this subject.

Now, how was this estimate produced? Let me talk for a moment about that. National estimates are unique in many ways. First, they represent the views of the entire intelligence community, not just a single agency or analyst. Eight separate agencies contributed in various ways to this estimate.

Second, estimates strive to ensure the presentation of all points of view. We do not impose consensus. Disagreements are recorded in the text. This estimate was no exception, although the differences among experts were not great.

Third, estimates are also unique -- another important point -- in that they focus more consistently on future trends than most intelligence analysis. And in doing so, they strive to reduce the uncertainties for our policymakers on the most contentious issues facing them.

Now, analysts preparing these estimates have to wrestle with a number of difficult conceptual dilemmas, and I'd like to mention a couple of them, because how we deal with these often affects how estimates are received. And I think that's been the case in this instance in particular. For example, we struggle to balance the policymakers' demand for brevity against another thing -- our desire to lay out all the evidence to support our often-controversial judgments.

When we conclude we should lay out all the evidence, we must balance this against the risk of unauthorized disclosure. At the same time, we must balance the reader's desire for clarity in judgment against the need to note the uncertainties, the gaps, the qualifiers and the alternative outcomes. When we go too far in the latter direction, we don't serve you very well. It leads to charges that we are waffling.

In the case of the present estimate, we may have leaned too far toward brevity. No one has accused us, though, of waffling. Indeed, while some have criticized this estimate for too little emphasis on the uncertainties, others have praised it for not obfuscating or seeking refuge in the least-common-denominator judgment, all of which has contributed to the controversy.

And this leads me to a final point I'd like to make about estimates. Some years ago, the country's most senior practitioner of estimates responded to my query about the purpose of the business by noting simply that it was, above all, to, quote, "raise the level of debate about the future," unquote. His point was that controversy about estimates is not necessarily bad; that intelligence estimates, because they deal with the future, must never be portrayed as the last word or some kind of revealed wisdom and that policymakers and intelligence analysts can benefit from the very thorough airing of the issue that results. And it is in that spirit that we come here today, Mr. Chairman.

Now, finally, in closing, I won't take time to go through every critical comment about the estimate, but I would like to give you our perspective on three of the more sweeping charges we have heard over the last year. By far the most serious is the one that's been discussed here already, and that is that the conclusions of the estimate were politically influenced and that we in essence took orders from someone in the political arena rather than living up to the most basic tenet of our profession; that is, to call it as we see it.

This is the most serious charge you can level at an intelligence officer, as some of you have suggested. And I really can't let the occasion pass without rejecting it in the strongest terms. I state categorically that there was no attempt by administration officials to shape or modify the judgments of this estimate in any way at any time. Like it or not, it is purely the work of highly professional, independent, dedicated intelligence analysts. And I believe their judgments were and remain sound.

A second and presumably related criticism is that we've reversed assessments of recent years without sufficient justification and that, irrespective of the evidence, we have dropped earlier warnings in favor of a more benign scenario. This, too, is unfounded. Yes, some projections of missile developments were extended by a few years, but this was in response to new information that I could detail in another setting.

Moreover, the thrust of this judgment in the estimate is consistent with government assessments published in 1993 and later, including one published by the Ballistic Missile Defense Organization in July 1995. I also note that the GAO review of the estimate concluded it is not inconsistent with the two estimates published in 1993.

And finally, in closing, there is the criticism that the estimate did not address threats to all of the United States, particularly Hawaii and Alaska. This has always puzzled us, because the second key judgment of the estimate clearly describes the potential threat to Alaska and Hawaii. With regard to most of the matters in the estimate, however, the threat to Alaska and Hawaii is not greater than for the rest of the U.S. and therefore is not spelled out separately.

Now, I don't have prepared comments on methodology, but several of you have raised the question of whether the methodology of the estimate is sound. I will leave discussion of that for the question- and-answer period, but I would state at this point that I think, at the end of the day, I'm convinced that the methodology in this estimate was consistent with previous methodology, that it was professionally carried out and that a close examination of it will reveal it to have been sound.

Let me conclude there, Mr. Chairman, and I appreciate the opportunity to make these points. I have a colleague or two with me who may join in questions if you permit. And I will stop there and thank you for your attention.

SEN. SPECTER: Thank you very much, Mr. McLaughlin. We appreciate your being here, appreciate your testimony. If you would just -- you don't have to move. Mr. Gates, if you would step forward. Mr. McLaughlin, you're welcome to stay there. We'll now proceed to hear a very distinguished American, Robert Michael Gates. Mr. Gates was director of the Central Intelligence Agency from 1991 to 1993. His career began in 1966. And a matter of some coincidence: Bob Gates and I went to the same grade school, College Hill in Wichita, Kansas. Both of us were born in that distinguished city.

Mr. Gates, we appreciate your arranging a complicated schedule to be here, and we welcome you and look forward to your testimony.

MR. GATES: Thank you, Mr. Chairman. I would note that this is the first time that I have been on the Hill in nearly four years. I'll probably just stop there.

What I would like to do in the next few minutes, Mr. Chairman, before hearing your questions, is give you a summary of the findings of our report. I, too, have recommended to Director Deutch, our panel has recommended, that our findings be declassified to the extent they can. And what I'll present today is a declassified summary of the summary, if you will, in the hope of setting the stage for the questioning.

Congress directed the director of Central Intelligence to review the underlying assumptions and conclusions of National Intelligence Estimate 95-19, "Emerging Missile Threats to North America During the Next 15 Years." The legislation required that this review be carried out, quote, "by an independent, nongovernmental panel of individuals with appropriate expertise and experience."

Director Deutch asked me to chair the panel, and he appointed to it as well Richard Armitage, who was the coordinator for emergency humanitarian assistance to the former Soviet Union in 1992 and '93, the presidential special negotiator for the Philippine bases agreement in 1989 and assistant secretary of defense for international security affairs under President Reagan.

Dr. Sidney Drell, professor and deputy director of the Stanford Linear Accelerator Center, member of the president's Foreign Intelligence Advisory Board, member of this committee's technology review panel and the House Armed Services Committee panel on nuclear weapon safety.

Dr. Arnold Kantor, former undersecretary of state for political affairs, special assistant to President Bush for defense policy and arms control at the National Security Council and director of national security strategies program at RAND.

Dr. Janne Nolan, senior fellow at the Brookings Institution, adjunct professor at Georgetown University, past senior designee to the Senate Armed Services Committee and member of President Clinton's national security transition team.

Mr. Harry Rowan, professor emeritus with the graduate school of business administration at Stanford, former head of the RAND Corporation, former chairman of the National Intelligence Council, former assistant secretary of defense for international security affairs.

And finally, Major General Jasper Welsh, United States Air Force. Jasper served as assistant deputy chief of staff for the Air Force for research, development and acquisition, assistant chief of staff for studies and analysis at Headquarters U.S. Air Force, and defense policy coordinator for the National Security Council.

The conclusions of our report are divided into three sections: Politicization, process and presentation. The findings of the panel in every case are unanimous.

First, politicization. Certain members of Congress and others allege that NIE 95-19 had been politicized, implying that intelligence community analysts' views had been influenced by policymakers or individual policy preferences seeking to downplay an emerging missile threat. The panel found no evidence of politicization and is completely satisfied that the analysts' views were based on the evidence before them and their substantive analysis. There was no breach of the integrity of the intelligence process.

Beyond this, the panel believes that unsubstantiated allegations challenging the integrity of intelligence community analysts by those who simply disagree with their conclusions, including by members of Congress, are irresponsible. Intelligence forecasts do not represent revealed truth, and it should be possible to disagree with them without attacking the character and integrity of those who prepared them or the integrity of the intelligence process itself.

Now, with respect to the intelligence process, while the conclusions of a national intelligence estimate must not be influenced by policy debates or views, estimates cannot be prepared in a political vacuum, at least if they're to be relevant. It is the responsibility and the task of senior intelligence community officials to ensure that an estimate, especially when controversial issues are involved, addresses its subject matter in such a way as to anticipate questions and potential criticisms while fully protecting the integrity of the intelligence process.

Senior intelligence officials must make certain that the estimate addresses the issue in a comprehensive manner that provides both perspective and context. They should take special steps to ensure that an estimate with conclusions which may be unwelcome to a policy requester or which alters previous judgments provides unusually comprehensive analysis, clearly states the reasons for any change in previous judgments, explores alternative scenarios, and is candid about uncertainties and shortcomings in evidence.

It is the panel's view that there was too much of a hands-off approach by senior intelligence community management in the preparation of this estimate. The result was not a politicized estimate but one that was politically naive and not as useful as it could have been.

Second point: What were seemingly minor changes in the title of the estimate during the period of preparation narrowed the scope of the estimate and opened the way for embarrassing criticism. The failure to more fully consider Alaska and Hawaii and the separate treatment of the contiguous 48 states, frankly, was foolish from every perspective.

And third, and finally, on process, after months of delay and slow work on the terms of reference and the first draft, the final drafting of this estimate was done in haste in the fall of 1995. An estimate that should have been drafted with unusual care and thorough analysis was rushed to completion. This haste led to many of the presentational and analytical problems that we identified in the estimate.

And now, finally, presentation. Perhaps the most serious deficiency in the estimate is that the intelligence community's conclusions in the estimate with respect to the intercontinental ballistic missile threat to the United States are based on a stronger evidentiary and technical base than is presented in the estimate.

There was much that could have been added to the main text of the estimate that would have strengthened the analysts' case. For example, first, a review of successful missile programs capable of ICBM range in other countries such as India and its space-launch vehicle or China or even the United States and the Soviet Union would have shown that the lengthy time required to develop and test a ballistic missile with an intercontinental range, even to Hawaii. For example, China took more than 20 years to develop its CSS-3, and India took more than 15 years to develop its space-launch vehicle.

Second, the estimate failed to point out that development of a ballistic missile that could threaten the United States involves two separate challenges: Acquisition of the hardware and system integration. Even with clandestinely acquired critical technologies and hardware, integrating that hardware into the missiles would be a major and time-consuming challenge even with foreign engineering help.

Third, the text of the estimate should have presented more information on the technical obstacles to development of an intercontinental ballistic missile that could hit the United States, such obstacles as propulsion, re-entry vehicles, guidance, staging, the technical challenges of moving from a Scud-based derivative missile to an ICBM and more. Much of that is in the backup materials to the estimate, but not in the text of the estimate itself.

Fourth, the estimate did not highlight at the outset where the intelligence community's analysis had changed since the last estimate, and with specificity why it changed.

Fifth, the estimate was not as categorical as it could have been that there would have to be a flight test of any missile actually intended to hit the United States. No country in the world has developed a long-range ballistic missile with multiple stages without testing it, if only for demonstration purposes. Further, virtually every flight test program for a new missile has lasted several years, no matter which country has developed it.

Sixth, and finally on this point, the estimate should have pointed out that missile development programs and weapons of mass destruction programs in other countries represent one of the highest- priority issues for U.S. intelligence agencies. And in this light, the estimate should have provided the policymakers what analysts will be looking for as evidence of progress in such missile programs. It should have provided an estimate of minimum likely times from observation of such a new development to the initial operating capability of a deployed threat.

Although the panel was impressed by the technical analysis and broad agreement across the intelligence community -- and in our briefings, we found this to be more so than in the estimate -- there were also some very important weaknesses and deficiencies in the analytical approach in terms of potential threats to the United States.

First, an important deficiency was the failure to address adequately the motives and objectives of governments developing missile programs and how they affect technology needs. The brief discussion in the estimate of motive focuses on prestige and deterrence.

When we were doing estimates on Soviet strategic forces, given their vast size, capability was considered all-important, and most policymakers did not object to the technical focus of these estimates. With the ballistic missile programs we're seeing now, however, motive matters a great deal and can significantly affect technology. What is required technically for a crude terror weapon is very different than what is required for a weapon that is militarily useful.

Indeed, it was conceivable to the panel that a country might assemble a missile that appears to have intercontinental range but never even test it, in order to intimidate the United States or other countries from taking action. With respect to ballistic missiles of strategic range, motive and how that might affect technology is given short shrift in the estimate because operational capability is judged to be so far into the future.

Second, by contrast, the panel believes the estimate did not give nearly enough attention to the potential for missiles launched from within several hundred miles of U.S. territory; for example, land- attack cruise missiles and sea-launched ballistic missiles. It also discounted the likelihood of such deployments. And so we ended up with a conflicting rationale. ICBMs were considered technically infeasible and thus motive was relatively unimportant. On the other hand, shorter-range missiles were considered technically feasible even now, but the general judgment was made that it was not likely.

This inconsistency brought us to another problem. On a challenge as important as the emerging missile threat to the United States, this estimate fails to ask a critical question: What if our potential adversaries pursue approaches, technical or otherwise, unexpected by the intelligence community? The consequences of being wrong on this issue are very high. This problem in our view cries out for an intelligence community-commissioned "red team," a group of technically innovative men and women outside the intelligence community challenged to explore alternative approaches that could lead to a missile threat, ballistic or cruise, to the United States earlier than 2010 and to keep on to assure that there will be adequate time for appropriate U.S. responses to any observation of a new potential threat.

Fourth, the panel also believes that the possibility of a threat from missiles of less than intercontinental range warrants more attention than given in the estimate. Since developing missiles with sufficient range was identified as one of the most difficult technical obstacles which would have to be overcome before the United States would fact an ICBM threat, the lack of serious attention to possible alternative threats is all the more noteworthy.

Five, the panel believes the estimate places too much of a burden on the missile technology control regime as a means of limiting the flow of missile technology to rogue states.

Six, with major forces of change still in play in Russia, the panel believes the estimate's discussion of unauthorized launch from that country is superficial and may be overly sanguine. All agree that a launch unauthorized by Russian political leaders is a remote possibility, but it appear to be technically possible.

In this connection, finally, the seventh point, the panel notes that the economic conditions inside Russia are affecting the military, the military-industrial complex and weapons design and engineering institutions, and may provide incentives that increase the risk of leakage of hardware and expertise that could help governments aspiring to develop ballistic missiles, cruise missiles, and weapons of mass destruction.

In conclusion, Mr. Chairman, the estimate in our view too easily dismisses missile scenarios alternative to an indigenously developed and launched intercontinental ballistic missile by countries hostile to the United States, alternatives such as a land-attack cruise missile. The estimate should have assured policy makers that this issue will receive continuing high priority, and that all possible technical alternatives will be investigated vigorously and time to respond could be provided.

Mr. Chairman, in international affairs 15 years is a very long time. A decade ago the notion that the Soviet Union would collapse and disappear within five years would have been regarded by most as ridiculous. The United States cannot rule out the possibility of a strategic change of direction or policy in Russia or China or in other countries over a 15-year span of time that might lead to the sale of a long-range missile system to a third-world country. Nor can the United States rule out that potential adversaries will turn to missile threats other than ballistic missiles of intercontinental range.

All that said, however, the panel believes the intelligence community has a strong case that for sound technical reasons the United States is unlikely to face an indigenously developed and tested intercontinental ballistic missile threat from the third world before 2010, even taking into account the acquisition of foreign hardware and technical assistance, and that case is even stronger than was presented in the estimate.

Thank you, sir.

SEN. SPECTER: Thank you very much, Mr. Gates.

Before proceeding to the questioning, there's a matter which requires the committee's attention. A memorandum has been circulated on the need for some committee subpoenas, and the procedure requires that we have a quorum present. We have a quorum now but we're not going to take it up in open - (confers aside) - well, this memo is about to be circulated; I thought it had been. But it will be circulated.

And before anybody leaves, I would like the committee to retire to the back room and to have a very brief discussion on this to see if the committee is prepared to authorize these subpoenas. It's nothing to do with the current hearing, but since we do not have many senators here at this season, we want to accomplish this before we break up.

We'll proceed now to the round of questioning, with five minutes for each member. Mr. Gates, we will take you first since you have commitments which require your departure at about 11:30.

Beginning with the broader policy considerations as to what U.S. policy should be on developing systems and procedures to defend against missile attacks, nuclear missile attacks, I note your comment that who have suspected the demise of the Soviet Union, which is so unexpected. And I think back, in the relatively brief history of our consideration of intercontinental ballistic missiles, Vannevar Bush, one of the greatest scientists of his era, said in 1945 there could be no such thing as ICBMs. And in 1965, 20 years later, the secretary of Defense Robert McNamara said that the United States was so far ahead the Soviet Union could never catch up, and we know that they passed us.

And it's not an apocryphal story, it's a true story about the fellow in the patent office at the turn of the 19th century, resigning his position because there's nothing new to be developed - it's a true - true story. You don't get many of those out of Washington.

And on broad policy grounds, what is your view, beyond the role, say, of DCI or evaluator of a report as to what the Congress, the administration should be doing by way of missile defense?

MR. GATES: First of all, let me say, Mr. Chairman, that I'm fairly proud of the fact that, given the nature of this estimate we were asked to evaluate, this question was never discussed by the panel and I quite literally could not tell you where any of the panel members stand on the question that you just asked me.

My personal opinion on that question is that in a world that is changing as quickly as this one is, where events are so dynamic, where more than a dozen countries have ballistic missiles and several are attempting to develop longer-range ballistic missiles, given unsettled conditions in Russia and so on, I believe that the fact that the United States cannot defend itself against even a single errant missile is absurd. This country is not likely to face the kind of massive missile attack that was contemplated during the days of the Cold War. But with all of these developments under way, in a variety of countries, the notion of some kind of ballistic missile or other kind of missile attack against the United States by a single leader who has no concept of national self-interest or the interests of his people, to rule that out as a possibility I think would be a serious mistake -

SEN. SPECTER: So you think -

MR. GATES: I don't know what kind of a system we ought to develop, I'm not technically expert, and I'm really not up to speed on the different alternatives -

SEN. SPECTER: But on policy - but on policy grounds you think that the United States ought to do everything within its power to develop a defense to stop a missile attack.

MR. GATES: At a minimum, we ought to have some kind of basic capability that would be able to stop a very small-level attack.

SEN. SPECTER: Let me turn now to the broad question about organization within the United States government of our efforts against missile attacks. And I showed you the chart and will show to you again if I can get it here. You told me that you had a similar chart in 1992.

When the committee started to take a look at this issue, staff prepared this chart on the United States combating proliferation, key United States agencies. And there are 96 separate boxes on this chart which shows the maze of agencies. And there have been a number of efforts to try to organize this in a systematic way. And in our legislative which was enacted, we have called for the creation of a commission to try to work on this. What is your best judgment as to what ought to be done to have a more efficient governmental structure to deal with this problem?

MR. GATES: CIA's head of the Nonproliferation Center in 1992 prepared a similar chart which he referred to as the chart from hell, on nonproliferation issues, which probably had a different set of 96 boxes but had about the same number of boxes. The truth is that when two agencies are scrambling for turf in this government, very little is going to get accomplished. When you have 96 scrambling for turf, the potential of getting anything very substantial accomplished is even more difficult.

There needs to be, when you have that kind of chaotic situation, there needs to be in my view some kind of direction from the National Security Council that not only streamlines the process but puts in place an interagency forum where decisions can be made, issues brought to the fore, and action taken in an expeditious manner. I don't know whether that's been done. I know that if there are still 96 agencies that have a say in the business, that getting it done will be very difficult.

SEN. SPECTER: Thank you, Mr. Gates.

Senator Kerrey.

SEN. KERREY: Thank you, Mr. Chairman.

Mr. Gates, for you, again, subject to your having to leave early, I was sort of struck by your testimony, I mean I think -- its remarkably clear conclusions by this panel. And one of the things that you said that stuck in my mind is that the consequences of a mistake are quite large, which is why Senator Kyl has been putting so much attention into this issue I - and again, I appreciate his having done so.

But I'm struck as well by your suggestion that we need some kind of a red team, because it seems to imply that the current process - and to reiterate, I appreciate as well your saying that we need to take care that we don't attack in a personal way the analysts that are producing the report, they may make a mistake, they may make a judgment with which we disagree and we can openly express that disagreement. But is there a problem with the process of producing these kinds of estimates that needs to be addressed?

I mean is - I mean we have a process that does not appear to be terribly effective in assisting DCIs in producing good intelligence. And we've got a recent discussion of a problem that appears to be a constant, probably one that both you and Director Woolsey face, which is the recruiting and the retaining of high- quality personnel. It's much easier for us to build a satellite than to figure out 20 years from now how do we have the kinds of people that we need in place in order to do the job, and I'm thinking specifically of the Khobar Towers incident and the - connected to the Nicholson case. And I read some of your comments on that as well.

And I'm curious as to whether or not you have strong opinions that are connected to this red team. You've directed this red team's attention towards ballistic - the ballistic threat. But is there a broader need for a red team that can do some analysis that is not only remote but can come public, easier than the analysts' reports can? I mean, the context of the analyst is in a top-secret environment, and very often it's - and you pointed out one of the criticisms that you had was that they got rushed, they delayed and then they got rushed and that - who know what caused that? I don't know what caused that. I know in my own life I sometimes do that well. I'll get behind and then I'll rush a report. And particularly in a situation where the - as you say, the consequence of mistake are quite large, your conclusion is you need a red team for that particular area.

But have you given some thought to the need for something like that that would deal with questions other than just this narrow question of ballistic missile threat?

MR. GATES: Let me answer your question in two ways, Senator Kerrey.

First of all, I think the view of the panel and certainly my view, based on experience, is that the record of the intelligence community in assessing technical weapons developments around the world is really a very good one, but it's not flawless. We were all terribly surprised in the mid-1980s when we discovered the presence in Saudi Arabia of an already nearly deployed Chinese medium-range ballistic missile system. Both the Chinese and the Saudis had totally deceived us. The intelligence community was deceived - or not deceived, but the intelligence community underestimated Saddam Hussein's progress on a nuclear weapon because the technical experts sort of didn't think Saddam would rely on an antiquated technology like calutrons in terms of trying to get fissile material.

And there have been a number of other instances over the last 30 years where there has been an underestimation of what somebody else could do. And I think it is - I've always believed as a non-technical intelligence officer, that a lot of it was due to a certain kind of Western technological arrogance, that this is the best way to do it and if you don't do it that way you don't do it at all. And we've been wrong taking that approach in the past.

So I think on the critical question it's important -- such as this emerging missile threat, it's important to have another set of ideas, another set of minds out there working the problem.

The broader issue that you raise is one that I have felt very strongly about for many years, and one that I pursued as deputy director for intelligence, when I was chairman of the National Intelligence Council, and then as DDCI and DCI. And that is, the continuing value for the intelligence community, which is totally inside the government, to test their ideas, to test their hypotheses, to test their analysis, against fertile minds on the outside, to sponsor conferences, to have people come in and critique estimates, to go to people on the outside that they know disagree with their analysis, just to get the benefit of their thinking and to be able to justify in their own minds the continuing approach that they're taking, if not adapting it to the new ideas.

So I think that they're - this should be a routine part of the intelligence process in a lot of different areas. But I think it's particularly important in an area such as this.

Now I would make one final comment in this regard. The president's Foreign Intelligence Advisory Board commissioned its own red team in 1976, the B-Team, to look at the Soviet strategic team. And because that was imposed on the intelligence community, it was deeply resented and it created the impression inside the intelligence community that the politicization of the process was taking place from outside, that a stacked set of experts were brought to bear on a problem, that were going to come up with conclusions, that satisfied the then-current president's Foreign Intelligence Advisory Board.

I will tell you I think that effort to impose a red team on the community set back the cause of them going out and seeking alternative views by a decade, because they felt like it had been imposed on them. So this is something that I feel ought to be an internalized part of the intelligence community process that involves outsiders but is organized and commissioned from within the intelligence community on a professional level.

SEN. KERREY: Thank you.

SEN. SPECTER: Thank you very much, Senator Kerrey.

Senator Kyl.

SEN. KYL: Mr. Chairman, thank you very much again for holding this hearing. And I appreciate the questions both you and Senator Kerrey have asked.

Director Gates, having served as director and having advised us about some process issues here just a moment ago, let me ask you a question that goes to your conclusion about the report having been rushed to conclusion, hastily rushed to conclusion.

As you know, the declassification of the NIE's key judgment came just as the Senate debate on the DOD authorization bill was unfolding, and the release of the NIE some two or three weeks, I don't know the exact number of days, before the president's veto, among other reasons, for his views on the national missile defense issue.

My question to you is this. Had you been presented with the draft NIE as DCI at the time and under the circumstances that existed here, what would you have done, as good policy?

MR. GATES: Well, I hate to put myself in the shoes of my successor, so let me just refer to what my practice was as chairman of the National Intelligence Council and then as DDCI and DCI.

I was always sensitive not so much to the worry that an issue or an intelligence estimate would be a matter of dispute between the executive and the legislative branches of government, but rather that an ill-timed estimate would be seen within the executive branch as an effort by CIA or the DCI to tilt the argument and the debate inside the executive branch. And so unless an estimate was specifically called for in the context of the decision - in other words, the policy maker or the president saying, I want an estimate on this subject before we make a decision on this so that we have the benefit of its information - my inclination always was to try and time the emergence of an estimate so that it did not float out into the policy community in the middle of a heated debate on a subject. And sometimes there would just be a coincidence of timing, that the debate would arise even in a short period of time, even though an estimate might have been on the books for a number of months.

But it always - when on those rare occasions when we didn't do that, we would always get a lot of flak from the secretary of State or the secretary of Defense or whoever's view it didn't support about the fact that we were trying to skew the debate inside the administration. And so I would - I tried to be sensitive to that and to avoid it where we could.

SEN. KYL: Thank you.

Did you examine - or did the - did the panel which you chaired examine the reasons for the hasty conclusion of this report?

MR. GATES: No, sir, we did not. I think that Mr. McLaughlin may be able to answer that question later.

SEN. KYL: I found your very concise and well-organized presentation to be very, very helpful. And also, I guess I would conclude that it is a fairly significant indictment of the NIE itself, among other things, because in making a relatively important change in the estimate from just two years before, it failed to adequately explain the reasons for the change, the basis for it, and other issues that bore upon the change, such as the alternatives.

In order for us to utilize documents such as an NIE, is it your view that it should contain not only a comprehensive analysis of the reasons for any change from previous estimates, but also should consider other possibilities than perhaps were posed specifically in the question to the agency so that the full range of threats are discussed? And secondly, do you think that it needs to be updated on a timely basis, perhaps; for example, each year?

MR. GATES: Senator Kyl, I think that on an issue -- you know, we did the Soviet strategic estimates and the Warsaw Pact force estimates every year for many, many years. And one of the innovations that we made in the early '80s was to include, at the very front of particularly the strategic estimate, a one- or two-page summary of what was new in the estimate. What were the new developments in Soviet strategic programs since the last estimate had been produced?

It seems to me that that kind of a highlighting of what's changed and why it's changed really helps to focus policymakers and legislators on where things are moving in a given situation and with a given challenge in a way that helps advantage the decision-making process. And I think that, you know, we don't do that kind of an estimate anymore, now that the Cold War is over.

But it seems to me that I think it is very much worth the intelligence community considering doing this emerging missile threat estimate on an annual or every-two-year basis with basically the same approach to it so that readers can identify year-on-year what the changes are and what the dangers, whether the danger is increasing, whether the danger has been pushed further into the future, what new information has come to pass.

This is a terribly important issue. And I think, as I suggest, as the panel suggested, one of the things that the estimate should have said, in my view, in the key judgments, is what everyone in the intelligence community takes for granted, and that is they're going to be looking at this all the time. This is one of the most important things that they look at. This is not a snapshot that is going to be taken now and the issue then not looked at for another five or 10 years. So it really is more making explicit what is assumed in terms of the frequency with which this issue would be examined.

SEN. KYL: Thank you very much. Thank you, Mr. Chairman.

SEN. SPECTER: Thank you, Senator Kyl. Senator Shelby.

SEN. SHELBY: Thank you. Mr. Gates, as former director of the CIA, you, in your background and experience we're all familiar with, you've been involved in a lot of analytical approaches to our threats over the years, have you not --

MR. GATES: Yes, sir.

SEN. SHELBY: -- in preparing? Now, when someone prepares or groups prepare the estimate that is the subject of this hearing, at least part of it that we know about, that is put together by a lot of people and so forth. Is that right?

MR. GATES: Correct.

SEN. SHELBY: If this nation -- and I believe these were your words, but you're not the only one that said something like this -- if this nation at the moment can't defend itself against a single missile, incoming missile -- and I think that's basically understood by a lot of people, but not by the American people -- isn't a missile defense system for this country and our people a high priority?

MR. GATES: Well, as I said in response to the chairman's question, I don't know what kind of missile defense --

SEN. SHELBY: I know that.

MR. GATES: -- we need, whether -- and there are lots of different alternatives out there, and the administration has got some ideas, and I know people up here have some. But I think, at a minimum, we need the capability to defend ourselves against a very limited attack. And the notion that for the indefinite future not one single missile will ever be launched at the United States, I think, is a bold judgment.

SEN. SHELBY: And it could be folly, couldn't it, considering all the potential threats like an unauthorized launch that you mentioned earlier?

MR. GATES: I think that --

SEN. SHELBY: The development of technology or the movement of technology that maybe we don't know about or won't know until it's too late.

MR. GATES: I think it would be very unwise.

SEN. SHELBY: Let's focus on some things that you brought up. The deficiencies of this estimate, knowing that an estimate of 15 years is what -- in the financial markets they'd say that's going long. That's way out there. Senator Kyl brought up maybe revising and relooking at it. I know you're looking at -- the intelligence community is looking at threats every day, every night, you know, and revising, because things change.

Fifteen years is a pretty long estimate. And if the methodology is flawed in any way, it's open to challenge. And it should be, should it not, if the methodology was flawed, if some things were overlooked, such as Hawaii, Alaska in this report?

MR. GATES: I think that one of the approaches that I have long advocated in intelligence estimates is what I call the examination of alternative scenarios, the "What if we're wrong" notion.

SEN. SHELBY: You have to do this, don't you, if you're analytical?

MR. GATES: Particularly if you're looking that far into the future. And quite frankly, every time that the intelligence community has made an error in a major estimate over the past 30 or 40 years, it has been because it made a single-outcome forecast. It said, "We're talking about something happening five or 10 years in the future, and this is the way it's going to happen," not "We think this is the most likely way it's going to happen, and here are some other possibilities."

SEN. SHELBY: Did this estimate in any way consider, on a serious note, the possibility of sea-launched missiles?

MR. GATES: Yes, it did. And our panel looked at that in considerable detail. We think that the estimate does not devote adequate attention to a sea-based launch capability, although I would tell you, in all candor, that most of the panel believe that the technical challenges involved in that would make a cruise missile alternative more attractive to an adversary.

SEN. SHELBY: But there are nations in the world that could possibly move on an accelerated basis the development and acquiring of missile technology and the ability to launch missiles by sea or long- range missiles by --

MR. GATES: I think it was the judgment of the panel, based on the briefings we heard, that that could be done, yes.

SEN. SHELBY: Do you believe that any estimate which is a prediction should be challenged for the basis or methodology that it was predicated on?

MR. GATES: Well, as I suggested in my initial remarks, I don't think that any estimate represents revealed truth.

SEN. SHELBY: That's right.

MR. GATES: And I think that Mr. McLaughlin made the point that an estimate in many respects has performed an important service if it highlights an issue, and even if it provokes controversy, simply because it causes the re-examination of the basic issues.

SEN. SHELBY: And like today raises the level of debate on the threat to the United States.

MR. GATES: Correct.

SEN. SHELBY: Thank you, Mr. Chairman.

SEN. SPECTER: Thank you, Senator Shelby. Senator Baucus.

SEN. BAUCUS: Thank you, Mr. Chairman.

Mr. Gates, you mentioned something earlier about your concern that the community perhaps -- these aren't your words, but trying to make the point I thought you made -- is a bit maybe ingrown or just doesn't sufficiently reality-check some of its estimates or conclusions or maybe assumptions about the world.

I'd just like to explore that point a little bit further, if I might. Namely, do you think that still is a significant problem in the community, that is, the failure to check against the outside world some of its assumptions, intelligence assumptions, maybe hardware assumptions or systems assumptions, what not? And if you still think that is a problem, what can be done about it? What advice do you have to significantly address that problem?

MR. GATES: Senator Baucus, this is a very old issue for me. I think that the tendency of government intelligence analysts to talk to one another and to develop a certain mindset in dealing with certain kinds of problems is endemic to the analytical culture. And it is a continuing thing. It was around at the beginning of CIA and the intelligence community, and it will be around until the end.

My approach was, in effect, to impose from above a set -- a way of doing business that tried to open that closed culture, a culture that depends on U.S. government satellite information, U.S. government embassy information, U.S. government clandestinely-acquired information, U.S. government attache information, and so on, to open the doors to the involvement of outsiders in looking at our work and in critiquing it. And there are a lot of different ways it can be done.

When I was DCI, we sponsored -- the directorate of intelligence sponsored something like 70 or 75 conferences a year involving outside experts on everything from the course of the Afghan war to a host of other issues. This was one way. Another way was to have outside experts come in and critique our estimates, to come in and read the drafts or to critique the internal assessments of CIA on various issues.

I tried to build into the promotion process a requirement that analysts serve some time in policy agencies, that analysts attend conferences sponsored by outside, by universities and think tanks and other things. So there are a number of mechanisms that you can use that collectively, I think, help bring fresh air into that system and better inform intelligence community debate and discussion and analysis of these issues.

SEN. BAUCUS: I understand that, but what -- to answer my question specifically, do you think enough is being done today? I mean, look at the mistake we made not participating in the lives of the former Soviet Union, for example. I think that's a major intelligence failure. And others could mention others. And in your judgment, is the community -- have they done enough to, you know, reasonably make changes to correct or prevent those kinds of major mistakes?

MR. GATES: Senator, I'm not going to dodge your question, but I have to answer that I don't know, because I have stayed away from CIA and the intelligence community and I don't know all the things that Jim Woolsey and John Deutch may have done and the people that they're working with, like Mr. McLaughlin. I just don't know the status of any of these undertakings at this point.

SEN. BAUCUS: Thank you. Thank you, Mr. Chairman.

SEN. SPECTER: Thank you very much, Senator Baucus. Senator Hutchison?

SEN. HUTCHISON: Yes, thank you, Mr. Chairman.

I am particularly concerned about the short-term ballistic missile capability to come into our shores. I think we have some vulnerabilities. Certainly Alaska, as you said, should be considered, I think, in a different category from the lower 48. But I also think we have borders on our north and our south in our country where people can walk across. And I would like to ask if you think there is a realistic threat that we should at least address of having the capability for a ballistic missile to be brought in, maybe piecemeal hardware and then assimilation, into countries where we would not be able to detect it and then even be able to be brought into our shores.

I mean, as an example, something could be brought into Cuba. Could it be piecemeal into Mexico and then be -- I can tell you that I know anything can be brought across the Mexican border, and I know it could not be detected there. But do you think it could be also brought in realistically from another country into another bordering country without detection, or do we have the ability to detect the assimilation process or the hardware being brought in? Mr. Gates.

MR. GATES: Senator Hutchison, one of the members of our panel raised on several occasions his concern at the possibility that one of the smaller Cuban islands might be used as a place for bringing in some kind of a missile that overcomes the range obstacle that I talked about by being so close to U.S. shores. I think the majority of the panel and most of the intelligence community -- I would have to defer to Mr. McLaughlin and the experts, but I think most of the panel regarded that as perhaps, in some extreme sense, technically feasible, but most regarded it as extremely unlikely.

SEN. HUTCHISON: You don't put that in the same category then as your assessment that some of the potential threats were glossed over even if they were remote? Do you make that assessment, that it is too remote?

MR. GATES: Our panel looked at this, and I think the feeling was that that was -- even among the more remote alternatives we looked at, that was even less likely than some of them. I think the general view of most of the members of the panel was that if someone is going to go to all that trouble, rather than erecting a ballistic missile a few dozens or a few tens of miles from -- on an island outside the United States, say in Cuba, that the technical challenge and even the operational challenge of simply trying to move some kind of a weapon of mass destruction across our borders would be a more feasible challenge than -- I mean, why go to all the trouble to erect a ballistic missile when you only have to carry the weapon another 90 miles or 80 miles across one of our borders to conduct a terrorist attack?

SEN. HUTCHISON: But that's part of my question. Do you think we have the capability to assess if something were being brought in piecemeal to a bordering country and then --

MR. GATES: Smuggled into this country?

SEN. HUTCHISON: Yes. I know it can be smuggled into our country. The question is, can it be brought in without detection, or do we have the capability to detect it being brought in to a bordering country? Would it be realistic for that?

MR. GATES: Well, again, I think most people on the panel thought that that was quite unlikely, although probably technically feasible. I have a feeling, just based on experience that goes back to the beginning of '93, when I was director, that this is something that both the intelligence community and the FBI take very seriously, particularly in terms of the potential for a terrorist threat and so on, and have taken a number of measures to try and deal with that, both in terms of collection and enforcement and detection. So in terms of where we are in terms of capabilities today, I think I would have to defer to the people who are in office now to answer your question.

SEN. HUTCHISON: Well, let me go back to your red team approach, where you have outside views made of intelligence assessments. I guess I would ask Mr. McLaughlin. Do you think that it would be a sound thing to require an outside examination when we're talking about this kind of assessment to assure that some of the concerns that have been raised by Mr. Gates, for instance, are relooked at by the originating assessment team?

MR. MCLAUGHLIN: You mean, Senator Hutchison, with regard to ballistic missiles?

SEN. HUTCHISON: Well, yes, ballistic missiles especially, because many of us think this is one of our major security threats that we do not believe is being addressed forcefully enough from our defense capabilities. So let's take that as an example. But it could also apply to other major assessments where an internal CIA team makes an assessment but have an outside team look at it and make suggestions even before it goes outside the CIA.

MR. MCLAUGHLIN: Well, let me say, I would completely associate myself and endorse enthusiastically what former Director Gates said about the need to have the expertise of the outside community brought into the intelligence community. Former Director Gates has been my boss on several occasions, and I can assure you that this was one of his themes.

We do this. We have just held, for example, eight conferences with outside experts on every region of the world and a series of global issues. This is a particular responsibility under Director Deutch of the National Intelligence Council as distinct from the CIA itself.

SEN. HUTCHISON: How would you address some of the concerns on the issue before us that Mr. Gates has raised, that I think sound quite valid but also easily addressed? How would you --

MR. MCLAUGHLIN: The various critiques that we've heard?


MR. MCLAUGHLIN: Well, let me say in response to that that we all have the greatest respect for Mr. Gates and his panel, and we view it as a fair-minded critique. I would not view it, as Senator Kyl termed it, as an indictment of this estimate. I would view it as a fair- minded critique. And I'm perfectly willing to --

SEN. HUTCHISON: Well, let's start from here. What could we do to address some of these concerns? Because I think short-term ballistic missile capability is one of those that perhaps needs more scrutiny and what else we might look at from our security standpoint. How would you go from here, regardless of rhetoric, and address some of the concerns?

MR. MCLAUGHLIN: Well, I think the idea of periodically looking at this question has great merit. I don't think it would be advisable -- based on what we've seen in the preparation of this estimate about the deployment times of various countries with regard to ballistic missiles, I don't think it would be advisable to do an assessment like this annually, but perhaps every other year would be a good thing to do, to return to this subject periodically and to report, as Mr. Gates suggested, what is different in this assessment as contrasted with the previous one. That is -- that's a suggestion that has merit, I believe.

SEN. HUTCHISON: Well, I see that my time is up. And I will just say that I would like to see something, I think, a little more aggressive, because I think some of the concerns are valid. And when you look at this type of security threat that can be addressed, and we have the capability to address it, why not address even the most remote possibility so that we are better safe than sorry? That would be my last comment.

Thank you, Mr. Chairman.

SEN. SPECTER: Thank you very much, Senator Hutchison.

Mr. Gates, we really appreciate your coming in. Senator Kerrey and I were just chatting about your willingness to come back to talk to him and me privately or other members of the committee if they choose to sit in to talk more about the proliferation issue and how we combat it for the future, maybe anticipating what the president may do in the appointment of a commission next year, if you'd be willing to do that.

MR. GATES: Sure.

SEN. SPECTER: As I suggested to you before we started the hearing, there are just a couple of other questions that the committee has taken up on another subject that I think it'd be useful to get your opinion on. We had a report by the inspector general following Ames, a rather unusual report which suggested that directors of Central Intelligence, and specifically itemized Director Webster, Director Woolsey and you, should be held liable, referring to the Ames matter, even for items that were not personally known, which is an unusual concept, to hold somebody liable for something that they don't know.

And I think it was predicated on the conclusion that the problem of an Ames and now a Nicholson, so extraordinary, and sufficiently likely that a director ought to put into effect practices to smoke out that kind of a problem in advance. And I'd be -- the committee would be interested in your views on that inspector general's conclusion.

MR. GATES: Let me answer in two ways. First of all, I think that the notion that, particularly at the beginning of this process, that in investigating the mole which began in the 1980s, when Bill Webster was director, that there wasn't sufficient attention given to the problem, is just factually inaccurate. The fact is that Bill Webster created the counter-intelligence center. He gave it additional money. He gave it additional positions. We were briefed.

The problem that I have is that we were briefed, Bill Webster and I -- I was his deputy at the time -- were briefed, I think in 1987, that there were four or five operations that had been compromised in Moscow. Well, the fact is we discovered in the post-Ames investigations, much to the surprise of both Bill Webster and myself, that, in fact, there was a paper circulating at lower levels in the directorate of operations that said that 40 operations had been compromised. So we weren't told what had happened.

SEN. SPECTER: You weren't told about the paper that 40 had been compromised?

MR. GATES: Correct. At the other end of this --

SEN. SPECTER: How do you account for that?

MR. GATES: Well, let me tell you the other horror story, and then I'll come back to both of them. At the end of 1992, again, as I found out from the investigation, it was clear that by the end of 1992, people knew -- people inside the directorate of operations were pretty confident that Aldrich Ames was the mole. They didn't have a court case yet, but they were pretty confident they'd found their man.

SEN. SPECTER: At what point?

MR. GATES: This was by the end of '92.

SEN. SPECTER: Was something done to terminate his access at that point?

MR. GATES: No one ever came to me and told me that. I was the director. I'd been the deputy director when we began the mole hunt in 1987. And no one came to me at the end of 1992 and said, "We think we found the mole."

SEN. SPECTER: Even though they really thought they had.

MR. GATES: Even though they thought they had.

SEN. SPECTER: How do you account for that?

MR. GATES: And what I'm also told -- I don't know if this is true, but I was also told that they didn't even tell the deputy director for operations at the time.

SEN. SPECTER: How do you account for that?

MR. GATES: I think this gets at the problem that both Jim Woolsey and John Deutch have been trying to tackle, and that is a chain-of-command problem within the directorate of operations. There is a reluctance in that organization, and has been for many years, to move information upward, up the chain of command, particularly when there's a problem.

SEN. SPECTER: Well, that is absolutely egregious, horrible. How can that possibly exist with those people in the organization, and how can it be tolerated by the director, by the organization as a whole?

MR. GATES: Well, I think there are some structural things that can be done, and I think that my two successors have tackled those problems. But I will tell you that I think also it boils down to personalities. And the fact is, when John McMahon was deputy director for operations in the late 1970s, there were no such incidents, because the fact is, everybody in the directorate of operations knew that John McMahon would absolutely destroy anybody who failed to tell him something was going on or some problem had occurred. So strength of management --

SEN. SPECTER: That'd be mild for what wasn't told.

MR. GATES: So the strength of management, I think, is an important aspect of it. Now, the other -- to respond to your broader comment about the inspector general's report, I think all of us who have senior positions in the government accept the fact that we have responsibility for what takes place on our watch, whether or not we know about it. What was new to me in the report, and I think to my colleagues, but what was new in my nearly 30 years in government, was the idea of being held personally accountable for something that you didn't know about. And this was a standard I had never heard and I had never seen applied.

For example, in the case of the equally, if not worse, egregious treason of John Walker, I never heard anybody talk about holding the secretary of the Navy or the CNO or the chairman of the Joint Chiefs of Staff or the secretary of defense personally accountable for Walker. I never heard anybody say that George Shultz ought to be held personally accountable for Bloch's espionage in the State Department.

So the notion of personal accountability when you don't know about something, but especially when what has happened is contrary to the environment that a director or a senior officer has tried to establish, when you've set down rules, when you've set down behavior, when you've set down an attitude on how people are supposed to deal with oversight committees, how they're supposed to deal with issues, how they're supposed to follow the rules inside CIA or another institution, it's not clear to me how you can hold somebody personally accountable. And where do you draw the line? Is the director or the secretary of state personally accountable if somebody down at a lower level embezzles or cheats on time and attendance? Where do you draw the line?

So I fully accept the notion of responsibility, but I think that you are going to have a very difficult time getting anybody to serve at a senior level in the American government if they are to be held accountable personally for wrongdoing or mistakes or problems that occur at lower levels that are not only contrary to the environment that that leader has tried to set, but about which he knew nothing.

SEN. SPECTER: Well, thank you for that testimony, Mr. Gates. This committee heard from one of the people in the CIA who had been there for some 40 years, from 1950 to 1992, who passed on tainted material knowing that it came from KGB sources in the Soviet Union and passed it on to the highest echelon.

In fact, one bit of information: On January 13th, 1993, went both to the president and the president-elect, the two birds with one bad stone. And when we took his testimony, it was just incomprehensible when he said that he passed this information on, knowing that it was tainted, but thinking it was reliable, but not telling the recipient, President Bush, President-elect Clinton, that it was tainted coming from Soviet sources. And when you say these reports exist in the directorate, not passed up the chain of command, it is just an incredible kind of problem.

Well, I know that Director Deutch has worked on it and I know that Director Webster did, Director Woolsey did and you did. But it suggests something in the culture that may not be eradicated yet. And you have a Nicholson case coming right on the heels of an Ames case. With all the publicity on Ames, you have a Nicholson. Any suggestions as to what more ought to be done on that problem?

MR. GATES: Well, I think that the speed with which the --

SEN. SPECTER: I should say allegations as to Nicholson. They're not established.

MR. GATES: I think that the speed with which, in counter- intelligence terms, Nicholson was identified and then a case presented, built against him, really represents a mark of significant progress in terms of improving counter-intelligence at CIA, and I might add, cooperation between CIA and the FBI.

I frankly think, you know, you have to begin with the reality that when a CIA officer is accused of treason, that's a disaster in and of itself. But there is a good news side to it, and that is that, in contrast to other espionage cases -- for example, John Walker worked for the Soviets for 17 years, Ames for 10 years. In this case, apparently the fellow was identified within a year and then moved and surveillance begun. So I think that's a significant improvement, and I commend the people that have made those changes.

SEN. SPECTER: Thank you very much, Mr. Gates. Senator Kerrey? Anybody else have a question or comment? Okay, thank you. We'll let you catch your plane.

MR. GATES: Thank you very much.

SEN. SPECTER: And we look forward to talking to you again, as we have said.

MR. GATES: Thank you, Mr. Chairman.

SEN. SPECTER: I'd like now to call Mr. Woolsey. R. James Woolsey, former director of Central Intelligence, has made an outstanding contribution to the country in many ways, as his resume suggests -- captain in the Army, National Security Council staff -- perhaps one misstep, he worked for the Senate, was general counsel for the Committee on Armed Services, undersecretary of the Navy, delegate- at-large to missile talks, and then director of central intelligence. We welcome you here, Director Woolsey, and the floor is yours.

MR. WOOLSEY: Thank you, Mr. Chairman. If it's all right, I'll submit my written statement for the record, and simply talk from about two pages of it, page three to five.

SEN. SPECTER: Without objection, your statement will be in the record, and we appreciate your condensation.

MR. WOOLSEY: Thank you. Because those pages address directly the NIE. I might say, Mr. Chairman, when I was first asked to testify on this subject late last winter by the House National Security Committee, following the chairman of the National Intelligence Council's presentation before that committee, I reviewed the rather detailed public summation of the NIE 9519, that Dr. Cooper had submitted for the record of the House committee. And in that and in several subsequent appearances before the Congress, I relied on that for my assessment, because I didn't want to relying on classified material to give unclassified testimony.

Before I testified before this committee, I reviewed carefully NIE 9519 in its classified version, as well as the two previous NIEs from during my tenure in 1993. I have no reason to change what I said before the House committee or the Senate Foreign Relations Committee earlier this year, and so this testimony is substantially the same as those.

The answers that were provided to the questions that were asked in the NIE during the process of writing the NIE may well be the best consensus that the intelligence community analysts could produce. And in a technical, logical sense, in many ways may be consistent with earlier work. But one reason it seems to me why this estimate seems to differ in important ways from the major assessments that were made in 1993, lies in part on the questions that were asked. The NIE, yes, does mention Alaska and Hawaii, but the focus of the principal judgment is the threat to the contiguous 48 states. And to my mind, and I would agree fully with former Director Gate on this, that is to focus on a subset, and not a useful subset of the strategic problems that are caused for the United States by other countries possession of ballistic missiles.

If one goes further, and draws as a policymaker broad conclusions from a NIE of that limited scope, as apparently was the case when the president indicated that intelligence indicates that ballistic missiles do not pose a serious threat to the United States' interests for 15 years -- then I think those conclusions could be quite wrong, even if the drafters of the NIE at the analyst level answered as best they could the questions that the NIE was addressing. If decision- makers did conclude that this NIE covers the most important questions about ballistic missile threats to American interests, then it seems to me that the way this conclusion was stated -- excluding the principal conclusion at least, Alaska and Hawaii -- could lead to a great deal of confusion and, as far as the government as a whole is concerned, a self-deception.

I think that it is important to realize also that there are other aspects of this NIE that are troubling. The unclassified version of the GAO's recent report makes several important points that it did not identify explicitly its key assumptions and did not account for alternative economic and political futures, and did not quantify the certainty level of nearly all its key judgments. Now, sometimes I believe quantification can be overdone in intelligence assessments, but the use of what's normally called "gamblers' odds" -- one-in-three chance that something might happen, one-in-ten chance -- as a degree of specificity to judgment that is always useful.

The most important part of the GAO's critique, I believe, is that it did not account for alternative economic and political futures, because to my mind the most important function of intelligence is not to make point predictions of a specific future, but rather to help decision-makers reason and think through what is driving the problem, including sometimes relatively unlikely possibilities but that need to be nonetheless, in spite of their unlikeliness, need to be considered very carefully because of their serious character.

The NIE's answers, as I said, may be reasonable in view of the questions that it sought to answer. And if one is assessing indigenous capabilities within currently hostile countries to develop ICBMs of standard design that can hit the lower 48 states, then the answer that we have 15 years of comfort may well be a plausible answer. But each of those qualifications is an important caveat, and I believe it substantially restricts one's ability to generalize legitimately, or to make national policy based on the document.

The concentration on indigenous development seems to me to limit substantially general conclusions that might be drawn. Indigenous development of ICBMs was certainly of interest during the Cold War, because the Soviets sought to maintain a monopoly on their most precious military capabilities, and the export of fully developed ICBMs really was not in the cards from the Soviet Union. But in the aftermath of the Cold War, Russia, China and North Korea are in the export business for missile technology and components, and for some technologies that are related to weapons of mass destruction as well. Furthermore, there are close working relationships between some of the rogue regimes of the Mideast, such as Iran and Iraq, and some of these technology-exporting countries, such as Iranian ties to North Korea. Further, now the degree of control exercised by Moscow, or perhaps by Beijing over some of these technological components and systems may not be at all complete. Therefore, transfers to my mind deserve far more attention than they did during the Cold War.

A further problem is created by transfers of technology or components to a country which is currently friendly to the United States -- if that country should later turn hostile, through a revolution or a radical change in government. Even with the best intelligence in the world, it is impossible to forecast 15 years in advance such events as the Iranian revolution of the late 1970s which turned a friendly state into a hostile one.

Moreover -- and I think this is a particularly important point, and it's one that relates in some ways to a number of points that Bob Gates made -- indigenous capabilities may be enhanced by unconventional means. A country without traditional ICBM technology, that has been able to produce warheads carrying weapons of mass destruction -- let's say biological, which are far easier than nuclear -- may be able to produce a functioning ICBM, for example, by various ways of strapping several smaller boosters together. This has been done for space-launch purposes by countries such as Brazil. It has been done in a more limited way for medium- and shorter- and medium- range missiles, for example by Iraq.

The intelligence community was surprised in the late 1980s when the Iraqis, who at the time did not even have Scud Bs, as I recall, started targeting Iranian cities with very extended-range Scuds. They did so after a single flight test, to the best of my recollection. What they had done was to increase the size of the fuel tanks and limit the size of the payload for extended-range Scuds. Now, even if accuracy and performance are nowhere near American standards -- or even Russian standards for that matter -- such developments by various countries might serve quite adequately for purposes of blackmail and terror.

Bob Gates mentioned the possibility of an inter-continental ballistic missile that was cobbled together and could not actually function, but still could be used for blackmail and terror purposes. I believe that there is an intermediate case between that and a fully developed American-style, or even Russian-style, ICBM; namely, a relatively long-range missile equipped perhaps with a biological warhead, again much easier than nuclear, which had been flight tested a few times and could reasonably be counted on to get, let's say, somewhere within the confines of a large American city, say in Alaska or Hawaii.

One does not either have to have a system that is a complete fake or one that is up to American or Soviet or Russian standards. The Iraqis and others have shown us that at least with respect to shorter- range systems, some degree of accuracy and some degree of capability can have quite awesome blackmail purposes indeed. And, as Bob pointed out, the Iraqis in particular have shown that with respect to weapons of mass destruction they are willing and able to use techniques which are old-fashioned, inefficient. The Calcutrons were a technology the United States rejected in either I think 1942 or 1943 for purposes of producing fissionable material, but they were very close to have enough for weapons.

Now, I recommended last March before the House National Security Committee, and I still think it's a good idea, that we should focus not just on threats that we actually see in intelligence collection, but rather on technically feasible threats which nations would be able to develop with some degree of ingenuity but using generally available technology and systems from the international market. I suggested then, and I would suggest again, there are all sorts of different types of red teams. The one I suggested last March to the House committee was a technical team of bright young American scientists and engineers to see what they could actually assemble for internationally available technology and components. I believe that you will find that under not merely an intellectual undertaking, but a hardware- utilizing undertaking of that sort. There are a number of things which would be extremely troubling.

Now, it may be that the president was relying on something other than the NIE when he said, in vetoing the '96 Defense Authorization bill, that U.S. intelligence does not foresee the existence of a ballistic missile threat to the United States in the coming decade. But to the degree that the president was extrapolating such a general conclusion from the very limited part of the overall ballistic missile and general missile threat that appears to be assessed by NIE 9519, I believe in policy terms this was a serious error. Thank you, Mr. Chairman.

SEN. SPECTER: Thank you very much, Director Woolsey.

We are going to proceed now to hear from both Mr. Davis and Mr. Osias, and then questions at the end. I would like to turn now to Mr. Richard A. Davis, if you would come forward. Mr. Davis is the director of the National Security Analysis for the General Accounting Office. He has had a very distinguished career with GAO, beginning in 1964 in the Philadelphia office. He's a member of the Association of Government Accountants, and has served as the president of the North Virginia Chapter; received the GAO Meritorious Service Award in 1973 and 1981, and in 1994 received GAO's Distinguished Service Award for exceptional leadership on national security issues. The comptroller general also conferred on him the rank of meritorious executive in 1993. Welcome, Mr. Davis. Your full statement will be made a part of the record, and to the extent you can summarize within five minutes we would appreciate it, but if you go longer we understand.

MR. DAVIS: Thank you. Thank you, Mr. Chairman, other members of the committee. I think I can summarize it in five minutes.

SEN. SPECTER: Thank you.

MR. DAVIS: I am pleased to be here today to discuss our evaluation of National Intelligence Estimate 9519. We were asked to compare the content and conclusions of this estimate with the content and conclusions of two previous estimates, and to evaluate whether the estimates appear to be objective and supported by fact. We issued two

reports on August 30th of this year, a classified and unclassified version. All of our findings appear in the unclassified version. The classified information concerned detailed examples drawn from NIEs to support our findings and observations.

We had three major findings. First, the main judgment of NIE 95- 19 -- that is, "No country other than the major declared nuclear powers will develop or otherwise acquire a ballistic missile in the next 15 years that could threaten the contiguous 48 states or Canada" -- was worded with 100 percent clear certainty. We believe this level of certainty was overstated based on the caveats and the intelligence gaps noted in the estimate.

Second, the estimate had additional analytical shortcomings. It did not first quantify the certainty level of nearly all the key judgments; second, identify explicitly its critical assumptions; and third, develop less likely but not impossible scenarios referred to as alternative futures. However, the estimate did acknowledge dissenting views from several agencies and also explicitly noted certain information the intelligence community does not know that bears upon the foreign missile threat.

Our third finding was that the '95 estimate worded its judgments on foreign missile threats very differently than the two 1993 estimates on related subjects that we reviewed, even though the judgments in all three estimates were not inconsistent with each other. In general, the two '93 estimates pointed out unfavorable and unlikely outcomes associated with foreign missile threats to the United States more often than did the 1995 estimate.

Finally, the evidence in the 1995 estimate is considerably less than that presented in the two '93 estimates in both quantitative and qualitative terms.

Our evaluation did not include whether policymakers or intelligence officials interfered with the 1995 process. Therefore, we have no views on this matter. Also, we did not attempt to independently evaluate foreign missile threats to the United States. Our evaluation was significantly impaired by a lack of cooperation by several executive branch agencies. The Departments of Defense and State would not allow us to review their records on NIE 95-19, and instead referred us to the director of Central Intelligence.

The DCI declined to cooperate with our review. His office maintained that our review would be contrary to oversight arrangements for intelligence that the Congress has established. Therefore, we were unable to obtain the DCI's official standards, if any exist, the essential elements of an objective NIE review supporting documentation of the estimate or discuss the estimate with cognizant officials from the National Intelligence Council and other agencies.

Mr. Chairman, that concludes my prepared remarks, and I'd be happy to answer any questions.

SEN. SPECTER: Thank you very much, Mr. Davis. As I stated earlier, we need to have an executive session of the committee, which I had said would be at 11:30. It's a little past 11:30 now. We're going to -- we have to do this with a quorum on an issue of some subpoenas. So we're going to recess very temporarily, just for a few minutes, and we'll resume. Thank you very much.


SEN. KERREY: I mean no disrespect to Mr. Davis or the GAO, but I want to make it clear in very quiet but very strong terms that I think the current arrangement is the preferable arrangement.

MR. MCLAUGHLIN: Mr. Chairman, I might mention that Dr. Osias is the national intelligence officer for strategic programs and non- proliferation, and he oversaw the day-to-day preparation of this estimate.

SEN. SPECTER: Okay, thank you very much, Senator Kerrey. Thank you, Mr. McLaughlin. And we turn now to you, Mr. Osias, national intelligence officer for strategic programs, nuclear proliferation, of the National Intelligence Council.

MR. OSIAS: I'd like to take issue with some of the points that were made. I recognize that the author of the report probably has a different view of it than the reader of the report, and in general I would defer to the reader. But at the same time, there are some points that were made here that I think need to be at least addressed.

I would point out that Mr. Gates' key point, in our view, was that the evidence for the positions in the national intelligence estimate were -- the evidence is even stronger than presented in the estimate; that is, he took a great deal of issue in his report with the presentation, but not so much with the conclusion, although there are conclusions that he doesn't agree with. I would take issue with the fundamental assertion here that there were changes between 1993 and 1995 and that, therefore, there must have been a change in the methodology or some politicization or something. In my view, there were very few changes. They were small slips in timing. They were fully discussed with your staff in closed session. And I think it was clear that there were reasons for those changes and that there hasn't been a great change between '93 and '95. In fact, in one point we actually say we just reaffirm the '93 position.

I take issue that the scope was narrowed during discussions of the terms of reference. In fact, the only thing that happened during that period was a healthy discussion of what would be included and what wouldn't be included. The scope never narrowed to exclude Hawaii and Alaska. And the main points really -- it was narrowed in terms of reducing the time frame from 20 years to 15 years, and there was some discussion about where we would cut off the missiles that we were looking at.

There's a cutoff in the NIE that we don't look at missiles with ranges less than 300 kilometers, regardless, unless they were launched from Cuba, in which case we would look at them. And that was an effort to concentrate on long-range missiles and not look at airplanes coming in with small missiles under their wings, which, by the way, you might take a look at what our defenses are against airplanes as well.

The timing. The timing was rushed at the end because, more than any other single cause, because of a letter from a member of Congress to the secretary of defense asking where the NIE was. And after that, we pulled out all the stops and did what we could to get it out. But at the time, we were very aware that haste makes waste, and I think that we paid a great deal of attention to that. And I, in fact, am very proud of the quality of this estimate, even though it was done as quickly as we could at the end. In fact, there was an oversight in terms of what was actually included in the key judgments. We were accused of deliberately leaving something out. In fact, that was an oversight. And we discovered it about two months after publication.

The cruise missiles. I think this estimate gives full treatment to the cruise missile threat. The basic estimate is 23 pages long. There's two and a half pages on cruise missiles. There's a table that lists all the known developmental cruise missiles in the world. And we go beyond what's in that table to assess additional threats that could materialize. I think it's a full treatment. We clearly say it's technologically possible. In the end, we don't -- we step back from saying, "You are likely to see cruise missile attacks." That's what the purpose of the statement about it "not likely" is.

There are some assumptions that limited the scope. They are spelled out. I take issue with GAO's statement that we didn't spell out the assumption. There's a scope section in the beginning. There are some rather brief assessments in the key judgments and elsewhere in the report that I agree are briefly stated and not backed up as well as some of the other assessments, but they are not assumptions. They are not disguised in any way.

The assumptions that have come up today that I'd like to mention are that we did not include any assessments of terrorist threats, although you could argue that a single ballistic missile fired from anywhere in the world is a terrorist action. We did include those, but talking in terms of smuggling weapons across the border and short- range missiles.

And secondly, we did exclude major political and economic changes, and we've come under fire for that. And I have to accept that. It should have been in there. We missed it. But we basically had to draw the line somewhere in order to get the report done.

There was also a comment made that we should have focused more on the technical obstacles to ballistic missile production by Third World countries. I think that was the major focus of the paper. We went into great detail. We included some of the information in an annex. But I think even in the short main portion of the report, we did a very detailed job, I thought, of looking at just what was required. I will say, though, that in the briefings we gave to the panel chaired by Mr. Gates, we went into even greater detail about that.

I'd also like to say a few words about uncertainties in intelligence assessments in general and how we handled them. And the reason is that that's a common thread between several topics we've talked about today: Alternative scenarios, the certainty of our first key judgment, the effect of technology transfer on projections, the lack of well-defined uncertainty levels in the NIE. And it even relates to the slips in our projections.

I would say that early on, when we were preparing to do the estimate, General O'Neal, who was then head of the Ballistic Missile Defense Organization, BMDO, stated that he wanted to see us provide, and I quote, "earliest dates for deployment that could reasonably be expected." That is, we are not focusing in this NIE on the most likely threat, as we would like to do, but rather on the earliest time that is possible.

Let me try and clarify what I mean by the uncertainties in intelligence in general. And let me read for a minute. "When we in the intelligence community report uncertainties, we try to do it at the 90 percent confidence limit around the best estimate." The latter, the best estimate, is our best guess of the correct answer, regardless of how we get it. We use the term 'confidence limits' in the same way that statisticians use them, although we seldom have the numerical basis for it. So we have upper and lower bounds on the confidence interval, and they define a range that, as best we can determine, has about a 90 percent probability of containing the right answer. There's supposed to be a 5 percent probability that our uncertainty interval or our confidence limits are too high, 5 percent chance they're too high and 5 percent chance they're too low.

For NIE 95-19, we estimated the time frame for future developments and deployment by various countries of missiles capable of reaching North America, and that includes Alaska and Hawaii and Canada. It does not include Mexico, by the way. For each country, when we considered only the limitations imposed by technological shortfalls and the opposite effect of foreign assistance or technology transfer, the best estimate for deployment was well beyond 2010. In fact, when we estimated the lower bound on confidence interval for deployment dates, that too was beyond 2010. The lower bound date is the date for which we estimate the likelihood of an ICBM being deployed is only 5 percent.

As we consider earlier dates, like the year 2010 itself, the likelihood gets even smaller. However, estimates of activities beyond 2010 were not discussed specifically in the NIE because that was outside of the scope. And we rightly or wrongly said that we decided not to get into assessments that went beyond that time frame.

Remember, so far we've only taken on technological limitations, including the infrastructure that goes with that. When we also include the motivations and disincentives for investing in an ICBM program, the resources available for each country, the lack of evidence of any commitment to an ICBM development, the likelihood drops even further.

The point is that we have gone through this analysis -- it wasn't included in the NIE -- and it's somewhat subjective. But we did go through and attempt to define what the uncertainty was in our assessments. That uncertainty was beyond 2010, and that's why there was so little discussion of it in the NIE.

Let me mention the changes in our projections, to the extent that there were slips. If we have been reporting -- and most of the NIE reports -- let me back up. Most of the NIE reports the earliest time for deployment, as General O'Neal asked, and not our best estimate. The best estimate is way out in the future, and in some cases the best estimate is they won't do it at all.

But we concentrated on the earliest deployment time, as did the earlier NIEs. That is, if we're looking at the earliest, the lower bound, there's 20 to 1 bettor's odds that we're too early. So as we get better data, and as time goes on, our estimate of the earliest date should slip. There's a 95 percent chance that it's going to slip. We shouldn't be embarrassed about it. It's a validation of our analysis when it does slip.

And that leads me to alternative scenarios. If everything we're looking at is basically unlikely, then all the things we discuss in here have a way of -- in my view, are something like alternative scenarios. The basic question was, when are they going to develop a missile threat to the United States? The primary thing to look at is long-range ICBMs. We looked at a lot of other things. We looked at space vehicles and cruise missiles on ships and a variety of other things. To me, those represent some kind of alternative scenario.

And finally, Mr. Gates asked what happens if we're wrong. We project nothing for 15 years. Let me suggest my own personal view, that if it doesn't slip down -- if our estimate isn't wrong so much that it's down to 10 years, then we're sort of in the ballpark. So the question is, is an alternative scenario in which a country could obtain an ICBM within 10 years a realistic scenario? And I contend that it is not. Ten years is -- that's when the Russians come in, build the plant, operate the plant and build the missiles. But that can't work, either, because it takes them longer than that to build the plant.

So let me close on that and take your questions.

SEN. SPECTER: Well, Mr. Osias, picking up on your last statement, do you think that it is a wise conclusion not to try to develop a missile defense system by the year 2010?

MR. OSIAS: Well, as --

SEN. SPECTER: Before the year 2010.

MR. OSIAS: As an intelligence officer, I'd rather not answer that if I don't have to.

SEN. SPECTER: No, you don't have to. If you make an intelligence assessment that there's not going to be --

MR. OSIAS: Well --

SEN. SPECTER: Excuse me. Let me finish the question. If you make an assessment there's not going to be a missile threat until the year 2010, then a policymaker says, "We don't need a missile defense system until the year 2010."

MR. OSIAS: Well, I think, as Mr. McLaughlin said, we need to keep re-evaluating what's happening. This kind of threat is not going to materialize instantly, and we need to keep watching it. And we will keep watching it.

SEN. SPECTER: Well, the president issues a statement on December 28th of 1995 where he takes issue with the legislation requiring deployment by the year 2003 of a costly missile defense system able to defend all 50 states from a long-range missile threat that our intelligence community does not foresee in the coming decade.

Now, it may be that you have made your analysis and you have said what you have to say, but it does not follow from an intelligence analysis that there's no threat till the year 2010, that we ought not to provide a defense until that time. Maybe the Congress or the president has to say, "Okay, that's an interesting conclusion, but the consequence of being wrong is too serious to take it seriously." And I know you're in the intelligence community, Mr. Osias, but that's why I asked you the question. If you'd like to reconsider answering, I'd be pleased to hear your answer. If you'd like not to reconsider --

MR. MCLAUGHLIN: Could I offer a thought on that, Mr. Chairman?

SEN. SPECTER: No, I want to hear from Mr. Osias first, and then I'd be glad to hear from you.

MR. OSIAS: I would note that the administration didn't take it at face value and has gone ahead with the plans to be prepared to build a defense earlier than that. I don't have any quarrel with that. I think we've done our job to assess this realistically and objectively. And Mr. McLaughlin pointed out and Mr. Gates pointed out we can be wrong in these things. This is possible. And --

SEN. SPECTER: Well, Mr. Osias, I don't know that the administration did come to that conclusion. I don't know that others have come to that conclusion. But it certainly is a matter for policymakers beyond. But Mr. McLaughlin, do you want to comment?

MR. MCLAUGHLIN: Oh, I don't have a lot to say about this, Mr. Chairman, other than to note that Dr. Osias and I are unlikely to express our personal views on missile defense in this forum because of our professional intelligence affiliation.

But a point about estimates. Mr. Gates at one point termed the estimate politically naive, and I understood what he meant. But that isn't the term I would use. I would call it politically neutral, politically neutral. And estimates -- in this case, there's nothing in this estimate, in my view, that says the United States should not have a missile defense. That is for the policymaker to determine. And our job, in an estimate like this, is to answer the question we were asked. And in this --

SEN. SPECTER: So you think the policymaker should put in a calculus what the consequences are of being wrong.

MR. MCLAUGHLIN: The policymaker should put into the calculus, as one of many factors, the assessment that comes out of the intelligence community. And if the policymaker concludes there is a consequence of being wrong, that should be part of the calculus. But I guess my basic point is that we see our job is to answer the question as clearly as we can and then to allow those who are charged with doing so with drawing the consequences for policy and to answer any subsequent questions.

SEN. SPECTER: Let me move here to Mr. Woolsey before my red light goes on. Mr. Woolsey, you talk about Russia and China exporting, Iran and Iraq, and North Korea having a relationship with Iran, and the transfers being very, very ominous. Let me ask you the same question I asked Mr. Gates, or let me ask it in the context of Mr. Gates. Do you agree with former Director Gates that we ought to be doing a lot more to develop a missile defense system than we are?

MR. WOOLSEY: Yes, I do, Mr. Chairman.

SEN. SPECTER: Do you care to amplify that?

MR. WOOLSEY: Pardon me?

SEN. SPECTER: Do you care to amplify that?

MR. WOOLSEY: Well, I have said --

SEN. SPECTER: Most Yale Law grads don't speak so tersely.

MR. WOOLSEY: I have said, Mr. Chairman, that I think for a time I would not recommend withdrawing from the ABM Treaty. I believe that if we propose to the Russians that they get back on the track they were on in 1992 but stopped thereafter -- that is, cooperating with us on ballistic missile defense -- we work hard on intermediate-range systems, and particularly with space-based sensors, and we propose to them an amendment to the ABM Treaty to go back to something very close to the original version of the treaty, which permitted two sites rather than one, I believe we could do a decent job of defending the whole country, including Alaska and Hawaii, from two sides at the northeastern and northwestern corners of the country as long as we were fully able to use space-based sensor (cuing?) from Brilliant Eyes, for example.

I think that is a reasonable move at this time. It may be the case that as the years go on, and particularly as threats develop, such as fractionated payloads -- there has been public writing about this now recently of submunitions, let's say, of biological weapons being dispersed very early in the trajectory of an ICBM or a long- range ballistic missile. If we began to see the possibility of something like that hapsening, we would probably have to move to a rather more full and complete set of space-based defenses of some sort. But for now, this two-side approach is the one I would personally recommend.

SEN. SPECTER: Well, the question then arises, obviously, whether we ought to be moving now for something that we don't anticipate until later. But that's the policy judgment.

Senator Kyl?

SEN. KYL: Mr. Chairman, Senator Inhofe is going to have to leave in a moment, and I will defer to him until he's done.

SEN. SPECTER: Senator Inhofe.

SEN. INHOFE: Thank you, Mr. Chairman. Let me just, first of all, say, Mr. McLaughlin, I don't agree, and I think it's rather dangerous to say that the NIE is not for the purpose of making policy, because, in fact, the political reality is that when that is out there floating around, it makes it virtually impossible for those of us who see this risk that is out there, and that is imminent, as we believe it to be, to get the job done.

And I know what you're saying. I'm not saying that -- I'm just saying that it is very significant. And I can't tell you on the firing line how many times I heard about this NIE from people of the more liberal persuasion who would rather spend money that we otherwise could spend defending America against missile attacks on perhaps social programs. So I think it's very significant and it does directly affect policy.

I want to ask two very simple questions, because I get asked these questions. I don't have the answer. For the purpose of this report, you've excluded China and Russia and their technology. Is that correct?


SEN. INHOFE: What was the thought about that? What was the reason for that?

MR. MCLAUGHLIN: There is previous work done on China and Russia, and those are subjects that we devote a fair amount of attention to. We, in fact, currently have in preparation studies on those two countries. And the thought here in any NIE is always to try and delineate the subject so that it is manageable. And that was essentially it, that because of that body of work, we thought we ought to focus -- and in the end, the customer who requested it agreed -- ought to focus on the countries on which there had not been as much work.

SEN. INHOFE: Okay, I would respond by saying --

MR. MCLAUGHLIN: But this was not to in any way suggest complacency with regard to those missile forces.

SEN. INHOFE: Well, my response would be that regardless of where they are or what our current relationship is with various nations who might have missiles that could reach the United States, you don't know how those relationships could change. And it's lead time that we're talking about here, and it's been very concerning to me.

Mr. Woolsey, would you share that concern?

MR. WOOLSEY: Yes, I do, Senator Inhofe. And let me say, with respect to the NIEs, the CIA was created in order to have single unified intelligence judgments in order to avoid a Pearl Harbor. That was the driving force behind the creation of the agency and the position of DCI in 1947. The cover of an NIE says it's the personal view of the director of Central Intelligence. It is the DCI's job to see to it that the policy community's needs and interests are fairly met by what the professionals like Mr. McLaughlin and Mr. Osias are writing and that the rubber meets the road.

So it is an important function of the National Security Council, on which the DCI sits statutorily as an adviser, to see to it that the NIEs answer the questions that the president needs answered, and answer them in a way that is useful to the National Security Council; that is, the four members, the statutory members of the Council. So I think this question of the scope of the NIE is very important. I think you put your finger right on it. But that's where the rubber meets the road.

SEN. INHOFE: Well, let me ask one last question, because my time is running out. I have wondered also about -- a lot of our discussion is on range. Is it going to be continental United States or Alaska or Hawaii, and if so, how far into the continental United States? And range has become very critical. For the purposes of your report, you make some assumptions on weights of warheads, for example. What is your assumed weight of a warhead for the purpose of calculating your estimates?


SEN. INHOFE: I've seen 1000 kilograms, but I don't know whether that came from staff or that came from someone else's analysis or from the report.

MR. MCLAUGHLIN: I have to be a little careful about the detail I go into in an open session. And Mr. Osias may want to offer a technical definition. But generally, we're talking 1000 kilograms or 1200 kilograms.

SEN. INHOFE: Yeah, without having to go into it, there is an assumption of some size. Maybe it's 1000; maybe it's --

MR. MCLAUGHLIN: Yeah, part of the assumption is that countries building ICBMs in this kind of initial attempt to build one would give serious consideration to having a nuclear warhead. And typically, early-generation nuclear warheads are very heavy. So all of that comes into the calculus, and --

SEN. INHOFE: But if you were to cut the weight of the warhead, regardless of what kind of warhead it is, in half, or eliminate it altogether, the same amount of terror is still inflicted. That would have a direct effect on the increase in range, wouldn't it, Mr. Osias?

MR. OSIAS: Yes, it would. We have looked at that. I don't want to be too specific here. We have looked at that, and it does extend it. It doesn't change the basic conclusions about the long-range missiles. It extends the range of the TD-2 a little bit.

MR. MCLAUGHLIN: But the other thing it does is to extend -- if you make assumptions about the sophistication required to get a smaller warhead, it also extends the time line for development.

MR. WOOLSEY: Senator, could I add one point?

SEN. INHOFE: Yes, sir.

MR. WOOLSEY: I believe this is an example of over-focus on nuclear. You can get a lot of anthrax into 500 kilograms.

SEN. INHOFE: Exactly. Exactly.

MR. WOOLSEY: And I think that the assumption that the only type of weapon of mass destruction that a rogue state such as North Korea might use or try to blackmail the United States with would be a nuclear weapon is not a correct assumption.

SEN. INHOFE: I agree. Thank you, Mr. Chairman.

SEN. SPECTER: Thank you very much, Senator Inhofe. Senator Kyl.

SEN. KYL: Thank you. Mr. Chairman, I think this last exchange is just illustrative of a variety of other deficiencies in the report in which certain assumptions were made and others that were perhaps just as likely, if not more likely, were largely ignored. Former DCI Woolsey testified, for example, that a biological warhead -- and correct me if I'm wrong, Mr. Woolsey -- might be more quickly produced by one of these Third World countries than a nuclear weapon. Is that correct?

And secondly, I gather there is agreement that it could be much lighter, as much as half as light as a nuclear warhead. Is that correct? Any disagreement with that, Mr. McLaughlin?


SEN. KYL: So -- and without getting into the range of differences, there is a, I would assert, relatively significant difference in range in a missile whose warhead is half as heavy. And given the fact that, as Mr. Woolsey pointed out, the countries that we're most concerned about here may well have motives of blackmail or terror rather than specific military targeting motives, it seems to me, as it seemed to him, that motive should have been considered in that circumstance and that that could have significantly altered the conclusions. Why was that not done, Mr. McLaughlin?

MR. MCLAUGHLIN: Well, I think the first thing I'd want to say is that those alternatives were considered in the course of debating the questions we were asked in the estimate. Again, I don't want to seem to be holding back, but there are some things I'd rather not go into here.

But let me make some general points related to the question of a smaller warhead. While it might be technically feasible to do that, we had to give some consideration to factors such as how that would be done and why it would be done and to look at some of the technological problems that a country would face in trying to put a biological warhead on a missile and to weigh that against what their alternatives would be for accomplishing that kind of terrorist attack.

And given the enormous cost and the enormous investment required to build an intercontinental ballistic missile, contrasted, for example, with the simplicity that a group -- let's say the Aum Shinrikyo group was able to do its damage not with biological weapons but with chemicals in Tokyo -- when you consider the simplicity of the means for delivering a weapon of terror in that case and the easy availability, no dispute with Director Woolsey's point about the relative ease with which countries can make a biological or chemical weapon.

But when you add all of that up, it seemed to us that delivery of biological weapons in this manner would not be a very feasible or likely choice, which, I want to add very clearly at the end, does not signal in any way complacency on the part of the analysts who did this estimate about the threat potential of biological weapons.

SEN. KYL: I understand that. But it does suggest a judgment which I think is much off the mark, because the weapons that have been used -- the shorter-range weapons, to be sure -- were missiles, Scud missiles. And they were used for terror, not to destroy military targets, by and large. And there is more terror involved in a biological warhead than there is a conventional warhead. So it seems to me that if, to the extent that that judgment was discounted or that possibility was relatively discounted, it is an error in judgment.

Let me go on and make a more general point here and ask you a question, Mr. McLaughlin. I'm trying to synthesize what we have here. The chairman pointed out the initial point, which is that the consequences of being wrong here are very, very serious indeed. And Mr. Woolsey made the same point. He also -- and by the way, I gather you were an employee of the agency when Mr. Woolsey was director. Is that correct?


SEN. KYL: So he was your former boss.

MR. MCLAUGHLIN: He has been my boss.

SEN. KYL: Now, he has just made what I think is an extraordinarily important statement. And if my quotation is wrong, please correct me, Mr. Woolsey. I think you said, "To the degree that President Clinton was using this NIE for his veto of the DOD authorization bill, I believe this was a serious error." Does that capture the sentiment you intended to express?

MR. WOOLSEY: Yes, that's correct, Senator.

SEN. KYL: So that was expressed by your former boss, Mr. McLaughlin. You have the GAO criticisms, which are not insignificant, to borrow a phrase from the NIE with respect to the conclusion and comparison from 1993 to 1995. The Gates panel; just a variety of conclusions here: The NIE being hastily concluded, that it was politically naive, that there was a failure to consider certain things, and that was characterized as foolish, that the scope was too narrow, that there was inadequate analysis, inadequate explanations, that there should have been a discussion of motives, a greater discussion of sea-launched and cruise missiles and other alternative threats, that the MCTR was overstated in terms of its success.

Understated were Russian leakage problems and other unauthorized launch, that the primary client was dissatisfied with the report, and so on and so on and so on. And yet you began your presentation by saying that you still regard the NIE as a sound intelligence product.

I suppose the question is, whether it's a sound product or not, is it a useful product for policymakers? And how can we be confident, in light of all of this criticism -- and nobody accuses the GAO of being politically motivated; the Gates panel was an extraordinarily diverse and competent group of people. You've got two former DCIs sitting here who are both extraordinarily talented people who, in the spirit of constructive criticism, indict this NIE in a variety of very serious ways.

How can we be confident that the agency will be open-minded to constructive criticism, that you'd even pay attention to a red team report, for example, if you continue to be what I would characterize as very closed-minded about the constructive criticism of this report? What confidence can we have that you will listen to these other judgments which you cannot, I think, deny are, A, offered in the spirit of proper constructive criticism, and B, from very intelligent and well-motivated people?

MR. MCLAUGHLIN: Well, let me first state, as strongly as I can, that we are not closed-minded about critiques. If there's anything an intelligence analyst has to be, it's open to criticism, because our business essentially consists of skepticism, criticism and a rather robust give-and-take on issues of contention. So we're not closed- minded, I assure you.

We don't view -- and we have the greatest respect for Mr. Gates and Mr. Woolsey. We don't view the Gates panel report as an indictment, as you've characterized it. We view it as a responsible critique. And as I suggested in my opening remarks, my personal view is that controversy about an estimate can be healthy, and we view it that way.

SEN. KYL: May I just interrupt and say if I used the word "indictment" there, let me retract that word, because I don't think that the Gates panel would want to use that word. But could we agree that it was seriously critical of the NIE?

MR. MCLAUGHLIN: Let me comment on how critical I think it was. I read it very carefully because of the respect I have for all of the people who put it together. I count roughly 12 points in that panel report on which it is critical of the work in this NIE. Of the 12 points, seven are criticisms essentially of the way the findings were presented but criticisms in the context of agreeing with the essential finding of the estimate, that the likelihood of a ballistic missile being developed to hit the United States by 2010 is low.

Five -- and I could comment on those seven; I won't go on at length about them -- but five of the critiques were critiques on analytic technique or approach, and I believe they're fair critiques but they're arguable. They're arguable. I could dispute every one of them, and I don't think we could settle the argument. In a way, a panel report is impressive. But like an NIE, it is not the final word either.

Our understanding of these issues comes about iteratively, I think. If we were to critique the NIE ourselves -- I mean, for example, much has been criticized about the level of certainty in the first sentence, and Dr. Osias talked about that a bit. I could give you a little bit more of an explanation of why we set it as certainly as we did.

But one of the assumptions we made, perhaps mistakenly, was that in putting that first sentence after a bold announcement that these were key judgments, that that sentence would be seen as a judgment. And I remain convinced that had we substituted the word "judge" for the word "will," the reaction to that sentence might have been a little different. And that's something that we probably --

SEN. KYL: I'm sorry. If you'd done what?

MR. MCLAUGHLIN: If we had substituted the word "judge" for the word "will." That is, "We judge that no country will develop an ICBM capable of hitting us" --

SEN. KYL: Rather than stating the fact.

MR. MCLAUGHLIN: -- rather than stating it as a will. But I don't mean to detract from the high level of certainty with which analysts rendered that judgment. If I could tell you an anecdote, I've come to respect analysts when they come to me and say they're really rather certain about something. They don't say that very often. In fact, I'm sure Mr. Woolsey and Mr. Gates would agree that the analytic culture tends more toward qualifying things and adding nuances.

The anecdote I would tell you is the last time a group of analysts came to me with this level of certainty, it was to ask my view of their intention to begin an estimate in 1990 with a sentence that read roughly, "Within the 18-month period of this estimate, Yugoslavia will fall apart in violent conflagration." And after some consideration, I said, "Let's go ahead." And I've always been glad I did.

So in this case, while the word "judge" may have helped, essentially what we did in that first judgment was to look at countries that have a track record in terms of developing ICBMs to deduce what we can and what we have as a historic record -- Mr. Gates referred to the lengthy period of time that it took to develop Chinese missiles -- and to apply that to what we could see on the ground in these countries. And that's how we came up with that conclusion.

But to return to your original question and to finish this response, I think your question is, "How can you have confidence?" Well, I think I would want to leave you with the thought that we are not closed-minded about this report, that we have taken some lessons from it, that one phrase I wrote down that Mr. Gates used which strikes me as the one that I would take most away from his report; he said, "It would be important to make explicit what is assumed." I believe that's a critique that we can always apply to the production of national intelligence estimates.

So I would want to leave you with the thought that we are in no way closed-minded or kind of brushing this aside. But at the same time, if you were to ask me to go point by point through it, I would dispute some of the points and accept others.

SEN. KYL: Mr. Chairman, my time is up. May I just make one conclusory statement? Or would you like to go ahead, and then I can --

SEN. SPECTER: No, you may proceed, a little more than --

SEN. KYL: I hope that you would also agree with Mr. Gates's statement that it is also a good idea to try to compare previous reports and point out the areas of difference and explain any differences that occurred. Would you also accept that second suggestion of his?

MR. MCLAUGHLIN: Yes, that's a good thing to do. In this case, since you've asked that question, I want to reinforce the point,

though, that I think too much has been made about alleged differences between what is said in this NIE and what was said previously. There were two NIEs done before this one. There really had not been an NIE done before on this subject, on the question of ballistic missile development. The two NIEs cited in '93 were on different subjects with discussion of this as a sidebar, essentially.

And the estimates in those NIEs, the time lines, were about the period during which it was likely that these countries would begin development of a program, which is very different than this NIE, which talked about the realistic projected timetable for actually completing an ICBM. So I could read you a statement from one of these previous NIEs that is unclassified, and --

SEN. SPECTER: Would you make that briefly, Mr. McLaughlin?

MR. MCLAUGHLIN: And I will not -- no, I will not read it.

SEN. SPECTER: You're not going to read it?

MR. MCLAUGHLIN: I'm not going to read it. But my point is simply that it addresses this point and shows the consistency.

SEN. KYL: I'll follow up on that later, Mr. Chairman.

SEN. SPECTER: Well, we're going to conclude now, Jon.

SEN. KYL: Oh. Well, Mr. Chairman, there is much more that could be adduced here. May I just ask a question, then make a suggestion? The question is, could we submit questions for the record --

SEN. SPECTER: Oh, absolutely.

SEN. KYL: -- for these witnesses, particularly Mr. McLaughlin?

SEN. SPECTER: We're running over. We're now 12:25, about three hours since we started.

SEN. KYL: Yeah. We'll just do it that way, then, if I could submit some questions.


SEN. KYL: And then secondly, I'd like to make this suggestion. And if anybody on the panel would like to respond, I'd appreciate their response. Just a one-word response would be fine. But it seems to me that it would be very useful, given the nature of this particular threat, which I think everyone has acknowledged is one of, if not the most critical threat that we've got to deal with in the future, and given the confusion that's attended this particular report, and given the need to make significant policy decisions on it in the future -- for example, the president's view of a national missile defense is that we may not need it quite yet and he's not exactly sure of what type we need because the information is not necessarily conclusive as to the threat. And if that position is correct, it will have to rely significantly on the quality of our intelligence estimate about the nature of the threat.

So the administration's position in that regard is not different from my position, for example. I think there's no Republican-Democrat difference in the need for good intelligence for us to base a judgment about a national missile defense system on. And therefore, my suggestion would be -- and perhaps we could transmit this to the administration -- is that there be an annual national intelligence estimate on the threat from ballistic missiles, defined in the broadest possible way, to include, for example, the threat of blackmail or terror and that when that threat is updated each year, that NIE is updated each year, that there be a discussion of the difference from the previous year, if any.

SEN. SPECTER: Senator Kyl, I think that's a good idea. We can ask the president to do that and we can put it in legislation, but I don't think we're going to move that along any more in our hearing today.

SEN. KYL: No, I understand that. But if that's a bad idea, I'd like to hear it. If not, then I will pursue that with you in whatever way is appropriate to communicate that --

SEN. SPECTER: Well, let us ask the witnesses to give you a written response on that, if we may, and we'll hold the record open for additional questions.

Mr. Davis, you have something to say?

MR. DAVIS: Mr. Chairman, could I have just one minute?

SEN. SPECTER: Go ahead.

MR. DAVIS: I just feel that I'd like to make a comment or a response to the comment that Senator Kerrey made. I thought I might have had an opportunity --

SEN. SPECTER: Go ahead, Mr. Davis.

MR. DAVIS: It had to do with our relationships with the intelligence community and so forth. And I'd just like to say that over the years, the GAO has evaluated many, numerous intelligence- related programs. And our reports and efforts in that regard have been very useful to members of the Congress. I think that -- I'd like to think that our presence here today is an indication that we can bring something to the table as it relates to these programs and that for this to continue, we're going to need the support of you and other members of the Congress to help us do that. I think that we can make a contribution. We have made a contribution. And for us to do that, we're going to need the support of the people in the community.

SEN. SPECTER: Well, thank you for your comment, Mr. Davis. Senator Kerrey was making the point that this committee does the oversight as opposed to GAO. But that's a big subject, and we'll have to take it up at a later time. We're right at the three-hour mark and we'd like to conclude the hearing with our thanks to this panel. And I believe that this has been an extraordinarily productive hearing, and I thank my colleague, Senator Kyl, for his leadership on this issue. And there have been some sharp differences of opinion today, yesterday, will be in the future, as to what senators ought to say. But the First Amendment applies to all of us, even senators.

This has certainly elevated the level of debate very substantially. And when I asked Mr. Osias the questions and Mr. McLaughlin chimed in -- I understand the intelligence assessment and I understand the delineation, and when I refer to the president's veto message where he vetoes the Department of Defense authorization bill and puts as his first reason the assessment by the intelligence community that the threat doesn't exist as articulated by the Congress, then that is a political judgment on the president's part, beyond any question.

And it's taken issue with directly by quite a bit of the testimony by Mr. Gates, Mr. Woolsey, forcibly by Mr. Woolsey, I think by Mr. Gates as well, that the possibility of a mistake is too costly to have a potential for an error if we don't need a missile defense system by the year 2010. If we're wrong, it's just too costly.

And I can understand that the technical intelligence experts are giving an evaluation as to what they conclude on the evidence at hand. And this hearing, I think, to repeat, has been very useful to elevate this discussion. And it isn't going away. It's going to be back. And Senator Kyl raises the point about the information that ought to be contained in the reports. That's something that -- I'll co-sponsor it with you, Jon, this year to try to put that as a mandate of law.

But we thank you very much for all of your service and for being here today. And that concludes our hearing. We stand adjourned.