JULY 10, 2006
Transcript by:
Federal News Service
Washington, D.C.

CAROL HALLETT: Good afternoon, and welcome. I’m Carol Hallett, and I serve of counsel here at the U.S. Chamber of Commerce. And we welcome all of you this afternoon to this National Security Business Forum. We’re very pleased that so many of you could be here. I particularly want to thank our sponsors, Verizon Business and Federal Network Systems and General Dynamics Advanced Information systems, for participating in today’s events.

I also would like to make a special introduction. I would like to introduce all of you to David Shedd, the chief of staff to Ambassador Negroponte. And, David, if you would please stand just for that introduction. Thank you. David has spent his entire career in intelligence and I would like you to give him a warm applause because he has worked very hard for us. (Applause.) Thank you, David. David has been associated with Ambassador Negroponte for a number of years and I have to say they’re both very fortunate to be working with one another.

Today we’re going to hear from our nation’s senior intelligence official, and he is going to be discussing with us not only the government’s intelligence strategy for securing the homeland and what the business community can do to help in that way, but also to talk about the enhancement of our homeland security and what kind of a partnership we can have in working on a way to enhance our government’s security, as well as security for the private sector. Many times people forget that the private sector actually owns and operates 85 percent of our nation’s critical infrastructure, and when we realize that that infrastructure is a prime target for terrorists, it’s all the more reason for us to be talking today.

In the nearly five years since 9/11, businesses have been pouring billions of dollars into security measures that are designed to not only protect their people, their employees, their plants and their buildings, but also their computer systems against terrorism. And also since 9/11, government has recognized the need to share intelligence across agencies as well as to provide the private sector with actionable, timely and threat-specific information so that businesses can more effectively and efficiently allocate their resources, manage risk and develop the right security procedures as well as the right technology to deal with those issues.

There’s an ongoing effort to make the flow of information two-way, and businesses, we know, are eager to share with the government information about not only vulnerabilities that might be exploited by terrorists, but also there is the need to have a clear understanding of the threat and to have strong safeguards against company information falling into the wrong hands or being used against companies in lawsuits or in the formulation of regulations that will make it very difficult for business to operate.

Ambassador John Negroponte has the skills and the experience to tackle these very challenging issues. And as the nation’s first director of National Intelligence, he has presided over the largest ever reorganization of the United States government’s intelligence community. Ambassador Negroponte has also served his country in eight foreign nations for every president since President Eisenhower.

He began his career in the United States embassy in Vietnam in the 1960s, where, among other projects, he helped organize democratic elections and he played a key role in the peace negotiations. Ambassador Negroponte has served in a variety of government and diplomatic positions including ambassador to Honduras, where he aided with the democratic reforms and helped defeat the communist government of Nicaragua. He has also served as ambassador in Mexico, in the Philippines, and of course in the United Nations. More recently, he was the United States ambassador to Iraq, where he won bipartisan praise for transforming the coalition provisional government in the Green Zone in Baghdad into a highly professional U.S. embassy.

He is the recipient of the Lifetime Achievement Award from the World Affairs Council of America and of the Georgetown University’s Jit Trainor Award for Distinction in the Conduct of Diplomacy.

We are very pleased and honored to have Ambassador Negroponte join us here today. And please welcome with a very warm hand Ambassador Negroponte.


DIRECTOR JOHN NEGROPONTE: Thank you very much for that very kind introduction, Carol.

Ladies and gentlemen, it’s a pleasure to be here this afternoon to talk with you about what my colleagues and I in the intelligence community are doing to protect the homeland, making us safer and better prepared than we were on 9/11.

As you know, we find ourselves in an extended period of transition and turmoil that commenced with the end of the Cold War and is likely to continue well into the future. These are dangerous times. We are concerned about terrorism. We are concerned about the spread of weapons of mass destruction, especially in light of North Korea’s recent missile tests. We are concerned about acts that are inimical to our national security and the welfare of our friends and allies. And we are especially concerned about attacks on our citizens on our sovereign soil.

The Intelligence Reform Act of 2004 therefore gave my office a mandate that I can sum up in a single sentence, and that is to integrate the foreign, military, and domestic dimensions of the United States intelligence into a unified enterprise that meets the highest standards of objectivity, accuracy, and timeliness. In other words, my colleagues and I in the intelligence community are charged with connecting the dots across the foreign-domestic divide, integrating counterterrorism and counterproliferation analysis across the intelligence community, and removing policy and technical obstacles to information sharing.

Now, that is a tall order. The United States created its intelligence community in the early days of the Cold War to bolster America’s defenses against grave strategic threats. As a consequence, our system developed as an overwhelmingly externally focused intelligence system. The primary exception to this was the counterintelligence work of the FBI, but even this was focused on discovering or responding to external phenomena. Now we are reshaping our intelligence community not only to keep an eye on foreign strategic threats – they still exist; hostile states and their surrogates can still hurt us most – but also look beyond them at the activities of individuals, groups, and networks that seek to harm us abroad and at home. And we will never forget that this happened here on 9/11

Our national intelligence strategy – in our national intelligence strategy we therefore have tasked ourselves with bolstering intelligence support for homeland security as enterprise objective number one. And that gives you a sense of the priority that we attach to this. Our challenge, as we see it, is to, and I quote, "build an integrated intelligence capability to address threats to the homeland, consistent with United States laws and the protection of privacy and civil liberties."

Now, this means several things. At the institutional level, it means helping the FBI refine its new National Security Branch. It means strengthening the National Counterterrorism Center and the Office of Intelligence Analysis at the Department of Homeland Security. And it means tightly linking the new National Counterproliferation Center not just to the National Counterterrorism Center but also to the FBI and Department of Homeland Security.

At the procedural level, providing better intelligence support to homeland security also means facilitating the multidirectional flow of information – particularly terrorism-related information – throughout the intelligence community, the United States government, state governments, local law enforcement, the private sector, and tribal entities. In broad terms, that is the domestic agenda: institution building and information sharing without damaging the fabric and values of our political culture, and that is the agenda that I would like to focus on today.

On September 12th, 2005, the FBI established a National Security Branch to bring together under a single umbrella its counterterrorism, counterintelligence, and intelligence programs. Why? To integrate and exponentially upgrade the FBI’s resources focused on spotting, analyzing, and reporting national security threats to the homeland, and to make sure the FBI’s intelligence function is tightly connected to our foreign intelligence functions. If there is plotting in a distant land that affects the homeland, the FBI must be informed. The Department of Justice, the FBI leadership, and my office collaborated closely on pushing this initiative through, the single-largest intelligence reform reorganization in the post-9/11 era.

Indeed, already the creation of the National Security Branch, led by an executive assistant director of the FBI for National Security, has changed the way the FBI interacts as a member of the intelligence community. The FBI is upgrading its intelligence training for analysts, revising its human source validation standards in concert with the new National Clandestine Service in the CIA, and rationalizing its intelligence budget.

These are important advances. The FBI always has been a law enforcement agency, and that won’t change, but now it is becoming an intelligence agency too, and that is change.

The National Counterterrorism Center, the NCTC, is a second major component of our efforts to keep the homeland safe. The NCTC serves as the primary organization in the United States government for analyzing and integrating intelligence pertaining to terrorism and counterterrorism. Information from 28 different systems flow into the NCTC, which collocates representatives from the FBI, Homeland Security, Defense, and intelligence communities.

That force-feeds data about danger into all the right channels. No more bureaucratic walls. What happens abroad can kill us at home. We have to work as a team against that. Now we do. If we know something about terror, the NCTC knows it, and by virtue of the NCTC’s centrality, a hub into which all spokes are attached, other relevant authorities know it too.

A third major component of our domestic defense is of course the Department of Homeland Security, and in particular the department’s Office of Intelligence and Analysis, headed by Charlie Allen, a legendary expert in foreign intelligence who knows how to bridge the overseas-homeland gap. The DHS’s role in infrastructure protection, civil defense, preparedness, disaster response, and other key homeland security functions is well known. Less well known may be the progress that the department has made under Charlie Allen’s leadership in building up an intelligence component more or less from scratch. We sorely needed this capability. This effort at DHS brings intelligence to bear against the problems of domestic security and to the security challenges that you, as business leaders, face in your communities.

This leads me to the fourth major component of our homeland security effort: information-sharing writ large. Since September 11th, 2001, information sharing has been one of the imperatives driving intelligence reform. The information sharing challenge extends far beyond the intelligence community’s sixteen agencies to encompass the federal government; the state, local, and tribal level, and the private sector as well

In many cases, improved information sharing necessitates that foundational policies, like classification and U.S. person rules, be reexamined. We are tackling these and other issues head on. The creation of the Office of the Directorate of National Intelligence put in place two new organizational features that are driving information sharing forward.

The first is the establishment of the Information Sharing Environment Program Manager. The program manager is responsible for facilitating counterterrorism information sharing among federal, state, local, tribal, and private sector participants, consistent with national security requirements and the information privacy and other legal rights of Americans. To accomplish this ambitious goal, the program manager is developing relevant, specific policies and processes, publishing an architecture of an implementation plan for building the information sharing environment, and monitoring progress. The final implementation plan, setting out just how this environment will be created, is due out this month.

The second organizational change in the information area is the establishment of a chief information officer as a Senate-confirmed member of the ODNI’s senior leadership team. This is a major plus for the intelligence community. Our chief information officer, retired Major General Dale Meyerrose, the former CIO for the U.S. military command responsible for homeland defense, has already been successful at breaking down barriers to information sharing, implementing information sharing standards, and beginning to address procurement standards for information technology.

Finally, and as I noted at the outset, an important part of providing intelligence support for homeland security must include protecting privacy and civil liberties. This is sensitive work in a nation with our political culture and traditions. We are looking to bring intelligence to America in a way that has never before been attempted or been necessary, but it is necessary now. And as part of this effort, our civil liberties protection officer, a former privacy official with the Marriott International Corporation, is deeply involved in all of our activities. Where rules, policies, and processes have to be amended or created as a means of protecting civil liberties in this new age of information sharing and access, it falls to him to alert me and the rest of my leadership team. He has my ear and I can promise that you will have his ear too, if necessary.

Today I have spoken to you in broad terms about broad reforms. I am describing a historic effort to adapt and develop our intelligence capabilities to address not only the threats we face, but also to conform with the values we cherish. Most of the responsibility for pushing these reforms forward falls on my office and on the intelligence community at large. But in concluding my remarks, I would like to relate what we are doing more specifically to you, the private sector leaders with international interests. I would invite you to begin thinking, if you haven’t already, about the unitary nature of security in a globally interdependent system. And I would ask you to consider how your knowledge of diverse operating environments could, if fully integrated, better help you assess your vulnerabilities.

In other words, I would suggest that you do what we are attempting to do domestically and internationally: take some time to consider what your divisions know about security issues in California and South Asia, or New York State and West Africa. Keep in mind that geographic distance means very little in today’s world when it comes to terrorists or foreign powers who exploit the same social, transportation, and cyber networks that facilitate international commerce. And if you see something at home or abroad that you think could be damaging to our national or homeland security, let the relevant element of the law enforcement or intelligence communities know your concerns.

I would like to close with a final point. You all know that the intelligence community and the private sector have a long relationship, one that has become even stronger since 9/11 made painfully clear the danger our country faces. Your cooperation with your government is vital, providing our nation with critical capabilities in the fight against terrorists and in the nation’s defense more generally. For this, on behalf of the whole community, I thank you.

This vital collaboration, however, has been made more difficult recently by a series of leaks that have revealed very sensitive national security programs designed to combat Al Qaeda and its allies. Let me say to you in no uncertain terms that these revelations undermine the security of our nation. They significantly complicate the ability of the United States government to cooperate quietly with patriotic and concerned businesses to defend our country, and they damage our clandestine capabilities to track those who seek to do us harm. Rest assured that the intelligence community will work to protect the confidentiality of its arrangements so that we and those who would help us can continue to protect our nation, our citizens, and our way of life.

Thank you very much.


MS. HALLETT: Thank you, Mr. Ambassador.

We’re going to take questions. I would ask each one of you, when you do rise to ask your question, that you please introduce yourself, the company you represent, and we have people from the Chamber throughout the room who will bring a microphone to you to ask that question. So when you rise, please wait for the microphone to reach you. We have a question over here and I’m waiting the microphone.

Q: Bart Bartholomew, VSC Corporation. I frequently walk the back trails of Fairfax County, and I see major electric substations and other transmission facilities very exposed to attack. My question is, which agency has the lead in gathering intelligence to help prevent attacks on such facilities?

DIR. NEGROPONTE: Well, I think that the lead is going to be a domestic agency, whether it’s the DHS, which is concerned with the infrastructure, or the law enforcement authorities in the area, plus of course the FBI. But I think that a point that perhaps I should have made in my remarks, which I think is important, is probably the most significant thing that we’ve done in this war on terror since 9/11 is taken this battle to the adversary overseas. And I think the fact that we reacted the way we did in Afghanistan after 9/11 and the fact that we have taken this conflict to the terrorists abroad is probably one of the most effective things that we can do to prevent a repetition of such attacks here in our own country.

MS. HALLETT: Another question back here.

Q: I’m Katy (sp) Shrader with the Associated Press. I was wondering, Ambassador Negroponte, if you could give us your assessment of the situation in Iraq right now. Should Americans and American businesses feel safe doing business there? And has the situation gotten out of control?

DIR. NEGROPONTE: I think in terms of American business opportunity – certainly when I was Ambassador to Iraq we devoted a certain amount of attention to promoting business opportunities in that country, but I would say that most of them we related either to the fact of our military and civilian presence in that country or directly to the reconstruction effort. So that I would say that as a general proposition, until the security situation has further stabilized, that the opportunities for the business community in general in our country I would say are probably quite limited. But in certain specific areas, they are substantial, indeed, for construction companies, engineering companies, and so forth, companies concerned with provision of security services.

As to the general situation in Iraq at this time, I think that it’s been encouraging that this new government has been formed after a number of months that it took to get created. The fact that they now do have a minister of defense, and a minister of interior, and they have an opportunity now to look forward to a prolonged period in office I think is a hopeful sign. Obviously, the demise of Mr. Zarqawi was a positive development. And efforts proceed apace to build the Iraqi military and police forces.

On the other side of the ledger, I think it’s undeniable that’s there’s been a certain amount of sectarian violence in recent months ever since the February 22nd bombing of the mosque in Samarra. And I think that government efforts to bring this kind of sectarian violence under control have got to take the highest priority. And I know that that is on the top of the Iraqi prime minister’s list and the top priority of his entire government. So I think that’s probably the single most important undertaking that this government has got to proceed with at this time.

MS. HALLETT: Mr. Ambassador, while we’re waiting for the next person to receive a microphone, let me just follow up on one of the very interesting comments you made in your remarks, which were both candid as well as very broad, and we appreciate that so much. The question is, with respect to a number of the people who are present today, they are representing multinational companies, you talked about the ability to share information. This is sometimes a difficult situation for companies that are doing business around the world to find the right person to talk to if they do see something going on that they think the intelligence community should be made aware of. Could you gives a few more specifics as to what is the best route to follow when you’re an employer in another country wanting to be in touch with the intelligence –

DIR. NEGROPONTE: Well I think abroad, procedures and mechanisms have existed for a number of years now, either in relating to the security officers who are stationed at the various United States embassies abroad – sometimes there’s a security committee that exists within the American Chamber of Commerce. And, of course, both American companies and American government officials participate in the deliberation of chambers of commerce abroad. And as you know, Carol, from your experiences as ambassador abroad, the American community tends to be quite tight-knit in these overseas situations. So I don’t think there’s much difficulty in ensuring that there’s good communication between the business community on the one hand and the official American community on the other. So if that is your question about doing this abroad –

MS. HALLETT: That’s great.

DIR. NEGROPONTE: – I think that that is pretty straightforward.

MS. HALLETT: Very good. And I have a question back here.

Q: Peter Romero from Experior Advisory. John, good to see you again. My question doesn’t have anything to do with the tools upon which you all depend on that have been so much in the press lately as much as the product that that generations. And that is, if there is nothing actionable that relates to telephone calls or Internet or financial transfers, or whatever it might be, over the course of several years, what happens? Are there federal guidelines that address themselves to the disposal of that information? In other words, if I make a call to a client in the Middle East and five years from now, will there be someone that has access to that call if all of the analysts in the meantime have gone through it and it’s not actionable?

DIR. NEGROPONTE: Thanks for your question, Pete. I don’t know the answer to your question with respect to time limits as they might relate to one set of data or another, which might be in the repository of one or another agency. But what I can tell you with absolute certainty is that whatever information might exist, it is treated in strict compliance with the guidelines that we have under executive order 12333, which was promulgated more than 20 years ago about the proper observance of the privacy of American citizens and the – not making reference to their names or anything else so that the information is correctly – you can be assured that it is properly handled and not abused in any way no matter how long it might be available to the government.

MS. HALLETT: Next question. Please wait for the microphone. Oh, right here first. Thank you.

Q: Thanks very much. Mr. Negroponte – (off mike) – with ISIS News. Not quite two weeks ago the Department of Homeland Security issued its national protection plan for infrastructure. And now in Congress in both chambers, there is legislation pending that would give DHS broad new authority to oversee security of chemical plants, pipelines, and the like. Is there a risk, do you think, that the zeal of government to protect infrastructure might impede commerce and industry?

DIR. NEGROPONTE: I really don’t think I – since I’m more concerned with intelligence per se, and within the sphere of intelligence, the preponderance of my attention is focused on foreign intelligence, I think I would be reluctant to comment either on a matter of pending legislation outside my area of responsibility or in reply to your specific question.

MS. HALLETT: Thank you.

Now we will wait for the microphone to come back here. Does that mean you don’t get to ask your question?

Q: Hi. I am Steve Losey with the Federal Times Newspaper. I had a question about your workforce. I understand that you are looking to build up your mid-level work positions in the intelligence community. My question is, what kind of positions are you looking for and how is the hunt to build up that workforce going?

DIR. NEGROPONTE: What kind of – I didn’t quite hear your question clearly enough. Sorry.

Q: The mid-level – your mid-level staffing in the intelligence community – middle-management kind of work.


Q: I understand that that is where you have been trying to build up the workforce. My question is, how is that going? What kind of positions are you looking for?

DIR. NEGROPONTE: Right. Well, first of all, I would say that speaking with respect to the intelligence community as a whole, what we are trying to do is rebuild its capabilities after a period of decline in the 1990s following the end of the Cold War. And then in addition to that decline, there has been a loss of people through retirement and attrition because the baby-boomer generation is starting to come of retirement age. So I would say rather than – and that has, in turn, caused there to be a shortage of people at the middle levels.

But I think the way we are going to meet that shortage is by identifying capable people coming up through the junior ranks and then moving them up into positions of increasing responsibility. So the focus of the community in general is really recruitment at the entry level and to try to bring in the best and the brightest people that we can from the new generation of entrants into the workforce. And I would say that we are very encouraged by the fact that there is such a great deal of interest in joining the intelligence community. And so I would say that over the next several years, we can look to a healthy building up of our workforce.

MS. HALLETT: Might I ask if you have a question you raise your hand while the ambassador is answering other questions and they will bring a microphone to you? And I have seen one hand here.

Mr. Ambassador, with the U.N. Security Council meeting on North Korea, do you have any comments or thoughts that you could share with us on that issue?

DIR. NEGROPONTE: Well, I think that when you talk about contemporary threats that we are concerned about, Carol – and I mentioned it right at the beginning of my remarks – in addition to international terrorism, there is of course the concern about the proliferation of weapons of mass destruction, particularly should they get into the hands of dictatorial regimes such as North Korea.

We know that North Korea has enough fissile material to construct nuclear weapons. We don’t know for absolute certainty that they have nuclear weapons, although the intelligence community assesses that they do. And in addition, we know that they have considerable capabilities in the area of missile technology. And of course the tests that they conducted of this Nodong missile the other day was just one example.

So North Korea is a particularly serious situation, and it’s one of the reasons that such great importance is being attached at the moment to try to resume these six-party talks between ourselves and North and South Korea, and Japan and China and Russia to see if we can get a better handle on this situation.

MS. HALLETT: Thanks for that further comment. Yes?

Q: Mike Arnone, Federal Computer Week. I was just wondering what the timeline for Mr. Myerrose’s confirmation would be, and then also –

DIR. NEGROPONTE: He has been confirmed already.

Q: Okay, and then also any details you might be able to give for the IT procurement standards.

DIR. NEGROPONTE: Well, I would have to ask Mr. Meyerrose to address that for you, but it is the kind of issue that he has very much seized on. I would say that although a lot of these issues as I understand it relate to technology and procurement, another equally, if not more important, issue that we have to deal with when it comes to information sharing is really the cultural and institutional issues that have precluded information sharing in the past because intelligence agencies or other government agencies have tended to guard their information within their own stovepipes.

So I think the really important thing is, in addition to whatever technological fixes need to be made, we have to instill a new culture, if you will, of people willing to share and move information horizontally across the intelligence community. And this is particularly important, as I was – a point I was trying to make in my remarks – when you’re dealing with terrorist-related information where you may be obtaining information in some country far away such as the Pakistan-Afghanistan border area that relates to a threat to some specific locality in our own homeland. That information has to be able to move expeditiously to entities and organizations that can act upon it.

MS. HALLETT: I have one question here and then we’ll finish up with a question on the other side.

Q: My name is William Krause (sp) and I’m an analyst at the Congressional Research Service, and I would like to share a concern with you that I think may also be a concern of the Chamber of Commerce, and that’s the pending caseloads of immigration-related benefits at the Bureau of Citizenship and Immigration Services. Prior to 9/11 we had 4 million pending applications and now, five years later, we have 6 million pending applications. Those pending applications are bad for business and, you know, if we’re not adjudicating them in a timely and efficient manner, it seems to me that we can’t achieve border security in any sense of the term. And my question to you is, couldn’t the information gleaned from processing those applications in an efficient manner be a source of good operational intelligence for both the intelligence community as a whole and for the Homeland Security Department as well?

DIR. NEGROPONTE: I must say, I just had never thought of that question. I would have to reflect on that. I can see some privacy issues leaping out at me. A few alarm bells go off with that question, but I just have to reflect on that.

MS. HALLETT: Last question is over here.

Q: Good afternoon, Ambassador, and it’s a pleasure to be here, and thank you for taking time from your busy schedule to answer our questions. I’m Jim Hans (sp) with U.S. Customs and Border Protection. One of the things that’s been bugging me a little bit from lessons learned – if we look back and we go to the ’93 bombing of the World Trade Center, 9/11, and Saddam Hussein’s comments years back – and not to negate the importance of national intelligence and your job, but the bombs have come from our soil; they haven’t been imported, or they haven’t been brought in. There is a possibility that someone could construct a nuclear device that would spew out radiation without any evidence of an explosion or plume. Are there presently any intelligence efforts being made to determine is this is planned? And if it would be done in one of our largely populated cities, what agency would be responsible for detecting such a radiation event, and how would our nation’s intelligence respond to that?

DIR. NEGROPONTE: Well, I think in terms of disarming such an event, if it occurred, that responsibility would fall to the FBI. And again, I think, in terms of whether such possibilities might arise and what kind of research and thought into that kind of eventuality, I know that some of the Department of Energy laboratories spend a good deal of time thinking about those issues.

And then lastly, I would mention the fact that in our own Directorate of National Intelligence we have created a National Counterproliferation Center, which brings together intelligence experts in this whole field of weapons of mass destruction who coordinate intelligence that is collected throughout the community on these kinds of issues.

MS. HALLETT: Mr. Ambassador, we are indeed fortunate to have you share this much time with us this afternoon at this business forum. I think you all would have to agree that we’re indeed not only appreciative of the time but what you are doing for this country, for everyone in America and around the world. You have set a tremendously high level of achievement and we are very proud of you, and I am certainly proud to know you, and thank you very much. (Applause.) Thank you all. And on behalf of Tom Donohue and the U.S. Chamber of Commerce, this certainly concludes one of our more interesting and certainly high-level business forums, and we are very grateful to you and to David Shedd and to all that work with you, Ambassador, for the outstanding work you are doing. Thank you so much, and we look forward to the next time you join us.