[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
ESPIONAGE THREATS AT
FEDERAL LABORATORIES:
BALANCING SCIENTIFIC COOPERATION WHILE
PROTECTING CRITICAL INFORMATION
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
THURSDAY, MAY 16, 2013
__________
Serial No. 113-28
__________
Printed for the use of the Committee on Science, Space, and Technology
Available via the World Wide Web: http://science.house.gov
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COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HON. LAMAR S. SMITH, Texas, Chair
DANA ROHRABACHER, California EDDIE BERNICE JOHNSON, Texas
RALPH M. HALL, Texas ZOE LOFGREN, California
F. JAMES SENSENBRENNER, JR., DANIEL LIPINSKI, Illinois
Wisconsin DONNA F. EDWARDS, Maryland
FRANK D. LUCAS, Oklahoma FREDERICA S. WILSON, Florida
RANDY NEUGEBAUER, Texas SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas ERIC SWALWELL, California
PAUL C. BROUN, Georgia DAN MAFFEI, New York
STEVEN M. PALAZZO, Mississippi ALAN GRAYSON, Florida
MO BROOKS, Alabama JOSEPH KENNEDY III, Massachusetts
RANDY HULTGREN, Illinois SCOTT PETERS, California
LARRY BUCSHON, Indiana DEREK KILMER, Washington
STEVE STOCKMAN, Texas AMI BERA, California
BILL POSEY, Florida ELIZABETH ESTY, Connecticut
CYNTHIA LUMMIS, Wyoming MARC VEASEY, Texas
DAVID SCHWEIKERT, Arizona JULIA BROWNLEY, California
THOMAS MASSIE, Kentucky MARK TAKANO, California
KEVIN CRAMER, North Dakota ROBIN KELLY, Illinois
JIM BRIDENSTINE, Oklahoma
RANDY WEBER, Texas
CHRIS STEWART, Utah
VACANCY
------
Subcommittee on Oversight
HON. PAUL C. BROUN, Georgia, Chair
F. JAMES SENSENBRENNER, JR., DAN MAFFEI, New York
Wisconsin ERIC SWALWELL, California
BILL POSEY, Florida SCOTT PETERS, California
DAVID SCHWEIKERT, Arizona EDDIE BERNICE JOHNSON, Texas
KEVIN CRAMER, North Dakota
LAMAR S. SMITH, Texas
C O N T E N T S
Date of Hearing
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Paul C. Broun, Chairman, Subcommittee
on Oversight, Committee on Science, Space, and Technology, U.S.
House of Representatives....................................... 9
Written Statement............................................ 10
Statement by Representative Dan Maffei, Ranking Minority Member,
Subcommittee on Oversight, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 11
Written Statement............................................ 11
Witnesses:
Dr. Charles M. Vest, President, National Academy of Engineering
Oral Statement............................................... 12
Written Statement............................................ 15
Dr. Larry Wortzel, Commissioner, U.S.-China Economic and Security
Review Commission
Oral Statement............................................... 30
Written Statement............................................ 32
Hon. Michelle Van Cleave, Senior Fellow, Homeland Security Policy
Institute, George Washington University
Oral Statement............................................... 43
Written Statement............................................ 45
Mr. David G. Major, Founder and President, The Centre for
Counterintelligence and Security Studies
Oral Statement............................................... 59
Written Statement............................................ 62
Discussion....................................................... 104
Appendix I: Answers to Post-Hearing Questions
Dr. Charles M. Vest, President, National Academy of Engineering.. 116
Dr. Larry Wortzel, Commissioner, U.S.-China Economic and Security
Review Commission.............................................. 120
Hon. Michelle Van Cleave, Senior Fellow, Homeland Security Policy
Institute, George Washington University........................ 125
Mr. David G. Major, Founder and President, The Centre for
Counterintelligence and Security Studies....................... 133
ESPIONAGE THREATS AT FEDERAL LABORATORIES:
BALANCING SCIENTIFIC COOPERATION
WHILE PROTECTING CRITICAL INFORMATION
----------
THURSDAY, MAY 16, 2013
House of Representatives,
Subcommittee on Oversight
Committee on Science, Space, and Technology,
Washington, D.C.
The Subcommittee met, pursuant to call, at 3:00 p.m., in
Room 2318 of the Rayburn House Office Building, Hon. Paul Broun
[Chairman of the Subcommittee] presiding.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Broun. The Subcommittee on Oversight will come to
order. Good afternoon, everyone. I appreciate you all's
patience. Every now and then we have votes that come into play
that interfere with our schedule and we appreciate everybody's
patience.
In front of you are packets containing the written
testimony, biographies, and the truth-in-testimony disclosures
for today's witnesses. I now recognize myself for five minutes
for an opening statement.
The title for today's hearing is, ``Espionage Threats at
Federal Laboratories: Balancing Scientific Cooperation while
Protecting Critical Information.'' I would like to extend a
particularly warm welcome to our witnesses and to thank you all
for joining us here today, and we are looking forward to your
testimony.
This hearing focuses on the intersection of two very
important issues: one, ensuring that the United States remains
the world's leader in scientific research and technological
innovation; and protecting our national security on the other
hand. Both are extremely important.
Finding the appropriate balance between scientific openness
and security concerns is not new. But it is critical that we
have this type of public discussion regularly so as to maintain
open lines of communication and, if necessary, recalibrate our
strategies to respond to new threats.
Science is a global endeavor. International cooperation on
science and technology and the open exchange of ideas has led
to countless significant breakthroughs that have benefited all
of mankind. Here in the United States, visiting foreign
scientists and scholars sparks innovation and entrepreneurship.
They make critical contributions to our economy, and they learn
firsthand about American culture and values. But, we cannot
afford to close our eyes to the reality that there are
nefarious actors--scheming insiders, business rivals,
criminals, even terrorists and foreign intelligence services--
who exploit our free and open society to steal the results of
American ingenuity and innovation.
Russia and China have regularly topped the intelligence and
law enforcement community's list of the most aggressive and
persistent thieves of our scientific and technological
information that is very sensitive. Russia views the United
States as a strategic competitor and its intelligence services
are very capable and just as prolific as ever.
And China continues efforts to gain access to advanced
technology to fuel its military modernization program,
according to the Pentagon's latest report on the capabilities
of the Chinese military. The report says China operates a
large, well-organized network of companies and research
institutes with both military and civilian R&D functions that
enable the Chinese military to access sensitive and dual-use
technologies or knowledgeable experts under the guise of
legitimate civilian R&D. This raises the question: are American
taxpayers' dollars subsidizing the modernization of China's
military? Just last week, Chinese media reported that their
military is ready to test-fly an armed stealth drone which
looks remarkably like some American stealth aircraft.
In addition to foreign intelligence services, terrorists
could clandestinely acquire the advanced technological
information or materials needed to build a nuclear, biological,
chemical, or radiological weapon. What if the Boston bombers
had used their university ties to acquire radiological material
to turn their bombs into dirty bombs?
Our goal today is to gain a better understanding of how
Federal laboratories and their partners in the broader academic
and scientific communities balance international scientific
cooperation with the need to protect sensitive information. I
don't have any prescriptions to put before you. As a doctor, I
wish I did. But, I look instead to our witnesses to identify
best security practices and sensible Federal policies that
don't allow the pendulum to swing too far in either direction.
Thank you.
Now, I recognize the Ranking Member, the gentleman from New
York, Mr. Maffei, for an opening statement. My friend, you are
recognized for five minutes.
[The prepared statement of Mr. Broun follows:]
Prepared Statement of Chairman Paul C. Broun
Good afternoon and welcome everyone to this Subcommittee on
Oversight hearing titled ``Espionage Threats at Federal Laboratories:
Balancing Scientific Cooperation while Protecting Critical
Information.'' I would like to extend a particularly warm welcome to
our witnesses and thank them all for joining us here today.
Today's hearing focuses on the intersection of two very important
issues--ensuring that the United States remains the world leader in
scientific research and technical innovation, and protecting our
national security.
Finding the appropriate balance between scientific openness and
security concerns is not new. But it is critical that we have this type
of public discussion regularly, so as to maintain open lines of
communication, and if necessary, recalibrate our strategies to respond
to new threats.
Science is a global endeavor. International cooperation on science
and technology and the open exchange of ideas has led to countless
significant breakthroughs that have benefitted all of mankind. Here in
the United States, visiting foreign scientists and scholars spark
innovation and entrepreneurship, make critical contributions to the
economy and learn first-hand about American culture and values.
But we can't afford to close our eyes to the reality that there are
nefarious actors--scheming insiders, business rivals, criminals,
terrorists, and foreign intelligence services--who exploit our free and
open society to steal the results of American ingenuity and innovation.
Russia and China have regularly topped the intelligence and law
enforcement community's lists of the most aggressive and persistent
thieves of sensitive scientific and technical information.
Russia views the United States as a strategic competitor and its
intelligence services are very capable and just as prolific as ever.
And China continues efforts to gain access to advanced technology
to fuel its military modernization program, according to the Pentagon's
latest report on the capabilities of the Chinese military. The report
says China operates a large, well-organized network of companies and
research institutes with both military and civilian R&D functions that
enable the Chinese military to access sensitive and dual-use
technologies or knowledgeable experts under the guise of legitimate
civilian R&D. This raises the question, are American taxpayer dollars
subsiding the modernization of China's military? Just last week,
Chinese media reported that their military is ready to test-fly an
armed, stealth drone which looks remarkably like the American MQ-9
Reaper.
In addition to foreign intelligence services, terrorists could
clandestinely acquire the advanced technological information or
materials needed to build a nuclear, biological, chemical or
radiological weapon. What if the Boston bombers had used their
university ties to acquire radiological material to turn their bombs
into dirty bombs?
Our goal today is to gain a better understanding of how federal
laboratories and their partners in the broader academic and scientific
communities balance international scientific cooperation with the need
to protect sensitive information. I don't have any prescriptions to put
before you, but look instead to our witnesses to identify best security
practices and sensible federal policies that don't allow the pendulum
to swing too far in either direction.
Mr. Maffei. I want to thank the Chairman of the Committee
and I want to thank particularly the witnesses and audience
today for your patience given these--the voting schedule and
the logistics of getting back here.
I want to associate myself with the comments of the
distinguished Chairman from Georgia and I would only add that
the challenge at our national labs and our scientific
facilities is controlling access to information and innovations
that are truly highly sensitive without obstructing the
positive interaction that occurs between scientists.
So, as we see on a routine basis, other nations and foreign
corporations regularly are attempting to steal, siphon, or
subtly acquire U.S. Government secrets or other kinds of
proprietary data that has highly technical and scientific value
for the economy or national security. So identifying specific
espionage threats, developing safeguards against them, and
warning American scientists about them is certainly an
important task. But it is a task that has to be balanced
against the cost of overreacting and inhibiting the advance of
scientific understanding and positive international
cooperation.
So this hearing will help illuminate those tradeoffs. And I
am very grateful to the Chairman for calling it. I look forward
to hearing from our witnesses today about how to strike the
right balance between these both very necessary goods. And I
hope that our witnesses can offer key and, if possible,
specific recommendations that could be followed by us in
Congress and the Federal Government as a whole, as well as
inform action by our universities, private corporations, and
the laboratories.
I yield back the balance of my time.
[The prepared statement of Mr. Maffei follows:]
Prepared Statement of Ranking Member Dan Maffei
Thank you Chairman Broun for holding this hearing today.
The challenge at our national labs and other facilities is
controlling access to the information and inventions that are truly
deemed to be highly sensitive without obstructing the positive
interaction that occurs between scientists. Still, as we see on a
routine basis, other nations and foreign corporations regularly attempt
to steal, siphon or subtly acquire U.S. government secrets or
proprietary data that has high technological and scientific value for
their economy or national security.
Identifying specific espionage threats, developing safeguards
against them and forewarning American scientists about these expanding
and evolving threats is an important task. But it is a task that has to
be balanced against the costs of overreacting and unnecessarily
inhibiting the advance of scientific understanding. This hearing will
help illuminate the tradeoffs.
I look forward to hearing from our witnesses today about how to
strike the right balance between international scientific cooperation
and ensuring the protection of critical key data or research. I hope
that our witnesses can offer key recommendations that could be followed
by the Federal government as well as inform actions by our Universities
and private corporations.
Yield back.
Chairman Broun. Thank you, Mr. Maffei. We have these huge
problems with cyber attacks upon business and national labs and
cyber security should be at the forefront of what all of us
here in Congress focus upon because we have a tremendous
potential of economic espionage and scientific espionage, and
thank you so much for your opening remarks.
If there are any other Members who wish to submit
additional opening statements, your statements will be added to
the record at this point.
Now, at this time I would like to introduce our panel of
witnesses. Our first witness is Dr. Charles Vest, President of
the National Academy of Engineering and President Emeritus of
the Massachusetts Institute of Technology.
Our second witness is Dr. Larry Wortzel, the Commissioner
of the U.S.-China Economic and Security Review Commission. Dr.
Wortzel is a former Army Counterintelligence Special Agent.
Thank you for your service in the Army, sir. I am a Marine and
I appreciate your service. You are a former Marine, too? Oorah.
Our third witness is Ms. Michelle Van Cleave, Senior Fellow
at the Homeland Security Policy Institute at the George
Washington University. Ms. Van Cleave is also the first
national counterintelligence executive and has previously
served as counsel on this Committee. Welcome back. We are glad
to have you. Welcome, Ms. Van Cleave.
Our final witness is Mr. David Major, Founder and President
of the Centre for Counterintelligence and Security Studies. Mr.
Major is a veteran FBI Special Agent and experienced
counterintelligence educator.
As our witnesses should know, spoken testimony is limited
to five minutes each if you could please try to restrain
yourselves. I know this is a big topic, but if you can, please
keep it within the five minutes. I am not going to gavel you
down if you go over, but if you could, please limit it to five
minutes and after which the Members of the Committee will have
five minutes each to ask questions. Your written testimony will
be included in the record of the hearing.
Now, it is the practice of this Subcommittee on Oversight
to receive testimony under oath. If you would all please stand.
I should ask you, do any of you have an objection to taking an
oath?
Okay. Let the record reflect that all of the witnesses
indicated they have no objection to taking the oath.
Now, if you would raise your right hand.
Do you solemnly swear or affirm to tell the whole truth and
nothing but the truth, so help you God?
Thank you. You may be seated. Let the record reflect that
all the witnesses participating have taken the oath.
Now, I recognize our first witness, Dr. Vest, for five
minutes. You are on, sir.
TESTIMONY OF DR. CHARLES M. VEST, PRESIDENT,
NATIONAL ACADEMY OF ENGINEERING
Dr. Vest. Openness of research and education accelerates
discovery, contributes to worldwide advancement of knowledge
and technology, and enhances American leadership, economy,
diversity, and values. I also understand the importance of
security. I served on the independent Intelligence and Weapons
of Mass Destruction Commission appointed by President George W.
Bush, and I am a trustee of In-Q-Tel.
Here are three things I believe in: the ``Leaky Bucket
Theorem.'' It is far more important to keep filling our bucket
of science and technology than it is to obsessively plug every
little leak; second, high fences around the small areas of
scientific results and technology that truly must be denied to
others through classification; and finally, competing and
cooperating with other nations and institutions.
Export control and visa policy remain somewhat rooted in
the Cold War when we had a single enemy. Our dominant security
asset was technology superiority; the Soviet Union's was a huge
military. Secrets were more easily maintained and military
technologies were mostly separate from consumer products. That
ended in 1989. Today, we face diffuse threats like terrorism.
We no longer singularly dominate the world's science and
technology. We are subject to the instant and open
communications of the Internet and the World Wide Web. Our
military and intelligence agencies are very dependent on
commercial products, our companies have global supply chains,
open innovation, manufacturing facilities, customers,
suppliers, and research laboratories all over the world.
In 1982, Executive Order 12356 broadened the government's
authority to classify defense-relevant information that stated
basic research information not clearly related to national
security may not be classified. However, the government soon
forced last-minute withdrawal of the 150 technical conference
papers on the subject of cryptography.
President Ronald Reagan responded to the resulting vigorous
debate by issuing National Security Decision Directive 189 that
stated, ``It is the policy of this Administration that, to the
maximum extent possible, the products of fundamental research
remain unrestricted.''
The horrific 9/11 attacks raised new questions about our
openness. Globalization of modern industries complicated these
questions. Visas denied to many foreign students, visitors, and
conference participants in the United States reflected
legitimate concerns, overreaction, bureaucratic foibles, risk
aversion, antiquated systems, good intentions, bad policies,
heart-rending personal experiences, and, finally, slow-but-
steady improvement.
My views on scientific technological and educational
openness are based on five considerations: America's
traditional values and strengths, the nature of basic science
and technology, U.S. science and engineering workforce, the
value of a well-educated world, and national security writ
large. America's economic and military strength and leadership
are made possible by our unique combination of democracy,
market economy, investment in research and advanced education,
and diversity. There is no longer a singular threat like the
Soviet Union or an economically surging Japan, and our world is
integrated by digital communication and expanding talent base
from new markets everywhere, so we must compete and cooperate.
Here is a specific example. In 2011, the U.S. and Chinese
Academies of Engineering held a joint meeting of experts to
discuss the future of the Global Navigational Satellite
Systems. We discussed applications to consumer products,
transportation, agriculture, and science. It was noted that the
codes enabling civilians to use the U.S. GPS signals are openly
published whereas the codes for the non-defesnse new Chinese
system called Compass are closed and unavailable. If both
systems could be used, accuracy, coverage, reliability, and
safety would be improved for all.
The CEO of one of our largest U.S. GPS companies explained
that in our country, the government launches and maintains the
satellites and provides open codes for their use. Entrepreneurs
then bring useful applications to market. Soon after this joint
meeting, the Chinese made the codes for Compass openly
available. Perhaps we contributed to this decision by
cooperating as well as competing.
In summary, openness is very important to the United States
in the 21st century, but our policies have a long and
continuing history of sometimes getting unnecessarily in the
way. When this occurs, there are three simple guidelines my
colleagues and I follow at MIT: one, obey the law; two, reject
grants or contracts incompatible with institutional values;
three, analyze and give voice to needed reforms in Federal
policy or its implementation.
Finally, I commend to you our 2009 National Academies
report titled ``Beyond Fortress America: National Security
Controls on Science and Technology in a Globalized World,''
that was authored by a highly experienced committee co-chaired
by retired General Brent Scowcroft and Stanford University
President John Hennessy.
Mr. Chairman, I would be pleased to respond to questions.
Thank you.
[The prepared statement of Dr. Vest follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Broun. Thank you, Dr. Vest. I appreciate your
testimony.
Now, I will go to my fellow Marine. We can talk about why
you left the best service to go to the Army later on offline.
But now, Dr. Wortzel, you are recognized for five minutes.
TESTIMONY OF DR. LARRY M. WORTZEL, COMMISSIONER,
U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION
Dr. Wortzel. Chairman Broun, Ranking Member Maffei, Members
of the Committee, thanks for the opportunity to appear before
you today.
China is putting in somewhere in the area of $1.5 trillion
in its 2006 Medium to Long-Term Plan for the Development of
Science and Technology, and the expenditure will go from 1.7
percent of GDP to about 2-1/2 percent of GDP by 2020. That is
still less than we spend.
But for the purpose of this hearing, it really doesn't
matter what they are spending. We should be focusing on the
fact that China is saving an incalculable amount of time,
money, and research effort through espionage and intellectual
property theft. And that science and technology cooperation
programs certainly are vital to China and help foster better
cooperation between China and the United States, but there
remains a substantial espionage threat posed by Chinese
nationals that are working at U.S. labs.
The U.S.-China Economic and Security Review Commission in
its annual reports have reviewed how China acquires foreign
technology through traditional espionage and through cyber
espionage, and we have recommended that Congress provide
additional funding and emphasis on export control enforcement
and counterintelligence efforts to detect and prevent
espionage.
I have to say there is sort of a natural tension between
maintaining scientific openness and preventing espionage. Dr.
Vest talked about National Security Decision Directive 189 and
that was in 1985, but in 2010 and 2012, the Office of the
Secretary of Defense in two other reviews really reaffirmed
that decision, that fundamental research, basic and applied
research has to remain open, and anything else is probably
going to cripple our universities, cripple our companies, and
cripple our graduate education.
So if there is one place you might focus, it is on this
dividing line between fundamental research and applied
technology development. Where is that? It is a little opaque to
me. And second, you might look at specific new or emerging
technologies that require additional protection. The Army
argues that developments in biological agent research,
robotics, information and cyber systems, nanotechnology, and
explosives or energetics should get a little bit more
attention. And other services want to look at integrated
circuit technology, new materials and processes. So I think
there is room for that.
I also think there is a lot of room for better education in
the labs and in universities because you have to know what the
cover organizations are that these researchers come in under.
Some of them--almost all of the intelligence collection
organizations I have had familiarity with in China have cover
organizations, and most people don't know them, including a
number of new FBI agents.
The other thing to think about when you look at China is
you really have to consider the political environment in the
home country of a particular researcher. You are dealing with a
citizen of an authoritarian state that is ruled by a single
party. The Chinese Communist Party runs the country, runs the
police, the intelligence agencies, and the judiciary. They are
all members of the Communist Party. And any resident that
applies to study overseas or for a visa is essentially a
potential hostage to party dictates. And that is in a country
that has no rule of law.
People in China that apply for these passports are often
interviewed by the security services. Their future employment,
where their relatives live, their relatives' employment is
subject to a great deal of pressure. So--and there is no right
of refusal for citizens of China if a government asks them to
gather information.
Thank you for the opportunity to make this testimony and I
am happy to answer any questions you have.
[The prepared statement of Dr. Wortzel follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Broun. Thank you, Dr. Wortzel.
Now, Ms. Van Cleave, you are recognized for five minutes.
TESTIMONY OF HON. MICHELLE VAN CLEAVE,
SENIOR FELLOW, HOMELAND SECURITY POLICY INSTITUTE,
GEORGE WASHINGTON UNIVERSITY
Ms. Van Cleave. Thank you, Mr. Chairman and Members of the
Committee. It is, as you say, a pleasure for me to be here
because it is like old home week being back in the old
Committee hearing room for me.
Chairman Broun. Do you feel like you need to sit back up
here somewhere?
Ms. Van Cleave. Yes, sir. That is fine.
Chairman Broun. Go ahead. Sorry.
Ms. Van Cleave. But what I would like to do is just to take
a second to tell you about another job that I had, which was in
the last Administration as the National Counterintelligence
Executive of the United States. I have to say it is the most
fascinating job that no one has ever heard of and very relevant
to the subject of today's hearing.
There were two major currents that led to its creation. One
was in the wake of the Rick Ames espionage case. Ames had been
spying for then the Soviet Union and later Russia for nine
years deep within CIA and it was quite a shock to U.S.
intelligence to discover that there had been such a damaging
and horrible penetration into U.S. intelligence. So there were
studies in the wake of that asking what had we missed? Why did
we miss it? What were the seams that needed to be plugged?
And out of those studies came a recommendation from
President Clinton that there should be created a National
Counterintelligence Executive to head up all of U.S.
counterintelligence. We had not in decades past since the
inception of our current intelligence infrastructure ever had
any individual position where all parts of U.S.
counterintelligence would come together. So President Clinton,
in an Executive Order, created this position, which was later
put into law in 2002 by the Counterintelligence Enhancement Act
passed by this body.
Second, in the wake of the end of the Cold War, there were
a lot of other actors involved in intelligence activities
against the United States. That included not only the more
traditional targets of espionage of our national security
secrets, but broader interests in the U.S. science and
technology, our economic base, the riches of this country as
well; and we didn't have a way within the U.S. Government to
bring together policy and strategy to deal with this kind of
threat broadly to the U.S. economy and society. So that was
another current that led to the creation of the position of the
NCIX, as the job is called.
And thirdly, I would observe--and this is from my
experience with the job--that intelligence is an asset, a
technique, resources, a set of tools that foreign powers use to
advance their interests and disadvantage ours. And there is a
question about how we think about those kinds of threats to the
United States from the perspective of how we develop national
strategy and policy. And that became yet another responsibility
of the office of the NCIX: to provide these kinds of policy
options to the President and his national security team.
With that lengthy explanation, it brings me to why I think
today's hearing is so important and the fact that the Oversight
Subcommittee is taking on this subject.
The United States invests more in R&D on an annual basis
than all of the G-8 combined. We are everybody in the world's
number one target for collection because of that. This is where
everything is. All the goodies of our R&D capabilities are
resident here in the United States in the things that we do,
and so we are everyone's number one target with the possible
exception of some of our closest allies, and in that case, even
some of those would find us their number one target.
And they are interested in virtually everything in our
economy, in our economic activity, including, of course, our
science and technology. This is not a new threat, but the point
I want to convey to you is that these numbers are growing in
terms of actors and reach and costs. It is true that during the
Cold War we had a core unitary threat, and the fact that we had
a unitary threat made it easier to deal with that. Today, the
multiplicity of threat, multiplicity of actors makes it vastly
more difficult to deal with. And these numbers have frankly
overwhelmed our ability to deal with those kinds of threats
given the current apparatus that we have.
Mr. Chairman, the report that you mentioned that the
Pentagon released on Chinese military activities is significant
for many reasons, but one of those reasons is that it is the
first official acknowledgement that the Chinese have a
dedicated program to acquire U.S. technology that is
sophisticated, highly resourced, tasked, and very, very active
and successful against us and they are not the only ones.
So how do we understand the costs of this? Well, the FBI
estimated in the last Fiscal Year that economic espionage costs
us about $13 billion a year, but I would say that figure
substantially underestimates the potential cost, first, because
there is underreporting. You don't see firms coming forward and
saying we have been hit, so it is difficult to estimate all of
that. Second, there is a dynamic cost in estimating--dynamic
scoring if you will in understanding real economic costs. You
know, what is the cost when we lose competitive ideas in our
R&D base. And then thirdly, the whole cyber dimension, which is
a hearing unto itself-- ``the largest transfer of wealth in
history'' as the Director of NSA has called cyber attacks
against us.
So when you put all of those things together, we have a
serious problem and it is growing worse every year, and reports
out of government are worse every year. And so we talk every
year about the need to balance. So the question back to this
Committee is if things continue to grow worse at what point is
it genuinely a terribly serious problem for the United States
that there is this hemorrhaging of our technology?
I welcome your questions.
[The prepared statement of Ms. Van Cleave follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Broun. Thank you, Ms. Van Cleave. And that point
is well-taken. And we would very much like to hear some
prescription from all of you about how we should go forth
legislatively to try to make sure that the tension between
openness and security is met. As a physician, as a medical
doctor, and as a scientist, I understand the importance of
openness of research and development, but this is a tremendous
tension. And thank you, Ms. Van Cleave. And if you all do have
some ideas, we would like for you to present them to us later
on, maybe answers to questions for the record.
Now, you look like an FBI agent. Mr. Major, you are
recognized for five minutes.
Please turn on your microphone.
TESTIMONY OF MR. DAVID G. MAJOR,
FOUNDER AND PRESIDENT,
THE CENTRE FOR COUNTERINTELLIGENCE
AND SECURITY STUDIES
Mr. Major. Yes. I have been studying espionage for 43
years, which makes me one of the oldest people in this room
looking at this particular problem. Michelle and I were at the
White House together in the Reagan Administration trying to put
counterintelligence at the policy table, and since that time I
have formed this company called CI Centre. It is a little red
schoolhouse that tries to train people on the significance of
counterintelligence, and we have trained over 100,000 people in
the intelligence community on espionage and counterespionage.
And we take our information, we put it on an empirical
basis, because what we have created is a thing called SPYPEDIA,
and SPYPEDIA is a way we track espionage around the world every
day and make it available to members who are a member of our--
what is a membership webpage.
And if I would look at the United States, espionage is a
big issue. In the United States from 1945, the end of Cold War
to today, I can put some numbers on that and explain exactly
the size of espionage as we see it today. Don't forget that
during the Cold War, the Russians had 531 Americans who were
their clandestine agents operating for them during the Cold
War.
And since that time, how many cases have we had? Well, what
we do is we track these cases based on these laws, economic
espionage, and national security laws, classified information,
and the private sector, and we use this--these criteria to
track it, and where right now the big talk is about the insider
threat, and that is what this hearing is about. The fact of the
matter is the insider threat has always been with us and will
be with us.
We say how many espionage cases have we had which has been
legal action taken against the people who have acquired the
information in the last 68 years? The answer is 564 people.
Now, we look at espionage cases, technology transfer where they
take the material itself, and technology acquired through--in
the private sector. And if you notice, last year, we had 64
cases, the largest we have had. Notice the last ten years since
2000 there is an expansion, a growth, exactly as Michelle was
talking about. The reality of what we have on this issue, 564
cases, an average of 8.1 over that time period but not in the
last 10 years.
Where are they coming from? Now, they are coming from the
private sector. Over 260 people have been charged from the
private sector and the government section also we see it. How
are we doing catching spies? Well, one good news is one of
these cases where a case related to national security
information in which they were trying to acquire classified
information were interdicted by the FBI before the person ever
actually passed it. That is the good news. These two were at
the National Laboratories and they were trying to acquire
information for Venezuela. We have--and also three cases of
Foreign Agent Registration Act. That is the good news.
Here is another bad news message. If we look at every case
someone was an agent of a foreign power operating in the United
States but hadn't been caught yet, we said how many agents are
out there each year? Well, our average turns about to at least
25 who eventually get caught. And for 33 years the average has
been above 25. The biggest we had is 53. Compare that to how
many we caught and we are using catch to get the best of the
years, 25 percent. So it is--continues to be a problem. It
continues something we have to invest in.
Now, the average spy will last about 1 to five years, but
they can do significant damage during that period. We say what
countries are conducting espionage against the United States,
and it turns out that obviously Russia, the Soviet Union is the
largest, but China is coming up really quickly. Between 1949
and 2000 there were only five Chinese cases. Now, there are 100
cases. There have been 95 new cases in the last 13 years and
they are the largest growth area has in Chinese cases that have
led to legal action against the individuals. You can see the
other countries.
But what is interesting here, we have tracked the
countries. The dark blue represents national security cases, in
other words, classified material; and the light blue represents
private sector or corporate espionage, and you notice that
China is a very large profile in the private sector espionage
cases even though they have attacked classified information.
Notice that Iran has never--has--they are only using
diversion--or there is no national security Iran cases but they
are the largest diverter of material. And if we look at Chinese
cases, the 100, you notice what the trend line has been since
the year 2000. If we also look at that compared to Russia, you
can see how many cases that we have seen here in the United
States.
We talk about foreign entities and declassified
information. This shows you that it has been the Soviet Union
and Cuba and China and Iraq and so forth. On economic espionage
cases, what the target is, we have talked about--this is a
great thing; it comes from scientific America and it shows you
between research papers, patents, issues, expenditures, and
higher education, the United States is number one. But if you
go down to China, number three, and you go way over to the
right-hand side, they are not even on the higher education side
because they get here to get their education. And some of them
stay and then steal information and pass it on to China.
If you look at cases of economic espionage, you can see the
trend line. The red line is the number of cases. The blue line
is the number of people. Because of economic espionage cases,
you are normally looking at 1 to 1.8 per case. It is more of a
conspiracy than it is an individual by themselves. But the
company benefitting from economic espionage cases have been
China, Taiwan, South Korea, India, Japan. Eighty-five percent
of all these cases come from Asia. That is where the majority
of these kinds of cases are coming from.
If you look at domestic and foreign cases, you can see
China, Iran, Russia. These are the actors in this side of the
issue. Why--what are they targeting? I think very revealing
that the number one target is information systems. They are
targeting our information systems to get the technology to do
external targeting of our information. So they do cyber warfare
by using our information to then attack us externally. So they
internally acquire it and then use that to externally target
us. And it is across the board the kinds of information they
are targeting.
Why target the United States? As I said, information
technology, industrial information, military information, and
business, it is across the board on what United States
manufacturers. That is who is targeting us during this period.
On illegal exports, the exports are obviously increasing,
primarily coming from Iran. And if we look at these cases
benefitting China, Iran, Russia, Taiwan for illegal export
cases.
So that is what we are finding in SPYPEDIA as we track
this, and excuse me for going a minute over on that. I will
answer any questions you have on this material.
[The prepared statement of Mr. Major follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Slides shown during Mr. Major's testimony
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Broun. You could go on with that longer. You
didn't have to talk that fast. That was a lot of information. I
appreciate it, Mr. Major. It is excellent. I thank you all for
your testimony.
Now, reminding Members that the Committee rules limit
questions to five minutes. The Chair at this point will open
the first round of questions, and I recognize myself for five
minutes.
Now, Dr. Vest, in your testimony you used the analogy of a
leaky bucket and suggested that it would be better to keep
filling the bucket rather than to obsess over plugging the
holes, but reports from the U.S. intelligence community, the
Pentagon, and testimony that we have heard today seem to
suggest that at least one of those holes are pretty big and
continues to grow. If we don't do something about China, we may
not have much water left in our bucket. Would it be possible
and acceptable within the academic and scientific communities
to implement a targeted approach to address the growing threat
from Chinese espionage while still generally adhering to the
principle of keeping basic, fundamental research open and
unrestricted?
Dr. Vest. It is obviously a complicated question, and I go
back to something that Ms. Van Cleave said, which is they are
interested in virtually everything. And I do not think that we
can keep virtually everything secret from the Chinese or anyone
else, so I would still contend that we should focus on two
things: one is really protecting those things that the national
security community believes to be the most important--weapons
systems, et cetera--and secondly, I very much agree with what
has been said by you, Mr. Chairman, and others that we really
have to do something about making ourselves more secure against
cyber intrusion. Stealing is different than openness of the
academic community.
Precisely where that line is I don't know, but given the
speed with which science and new technology move forward these
days, we simply cannot keep absolutely everything closed and
secret, nor do we want to. So I still contend that the leaky
bucket approach is correct today even though the numbers are
getting larger and the areas of interest are getting larger. We
have to focus on the things that are critical and help our
laboratories and our universities to remain as open as possible
so that we transmit our values, learn from each other.
Every company I know anything about now does research,
serves markets virtually everywhere in the world. I gave in my
testimony an example of the new Boeing aircraft that is built
in 535 different places. We can't just keep everything on our
shores totally closed up. And I think it is up to the
universities, by the way, to do some of their own drawings of
lines and simply not do research that they believe needs to be
classified or thought of in some different way.
Chairman Broun. Well, Dr. Vest, I hope that the bucket
still has a bottom to it and it is not just a sieve, but I
agree with you.
Communication between the science and security communities
to deal with the questions raised by this hearing is critical.
What are the examples of effective methods for conducting such
a dialogue, Dr. Vest?
Dr. Vest. Well, I think that after 9/11, there was actually
some very productive dialogue back-and-forth between the
universities, the National Academies, the security
establishment, and some of those things went pretty well,
things such as defining the so-called select agents, the
biological materials that everybody agreed needed to be
restricted in their use on campuses and under secure facilities
and so forth. But on the other hand, during that period we also
saw things like technology alert lists that didn't want to let
people in the country who had studied fields like landscape
architecture. So we got a little bit over the map.
I think the dialogue is the important thing because in my
relatively modest forays into engagement with the intelligence
community, these--as we know from the table--are very
intelligent, very thoughtful, very patriotic people, and so are
most of us in universities and independent research
laboratories. So to me, ongoing dialogue is the key to trying
to find somewhere where that fuzzy line that Dr. Wortzel
referred to is. And then I think universities need to adhere to
it.
Chairman Broun. Well, my time is expired, but if any of you
all have any suggestions about creating more dialogue between
the communities, I would appreciate it.
Now, I will recognize Mr. Maffei for five minutes.
Mr. Maffei. Mr. Chairman, thank you. I want to thank again
this panel for your testimony. I haven't been on this Committee
very, very long yet, but we have--already had a lot of
distinguished witnesses. But I think this is probably the most
distinguished panel that we have had.
Nonetheless, only one of you, Mr. Major, actually has a
degree from Syracuse University, so I am going to start with
you, Mr. Major.
Chairman Broun. But we have a Marine.
Mr. Maffei. Well, that is good. That is--they are--that is
very important. But what advice would you give scientists,
people working at these labs in order to ward off these
practices? And I don't know--we don't have a lot of time here
but is there a best practices that could be followed? Does your
company ever do that kind of training? And if they are not
being followed, why not or how can we get a better--are there
simple things that maybe can be done to at least ward off some
of these intrusions, these espionage efforts?
Mr. Major. Well, thank you for your question. First of all,
it is Syracuse University in biochemistry and I--go Orangemen.
And I was in the United States Army, I should tell you also,
but I am not a Marine.
We----
Chairman Broun. Thank you for your service.
Mr. Major. Thank you, sir.
You know, this idea of education of espionage is not a new
problem but some of the hardest targets are trying to--targets
to educate are academics and people in laboratories. Department
of Energy has been struggling with this problem for many, many
years, as is anybody who ever deals with the universities. When
I was a supervisor in Baltimore, I had trouble with the
universities up there to explain to them the reality of what
was happening with some of their students that were coming
there, because we know that students represent a particular
problem when they come in there.
We actually had a dean go in and tell the Chinese
students--he said the FBI may come in here to talk to you. If
they do, come to me because you have no obligation in this
country to talk to the FBI. Well, I went in and had a
discussion with him and I said it is my responsibility to worry
about this regardless of what you say, Mr.--as the dean there.
So this is always a long, long problem. It is an education
problem and you have to do it in a creative way. You have to be
very realistic. You have to be pithy. You have to let them know
the facts. You can't just go in and say there is a problem.
And I will tell you this in follow-up to the last
discussion is that we can sometimes make a mistake and we said
the problem is primarily in classified national security
information, but our empirical evidence shows us that across
the board the United States is being targeted, and some
corporations are having them on themselves to create meaningful
protection programs because it can be worth an awful lot of
money. I mean DuPont had a major case where they were trying to
steal titanium oxide, which is worth billions of dollars, this
white paint. But that is worth a lot of money, and yet we have
espionage cases trying to steal those kinds of information.
So you have to really educate people on it. You have to be
realistic, but you have to invest in it. And this is a problem.
It is a problem in a government and it is a problem in
corporations. Corporations--there is a movement in some
corporation to create their own internal counterintelligence
cells to do a better job of educating them on this, probably
the single-best thing you can do. And then there is a lot of
other things you have to do that have to do with cyber security
and the failures--mistakes people make.
When we go through and talk in our courses and we do that
as one of the products that this company does is that we try to
explain what has happened in the past and where it broke down
and where it failed and what you can do, and the people are
very shocked when they realize that despite the policies that
were set up, the human errors that allowed someone to come in
there and still operate.
There was a man--there was a Chinese student who was
stealing just recently information on cancer research and they
fired him. He went home and they never took him off the server
and he went back in the server and got information. Well, he
should have been taken off the server immediately after that
took place.
So you see these kind of human failures that can--that
break in on a repeated basis when you are trying to create an
environment that is both open but realizing there are a lot of
collectors out there. And as I said, this is a bigger problem
from corporate America today than it has historically, partly
because the House passed the law on economic espionage. And
that was an issue that we couldn't--we didn't have a way to
deal with when that law was passed in '96. We are dealing with
it and that is the growth area in espionage in the United
States.
Mr. Maffei. Good. And I do note that in your written
testimony you mention that 555 individuals that have engaged in
espionage-related activities since 1945, all but--all of those
cases, there was only one case involving the Department of
Energy, one involving NASA, six cases involving university
employees, but 252 cases involving the private sector, so I
think that is interesting.
I do--I know that Ms. Van Cleave mentioned sort of the cost
of this. Do you have any estimates of it? You said that $12
billion was probably too low. Do you have any reliable
estimates of how much this is costing us every year?
Ms. Van Cleave. It really is not possible to calculate how
much this in fact is costing us because it depends on the
assumptions that you build into that. The Bureau's estimate of
$13 billion in 2012 was based on the cases that they had an
economic espionage and what was involved in those particular
losses and their estimates of what they may have missed. But my
concern is--and I think there is with you, too--that there is a
great deal of underreporting in that area and that the real
cost to the economy is something far beyond that because what
you are talking about is loss of the basic idea factory. R&D is
the idea factory and so what happens with the ideas that are
lost competitively to others?
Mr. Maffei. All right. Thank you. Well, Mr. Chairman, my
time is up but the only thing I might observe is that so much
of this is economic in that we do have a trade deficit problem
with the People's Republic of China in addition to some of the
other countries out there, but this actually could be one of
the major factors since they are not paying for it. They are
stealing it or their companies are stealing it or particular
individuals are stealing it. And that could be one of the major
factors why we are not selling more to China. It may not just
be a security issue.
Chairman Broun. Well, the gentleman's time is expired. And
I think that is a good point and that is part of the reason for
this hearing.
Now, the Chairman recognizes Mr. Posey.
Mr. Posey. Thank you very much, Mr. Chairman. And thank all
four of you for your excellent presentations, very interesting.
You know, if Americans focused more on the many, many threats
to their futures, we would be, I think, a much more united
country. You know, unfortunately, we are only united like we
should be for a short period of time following 9/11, a short
period of time following Boston, and completely another
subject. But anyway, sometimes the best defense is an offense,
and so, you know, any of you feel free to answer whether or not
we have an offensive program toward those who are threats to
us.
Ms. Van Cleave. Sir, if I might take that one, I think that
is a superb question. Really, the efforts that we have made to
try to protect our technology and science base have been
largely defensive in nature, which is to say we promulgate
security regulations. We have export controls over the things
that we permit to go out. We have classification protection
around sensitive information. But what we don't have, as much
as we need to have, is an offensive capability that can go
inside the foreign intelligence service that is targeting us in
order to be able to actively defeat their activities against
us.
One of the reasons we don't have that hearkens back to my
opening explanation today, which is we have never had really a
unified counterintelligence strategic capability in the United
States. We have done things defensively to protect certain
operations abroad against foreign intelligence attacks. We have
enforced espionage laws here at home, but offensively, to get
inside that foreign intelligence service to understand how they
operate, how they are tasked, what their liaison relationship
are, the things that may make them vulnerable to us, that is
what we really need. So I think it is a great question.
Mr. Posey. Well, I am really sad about the answer. I mean I
thank you for the frank answer but I am sad about it. I mean I
was hoping you would say, yeah, we have all kinds of those
programs but we can't talk about them. I am sad to learn that
we don't. I mean there is one reason this country hasn't been
overtly attacked and that is because people who might attack us
realize the cost of retaliation and it is unbearable to them.
That doesn't seem to be the case in cyber warfare.
Ms. Van Cleave. When it comes to cyber warfare, that is an
interesting and challenging calculation in and of itself, and I
think that there are lots of conversations, studies underway to
try to better understand what we can do consistent with, you
know, our values and the laws of war in offensive cyber
operations, so that is a great question in and of itself.
But beyond that, there are all of the other operations of
foreign intelligence services against us where again having
capability to get inside those services and to degrade what
they are doing would be of great benefit to us.
Mr. Posey. And doesn't it seem like it makes an awful lot
of good sense to you to unilaterally disarm when you make
agreements with these countries that are robbing you blind in
the left pocket and you are going to voluntarily disarm any
defense you have in the right pocket? I mean is there something
wrong with that theory that--or something right about that
theory that we don't see?
Ms. Van Cleave. I am not sure what you mean by unilaterally
disarm but I know I don't like it.
Mr. Posey. Yeah, well, you know, supposedly friendly
countries, you know, don't hack you, don't rob you. You know,
they don't go into your Pentagon, they don't go into your
banks, they don't--you know, they don't cause the havoc that
they have caused.
Mr. Major, you are waving your pencil there.
Mr. Major. Yeah, I did. The Bureau in the last few years
has a very aggressive program to try to educate the private
sector in economic espionage. They have reached out
significantly to try to--they have even made bulletin boards to
tell people about this particular problem. So taking an
offensive standpoint they have.
On the other side, the FBI can speak from them is--has
always had an aggressive program to target foreign intelligence
services that operate in the United States to penetrate them to
try to find out what they are doing. And one of the things you
see reflected in the numbers I showed you, you don't just find
an espionage case. Almost always when you find an espionage
case that I showed you, it is because you have penetrated that
service in some manner either from a technical standpoint or a
human standpoint. They have told you about the fact that you
have been under attack.
The first target of the Chinese was made by the CIA in
1982. It was the first western service to ever penetrate the
MSS. We didn't understand what China did for many, many years.
One of the reflections we have seen with the 100 cases is two
things: you are seeing a more aggressive service, a better
understanding of how they are operating, and I would suggest
also a better penetration of some of these services that you
can't talk about in this environment because the counterpart of
no more espionage cases is more understanding of espionage
cases usually through operations being done by the intelligence
community. And I know at least in my experience I spent most of
my career running offensive operations against intelligence
services that operated here.
Mr. Posey. Mr. Chairman, I would like sometime maybe we
could have a closed hearing and have some of the discussions
about things we can't have in an open public hearing like this.
Chairman Broun. Mr. Posey, that may be a very good idea and
we will see about looking into that.
One quick question, Mr. Major, are you suggesting more
human and counterintelligence, more boots on the ground?
Mr. Major. Oh, yes. I mean the more you do this, the more
aggressive you operate this, it is successful. One downside is
happening right now, however, is that a lot of education
programs are being cancelled because when you have a
sequestration problem, the first thing you cancel are training
and travel and that is what is happening across the board right
now.
Chairman Broun. Thank you, Mr. Major.
Mr. Swalwell, you are recognized for five minutes.
Mr. Swalwell. Thank you, Mr. Chair. And thank you, Ranking
Member Maffei, for holding this hearing.
And Mr. Major, I think you make a great point. We are
talking about important threats that are facing our country
right now and the need to protect and defend against them,
especially against outside actors and nation states who are
very aggressive in going after our intellectual property, going
after our government networks. But on the other hand, we have
the sequester and that, I can imagine, you would agree makes it
difficult. I mean it is nice to hold a hearing and say, you
know, these are the threats. We need to, you know, be more
secure, but there is no money to pay for doing that. It is
just, you know, we need to do that. And would you agree?
Mr. Major. One of the first things that is always cut is
that. I have been around long enough to see this happening over
and over again. It is a trend and it is happening right now.
Mr. Swalwell. Also, I think we can agree that international
collaboration has served our country well, and I for one want
to emphasize the role that scientists of Asian and Middle
Eastern descent have played at our National Laboratories. I
have two National Laboratories in my Congressional District--
Lawrence Livermore labs--Laboratory and Sandia Laboratory. And
also we know the role that immigrants have played in our
country. Forty percent of the largest companies in our country
were founded by immigrants or the children of immigrants. So I
think it is important that we balance the need to protect
against espionage against the role and understanding that
immigrants come here and they create jobs, they participate and
engage in the type of innovation we need.
And so that leads me to my question, which is in Livermore
we have what is called the Livermore Valley Open Campus. This
is a collaboration between Lawrence Livermore National
Laboratory and Sandia National Laboratory working to create an
open, unclassified research and development space. And the
challenge right now, of course, is you have laboratory workers
who--inside the laboratory they have to be cleared to work
there. It is a largely inaccessible place for the public, and
because of shrinking budgets, the laboratories are having a
hard time continuing to meet the needs and demands of their
clients, principally, the NNSA for Lawrence Livermore. And so
they are looking at using outside contractors very often. But
getting those outside contractors screened and cleared is often
a challenge.
But we know the role that private industry can make, and I
have never been one to believe that the government should be
the only one at the table when it comes to innovation. I think
we have to partner with private industry.
So is there a way that we can continue to see these open
campuses thrive and work in an unclassified manner on perhaps
high-performance computing and cyber security research and
development while still keeping us safe from espionage, Mr.
Major?
Mr. Major. First of all, let me say that of the 565 people
that we know have been indicted and arrested, the vast majority
have been Americans; they are not immigrants. But we are all
immigrants in one way or another, but that is the vast majority
committing espionage.
However, we have both sides of the gamble taking place.
What you do have in your environment is you have a mix and
match. You have one person who is working in a totally open
environment that--when you are working a material, you don't
care where it goes and who has access to it. That is one thing.
But if what that same person is working on a sensitive program
or a classified program and they start interfacing, it is very
easy to lose the connectivity; who am I speaking to right now?
And that is really an education problem and it is also an
organization problem. Do I want to have people that are working
in these sensitive programs also interfacing with these people
in these totally open programs? Because very quickly, that line
will blur between the--that individual and who is my friend and
who do I talk to and what can I say? So that is an
organizational issue. Yeah, sure, they can exist separately but
it has to be done I think in a calculated way.
Mr. Swalwell. So you believe if the open campuses are able
to have that bright line that distinguishes between the
classified work and the unclassified work and knowing that in
the unclassified areas we can still make great strides and
progress in energy security and national security without
giving the individuals working in those areas anything that
would be sensitive or compartmentalized, do you think that is
possible?
Mr. Major. You look at it and you say I am going to--if you
color it gone and said soon after we do it, it going to go
someplace else, then it--you don't have a problem. But then the
people that are working on it, they also have information that
you don't want to have color gone. And you got to figure out is
that the same people or is that different people?
By the way, in your comment about economics, let me just--
one other thing. We often say to corporations, however, that if
they are going to go to China and you are going to open up a
business in China, this is an economic issue, color it gone
because it won't take long before whatever you have there will
be copied by that society and you will be out of business
there. And so corporations have to look very carefully because
it is a big market, but they are not--it is a Delta T, a period
of time in which you can operate there before you will now
have--build your own competitor.
Mr. Swalwell. Great. Thank you, Mr. Chairman. I yield back.
Chairman Broun. Thank you, Mr. Swalwell.
My good friend from Arizona, Mr. Schweikert, you are
recognized for five minutes.
Mr. Schweikert. Thank you, Mr. Chairman.
Is it proper to say Professor Vest?
Dr. Vest. Chuck is fine.
Mr. Schweikert. Well, okay, if you say so. Professor Chuck,
if this were the 1980s--if I remember the language we used back
then--it was called the run-fast theory very similar to your
bucket. If anyone goes back that long, the old--we were going
to produce, particularly in military technology--this much
faster than the Soviet Union. In today's world where everything
is ultimately sitting out there on a server somewhere, can you
ever run fast enough that our technological value, both--
whether it be military, whether it be economic, data research--
is produced in a way where you can truly have, you know,
something--at MIT or other fine universities a truly open
platform?
Dr. Vest. That is a really good question, and it seems to
me that when it comes to the distinction you made, I suspect
that under today's contracting laws and everything else,
literally military technology could not run fast enough to stay
ahead if it were as you have said.
I do think, however, that basic advances in information
technology and life sciences and manufacturing and so forth, in
new chip design, new materials, bioinformatics and so forth,
these things in fact do move fast enough that we ought to be
able to claim them for a significant period of time, perhaps
start initial manufacturing in the United States, and then it
is probably going to drift off.
Dr. Vest. But if you don't try to stay out ahead of the
curve, then you know you are dead.
Mr. Schweikert. Well, what is the United States ultimately
resource?
Dr. Vest. It is our free market.
Mr. Schweikert. I will make the argument it is our
entrepreneurship.
Dr. Vest. It is our free markets and entrepreneurship.
Mr. Schweikert. Yes, it is that we do creative destruction
really well, really fast.
Ms. Van Cleave, I have sat through a series of these
hearings on sort of the banking finance side and learning, you
know, the networks that are attacking bank accounts and
collecting credit cards number and these--and fascinating and I
am not breaking any rules because a couple of those were inside
the tank--that we literally have criminal organizations,
criminal entrepreneurs that are not nation states. They are
literally--they collect the data and it is up for sale for
whoever will pay for it. Are we now seeing that in the science
and technology and military espionage world where I am not a
state actor; I am in it for the money and I am going to collect
the data and put it up, and whoever is willing to buy it?
Ms. Van Cleave. Congressman, I don't have specific insights
into the kinds of entrepreneurial criminal organizations that
might be going against our S and T base in that way, but I can
tell you that I do know that there is a third country market if
you will in things that get stolen by other governments.
Mr. Schweikert. Well, that was going to be--well, in----
Ms. Van Cleave. So it wouldn't surprise me to learn that
there could be entrepreneurs who are also taking advantage of
that market to be out pedaling their wares.
Mr. Schweikert. Mr. Major, in that same thread, I have
heard lots of stories out there where--whether they be
entrepreneurs but also literally engineers, scientists saying
you--if you can steal the equipment, we will reverse it for
you. We will reverse engineer it.
Mr. Major. There are specific cases of that. Of the ones we
have been tracking in SPYPEDIA we find that happening. Someone
may be a foreign national but they see the technology and say,
hey, I can compete against this. I can take this out and set up
my own competitive business or buy someone to do that. So yes,
we have empirical cases that feature it exactly. I would like
to add one thing to your fast run--run-fast strategy that we
had during the Reagan Administration is that that run-fast
didn't work very well because we found out through a source
called farewell manmade vitriol that the--as we develop new
technology, immediately it was being stolen by the Russians. So
they were not three generations behind us; they were about one
or two generations because their espionage network was so large
and so successful, it really shaped--reshaped our defense
thinking as a result of that. And there is one source who told
us that.
But yes, there are examples like you are talking about. In
this business, you have to look at this and say whatever the--
whatever someone is stealing, you know, you can't keep anything
secret forever. You have to keep it what I call a Delta T. It
is a period of time before it will eventually become public,
but you only have to define how long and how much you want to
invest in that Delta T. How long do you want to keep that
secret for that period of time, and that is where you put your
efforts and so forth.
Mr. Schweikert. Thank you, Mr. Major. Well, being for all
of us as Members of Congress, we all know what it is like to be
in an environment where there are no secrets.
With that, I yield back, Mr. Chairman.
Chairman Broun. Thank you, Mr. Schweikert.
I want to thank the witnesses for you all's valuable
testimony and I want to thank Members for you all's great
questions.
Members of the Committee may have additional questions for
you guys, and we will present those for you for you to respond
in writing. And if you will do those please expeditiously. The
record will remain open for two additional weeks for comments,
for written questions by Members.
Thank you all so much, very informative, great testimony
from all four of you. We really appreciate your effort. As I
said in my opening statement, I don't have a prescription to
balance between openness and security, and I believe very
firmly if--that property rights, whether it is real property or
intellectual property, is absolutely critical for a free
society. And if we have private entities or government entities
that are stealing our property, whether it is military
property, real or intellectual, whether it is research and
development or what have you, that we are not a free people
anymore and it is absolutely critical.
So if you all have a prescription of how we can balance
this and how we can go about making sure that our national labs
and our businesses and any other entity here in this country
can remain secure but be as open as possible, I would welcome
you all's suggestions for any kind of legislation that we can
go forward. So please let us know.
Thank you all so much for coming today and I appreciate
your valuable time. And again, I appreciate your patience and
we will look forward to hearing your written answers back. If
you would, please do so as expeditiously as possible.
The witnesses are excused and this hearing is now
adjourned.
[Whereupon, at 4:02 p.m., the Subcommittee was adjourned.]
Appendix I
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Answers to Post-Hearing Questions
Responses by Dr. Charles M. Vest
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Responses by Dr. Larry M. Wortzel
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Responses by Hon. Michelle Van Cleave
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Responses by Mr. David G. Major
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]