The United States does not recognize the legitimacy of the Russian Supreme Court’s ruling to uphold the ban of Crimean Tatars’ self-governing body, the Mejlis. We reject the characterization of the Mejlis as an ‘extremist’ organization and condemn the suspension of this democratic institution. This decision is particularly troubling given Russia’s systematic and unjust mistreatment of Crimean Tatars.
Russia continues to subject Crimean Tatars to arbitrary arrests, abductions, politically motivated prosecutions, restrictions on freedom of movement, and police raids on their homes and mosques. We call on Russia to cease these unacceptable practices immediately.
We do not recognize Russia’s attempted annexation of Crimea, and we reiterate our call on Russia to return control of the peninsula to Ukraine.
Our Crimea-related sanctions will remain in place until Moscow returns control over Crimea to Ukraine.
September 29, 2016 Washington, DC Committee on Financial Services Background for Hearing:
On September 8, 2016, Wells Fargo entered into consent orders with the
Office of the Comptroller of the Currency (OCC), the Consumer Financial Protection
Bureau (CFPB), and the City of Los Angeles for alleged unsafe and unsound sales
practices, unfair and abusive practices, and unlawful, unfair, and fraudulent sales
and related business acts and practices.
While neither admitting nor denying the allegations as part of the consent
orders, Wells Fargo agreed to pay $190 million in collective fines and restitution.
The consent orders asserted that Wells Fargo had fired 5,300 employees over a five-
year period for opening hundreds of thousands of deposit and credit card accounts
without customers’ knowledge or consent. This was allegedly caused by the setting
of aggressive sales quotas, pressure from managers to meet those quotas, and
inadequate monitoring by Wells Fargo.
Chairman and Chief Executive Officer of Wells Fargo & Company
Before the U.S. House of Representatives
Committee on Financial Services
Chairman Hensarling, Ranking Member Waters, and Members of the Committee, thank
you for inviting me to be with you today.
I am the Chairman and Chief Executive Officer of Wells Fargo, where I have worked for
nearly 35 years. It is my privilege to lead the company, which was founded 164 years ago and
has played a vital role in the financial history and development of our country. Today, we are
part of so many people’s lives. We employ more than 268,000 team members, 95 percent of
whom are in the United States. One in every 600 working adults is a member of the Wells Fargo
team, and we have a presence in all 50 states.
I am deeply sorry that we failed to fulfill our responsibility to our customers, to our team
members, and to the American public. I have been with Wells Fargo through many challenges,
none that pains me more than the one we will discuss this morning. I am here to discuss how
accounts were opened and products were provided to customers that they did not authorize or
want. I am going to explain this morning what happened and what we have done about it. But
first, I want to apologize to all Wells Fargo customers. I want to apologize for violating the trust
our customers have invested in Wells Fargo. And I want to apologize for not doing more sooner
to address the causes of this unacceptable activity.
I do want to make very clear that there was no orchestrated effort, or scheme as some
have called it, by the company. We never directed nor wanted our employees, whom we refer to
as team members, to provide products and services to customers they did not want or need. It is
important to understand that when an employee provides a customer with a product or service
that she did not request or authorize, that employee has done something flat wrong. It costs us
satisfied customers, and we lose money on these accounts. Wrongful sales practice behavior
goes entirely against our values, ethics, and culture and runs counter to our business strategy of
helping our customers succeed financially and deepening our relationship with those customers.
That said, I accept full responsibility for all unethical sales practices in our retail banking
business, and I am fully committed to doing everything possible to fix this issue, strengthen our
culture, and take the necessary actions to restore our customers’ trust.
Let me assure you and our customers that Wells Fargo takes allegations of sales practice
violations extremely seriously and that we will not rest until the problem is fixed. As I will
explain shortly, we are moving to demonstrate once again that Wells Fargo remains the
dependable, principled partner that it has been throughout its 164-year history.
I will first provide some context around our business strategy of serving customers;
discuss some of the changes we have made to address the problems we uncovered; discuss the
terminations about which you have read; and describe further efforts to strengthen our controls
and make things right for customers.
Cross Selling Means Deepening Relationships With Customers
A typical American household has multiple financial services and products, and our goal
is to have as deep a relationship as we can with those households. Our cross sell strategy is
simply another way of saying that we provide our customers a wide variety of products that can
satisfy their financial needs. The more products a customer uses, the deeper the relationship of
trust and value. Deep relationships with products that are wanted and used are what furthers our
business strategy and truly helps our customers to succeed financially.
Retail Banking Has Made Progressive Changes To Detect And Deter Unethical Behavior
Our efforts to detect and deter unethical conduct have progressively evolved over the last
five years. They were put in place out of concerns that some employees were not doing what
was right for customers and were providing products to customers they did not want. For
example, in 2011, we piloted our Quality-of-Sale Report Card in California, and it was
implemented in 2012 across retail banking. The Quality-of-Sale Report Card was designed to,
among other things, deter and detect misconduct through monitoring of sales patterns that may
correlate with unethical behavior.
In 2011, a dedicated team (now called the Sales and Service Conduct Oversight Team)
began to engage in proactive monitoring of data analytics, specifically for the purpose of rooting
out sales practice violations.
In addition, during 2012, Wells Fargo began to reduce the sales goals that team members
would need to meet to qualify for incentive compensation. Between 2012 and 2015, we steadily
reduced sales goals by up to 30% for branch-based team members.
Along with the reduction in sales goals in 2013, we introduced an expanded set of
training materials for our managers, which managers use to train bankers on ethical practices and
prohibited conduct. Further, in the first quarter of 2013, we incorporated the Quality-of-Sale
Report Card into the incentive compensation plan for our retail banking district managers.
Starting in 2013, we further strengthened our oversight of potential sales integrity issues
and revised our performance evaluation system to put less emphasis on sales goals. These
revisions were made to enable bankers to earn acceptable ratings on their performance
evaluations, even if they did not meet their sales goals.
In 2013, the Sales and Service Conduct Oversight Team began its first proactive analysis
of “simulated funding” across the retail banking business, reviewing employee-level data around
account openings. Let me explain: “simulated funding” is a prohibited practice whereby an
employee creates an account for a customer and then funds it in order to make it look as if the
customer had funded the account. Based on the original proactive monitoring, our Internal
Investigations team began an intensive investigation into simulated funding activity in the Los Angeles and Orange County markets. As a result of these investigations, we terminated team
members for sales integrity issues.
Retail Banking, In Conjunction With Enterprise Risk, Expanded Oversight From 2013 To 2015
Further improvements in our sales practice oversight continued in 2013-2015, following
the terminations in California that occurred and were reported by the media.
In 2013, we created a new cross-functional oversight team for retail banking sales
integrity issues comprised of representatives from our Sales and Services Conduct Oversight
Team, Corporate Investigations, Human Resources, Employee Relations, and the Law
Department. The purpose of this team was to identify trends around sales integrity issues, and to
identify any additional improvements in the process that would enhance our oversight of sales
integrity issues, with a goal of preventing future violations.
In 2013 and 2014, we made several changes to our incentive compensation plans to better
align incentive pay with ethical performance, and we further restructured how we went about
setting goals in our bank branches.
In 2014, the Sales and Service Conduct Oversight Team expanded the simulated funding
review to a national scope.
In 2015, we continued to enhance our training materials and practices, continued to make
changes to incentive plans, and substantially lowered incentive compensation goals for new team
members.
Sales-Related Terminations Took Place Over The Course Of 2011-2015. I want to pause for a moment to discuss the issue of terminations. We do not have
tolerance for dishonest conduct or behavior inconsistent with our Code of Ethics. It has been
reported in the media that Wells Fargo terminated approximately 5,300 individuals after the
CFPB’s enforcement investigation. Instead, individuals were terminated over time for sales-
related misconduct as a result of investigations opened from January 1, 2011 through March 7,
2016. In any given year, approximately 100,000 individuals work in our retail bank branches,
and we have terminated approximately 1% of that workforce annually for sales practice
violations.
Wells Fargo Is Working To Make It Right For Our Customers
Despite all of these efforts, we did not get it right. We should have done more sooner to
eliminate unethical conduct and unintended incentives for that conduct to occur. Even one
unauthorized account is one too many. We should have addressed earlier the possibility that
customers could be charged fees in connection with accounts opened without their authorization.
Because deposit accounts that are not used are automatically closed, we assumed this could not
happen. We were wrong. In August 2015, we began working with a third-party consulting firm,
PricewaterhouseCoopers (“PwC”), and asked them to evaluate deposit products, unsecured credit
cards, and other services from 2011-2015 to determine whether customers may have incurred
financial harm (specifically, fees, other bank charges, and interest) from having been provided an
account or service they may not have requested. Our charge to PwC was clear—using our
account records for our products and services, employ data analytics to determine who may have
suffered financial harm as a result of an account that may not have been authorized, and to
quantify what that financial harm might have been.
I want to highlight that our direction to PwC was to err on the side of the customer and to
be over-inclusive in attempting to identify a population of customers that may have suffered
financial harm. In other words, if it could not be ruled out that a deposit account or credit card
was unauthorized, we designated those accounts for further analysis. We made available to PwC
any records they needed. Beginning in September 2015 and continuing well into 2016, PwC
conducted extensive large-scale data analysis of the more than 82 million deposit accounts and
nearly 11 million credit card accounts that we opened during that time frame.
With respect to deposit accounts, PwC focused on identifying transaction patterns that
might be consistent with improper conduct. Out of the 82 million deposit accounts, it identified
approximately 1.5 million such accounts (or 1.9%) that could have been unauthorized. To be
clear, PwC did not find that each of these accounts was unauthorized. Among these accounts,
PwC calculated that approximately 100,000 incurred fees in the amount of about $2.2 million.
With respect to credit cards, PwC identified a population of credit cards that had never
been activated by the customer nor had other customer transaction activity. By itself, the lack of
activation and use by a customer does not mean that the customer had not authorized the card to
begin with. We know that some customers will request a credit card for many reasons, including
for emergencies and other reasons, but then they may not activate the card. However, because
we could not confirm, based on account activity, that the customer authorized the account in the
first place, we elected to consider these accounts for potential remediation. PwC calculated that
approximately 565,000 consumer cards, or 5.8% of all credit cards opened, had not been
activated nor had other customer transaction activity, and approximately 14,000 of these cards
had incurred a fee. These fees totaled approximately $400,000. PwC did not find that these
cards were unauthorized.
In February 2016, we began the process of remediating the deposit and credit card
customers identified above. For existing customers, we credited their accounts. For former
customers, we sent a check. All customers received a letter informing them that they were
receiving a refund as a result of fees that may have arisen from an account they may not have
authorized. We were transparent with our customers and provided them contact information to
discuss the matter further with us.
Wells Fargo Is Engaged In Multiple Efforts To Take Responsibility For, And Rectify, Our
Mistakes
We decided that product sales goals do not belong in our retail banking business.
Specifically, we recently announced that we would be eliminating all product sales goals for retail banking team members and leaders, including those in branches and retail banking call
centers, effective January 1, 2017. We have now decided to expedite that change, and sales
goals for retail bank team members will be eliminated effective October 1, 2016. We are doing
this in order to better align with the additional training, controls, and oversight implemented
since 2011 and focus on rewarding excellent customer service rather than product sales.
We have taken, and continue to take, other significant and meaningful steps to prevent
unauthorized accounts from being created. These steps include:
Working closely with our primary regulator, the Office of the Comptroller of the
Currency (“OCC”), to strengthen our enterprise oversight of sales conduct risk. We have
established an enterprise Sales Conduct Risk Oversight Office, reporting into the Chief
Risk Officer, and have regularly responded to numerous inquiries and provided regular
briefings to our regulators;
Creating a new enhanced branch compliance program that will be dedicated to
monitoring for sales practice violations by conducting data analytics and frequent branch
visits. Results will be reported to the enterprise Sales Conduct Risk Oversight Office;
Implementing a process whereby, approximately one hour after opening an account, a
customer will receive an email that confirms the opening of the account;
Revising procedures for credit cards, to require each applicant’s documented consent
before a credit report is pulled. Consent is manifested by a physical signature or, if the
applicant is unable to sign on the PIN pad, by a dual attestation of the banker and the
manager or branch designee; and
To further address possible customer harm, we are contacting all customers with open,
inactive credit cards to confirm whether the customer authorized the account. If the
customer indicates they did not authorize the card, we will offer to close it (if it is still
active) and suppress any bureau inquiry.
I will close by saying again how deeply sorry I am that we failed to live up to our
expectations and yours. I also want to take this opportunity to thank our 268,000 team members
who come to work every day to serve our customers. Today, I am making a personal
commitment to rebuild our customers’ and investors’ trust, the faith of our team members, and
the confidence of the American people.
Coalition Shapes Mosul Fight by Removing ISIL Leaders From Battlefield
By Cheryl Pellerin
DoD News, Defense Media Activity
WASHINGTON, Sept. 29, 2016 — The coalition supporting the fight against the Islamic State of Iraq and the Levant is helping to shape the Iraqi security forces’ upcoming battle for Mosul, Iraq, by targeting and removing ISIL leaders from the battlefield, the Operation Inherent Resolve spokesman said today.
Air Force Col. John L. Dorrian briefed Pentagon reporters by video conference from Baghdad, noting that in the past 30 days alone, coalition airstrikes have targeted 18 ISIL leaders who supported terrorist efforts in Iraq and Syria.
Dorrian said 13 of the leaders were part of military, intelligence and communication networks in Mosul.
The spokesman said the counter-ISIL coalition continues to target and remove the terrorist group’s leaders from the battlefield. Also, ISIL’s intelligence, military operations, communications, finance and external operations networks are being disrupted and degraded, he said.
Degrading, Disrupting ISIL
The strikes have targeted ISIL’s military commanders, administration and media officials, foreign-fighter facilitators, emirs, security commanders, communication leaders and senior Shura council leadership, Dorrian said.
“The people who replace these [leaders] have not established their bona fides with [ISIL leader Abu Bakr al-Baghdadi], his inner circle, and they’re often not as seasoned as those they replace,” he added.
“This is especially true around Mosul,” Dorrian said, “as the coalition continues to be relentless in degrading and disrupting command and control of their fighters, softening their grip on the city and prepping the battlefield for the liberation.”
In a two-day period in Mosul, the coalition removed Abdul Hamid al-Shishani, Abu Jabir al-Shishani and Abdul al-Rahman al-Shishani -- all ISIL Chechen foreign fighters responsible for administration and command of fighters in Mosul, Dorrian said, degrading ISIL’s foreign-fighter footprint and capabilities in the city.
Pressuring ISIL
Coalition forces also eliminated Wa’il Adil Hasan Salman al-Fayyad, also known as Dr. Wail, ISIL’s minister of information and senior Shura member who was one of the top five most senior ISIL leaders and a direct associate of Baghdadi, the spokesman said. Wail was in charge of ISIL’s media network, responsible for providing messaging guidance for propaganda and directions for terrorist attacks abroad. Dorrian explained.
“[Removing] the ISIL media head at this time when ISIL is under increased pressure will further disrupt their ability to maintain any illusion that things are going well for them,” Dorrian said. “This is important because it affects foreign recruiting and foreign financing.”
Another strike in Mosul killed Abu Ahmad Imarah, the ISIL Mutah Division leader. The division is the ISIL unit responsible for security in eastern Mosul. His removal disrupts ISIL military formations and affects the terrorist army’s readiness for the Mosul liberation fight, Dorrian added.
The coalition also has removed Abu Jannat, ISIL’s deputy military emir in Mosul, with another strike, the spokesman said. This action has further degraded ISIL’s military operations around Mosul, he said, while applying more pressure to ISIL’s leadership network.
Jannat, an Iraqi native, was responsible for military operations around Mosul, including the manufacture of chemical weapons and the defense of Mosul, Dorrian said.
Targeting ISIL’s Enforcers
The coalition also is dismantling ISIL’s terrorist law enforcement apparatus in Mosul, the spokesman said, noting that a coalition strike killed Abu Bakr, an emir of the East Mosul military police.
Abu Bakr is an Iraqi and considered by ISIL to be an effective member of their leadership and law enforcement apparatus, Dorrian said. The removal of Abu Bakr from the terrorist’s network, he added, will continue to compound pressure on ISIL's military leadership in Mosul and reduce their ability to control the population.
Coalition attacks directly against ISIL leadership compound the impact of the relentless coalition air campaign, which is now well above 15,000 strikes, he added. The air campaign is dismantling ISIL’s command and control network by destroying safe houses, weapons manufacturing and storage facilities, supply routes, oil revenue and money, Dorrian said.
More Troops
The 600 additional troops that President Barack Obama authorized this week to be deployed to Iraq will help the Iraqi security forces liberate Mosul, the spokesman said.
“Those forces will come into the country in the coming weeks to provide additional logistics and maintenance capability as we continue to provide advice and assistance to the Iraqi security forces,” Dorrian said. “Part of the force upgrade will also provide increased intelligence support.”
He added, “Just as the ISF is taking on the largest liberation fight to date in Iraq's second-largest city, we will be enhancing our support to them because of the size of the task and the number of troops involved.”
(Follow Cheryl Pellerin on Twitter: @PellerinDoDNews)
MR CLEMONS: Thank you. So let’s get to Syria stuff. I hear a rumor – I don’t know if it’s true – that Vladimir Putin and Sergey Lavrov are huddled around a screen right now in one corner of the world watching us, and I hear Lindsey Graham and John McCain are near another. And so I’d like to ask you, what would you like to communicate to the world and to those parties about Syria that they may not have heard? (Laughter.)
SECRETARY KERRY: There is absolutely no way possible to communicate with those four people (inaudible). (Laughter.)
MR CLEMONS: Okay, how about for our crowd here?
SECRETARY KERRY: I’ll take on a lot of challenges --
MR CLEMONS: Yeah, yeah.
SECRETARY KERRY: -- but Syria is as complicated as anything I’ve ever seen in public life, in the sense that there are probably about six wars or so going on at the same time – Kurd against Kurd, Kurd against Turkey, Saudi Arabia, Iran, Sunni, Shia, everybody against ISIL, people against Assad, Nusrah. This is as mixed-up sectarian and civil war and strategic and proxies, so it’s very, very difficult to be able to align forces. So it’s --
MR CLEMONS: So in the middle of that, why did you think you could get a ceasefire?
SECRETARY KERRY: Well, we did. We got one for a period of time. We got one that held for a number of weeks, originally. And then this one was interrupted by two very tragic different kinds of events: One was a mistake; the other was the destruction of 18 UN humanitarian trucks, which is hard under any circumstances to find a rationale or an excuse for what happened. There is no excuse.
MR CLEMONS: And you now believe, as I understand it, that that was a purposeful action by --
SECRETARY KERRY: Well, I think there is strong evidence with respect to Syrian regime engagement in the beginning of it and Russian involvement. But look, the point is that there’s just huge levels of mistrust on either side.
But you asked me the question, what makes me think? I make no apology, nor does President Obama, none whatsoever, for trying to reach out and find out if there is a way to achieve the political settlement that everybody says is the only way to solve the problem of Syria. You’ll find most people constantly saying there is no military solution. Well, if there’s no military solution, what is the political solution and how do you get there? And who’s going to get you there? Well, it’s the job of the secretary of state and it’s the job of diplomats to try to do that, as tough as it may be, and it is tough. So --
MR CLEMONS: Do you think diplomacy has become a dirty word?
SECRETARY KERRY: With respect to Syria, to some degree. It’s been marred by these breaches of the ceasefire and by the destruction and by Russia’s persistent support of Assad in a way that is beyond the seeking of a political settlement, if you will.
And I think that the bombing of Aleppo right now is inexcusable. It’s beyond any – beyond the pale of any notion of strategic or otherwise. It’s indiscriminate. It is – they took out a hospital last night. I think 400 civilians have been killed in the last eight days; 100 of them are children. And we’ve made it crystal clear to them that under those kinds of circumstances it is not possible to be cooperating, and we need to see a change.
MR CLEMONS: So are we on the verge of taking down this scaffolding and walking away from any chance of going back to your plan of a joint implementation center and a deal with the Russians on how to do it, or are you willing to give it another chance?
SECRETARY KERRY: No, I think we’re on the verge of suspending the discussion, because you – it’s irrational in the context of the kind of bombing taking place to be sitting there trying to take things seriously. There’s no notion or indication of a seriousness of purpose with what is taking place right now.
So it’s one of those moments where we’re going to have to pursue other alternatives for a period of time, barring some clearer indication by the warring parties that they’re prepared to consider how to approach this more effectively.
MR CLEMONS: Senators Lindsey Graham and John McCain have kind of lampooned you with threatening the suspension of talks and saying, how can this have any influence on the Russians? I just, look, because I’ve – you and I have talked about this before that I’d like to understand how you, if you’re putting yourself, as a diplomat does, in the heads and intentions of Russia, how do they see the map in their future and what are you trying to influence? And if we do walk away, then what influence do we have with the Russians?
SECRETARY KERRY: Well, I’m not worried about lampooning, particularly from people who don’t seem to have the votes or the ability to be able to cobble together a legitimate plan or a legitimate approach. I don’t see Congress panting to put people on the ground to go to war in Syria. I don’t see people – it’s easy to be critical of the diplomatic effort because it’s difficult, but what is the alternative? Is the United States of America going to go to war in Syria? I don’t think that’s about to happen. We are at war against ISIL and we are going to win that war; I have no doubt about that. And we are making enormous progress, but that is different and distinct from involving ourselves directly into the civil war, which is the war against Assad.
And the Russian point of view, they look at it and they see Nusrah, Jabhat al-Nusrah growing stronger. Jabhat al-Nusrah is al-Qaida and Jabhat al-Nusrah al-Qaida is plotting against the United States of America. They are a designated terrorist organization, and we are prepared to go after them. But Russia doesn’t believe that because months ago there was a statement about our beginning to separate some of our fighters from them because they are “marbleized,” as the saying has come to be. And so, there’s a huge distrust by Russia that we’re actually serious about going after Nusrah. They think we’re using Nusrah in order to go after Assad, so there’s huge distrust on both sides here.
And the levels of mistrust, because of the type of operations that the Russians have chosen to engage in, is huge and appropriate on our side, incidentally. It is inappropriate to be bombing the way they are. It is completely against the laws of war, it is against decency, it is against any common morality, and it is costing enormously.
So that is why we’re going to have to – why we are pulling back from this concept of – so there’s no – no miscalculation in anybody’s mind about us cooperating in a way that is empowering them to do what they’re doing.
MR CLEMONS: Right.
SECRETARY KERRY: We’re just not going to go there. We’re not going to do that, obviously.
MR CLEMONS: As much as I don’t want to leave the Syria subject of Syria and ISIL and Iraq, I want to ask you a bigger question.
My colleague, Jeffrey Goldberg, wrote probably one of the most important articles in foreign policy on the Obama Doctrine, one of our cover stories. And I thought it was useful, because it began to sort of raise this question of what is someone’s frame and filter, their dashboard, their priorities? And I’m really interested in what – John Kerry’s frame. When you look at a problem out there, I’m interested in what you see as a – as the nation’s leading diplomat, as a man who may have been president of the United States, how do you organize in your mind taking on one of these big national security challenges?
SECRETARY KERRY: Well, I mean, the first thing you need to do is obviously understand and define the interests of the United States of America. Our job, my job, the President’s job, is to protect our nation and to advance our interests and our values simultaneously. That’s really what foreign policy is. I mean, foreign policy is a combination of interests, values. Hopefully they’re melded like that, but not always. Sometimes interests are of far greater importance to a particular moment and you may have tension with the values because of the level of the interest, or the values may be – I mean, the Holocaust or Rwanda or – which is also relevant to the debate about Syria, by the way, is the killings and the torture and the barrel bombs and the gas.
MR CLEMONS: So you put Syria in the values category more than the interest category?
SECRETARY KERRY: It’s both. No, no, no, it’s in both. We have both. We have huge interests because of the stability of the region, because of the need to fight against extremism, the need to prevent the country from breaking up and having a negative impact on all of the neighborhood, including our ally Israel and Jordan and Egypt, so forth. So there are a lot of interests there, but there are also values, obviously. And what I’m just trying to say is you have to get a sense of the import of all of that --
MR CLEMONS: So what’s the John Kerry secret sauce in that if --
SECRETARY KERRY: Well, you have to figure out --
MR CLEMONS: A lot of people can say what you just said.
SECRETARY KERRY: Once you’ve figured out those things, then you have to figure out whether you can find in the adversaries a meeting of the minds on any of the interests or – and/or values. And that mixes differently with different people at different times. With Iran obviously and negotiating the Iran nuclear agreement, Iran wanted out from the sanctions, Iran wanted to – didn’t think it was worth the cost they were paying to pursue a nuclear weapon, and I think the Ayatollah made it clear that he was going to outlaw it, not go after it. He made a calculated decision – I think the right decision, an important decision – and so there was something to work with. But at the same time, there was a huge level of mistrust, a huge level of questioning about sort of where they might go at some future point in time, so we had huge interests in making sure the verification was as strict as possible, that we were able to answer people’s questions about the technology and the capacities. And ultimately you could see a way to get from here to there.
That’s what you have to decide, you have to figure out. There are some frozen conflicts in the world today --
MR CLEMONS: Right.
SECRETARY KERRY: -- Nagorno-Karabakh, Azerbaijan-Armenia, where you can’t quite see that right now because the leaders aren’t ready, because the tensions aren’t there.
MR CLEMONS: Right.
SECRETARY KERRY: There are some where I think they’re difficult but you can see how you could get there if people made a certain set of decisions. I believe Israel-Palestine falls into that category.
MR CLEMONS: Right.
SECRETARY KERRY: But you have to have people prepared to make a certain set of decisions.
MR CLEMONS: Is the Iran deal what you’re most proud of during your tenure?
SECRETARY KERRY: I don’t – I really haven’t stopped to sort of start to create a scale of --
MR CLEMONS: So what are you least satisfied with during your tenure?
SECRETARY KERRY: I’m not happy with Syria. I’m very, very dissatisfied with where we are in Syria. I’m extremely concerned about where it is going and what will happen to the people of Syria and to the region if a more rational and moral-based, common-sense approach is not found to deal with the situation. Yemen, Libya – I mean, there are challenges, many challenges, that are extremely difficult right now.
I feel good about where we are moving with ISIL. I think we could move faster to some degree, but I think the President has really gotten us on a track where you can see where we’re going in Iraq, you can see where we’re heading in Syria, and he’s constantly looking for ways to try to accelerate that.
I think the climate change agreement that we reached in Paris is a monumentally – a monumental agreement, extraordinarily important because of the threat of climate change, which we’re seeing manifest itself on a global basis everywhere. And to have brought 185, 186 nations together to reach agreement, which really largely grew out of the effort we made with China when we got China to agree to work with us rather than against us --
MR CLEMONS: On climate --
SECRETARY KERRY: -- which is what had happened in Copenhagen.
MR CLEMONS: Right.
SECRETARY KERRY: That was a sea change, and that resulted in sending a signal to the marketplace in Paris which we’re now following up on with the aviation agreement, with the hydrofluorocarbon agreement which we hope to get in Kigali in October. And that alone, just getting the hydrofluorocarbons, could save one-half degree centigrade of rise of temperate on the planet. So these are critical issues.
MR CLEMONS: So --
SECRETARY KERRY: I think getting chemical weapons out of Syria was key --
MR CLEMONS: Right. So you’re laying out the net positives, the net gains in the foreign policy roster. And I think you probably talk to more world leaders and foreign ministers than any person alive right now, say per day. I mean, you’ve got probably the largest quotient. How are they seeing American engagement in the world today? Are they seeing us robust and out there? Because there’s a sense that the world doubts America’s staying power in the world.
SECRETARY KERRY: Well, I hear this, but it’s really interesting. I hear this and I hear people allege that the United States is retrenching and that we’re somehow pulling back or – but I have to tell you, Steve, I think if you measure all of American history, there has never been a moment where the United States is more engaged in more places simultaneously on as significant a number of complicated issues as we are today, and with impact.
On Ebola, predictions were a year ago a million people were going to die. President Obama had the courage to send 3,000 troops there. We built health care delivery capacity. We galvanized support from around the world. We led that effort. And that never happened. We never lost a million people. Ebola didn’t become the global scourge.
MR CLEMONS: Right.
SECRETARY KERRY: AIDS – we’re in the front – we’re about to have the first generation of children born in Africa free of AIDS, and we have put an unprecedented amount of money on the table and expertise to deal with that.
Afghanistan – we’ve held Afghanistan together with a unity government after a failed election where it could have collapsed. We’ve been able to nurture that. It’s complicated, difficult, but we’ve been able to sustain the effort in Afghanistan.
In the South China Sea, we have been able to make it clear, freedom of navigation. We’ve been able to deal with China. We’ve held that from becoming a major conflict.
Ukraine – the sanctions worked. We are working on the Minsk application and implementation right now even as we sit here. We’ve been making progress. I hope we can further that.
On Yemen, we’ve put a peace proposal forward. The parties are talking about it. We’re on the verge maybe of a ceasefire there.
Libya – we’ve been able to build the GNA, the Government of National Accord. We’re working with the Egyptians, with the Emiratis. We’re able to try to grow the capacity, the sustainability of that government. It’s very tricky. It’s tribal. It’s complicated. There are extremists there. There is Daesh in some places. We’ve been able to limit the Daesh presence with a very aggressive effort.
Boko Haram in Nigeria, we’re pushing them back. We’re working with Buhari.
MR CLEMONS: Right.
SECRETARY KERRY: Al-Shabaab in Somalia – we’re pushing them back. We’ve got a major planned offensive to really sort of, I hope, terminate the al-Shabaab challenge in Somalia.
MR CLEMONS: So maybe we need a bumper sticker or something like, “There’s a lot going on. More going on than you think.” (Laughter.)
SECRETARY KERRY: I mean, I --
MR CLEMONS: It sounds like a marketing problem, right? (Applause.) Yeah. So --
SECRETARY KERRY: I like that. It is a marketing problem. But --
MR CLEMONS: You’ll call your folks. We’ve got a couple of minutes, and I know you’ve got some hard stops and I know you’re going to Israel for Shimon Peres’s funeral, and we’ll work on that.
SECRETARY KERRY: Yes.
MR CLEMONS: But in the next minute and a half, I’m going to combine two things. One, I’d like to know just real quickly: What do you think about Iran today? Is Iran becoming more comfortable for us or does it still remain in the very, very uncomfortable, despicable category?
And I’m going to tack on – my last question is: Vietnam is such an important frame for you. I’d like to know what lessons you think we’re forgetting from Vietnam in your role that you think – that you’re worried about. So I’m going to ask you to do those two things because we’ve got to wrap up.
SECRETARY KERRY: Wow. (Laughter.) Two small little --
MR CLEMONS: David Bradley, our chairman, says you should never combine two big questions, but I’m doing it.
SECRETARY KERRY: Well, Iran is complicated. We just had a meeting in New York of the Joint Commission. The Iran agreement is holding. They are living up to their requirements in the Iran agreement. It is measurable and accountable, transparent. The IAEA knows what’s happening, we know what’s happening, and we are comfortable that Iran is meeting the agreements it met. They think we are not meeting our part of the agreement and they’re upset at us that more banking hasn’t – more banks, large banks have not engaged --
MR CLEMONS: Are we meeting our part of the agreement?
SECRETARY KERRY: We are. We’ve done everything and more. We’ve not only met our part of the agreement in terms of lifting all the sanctions we said we would lift, but we’ve personally engaged – I’ve engaged, and others, with banks. We’ve tried to help, because we think it’s important that we live up to our side of the bargain and that Iran get the benefits that they bargained for.
MR CLEMONS: Right.
SECRETARY KERRY: Otherwise, there’s not a lot of incentive for them to continue to live by it. So it’s important. There are tensions in Iran; there is a battle in Iran, in a sense, for its own direction. That’s an internal struggle within the country, and President Rouhani I think has tried very hard to try to reach out to the world, but there are forces there that pull back on that. And so it’s – it will remain complicated and it just is complicated.
MR CLEMONS: So your successor is going to have a fun time with that.
SECRETARY KERRY: Well, I hope it’s not – I mean, I hope it’s not a time-consuming, tense time. It will always be challenging. There are things that Iran is doing in the region that we obviously object to. We don’t like the support for the Houthis, we don’t like the support for Hizballah, the support for Assad, some of their engagement in other countries – meddling. Obviously, those are things – the missiles, the concerns about human rights and terrorism – those remain.
And we left all of those, in fact, intact in the sanctions regime that we have, because we really were negotiating the nuclear piece. And the reason for separating it was we knew that if we put those things on the table, we’d still be there at the table and we wouldn’t probably get anywhere, so --
MR CLEMONS: And finally, quickly, I’m really interested on Vietnam and the frame – and --
SECRETARY KERRY: Well, Vietnam --
MR CLEMONS: Because it’s been so much a part of what you have framed. I’m interested, at this point when you’ve done so much in the diplomatic – what are we getting right, what are we getting wrong? And if you can do it in 30 seconds, you’ll make everybody real happy. (Laughter.)
SECRETARY KERRY: I never thought I’d do Vietnam in 30 seconds. (Laughter.) Can’t do it in 30 seconds, but it’s – I think what’s happening in Vietnam is exciting. It’s incredible. Nobody would have imagined years ago that Vietnam, the, quote, “communist country,” the country that we went to fight to stop from being communist – it’s not communist. It’s authoritarian. It’s a one-party, authoritarian government, but it’s raging capitalism. And it is moving so rapidly into the marketplace – it’s one of the fastest growing countries in terms of transition, transformation. When I first went there in 1990, there were no cars. People were in black pajamas still. They were mostly on bicycles. The traffic lights didn’t work in Hanoi. It was just 50 years ago then.
Now skyscrapers everywhere, traffic, people wearing blue jeans and Western clothes and yearning for engagement with the world; fast, fast-growing, changing lifestyle; middle class, investment opportunities. And it’s changed and changing rapidly. They’re allowed labor unions, you can strike – that’s part of, actually --
MR CLEMONS: So that should be our lesson, then --
SECRETARY KERRY: So the lesson is that transformation comes through diplomacy. We went there and fought a war to prevent them from being something, and in fact, it’s only the aftermath of the war and the diplomacy – the opening up, the lifting of the embargo – which, by the way, John McCain was a partner with me in the effort to do that – and to help change Vietnam, and Vietnam has changed and is changing.
And we announced when I went there last – a few months ago, the opening of a Fulbright university in Hanoi – in Saigon, excuse me; in Ho Chi Minh City – that will be completely academically free, total independence, able to teach. And the Fulbright Program has been one of the real transitional vehicles, if you will – catalysts – in Vietnam. Many of the top leaders in the highest echelons of leadership of Vietnam have been part of the Fulbright Program, and they’ve studied either at Harvard or somewhere and come over here, and Harvard’s gone over there. It’s been an incredible transformation.
And the lesson is that – really underscores knowing why, if you’re going to go to war, you’re going to war and getting it right, and then afterwards also getting it right. And I think we did one part of it wrong, the other part we’ve gotten it right, and I’m very proud of that. (Applause.)
MR CLEMONS: So on that, Mr. Secretary, thank you. I hear President Obama is holding a plane for you, so --
9/29/16 Washington, DC Adm. John Kirby (State Dept Spokesperson) "On Ukraine and the MH17 report, as you saw, we issued a statement on this earlier today. I want to reiterate, however, that we are gratified that the Netherlands and other members of the joint investigation team are objectively and thoroughly investigating the shoot-down of Malaysia Airlines Flight MH17. The team’s interim findings corroborate Secretary Kerry’s statement in the days following the tragedy and leave no doubt that MH17 was shot down by a Buk surface-to-air missile, fired from territory in eastern Ukraine controlled by Russian-backed separatists. We also note the JIT’s – the joint investigation team’s finding that the missile launcher was first brought into Ukraine from Russia and then moved out of Ukraine and back to Russia after the shoot-down.
And while nothing can take away the grief of all those who lost loved ones on that very terrible day, the announcement – this announcement is now another step toward bringing those responsible for this outrage to justice."
Donald Trump delivering an outstanding speech in front of a large Patriotic crowd in Bedford, NH.
Trump delivering truly inspirational speech going over key policy issues and opponent Hillary Clinton's desire to continue the status quo establishment policies that are not going to be beneficial to the average American. Policy issues reviewed:
- Law and Order
- Inner city development
- Racial division solutions
- Media bias
- Infrastructure rebuilding
- Protecting U.S. job losses
- Establishment of solid trade deals
- Clinton's desire to pass TPP / Expand NAFTA
- Coming together as one nation
Trump was clear that America will not see another opportunity to change the establishment political theater. Mr. Trump was also implying that the FBI did not exactly act in good faith during the Hillary Clinton Email Scandal. You can watch the live-stream of the speech at the linked video above.
Washington, D.C. – House Judiciary Committee Chairman Bob Goodlatte (R-Va.) today delivered the following statement on the floor of the House of Representatives supporting the veto override of the Justice Against Sponsors of Terrorism Act.
Chairman Goodlatte: Earlier today, the Senate voted 97 to 1 to override the President’s veto of the Justice Against Sponsors of Terrorism Act. I rise to urge my colleagues to follow the Senate’s action and vote to override this veto so that Americans may seek judicial redress against any foreign government that chooses to sponsor a terrorist attack on U.S. soil.
The question that this veto override vote poses is whether we should allow those who harm our citizens to hide behind legal barriers that are required by neither the Constitution nor international law or whether we should permit U.S. victims to hold those who sponsor terrorism in our country fully accountable in our courts. I think that the answer to this question is clear and I hope that my colleagues will join me in overwhelmingly overriding the President’s veto of JASTA.
The changes JASTA makes to existing law are not dramatic, nor are they sweeping.
JASTA amends the Anti-Terrorism Act to make clear that any person who aids, abets, or conspires with a State Department designated foreign terrorist organization is subject to civil liability for injury to a U.S. person.
In addition, the legislation amends the Foreign Sovereign Immunities Act to add an exception to foreign sovereign immunity for acts of international terrorism sponsored by a foreign government that cause physical harm within the United States.
The President objects to this change to the law on the grounds that it upsets principles of foreign sovereign immunity and, that by so doing, our national interests will be threatened by reciprocal treatment from abroad. The President’s objections, however, have no basis under U.S. or international law.
The Foreign Sovereign Immunities Act already has nine exceptions to sovereign immunity, including the territorial tort exception. This exception provides that a foreign country is not immune from the jurisdiction of our courts for injuries that it causes that occur entirely, within the United States.
Consistent with customary international law, JASTA, for terrorism cases, removes the current requirement that the entire tort occur within the United States and replaces it with a rule that only the physical injury or death must occur on U.S. soil. JASTA makes this change because, under current law, a foreign nation can provide financing and other substantial assistance for a terrorist attack in our country and escape liability so long as the support is provided overseas.
For example, under current law, if the intelligence agency of a foreign government handed a terrorist a bag of money in New York City to support an attack on U.S. soil, the country would be liable under the Foreign Sovereign Immunities Act’s tort exception. However, if we change the fact pattern slightly, so that rather than giving a terrorist money in New York City, the money is provided in Paris, the foreign state will not be subject to liability in U.S. courts. This is a troubling loophole in our antiterrorism laws.
When Congress enacted the Foreign Sovereign Immunities Act in 1976, it put in place a broad set of exceptions to sovereign immunity, including an exception for tort claims involving injuries occurring in the United States. However, the courts have not consistently interpreted those exceptions in such a manner that they cover the sponsoring of a terrorist attack on U.S. soil. JASTA addresses this inconsistency with a concrete rule that is consistent with the nine, long-standing exceptions to foreign sovereign immunity already provided for under U.S. law.
JASTA ensures that those, including foreign governments, who sponsor terrorist attacks on U.S. soil are held fully accountable for their actions. We can no longer allow those who injure and kill Americans to hide behind legal loopholes, denying justice to the victims of terrorism.
I urge my colleagues to vote to override the President’s veto and reserve the balance of my time.
Washington, D.C. – On Wednesday, September 28, 2016, Director James Comey testified before the House Judiciary Committee at an oversight hearing on the Federal Bureau of Investigation. At the hearing, members of the House Judiciary Committee pressed Director Comey on his recommendation and the Department of Justice’s decision to not prosecute Secretary Clinton for mishandling classified information through private email servers.
Background:
On July 5, 2016, Director Comey announced that the FBI does not recommend criminal charges against former State Department Secretary Hillary Clinton, even though federal law criminalizes mishandling classified information with “gross negligence.” Following his announcement, House Judiciary Committee Chairman Bob Goodlatte (R-Va.) and over 200 members of Congress sent a letter to Director Comey pressing for more information regarding the many questions surrounding his recommendation.
On July 11, 2016, Chairman Goodlatte and House Oversight and Government Reform Committee Chairman Jason Chaffetz (R-Utah) requested that the Department of Justice open an investigation into whether Secretary Clinton committed perjury and made false statements when testifying under oath before Congress. Contrary to statements she made before the House Select Committee on Benghazi hearing in October 2015, Secretary Clinton sent and received emails that were marked classified at the time; her lawyers did not read each email in her personal account to identify all the work-related messages; she used several different servers and numerous devices to send and receive work-related emails; and she did not provide all of her work-related emails to the Department of Justice.
Hearing Takeaways:
At the hearing, Director Comey defended the FBI’s conclusion of its investigation into Secretary Clinton, but new information casts serious doubts about whether the decision to not prosecute Hillary Clinton was made impartially.
For example, Cheryl Mills, chief of staff and counselor to Secretary Clinton at the State Department, was granted immunity for the production of her laptop and was able to be in the room with Secretary Clinton while she was interviewed by the FBI. In all of his years in law enforcement, Director Comey admitted that he had never heard of a potential witness representing a subject of an investigation during an interview with investigators.
The FBI never considered electronically recording Hillary Clinton’s interview with the FBI despite the fact that the Deputy Attorney General issued a memo to all DOJ components encouraging them to do just that in such situations.
****************************************
STATEMENT OF
JAMES B. COMEY
DIRECTOR
FEDERAL BUREAU OF INVESTIGATION
BEFORE THE
COMMITTEE ON THE JUDICIARY
UNITED STATES HOUSE OF REPRESENTATIVES
FOR A HEARING CONCERNING
OVERSIGHT OF THE FEDERAL BUREAU OF INVESTIGATION
PRESENTED
SEPTEMBER 28, 2016
Good morning Chairman Goodlatte, Ranking Member Conyers, and members of the committee.
Thank you for this opportunity to discuss the FBI’s programs and priorities for the coming year.
On behalf of the men and women of the FBI, let me begin by thanking you for your ongoing
support of the Bureau. We pledge to be the best possible stewards of the authorities and the
funding you have provided for us, and to use them to maximum effect to carry out our mission.
Today’s FBI is a threat-focused, intelligence-driven organization. Each FBI employee
understands that to defeat the key threats facing our nation, we must constantly strive to be more
efficient and more effective. Just as our adversaries continue to evolve, so, too, must the FBI. We
live in a time of acute and persistent terrorist and criminal threats to our national security, our
economy, and our communities. These diverse threats underscore the complexity and breadth of
the FBI’s mission.
We remain focused on defending the United States against terrorism, foreign intelligence, and
cyber threats; upholding and enforcing the criminal laws of the United States; protecting privacy,
civil rights and civil liberties; and providing leadership and criminal justice services to federal,
state, tribal, municipal, and international agencies and partners. Our continued ability to carry out
this demanding mission reflects the support and oversight provided by this committee.
National Security
Counterterrorism
Preventing terrorist attacks remains the FBI’s top priority. Threats of terrorism against the United
States remains persistent and acute. The dangers posed by foreign fighters, including those
recruited from the U.S., traveling to join the Islamic State of Iraq and the Levant (ISIL) and from
homegrown violent extremists are extremely dynamic. The tragic events we witnessed last week
in New York and New Jersey and last June in Orlando are a somber reminder that the challenges
we face are not just foreign in nature – they also come from within our own borders. Our work is
very difficult; we are looking for needles in a nationwide haystack, but we are also called upon to
figure out which pieces of hay might someday become needles. That is hard work and the
particular challenge of identifying homegrown violent extremists.
Threats of terrorism remain our highest priority and create the most serious challenges for the
FBI, the U.S. Intelligence Community, and our foreign, state, and local allies. ISIL is relentless
and ruthless in its pursuits to terrorize individuals in Syria and Iraq, including Westerners. We
continue to identify individuals who seek to join the ranks of foreign fighters traveling in support
of ISIL, and also homegrown violent extremists who may aspire to attack the United States from
within. In addition, we are confronting an explosion of terrorist propaganda and training
materials available via the Internet and social media. As a result of online recruitment and
indoctrination, foreign terrorist organizations are no longer dependent on finding ways to get
terrorist operatives into the U.S. to recruit and carry out acts. Terrorists in ungoverned spaces—
both physical and cyber—readily disseminate poisoned propaganda and training materials to
attract easily influenced individuals around the world to their cause. They encourage these
individuals to travel, but if they cannot travel, they motivate them to act at home. This is a
significant change and transformation from the terrorist threat our nation faced a decade ago.
ISIL’s widespread reach through the Internet and social media is alarming as the group has
proven dangerously competent at employing such tools for its nefarious strategy. ISIL uses high-
quality, traditional media platforms, as well as widespread social media campaigns to propagate
its extremist ideology. Recently released propaganda has included various English language
publications circulated via social media.
Social media also helps groups such as ISIL to spot and assess potential recruits. With the
widespread horizontal distribution of social media, terrorists can identify vulnerable persons of
all ages in the United States—spot, assess, recruit, and radicalize—either to travel or to conduct a
homeland attack. The foreign terrorist now has direct access into the United States like never
before.
Unlike other groups, ISIL has constructed a narrative that touches on all facets of life from career
opportunities to family life to a sense of community. The message isn't tailored solely to those
who are overtly expressing symptoms of radicalization. It is seen by many who click through the
Internet every day, receive social media push notifications, and participate in social networks.
Ultimately, many of these individuals are seeking a sense of belonging. Echoing other terrorist
groups, ISIL has advocated for lone offender attacks in Western countries. Recent ISIL videos
and propaganda specifically advocate for attacks against soldiers, law enforcement, and
intelligence community personnel. Several incidents have occurred in the United States, Canada,
and Europe that indicate this “call to arms” has resonated among ISIL supporters and
sympathizers.
Investigating and prosecuting ISIL offenders is a core responsibility and priority of the
Department of Justice and the FBI. The Department has worked hard to stay ahead of changing
national security threats and changing technology. The benefits of our increasingly digital lives, however, have been accompanied by new dangers, and we have been forced to consider how
criminals and terrorists might use advances in technology to their advantage.
For instance, some of these conversations among ISIL supporters and sympathizers occur in
publicly accessed social networking sites, but others take place via private messaging platforms.
These encrypted direct messaging platforms are tremendously problematic when used by
terrorist plotters. Similarly, we are seeing more and more cases where we believe significant
evidence resides on a phone, a tablet, or a laptop evidence that may be the difference between an
offender being convicted or acquitted. The more we as a society rely on electronic devices to
communicate and store information, the more likely it is that information that was once found in
filing cabinets, letters, and photo albums will now be stored only in electronic form. If we cannot
access this evidence, it will have ongoing, significant effects on our ability to identify, stop, and
prosecute these offenders.
We have always respected the fundamental right of people to engage in private communications,
regardless of the medium or technology. Whether it is instant messages, texts, or old- fashioned
letters, citizens have the right to communicate with one another in private without unauthorized
government surveillance not simply because the Constitution demands it, but because the free
flow of information is vital to a thriving democracy.
The FBI is using all lawful investigative techniques and methods to combat these terrorist threats
to the United States, including both physical and electronic surveillance. Physical surveillance is
a critical and essential tool in detecting, disrupting, and preventing acts of terrorism, as well as
gathering intelligence on those who are capable of doing harm to the nation. Along with our
domestic and foreign partners, we are collecting and analyzing intelligence about the ongoing
threat posed by foreign terrorist organizations and homegrown violent extremists. We continue
to encourage information sharing; in partnership with our many federal, state, local, and tribal
agencies assigned to Joint Terrorism Task Forces around the country, we remain vigilant to
ensure the safety of the American public.
Be assured, the FBI continues to pursue increased efficiencies and information sharing processes
as well as pursue technological and other methods to help stay ahead of threats to the homeland.
However, when changes in technology hinder law enforcement’s ability to exercise investigative
tools and follow critical leads, we may not be able to identify and stop terrorists who are using
social media to recruit, plan, and execute an attack in our country. Ultimately, we must ensure
both the fundamental right of people to engage in private communications as well as the
protection of the public.
Going Dark
While some of the contacts between groups like ISIL and potential recruits occur in publicly
accessible social networking sites, others take place via encrypted private messaging platforms.
This real and growing gap, which the FBI refers to as “Going Dark,” is an area of continuing
focus for the FBI; we believe it must be addressed, since the resulting risks are grave both in
both traditional criminal matters as well as in national security matters. The United States government actively communicates with private companies to ensure they
understand the public safety and national security risks that result from malicious actors’ use of
their encrypted products and services. Though the Administration has decided not to seek a
legislative remedy at this time, we will continue the conversations we are having with private
industry, State, local, and tribal law enforcement, our foreign partners, and the American people.
The FBI thanks the committee members for their engagement on this crucial issue.
Intelligence
Integrating intelligence and operations is part of the broader intelligence transformation the FBI
has undertaken in the last decade. We are making progress, but have more work to do. We have
taken two steps to improve this integration. First, we have established an Intelligence Branch
within the FBI headed by an Executive Assistant Director ("EAD"). The EAD looks across the
entire enterprise and drives integration. Second, we now have Special Agents and new
Intelligence Analysts at the FBI Academy engaged in practical training exercises and taking core
courses together. As a result, they are better prepared to work well together in the field. Our goal
every day is to get better at using, collecting and sharing intelligence to better understand and
defeat our adversaries.
The FBI cannot be content to just work with what is directly in front of us. We must also be able
to understand the threats we face at home and abroad and how those threats may be connected.
Towards that end, the FBI gathers intelligence, consistent with our authorities, to help us
understand and prioritize identified threats and to determine where there are gaps in what we
know about these threats. We then seek to fill those gaps and learn as much as we can about the
threats we are addressing and others on the threat landscape. We do this for national security and
criminal threats, on both a national and local field office level. We then compare the national and
local perspectives to organize threats into priority for each of the FBI's 56 field offices. By
categorizing threats in this way, we strive to place the greatest focus on the gravest threats we
face. This gives us a better assessment of what the dangers are, what's being done about them,
and where we should prioritize our resources.
Counterintelligence
We still confront traditional espionage—spies posing as diplomats or ordinary citizens. But
espionage also has evolved. Spies today are often students, researchers, or businesspeople
operating front companies. And they seek not only state secrets, but trade secrets, intellectual
property, and insider information from the federal government, U.S. corporations, and American
universities. Foreign intelligence entities continue to grow more creative and more sophisticated
in their methods to steal innovative technology, critical research and development data, and
intellectual property. Their efforts seek to erode America’s leading edge in business, and pose a
significant threat to our national security.
We remain focused on the growing scope of the insider threat—that is, when trusted employees
and contractors use their legitimate access to information to steal secrets for the benefit of another company or country. This threat has been exacerbated in recent years as businesses have
become more global and increasingly exposed to foreign intelligence organizations.
To combat this threat, the FBI’s Counterintelligence Division has undertaken several initiatives.
We directed the development, deployment, and operation of the Hybrid Threat Center (HTC) to
support Department of Commerce Entity List investigations. The HTC is the first of its kind in
the FBI; it has been well-received in the U.S. Intelligence Community, multiple FBI divisions,
and the private sector.
The Counterintelligence and Cyber Divisions have also partnered to create the Cyber-
Counterintelligence Coordination Section. This goal of this section is to effectively identify,
pursue, and defeat hostile intelligence services that use cyber means to penetrate or disrupt U.S.
government entities or economic interests by increasing collaboration, coordination, and
interaction between the divisions. Finally, the Counterintelligence Division and the Office of
Public Affairs collaborated to conduct a joint media campaign regarding the threat of economic
espionage. As a result of this collaboration, the FBI publicly released a threat awareness video
called The Company Man: Protecting America’s Secrets. This video is available on the FBI’s
public website and has been shown more than 1,300 times across the United States by the
Counterintelligence Division’s Strategic Partnership Coordinators to raise awareness and
generate referrals from the private sector. The video was also uploaded to YouTube in July 2015
and has received over 97,000 views since then.
Cyber
We face sophisticated cyber threats from state-sponsored hackers, hackers for hire, organized
cyber syndicates, and terrorists. On a daily basis, cyber actors seek our state and trade secrets,
our technology, and our ideas—things of incredible value to all of us and of great importance to
the conduct of our government business and our national security. These threats seek to strike
our critical infrastructure and to harm our economy.
The pervasiveness of the cyber threat is such that the FBI and other intelligence, military,
homeland security, and law enforcement agencies across the government view cyber security and
cyber-attacks as a top priority. Within the FBI, we are targeting the most dangerous malicious
cyber activity: high-level intrusions by state-sponsored hackers and global cyber syndicates, and
the most prolific botnets. We need to be able to move from reacting to such attacks after the fact
to operationally preventing such attacks. That is a significant challenge, but one we embrace.
As the committee is well aware, the frequency and impact of cyber-attacks on our nation’s
private sector and government networks have increased dramatically in the past decade and are
expected to continue to grow.
We continue to see an increase in the scale and scope of reporting on malicious cyber activity
that can be measured by the amount of corporate data stolen or deleted, personally identifiable
information compromised, or remediation costs incurred by U.S. victims. For example, as the
committee is aware, the Office of Personnel Management (OPM) discovered last year that a
number of its systems were compromised. These systems included those that contain information related to the background investigations of current, former, and prospective federal government
employees and contractors, as well as other individuals for whom a federal background
investigation was conducted. The FBI is continuing to investigate this matter with our
interagency partners to investigate this matter.
Another growing threat to businesses and individuals alike is Ransomware. Last year alone there
was a reported loss of more than $24 million. The FBI works closely with the private sector so
that companies may make informed decisions in response to malware attacks. Companies can
prevent and mitigate malware infection by utilizing appropriate back-up and malware detection
and prevention systems, and training employees to be skeptical of emails, attachments, and
websites they don’t recognize. The FBI does not condone payment of ransom, as such a payment
does not guarantee a victim will regain access to their data, will not be targeted again, and may
inadvertently encourage continued criminal activity.
The FBI is engaged in a myriad of efforts to combat cyber threats, from efforts focused on threat
identification and sharing inside and outside of government, to our internal emphasis on
developing and retaining new talent and changing the way we operate to evolve with the cyber
threat. We take all potential threats to public and private sector systems seriously and will
continue to investigate and hold accountable those who pose a threat in cyberspace.
Criminal
We face many criminal threats, from complex white-collar fraud in the financial, health care, and
housing sectors to transnational and regional organized criminal enterprises to violent crime and
public corruption. Criminal organizations—domestic and international—and individual criminal
activity represent a significant threat to our security and safety in communities across the nation.
Public Corruption
Public corruption is the FBI’s top criminal priority. The threat—which involves the corruption of
local, state, and federally elected, appointed, or contracted officials—strikes at the heart of
government, eroding public confidence and undermining the strength of our democracy. It
affects how well U.S. borders are secured and neighborhoods are protected, how verdicts are
handed down in court, and how well public infrastructure such as schools and roads are built.
The FBI is uniquely situated to address this issue, with our ability to conduct undercover
operations, perform electronic surveillance, and run complex cases. However, partnerships are
critical and we work closely with federal, state, local, and tribal authorities in pursuing these
cases.
One key focus is border corruption. The federal government protects 7,000 miles of U.S. land
border and 95,000 miles of shoreline. Every day, more than a million visitors enter the country
through one of the 327 official Ports of Entry along the Mexican and Canadian borders, as well
as through seaports and international airports. Any corruption at the border enables a wide range
of illegal activities along these borders, potentially placing the entire nation at risk by letting
drugs, guns, money, and weapons of mass destruction slip into the country, along with criminals, terrorists, and spies. FBI-led Border Corruption Task Forces are the cornerstone of our efforts to
root out this kind of corruption. Located in nearly two dozen cities along our borders, these task
forces generally consist of representatives from the FBI; the Department of Homeland Security
Office of Inspector General; Customs and Border Protection Internal Affairs; Transportation
Security Administration; Drug Enforcement Administration; Bureau of Alcohol, Tobacco,
Firearms, and Explosives; U.S. Immigration and Customs Enforcement-Office of Professional
Responsibility; and state and local law enforcement. Another focus concerns election crime.
Although individual states have primary responsibility for conducting fair and impartial
elections, the FBI becomes involved when paramount federal interests are affected or electoral
abuse occurs.
Civil Rights
The FBI remains dedicated to protecting the constitutional freedoms of all Americans. This
includes aggressively investigating and working to prevent hate crime, “color of law” abuses by
public officials, human trafficking and involuntary servitude, and freedom of access to clinic
entrances violations—the four top priorities of our civil rights program. We also support the
work and cases of our local and state partners as needed.
We need to do a better job of tracking and reporting hate crime and “color of law” violations to
fully understand what is happening in our communities and how to stop it. We cannot address
issues about use of force and officer-involved shootings or why violent crime is up in some cities
if we don't know the circumstances. Some jurisdictions fail to report hate crime statistics, while
others claim there are no hate crimes in their community—a fact that would be welcome if true.
We must continue to impress upon our state and local counterparts in every jurisdiction the need
to track and report hate crimes.. And we need the information they report to be accurate, to be
timely and to be accessible to everybody or it doesn't do much good. On the part of the FBI, we
are pushing for a more modern system of collecting data on officer-involved incidents and
violent crime at all levels. It’s a large undertaking; it will take a few years to ensure that all of
the databases functional, but we are going to get there.
Health Care Fraud
We have witnessed an increase in health care fraud in recent years, including Medicare/Medicaid
fraud, pharmaceutical fraud, and illegal medical billing practices. Health care spending currently
makes up about 18 percent of our nation’s total economy. These large sums present an attractive
target for criminals. Health care fraud is not a victimless crime. Every person who pays for
health care benefits, every business that pays higher insurance costs to cover their employees,
and every taxpayer who funds Medicare is a victim. Schemes can also cause actual patient harm,
including subjecting patients to unnecessary treatment or providing substandard services and
supplies. As health care spending continues to rise, the FBI will use every tool we have to ensure
our health care dollars are used appropriately and not to line the pockets of criminals. The FBI currently has 2,783 pending health care fraud investigations. Over 70 percent of these
investigations involve government sponsored health care programs to include Medicare,
Medicaid, and TriCare, as well as other U.S. government funded programs. As part of our
collaboration efforts, the FBI maintains investigative and intelligence sharing partnerships with
government agencies such as other Department of Justice components, Department of Health and
Human Services, the Food and Drug Administration, the Drug Enforcement Administration,
State Medicaid Fraud Control Units, and other state, local, and tribal agencies. On the private
side, the FBI conducts significant information sharing and coordination efforts with private
insurance partners, such as the National Health Care Anti-Fraud Association, the National
Insurance Crime Bureau, and private insurance investigative units. The FBI is also actively
involved in the Health Care Fraud Prevention Partnership, an effort to exchange facts and
information between the public and private sectors in order to reduce the prevalence of health
care fraud.
Violent Crime
Violent crimes and illegal gang activities exact a high toll on individuals and communities.
Today’s gangs are sophisticated and well organized; many use violence to control neighborhoods
and boost their illegal money-making activities, which include robbery, drug and gun trafficking,
fraud, extortion, and prostitution rings. Gangs do not limit their illegal activities to single
jurisdictions or communities. Because of its authority, the FBI is able to work across
jurisdictional lines, which is vital to the fight against violent crime in big cities and small towns
across the nation. Every day, FBI special agents work in partnership with state, local, and tribal
law enforcement on joint task forces and individual investigations.
FBI joint task forces—Violent Crime Safe Streets, Violent Gang Safe Streets, and Safe Trails
Task Forces—focus on identifying and targeting major groups operating as criminal enterprises.
Much of the Bureau’s criminal intelligence is derived from our state, local, and tribal law
enforcement partners, who know their communities inside and out. Joint task forces benefit from
FBI surveillance assets and our sources track these gangs to identify emerging trends. Through
these multi-subject and multi-jurisdictional investigations, the FBI concentrates its efforts on
high-level groups engaged in patterns of racketeering. This investigative model enables us to
target senior gang leadership and to develop enterprise-based prosecutions.
Despite these efforts, there is something deeply disturbing happening all across America. The
latest Uniform Crime Reporting statistics gathered from the Preliminary Semiannual Uniform
Crime Report, January-June, 2015, show that the number of violent crimes in the nation
increased by 1.7 percent during the first six months of 2015 as compared with figures reported
for the same time in 2014, and this year we are also seeing an uptick of homicides in some cities.
The police chiefs in these cities report that the increase is almost entirely among young men of
color, at crime scenes in neighborhoods where multiple guns are recovered. There are a number
of theories about what could be causing this disturbing increase in murders in our nation’s cities and the FBI is working with our federal, state, and local partners to uncover the root causes of
violence and tackle it at its infancy.
Transnational Organized Crime
More than a decade ago, the image of organized crime was of hierarchical organizations, or
families, that exerted influence over criminal activities in neighborhoods, cities, or states, but
organized crime has changed dramatically. Today, international criminal enterprises run multi-
national, multi-billion dollar schemes from start to finish. These criminal enterprises are flat,
fluid networks with global reach. While still engaged in many of the “traditional” organized
crime activities of loan-sharking, extortion, and murder, new criminal enterprises are targeting
stock market fraud and manipulation, cyber-facilitated bank fraud and embezzlement, identity
theft, trafficking of women and children, and other illegal activities. Preventing and combating
transnational organized crime demands a concentrated effort by the FBI and federal, state, local,
tribal, and international partners. The Bureau continues to share intelligence about criminal
groups with our partners and to combine resources and expertise to gain a full understanding of
each group.
Crimes Against Children
The FBI remains vigilant in its efforts to eradicate predators from our communities and to keep
our children safe. Ready response teams are stationed across the country to quickly respond to
abductions. Investigators bring to this issue the full array of forensic tools such as DNA, trace
evidence, impression evidence, and digital forensics. Through improved communications, law
enforcement also has the ability to quickly share information with partners throughout the world,
and these outreach programs play an integral role in prevention.
The FBI also has several programs in place to educate both parents and children about the
dangers posed by predators and to recover missing and endangered children should they be
taken. Through our Child Abduction Rapid Deployment Teams, Innocence Lost National
Initiative, Innocent Images National Initiative, annual Operation Cross Country, Office for
Victim Assistance, 71 Child Exploitation Task Forces, and numerous community outreach
programs, the FBI and its partners are working to keep our children safe from harm.
Operation Cross Country, a nationwide law enforcement action focusing on underage victims of
prostitution, completed its ninth iteration during the first full week of October. Over 300
operational teams from over 500 agencies across 135 cities and 53 FBI Field Offices were
instrumental in recovering child victims of all races and arresting pimps and customers. Ninety
victim specialists, in coordination with local law enforcement victim advocates and non-
governmental organizations, provided services to child and adult victims.
Indian Country
There are 567 federally recognized tribes in the United States, with the FBI and the Bureau of
Indian Affairs having concurrent jurisdiction for felony-level crimes on over 200 reservations. According to the 2010 Census, there are nearly five million people living on over 56 million
acres of Indian reservations and other tribal lands. Criminal jurisdiction in these areas of our
country is a complex maze of tribal, state, federal, or concurrent jurisdiction.
The FBI’s Indian Country program currently has 124 special agents in 34 FBI field offices
primarily working Indian Country crime matters. The number of agents, the vast territory, the
egregious nature of crime being investigated, and the high frequency of the violent crime
handled by these agents makes their responsibility exceedingly arduous. The FBI has 15 Safe
Trails Task Forces that investigate violent crime, drug offenses, and gangs in Indian Country,
and we continue to address the emerging threat from fraud and other white-collar crimes
committed against tribal gaming facilities.
Sexual assault and child sexual assault are two of the FBI’s investigative priorities in Indian
Country. Statistics indicate that American Indians and Alaska Natives suffer violent crime at
greater rates than other Americans. Approximately 75 percent of all FBI Indian Country matters
involve death investigations, physical and/or sexual assault of a child, or aggravated assaults. At
any given time, approximately 30 percent of the FBI’s Indian Country investigations are based
on allegations of sexual abuse of a child.
The FBI continues to work with Tribes through the Tribal Law and Order Act of 2010 to help
Tribal governments better address the unique public safety challenges and disproportionately
high rates of violence and victimization in many tribal communities. The act encourages the
hiring of additional law enforcement officers for Native American lands, enhances tribal
authority to prosecute and punish criminals, and provides the Bureau of Indian Affairs and tribal
police officers with greater access to law enforcement databases.
FBI Laboratory
The FBI Laboratory is one of the largest and most comprehensive forensic laboratories in the
world. Operating out of a state-of-the-art facility in Quantico, Virginia, laboratory personnel
travel the world on assignment, using science and technology to protect the nation and support
law enforcement, intelligence, military, and forensic science partners. The Lab’s many services
include providing expert testimony, mapping crime scenes, and conducting forensic exams of
physical and hazardous evidence. Lab personnel possess expertise in many areas of forensics
supporting law enforcement and intelligence purposes, including explosives, trace evidence,
documents, chemistry, cryptography, DNA, facial reconstruction, fingerprints, firearms, and
WMD.
One example of the Lab’s key services and programs is the Combined DNA Index System
(CODIS), which relies on computer technology to create a highly effective tool for linking
crimes. It enables federal, state, and local forensic labs to exchange and compare DNA profiles
electronically, thereby connecting violent crimes and known offenders. Using the National DNA
Index System of CODIS, the National Missing Persons DNA Database helps identify missing
and unidentified individuals. Another example of the laboratory’s work is the Terrorist Explosives Device Analytical Center
(TEDAC).. TEDAC was formally established in 2004 to serve as the single interagency
organization to receive, fully analyze, and exploit all priority terrorist improvised explosive
devices (IEDs). TEDAC coordinates the efforts of the entire government, including law
enforcement, intelligence, and military entities, to gather and share intelligence about IEDs.
These efforts help disarm and disrupt IEDs, link them to their makers, and prevent future attacks.
Although originally focused on devices from Iraq and Afghanistan, TEDAC now receives and
analyzes devices from all over the world.
The National Institute of Justice (NIJ) and the FBI have formed a partnership to address one of
the most difficult and complex issues facing our nation’s criminal justice system: unsubmitted
sexual assault kits (SAKs). The FBI is the testing laboratory for the SAKs that law enforcement
agencies and public forensic laboratories nationwide submit for DNA analysis. The NIJ
coordinates the submission of kits to the FBI, and is responsible for the collection and analysis of
the SAK data. The goal of the project is to better understand the issues concerning the handling
of SAKs for both law enforcement and forensic laboratories and to suggest ways to improve the
collection and processing of quality DNA evidence.
Additionally, the Laboratory Division maintains a capability to provide forensic support for
significant shooting investigations. The Laboratory Shooting Reconstruction Team provides
support to FBI field offices by bringing together expertise from various Laboratory components
to provide enhanced technical support to document complex shooting crime scenes. Services are
scene and situation dependent and may include mapping of the shooting scene in two or three
dimensions, scene documentation through photography, including aerial and oblique imagery,
360 degree photography and videography, trajectory reconstruction, and the analysis of gunshot
residue and shot patterns. Significant investigations supported by this team in recent years
include the shootings in Chattanooga, the Charleston church shooting, the shootings at the
Census Bureau and NSA, the shooting death of a Pennsylvania State Trooper, the Metcalf Power
Plant shooting in San Francisco, and the Boston Bombing/Watertown Boat scene.
Information Technology
The Information and Technology Branch provides information technology to the FBI enterprise
in an environment that is consistent with intelligence and law enforcement capabilities, and
ensures reliability and accessibility by members at every location at any moment in time.
Through its many projects and initiatives, it is expanding its information technology (IT) product
offerings to better serve the operational needs of the agents and analysts and raising the level of
services provided throughout the enterprise and with its counterparts in the law enforcement
arena and Intelligence Community.
FBI special agents and analysts need the best technological tools available to be responsive to the
advanced and evolving threats that face our nation. Enterprise information technology must be
designed so that it provides information to operational employees rather than forcing employees
to conform to the tools available. IT equipment must be reliable and accessible, as close to where the work is performed as possible. By doing so, the FBI will decrease the time between
information collection and dissemination.
Special agents and intelligence analysts are most effective when their individual investigative
and intelligence work and collected information is connected to the efforts of thousands of other
agents and analysts. We have developed software that makes that possible by connecting cases to
intelligence, threats, sources, and evidence with our enterprise case and threat management
systems. Similarly, we have provided our agents and analysts with advanced data discovery,
analytics, exploitation, and visualization capabilities through tools integration and software
development. In addition, we have enterprise business applications that address administrative,
legal compliance, internal training standards, investigative and intelligence needs, and
information sharing services. These tools allow for better data sharing with our law enforcement
partners and allow FBI agents and analysts to share FBI intelligence products with our
Intelligence Community partners around the world.
Conclusion
Finally, the strength of any organization is its people. The threats we face as a nation have never
been greater or more diverse and the expectations placed on the Bureau have never been higher.
Our fellow citizens look to us to protect the United States from all of those threats and the men
and women of the Bureau continue to meet and exceed those expectations, every day. I want to
thank them for their dedication and their service.
Chairman Goodlatte, Ranking Member Conyers, and members of the committee, thank you
again for this opportunity to discuss the FBI’s programs and priorities. Mr. Chairman, we are
grateful for the leadership that you and this committee have provided to the FBI. We would not
be in the position we are today without your support. Your support of our workforce, our
technology, and our infrastructure make a difference every day at FBI offices in the United
States and around the world, and we thank you for that support. I look forward to answering any
questions you may have.
