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ENCRYPTION

ONE OF THE MOST DIFFICULT CHALLENGES FACING ALL OF LAW ENFORCEMENT IS HOW RAPIDLY TERRORISTS AND CRIMINALS ADOPT ADVANCED TECHNOLOGIES TO THWART LAW ENFORCEMENT'S ABILITY TO INVESTIGATE THOSE WHO WISH TO DO HARM TO OUR NATION AND ITS CITIZENS. THAT IS WHY ENCRYPTION IS ONE OF THE MOST IMPORTANT ISSUES CONFRONTING LAW ENFORCEMENT. LAW ENFORCEMENT REMAINS IN UNANIMOUS AGREEMENT THAT THE WIDESPREAD USE OF ROBUST NON- RECOVERABLE ENCRYPTION WILL ULTIMATELY DEVASTATE OUR ABILITY TO FIGHT CRIME AND TERRORISM. UNCRACKABLE ENCRYPTION ALLOWS, AND WLLL CONTINUE TO ALLOW WITH INCREASING REGULARITY, DRUG LORDS, TERRORISTS, AND EVEN VIOLENT GANGS TO COMMUNICATE ABOUT THEIR CRIMINAL INTENTIONS WITH IMPUNITY AND TO MAINTAIN ELECTRONICALLY STORED EVIDENCE OF THEIR CRIMES IMPERVIOUS TO LAWFUL SEARCH AND SEIZURE.

CONVICTED SPY ALDRICH AMES WAS TOLD BY HIS SOVIET HANDLERS TO ENCRYPT COMPUTER FILE INFORMATION THAT WAS TO BE PASSED TO THEM. RAMZI YOUSEF, CONVICTED WITH OTHERS FOR PLOTTING TO BLOW UP 11 UNITED STATES OWNED COMMERCIAL AIRLINERS IN THE FAR EAST, USED ENCRYPTION TO PROTECT FILES ON HIS LAPTOP COMPUTER. A MAJOR INTERNATIONAL DRUG TRAFFICKER RECENTLY USED A TELEPHONE ENCRYPTION DEVICE TO FRUSTRATE COURT-AUTHORIZED ELECTRONIC SURVEILLANCE. THE EEL IS ENCOUNTERING A GROWING NUMBER OF CASES WHERE 56 BIT DATA ENCRYPTION STANDARD (DES) AND 128 BIT "PRETTY GOOD PRIVACY" ENCRYPTION ARE BEING USED FOR PROTECTION BY CRIMINALS. AS CONGRESS CONTINUES ITS WORK THIS SESSION TOWARDS A BALANCED APPROACH TO THE IMPORTANT ISSUE OF ENCRYPTION, I URGE YOU TO CONSIDER PUBLIC SAFETY AND NATIONAL SECURITY CONCERNS REGARDING ENCRYPTION PRODUCTS AND SERVICES MANUFACTURED FOR USE IN THE UNITED STATES OR IMPORTED INTO THE UNITED STATES.

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COUNTERTERRORISM AND CYBERCRIME

THE CRIMINAL EXPLOITATION AND ILLEGAL ELECTRONIC INTRUSION INTO PUBLIC AND PRIVATE SECTOR COMPUTER NETWORKS IS RAPIDLY ESCALATING INTO A MAJOR CRIME PROBLEM. THE NATIONAL AND ECONOMIC SECURITY OF THE UNITED STATES RELIES EXTENSIVELY ON A NATIONAL INFORMATION INFRASTRUCTURE (NIL) THAT IS VULNERABLE TO DISRUPTIVE FORCES. THESE FORCES INCLUDE NATURAL EVENTS, MISTAKES, TECHNICAL FAILURES, AND MALICIOUS ACTS BY HACKERS, DISGRUNTLED EMPLOYEES, CRIMINALS, INDUSTRIAL SPIES, FOREIGN AGENTS, AND TERRORISTS. THE ADVENT OF COMPLEX COMPUTER AND COMMUNICATIONS NETWORKS HAS PRODUCED A TANDEM CAPABILITY FOR THE POTENTIAL OF ILLEGAL INFORMATION RETRIEVAL, DISRUPTION AND/OR DESTRUCTION FROM VARIOUS SOURCES. WHITE-COLLAR CRIMINALS, ECONOMIC ESPIONAGE AGENTS, ORGANIZED CRIME MEMBERS, FOREIGN INTELLIGENCE SERVICES, AND TERRORIST, GROUPS HAVE ALL BEEN IDENTIFIED AS "ELECTRONIC INTRUDERS" WITH. THE POTENTIAL TO HAVE IMMEDIATE AND SEVERE CONSEQUENCES FOR EVERY FACET OF GOVERNMENT AND INDUSTRY.

THE UNITED STATES IS INCREASINGLY RELIANT ON COMPLEX, NETWORKED INFRASTRUCTURES FOR ITS NATIONAL AND ECONOMIC SECURITY AND THE WELFARE OF ITS CITIZENS. THE MOVEMENT OF THE UNITED STATES TOWARDS AN INFORMATION-BASED ECONOMY, AND THE RAPID EXPANSION OF ELECTRONIC COMMERCE, HAS GREATLY INCREASED DEPENDENCE UPON THE NIL. ANY PROTRACTED LOSS OF CRITICAL INFRASTRUCTURE WOULD SEVERELY IMPACT NATIONAL SECURITY AND THE NATIONAL WELFARE. IN RECENT YEARS, UNKNOWN INTRUDERS HAVE PENETRATED TELECOMMUNICATIONS CARRIERS, INTERNET SERVICE PROVIDERS, AND OTHER GOVERNMENT, PRIVATE AND UNIVERSITY SYSTEMS. LISTS OF FREQUENTLY ASKED QUESTIONS (FAQS) OUTLINING THE SPECIFICS OF SYSTEM VULNERABILITIES ARE WIDESPREAD. "THE UNOFFICIAL WEB HACK FAQ," "THE HACKER FAQ," AND "HOW TO HACK A WEBSITE" ARE POPULAR, ACCESSIBLE, AND EASILY DOWNLOADED FROM THE INTERNET. KNOWLEDGEABLE OBSERVERS AND RECENT SURVEYS PREDICT THAT MALICIOUS ACTS DIRECTED AGAINST THE NIL WILL ONLY INCREASE IN FREQUENCY AND SOPHISTICATION, AND WILL CONTINUE TO POSE GRAVE CONSEQUENCES AND POTENTIAL HARM.

THE CHALLENGE FACING THE FBI TODAY IN THE AREA OF CYBERCRIME IS BUILDING THE REQUISITE CAPABILITIES TO ADDRESS THIS RAPIDLY GROWING AND EVOLVING PROBLEM. TECHNOLOGY EXPLOITATION IS AN EMERGING PROBLEM WHICH TOUCHES VIRTUALLY EVERY AREA OF THE FBI'S MISSION, INCLUDING WHITE-COLLAR CRIME, COUNTERTERRORISM, FOREIGN COUNTERINTELLIGENCE, VIOLENT CRIME, ORGANIZED CRIME AND DRUGS. THE FBI MUST ACT NOW TO IDENTIFY, TRAIN, EQUIP AND DEPLOY INVESTIGATIVE RESOURCES TO STAY ABREAST OF THE GROWING CASELOAD, AS WELL AS MEET ITS RESPONSIBILITIES FOR INFRASTRUCTURE PROTECTION. WE ARE BUILDING THIS CAPABILITY AT TWO LEVELS: THROUGH SPECIALIZED AND HIGHLY TRAINED FIELD SQUADS; AND, THE OPERATION OF A NATIONAL-LEVEL CENTER THAT SUPPORTS FIELD INVESTIGATIONS AND COORDINATES WITH OTHER FEDERAL, STATE AND LOCAL AGENCIES AND THE PRIVATE SECTOR.

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TELECOMMUNICATIONS CARRIER COMPLIANCE

I AM VERY APPRECIATIVE OF THE EFFORTS OF THE COMMITTEES ON APPROPRIATIONS TO MOVE ALONG THE COMMUNICATIONS ASSISTANCE FOR LAW ENFORCEMENT ACT (CALEA) INITIATIVE. PRESERVING THE ABILITY OF FEDERAL, STATE, AND LOCAL LAW ENFORCEMENT TO LAWFULLY CONDUCT ELECTRONIC SURVEILLANCE CONTINUES TO BE ONE OF MY TOP PRIORITIES. FOR 1999, $100,000,000 IS REQUESTED IN THE DEPARTMENT'S TELECOMMUNICATIONS CARRIER COMPLIANCE FUND TO REIMBURSE TELECOMMUNICATIONS CARRIERS AND OTHERS FOR ELIGIBLE COSTS INCURRED IN MODIFYING EQUIPMENT AND FACILITIES TO COMPLY WITH THE CALEA. NARROWBAND RADIO COMMUNICATIONS

THE FBI OPERATES THE LARGEST CIVILIAN LAND-BASED MOBILE RADIO SYSTEM IN THE UNITED STATES WHICH PROVIDES CLEAR AND ENCRYPTED RADIO COMMUNICATIONS FOR 56 FIELD OFFICES AND NEARLY 400 RESIDENT AGENCIES. THE FIXED INFRASTRUCTURE FOR THIS SYSTEM INCLUDES BASE STATIONS IN EACH FIELD OFFICE AND LARGER RESIDENT AGENCIES, MORE THAN 12,000 MOBILE OR VEHICULAR RADIOS, OVER 12,000 PORTABLE OR HAND-HELD RADIOS, AND NEARLY 4,000 LEASED ANTENNA MICROWAVE REPEATER AND ANTENNA SITES AND DATA COMMUNICATIONS LINKS. THE FBI ALSO OPERATES SPECIALIZED RADIO COMMUNICATIONS SYSTEMS THAT SUPPORT NATIONAL SECURITY OPERATIONS, TASK FORCES, AND OTHER ACTIVITIES. BY JANUARY 1,2005, WE ARE REQUIRED TO CHANGE-OVER FROM THE CURRENT 25 MEGAHERTZ RADIO BANDWIDTH TECHNOLOGY TO MORE SPECTRALLY EFFICIENT 12.5 MEGAHERTZ BANDWIDTH EQUIPMENT. TO COMPLY WITH THIS MANDATE, IT WILL BE NECESSARY TO IMPLEMENT AN ENTIRELY NEW RADIO SYSTEM. NONE OF THE EXISTING WIDEBAND EQUIPMENT CAN BE UPGRADED OR RETROFITTED WITH NARROWBAND TECHNOLOGY.

IN ORDER TO COMPLY WITH THE NARROWBAND RADIO COMMUNICATIONS MANDATE, THE FBI IS PROPOSING A FIVE-YEAR EFFORT TO PLAN, DESIGN, AND IMPLEMENT A SINGLE NATIONWIDE COMMUNICATIONS SYSTEM THAT WILL REPLACE THE EXISTING NATIONWIDE AND SPECIALIZED SYSTEMS. WITHIN THE DEPARTMENT'S NARROWBAND COMMUNICATIONS FUND, THE FBI IS REQUESTING A TOTAL OF $64,079,000, OF WHICH $60,220,000 IS NEW FUNDING, TO BEGIN THESE PROCESSES. ADDITIONALLY, DIRECT FBI FUNDING TOTALING $780,000 IS REQUESTED TO HIRE 7 ENGINEERS AND SPECIALISTS TO SERVE ON THE EEL PROJECT TEAM FOR THE NARROWBAND RADIO COMMUNICATIONS PROJECT. CONCLUSION UP,. CHAIRMAN, I WOULD LIKE TO AGAIN EXPRESS MY GRATITUDE FOR THE COMMITTEE'S STRONG SUPPORT AND CONFIDENCE IN THE FBI.

BOTH YOU AND SENATOR ROLLINGS SHOULD TAKE PRIDE IN THE LEADERSHIP SHOWN IN THE AREAS OF ENSURING COUNTERTERRORISM PREPAREDNESS AND PROTECTING OUR CHILDREN FROM SEXUAL PREDATORS AND PEDOPHILES. I BELIEVE YOUR APPROACH OF BALANCING TARGETED INCREASES IN FBI INVESTIGATIVE RESOURCES AND CAPABILITIES IN SELECT AREAS WITH AN EMPHASIS ON TRAINING FOP, STATE AND LOCAL LAW ENFORCEMENT, ENCOURAGES PARTNERSHIPS AND COOPERATION THAT ARE THE KEYS TO AN EFFECTIVE RESPONSE TO CRIME. I KNOW THAT WITH YOUR CONTINUED SUPPORT, THE FBI CAN BUILD UPON ITS SUCCESSES AND SERVE THE AMERICAN PEOPLE PROUDLY AND EFFECTIVELY AS THE NATION MOVES INTO THE 21ST CENTURY. THIS CONCLUDES MY PREPARED REMARKS. AT THIS TIME, I WOULD LIKE TO RESPOND TO ANY QUESTIONS THAT YOU MAY HAVE.

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