It’s a real pleasure for me to be here and to be associated with this series of events. Our intelligence institutions are such a vital part of our national security that I’m happy to see my dear friend Mike Hayden as our first guest speaker in this series. I want to congratulate the Atlantic Council. Under Fred Kempe, the Atlantic Council has gone from a sort of backwater at the end of the Cold War, where nobody knew how to spell NATO any more, to a peer in the intellectual and national security activities in Washington. Congratulations, Fred.

Arnold is the executive vice president at SAIC. He also serves on Secretary Gates’ Defense Business Board, and is a senior associate at the Center for Strategic and International Studies. Arnold is a retired Marine major general and was mobilized to support Operation Enduring Freedom and Iraqi Freedom. I gather you’ve been released from your captivity. Anyway, Arnold, it’s great to welcome you and the floor is yours. 

GENERAL ARNOLD PUNARO: Thank you, General Scowcroft. For those of us that have grown up in the defense establishment, either in uniform, on Capitol Hill, in the Pentagon, and around town, we all know that General Brent Scowcroft is a national treasure; and we mean that, Brent, from the heart. Everybody knows it. So thank you, General Scowcroft, for your continuing great service.

But right now the leadership that we have in our intelligence organizations, with Bob Gates at the Department of Defense, a real decisive person who has a strong intelligence background and national security background; his undersecretary for intelligence, Jim Clapper, another fellow in uniform, intelligence professional, a colleague of longstanding of Bob Gates. And Mike McConnell of the Navy, from Naval Intelligence, the N-2 or the J-2 during Operation Desert Shield, Desert Storm, and with Mike Hayden out at CIA, they’re doing things behind the scenes that none of us would have ever thought possible, and pulling together for the greater good of the nation. 

They’ll never get the personal credit they deserve for that because much of what they’ve done can never be talked about. But I know from my limited exposure to it and just what you hear from the people saying, what a refreshing situation for these four individuals to be working together as this cohesive team, when each and every day in our country we’re challenged by the kind of threats we face, not just abroad but here at home. 

And finally, I will say that the other area that he gets very, very high marks and you won’t read in his biography, is he came to CIA from NSA. And NSA people think of as more of a technical side of the house. There have been tensions between NSA and CIA over the years, and they tend to think that the technical folks don’t get along with the analytical folks, or the people that are working on the ground, the so-called human intelligence. I know for a fact that the folks that work in that area said, wow, he got it immediately. When we had the opportunity to sit down and tell him the things that we were doing and how important they were, he got it immediately and has been a tremendous supporter of this most important element of our intelligence apparatus, which is eyes and ears on the ground, human intelligence, again you can’t talk about. 

There have been people in the past, many, many years in the past, that did not put that as a high priority, and it’s a very, very important high priority. So whatever happens in the future, the foundation for what we need for intelligence for the future for this country, we can thank the individual, this leader that’s going to speak here in a few moments for unprecedented contributions to this area. General Hayden. 

GENERAL MICHAEL HAYDEN: Thank you. That was very generous. I know you’ve spent some time up on Capitol Hill. Clearly you didn’t consider yourself under oath for any of those comments. (Laughter.)

I’m going to be the first speaker, as Arnold and the general pointed out, in a series devoted to intelligence issues. I want to focus on the issue within my community that demands more energy and attention than any other. That’s the threat of terrorism. Before I do that, though, I need to point out that General Scowcroft made his first contact with CIA about today’s speech in January of 2008. We firmed up the date in June of 2008. And here I am, giving an assessment of al Qaeda eight days after a national election, and 10 weeks before a new president takes office. When you think of CIA as a risk-averse agency, you need to think of today. (Laughter.)  

For more than seven years now the United States, with our allies in Europe and around the world, we’ve waged an unprecedented fight against al Qaeda, its affiliates and its sympathizers. My agency, CIA, has been at the forefront of that fight, using all of our authorities and all of our capabilities. That’s human and technical collection, all source analysis, and covert action to protect the homeland from another devastating attack. Now as our nation prepares for its first wartime presidential transition in 40 years, it’s the responsibility of CIA – frankly, it’s the responsibility of the entire intelligence community to give the incoming administration as clear a picture as possible of the state of this conflict, and of the shape of the enemy.  

Now, I know I’m biased, but frankly I believe that CIA’s understanding of al Qaeda is second to none. So my remarks today will draw on the insights of officers who have tracked, studied, and countered this threat for years. Much of what we know about al Qaeda comes from this creative and aggressive set of clandestine operations that CIA conducts around the world, including in places of great danger.           

Now, there will clearly be limits to what I can say in this kind of forum, but my goal here today is to give you as good an idea as I can of how my agency views this threat seven years after the attacks of September 11^th. Last May I gave a reporter a bottom-line assessment of America’s performance in the global war on terror. It wasn’t all that technical. The actual quote was, on balance, not bad. I think we’re doing pretty well. That is, by the way, a view that I still hold. 

Now, at the time when that comment was made public it got a fair amount of attention, stirred some controversy, and frankly, as can happen with some front-page stories, the headline seemed to overshadow both the content and the context of the longer article. So as I discuss the state of al Qaeda today in 2008, I want to make sure that you take away both the headline and the underlying complexity. 

I want to make three points. Number one, al Qaeda has suffered serious setbacks but it remains a determined, adaptive enemy, unlike any our nation has ever faced. This war – and let me underscore that. You should make no mistake this is anything else but a war. This war is far from over. Now, to be very clear, all the elements of national power are going to be required in order to keep the republic and the homeland safe. That’s the tools of law enforcement, diplomacy, and a variety of other methodologies that we have at our disposal. But at its core I personally, and my agency, believe that we are in a state of war with al Qaeda. 

Second, al Qaeda today is both resilient and vulnerable. Now, our job as intelligence professionals is to understand that complex picture so we can provide warning and opportunity to those who are making decisions on behalf of our country. 

Third, al Qaeda, operating from its safe haven in Pakistan’s tribal areas, remains the most clear and present danger to the safety of the United States. If there is a major strike against this country, it will bear the fingerprints of al Qaeda. 

To quickly review, al Qaeda has suffered serious setbacks but it’s a determined, adaptive enemy. Secondly, today al Qaeda, resilient and vulnerable, and third, it remains the most serious threat to the nation. 

Now, from those three points flows an enduring responsibility, and a responsibility that’s deeply felt by every CIA officer, and that’s to protect the homeland from attack. Out at Langley there’s an office. It’s one of the most operational offices we have on our campus, and it’s absolutely crucial in the day-to-day fight against terrorism. There’s a sign in that office, and I’ve said this in other public fora but it bears repeating. There’s a sign in that office that captures the sense of duty and determination that exist inside my agency today. It’s simply this. It says, “Today’s date is September 12, 2001.” When you walk into that office there’s a divider there, a wall, and you’ve got to go left or right. It is what you see, and at first glance it appears to be one of those signs of convenience, almost as if it was telling you the Julian date or the time of day. And only when you pay attention do you recognize that at all times it says, “Today’s date is September 12.”   

It has for me, every time I see it, and I’m in that office a lot, it has an emotional impact. More than a year ago, right around the anniversary of the attack about 14 months ago I gave a speech in New York at the Council on Foreign Relations. I said to that audience at that time, when I’m in that office I get the sense that today really is September 12^th, 2001. When I get in my car and go home and drive down Route 123 or the GW Parkway, the further I get away from the agency, the more of a sense I get that today’s date is September 10^th. And I don’t mean September 10^th in the sense that an attack is imminent. I mean September 10^th in the sense of a complacency inside the larger American population. 

I don’t mean to be critical about that. It’s the seventh year since an attack, and it’s probably both normal and healthy that the largest part of our population is going about their business with a feeling of safety, that the American people are right to expect that CIA does not feel that way and remains focused on that date, September 12^th. They expect us to do all we can do to stop those with a clear intent to attack us. They’re right to expect that we will do all we can to disrupt this most urgent and deadly threat. We have, and we are doing that. We’re doing it and we have done it with lawful tools, lawfully applied. I’ll talk a little bit about that today as well. 

Now, as you know, al Qaeda is an organization with the ambitions that stretch across many regions. Any appraisal of its current state then requires a look at several points around the globe, so let me start with Iraq. Three years ago, in a letter to the leader of al Qaeda in Iraq, Osama bin Laden’s deputy declared that that country, Iraq, was a central front in the global jihad. Foreign fighters, money, weapons streamed into Iraq, fueling a fierce insurgency that aimed to advance al Qaeda’s goal of an Islamic caliphate from Iraq to Indonesia. Indeed, bin Laden had previously stated that Baghdad would be the capital of the caliphate. 

Even today al Qaeda in Iraq remains that organization’s – al Qaeda’s – largest regional affiliate. It still can and does inflict damage. No matter what residual tactical strength it retains in Iraq, though, the most important point is that al Qaeda in Iraq is on the verge of strategic defeat. The U.S. military fought and the Iraqi people rejected the AQI-led insurgency. Al Qaeda lost its power when Iraqis came to see it for what it was – a terrorist organization waging war on the Iraqi people. 

Today, that flow of money, weapons and foreign fighters I talked about, that flow is greatly diminished. We don’t often hear al Qaeda’s senior leadership pointing to Iraq as the central front in their global battle. In fact, bleed-out from Iraq, the export or frequently what we see, the diversion of terrorists and their deadly capabilities, is as much a concern now as the ongoing threat of AQI attacks inside the country of Iraq itself. Many of the foreign fighters who have left Iraq over the past three years have frankly been frustrated by the lack of success, or disillusioned with al Qaeda’s ideas and tactics. Some have likely abandoned the fight altogether, and they’ve simply gone home to resume their lives. Others leave Iraq with hopes of building al Qaeda capacity elsewhere, and that might be Afghanistan or Lebanon on the Arabian Peninsula, North Africa, just to name a few examples. We even see some Iraq veterans involved in planning attacks in the West, in Europe and in the United States.  

Now, this bleed-out problem is one we have always known we would have to deal with. But I frankly take a great deal of personal consolation in knowing that that shift, that shift we’re seeing, is further evidence that al Qaeda in Iraq is failing.  

In Saudi Arabia, a place where bin Laden lived for many years, and home of Islam’s holiest sites, al Qaeda’s operational arm is also largely defeated. Aggressive efforts by the Saudi security forces between 2003 and 2006 led to the death or the capture of most al Qaeda leaders and operatives within the kingdom.  Financing networks were disrupted. The Saudi interior ministry undertook what is perhaps the world’s most effective counter-radicalization programs.   

One of the real delights in my job is I get to meet the liaison partners of CIA. I have to tell you, among the most fascinating dialogues I have is sitting and talking with our Islamic partners, including the kingdom of Saudi Arabia. I learn such a great deal in those dialogues. I’m struck, maybe even surprised, although looking backward on it I shouldn’t have been surprised, but I was certainly struck by the degree of emotion in my Islamic counterpart’s voice when he is talking about al Qaeda and how un-Islamic al Qaeda really is.  

The kingdom remains an al Qaeda target, but today much of that threat comes from outside its borders. It’s a vastly different scenario than we saw only a few years ago. 

While JI still exists today, its once robust relationship with al Qaeda is gone. Its plots are increasingly detected and disrupted. Hundreds of its leaders and operatives have been captured or killed by the Indonesian national police. The group’s capabilities and its confidence are simply not what they were three years ago, thanks to aggressive action by one of our most effective counter-terrorism partners. This past week I’m sure many of you have read that three of the perpetrators of the Bali bombing were actually executed, a very dramatic step that underscores the determination of the Jakarta government in this global war. 

The terrorist ambitions of JI’s Philippine-based ally, the Abu Sayef group have been similarly degraded by persistent pressure from our Filipino allies. I also want to highlight one other area of significant progress, and it’s not geographically focused. It’s an area of progress that I’ve simply called the ideological front. In the military, we’re very accustomed to thinking in terms of the close battle and the deep battle. This fight, this ideological fight, is the deep fight. That’s the battle for hearts and minds, and it has a very deep time horizon.  

But over the past year or so there is clear and mounting evidence that we have real cause for optimism. Some hard-line religious leaders are speaking out against al Qaeda’s tactics and its ideology. Polling has shown that support for al Qaeda and bin Laden has fallen in many predominantly Muslim countries. In fact, more and more Muslims are pushing back against the senseless violence and flawed worldview of al Qaeda. Credible, influential voices are refuting al Qaeda’s twisted justification for murdering innocents. These voices are tapping into doubts about al Qaeda that have always been there. People understand that most victims of terrorism are Muslim, and they ask a simple question: what justifies this? 

The answer from al Qaeda is one that a vast majority of people in the Islamic world simply now don’t espouse. They don’t support bin Laden’s caliphate, they don’t want to be governed as the Afghan people were governed by the Taliban. Even today as we speak, in New York City one of the most prominent voices in Islam, King Abdullah of Saudi Arabia, the keeper of the two holy places, is right now sponsoring and attending an international symposium on religious tolerance. I’ve always said that the civilized world will win this fight when we win the war of ideas. So these developments are very promising. 

I should underscore, this conflict of ideas requires authentic voices. In the world as we find it, in this conflict as we find it, authentic voices are Islamic voices. What I have just referred to are Islamic voices speaking out against al Qaeda. This is very promising, but remember, point number one earlier was that al Qaeda is determined and adaptive. In the face of setbacks, their senior leadership recalibrates. They constantly look for ways to make up for losses, extend their reach, take advantage of opportunities, and we’re seeing that. We see it clearer today in some places like North Africa, Somalia, or Yemen. 

The presence of extremist sympathizers, the availability that’s just the raw availability of weapons, and ungoverned space, a lack of effective security make these areas attractive locations for al Qaeda recruitment and training, as well as attacks. In addition, one of those, North Africa, provides an easy transit point for those destined to facilitate or carry out attacks in Europe. The level of focus and activity we’re seeing in these areas is troubling. In fact, the recent attacks and threats from al Qaeda in the land of the Islamic Maghreb are greater in scope and severity than any since the group merged with al Qaeda about two years ago. Suicide attacks against an Algerian military barracks and nearby café in June, along with several recent attacks on French tourists and workers underscore not only the group’s intent to strike Western targets, but its ability, its ability to plot and operate even under the tightened security regime that we now see in Algeria.  

In East Africa al Qaeda is engaging Somali extremists to revitalize operations. While there clearly has not yet been an official merger, the leader of the al Shabab terrorist group is closely tied to al Qaeda. The recent bombings in Somalia may have been meant, at least in part, to strengthen the bona fides of this group with al Qaeda senior leaders. A merger between al Shabab and al Qaeda could give Somali extremists much-needed funding, while al Qaeda could then claim to be re-establishing its operations based in East Africa. That’s a base that was severely disrupted about two years ago when Ethiopia moved into Somalia. 

Yemen is another country of concern, a place where al Qaeda is strengthening. We’ve seen an unprecedented number of attacks this year, 2008, including two on our embassy. Plots are increasing not only in number but in sophistication and the range of targets is broadening. Al Qaeda cells are operating from remote tribal areas, where the government has traditionally had very little authority, and they’re being led or reinforced by veterans of the wars in Afghanistan and Iraq. I mentioned earlier that the threat to Saudi Arabia was probably more external than internal, and these developments in Yemen are the primary reason for that reality.  

North Africa, East Africa, Yemen serve as kind of a counterweight to the good news out of Iraq, Saudi Arabia and elsewhere. Make no mistake, what I’ve just mentioned – East Africa, North Africa, Yemen, these are not problems on the same scale as Iraq or Saudi Arabia, but al Qaeda’s strength in these areas demonstrates not only its adaptability and determination but that characteristic I’ve mentioned several times now, resilience. 

Now let me turn to that part of the globe that’s most important to al Qaeda, most important to al Qaeda’s continuing operations. Al Qaeda sanctuary along the Afghanistan-Pakistan border, in those tribal areas, has allowed it to recover some of the capacity lost when it was expelled from Afghanistan almost seven years ago now. The group has reconstituted some training and operational capabilities. It’s increased its recruitment and its propaganda efforts. It’s established a more durable leadership structure. It’s built redundancies into its plotting, and it’s developed a bench of skilled operatives to carry plans forward when other plans are disrupted.  

All that activity is enabled by a fairly recent development, and that’s al Qaeda’s ties to local tribes. The terrorist group – here I’m talking about al Qaeda – has developed a close, co-dependent relationship with Pashtun extremists and separatist groups. Al Qaeda, foreigners in a land that’s long been suspicious of foreigners, has been able to curry favor with locals by supporting their causes, training their fighters, funding their operations, and importantly, showing sufficient deference to tribal leaders. Bin Laden’s lieutenants work in concert with Pakistani militant groups as long as the operational goals of those groups don’t conflict with al Qaeda’s own strategic objectives. And increasingly, ties to the tribes are being made a bit more permanent through intermarriage. 

Now, the safe haven in the tribal region, in the FATA, that safe haven is not comparable to what al Qaeda had in Afghanistan. It’s not comparable in terms of either security or scale, but it is more worrisome today than it was two or three years ago. Cross-border attacks in Afghanistan are more violent and aggressive, as are al Qaeda’s efforts to destabilize Pakistan itself. Furthermore, we’re seeing a disturbing emphasis on the recruitment, training, and deployment of Western operatives. What do I mean by Western operatives? Those are people who may not elicit any notice whatsoever from you if they were standing next to you in the airport line.  

The crossover point for al Qaeda’s foothold in the tribal areas is probably since September of 2006, when the governor of North Waziristan signed a peace agreement with local militants. That truce set in motion a whole series of events and decisions that gave al Qaeda a lot more breathing space than it had had previously.  

Let me be very clear. Today virtually every major terrorist threat that my agency is aware of has threads back to the tribal areas. Whether it’s command and control, training, direction, money, capabilities, there is a connection to the FATA. It is no overstatement to say that al Qaeda’s base in Pakistan is the single most important factor today in the group’s resilience and its ability to threaten the West.  

So it may surprise some of you to hear me say it also represents a key vulnerability. The truth is, it’s not all that easy to build a worldwide terrorist network and manage a global fight from an isolated outpost in northwestern Pakistan. To the extent that the United States and its allies deepen that isolation, disturb the safe haven, target terrorist leaders there, we keep al Qaeda off balance. The Pakistani government and military deserves great credit for its current campaign against extremists and Bajaur agency. The Pakistani army has been fighting there forcefully and with considerable success since early August. This is a major commitment. This is a multi-brigade operation. It is very hard fighting. They are suffering significant casualties, but they are also imposing significant casualties on our common enemy. 

Throughout the FATA, al Qaeda and its allies are feeling less secure today than they did two, three, or six months ago. It has become difficult for them to ignore significant losses in their ranks. Mid-level operatives have been killed. In the past year alone a number of senior al Qaeda leaders who have sought refuge in the tribal areas have died, either by violence or natural causes. These include a chief of external operations, senior commander who plotted attacks against the coalition in Afghanistan, a seasoned explosives expert and trainer, a veteran combat leader, and a senior operational planner. Those losses are significant. These men were decision makers, commanders, experienced and committed fighters at the center of planning attacks, not only in Pakistan and Afghanistan, but against Europe and the United States.

After the September 11^th attacks, we said, no more. Of all the things that have been done to help protect the homeland, the single most important one in my view is that America and its friends have taken the fight to the enemy. A comment like that, any discussion of American successes against al Qaeda typically leads to another question. What about bin Laden? Why haven’t we killed or captured him? Anyone familiar with the Afghan-Pakistan border area knows how rugged and inaccessible it is. In preparation for this I sat down and read and re-read my speech this morning and over lunch. Four times I came across language in the speech that in one way or another stressed the importance of isolation and ungoverned territory to the survival of al Qaeda. Think about it. That may be the most damning thing we can say about this organization, that it can only subsist beyond the reach of civilization, beyond the reach of the rule of law. It survives only in the absence of law. We see that in those other areas that I’ve mentioned – the more remote areas of Somalia or Yemen, or along the Afghan-Pakistan border area. 

Beyond that remoteness – remember we’re talking about the hunt for bin Laden – beyond that remoteness, the sheer challenge of surveying every square mile of that inhospitable and dangerous region, part of the explanation for his survival lies in the fact that he has worked to avoid detection. He is putting a lot of energy into his own survival, a lot of energy into his own security. In fact, he appears to be largely isolated from the day-to-day operations of the organization he nominally heads. 

I can assure you, although there has been press speculation to the contrary, I can assure you that the hunt for bin Laden is very much the top of CIA’s priority list. Because of his iconic stature, his death or capture clearly would have a significant impact on the confidence of his followers, both core al Qaeda and these unaffiliated extremists throughout the world. This is an organization that has never been through a change at the top. For 20 years bin Laden has been the visionary, the inspiration and harmonizing force behind al Qaeda. Whether his deputy, Ayman al Zawahiri, could maintain unity in the ranks is a genuinely legitimate question. The truth is, we simply don’t know what would happen if bin Laden is killed or captured. But I’m willing to bet that whatever happens, it would work in our favor. 

Killing, capturing, disrupting al Qaeda senior leaders, wherever they may find or seek sanctuary, is absolutely essential to thwarting attacks on the West. That’s the key lesson from 9/11. Our understanding of this enemy and what it will take to defeat him changed on that day. Never before have we faced an enemy so completely committed to our destruction and so completely irresponsible with human life. Al Qaeda is willing to sacrifice both its own operatives and the Muslims for whom it professes to fight.  

This enemy, unprecedented in our history, requires a response that also has no model in our past. Let me remind you, one of the defining objectives of al Qaeda’s theory of war is to erase the distinction between combatant and non-combatant for themselves and for their victims alike. And that distinction, between combatant and non-combatant, has been an inviolate distinction in the laws and morals of the civilized world. And so this war presents us with operational, ethical, and legal challenges that we as a nation have not faced before. And at CIA we have been at the center of this nation’s response to that challenge, using our full authorities and our most advanced capabilities, always within law, always with executive and congressional oversight. Doing anything less, doing anything less than playing to the full extent of our authorities and our capabilities would be a failure to live up to the oath we took, which is to defend the nation.  

I’m extremely proud that our efforts, together with those of the military, law enforcement, and our foreign partners, have yielded results, results in Iraq, Saudi Arabia, Pakistan, Indonesia, and even in the war of ideas. I’m encouraged by the progress that’s being made in South Asia today and I’m grateful for the talent and dedication of the thousands of CIA officers involved in this fight. Their work has helped us to disrupt many attacks, including one that would have rivaled the destruction of 9/11.  

But I’m also acutely aware that al Qaeda remains the most dangerous threat we face. The men and women of CIA live with that awareness every hour of every day. They’re working around the clock in every part of the world to defeat al Qaeda, to win this war, and to keep America and our allies safe. Thank you again for the opportunity to be here. Now, I’ll be quite happy to take your questions.  

FRED KEMPE: Thank you, General Hayden. And let me just say on behalf of the Atlantic Council, I’m Fred Kempe, the president of the Atlantic Council, that was worth waiting for. (Laughter.) Thank you for giving us a rich insight into the state of al Qaeda, I think, with a lot of new information as well.  

To simplify, in terms of asking my first question, and then we’ll go to the audience, Pakistan, you’re saying that al Qaeda is still the most dangerous threat and essentially you’re saying Pakistan is the most dangerous place. And I suppose one would have said that about Afghanistan ahead of 9/11 if one had thought about it then. Is that right? And if that’s right, what happened with our relationship with our strategic ally in the war on terror, General Musharraf? What happened during that period of time? And what do we have to do different now that we didn’t do then?  

GEN. HAYDEN: Well, what we did then, what we are doing now is working with our Pakistani partners. The first thing I need to point out, as challenging as the current circumstances are, and I think broadly we and our Pakistani allies agree on the challenges, as challenging as the current situation is, we have killed or captured more members of al Qaeda, more of the al Qaeda senior leadership in partnership with our Pakistani allies than we have with any other partner around the world. And so that needs to be stated up front and very clearly.  

The tribal region of Pakistan looks simple from about 9,000 miles away. The closer you get to it, the more complex the questions become. And I think what happened in 2006, the government in Islamabad made a decision that we, absent the imminence of the threat, absent the development of al Qaeda, would have viewed to be as wise and far-reaching, which was in essence to invest in a long-term strategy of development and gradual incorporation of the tribal regions into Pakistan. I mean, you have to understand historically the reach of the central government into these areas has been weak, has been weak at best.  

And so the Pakistani government in 2006 began to pull back a bit, the peace agreement that I mentioned in my remarks being one element of it. And again, we would have viewed it to be patient and wise and far-seeing, absent the immediate threat. But our enemies in the antecedent of our, is the United States and Pakistan and Afghanistan, but our enemies took advantage of that respite, took advantage of the breathing space to build up the kind of safe haven that I described in my remarks.  

And now the question becomes, how do we deal with that? And you’ve got the Pakistanis – again I need to point out very strongly, I mean, multi-brigade operations in Bajaur, tough fighting against hardened militants, and they’re staying there and fighting and fighting against – against people by any definition are our common enemies. 

MR. KEMPE: One question before going to the audience – and when you do ask your questions, identify yourselves and put a question mark at the end of what you say. (Laughter.) Just to save people a little bit of trouble who are here from the media, you and the Director of National Intelligence McConnell have offered to stay on. What have you heard from the people who would have to answer you – (inaudible)?  

GEN. HAYDEN: Okay, three minutes into the Q&A period and – 

MR. KEMPE: Well, we’ll get that – we’ll get this part done and then we’ll be able to focus on what I would say is the news, which I think what you’ve said about Pakistan is quite important.  

GEN. HAYDEN: No, very frankly, I mean, I’ll let Admiral McConnell speak for himself, but I think he shares my view. We clearly serve at the pleasure of the president. Admiral McConnell is a senior intelligence advisor to the president. There has to be a personal relationship between the president and that person and I think and perhaps the director of CIA as well. So we fully understand that this is a decision for the president.  

I think what Admiral McConnell was said that – and Arnold suggested in his earlier comments, we think we’re doing some things well. If asked to stay, I think both of us would seriously consider it. But this is truly something – this is the business of the transition team, the business of the president-elect. And I would leave it there for now. 

Q: Jeff Steinberg with EAR. Could you discuss two other aspects of the al Qaeda situation? Number one, the al Qaeda-Taliban relationship as it currently stands, we’re talking apparently with some factions of Taliban about an agreement in which they might even come into a coalition government in Afghanistan. And secondly, the role of the opium and heroin trade in the financing of the insurgency and what are some of the things that you could say about what’s being done about that and other financial disruptions?  

GEN. HAYDEN: I’m going to talk about the second question first. Clearly, one of the most disruptive elements in the situation in Afghanistan today is the drug trade. I mean, you’ve got two countries, Iraq and Afghanistan, many parallels between the two, about the same size physically, about the same geographically, both of them have one major export, the one’s legal, the other one’s not, it’s a product of the opium fields. And I think all of us agree that there are several things that are preconditions to success in Afghanistan and one of them is what you just raised: getting a grip on the growth of opium, the trade of opium, which feeds a whole bunch of things, all of them bad. It feeds a global drug issue. It feeds instability and corruption inside the Afghan government. And it actually does, as you suggest, fund the Taliban. 

Your first question has been an interesting development. It’s something that we saw coming that was probably crystallized in – about a year ago. All right. And that is the merger – and I tried to suggest it in my prepared remarks – the merger of Pashtun separatists and Pashtun extremists into a functioning operational alliance with the foreigners in the FATA, represented by al Qaeda. The proximate cause for that was probably the activity a summer ago when the Pakistani government moved against the Red Mosque. And if you recall, a month or two after that action, bin Laden called for warfare, open warfare, against the Pakistani government.  

At that point – and look, there are no right angles in the real world here, all right, and there are no absolutes. But at that point, it began to get increasingly clear to us that in addition to this being a threat from Pakistan, this was now a threat to Pakistan. And that Pakistan, rather than being a base of operations for al Qaeda, Pakistan writ large had become a target for al Qaeda. And so when you see the assassination of Benazir Bhutto, for example, the best intelligence we have is that effort was a blend of al Qaeda and Baitullah Mehsud. And Baitullah Mehsud is a Pashtun separatist, native of Pakistan, not a foreign fighter. That’s been the new development. And that, I think, is the issue that’s been most troubling. And what we have to do is, in essence, deconstruct that merger, deconstruct that alliance.  

GEN. HAYDEN: I can. I mean, without getting into too much detail, al Qaeda puts a great premium on bringing people into the FATA for orientation, indoctrination, and training, a great premium especially on people who are Western, you know, Western in their upbringing, Western in their outlook, Western in their appearance. And it’s clear to us the reason for that is to make use of them against targets in the West.  

Q: General, I’m Pam Hess with AP. How are you? Right at the end of your speech, you said something that intrigued me. I think we all know what the legal challenges have been, because we spend a great deal of time reporting on them, but I’m wondering looking back on the time that you’ve spent there, what have been a couple examples of an operational challenge and an ethical challenge that you’ve struggled with? 

And frankly, the legal structures under which we are working in the West present great challenges to us because there’s a body of thought that wants to describe this as a law enforcement issue and a body of thought that wants to describe it as a war. And focusing exclusively on either one of those lenses doesn’t work. It becomes a blend. But our legal structures aren’t really accustomed to working inside that blend. 

I would offer you the view that there are very few governments in the world that would agree with all three of those sentences. I believe them to be absolutely correct. I believe them to be ethically and legally sound. But we are working with an international legal structure that I think would have even our best friends, even people who are mostly like-minded, they’re willing to discuss each of those three sentences with us and the legitimacy of each, those are the kinds of challenges we’re working under. And I think what I tried to stress, Pam, it’s an agency like CIA that’s out there on the cutting edge of those kinds of questions all the time because that’s the space in which a nation’s secret intelligence service works.  

Q: Ken Dillon, Scientia Press. Could you give us your assessment of al Qaeda’s current capabilities in bio-warfare? And could you comment on whether you consider the 2001 anthrax mailings as a serious possibility that they were the work of al Qaeda?  

GEN. HAYDEN: I’ll have to defer on the second question to what the bureau has said. I know Bob Mueller has talked about this, particularly since they were, you know, moving to resolution of that case. It is clear to us – and again, I’m going to sum up by classification, but what I can share is that it’s clear to us that the intent for weapons of mass destruction, and it’s across bio, chem., and nuclear, is unarguable. We see that in multiple strands of reporting. The good news is in some of those higher end weapons, that’s hard to achieve. The bad news is that there are some lower end weapons that are not. And that represents a great danger to us. And our belief is, you know, a lot of this is reporting and some of it is assessment. But it all comes wrapped with a high confidence level. If al Qaeda could do it, they would. And so it’s something that we pay great attention to.  

Q: Tom Baldwin – (inaudible) – Times of London around the pillar. The president has recently spoken about the transition as being a time of a particular vulnerability. The president-elect has spoken about the possibility of an early test of the new administration. In my country, Lord West has spoken about a new threat bubbling up. I wonder if you could explain some of the context of those remarks and tell us whether we’ve really got something to be worried about at the moment.  

GEN. HAYDEN: Sure. We had a chat earlier, right before we came in here, myself and another gentleman, about this very thing. And he pointed out two data points, the attacks in 2001 and the attacks in 1993. Now, I would add that for some people, two data points create a trend line. For others, there may be a bit more hesitation to call that a trend line. I guess I’d introduce another factor into this as well. Okay.  

I tried to give you an accurate picture of al Qaeda. This is not an omnipotent enemy. This is an enemy whose actions we can affect by the actions we take. And I tried to give you a picture that, in many ways, we’ve been taking those actions and keeping them off balance, so that even if al Qaeda had this strong wish to do something between date X and date Y, it’s another thing to do it beyond just the wish. So I think we need to keep those kinds of things in mind.  

That said, I mean, there’s a clear historical pattern that during a transition as governments are forming, people are becoming accustomed to what they’re doing and who else is doing it, decision-making may theoretically be slower than it is one, two, or three years later. That’s why we’ve received very clear direction that we’re going to make this the smoothest transition in recorded history so that we can get the new team, whomever they might be, as their named, up to speed as quickly as possible so that there’s no diminution in the ability of the republic to defend itself.  

Q: Jan Lodal, Atlantic Council. General, I heard recently some put forward the proposition, to follow up on your comment, that al Qaeda is not monolithic here. But in fact, it might be pretty possible to separate the Taliban and al Qaeda and turn them against al Qaeda with some sort of diplomatic approach. And another element of this is that we’re perhaps making a mistake by paying much attention to the Pakistan-Afghan border, which isn’t real on the ground in any event and that we might be pushing the war into Pakistan, rather than keeping the war out of Afghanistan, and that a different approach to the al Qaeda-Taliban thing might offer a solution to both of those problems.  

GEN. HAYDEN: Jan, great question. And actually, it follows up on a question asked earlier and I didn’t completely answer it. First, Taliban. If we were parsing Taliban as a part of speech, I think we’d have an honest debate as to whether it was a singular noun, a collective noun, or a plural noun and depending on how you do that might shape your policy approach. I think we might – certainly in our common discourse, I hope not so much in our professional discourse, but in our common discourse might be a bit too facile in spreading a Taliban label across a whole variety of populations.  

And so I think what’s implied in your question is certainly true and worth exploring, that you can hive off some of these groups. Some are more or less dangerous than others. Some are more or less committed. Some are more or less your friends or more or less enemies. And that a realistic appreciation of that is an important tool in the toolbox of a nation like ourselves or Pakistan going forward.  

I’d also underscore – and, of course, the model that’s brought up is Anbar, where we did something similar, and there are similarities and there are differences between Anbar Province in Iraq and what goes on in the tribal region. But in Anbar, we did accept the premise that we could talk to people who had recently been shooting at us as long as we could arrange something in the future that was quite different from what was going on in the past. So that does offer us opportunities.  

What you had in Anbar, though, was security. You were able to provide these groups with sufficient security to make decisions based on their own self-interest that more comported with your vision for the future. Until we can provide security in the tribal region, that effort is much, much more difficult there. But it remains a distinct possibility. We would be foolish not to include that in our approach to the region.  

And to be very candid, doing it from Washington or doing it with an American lens is probably not going to be all that successful. Here’s an element where our Pakistani allies are far more sensitive to experience with the realities on the ground.  

GEN. HAYDEN: Yeah, I mean, there are a lot of things that I can’t comment on in any way. I would share with you, though, that General Pasha who is the – essentially my counterpart inside the Pakistani government, head of ISI, visited us a few weeks ago, for three days. We had long productive discussions, friendly discussions with General Pasha. I think it’s fair to say that we’ve got a common view of the threat and I think there’s a lot more commonality on how the threat should be dealt with than many people seem to assume. And that over the long term, okay, over the long term, success here is going to be defined by the success of Pakistani sovereignty over these regions. And that’s something that’s a strong powerful common interest for the two of us and that we would work to support.  

MR. KEMPE: There’s been some talk about reliability of the ISI. Do the Pakistanis consider it that you’re talking about or do they have some concerns as well?  

GEN. HAYDEN: I would never venture to try to judge anything like that. Again, I just simply repeat. We meet with ISI routinely. They are – we have worked with them for some of the most significant success in the war on terror and we’ll continue to work with them.  

Q: Alex Kingsbury from U.S. News & World Report. You said that AQI in Iraq is on the verge of strategic defeat and I’m wondering if you could expand a little bit more on the situation in Iraq. You have some of these foreign fighters that are still there loosely under the – you know, under the al Qaeda in Iraq banner, some of them seeking sanctuary across the borders.  

GEN. HAYDEN: Sure. And again, I’m afraid I can’t give you that crisp, definitive answer because there’s probably not one available, but I can talk about some factors bearing. Number one, the flow of foreign fighters is down, significantly down. You just don’t see the number of people wanting to cross one or another border and go into Iraq and fight. I think there are a lot of reasons for that. I think it’s the – I’ll say the fight in Iraq has lost its ire for a lot of al Qaeda adherents. And then there’s just the, you know, pure physical security environment that we’ve been able to create with our Iraqi allies. I think both of those are very important things.  

Now, that said, when you look – and we asked our analysts to do this – when you look at the history of these kinds of things and you have an insurgency – and again this is – words escape us to accurately describe in one label exactly what it is, but I’ll use the word insurgency for al Qaeda – when you look at the history of such movements, take the Melee (ph) Rebellion, take the Huks in the Philippines, when you look at it over the long term, these things don’t go out over night. There is a long period in which there is considerable smoldering and the occasional shooting out of flames. And I suspect that that’s probably what we’ll see for al Qaeda in Iraq for a long period of time. And in each of those cases, with the Huks and with the Melee Rebellion, it’s just not the security services, but the growth of governance, the growth of providing services to the population that ultimately lead to their demise. So I don’t want you to get – strategic defeat I believe in, I’m not backing away from that at all. But this is going to go for a long time before it’s just out all together.  

Q: Hi, sir, Tom Gjelten from NPR. Going back to your statement that al Qaeda operating out of Pakistan is the greatest danger to the United States, and then you said that if there is a major strike in this country, it will bear al Qaeda’s fingerprints. Just to clarify that, are you saying al Qaeda in Pakistan, it will bear the fingerprints of al Qaeda in Pakistan, as opposed to Islamic Maghreb? And what does that say about the sort-of non-al Qaeda jihadi movements around the world? You’re really – it sounds like you’re really narrowing it down to al Qaeda in Pakistan.  

GEN. HAYDEN: And Tom, I have to preface my answer with, you don’t know what you don’t know. But dealing with what I do know, all the threats we have to the West have a thread that takes them back to the tribal region along the Af-Pak border. And it may be training. It may be command and control. It may be financing. But there is at least one and, in some cases many, threads that take them back to there and that’s why I chose to focus on it as much as I did in my remarks.  

Q: General, Lloyd Hand, King & Spalding. I want to ask you to say a few more words about how you would characterize the Pashtun. I understand that they are the dominant cultural influence in the region, particularly in FATA. But at one time, if I understand correctly, back in the late ’80s, we were able to align their interests with our interests. Is that still possible to do that in that region? And sort of a sub-part of that, has al Qaeda been able to subjugate or to incorporate Pashtuns’ objectives with theirs in that region?  

GEN. HAYDEN: The answer to the first question, can we envisage a future in which Pashtun objectives comport with our own, I think the answer is absolutely yes. I mean, there is nothing intrinsic in our worldview or their worldview, even our strategic needs, their perceived strategic needs, that would preclude that. So that’s one.  

This merging of al Qaeda and Pashtun extremism or Pashtun separatism has been building for a while. It is very complex. It’s not something that’s easily understood from a distance. I mean, I almost liken it – and I don’t mean to trivialize this, but you know, any of you grown up in a big city and know that there are certain unofficial organizations called gangs that have sway here, have sway there, have sway over here, and the relationships and alliances among those are very difficult to understand by an outsider, even if the outsider there is defined as a local police force, you know, someone who’s accustomed to living in the area, could actually read the street signs and speak the language. So there are a lot of subtleties to this that we and our Pakistani and Afghan allies have to master. But there’s nothing that precludes that.  

Al Qaeda has been, as I tried to point out in my remarks, has been successful. They’ve been there for a while. The Arabs in al Qaeda have been very respectful of local custom. And you have the custom of Pashtunwali, which is hospitality for guests, that is very strong and the Arabs in al Qaeda have been very respectful of that. And so we’re now seeing inter-marriage and a whole linkage of folks who, you know, perhaps don’t know or don’t care what al Qaeda’s strategic objectives are, just know that they are their guests and that their culture requires certain norms of behavior. Other foreigners in the tribal region, Uzbeks, Chechens, and others, have not nearly been as respectful of local custom and they are not nearly as welcome. So again, the more you learn about the complexity of the situation, they more you learn about angles and advantages that you can exploit.  

But ultimately, there is nothing that precludes success here. Someone talked earlier, I think it was Jan talking about – you know, we talk about the Pashtuns and they’re divided by what some would suggest is the artificial line of the – (inaudible) – line. I can only tell you it doesn’t seem artificial when I talk to our Afghan friends or our Pakistani friends. Okay. That seems to be quite a significant line that they’ve drawn there and that simply makes it more complex because the local identity doesn’t view that line in the same way that mapmakers in Kabul, in Islamabad, or in Washington might view it.  

MR. KEMPE: General Hayden, let me ask you a last question as we’re running out of time. What’s the most important single thing that you’ve learned in this job that you would want to pass on to your successor or, should you not have a successor, pass on to yourself? (Laughter.) And maybe part of that could be you fixed a lot in a lot of places, you fixed a lot at the NSA when you were there and it came out a better place, I think people are saying that about you very clearly of the CIA as well. What’s the one thing you weren’t able to fix that you would say should be fixed in the next administration?  

Two, I actually believe that the wealth the American taxpayers have given us, the guidance we’ve gotten from our political leadership in the White House and the Congress has created a pretty good organization. I don’t mean just CIA; I mean the entire intelligence community. And one of the things we’re flogged at about fairly routinely is sharing of information. And so I’ve taken a little parlor game when I get that kind of homily from people. I say, okay, I got it, we have to share information better. Now, help me with this, fill in the blank, finish this sentence for me, you guys don’t share information well enough, you should be more like the – (laughter). And there is no – there is no name, no country that fits that blank and makes that statement true. Okay.  

So my point is, if we were marking on the curve, I’d really feel good about life. But life doesn’t mark us on the curve. Life marks us on an absolute scale, particularly for an intelligence community.  

With all that in mind, I would pass on to those coming in that this community has been inspected, investigated, reviewed, and commissioned to death for the last six or seven years. The metaphor I use is they wonder how we’re going, so they come in, grab us, pull us up by the roots, say, well, not growing fast enough, and put us back down – (laughter) – with the effect that would be obvious.  

I would say this: the structure that we currently have is fine. It’s good enough. Good people can make it work. All right. Is it perfect? Oh god no, nothing’s perfect. But this can work. So I would simply offer the advice, pick people to head these structures who are – who have the competence to govern complex organizations and who have the confidence of the political leadership and then just let them go and go do things. Modifications, change in the size of the staff here, little change in responsibilities there, fine. But another major look, another major restructuring I think would be catastrophic for the community. So if you’re asking the one piece of advice: pick good people to lead this, people you trust, people you think have the talent to do it, give them their mission and let them work, broadly speaking, within the current structure.  

MR. KEMPE: And don’t pull up the roots just when – (inaudible).  

MR. KEMPE: Before I thank you, General Hayden, I just want to thank a couple of other people. First of all, I do want to thank General Punaro, who’s a member of our board and also SAIC for supporting our work on global intelligence, where we’re really trying to understand what’s going on across the Atlantic and also help understanding where we can. And I think you’ve really helped us tonight, General Hayden.  

The second thing is I’d like to thank General Scowcroft. Truly, I want to tell my staff, I did not write his opening comments where he praised the Atlantic Council and our work. (Laughter.) But as our chairman of the International Advisory Board, it’s a great compliment coming from you. And thank you so much. Finally, I want to tip the hat to the vice-president of the Atlantic Council, Jim Townsend, and his action officer for this series, Magnus Nordenman , who really put all this together.  

And then finally, General Hayden, this was really a rich conversation. It was a wonderful presentation on your part. I think we’re all going home with a lot to digest and a lot of new insights. Thank you for taking the time.  

Related Experts: Magnus Nordenman