That should not be a reason, could not be a reason to discourage aggressive action by the United States, whether in the law enforcement category or some other capacity. But we should be under no illusions that these successes, even the ones recently cited, clearly, in our view, will result in reaction and reprisal. And we need to be prepared to deal with that as a country and as a government.

     With respect to the Anti-Terrorism and Effective Death Penalty Act of 1996, Section 302  authorizes the secretary of state, as you know, to designate organizations as terrorist organizations. That gives us some powers and authority, together with the Department of the Treasury, to identify and seize assets of terrorist organizations within the United States.

     In a recent case, in July of 1998, we arrested an individual in Michigan and we seized, together with the Customs Service, $124,000 in sensitive night-vision and navigational devices. The individual was charged with material support to a foreign terrorist organization and the export of materials under the munitions control list.

     With respect to renditions, renditions is probably, from a law enforcement point of view, the most powerful weapon that we have to pursue our jurisdiction. Since 1993 -- I'm sorry, since 1987 we have done a total of 15 renditions from a variety of countries; individuals who were brought back to the United States to be charged. Since 1993 we've done 12 of those renditions. The other three were in the period between 1987 and 1991. So there's been a tremendous increase in the number of renditions. That has become a focal point of our policy.

     When I was in East Africa two weeks ago, I negotiated with the government there to return from Kenya the two individuals who were charged in the complaint in New York City. I believe that part of our success in getting custody of these individuals is based on a long record of successful renditions where the rights of the individuals involved, as well as the sovereignty of the countries, were respected. And we discussed that in our conversations in Nairobi.

     But this is an extremely effective weapon. Some of these renditions relate to cases that are 10, 15, 17 years old in one case. And it's critical that people who engage in acts of terrorism against the United States remember that at no time and no place will they be safe from our process, our process which is very powerful but also constrained by the limits of our constitutional system.

     The individuals who we interviewed in Nairobi, and in one case who made substantial admissions to us, were done strictly according to our criminal procedure. We gave them Miranda rights. We gave them all of the rights and opportunities that a subject would have here in the United States.

     And it is very important that, from a law enforcement point of view, as we carry out our obligations, we strictly adhere to the rule of law. I think that gives us a credibility and the support that we will need from other countries to ask, which are in many cases difficult political acts for these governments in terms of renditing individuals who need to be brought back to the United States.

     One other aspect I want to just highlight briefly is the establishment of the Counter-Terrorism Center at the FBI which was funded by the Congress and which is now operational. We have in that center representatives not only from 18 other federal agencies, including the intelligence community, but we have the ability, for the first time, to centralize in one analytical place, a lot of the raw information that comes in, not just from around the country, but from our intelligence services, so we can plan and analyze and prepare for potential acts of terrorism, as well as to react swiftly when those occur. And that center is working very well.

     The interagency cooperation, I couldn't say more about that. You alluded to it in your opening remarks, Mr. Chairman, but the cooperation that we have received from the other law enforcement agencies, and particularly from the intelligence community, has really been exemplary. We would not have been able to operate successfully, with respect to this particular case, without the assistance of the intelligence community, particularly the CIA.

     The symmetry and the cooperation between the Bureau and the CIA in the counterterrorism area, as well as in other areas, but particularly in this area, is really at its height. And I can't think of a better partnership, in terms of discharging our mutual responsibilities. A lot of that has to do with the exchange of high- ranking FBI and CIA officers at our respective headquarters, the relationships that have developed between our legates and chiefs of station overseas.

     This is a relationship which protects the country, and saves lives. And I just want to publicly thank Mr. Tenet and the CIA for their assistance.

     The State Department also, particularly the diplomatic security service, has been outstandingly supportive. And again, a lot of the criminal case which has developed successfully, at a very quick pace, is responsible to their association.

     With respect to threat warnings, we have greatly increased, in a very comprehensive way, the ability to threat warnings, not just to the law enforcement community, but to the state and local governments around the country. To American corporations; we have a system now where, within minutes, we can communicate with thousands of U.S. corporations, to bring them up to date with respect to specific threats. And the on-line ability to communicate with our state and local partners, to put out threat warnings in a rapid fashion has increased, and is serving the country very well.

     Legates, again, Senator Leahy, you mentioned that, and I appreciate your attention to that. We are in desperate need of our legate situation overseas, to perform our counterterrorism responsibilities. We have a total of 144 FBI personnel overseas. That's in 32 different countries -- a very small percentage of the 28,000 FBI employees. But this deployment is critical to us, particularly in the area of counterterrorism, the East African bombings being the perfect example of that.

     Within several hours after the bombing, our legate from South Africa was on the scene in Nairobi, and our legate from Cairo was on the scene in Tanzania, organizing the crime scene. In the case of Tanzania, the legate got the Tanzanian army to create an outer perimeter to protect the crime scene. Those two offices, both in South Africa and Cairo, are new offices. They've only been open for about a year and a half each. And to deploy people from Rome or other places would have taken us hours. We would have lost precious time and opportunities. So the legate program as we have established it, is working well, but we're also dependent upon it for a successful counterterrorism mission.

      We have approximately 32 legates now. We've asked, in our 1998 -- I'm sorry -- in the 1998 and 1999 budgets -- for several additional offices, 20 more agents overseas in some key places where we know some of these groups that I alluded to before are active, and are planning operations against the
United States. But that program has worked very well.

     With respect to future needs, we certainly continue to enjoy the support that we've received on our counterterrorism programs. We are very concerned, still, as this committee is, about the encryption situation, particularly as it relates to fighting crime and fighting terrorism. Not just bin Laden, but many other people who work against us in the area of terrorism, are becoming sophisticated enough to equip themselves with encryption devices.

     We believe that an unrestricted proliferation of products without any kind of court access and law enforcement access, will harm us, and make the fight against terrorism much more difficult. So we appreciate the attention and support of this committee, particularly some of the members who have worked very, very hard to focus attention on this area, so we don't disturb the leadership of American technology in this area, but we also make sure that we have an ability to protect people in the technology that grows every day.

     In the area of weapons of mass destruction, we have increased our ability to deal with those issues, both by equipment, by training, by resources that are dedicated to that, both in our laboratory, as well as operational units, both at FBI headquarters and in the field.

     If you take Yousef statement with respect to the Trade Tower, you look at the Tokyo subway incident, and you look at some of the statements that even bin Laden has made, with respect to chemical and biological weapons, this is a new feature, with respect to terrorism, that gives us immense concern, and an immediate need to continue to prepare for attacks in this area, both in terms of prevention, but also in terms of our ability to react to them swiftly and to have the capability as a government, not just as a law enforcement agency, to prepare for that.

     We're in the process now of a training protocol, which will reach approximately 120 cities over the next year and a half, to train their first responders, police and fire, to deal with this issue. But from a law enforcement point of view, and from a counterterrorism point of view, this is an area of great concern. We've seen the use here in the United States of risine (sp), of easy ability to fabricate sarin. The threats with respect to anthrax, most of which have been false alarms, are necessarily critical for us to prepare for, and to have the ability to deal with, both from prevention and reaction.

     I alluded briefly to the Joint Terrorism Task Forces. We have 16 of them now around the United States. We've asked for a few more in the 1999 budget. These are very critical operational task forces. They include, not just FBI agents, many other federal agents, and, always, state and local police officers and detectives. They give us an ability that we could never enjoy as an agency operating alone.

     I wanted to say just a few words about the East African bombings. I'm limited, of course, because the case has now moved to a criminal prosecution. There are two individuals, as you know, who have been charged in separate complaints in the Southern District of New York, and I have to be very circumspect in what I can say, with respect to the case.

     It is a very fast-moving and very wide-ranging investigation. There were a total of 471 FBI personnel, between the two crime scenes in East Africa, at the height of the deployment. There were, both in those countries, and in the countries which have become relevant to that investigation, both in terms of support, leads and investigation, 13 other countries who have assisted us in that endeavor.

     We are working very hard, with some initial success, in identifying the individuals responsible for that. We have a lot of work to do. We've completed most of the forensic examinations at the two crime scenes. There is still much to do, both with respect to the individuals who have been charged, and any other individuals who may become part of that prosecution.

     Having gone to those crime scenes, and spent time, not just with my own investigators, but the police officers from Kenya and Tanzania, speaking to the government officials in both places, it is absolutely critical that we enjoy the support and the confidence of the countries where these crimes occur. This was a crime both against Americans and against Kenyans and the people of Tanzania who were victimized even to a greater extent than the United States.

     We need very much the support and cooperation of our law enforcement colleagues around the world do to do these cases. We could not operate, we couldn't even get off the plane in those places without the support and cooperation of the police forces. And as I said last week and I expressed it to the highest levels of the governments of both countries, their cooperation was just outstanding. I can't think of a more exemplary time in dealing with foreign countries where we're had the cooperation that we've enjoyed and continue to enjoy there. And that's very, very important for us in order to persevere.

     Again, I want to thank the committee for its attention to these matters, always its support, and I'd be happy to try to answer some of your questions.

     SEN. HATCH: Well, thank you, Mr. Director.

     We -- I have to -- I have a meeting with the majority leader, so I'm going to turn the committee over to our chairman of the Subcommittee on Terrorism. Just a couple of real quick questions and then I'll turn it over to him for his questions. We'll have five- minute question periods.

     Without compromising classified information, can you give people in America approximately how many known terrorists and terrorist organizations we have within our country?

     MR. FREEH: I think if you --

     SEN. HATCH: Or would you rather not say?

     MR. FREEH: If you define the organization broadly, I think, you know, you would be certainly in the category of 20 to 25 major organizations --

     SEN. HATCH: What about --

     MR. FREEH: -- and many other loosely affiliated groups.

     SEN. HATCH: What about known terrorists?

     MR. FREEH: You know, we have --

     SEN. HATCH: (Inaudible.)

     MR. FREEH: -- as you know, active investigations on many individuals in the United States who are suspected of active terrorism or being agents of foreign powers or organizations who perform acts of terrorism. It's a very vital part and an active part of our counterterrorism --

     SEN. HATCH: It's a significant number, though, is my point.

     MR. FREEH: Yes.

     SEN. HATCH: And then one last question. How many -- as I understand it, Osama bin Laden has some members of his organization even in this country, as well as many, many other countries.

     MR. FREEH: We've identified people in the United States or people who have transited the United States who are associated with him.

     SEN. HATCH: And he's also setting up terrorist cells and terrorist organizations and financing terrorist organizations and activities in -- can you give us a roundabout ballpark figure of how many countries?

     MR. FREEH: He is active, through his followers, in various different dimensions in several dozen countries.

     SEN. HATCH: Well, I have a lot of other questions but I'm going to count on -- if I can turn it over to Senator Kyl at this point. And the list that I have is Senator Kyl -- on the Republican side, Senator Kyl, Sessions, Thompson, Abraham, DeWine and Specter, and on the Democrat side, Leahy, Feinstein, Durbin and Biden, in that order, to call on.

     And I just want to personally thank you for the effort you've made, especially in these recent matters, but in a lot of unknown private matters that I personally know about, where you've protected American citizens not only domestically but abroad. And the FBI doesn't get nearly the credit it deserves, naturally, because you can't talk about a lot of these things. But I want to certainly compliment you for what you've done and the leadership you've provided.

     And I also want to thank Mr. Woolsey and Dr. Kirkpatrick as well for the efforts they make in these efforts and for being here today as well.

     So I'll turn this over to --

     SEN. : (Inaudible) -- questions in the record --

     SEN. HATCH: Yeah, I'll put my questions, the rest of my questions --

     SEN. : Thank you, Mr. Chairman.

     SEN. LEAHY: Thank you, Mr. Chairman.

     I -- Director Freeh, you stated in your testimony that disrupting the ability of terrorist organizations to fund their destructive activities is a critical tool for law enforcement. And of course, we all agree with that.

     I've introduced some money-laundering legislation, S. 2011, with the department's support, to facilitate the seizure of criminal assets. Just if I could lay out for members here what it does, it would allow immediate seizure of assets of persons arrested broad. It would improve access to records and bank secrecy jurisdictions. It would add crimes committed abroad, such as crimes of violence, bribery of foreign officials, smuggling weapons, to the list of money- laundering predicates. It would ease admissibility of foreign business records. And it would provide for fugitive disentitlement, so that criminals fleeing US prosecution would be unable to use American courts to fight seizure of their criminal assets.

     Would these kind of provisions be useful on crippling either a bin Laden organization or similar terrorist groups?

     MR. FREEH: Yes, sir. They'd be very instrumental.

     SEN. LEAHY: Is this one of the big problems we have, being able to get their money?

     MR. FREEH: It's one of the biggest problems we have. And, of course, they don't usually keep the money in their own name or keep it in one place for any period of time. So those are additional tools and resources that would be very relevant to these particular types of transactions.

     SEN. LEAHY: I think that one of the things that prompted me on it is the awareness of how easy it is to buy any kind of weapons, major weapons, explosives and so on, if you have the money, and also the ease to be able to store things or to even train -- set up training facilities again if you've got the funding.

     You've referred to encryption, and you and I have had a number of discussions on encryption, probably have more. But at a hearing earlier this year before the Subcommittee on Technology, Terrorism and Government Information, a former colleague of ours, Senator Sam Nunn, talked about the need for breaking the deadlock on encryption, which he says is, quote, "absolutely essential for infrastructure protection as well as for any kind of commercial activities which are beginning to emerge in the world of the Internet."

     He also said, quote, "I do not think that we can limit the power of encryption successfully over the long term. That's like trying to limit technology. I do not think it can be done."

     Do you disagree with Senator Nunn and think instead the FBI's efforts to limit strong encryption without key recovery mechanisms can be done?

     MR. FREEH: You know, I agree with him, and we've never really tried to limit strong encryption. In fact, we advocate the strongest American-made encryption that's possible. Our only interest in the technology is having the ability, with a court order in our hand, to get access to plain text at some point that doesn't affect the level, the strength or the robustness of the encryption.

     So we are strong proponents of encryption. In fact it, has a great public safety interest in it that we support.

     SEN. LEAHY: My concern, though, on encryption, we still cannot seem to get either laws or the policies together in this country. We have those who are involved with encryption, software companies, people who use it for corporate means and moving material back and forth, whether it's financial material or designs or anything else, back and forth across the world, and law enforcement, and the administration and export controls and everything, everybody seems to be going at different purposes. I've hosted so many matters I've lost count, between law enforcement and everybody else.

     I also think about how we put together the Leahy-Edwards law on digital telephony, the wiretap law. We did that when we finally brought everybody together.

     I would just urge again that we try to find some way to do that in encryption, or we're going to find that it's going to be a moot point because all the encryption will be done by the Europeans or the Asians.

     Senator Nunn recommended a council of high technology people, an advisory committee to the law enforcement community, if for no other reason so they could start communicating with each other. I don't know, maybe such a counsel might be helpful. Do you have any feelings?

     MR. FREEH: It would be very helpful. And we talked about this recently. Senator Kyl and Senator Feinstein had seven of the major CEOs with respect to the industry, and we talked about a technical support center, the contribution of their corporate resources to efforts which would begin to solve some of these problems. So we have some things that I think are moving in the right direction. I do agree with you we do have to act on this fairly quickly, and we have to protect our commercial interests because our economic security is important. But just as important is our national public safety, which is the law enforcement part of this, and you know it's not in my view something that can't be done. It's just going to require as it has a lot more hard work.

     SEN. LEAHY: And, lastly, you and I talked about he legates abroad and how we use them in both the Tanzania and the Kenya bombings. Did we find in this exercise that there were problems or things that we could improve or things we should be doing differently?

     MR. FREEH: Our communications systems really need to be improved. When I was in Nairobi to talk to my special agent in charge in Dar es Salaam I had to call back through Washington. We couldn't get direct lines there. That's one of the many logistical problems. Part of the other infrastructure is just our ability to get the funding required to put agents in a particular place.

     We have now, as you know, agents in places like Riyadh and Cairo, Tel Aviv, Islamabad. We didn't have them there a few years ago. That has given us a tremendous capability, and we want to preserve that.

     SEN. LEAHY: Thank you. Thank you, Mr. Chairman.

     SEN. KYL: Thank you, Senator Leahy.

     SEN. LEAHY: Again, I applaud you for your work. You have done a great deal of work in putting these hearings together, and I applaud you.

     SEN. KYL: Well, thank you. And much of the legislation you talked about is legislation that you began some time ago. So this is a joint effort, and certainly a bipartisan effort.

     Director Freeh, there and several things that I'd like to get into, but first of all let me give you an opportunity, if you would like to avail yourself of it, to take a minute to indicate what efforts you have undertaken to at least ensure that any law enforcement capability that is necessary to bring to the tragedy of the SwissAir disaster last evening has been brought to bear. Is there anything you would like to comment on with respect to that?

     MR. FREEH: We have been in close contact this morning with our colleagues in the RCMP as well as the Canadian intelligence services. We have certainly some great interest in the passenger manifests which we are examining now, and the other aspects of the American part of this that need to be preserved -- the fuel mixtures -- a lot of things are being done at the airport to secure what could be evidence or information that is required to make decisions. We don't have any indication at this point what caused that tragedy. We are hopeful in the next couple of hours to be getting additional information from our colleagues in Canada.

     SEN. KYL: Thank you very much. I think it's at least reassuring that you have the people in place and can act quickly to at least preserve anything that needs to be preserved so that we can always know the cause of tragedies such as this. And obviously if there is something amiss to be able to take appropriate action.

     I think everyone has spoken appropriately of the good job that the FBI and associated agencies did in getting our agents and material to the two embassy bombing sites and working with local authorities to help crack those cases. My understanding from you is that it's the largest deployment of U.S. law enforcement in investigative history. At the same time, I know that there were a lot of logistical problems that arose. For example, Iunderstand that there were some weight restriction problems on some aircraft -- too much equipment to fly safely, apparently mechanical failures of two aircraft in the very first deployment, and some other delays.

     You have mentioned the great importance of having legates in the agent, in Egypt and South Africa. What other kinds of changes do you think we need to make, Congress working with the administration, with law enforcement, perhaps the Defense Department and others, to ensure that we learn lessons from this experience and next time the operations can go even more smoothly?

     MR. FREEH: We have learned a lot of things, senator. As, as you pointed out, there were some logistical problems, none of which were insurmountable -- and I don't think any of which resulted in the loss of evidence or certainly the loss of lives. But we did experience issues. Three of the four aircraft that took either the FBI crime scene personnel or the FES (sp) -- those are the rapid advance deployment teams -- three of the four aircraft had mechanical issues that had to be resolved. When we did get on the scene obviously communications issues -- these are our own problems -- and just the logistical movement of so many resources to support 471 people.