SEN. FRED THOMPSON (R-Tn): Thank you, Mr. Chairman. Good morning, Mr. Freeh. I want to ask you to give us a little bit better assessment, if you can, as to what we may be in for as a country, as far as terrorist activity is concerned. I know this necessarily must be imprecise, but in light of recent activities, we've been told that bin Laden, for example, has declared war upon us. And I've certainly got the indications that we have declared war on him. And we have -- and perhaps others like him.

Those are strong words. We've heard here today, how extensive his network is, his operations are, how many countries he may be in, some countries that may be on our terrorist nation list, and some that may not. That he has people here, in the United States.

It seems to me that it is important, if in fact that we are in for the long haul, and that we have this kind of problem, that we as a people assess as best we can, the seriousness of the problem. And if it is very serious, if we are going to be in, or expecting more of these kinds of attacks, both domestically and with regard to our embassies abroad, and our other targets abroad, we need to know that. And the American people need to get ready for that. And they need to be convinced that we need to do the
things necessary to confront that.

Is it being overblown? Or are we in fact going to be in for a succession of these things in the future, in your opinion?

MR. FREEH: I think we can predict, with some certainty, that we will see a reaction by bin Laden and his organization, with respect to the law enforcement, as well as the national security actions that the United States has taken. This is an organization of great resources, as I mentioned, active in many countries. It is a unique organization, in the sense that you have a multinational following. You have individuals literally all over the world, who are followers of bin Laden.

If you remember, one of the individuals who was charged and executed by the Saudis for the OPM Sangh (sp) bombing -- that was the bombing in November of 1995, four Americans were killed, in Saudi Arabia -- said that he was a follower of bin Laden.

We know that many, many people have been trained in the camps which he funds and supports, including Yousef, including many of the other individuals that we are concerned about.

So, I think there should be no illusions about the fact that when bin Laden, going back to August 22nd of 1996, repeated in May of 1997, in a CNN interview, in February 23rd of this year, and as recently as May of this year, declares war on Americans, and issues a fatwah to kill American
civilians anywhere they may be found, is about as serious and imminent a threat as I can imagine. So I think that --

SEN. THOMPSON: So we talk in terms of his retaliating, but the fact of the matter is, he was apparently planning on a series of activities against us, whether or not we did anything.

MR. FREEH: That's right. Had we taken no action at all in this case, we would still be subject to his targeting.

SEN. THOMPSON: But you do think that there will be a retaliation, specifically from our latest activities in Afghanistan and Sudan.

MR. FREEH: I think we can expect that.

SEN. THOMPSON: Just from his organization alone you're talking about, and of course he's only one organization.

MR. FREEH: Yes.

SEN. THOMPSON: So, on a little broader scale, can you give us a better sense of your estimate over the next few years, in terms of the level of activity? We've had, from time to time, terrorist activities for some time now. Can we expect an increased level of activity, do you think? Is there
any reason to believe there might be?

MR. FREEH: There is reason to believe that the increased activity, in terms of larger targets, with more fatalities being the objective of those attacks, is clearly the pattern that we've been seeing for the last couple of years, with respect to this organization, and several others that are aligned with him. He has very strong alliances with the two major terrorist organizations in Egypt, for instance; with other terrorist organizations --

SEN. THOMPSON: Is there any indication of any alliances with, or dealings with, communications with, any of these terrorist nations that you described?

MR. FREEH: There are some indications of that, but I would prefer to do that in an executive session.

SEN. THOMPSON: All right, sir. Well, I appreciate that. I think that we need to further explore that, because it certainly seems to me that we're in for something that we're not ready for, as a people. We don't fully understand the nature of the threat, and that needs to be gone into.

One other group: the extent to which front groups present a problem. You mentioned the fact that there are front groups here, or terrorist groups here, that are operating, I assume mostly as front groups. I know in the '96 Terrorist Act, we attempted to do some things as far as their fundraising activities are concerned, that the Secretary of State would provide a list that would not allow them to raise money and send it abroad.

Of course, by the fact that they're front groups, it indicates that there's some at least ostensible,  legitimate activity going on. To what extent are these groups a problem? What special difficulties do you have in encountering them, and have we seen any indication of the Terrorist Act of '96 having any effect on that?

MR. FREEH: The Act has resulted in 30 of these groups being declared, under the statute, terrorist organizations. In some cases, including the one I mentioned in my opening statement, we have seized monies and moved to criminally charge people involved in material support of these designated
organizations.

A lot of the affiliated members and groups in the United States, do not engage in violent criminal activity, or even planned activity. A lot of the activity here has to do with fundraising, infrastructure building, even acquisition of technology issues.

A lot of the groups that we've identified, are not actively planning, nor do they have plans, we think, to attack American targets. But the Act is a very --

SEN. THOMPSON: They just raise money for those who do attack American targets.

MR. FREEH: Sure. The Act has given the government the ability to seize some resources. But again, they don't keep their resources where they're easily found, and they move them very quickly. So, it's one of many things that are necessary.

SEN. THOMPSON: Thank you.

SEN. KYL (?): Thank you. And I know that that is the subject of some of the chairman's questions that he wanted to submit for the record, and I had a couple, too, some of which may have be answered in a classified way.

Senator Biden.

SEN. JOSEPH BIDEN (D-Dl): Thank you. Welcome, Judge, Director Louie. Isn't it amazing what a difference a year makes? I'm glad to see that this proves in this town, if you hang around long enough, they'll figure out how good you are. And congratulations. People have finally figured out what a
good job you're doing. I remember a year and a half ago, it wasn't quite the same position. So, just keep your head down, and keep doing what you're doing. You're doing a hell of a job. This town's amazing.

At any rate. And I'd make another point here. I think we should clarify, and again, you tell me if I'm wrong. We should stop talking about "retaliation," and talk about continuation. These plans that bin Laden had laid out, many of which you've intercepted, some of which have been thwarted, were plans that were sitting there on the table before the President of the United States ordered a strike. They're there. We thought they were going to occur, some did occur. We assume they are going to continue.

And so, I really think it's a very important point to make to the American people: this is about continuation, not retaliation. Because if we let it slip into this notion of retaliation, it implies that if we do not respond, then they'll stop. And that is -- is there any evidence to suggest, that had we not retaliated -- us retaliate -- in Afghanistan, or anywhere else in the world, that bin Laden would have said "You know, they didn't get mad at me for blowing up those two embassies, so I'm now stopping."?

MR. FREEH: No. The evidence is to the contrary. In his interview on May 26th of this year, which was from his headquarters in Kost (sp), which was one of the areas targeted, he said that the jihad against the Americans, which was the result of the fatwah which he had signed in February with leaders of two other organizations, quote, "would be known in the next few weeks."

So this is, as you point out --

SEN. BIDEN: With all due respect, and you don't need advice from me, but I hope you and everyone else, drops the word "they're going to retaliate against us," and talks about a continuation of their stated goal. Because when you say anything else, you get Americans walking up to each of us in our cities, saying, "well, are you sure? I mean, should we really do that?" I want to say it again: this is a continuation.

If and when another attack occurs, and as sure as I'm sitting here, there will be another one,  somewhere, somehow. Terrorism all of a sudden isn't going to be evaporated from the word. It will not be because of what we, quote, "did." It will be because it is part of the long-term strategy and agenda of bin Laden, as well as others, who we should talk about in another context.

My time is going to run out quickly. I met yesterday, and my staff a couple of hours, with State Department people. We in the Foreign Relations Committee, Senator Helms and I, are about to hold hearings on embassy security, what do you need, what do the embassies need. You make a major
impact on that. Your recommendations impact on that. The Inman Report is being looked at again. And as the Admiral indicated, it should be looked at again, to see what needs to be done.

And so, we're going to hopefully have a serious supplemental - - an emergency supplemental here, to deal with that problem. I would respectfully suggest, that while everyone is aware of and knows the job you're doing, now's the time to ask for what you want. Ask now. Ask now.

Just as this town has an incredible memory, this place has very short memory. And we get diverted very quickly. And I want to go to the '96 Terrorist Act, which I'm the author of. You gave me advice on how to write it, and they kicked out -- a lot of our colleagues decided a lot of the things you thought you needed, were not relevant.

For example, we added a number of additional crimes that fall within Title 18, as federal crimes, relating to wrecking of trains, terrorist acts abroad, terrorist acts transcending boundaries. And we said for the first time, these are now federal law. But because some of my friends were so caught up in the Minutemen and the -- remember, this was in the context of those wackos in Montana, who were out there, whatever their names were they called themselves, and all this Minutemen and militiamen malarkey -- we had all of a sudden, this crescendo coming from the right, saying, "No, no, no, we can't go that far."

Now, the very crimes we made federal laws, you don't have the authority to use wiretap on. We made them a federal crime. But what everybody forgets, except the people on this committee, is there's two
requirements for you to get a wiretap: you have to have probable cause. But beyond that, whatever the crime, has to be listed in the federal code, and then it also has to be listed in the wiretap section of the federal code.

Now, you don't have time, and I don't have time to ask you to answer the question now. But I'd like, for the record, for you to go back and say whether or not we should reinstate many of those provisions that were dropped in the '96 law.

And the last thing I'd like to ask you to do, for the record, or, if you have time today, is to tell us whether or not the question asked by Senator Feinstein, warrants our attention. I would very much like, with the permission of the chairman, a legal memorandum from the FBI, stating whether or not the prohibition against assassination of heads of state applies to organized crime units, and/or
terrorist units, that are not, in any way, elected by, part of, or contingent upon a state connection.

And I'd like a legal judgment. Now, maybe you will now have to ask the Justice Department for that. But to the extent that you can do that, I would find that personally very helpful.

Let me close by saying I think there's a lot of hope here. I just got back from an eight-day trip, and long meetings with Mubarak, meetings with Arafat, meetings with Bibi Netanyahu, meeting with Arafat's security people and so on.They're starting to figure it out. Bin Laden -- bin Laden for example is a greater threat to Arafat's life than he probably is to the president of the United States.
Bin Laden is a greater threat to Mubarak's life than he probably is to Bibi Netanyahu's. These
guys are starting to figure it out. They're starting to get it right. I'm going to make a prediction here. You're going to get a whole hell of a lot more cooperation from quarters -- and you're already getting some -- from quarters that we would in the past assume to be hostile to our interests, because they figured out -- they figured out -- whether it's the Hashemite Kingdom or the House of Saud or the
president of Egypt or the head of the PLO -- that they are on their targets. Hamas for example would just be happy to get rid of Arafat as it would be to get rid of somebody in the Israeli government.

And so I think you're going to find more cooperation. I found some hope -- not because they're good guys -- not because all of a sudden they've seen the Lord -- but because they've seen the light, and the light is they're at the other end of that night scope too. And so I hope the progress you've been
making -- it will be continued. You're doing a heck of a job -- they talk about you, by the way
-- I'm serious -- about the good job you're doing -- over there, not just here.

MR. FREEH: Thanks, senator.

SEN. KYL: Thank you. And if I could just follow up I think two of the suggestions or comments that Senator Biden made here are very, very important. First his request that you revisit the question of what ought to be put back into future legislation with respect to authority or tools that the FBI needs. I think that's a very good suggestion. And, secondly, our Subcommittee on Technology and Terrorism had a hearing -- I believe it was February 26th -- in which the fatwah was first -- of Osama bin Laden -- was first made public. And I think it's an excellent point, that we've had their threats out there for a long time, and it's -- it may be retaliation in one sense, but in another sense it's the continuation of a war, and I think that's a point that needs to be made over and over.

MR. FREEH: That's a very good point.

SEN. KYL: Senator Specter.

SEN. SPECTER: Thank you, Mr. Chairman. Director Freeh, I would like to pursue the question about terrorist problems with chemical and biological warfare within the territory of the United States. On Tuesday of this week the Veterans Affairs Committee released a staff report which showed the
inadequacy of the Department of Defense in protecting military personnel, focusing first on the Gulf War, on Kamisseyih (sp) in March of 1991, where a nerve gas was disseminated -- tough questions as to what has caused Gulf War Illness. But that report gets into a long list of chemical and biological agents which are deadly. That report makes the book, "The Cobra Event" look like small potatoes. I
was surprised to find out that a number of these deadly substances is classified -- can't even talk about how many there are. And the number where we have a response, an antidote or a serum, is also classified. An even smaller number of the serums have been approved by the FDA, so that what we really have is not only Department of Defense which is unguarded, but an America which is unguarded.

A reference was made earlier to anthrax, and there is an inoculation program being undertaken by the Department of Defense, except that there is only one source of supply for anthrax, a Michigan outfit, and that plant has now shut down -- won't reopen until 1999. And the number of inoculations needed are six per person. And the president earlier this year said that there ought to be a source of supply of anthrax for the civilian population, which is a subject that ought to be addressed by perhaps the
Department of Health and Human Services. And the question is: What is the risk internally to the United States, our population, for chemical and biological attacks, and what level of preparedness do we have on such attacks?

MR. FREEH: Senator, I think it's probably accurate to say that the possibility or the probability of such an attack in the United States is fairly low right now, but the impact of any such attack, even a small attack -- we had the anthrax incident in Las Vegas, we had one here in Washington -- the impact of one small incident is so grave, and the loss of life could be so extreme that it's an odd juxtaposition of a low probability with a very devastating impact. And so I think we have to look at the problem as one that is probably more imminently within our experience than otherwise. The --

SEN. SPECTER: Director Freeh, are you saying that there is no evidence known to the FBI of any plans for a chemical or a biological attack on the civilian population of the United States?

MR. FREEH: Yes. We have incidents -- the ones that I've discussed. We've also had cases with individuals who are making and trying to use ricin for instance. We had a prosecution recently in the Midwest with respect to that. But with respect to any plan or operational indication that somebody is going to carry out such an attack in the United States, we do not have that.

SEN. SPECTER: Director --

MR. FREEH: That does not mean -- excuse me -- that it is something that doesn't deserve, as it does deserve our most immediate attention.

SEN. SPECTER: The issue of retaliation is always one in the forefront of our minds when we take a look at the bombing of the German discotheque by the Libyans and our going after the Libyans in 1986, and then Pan Am 103. What do you assess the risk factor of retaliation from our missile attacks on Afghanistan and the Sudan?

MR. FREEH: Well, again, with respect to bin Laden, his plan and his experience and his capability against Americans, has been ongoing and intensifying since early 1996. So I think his plans and his targeting is probably unaffected by the reaction on August 20th. But certainly --

SEN. SPECTER: You think whatever he was going to do was bad and he's going to do it anyway?

MR. FREEH: Well, by his own pronouncements, killing Americans everywhere did not certainly at that time have anything to do with anything we were doing. So I think his plan is probably clear.

SEN. SPECTER: Well, I would think we would be well advised to prepare for an acceleration of whatever plans he has. My yellow light is on. I want to pick up on what Senator Durbin said about Khobar Towers. And I believe it is infuriating that we have 5,000 men and women in tent city in the
middle of the desert protecting the Saudis, and what we have done to defend the Saudis, and their refusal to let us question the suspects they have in custody over Khobar Towers. Now, this is a subject you and I have discussed on many occasions,and I compliment you for the work that you have done in going to Saudi Arabia, and your efforts with Saudis. And we know the history that just less than a month prior to the June 25th attack on Khobar Towers the Saudis executed four individuals who were involved in a car bombing I believe in Riyadh the previous November. And the FBI couldn't question those suspects either. And I'm interested to hear you talk today about Saudi cooperation on some other matters. And I know it is very, very difficult, but I think the situation is ntolerable.

I think you've done an outstanding job, as I've said publicly on many occasions in the past, but I don't know quite the level of disagreement with the Saudis this morning about Khobar Towers. And I think we have to find a way to get more from the Saudis, or find a way to become independent of their oil and take out our troops and let them defend themselves, which wouldn't last very long. And I appreciate the fact that that's not a viable alternative today, but in some way we have to turn up the heat and have the FBI ask those questions and make a determination as to whether Iran is involved and what the unpleasant consequences may be, so that we can figure out what to do.

MR. FREEH: We are dedicated -- I am personally committed to doing that. I had -- as you know, because we spoke about it -- I had the families of the 19 slain airmen down actually to the FBI Academy for two days we spent with them. And their question, which is a very simple but very
powerful question, is: What are you going to do, and when are you going to solve this case and bring the people to justice or at least charge the people who are involved? I could not be more committed to doing that. You yourself have talked to the highest representatives of the government. Many of the senators have done that. I want to keep those lines of communication open, but I also, as I have in my meetings and my letters and other meetings we are going to have later this month with some Saudi officials, repeat our requests, and we will persist in our requests. We will not be satisfied until we get that information.

SEN. SPECTER: Thank you very much. Thank you, Mr. Chairman.

SEN. KYL: Senator Specter, I want to commend both you and Senator Durbin for bringing this  matter up at the hearing. I've spoken with the director about it. And I think another thing we could do to be helpful on this frankly is to communicate our strong sense of commitment to this to the president, vice president, secretary of state, all of the other key administration officials. Obviously we can't expect the FBI itself to do this when there are key administration officials who are also involved in dealing with the Saudi government in a variety of different ways, and maybe our strong expression to the administration of a willingness to cooperate and help to pursue that would be another thing we could do. And you've taken leadership in that -- perhaps that's something else you'd want to pursue.

May I ask one more question, Director Freeh, Senator Feinstein asked me ask you? The FBI needs some $85 million to build and fund a technological support center that you discussed before. It is her understanding that this will not be in the administration's supplemental funding request. First of all,
is that true? And, secondly, if so, will it be in next year's budget, fiscal year '99 budget request, to your knowledge?

MR. FREEH: Senator, it is not in the supplemental, as I understand it. It is included in our 2000 request. And, as I mentioned, we have identified some funding to do the architectural and engineering work which will be done in the next year out of already available funds. But we are under our own urgency to get this done.

SEN. KYL: All right, thank you very much. Do any of the senators have any other questions of Director Freeh? Yes, Senator Sessions?

SEN. SESSIONS: Did you understand that bin Laden was supposed to be at the Afghanistan camp when the missile attack occurred? I've not heard that stated publicly.

MR. FREEH: I'd be happy to discuss that with you, if we could, in a -- maybe right the hearing if you have a moment. Thank you.

SEN. KYL: Thank you. If there are no other questions of Director Freeh, let me just say that I think it was important this morning for you to appear publicly to describe to the American people the latest
information that you can discuss with respect to the embassy bombings in Africa, what the FBI has done in that regard, and importantly to paint the picture that you have about this ongoing threat of terrorism, the sophistication of the terrorists, the amount of money they have available, their use of technology like encryption, the fact that they're working on the most deadly kinds of weapons of mass destruction, and that in fact their emphasis seems to have changed to killing many more people in the incidents of terrorism that they seek to sponsor. It's important that this base be established and
the discussion of the kind of strategy that the Congress and the administration need to pursue. And since that's the subject of our next panel, I think it's a good lead-in. But I want to personally thank you, Director Freeh, for providing that information to us. And, again, you will have the continuing cooperation of this entire committee, I know, in the requests that you make to help us in fighting terrorism. Thank you.

MR. FREEH: Thank you, Mr. Chairman. And both to you and Senator Feinstein for having a hearing. We appreciate it very much.

SEN. KYL: Thank you.

END.