Excerpts from Testimony by Louis Freeh,
FBI Director, to the Senate Judiciary Committee

June 4, 1997

Today, I would like to talk about what the FBI is doing to prepare for the future, the next century, because perhaps unlike any time in our history, the nature of crime and terrorism is evolving at an unprecedented pace. New technology, new threats, new kinds of crime and a shrinking globe are continuously creating new issues. Because of this constantly changing environment, the FBI must anticipate, plan and prepare for the future to a degree and in ways never before imagined.

For example, not long ago, no one perceived that telephone systems could become untappable, that virtually unbreakable encryption would become commonplace, that people using powerful laptop computers in distant lands could steal in seconds sensational amounts of money, or that the marvels of the Internet could be used for evil against children.

International crime and terrorism have developed in nearly unimaginable ways. Complex frauds perpetrated here are controlled from Eastern Europe. Russian and Asian organized crime activity has become commonplace. New corridors have opened to continue the flood of drugs into America, and drug lords are now supported by the best technology money can buy.

Terrorism, both international and domestic, threatens us like never before. The country has for the first time suffered catastrophic attacks. In some parts of the world nuclear material floats across the black market to the highest bidder. We have arrested people here who possessed anthrax or ricen, an extraordinarily deadly chemical. Reliance on computers and other amazing technologies has inadvertently created vulnerabilities that can be exploited from anywhere in the world. Modern transportation and modern technology give terrorists abilities unheard of only a few years ago.

Yet the traditional crimes remain as well. Violent crimes and violent gangs have come to cities big and small. small police departments -- ill-equipped to deal with gangs like the Bloods and Crips -- must now do so. Children continue to fall prey to violent abductors or pedophiles who now come into homes over modems and telephone lines. Massive health care fraud and telemarketing schemes defraud those in our society who are often most vulnerable. Drugs continue to flood our streets, and hate crimes and other egregious civil rights violations continue to happen with alarming frequency.

The decisions about meeting current demands versus preparing for the future are not easy ones. Achieving the proper balance is more difficult than ever before. The explosion of new technologies and the globalization of crime have become realities. The need for the right investigative tools is immediate. The necessity for strong partnerships between local, state, federal and international law enforcement is more urgent. Information must flow unimpeded and coordination at all levels must be superb if we are to continue to make inroads against these increasingly complex crimes. These are among the issues the FBI is addressing.

The FBI has spent the last three years preparing for the transition into the next century -- but more needs to be done. I would like to briefly mention some of the initiatives underway that can be discussed in open session.

On the technology front, Congress in 1994 passed the Communications Assistance to Law Enforcement Act (CALEA) to preserve one of law enforcement's most valuable investigative techniques -- court-authorized wiretapping -- which was being lost to new technology. Since then, and amidst much public misunderstandings, the FBI has been working with the telephone companies to develop cost effective solutions. After literally hundreds of meetings, we are now certain solutions can be implemented. By enacting this law and providing the initial funding, Congress has addressed one of the most difficult, complex issues ever to confront law enforcement.

Encryption is an equally difficult issue. Law enforcement is in unanimous agreement that the widespread use of robust non-key recovery encryption ultimately will devastate our ability to fight crime and prevent terrorism. Uncrackable encryption will allow drug lords, terrorists, and even violent gangs to communicate with impunity. Other than some kind of key recovery system, there is no technical solution.

Several bills have recently been introduced in Congress that address certain aspects of the encryption issue. The legislative proposals introduced thus far would largely remove existing export controls on encryption and promote the widespread availability and use of any type of encryption, regardless of the impact on public safety and national security, and these proposals do not address the public safety issue associated with the availability and use of encryption within the United States. We are now at an historical crossroad on this issue. If public policy makers act wisely, the safety of all Americans will be enhanced for decades to come. But if narrow interests prevail, law enforcement will be unable to provide the level of protection that people in a democracy properly expect and deserve. I do not believe it is too late to deal effectively with this issue.

New and evolving computer and information technologies likewise present law enforcement with the imposing and significant challenge of protecting the nation's critical infrastructures and electronic networks fron criminal and terrorist computer attacks. Recognizing this trend for the future, the FBI has established the Computer Investigations and Infrastructure Threat Assessment Center (CITAC) to coordinate the criminal, counterterrorism and counterintelligence responsibilities of the FBI relating to computer intrusions and threats and analytical effort. Its creation allows the FBI to analytically cross disciplines and investigative programs, and to view cases from both law enforcement and counterintelligence perspectives. Through CITAC, the FBI will be better positioned to prevent and counteract threats to computers, information technologies, and components of critical national infrastructures. CITAC and the components under CITAC provide support for law enforcement at all levels and every Special Agent in Charge of an FBI field office has a working group of local officials identifying local critical infrastructure, vulnerabilities and planning and preparing for foreseeable contingencies.

Current needs

Finally, there are remaining issues important to the FBI and law enforcement that we look forward to working on with this committee. These items are critical for our continuing ability to address the most serious crimes and terrorism and to permit the FBI to have the capability to deal with current and future technology. Briefly, they are:

• Continued funding for CALEA: Congress authorized $500 million in 1994 to reimburse telephone companies for their direct costs associated with developing and retrofitting existing telephone equipment that will not support court authorized wiretaps, pen registers and trap and traces. Thus far, Congress has only partially funded CALEA. Because progress with the telephone companies has reached a critical stage and some are ready to move forward, it is essential we be permitted to obligate existing funding and receive future funding as envisioned in the 1994 law.
  
  
• The enactment of a balanced legislative solution to the encryption issue that addresses law enforcement's public safety needs is badly needed. I do not believe it is too late to do so. The bills introduced thus far fail to address law enforcement's needs. In my opinion, the enactment of these bills would have a serious negative impact on public safety and national security. Any solution that ignores the public safety and national security concerns risks grave harm to both.
  
  
• Multipoint electronic surveillance authority: Modern telephone technology has created issues never envisioned in 1968 when wiretapping was first authorized. We now see criminals who buy dozens of cellular telephones at once, discarding each after using it for only a short period of time. Prepaid calling cards and the use of clone cellular phones have become commonplace. These and other technologies make current surveillance methods obsolete. Congress partially addressed this issue in 1986 with the passage of the Electronics Communications Privacy Act. This proposal does not expand the scope of existing court-authorized wiretapping, rather it would harmonize the legal showing for wiretapping with that for "roving" oral intercepts.
  
  

In recent testimony, a copy of which has been provided to this committee, I laid out the initiatives underway and still needed to continue to effectively attack terrorism. More needs to be done if law enforcement is to keep pace with the technology certain to be used by terrorists and other criminals alike. Progressive, long term strategies need to be developed, authorized and ultimately funded to ensure that law enforcement at all levels remains effective in the next century and has available the tools and technologies necessary to get this job done.