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Senate Judiciary Hearing with Susan Yates and James Clapper Begins. Air 2:30-3p ET

Aired May 8, 2017 - 14:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[14:30:00] PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Right, because we know he received payments from Russia that went to his speakers bureau. The number isn't coming to me right now.

WOLF BLITZER, CNN ANCHOR: $45,000.

BROWN: $45,000 from Russia. He was paid, I believe, more than $600,000 from Turkey to his consulting firm. And he, according to congressmen who have looked at the disclosure forms, he did not disclose that information. When you're applying for a security clearance, the onus is on you to provide that information. So it does -- it is a little bit like comparing apples to oranges in terms of looking at his past security clearance. We don't know -- this was clearly after the security clearance --

(CROSSTALK)

BLITZER: He only registered, Jim -- and you're familiar with the rules -- as a foreign agent of Turkish elements after he was fired, as opposed to when he started receiving all that money.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Also the Defense Department doesn't have a record of him actually asking for permission to give this speech in Russia. You heard Sean Spicer say they let him go to Russia to give that speech. There's no record of him asking for permission in advance.

I would make this point. There's an essential conflict here because the White House is saying, we trusted the Obama administration on that security clearance and therefore we were fine to make him the national security adviser, but we didn't trust the president when he sat down in the Oval Office two days after the election and said you might have a problem with this man. There's a fundamental inconsistency.

Finally, I would just say, it's apples and oranges, but it's 1.5 million apples. There are 1.5 million people walking around D.C. or in the world who have a top-secret security clearance. To suggest that's all you need to be assigned one of the most-senior national security positions in the country without the vetting that Gloria and Tony Blinken have talked about that we know the most-senior official goes through, it doesn't pass the --

BLITZER: Let's be precise. Gloria, Dana, Jim, I'm sure you remember as well, all of you probably do, he was interested in other positions besides the position of being the national security adviser to the president. If you're working in the White House, you don't need Senate confirmation.

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: That's exactly right.

BLITZER: You don't need to go through that. If he wanted to be secretary of Defense or director of National Intelligence, you do need Senate confirmation. They had made a decision early on this is a guy who is not going to get Senate confirmation hearings.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Right. And he told the initial transition team, I reported, that there were three jobs he wanted. He either wanted to be secretary of state, secretary of defense or national security adviser. As you point out, which one doesn't need to go for confirmation? It's national security adviser.

BLITZER: It looks like Lindsey Graham is about to begin.

[14:32:35]

SEN. LINDSEY GRAHAM, R-SOUTH CAROLINA: The hearing will come to order, thank you all for coming. Here's sort of the order of the day. I'll give a brief opening statement along with Senator Whitehouse, then we'll have Senator Grassley and Feinstein follow some questioning and it'll be seven minute rounds initially and we'll try to do a second round of five minutes. To both of the witnesses, thank you for coming.

I'll try to make this as reasonably short as possible and if you need a break, please let us know. So people wonder what are we doing and what are we trying to accomplish? In January, the intelligence community unanimously said that the Russians through their intelligence services tried to interfere in the 2016 American presidential election, that it was the Russians who hacked Podesta's e-mails.

It was the Russians who broke into the Democratic National Committee and it was Russians who helped empower WikiLeaks. No evidence that the Russians changed voting tallies, how people were influenced by what happened only they know and God knows but I think every American should be concerned about what the Russians did. From my point of view, there's no doubt in my mind it was the Russians involved in all the things I just described, not some 400 pound guy sitting on a bed or any other country.

Russia is up to no good when it comes to democracies all over the world. Dismembering the Ukraine, the Baltics are always under siege by Russian interference, so why? We want to learn what the Russians did, we want to find a way to stop them because they're apparently not going to stop until somebody makes them. The hearing that was held last week with Director Comey asked a question, is it fair to say that Russian government still involved in American politics and he said yes.

So I want House members and Senators to know it was the presidential campaign in 2016, it could be our campaigns next. I don't know what happened in France but somebody hacked into Mr. Macron's account and we'll see who that may have been but this is sort of what Russia does to try to undermine democracy. So what are we trying to accomplish here?

To validate the findings of the intelligence committee as much as possible and to come up with a course of action as a nation bipartisan in nature because it was the Democratic Party of 2016 were the victims, could be the Republican Party of the future. When one party's attacked, all of us should feel an attack. It should be an Article 5 agreement between both major parties -- all major parties, that when a foreign power interferes in our election, it doesn't matter who they targeted, we're all in the same boat.

Secondly, the unmasking the 702 program. Quite frankly, when I got involved in this investigation, I didn't know much about it. Director Comey said the 702 program, which allows warrants for intelligence gathering and a vital intelligence tool, I've learned to bid about unmasking and what I've learned is disturbing.

So I don't know exactly all the details, what goes into unmasking an American citizen, being incidentally surveilled when they involved with a foreign agent. I'd like to know more and I want to make sure that that unmasking can never be used as a political weapon in our democracy, so I am all for hitting the enemy before they hit us, intelligence gatherings essential.

But I do believe we need to take a look at the procedures involved in 702, particularly how unmasking is requested, who can request it and what can -- what -- what limitations exist, if any, on how the information can be used. So that's why we're here.

We're here to find out all things Russia and the witnesses are determined by the evidence and nothing else. And the 702 reauthorization will come before the Congress fairly soon and I, for one, have a lot of questions I didn't have before.

I've enjoyed doing this with Senator Whitehouse, Senator Feinstein and Grassley have been terrific. Let it be said that the chairman and ranking member of this subcommittee have allowed us to do our job, have empowered us and have been hands-on and it's much appreciated.

And with that, I'll recognize Senator Whitehouse.

WHITEHOUSE: Thank you, Chairman Graham, for the important work this subcommittee is doing understood your leadership investigating the threat of Russian interference in our elections.

In January, America's intelligence community disclosed that the Russian government on the orders of Vladimir Putin engaged in an influence campaign throughout 2016. In March, FBI Director Comey confirmed that, and I quote him here, "The FBI as part of its counter- intelligence mission, is investigating the Russian government's efforts to interfere in the 2016 election and that includes investigating the nature of any links between individuals associated with the Trump campaign and the Russian government and whether there was any coordination between the campaign and Russia's efforts." The FBI and the intelligence community's work is appropriately taking place outside the public eye. Our inquiry serves broader aims. To give a thorough public accounting of the known facts, to pose the questions that still need answers and to help us determine how best to protect the integrity and proper functioning of our government.

At the subcommittee's first hearing on March 15th, we heard from expert witnesses about the Russian toolbox for interfering in the politics of other countries. Now, we can ask which of these tools were used against us, by the Russians, in 2016.

Here's a checklist, propaganda, fake news, trolls and bots. As Clint Watts told the Senate Select Committee on Intelligence in March, Russian state-sponsored media outlets, RT and Sputnik in the lead up to the election, quote, "Turned out manipulated truths, false news stories and conspiracies," end quote, providing a weaponized fake news effort openly supporting Donald Trump's candidacy, quoting again, "While consistently offering negative coverage of Secretary Clinton."

This was to again, quote, "Watch a deliberate, well organized, well resourced, well funded, wide ranging effort," end quote, by Russia, using trolls and bots to amplify its messages particularly across social media. These facts are not disputed by any serious person, so this is a yes on the checklist.

Hacking and theft of political information. Throughout 2015 and 2016, Russian intelligence services and state-sponsored hackers conducted cyber operations against U.S. political targets, including state and local election boards, penetrating networks probing for vulnerabilities and stealing private information and e-mails.

Attribution of these crimes to Russian actors was confirmed in our last hearing and by many other sources. So this is another yes. Timed leaks of damaging material. Russian intelligence fronts, cutouts and sympathetic organizations like Guccifer 2.0, dcleaks.com and WikiLeaks, then time the release of stolen victim data to maximize its political effect, manipulate public opinion and thereby, influence the outcome of an election.

Long time Trump associate Roger Stone admits to having interacted with Guccifer 2.0 and he foreshadowed released of stolen data on Twitter in August and October 2016. Timing can matter. On October 7th, just hours after the damaging Access Hollywood tapes of Donald Trump were made public, WikiLeaks began publishing e-mails stolen from Clinton campaign manager, John Podesta.

So yes, again. Assassination and political violence. Last October, Russian military intelligence reportedly conspired to assassinate the then prime minister of Montenegro as part of a coup attempt.

In 2004, former Ukrainian prime minister, Viktor Yushchenko was disfigured when he was poisoned in a suspected assassination attempt by Russian agents. Russian opposition figures are routinely the targets of state directed political violence.

Volodymyr (inaudible) has survived two recent poisonings while Boris Nemtsov was brazenly murdered near the Kremlin in 2015. Thankfully we have no evidence of that happening here. Investment control and key economic sectors.

We learned from Heather Connolly's testimony in our last hearing that the Kremlin playbook is to manipulate other countries through economic penetration. Heavily investing in critical sectors of the target country's economic to create political leverage.

Putin's petro politics uses Russia's control of natural gas to create political pressure. But no, as to that tactic here so far. Shady business and financial ties. Russia exploits the dark shadows of economic and political systems.

FBI Director Comey testified last week that the United States is becoming the last big haven for Shell corporations where the opacity of the corporate form allows the concealment of criminal funds and can allow foreign money to directly and indirectly influence our political system.

Since the citizens united decisions, we've seen unprecedented dark money flow in our elections from 501(c)(4) organizations. We don't know who's behind that dark money, or what they're demanding in return.

Using Shell corporations and other devices, Russia establishes elicit financial relationships to develop leverage against prominent figures through the carrot (ph) of continued bribery or the stick of threatened disclosure.

How about here? Well we know that President Trump has long pursued business deals in Russia. He's reported to have done or sought to do business there since the mid 1990s.

As he chased deals in Russia throughout the 2000s he deputized a colorful character named Felix Sater to develop real estate projects there under the Trump name. Sater's family has links to Russian organized crime. And Felix himself has had difficulties with the law.

Sater said in a 2008 deposition that he would pitch business ideas directly to Trump and his team on a constant basis. As recently as 2010, Trump had a organization business card and an office in Trump Tower.

Donald Trump Jr. said in September 2008 that he'd made half a dozen trips in the preceding 18 months, noting that Russian investors were heavily involved in Trump's New York real estate projects. We see a lot of money pouring in from Russia, he said.

One Trump property in midtown Manhattan had become, within a few years of opening, a prominent depository of Russian money, according to a report in Bloomberg Business Week. So here, there are still big questions.

Of course President Trump could clarify these questions by releasing his business and personal tax returns. Corrupting and compromising politicians. In testimony before the

judiciary committee last Wednesday, Director Comey acknowledged that financial leverage has been exploited by Russian intelligence over many decades.

Back to the days of -- day of Joseph Alsop, they used compromat (ph) or compromising material to pressure and manipulate targeted individuals with the prospect of damaging disclosures.

Has Russia compromised, corrupted, cultivated, or exerted improper influence on individuals associated with President Trump, his administration, his transition team, his campaign, or his businesses? Another big question mark.

We know that President Trump has had in his orbit a number of very Russia friendly figures. In August 2015, Trump first met informally with Michael Flynn who as Director of the Defense Intelligence Agency, had developed strong professional relationships with Russian military intelligence.

In December of that year, Flynn traveled to Moscow for a paid speaking appearance at an anniversary gala for RT (ph) where he was briefly seated next to Vladimir Putin. Quite a seat for a retired American General.

Two months after that trip, Flynn was reportedly serving as an informal national security advisor to Trump. Trump identified a little know energy investor named Carter Page as one of his foreign policy advisors.

In late March 2016, Page told Bloomberg Politics that friends and associates had been hurt by U.S. sanctions against Russia. And that there's a lot of excitement in terms of the possibilities for creating a better situation, end quote.

On April 27, 2016 Trump and several of his advisors, including Jeff Sessions, met Sergey Kislyak, Russia's ambassador to United States before a campaign speech. The speech which was hosted by the Center for the National Interest had been arranged by Trump's son in law, Jared Kushner. Kislyak attended the Trump Republican convention and he told the Washington Post that he had multiple contacts with the Trump campaign both before and after the election.

In the days after the November election, Russia's deputy foreign minister confirmed that his government had communicated with the Trump team during the campaign. And we know Michael Flynn spoke with Ambassador Kislyak on December 29, the same day President Obama announced punitive sanctions against Russia for its interference in the 2016 election.

Trump transition and administration officials thereafter made false statements to the media and the public about the content of Flynn's conversations with Kislyak apparently as a result of Flynn having misled them. This eventually led President Trump to ask for Flynn's resignation, something I'm hoping Ms. Yates can shed some light on in her testimony today. The president and his administration have yet to take responsibility for or explain these and other troubling Russia links, dismissing facts as fake news and downplaying the significance of individuals involved. More than 100 days into the Trump administration and nearly two years since he declared his candidacy for president, only one person has been held accountable for improper contacts with Russia; Michael Flynn.

Even then, the Trump administration has maintained that Flynn's communications with the ambassador were not in fact improper. He simply lost the confidence of the president. We need a more thorough accounting of the facts. Many years ago, an 18 minute gap transfixed the country and got everybody's attention in another investigation. In this case, we have an 18 day gap between the notification of the White House that a senior official had potentially been compromised and action taken against that senior official's role.

At best the Trump administration has displayed serious errors of judgment, at worst these irregularities may reflect efforts at compromise or corruption at the hands of Russian intelligence. My sincere hope is that this hearing and those to come will help us find out. Thank you, Chairman.

GRAHAM: Our two witnesses are well known and will be sworn in but Mr. Clapper, the former director of national intelligence has served his country for decades in uniform and out and dedicated his life to intelligence gathering and we appreciate that. Ms. Yates was the former deputy attorney general, is well respected by people in the legal profession. Thank you both for coming.

If you'll please rise. Raise your right hand, please. Do you affirm that testimony you're about to give this subcommittee is the truth, the whole truth, and nothing but the truth so help you God?

YATES: (OFF MIKE)

GRAHAM: Mr. Clapper.

CLAPPER: (OFF MIKE). Chairman Graham, Ranking Member Whitehouse and members of the subcommittee, certainly didn't expect to be before this committee or any other committee of the Congress again so soon since I thought I was all done with this when I left the government. And this is only my first of two hearings this week. But understandably, concern about the egregious Russian interference in our election process is so critically serious as to merit focus, hopefully bipartisan focus by the Congress and the American people.

Last year, the intelligence community conducted an exhaustive review of Russian interference into our presidential election process resulting in a special intelligence community assessment or ICA as we call it. I'm here today to provide whatever information I can now as a private citizen on how the intelligence community conducted its analysis, came up with its findings, and communicated them to the Obama administration, to the Trump transition team, to the Congress and in unclassified form to the American public. Additionally, I'll briefly address four related topics that have emerged since the ICA was produced. Because of both classification and some executive privilege strictures (ph) requested by the White House, there are limits to what I can discuss. And of course my direct official knowledge of any of this stopped on 20 January when my term of office was happily over.

As you know, the I.C. was a coordinated product from three agencies; CIA, NSA, and the FBI not all 17 components of the intelligence community. Those three under the aegis of my former office. Following an extensive intelligence reporting about many Russian efforts to collect on and influence the outcome of the presidential election, President Obama asked us to do this in early December and have it completed before the end of his term.

The two dozen or so analysts for this task were hand-picked, seasoned experts from each of the contributing agencies. They were given complete, unfettered mutual access to all sensitive raw intelligence data, and importantly, complete independence to reach their findings. They found that the Russian government pursued a multifaceted influence campaign in the run-up to the election, including aggressive use of cyber capabilities.

The Russians used cyber operations against both political parties, including hacking into servers used by the Democratic National Committee and releasing stolen data to WikiLeaks and other media outlets. Russia also collected on certain Republican Party-affiliated targets, but did not release any Republican-related data.

The Intelligence Community Assessment concluded first that President Putin directed and influenced campaign to erode the faith and confidence of the American people in our presidential election process. Second, that he did so to demean Secretary Clinton, and third, that he sought to advantage Mr. Trump. These conclusions were reached based on the richness of the information gathered and analyzed and were thoroughly vetted and then approved by the directors of the three agencies and me.

These Russian activities and the result and (ph) assessment were briefed first to President Obama on the 5th of January, then to President-elect Trump at Trump Tower on the 6th and to the Congress via a series of five briefings from the 6th through the 13th of January. The classified version was profusely annotated, with footnotes drawn from thousands of pages of supporting material. The key judgments in the unclassified version published on the 6th of January were identical to the classified version.

While it's been over four months since the issuance of this assessment, as Directors Comey and Rodgers testified before the House Intelligence Committee on the 20th of March, the conclusions and confidence levels reached at the time still stand. I think that's a statement to the quality and professional of the -- of the intelligence community people who produced such a compelling intelligence report during a tumultuous, controversial time, under intense scrutiny and with a very tight deadline. Throughout the public dialogue about the issue over the past few

months, four related topics have been raised that could use some clarification. I'd like to take a few moments to provide - attempt to provide that clarification.

First, I want to address the meaning of quote, "unmasking," which is an unofficial term that's appeared frequently in the media in recent months and was often I think misused and misunderstand. So it frequently happens that in the course of conducting lawfully authorized electronic surveillance on validated foreign intelligence targets, the collecting agency picks up communications involving U.S. persons, either their direct interface with a validated foreign intelligence target or where there is discussion about those U.S. persons by validated foreign intelligence targets. Under intelligence community minimization procedures, the identities of these U.S. persons are typically masked in reports that go out to intelligence consumers and they're referred to each report at a time as U.S. person one, U.S. person two, et cetera.

However, there are cases when, to fully understand the context of the communication that has been obtained or the threat that is posed, the consumer of that collected intelligence may ask the identity of the U.S. person be revealed. Such requests explain why the unmasking is necessary and that explanation is conveyed back to the agency that collected the information. It is then up to that agency whether to approve the request and to provide the identity. And if the U.S. person's identity is revealed, that identity is provided only to the person who properly requested it, not to a broader audience.

This process is subject to oversight and reporting, and in the interest of transparency, my former office publishes a report on the statistics of how many U.S. persons' identities are unmasked based on collection that occurred under section 702 of the FISA Amendment Act, which I'll speak to in a moment. And in 2016, that number was 1,934. On several occasions during my six and a half years as DNI, I requested the identity of U.S. persons to be revealed. In each such instance, I made these requests so I could fully understand the context of the communication and the potential threat being posed.

At no time did I ever submit a request for personal or political purposes or to voyeuristically look at raw intelligence nor am I aware of any instance of such abuse by anyone else.

Second is the issue of leaks. Leaks have been conflated with unmaskings in some of the public discourse, but they are two very different things. An unmasking is a legitimate process that consists of a request and approval by proper authorities, as I've just briefly described. A leak is an unauthorized disclosure of classified or sensitive information that is improper under any circumstance.

I've long maintained during my 50-plus year career in intelligence that leaks endanger national security, they compromise sources, methods and tradecraft and they can put assets' lives at risk. And for the record, in my long career, I've never knowingly exposed classified information in an inappropriate manner. Third is the issue of counterintelligence investigations conducted by

the Federal Bureau of Investigation. While I can't and won't comment in this setting on any particular counterintelligence investigation, it's important to understand how such investigations fit into and relate to the intelligence community and at least the general practice I followed during my time as DNI with respect to FBI counterintelligence investigations.

When the intelligence community obtains information suggesting that a U.S. person is acting on behalf of a foreign power, the standard procedure is to share that information with the lead investigatory body, which of course is the FBI. The bureau then decides whether to look into that information and handles any ensuing investigation if there is one. Given its sensitivity, even the existence of a counterintelligence investigation's closely held, including at the highest levels.

During my tenure as DNI, it was my practice to defer to the FBI director, both Director Mueller and then subsequently Director Comey, on whether, when and to what extent they would inform me about such investigations. This stems from the unique position of the FBI, which straddles both intelligence and law enforcement. And as a consequence, I was not aware of the counterintelligence investigation Director Comey first referred to during his testimony before the House Permanent Select Committee for Intelligence on the 20th of March, and that comports with my public statements.

Finally I'd like to comment on Section 702 of the Foreign Intelligence Surveillance Act Amendment Acts, as it's called, what it governs and why it's vital. This provision authorizes the Foreign Intelligence Surveillance Court to approve electronic surveillance of non-U.S. person, let me repeat that, non-U.S. person, foreign intelligence targets outside the United States. Section 702 has been a tremendously effective tool in identifying terrorists and other threats to us, while at the same time protecting the privacy and civil liberties of U.S. persons.

And as the - as Chairman Graham indicated, Section 702 is due for reauthorization by Congress this year. It was renewed in 2012 for five years and it expires on 31 December of this year. With so many misconceptions flying around, it would be tragic for Section 702 to become a casualty of misinformation and for us to lose a tool that is so vital to the safety of this nation.

In conclusion, Russia's influence activities in the run-up to the 2016 election constituted the high water mark of their long running efforts since the 1960s to disrupt and influence our elections. They must be congratulating themselves for having exceeded their wildest expectations with a minimal expenditure of resource. And I believe they are now emboldened to continue such activities in the future both here and around the world, and to do so even more intensely. If there has ever been a clarion call for vigilance and action against a threat to the very foundation of our democratic political system, this episode is it.

I hope the American people recognize the severity of this threat and that we collectively counter it before it further erodes the fabric of our democracy.

I'll now turn to my former colleague, Acting Attorney General Sally Yates, for any remarks that she has to make.

YATES: Thank you. Chairman Graham, Ranking Member Whitehouse and distinguished members of the subcommittee, I'm pleased to appear before you this afternoon on this critically important topic of Russian interference in our last presidential election and the related topics that this subcommittee is investigating.

For 27 years, I was honored to represent the people of the United States with the Department of Justice. I began as an assistant United States attorney in Atlanta in the fall of 1989, and like all prosecutors, I investigated and tried cases and worked hard to try to ensure the safety of our communities and that those who violated our laws were held accountable. Over time, through five Republican and Democratic administrations, I assumed greater leadership positions within the department.

In the U.S. Attorney's Office in Atlanta, I served as chief of the fraud and public corruption section as first assistant United States attorney and then was appointed United States attorney.

[15:00:04]

And then, I had the privilege of serving as deputy attorney general for a