Hearings
Hearing Type:
Open
Date & Time:
Tuesday, November 30, 2021 - 2:30pm
Location:
Hart 216
Witnesses
Full Transcript
[Senate Hearing 117-247]
[From the U.S. Government Publishing Office]
S. Hrg. 117-247
NOMINATION OF SHANNON CORLESS
TO BE ASSISTANT SECRETARY FOR
INTELLIGENCE AND ANALYSIS,
U.S. DEPARTMENT OF THE TREASURY
=======================================================================
HEARING
BEFORE THE
SELECT COMMITTEE ON INTELLIGENCE
OF THE
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 30, 2021
__________
Printed for the use of the Select Committee on Intelligence
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
46-623PDF WASHINGTON : 2022
SELECT COMMITTEE ON INTELLIGENCE
[Established by S. Res. 400, 94th Cong., 2d Sess.]
MARK R. WARNER, Virginia, Chairman
MARCO RUBIO, Florida, Vice Chairman
DIANNE FEINSTEIN, California RICHARD BURR, North Carolina
RON WYDEN, Oregon JAMES E. RISCH, Idaho
MARTIN HEINRICH, New Mexico SUSAN COLLINS, Maine
ANGUS KING, Maine ROY BLUNT, Missouri
MICHAEL F. BENNET, Colorado TOM COTTON, Arkansas
BOB CASEY, Pennsylvania JOHN CORNYN, Texas
KIRSTEN E. GILLIBRAND, New York BEN SASSE, Nebraska
CHUCK SCHUMER, New York, Ex Officio
MITCH McCONNELL, Kentucky, Ex Officio
JACK REED, Rhode Island, Ex Officio
JAMES INHOFE, Oklahoma, Ex Officio
----------
Michael Casey, Staff Director
Brian Walsh, Minority Staff Director
Kelsey Stroud Bailey, Chief Clerk
C O N T E N T S
----------
NOVEMBER 30, 2021
OPENING STATEMENTS
Page
Warner, Hon. Mark R., a U.S. Senator from Virginia............... 1
Rubio, Hon. Marco, a U.S. Senator from Florida................... 2
Cornyn, Hon. John, a U.S. Senator from Texas..................... 3
WITNESS
Corless, Shannon, Nominee to be Assistant Secretary for
Intelligence and Analysis, U.S. Department of the Treasury..... 11
Prepared Statement........................................... 14
SUPPLEMENTAL MATERIAL
Nomination material for Shannon Corless
Questionnaire for Completion by Presidential Nominees........ 34
Additional Pre-Hearing Questions............................. 51
Post-Hearing Questions....................................... 61
Letter of support dated November 29, 2021 from Senator Dan
Coats...................................................... 5
Letter of support dated November 17, 2021 from Stuart Levey.. 6
Letter of support dated November 1, 2021 from James R.
Clapper.................................................... 8
Letter of support dated October 29, 2021 from Hon. Mike
Rogers..................................................... 10
NOMINATION OF SHANNON CORLESS
TO BE ASSISTANT SECRETARY FOR
INTELLIGENCE AND ANALYSIS,
U.S. DEPARTMENT OF THE TREASURY
----------
TUESDAY, NOVEMBER 30, 2021
U.S. Senate,
Select Committee on Intelligence,
Washington, DC.
The Committee met, pursuant to notice, at 2:30 p.m., in
Room SH-216 in the Hart Senate Office Building, Hon. Mark R.
Warner (Chairman of the Committee) presiding.
Present: Senators Warner, Rubio, Wyden, Heinrich, King,
Bennet, Casey, Gillibrand, Burr, Risch, Collins, Blunt, Cornyn,
and Sasse.
OPENING STATEMENT OF HON. MARK R. WARNER, A U.S. SENATOR FROM
VIRGINIA
Chairman Warner. I would like to call this hearing to
order.
Before we get to our witnesses, I want to acknowledge that
today is the birthday of the oldest Member on the Committee,
Richard Burr, and we want to wish Richard a very, very happy
birthday.
Senator Burr. I will correct you on that. You're right
about the birthday. You're not right about the oldest.
Chairman Warner. I know. I was hoping that somebody might
self-correct that. But Richard, happy birthday.
Again, welcome Ms. Corless, and welcome to your family. I
had a chance to meet briefly Josh and Declan and your mom,
Linda, and your brother, Chet. Congratulations on your
nomination to be Assistant Secretary of the Treasury for
Intelligence and Analysis.
Welcome also, obviously, to John Cornyn, who's going to
introduce you.
You come to this position as a highly qualified and highly
recommended nominee. You're currently the Intelligence
Community Executive and National Intelligence Manager for
Economic Security and Financial Intelligence at the office of
the DNI. It's clearly a position of direct relevance to the
position you're about to be nominated for and hopefully will be
confirmed for. My understanding is that you currently have the
IC's activities and assessments relating to economic security,
energy security, export controls, investment security,
sanctions, the supply chain, telecom, threat, finance and
trade, including engagements with interagency process and our
foreign partners.
So we'll probably ask you on each of those subjects today.
You obviously have come highly recommended by your former boss,
DNI Jim Clapper. I understand Dan Coats and former HPSCI
Chairman Mike Rogers, as well. And obviously, John Cornyn
doesn't introduce or recommend that many folks, so that's a
very, very good sign as well. The fact is, that kind of broad
bipartisan support is absolutely what we need in the
Intelligence Community. Nonpartisan professionalism throughout
the community. The office that you hopefully will be coming to,
the Office of Intelligence and Analysis, is really, really
important. I know you're going to be over at Treasury. When we
get to our questions, I'd like to hear your thoughts on the
importance of financial intelligence to the IC, and what
capabilities Treasury's OIA brings to the table, especially as
we enter a period of strategic competition with countries like
China and Russia.
I have not mentioned this to Senator Rubio yet, but Senator
Cornyn and I, most or all of us on this Committee, are
obviously very supportive of the CHIPS Bill and trying to make
sure that we protect our semiconductor industry.
I'm reading today from DIA, there was some information
about a potential American company that is perhaps being
acquired by China. This is exactly the thing we need to
prevent. And I don't know whether I can, I'm not sure where
that kind of responsibility fits in the overall framework.
Senator Cornyn, Senator Feinstein did a good job on CFIUS
Reform a few years back. But this is still an area that we
need, I think, a lot more work on. This whole movement around
financial intelligence--follow the money--was obviously a
critical component of our fight against terrorism extremism. I
think we're going to have to follow the money in the same way,
particularly as we see the emerging challenges that China and
particularly the Communist Party of China is putting forward. I
think we also are interested in some of the effects of the
digital Yuan, how that plays into the whole power balance.
Also, how we deal with Russia from their cyber activities to
their use of proxies. And again, the follow the money
component, I think, is terribly important.
So I thank you for being willing to serve. And a big thank
you to all the women and men who served under your leadership
in your current position. The Vice Chairman will now make a
statement, followed by Senator Cornyn. And then, Ms. Corless,
you will be sworn in and invited to give your introductory
statement. After this, the Members' questions will be in five
minute rounds.
I now recognize the Vice Chairman.
OPENING STATEMENT OF HON. MARCO RUBIO, A U.S. SENATOR FROM
FLORIDA
Vice Chairman Rubio. Thank you, Mr. Chairman. And thank
you, Ms. Corless, for being here, for your willingness to serve
in this capacity, for your years of service. You have two
decades of service in the Intelligence Community and extensive
experience in financial intelligence. And this is a department,
in the Treasury Department, that is a really critical member of
the Intelligence Community. It has a really important mandate.
I think one that's become even more important in the last few
years. Obviously, within the context of those challenges, I
think none is greater at this point, that's widely
acknowledged, than that posed by the Chinese Communist Party.
They have a holistic, comprehensive, long-term, and committed
plan that they're using both licit and illicit means to
dominate particularly global emerging technologies to displace
the United States, and, ultimately, to reshape the rules based
on international order to its benefit. They used to hide that
ambition. They hide it a lot less these days. And it certainly
puts a tremendous amount of pressure on us. So I appreciate
your long standing work on CFIUS.
I would be interested to hear a little bit today about how
you'll support efforts to identify and ensure U.S. companies
are not providing--not just being acquired--but providing data,
capital technology, know-how to Chinese state-owned companies
and state controlled, so called private companies that advance
the goals of the Communist Party, as I described earlier.
Through the things like joint venture, venture capital, private
equity, and other vehicles, which make the tracking of some of
these things harder than ever before. I know it's not your
doing or in your department, but once again today for the
second time at hearing, I expressed the concern I have with the
Administration's recent decision to remove the FARC from the
Foreign Terrorist Organization lists. I'm just deeply concerned
that it's going to contribute to a quick unraveling of decades
of progress in Colombia and actually goes against the wishes of
our democratic partners in Colombia, a very stable ally, who we
worked very closely with throughout all these years. Without, I
think, the expectation of this Committee in a role, like the
one you will play, is that you will provide the support needed
to better inform policy decisions such as these and others, and
that it not be driven by political agendas. From all I have
seen and read so far, there's no reason to expect that you
won't meet that standard.
And so, we're grateful for your willingness to continue to
serve, and we look forward to your testimony.
Thank you.
Chairman Warner. Thank you, Senator Rubio.
I now recognize Senator Cornyn for a formal introduction.
OPENING STATEMENT OF HON. JOHN CORNYN, A U.S. SENATOR FROM
TEXAS
Senator Cornyn. Well, thank you, Mr. Chairman and Vice
Chairman Rubio. Thank you for holding this hearing to consider
the nomination of Shannon Corless to serve as Assistant
Secretary for Intelligence and Analysis at the Department of
Treasury. She's accompanied by her husband and son and her mom
and her brother, and we welcome all of you here today.
I appreciate the opportunity to introduce her to you
briefly. I had a chance to work with Ms. Corless a few years
ago when we were working on reforms to the Committee on Foreign
Investment in the United States, which we all know as CFIUS.
There was a clear need to modernize the CFIUS process to
prevent predatory investments by adversaries like China and
Russia from impacting our national security.
To close that security gap, Senator Feinstein and I
introduced the Foreign Investment Risk Review Modernization
Act, now known as FIRRMA, and we looked to Ms. Corless for her
expert non-partisan advice. Her tireless work as an
intelligence professional was integral to ensuring that we got
this legislation right. She provided expertise, advice, and
experience to a process that ultimately saw FIRRMA signed into
law.
But her interaction with that legislation did not end
there. In her capacity at the Office of the Director of
National Intelligence, Shannon has adeptly overseen the
expansion of capabilities within the Intelligence Community to
comply with the requirements to support the updated CFIUS
regime. I'm proud of the process we all made together, since
FIRRMA became law, and I imagined Ms. Corless is as well. She
should be. But we all know that the threat from our foreign
adversaries has not all of a sudden evaporated. Our adversaries
continue searching for ways to undermine the United States and
threaten our position as the preeminent global power.
That's exactly why we need intelligence professionals like
Ms. Corless in key positions. In a meeting in my office
yesterday, Ms. Corless and I had the opportunity to discuss the
importance of export controls and outbound investment reviews,
something along the lines that Senator Casey and I have been
advocating for, as a way to round out what we began with CFIUS
reform. And we look forward to asking you a few questions about
that topic.
The Assistant Secretary for Intelligence and Analysis, the
Department of Treasury plays a vital role in ensuring our
continued economic security. At a time when our adversaries are
testing American power all around the world, we cannot ignore
the economic component of our national security. Ms. Corless'
passion for national security, her work at the ODNI and her
nearly 20 years of experience in the Intelligence Community, in
my opinion, make her an ideal candidate for this position.
I have confidence that if confirmed, she'll continue to
serve our country with honor and integrity and act in the best
interest of our national security. Our country is fortunate to
have leaders willing to answer the call to preserve American
strength and to serve our country despite the hard work, long
hours, and thankless expectations that often accompany such
service.
Finally, I would be remiss if I didn't mention in my
comments that while Shannon is a native of Florida, she did
live in Dallas, Texas, for a few years as a child, and that
makes her a fellow Texan in my eyes--or at least an honorary
Texan.
I'm honored to introduce her to the Committee today.
Thank you very much, Mr. Chairman.
Chairman Warner. Thank you, Senator Cornyn. I now ask
unanimous consent that the many letters of support for the
nominees received by the Committee be entered into the record
without objection.
[Letters of support for the Nominee follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Warner. With that we'll proceed to the
administering of the oath.
So, will the witness please stand and raise her right hand?
Do you solemnly swear to give this Committee the truth, the
full truth and nothing but the truth, so help you God?
Ms. Corless. I do.
Chairman Warner. Please be seated.
Before we move to your opening statement, I'll now ask you
to answer the five standard questions that the Committee poses
to each nominee who appears before us. They require a simple
yes or no as an answer for the record.
First, do you agree to appear before the Committee here or
in other venues when invited?
Ms. Corless. I agree.
Chairman Warner. If confirmed, do you agree to send
officials from your office to appear before the Committee and
designated staff when invited?
Ms. Corless. Yes.
Chairman Warner. Do you agree to provide documents or other
materials requested by the Committee in order for it to carry
out its oversight and legislative responsibilities?
Ms. Corless. Yes.
Chairman Warner. Will you ensure that your office and your
staff provide such material to the Committee when requested?
Ms. Corless. Yes.
Chairman Warner. Do you agree to inform and fully brief to
the fullest extent possible, all members of the Committee on
intelligence activities, covert activity, and covert actions
rather than only the Chairman and the Vice Chairman?
Ms. Corless. Yes.
Chairman Warner. Thank you very much, and we will now
proceed to your opening statement.
STATEMENT OF SHANNON CORLESS, NOMINEE TO BE ASSISTANT SECRETARY
FOR INTELLIGENCE AND ANALYSIS, U.S. DEPARTMENT OF THE TREASURY
Ms. Corless. Chairman, Vice Chairman and distinguished
members of the Committee, it is truly an honor to sit before
you today as you consider my nomination for the role of
Assistant Secretary for Intelligence and Analysis at the U.S.
Department of the Treasury.
I am deeply grateful to President Biden, Vice President
Harris, Secretary Yellen, and Deputy Secretary Adeyemo for
their confidence in me, and also to the Director of National
Intelligence Avril Haines for her support and encouragement in
my decision to accept this nomination.
I want to take a moment to recognize several important
individuals in my life, without whom today would not have been
possible. First and foremost, my husband Josh; he is the love
of my life, my best friend, and the most amazing father to our
two children, Declan and Margo.
I would also like to recognize my mother and father Linda
and Bill Ratliff and my brother Chet. Our parents were the
ultimate role models. They instilled in us from a young age a
sense of confidence that we are capable of achieving our goals
and realizing our dreams. My father passed away nearly 10 years
ago, and while it saddens me enormously that he's not around to
savor this moment, I know that he is with me every step of the
way.
I would also like to recognize my in-laws, Joseph and
Sylvia Corless, who have truly become like a second set of
parents to me. And finally, I would like to recognize my late
grandmother, Virginia Moser Horgan, who passed away on
Christmas night of 2020 from complications related to COVID.
There are so many more people, family, friends and colleagues
to whom I owe a debt of gratitude for their love and support.
My interest in service to country came at an early age. I
grew up in Tampa, Florida, near MacDill Air Force Base. I
vividly recall watching my father, a television anchor at WFLA
TV in Tampa, report daily on Operation Desert Storm. The
conflict and my father's role in reporting it led to many
conversations at home about the history of service in my
family. This included my great grandfather's service in World
War I, both grandfathers' service in World War II and the
Korean War respectively, and my great uncle, Colonel Robert
Montel, who spent over 30 years in the Army. My uncle served in
a variety of special forces roles and posts throughout his
career, including as commander of the 5th Special Forces Group.
He was my inspiration to pursue a career in national security.
And he readily indulged and encouraged my growing interest as a
child and young adult.
This passion for national security led me first to work
with the Office of Naval Intelligence and then at the Office of
the Director of National Intelligence, where I have overseen
the provision of broad intelligence for support to Treasury,
including with respect to Treasury's role as Chair of the
Committee on Foreign Investment in the United States. I am
currently responsible for leading the Intelligence Community's
economic security and financial intelligence mission. In short,
my team is responsible for ensuring that the IC is postured to
support policy customers on issues such as CFIUS reviews,
export controls, telecommunications, sanctions implementation,
and the rise of digital assets, among many others.
The position I am being considered for today, the Assistant
Secretary for the Department of the Treasury Office of
Intelligence and Analysis, or OIA, is perhaps one of the most
unique roles in the IC. The Department of the Treasury is the
only finance ministry in the world to have its own intelligence
component. Though OIA may have been born out of 9/11 and
designed to play a key role in the U.S. government's
counterterrorism efforts, it is increasingly pivotal to our
government's efforts to compete with China and assure U.S.
economic security and that of our allies. Leading an
organization with such a unique and critical responsibility is
an opportunity I am eager to take on. And one I feel I am
prepared to lead, drawing upon my decades of service to the IC
and leadership in the IC.
If confirmed to the role of Assistant Secretary, I will
strive to ensure that OIA has the human capital and technology
resources it needs to successfully execute its mission.
Intelligence integration has been a central pillar and guiding
principle of my career at ODNI. If confirmed, I intend to
leverage that experience and ensure that OIA continues to lead
when appropriate, and partners with IC colleagues always. My
entire career has been in the IC, where I am privileged to work
with extraordinarily committed and talented colleagues. I never
imagined I would have the opportunity to be considered for this
role, but I am deeply honored to be nominated and I look
forward to your questions.
Thank you.
[The prepared statement of the Nominee follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Warner. Thank you, Ms. Corless. And for planning
purposes, if any members of the Committee wish to submit
questions for the record, after today's hearing, please do so
by 5 p.m. this Thursday, December 2nd.
And as usual, we recognize members for five minutes each in
order of seniority at the gavel, followed by order of arrival.
Because we actually got a larger turnout than I
anticipated, I'm only going to ask you one question and make
sure all my colleagues get in, if there's something they don't
get to them, I'll get you on a second round.
How do we, from your vantage point right now at ODNI, we're
supposed to see some of these efforts to collaborate these
economic financial challenges and threats we face. How do we
make sure we stay up with what China's doing?
I want to cite this case, where they're potentially buying
into a cutting-edge semiconductor entity here in the United
States and seems like everything we've done that should have
been red flashing lights. How do we make sure that we don't
have gaps in obtaining this information? That we have the right
tools in place to follow it?
I know from a written standpoint where Treasury OIA fits
in, but how do you see your role fitting in with having this
role of coordination at ODNI? And what do we need to do to
improve the product?
Ms. Corless. Sure, Senator, thank you very much for that
question. Thank you again for the opportunity to meet with you
the other day.
So I think I would offer a couple of points to your
question. First, OIA's responsibility within the Department of
the Treasury is to identify, deter, and help enable disruption
of threats to the U.S. financial system. And I think that would
come in a variety of different ways that would certainly come
through potential cyberattacks to financial system, but it also
comes through efforts to acquire intellectual property, to
invest in as U.S. companies gain access to technological
capabilities.
So I think the role and responsibility of OIA in this
regard is to ensure that it is providing strategic analysis to
Secretary Yellen, and to other senior leadership within the
government, so that they understand how we see that China is
trying to adjust to our efforts to stop their access to
technology, through efforts like CFIUS reform. Something that I
think we all well know is that China is a learning adversary
and while we make great strides to reform how we are reviewing
the foreign investments in the U.S., we should expect that they
will try to continue to get around those.
So certainly making sure that we have our collection and
analysis. Our collection and priorities in place that they are
in alignment with what we understand to be the priorities of
the administration.
But also critical to that is our partnerships with our
foreign partners and our private sector partners. Without those
partnerships, and without understanding what private sector
sees as trends in industry, it'll be hard for us to necessarily
get ahead of the problem.
Chairman Warner. Well, thank you, I would simply say I was
out at ODNI recently, and on the subject of China's economic
efforts and kind of ask a basic question about which American
venture funds are investing in which of these Chinese tech
companies and these good analysts, but they almost felt like
they were constrained from looking at American enterprise. I
mean, this was a question that at a big Wall Street firm, you'd
have a first year analyst to get an answer in a matter of
hours, if not, days. So I do hope with your background coming
into this role, this is an area we're going to need to beef up
our skills and our playing sense.
And, again, your question about making sure we partner
with, or your comment making sure we partner with the private
sector, is very critical.
Vice Chairman.
Vice Chairman Rubio. Thank you, again for being here. Look,
it's my belief that the Communist Party of China isn't simply a
competitor of the United States, but they're engaged in a zero-
sum game that they seek to grow at our expense, and ultimately
to displace us as the world's most powerful and influential
nation in every realm.
Do you agree with that assessment? Do you share that same
view?
Ms. Corless. Sure. Senator Rubio, I see China as perhaps
our greatest strategic competitor. We know that they go after
U.S. critical technologies using a whole of government, in a
comprehensive approach we know they use the traditional methods
such as espionage. We also know that they work with academia.
They leverage the seams in our system, whether it would be
CFIUS reviews or export control. They take advantage of those.
So I absolutely agree that we are facing a significant
challenge with China.
Vice Chairman Rubio. Yes. I get that they're a challenge.
And they're not our only global competitor. I guess the
question really is, are they engaged in a zero-sum game in your
view? You don't have to agree with my view, I'm just wondering,
do you agree that they seek to displace us to become the
world's most powerful country as opposed to simply being a
competitor that wants to reach parity?
Ms. Corless. Senator, that is a very good question. It's a
complex one. And I do think that there is a great reason for
concern that they do have an aim of displacing U.S. economic
superiority. And I think for that reason, it's all the more
important that OIA, makes sure that it provides the best
strategic analysis that it can to the Secretary. If confirmed,
I will ensure that OIA will do so.
Vice Chairman Rubio. So is there anything in the time that
you've been working in that position--you can't divulge it
obviously in this setting--that leads you to be more cautious
about the assessment than I've been? I mean, I've made a pretty
straightforward pronouncement. And that is China is involved in
a zero-sum game in which they believe either they win or we
win, but we can't both benefit.
Is there anything that you've seen or come across, that
gives you some pause and reaching the same conclusion in such
terms?
Ms. Corless. Senator, thank you very much for that
question. I think that is probably one that is better reserved
for a classified conversation, and I would be more than happy
to come back and talk to you and your staff about that
question.
Vice Chairman Rubio. Okay, so putting aside anything in
your work, I just want to be fundamentally clear: what I just
said about the zero-sum game, you obviously acknowledge that
that's a concern, and you acknowledge that they are a
significant, powerful competitor. But you're not able to say,
as I have said, that they're involved in a zero-sum game, at
least not in this setting?
Ms. Corless. So, Senator, yes, I think I would agree with
everything that you've just said. We absolutely see them as
perhaps our greatest strategic competitor. And they are, at
least sitting in within my role right now, they are the
priority of the ODNI and of the Intelligence Community in terms
of how we are placing our resources and trying to get at the
challenge.
Vice Chairman Rubio. Alright, let me ask you, related to
that question: the Chinese laws require companies to turn over
information to the Chinese State and the CCP, clearly blurring
the military and civilian sector through this military/civil
fusion strategy.
Given that, is there any meaningful distinction, for
example, at this point between Chinese state-owned entities and
what they claim to be private companies, given the reach--in
essence, no matter how private you think you are, under Chinese
law, if the Communist Party tells you, we need your data, we
want your information, you have to do this, they have to do it,
or they don't exist as a company anymore.
At this point, is there any real distinction when it comes
to the purpose of reviewing investments and things of that
nature?
Ms. Corless. Senator, if I understand your question
correctly, are you asking if there is truly a distinction
between the state-owned enterprises and a company that may put
itself out as a private Chinese company?
Vice Chairman Rubio. Correct.
Ms. Corless. I think that while there may be some validity
to making that distinction, I think what we ultimately have to
realize is that the Chinese government has a number of levers
over companies that may put themselves out as being private,
and there are requirements for them to go back to seek certain
approvals from the government in order to seek outbound
investments in the United States or in countries like our
allies in Europe.
And so I think whether--I almost wondered the extent
sometimes whether it's a distinction without a difference,
because of the nature of the Chinese laws, as you pointed out.
Vice Chairman Rubio. Okay, thank you.
Chairman Warner. Senator Wyden.
Senator Wyden. Thank you, Mr. Chairman. Good to see you,
Ms. Corless, and I certainly know you've gotten positive
reviews for your work.
I'm going to start with a question we told you then I would
ask you about under the Terrorist Finance Tracking Program. The
Treasury Department obtains information on financial
transactions from the Swift Company, which is used by thousands
of financial institutions to move money around the world. The
program has been controversial, because the Treasury Department
just scoops up the data, meaning it gets information on the
personal financial transactions of countless innocent people.
More than a year ago, the independent Privacy and Civil
Liberties Board reviewed the program, and urged the Treasury do
more to protect the privacy of individual Americans, as we
indicated before the hearing. What's been done?
Ms. Corless. I'm sorry, Senator, could you repeat the last
part of your question?
Senator Wyden. We said that we would be asking, given the
recommendation from the board more than a year ago, that more
had to be done to protect the privacy of individual Americans.
What's been done?
Ms. Corless. So, Senator, thank you for the question. I am
familiar with the Terrorist Finance Tracking Program. But it is
one that I would need to be briefed on, if confirmed, upon
arrival with the Treasury, to better understand how it is used
and what OIA's role is in it.
That being said--and certainly how I would be implementing
any of the board's recommendations--I do want to ensure, I
would ensure, that OIA, if I'm confirmed for this role, abides
by both the spirit and the intent of the ODNI's processes and
procedures with respect to handling U.S. persons' information,
and ensuring protection of civil liberties.
Senator Wyden. Why don't I let you put that in writing?
Because I did tell you that I was going to ask the question.
Second question is about following the money. Over the
years, the previous Presidents spent decades developing and
maintaining and relying on financial relationships with Russia.
Other administration officials had compromising links to other
countries such as Turkey. And I'm very concerned about foreign
adversaries exploiting financial entanglements to undermine our
democracy. Are you?
Ms. Corless. Senator, yes, I absolutely am concerned about
that. And I think, understanding how money moves, it gives us
insight into the nature of the relationships and how these
adversaries might be trying to circumvent U.S. laws, to
circumvent our sanctions process. If confirmed, that is
absolutely something that I would ensure that OIA continues to
do because it is core to their mission.
While OIA was born out of 9/11 and focused on countering
terrorism threats, we see considerable applicability of that
same approach to understanding how China and Russia and other
adversaries such as Iran and North Korea are trying to use that
approach.
Senator Wyden. Let's be very specific then. I appreciate
your answer. As chairman of the Senate Finance Committee--and I
should note that I believe there are six members of the
Committee in the room now--so there is a real connection
between the Finance Committee, Treasury, and Intelligence and
as chairman of the Committee, I've long been concerned about
the ways in which government investigators are prevented from
following the money. Specifically, large private investment
funds are a $10 trillion global industry, yet are exempt from
most due diligence and disclosure rules that other investment
vehicles are subject to.
If you're confirmed, will you examine whether private
offshore investment funds like hedge funds and private equity
firms are being used to launder money at scale and potentially
evade sanctions or finance terrorism?
Ms. Corless. Senator Wyden, thank you for your question. If
confirmed, I will ensure that OIA will continue to look at a
variety of mechanisms which are used for money laundering,
whether it be through mechanisms, such as what you just
mentioned, whether it may be through the use of
cryptocurrencies or other tools.
Senator Wyden. I'd like a written answer to that question
as well, Ms. Corless. These are hugely consequential issues.
Ten trillion, a global industry to a great extent exempt from
due diligence and disclosure rules that other investment
vehicles are subject to. I want to know whether you're going to
examine those.
So I've asked you two questions. As I say, I've heard only
positive things about you. I'd like those in writing and under
the rules that comes in through the Chair and the Vice Chair.
So I'll look forward to that. Thank you.
Thank you, Mr. Chairman.
Chairman Warner. I would echo this issue of investment
firms. I think is something that literally only fairly recently
I have become aware of. You talk about terrorism. You also talk
about all the challenges we've--we've tried to deal with
challenging, for example China. That's all opaque as well.
Senator Burr.
Senator Burr. Thank you, Mr. Chairman. Shannon, welcome.
Our paths have had the opportunity to cross a number of times
over the years. I don't have questions for you, I just have a
few comments.
One, it's refreshing to see somebody as qualified nominated
for a spot in the intelligence community and I will say that
this administration has held a high standard for anybody within
the intel community and you're at the top of that list.
You talk about I&A being created out of 9/11. I can still
remember when the office stood up and we had these young, smart
guys with computers downstairs in the basement, probably the
worst office in the building, and it didn't take them long
before they tracked down exactly how terrorist financing was
happening. And they began to shut it down, even in the most
rudimentary way.
My observation on that is we can do much more than just
track terrorism dollars down there. I would hope that when you
got there you would look at an expanded horizon as to how that
asset can be used. And I'm sure it's there, probably in a
different office. Probably they're a little older now, probably
the technology they use is a little bit better, but I think it
is a strong force multiplier for us in a lot of the things that
we're concerned with.
Second, Treasury is the loudest voice in the room for
CFIUS, but it seems that entities like the State Department
bring more assets to tip the scales when the vote happens and
how the votes line up. I just want to encourage you to make
sure that not only is Treasury a loud voice, they're the
loudest voice in the room.
What the Chairman and the Vice Chairman have expressed
about China concerns all of us on this Committee. It should
concern every American, but we've reached out and read
companies and academia into the China threat, and it by no
means is overwhelming when they walk away that they understand
just how big a threat this is. You'll see it, you'll know it,
you'll have the factual information. Make sure that the voice
at Treasury is the loudest voice that goes in the room on some
of the CFIUS decisions.
The last thing I want to say is you're probably the only
one in an intel role that fits into an agency that's not an
intelligence agency with the possible exception of the State
Department. We have high expectations about this intelligence
component at the Treasury and it's much different than the
intelligence component at the State Department because your
information goes to a much broader array of the intelligence
community. They don't have the insight that you're going to
have from your technical folks, from your analytic team. So it
is valuable that you make sure that that is properly broadcast
throughout the intelligence community to influence what
analysts are writing, but more importantly so the products that
we get on the Hill, as policymakers, we make the best decisions
that we possibly can. So you really are in a pivotal, pivotal
role where you're going.
I wish you tremendous success. I have high expectations of
you. I know you're going to make us proud and you already have
made your parents proud. Thank you for doing this.
Chairman Warner. Senator Casey.
Senator Casey. Mr. Chairman, thanks very much.
Ms. Corless, we're grateful for your willingness to serve
again, especially at this time. I wanted to raise some
questions with you, some of which we had a chance to talk about
recently, I guess just last week, about this question of
outbound investment and the review of that investment. We've
seen over the last couple of years how the Chinese government
has really politicized--I think that's an understatement--both
U.S. supply chain security as well as so many other issues
relating to this concern that I have and many have about
outbound investment. We know that CFIUS and the export control
regime have not been designed to address the gaps in knowledge
that we face and how this outbound U.S. investment to China and
other non-market economies are in fact badly compromising U.S.
supply chain and our national security.
The good news is this recognition that many of us have
identified, or this concern, I should say, that many of us have
recognized has gotten the attention of both branches of
government and some other entities as well. National Security
Advisor Jake Sullivan noted in July, and I'm quoting, ``That
the White House is looking at the impact of outbound U.S.
investment flows that could circumvent the spirit of export
controls and otherwise enhance the technological capacity of
our competitors in a way that harm--in ways that harms our
national security,'' unquote.
The U.S.-China Economic and Security Review Commission
published a series of recommendations--32 of them. Number 13
says, and I quote, Congress should consider, quote,
``legislation to create the authority to screen the offshoring
of critical supply chains and production capabilities to the
PRC to protect U.S. national and economic security
interests''--and it goes on from there. As Senator Cornyn made
reference to in his opening statements here today, in his
introduction of you, we've teamed up to a really bipartisan
bill, beyond just the two of us, to introduce the National
Critical Capabilities Defense Act which would establish the
mechanism we're talking about.
So first question is to what extent are both industrial and
supply chain intelligence--or to what extent are they an
element of financial intelligence?
Ms. Corless. Senator, thank you for that question. I think
you could easily argue that they are an element of financial
intelligence because it is about trying to understand how our
adversaries are trying to disrupt our financial infrastructure.
And so to the extent that we're talking about industrial
policies or efforts that they may have underway to take
advantage of vulnerabilities in our supply chains,
vulnerabilities in our infrastructure, you could easily make a
connection between the two.
Senator Casey. And the second question, I guess my last,
would be what gaps do we have in understanding how Chinese
state-owned enterprises weaponize either investment or
weaponize the outflow of capital, or even joint ventures, to
the detriment of, and against the interests of the United
States?
Ms. Corless. Senator, thank you for that question. I think
in part that question is one that's easier to discuss in more
detail in a classified setting, but I think it's very clear
when China shares with us its five-year plans, they share what
exactly they are intending to invest in, and that is certainly
something that we can use to help us better understand where we
need to focus our efforts to countering the challenges that
they present to us.
But yes, I'd be more than happy to answer those more in
depth in a classified setting.
Senator Casey. Well, I appreciate that and I thank you for
the answers to the questions. We'll have more time to discuss
them in a different setting as well, but we're grateful not
only for your public service but that of your family by
extension. So thanks very much.
Thanks, Mr. Chairman.
Chairman Warner. Senator Cornyn?
Senator Cornyn. Ms. Corless, thank you. Senator Casey's
asked most of my questions--how we can fill the gaps left by
CFIUS reform on the export side, export controls, and the like.
But recently colleagues and I went to Taipei to Taiwan
Semiconductor where they use Dutch lithography machinery, which
is enormously expensive and sophisticated machinery, to build
the most advanced microchips in Taiwan.
But I know at different times the People's Republic of
China and the CCP have attempted to purchase that kind of
machinery, and that that there's been discussions about whether
they should be able to gain access to that. But in the absence
of formal or legal controls on the sale and export of machines
made in other countries, what tools, if any, are available to
the U.S. Government to try to deter the sale of some of this
advanced equipment that would allow China, conceivably at some
point, to catch up with the rest of the world?
Ms. Corless. Senator Cornyn, thank you for that question
and thanks again for the opportunity to meet yesterday in
advance of this hearing and for your kind remarks in your
introduction of me.
Perhaps it's less appropriate for me to talk about tools
available to the U.S. Government and more appropriate for me to
speak to the need for the IC and for OIA in particular to make
sure that we are providing--that we have our collection
priorities align such that they can ensure that we get better
insight into what China's gaps are, what their capability gaps
are, what gaps they're trying to close.
And then similarly, to ensure that OIA, in concert with
other IC colleagues, is producing strategic analysis that
informs any policies that Secretary Yellen or others in the
government might take on to try and counter this challenge. I
think I would also add here that this is another example of
making sure that we have really strong and robust relationships
with our foreign partners because to the extent that we may not
have tools that we can use to counter this challenge, they may
very well. Or it could be that it's an issue that falls out of
our jurisdiction, in which case partnerships that we have with
some of our European allies, I think--and our allies such as
Japan and India and Australia--are increasingly important.
Chairman Warner. Senator Gillibrand.
Senator Gillibrand. Thank you, Mr. Chairman.
Thank you, Ms. Corless. I appreciate your dedication to
serving in this capacity and I want to echo the remarks of
Senator Burr. I thought his statements were exactly on point.
In your responses to questions sent by the Committee, you
listed, quote, ``Ensuring that OIA is effectively utilizing
human resources to enhance the financial intelligence expertise
of OIA's workforce,'' as your first priority.
Given that OIA was largely born of the post-9/11 work on
investigating terrorism financing, do you feel confident that
the current workforce has the necessary skills and training to
meet the challenge posed to our Nation by China?
And what skills and capabilities can you identify as
necessary to ensuring OIA is able to protect and increase its
competitive advantages against China and Russia?
Furthermore, if confirmed, what steps will you take to
ensure that you're hiring, training, and retaining the
necessary talent at OAI to counter the threat posed to the
United States by China? And what lessons have you learned from
your time at ODNI that will inform your approach to ensuring
your workforce is able to meet the strategic challenges posed
by China?
Ms. Corless. Senator Gillibrand, thank you very much for
that question. I appreciate it. While I'm obviously not in the
position of assistant secretary yet within OIA, my current
position has given me a decent amount of insight into the
unique nature of the mission as well as the broad skill set
that is required to support the efforts with respect to
following the money; for example, economics, global financial
infrastructure, virtual currencies, and the like. That's an
example of the broad set of expertise that OIA has and needs to
continue to build out.
Unfortunately, as you all probably well know, these are
very similar skill sets that the private sector highly values
and so we need to make sure that we are doing what we can to
recruit folks with this expertise--and that we are training
them appropriately, as well. These are folks that we often lose
to Wall Street, to the tech firms, and the like.
So I think it's important that we understand what our
baseline competencies are that we need. I think we need to make
sure that we take advantage of a variety of U.S. Government
tools that exist to recruit highly qualified experts and I know
that there is a provision in the upcoming Intel Authorization
Act which essentially is a pilot program of sorts to bring
individuals like this in and to compensate them accordingly.
If confirmed, I look forward to working with the Committee
and across the Department to see that pilot program through.
Senator Gillibrand. So one of the ideas that is in the NDAA
for this Committee is a Cyber Academy to do exactly that, to
train a whole set of young recruits like the service academies
to work in civilian capacities in the Federal Government like
at Treasury, like for you in the intel community, throughout
the intel community including Department of Energy, including
CIA and NSA, to do the type of work you're talking about.
Because I would imagine you will also need skills in data
protection, surveillance capitalism, cryptocurrency,
blockchain; and people who have the expertise to be able to
understand how those technologies are being used by China, by
Russia, by adversaries to undermine national security, to
undermine our economy, to undermine our financial services
industry, to undermine our entire financial underpinnings.
So to the extent recruitment and retention of the brightest
and best workforce will be essential for your completion of
your mission and duties, we hope that we can create this Cyber
Academy, to create a curriculum and to create even an ROTC-type
program and collaborate with existing universities to build
that workforce for you. I hope that I can work with you on
developing that curriculum and developing that pipeline of
talent to staff some of your efforts.
Ms. Corless. Senator, thank you for that. I am always in
favor of new and innovative ways come at critical challenges
like this, particularly with respect to recruitment of a next
generation workforce for the intelligence community. And to the
extent that we have opportunities to work together and with
your staff to explore those, if confirmed, I would be honored
to do so.
Senator Gillibrand. Thank you. Thank you, Mr. Chairman.
Chairman Warner. Senator Collins.
Senator Collins. Thank you. Let me begin, Ms. Corless, by
congratulating you for your nomination. I would join my
colleagues in saying that you have an impressive background and
that it should equip you well in your new position should you
be confirmed--I know you always have to add that phrase--which
I anticipate that you will be.
I want to talk a bit about the fact that we are pivoting
away from terrorism and terrorism financing in the focus on
Russia and China. The collapse of Afghanistan amid the chaotic
withdrawal by the administration has allowed the Taliban
obviously to seize control of the country, but equally
worrisome, it opens the possibility that once again Afghanistan
will be a safe haven for terrorist groups intent on attacking
us.
What can be done to ensure that any humanitarian assistance
that is sent to Afghanistan, whose people are in dire need, is
not diverted to strengthen terrorist groups?
Ms. Corless. Senator, thank you for that question and I
think it's a valid one, what you highlighted at the outset, the
pivot from counterterrorism to great power competition and the
focus on China and Russia. Certainly the core mission of OIA is
still going to remain through a pivot like this, identifying
tracking and enabling the threats of disruption to the U.S.
financial system; and certainly understanding, too, how much is
moving to places where we may not want it to go.
And so I think what I would offer as well, while OIA is
making an effort to pivot toward great power competition, that
capability still resides within OIA to follow the money, if you
will, and also to work closely with interagency partners to
understand where U.S. aid may be going, to understand what
those targets might be so, that we can potentially inform and
better direct, as a government, where that aid is going.
Senator Collins. About a decade ago, when former Senator
Joe Lieberman and I headed the Homeland Security Committee, I
remember vividly testimony that we received from the Treasury
Department in which the officials said that Saudi Arabia was
the epicenter of terrorism financing. That was his phrase. As
you look around the world today and as we see increasing
threats which I believe will become even stronger with the
collapse of Afghanistan, what country or countries would you
describe as the epicenter of terrorism financing?
Ms. Corless. Senator, I thank you very much for that
question. What I think I would offer in this setting is that
financial centers around the world are attractive to people
engaged in illicit financial activity. It's crucial that OIA
continues to partner with these financial centers to understand
how the systems are being abused and to understand how money
may be used to--furthering efforts with respect to terrorism-
related activity.
So if confirmed, I pledge that I would continue to work
with our Treasury policy counterparts to understand where
illicit financial activity is occurring so that we can
effectively engage with counterparts around the world.
Senator Collins. Well, just quickly, a final question.
Would Iran be on your list?
Ms. Corless. Senator Collins, I think we are certainly
concerned with Iran's malign influence behavior and their
funding of Hezbollah. So yes, I think I would be concerned.
Senator Collins. Thank you.
Chairman Warner. Senator Blunt.
Senator Blunt. Thank you, Chairman.
Shannon, congratulations to you and your family. This
hasn't been the toughest hearing anybody's ever had in this
Committee--for good reason. I've watched your work. Dan Coats
and others, in addition to Senator Cornyn, have stepped up to
say great things about your work in the past.
Following up on Senator Collins' question about diverted
aid, there have been several stories recently about state-
sponsored groups that seem to do very well collecting U.S.
unemployment during the pandemic and even terrorist groups
that, you know, would suggest they were obviously people they
weren't and start collecting those kinds of funds.
How big a problem do you think that is and what can we do
about it and what's the role of somebody in your job, working
with the Department of Labor or wherever these checks are going
from, to people who actually are in other countries? Though
obviously they're not saying that when they apply for those
moneys. And I've seen numbers adding up to billions of dollars
maybe going to places that were just pure fraud and some of
them were state-sponsored entities.
Ms. Corless. Senator Blunt, thank you for that question. So
I have heard what--much of what you have just shared. It is
something that I probably would need to go back and get briefed
on by colleagues to better understand the challenge and the--
the veracity of the concerns. So I'd be more than happy to come
back and discuss in further detail with you and your staff.
Senator Blunt. Well, I'd like you to do that and I think,
you know, it's obvious people with access to computers and lots
of great skills to suggest they're different people and they
really can take advantage of particularly situations like we've
been in for the last 18 months, where we're trying to get aid
to people as quickly as we can who wouldn't have anticipated
needing it, and what do we do to see that we're not using that
to fund other activities that we don't want to fund.
What would you say is the greatest outside threat to our
financial system?
Ms. Corless. Senator, thank you for that question. I think
without a doubt we are greatly concerned about the cyber
threats posed by China and Russia to the U.S. financial system
and their efforts and intents to take advantage of the
vulnerabilities both with our financial system but also with
respect to our critical infrastructure. We may not talk about
it as much and as at length as we do with China and Russia, but
I think we also would share that we had the same concerns with
Iran and North Korea as well, too.
If confirmed for this position, I would ensure that OIA
continues to stay on top of that issue and produce a strategic
analysis that examines those issues in detail and ensures that
the Secretary and other senior leaders within the government
are informed to take actions that they feel are necessary to
protect our infrastructure.
Senator Blunt. Right. Cyber threat. And as I suggested in
the other question, and as Senator Collins suggested in her
question, is serious cybercrime, some state-sponsored, some
terrorist-sponsored, some just sponsored by people who'd rather
they had our money than we had our money in the United States.
I think that could wind up taking a lot of the time of this job
over the foreseeable future.
Thank you, Chairman.
Chairman Warner. Let me echo what Senator Blunt said. I'd
be really curious. I mean, I saw those same stories, literally
in the hundreds of millions, if not billions potentially,
that--and the stories appeared and then I never saw--and maybe
shame on all of us--that that was many, many months ago and I
don't think we've ever gotten a readout on that ever.
Senator Blunt. Yes. I saw some stories just this week and
we had somebody in our office the other day talking about
people in prison, also with lots of time and the access to
computers, and they've just decided they're going to apply for
unemployment on behalf of them or somebody they know who starts
getting unemployment checks. But I think where Shannon's
concerned, particularly the outside people that could use that
and, you know, they spend their time, particularly terrorist
groups, being totally deceptive and this is a source of revenue
we don't want them to have.
Chairman Warner. Absolutely. Well, Ms. Corless, my friend
Senator Blunt said you've gotten through this hearing so far
pretty well, but you're down to that last Senator who's always
been a bit notorious about trying to raise the zinger
questions.
Senator Sasse. Failing nominees? Is that what I'm known
for? Well, let's call the--.
Chairman Warner. We're going to move to Senator Sasse.
Senator Sasse.--let's call the Chairman of the Finance
Committee instead, Mark.
This question you're asking about, all of the fraud in the
payments in the COVID response package three and four seems
like great, important work for the Finance Committee to do as
oversight. So when Chairman Wyden was here, he noted that six
of the nine of us who were here at that point were on that
committee. Maybe you and I could jointly stiff-arm him that we
ought to actually have a Finance Committee hearing.
Ms. Corless, congratulations on your nomination and
congratulations to your family as well and getting to have, I
guess, two-thirds of them with you today. In your response to
your pre-hearing questions, you noted that malign actors cannot
be permitted to utilize cryptocurrency, digital assets, or
other electronic payment forms as a means of evading sanctions,
financing terrorism, or violating other U.S. laws. Is China
included in that list?
Ms. Corless. If I understand your question correctly,
Senator, you're asking if China is using cryptocurrency to
circumvent the U.S. financial system?
Senator Sasse. Yes.
Ms. Corless. So I think this is again one probably I would
like to discuss in more detail appropriately in a classified
setting, but that said, I think we are generally concerned with
the potential that criminal actors, non-State actors, and then
certainly countries like China and Russia, would use
cryptocurrencies as a manner to circumvent--and Iran and North
Korea as well--to circumvent U.S. sanctions and other U.S.
laws. Absolutely.
Senator Sasse. Thank you. I think there are probably a lot
of us on this Committee who would like to continue to learn
from you on that topic in a classified setting. So then in our
public setting, walk us and the American people through, more
broadly, not the classified piece, but what does it mean that
China is pursuing the digital yuan?
What does it mean for them and what does it mean for us?
Ms. Corless. Senator, thank you for that question. I think
there are some legitimate concerns with respect to the digital
yuan. It is a new technology and so I think I would caveat my
forthcoming remarks by saying that technological innovation in
and of itself is not a bad thing. It is impressed that the U.S.
Government and the Federal Reserve is also exploring digital
currency as well, too.
So I think there's still a lot to be learned, but certainly
with respect to China's efforts with the digital yuan, I think
there is concern about the potential that it creates a new
opportunity for surveillance, more collection of data of U.S.
persons or people around the world, the extent to which it is
adopted more beyond China's borders. So I think it's something
that we need to pay extremely close attention to.
I know that they are planning to use the Beijing Olympics
as an opportunity to roll that out and it is something the
community and certainly other colleagues across the policy
interagency are watching very closely, as you all know.
Senator Sasse. Yes. I appreciate the distinction you drew
there because obviously the world has benefited, the U.S. has
benefited, but the world has benefited that the dollar has
remained the reserve currency of the world for the whole post-
World War II global order. It has been a positive-sum game that
nations that allied with us, nations that believe in human
rights, free trade, open navigation to seaways, transparent
contracts, et cetera, have benefited. It has been a positive-
sum game, not a zero or a negative-sum game as the CCP wants,
going back to Vice Chairman Rubio's questions.
So there's all sorts of threat to the U.S. as the global
reserve currency, but in addition, there's all this exported
surveillance State powers that the CCP continues to offer to
autocracies around the world that they can track. They could
potentially track all payments denominated in that digital
currency in real time, both their citizens and the citizens of
other countries that governments are scared of and want to hold
down.
What do you think the role of OIA should be in preventing
strategic surprise, not just for Treasury, but also for the
Federal Reserve more broadly?
Ms. Corless. Thank you very much for that question,
Senator. I think to sort of sum up your points, I think we can
easily say that the financial system is undergoing some
substantial changes right now with the arrival of digital
assets, to include cryptocurrencies and to include digital
currencies as well. How the financial system evolves will
affect the departments as a whole. It will affect their work
across both licit economic and illicit finance portfolios.
So if confirmed as the assistant secretary for OIA, I will
ensure that OIA is tracking these developments very carefully
through engagements with colleagues across the department,
counterparts in the Federal Reserve, and others across the
interagency to understand what's going on, make sure that the
workforce is able to provide expert level advice to Secretary
Yellen and others across the government.
Senator Sasse. We're basically out of time for me, so I'll
be brief on this one, but thinking of the office, not to which
you've been nominated, but the one you're departing from, and
the coordinating responsibilities of ODNI across CIA and other
agencies in particular, do you think we have the right human
capital right now to do that kind of high level of financial/
intel integration work?
Ms. Corless. That's an excellent question. I think what I
would say is that these are issues that elements of the IC have
been studying for a long time. Generally speaking, they tend to
be sort of smaller groups, I think, vis-a-vis the level of
importance that is being placed on the issues today. So I think
we have an opportunity here, thanks to the interest--the
recognition of our senior IC leadership, and the importance of
these issues with respect to countering China and Russia and
other competitors, as well. They recognize the importance, they
recognize the need to invest in human capital. And certainly
we've had some good opportunities with the committee staff to
look at opportunities to how we can better invest. So I think
we are in a good place. However, we have a ways to go,
particularly given the complexity of the issues which we are
facing today.
Senator Sasse. Thanks for being frank.
Chairman Warner. Very good job. I want to follow-up on two
things that Senator Sasse said, then I've got just a learning
question on my part.
One, I do think your--Senator Sasse's last comment--we've
got a lot of bright people in the intel community, but the kind
of basic financial knowledge that you get in the first couple
years at a McKinsey or at a Goldman or I think back to some of
my times--. Very smart folks on trying to sort through
Chinese tech firms. And again, I think we need to always make
clear our beef is with the Communist Party of China, not the
Chinese people. The CCP manipulating these tech firms. There
was an enormous lack of knowledge of that--again, a first-year
or second-year associate in investment firms would know how to
get that information--and I don't know whether part of that is
because there's a reluctance to look at American assets that
comes from the intelligence side. But where that fits? And is
that going to be your job if we're going to ask, all right, how
many of the American private equity firms that candidly have
refused to take a classified briefing from this committee on
the challenges presented by China, how many of these private
equity firms have major investments in Baidu, Tencent, Alibaba,
TikTok? The list goes on and on.
Where should I go to try to get that question from somebody
in the IC or USG? Would it be your office?
Ms. Corless. That is a good question, Senator, I think one
that I would have to explore in more detail and take back. I
think it is possible that that information is available through
a couple of different locations within the government and
certainly to the extent that that information is available in
terms of who is investing where, OIA, in partnership with other
IC partners, including those at the FBI, would certainly
welcome the opportunity to engage with those . . .
[Crosstalk.]
Chairman Warner. Some of this is public, you know--a lot of
this is public information that you could get from the SEC or
if you just look at the filing reports. I worry--again echoing
what Senator Sasse said and indirectly what Senator Gillibrand
said--that we may not have the skill set that has that
background as it's more than just kind of technically follow
the money, but look at the analysis of investment patterns.
It's one reason why so many of us on this committee think In-Q-
Tel is a very valuable asset. But I would hope this would be
something you think about.
Let me take another question that Senator Sasse raised and
we've had some spirited discussions with the IC about the
digital yuan and the movement within the financial community to
more digital assets. I think there's a lot of upside there, but
there's also some challenges. One of the theories that have
been said is that the ubiquity of Chinese mobile payment
systems, which will be, as you said, rolled out at the Olympics
and then, God willing, we'll see the demise of COVID and
tourism return, Chinese tourists in Europe.
And if those global payment systems get picked up as the de
facto payment system the currency that backs, most consumers
won't care. Could be the digital yuan. I do think we could get
to where Senator Sasse was headed on his questions about
ultimately the dollar's reserve currency. If we were looking at
that and trying to get the answers and monitor that and follow
that, where should I ask that question? To whom in USG? Would
it be OIA or would it be somebody in the traditional IC
community?
Ms. Corless. Certainly, Senator. I think OIA would probably
be one of the first places to go based on my understanding of
how they are looking at this activity, but certainly there are
other organizations within the IC that would be very well
positioned to discuss this as well.
Chairman Warner. Well, sitting there from your current
position at ODNI, when you list that mouthful title that you've
got, are you, in your current role, supposed to be coordinating
all that activity? I mean, like one of the things I worry
about--we've got lots and lots of expertise in the IC and I'm
still not sure that we're bringing it all together in one spot.
But you've done a great job, you've got a committee that's
obviously very, very supportive. I'm not trying to do a gotcha
here, but where should that be taking place?
Ms. Corless. Senator Warner, it's a valid question. I think
in my current role right now, our emphasis, I would say, is
two-fold. First, we work to ensure that the DNI and the
principal deputy and other leadership are prepared to engage
with--with their cabinet level counterparts and IC meetings
downtown and with respect to their engagements with the White
House, as well.
But the other part of my role is ensuring that the IC has
the resources that it needs to focus on issues such as this. So
I would say while we are responsible to a degree in my current
role for having some of that insight and expertise. Really,
where the work is done is out in the IC and so it is my current
job to ensure that we've got our collection and analytic
priorities in place and that we are working with IC agencies to
ensure that they have additional resources----
Chairman Warner. But does that mean, you bring in CIA
analysts? I know ODNI's got some of their own analysts. Do you
bring in OIA? You know, do you bring in--can you tap resources
of folks at the Fed? I mean, how do we make sure all this
information, particularly in new technology, emerging spaces
around finances that we're tapping into all that expertise?
Ms. Corless. Sure. It's less about bringing the resources
to ODNI from CIA and as much as it is--or other agencies as--
and as much as it is ensuring that they have the resources and
then we work with all the agencies to help coordinate the
production that is done so that we can take advantage of
whatever unique expertise resides in each agency. So that we
minimize redundancies and that we are providing a more complete
picture of the challenge to our various policy customers.
Chairman Warner. I think we've still got some room for
improvement there. Let me ask you--this will be my last
question. When Senator Burr and I and this committee took on
the Russia investigation, we spent some time with FinCEN which
was, you know--I think actually while the administration did
some good reforms there, but it's still pretty opaque to me.
At OIA, do you have the ability to garner data from FinCEN
or how do you get this trove of information that FinCEN--or
would you have to go through law enforcement? How would you
access some of that information?
Ms. Corless. Senator, thank you for that question. I offer
this without yet being confirmed for the position. As I
understand it, there is a good working relationship between the
two organizations and they are working through appropriate ways
for how to share information between the two organizations. If
confirmed, that's certainly something that I'd want to continue
to work on--and resolve--and certainly work with your staff as
appropriate.
Chairman Warner. Well, I think, again, that would be
something we found a not a very productive relationship from
the committee to FinCEN and I sit on the Banking Committee and
the Finance Committee, so I've followed this in a variety of
ways and, again, I think some of the people--. But I think when
we're thinking about--echoing a bit of Senator Wyden's concerns
around the privacy issue--but still getting at--that data to be
able to follow--.
I again, coming back to something I read today about the
very aspect of everything this Committee's been trying to
prevent in terms of China potentially, you know, not stealing
through cyber, but through direct investment into a struggling
American semiconductor facility that's at the cutting edge. I
mean, it was a little bit of a--holy heck, I mean, how is this
even still popping up? Where are the warning signals supposed
to come from? And I'm not really sure that I'm still clear,
even as much time as I've spent on this, whose responsibility
is it inside the American government? It may even be pre-actual
investment, which then might still go through FIRRMA. But, you
know, if this is floating out there, whose responsibility is it
to go, you know, tell the company beware? Is it FBI? Is it OIA?
Do you have a sense on that or any advice to give me?
Ms. Corless. Certainly, Senator. So I think it's a
reflection of the complexity of the environment that we're in
these days and the, I would say, sort of almost meteoric rise
of the use of economic and financial tools as a way to counter
these challenges. So there's a little bit of catch up that I
think the intelligence community in general, and maybe to some
extent, you could argue, the U.S. Government more broadly, is
going through right now to contend with the use of these very
powerful and effective tools when implemented correctly.
So I think while there is room for the IC to play a role in
this conversation, certainly I think the FBI is a critical
partner in engaging industry as well, with these challenges.
Chairman Warner. Well, it's something, you know you clearly
have a lot of support sitting around this committee and helping
us think it through and helping us find these answers with the
broad background that my friend Senator Burr talked about that
you bring to this job, we hope to engage with you. And then,
again, I guess final, final comment is: Declan, your mom did
really good and, Linda, your daughter did really good.
So we will remind the staff that if you've got questions
for the record, please get them in by 5 p.m. on Thursday. We
look forward to trying to move this nomination as quickly as
possible.
Any other questions?
[No response.]
This hearing is adjourned.
[Whereupon the hearing was adjourned at 3:47 p.m.]
Supplemental Material
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