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Now: Intel Chiefs Testify At Senate Worldwide Threat Hearing; Princess Of Wales Says She Edited Photo, Apologizes For "Confusion". Aired 3-3:30p ET

Aired March 11, 2024 - 15:00   ET

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

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BRIANNA KEILAR, CNN HOST: Right now, senators are meeting directly with the leaders of America's intelligence community at this annual hearing on worldwide threats.

BORIS SANCHEZ, CNN HOST: Yes, war is spiraling in the Middle East. There's been two years of carnage in Ukraine, the rise of autocracy and artificial intelligence. The world is facing a myriad of threats to security.

Let's listen now to DNI Avril Haines, who's speaking to the Senate committee.

UNIDENTIFIED MALE: I recognize people feel passionately but the American people deserve to hear from the leaders of the Intelligence Community. Director Haines, continue.

AVRIL HAINES, DIRECTOR OF NATIONAL INTELLIGENCE: The second category is a set of more intense and unpredictable transnational challenges, such as climate change, corruption, narcotics trafficking, health security, terrorism and cybercrime that often interact with traditional state-based political, economic and security challenges.

And the third category is regional and localized conflicts that have far-reaching and at times cascading implications, not only for neighboring countries, but also for the world. And all three challenges are affected by trends in new and emerging technologies, environmental changes and economic strain that are stoking instability and making it that much more challenging for us to forecast developments and their implications.

These dynamics are putting unprecedented burdens on the institutions and the relationships that the United States relies on to manage such challenges, and perhaps more than ever, frankly, highlight the need for sustained U.S. leadership to uphold the rules-based order. And I'll just touch on these three categories of challenges, starting with strategic competition in China, in an effort to provide some context and highlight some of the intersections.

President Xi continues to envision China as a leading power on the world stage, and Chinese leaders believe it is essential to project power globally in order to be able to resist U.S. pressure, for they are convinced that the United States will not tolerate a powerful China. Nevertheless, the PRC seeks to ensure China can maintain positive ties to the United States and will likely continue to do so this year, as they see stability in our relationship as important to their capacity to attract foreign direct investment.

Boosting the domestic economy is a fundamental priority for President Xi, yet he appears to be doubling down on a long-term growth strategy that will deepen public and investor pessimism over the near term. With youth unemployment around 14.9 percent, no major stimulus aimed at consumption forthcoming, massive local debts, and a property market contraction, 2024 is likely to be another difficult year for China's economy, all against the backdrop of an aging and shrinking population and slowing economic growth.

And President Xi is counting on China's investments in technology, such as advanced manufacturing and robotics, artificial intelligence, high-performance computing, to drive productivity gains and spur future growth. Yet he is increasingly concerned about the United States' ability to interfere with China's technological goals. Consequently, in an effort to protect and promote China's capacity to compete technologically, which President Xi views as fundamental to his long-term growth strategy, PRC leaders modified their approach to economic retaliation against the United States over the last year, imposing at least some tangible costs on U.S. firms, even as they continue to moderate such actions to avoid domestic costs.

And Chinese leadership is furthermore pursuing a strategy to boost China's indigenous innovation and technological self-reliance, expand their efforts to acquire, steal or compel the production of intellectual property and capabilities from others, including the United States, and continue to engage in coercive behavior to control critical global supply chains of relevance.

In the meantime, President Xi's emphasis on control and central oversight is unlikely to solve the challenges posed by China's economic and endemic corruption, demographic decline, and structural economic constraints. And over the coming year, tension between these challenges and China's aspirations for greater geopolitical power will probably become all the more apparent.

Given its ambitions, Beijing will continue to use its military forces to intimidate its neighbors and to shape the region's actions in accordance with the PRC's priorities. We expect the PLA will field more advanced platforms, deploy new technologies and grow more competent in joint operations, with a particular focus on Taiwan and the Western Pacific. The role intended for China's growing nuclear forces and cyber capabilities in this effort and the ultimate intent behind unprecedented growth in these areas remain a priority for us in the IC, and they are not unrelated to actions of Russia.

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President Putin's war of aggression against Ukraine continues unabated. Ukraine's retreat from Avdiivka and their struggle to stave off further territorial losses in the past few weeks have exposed the erosion of Ukraine's military capabilities with the declining availability of external military aid.

The assistance that is contemplated in the supplemental is absolutely critical to Ukraine's defense right now. And without that assistance, it is hard to imagine how Ukraine will be able to maintain the extremely hard-fought advances it has made against the Russians, especially given the sustained surge in Russian ammunition production and purchases from North Korea and Iran.

And meanwhile, President Putin is increasing defense spending in Russia, reversing his longstanding reluctance to devote a high percentage of GDP to the military as he looks to rebuild. In many ways, this is prompted by the fact that Russia has paid an enormous price for the war in Ukraine. Not only has Russia suffered more military losses than in any time since World War II, roughly 300,000 casualties and thousands of tanks and armored combat vehicles, setting them back years, it has also precipitated Finland and Sweden's membership in NATO, which Putin believes requires an expansion of Russia's ground forces.

Putin continues to judge that time is on his side and almost certainly assumes that a larger, better-equipped military will also serve the purpose of driving that point home to Western audiences. Such messaging is important because Putin's strategic goals remain unchanged. He continues to see NATO enlargement and Western support to Ukraine as reinforcing his long-held belief that the United States and Europe seek to restrict Russian power and undermine him.

And of course, in the meantime, Russia continues to modernize and fortify its nuclear weapons capabilities, even though it maintains the largest and most diverse nuclear weapons stockpile. We remain concerned that Moscow will put at risk longstanding global norms against the use of asymmetric or strategically destabilizing weapons, including in space and in the cyber domain.

Another critical intersection we are monitoring is the relationship, as the Vice Chairman noted, between government of Russia, China, North Korea and Iran, which is evolving as these four countries expand collaboration through a web of bilateral and in some cases trilateral arrangements.

This growing cooperation and willingness to exchange aid in military, economic, political and intelligence matters enhances their individual capabilities, enables them to cooperate on competitive actions, assists them to further undermine the rules-based order, and gives them each some insulation from external international pressure.

Nevertheless, we assess these relationships will remain far short of formal alliances or a multilateral axis. Parochial interest, desire to avoid entanglements, and wariness of harm and instability from each other's actions will likely limit their cooperation and ensure it advances incrementally, absent direct conflict between one of these countries and the United States.

And nevertheless, the power dynamics are shifting among them, and this is creating new challenges. In particular, Russia's need for support in the context of Ukraine has forced it to grant some long-sought concessions to China, North Korea and Iran, with the potential to undermine, among other things, long-held non-proliferation norms.

And as I noted in the beginning, intensifying transnational challenges are intersecting with these more traditional threats. For example, with the advent of generative AI, states and non-state actors who are interested in conducting foreign malign influence operations no longer need to master a language to create potentially believable false content. The threat of malign actors exploiting these tools and technologies to undercut U.S. interests and democracy is particularly potent as voters go to the poll in more than 60 elections around the globe this year, as the Chairman noted.

We have also seen a massive increase in the number of ransomware attacks globally, which went up roughly 74 percent in 2023 from what it was in 2022, and U.S. entities were the most heavily targeted. Many of these are conducted by non-state actors, with the Russia-based cybercriminal group, LockBit, remaining the most popular ransomware- as-a-service provider.

LockBit was responsible for nearly a quarter of all claimed attacks worldwide, leading to a joint effort by 11 countries to seize its resources and take down its online domains. Transnational criminal organizations and human smuggling operations increasingly exploit migrants through extortion, kidnapping, and human trafficking.

And in particular, the threat from illicit drugs remains at historic levels, with Mexican transnational criminal organizations supplying and moving large amounts of synthetic opioids, such as fentanyl, into the United States.

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More than 100,000 Americans have died from drug-related overdoses during the past year, and most of those deaths have been attributed to illicit fentanyl. And as such, the threat from fentanyl and other synthetic drugs to the health and welfare of everyday Americans remains a top priority for the intelligence community.

In the third category, we have multiple regional conflicts with far- reaching implications, perhaps nowhere more obviously than in the Middle East. This crisis in Gaza is a stark example of how regional developments have the potential for broader and even global implications. Now having lasted for more than five months, the Gaza conflict has roiled the Middle East with renewed instability presenting new security paradigms and humanitarian challenges while pulling in a range of actors.

The conflict has prompted new dynamics even as it has entrenched old ones. We continue to assess that Hezbollah and Iran do not want to cause an escalation of the conflict that pulls us or them into a full- out war. Yet the Houthis entered the war and were willing to do so without Iran acting first, becoming one of the most aggressive actors in the conflict.

And the Iranian-aligned militia groups in Iraq and Syria that have been attacking our forces and have been more focused on the United States than Israel, using the conflict as an opportunity to pursue their own agenda. Moreover, the crisis has galvanized violence by a range of actors around the world. And while it is too early to tell, it is likely that the Gaza conflict will have a generational impact on terrorism.

Both Al-Qaeda and ISIS, inspired by Hamas, have directed supporters to conduct attacks against Israeli and U.S. interests. And we have seen how it is inspiring individuals to conduct acts of anti-Semitism and Islamophobic terror worldwide. In this third category of regional and localized conflicts, we have many more we might discuss, including Haiti and Sudan, and what is happening in the Eastern Democratic Republic of Congo, and the list goes on.

And this finally brings me to 702 of the Foreign Intelligence Surveillance Act, which will expire on April 19th without congressional action. The intelligence gathered pursuant to Section 702 was essential in preparing this annual threat assessment and is absolutely fundamental to every aspect of our work, as I know you know. 702 provides unique insights into foreign intelligence targets such as foreign adversaries, terrorist organizations, including Hamas, weapons proliferators, spies, malicious cyber actors and fentanyl traffickers. And it does so at a speed and reliability that we simply cannot replace with any other authority.

And as Congress pursues reauthorization, we understand there will be reforms, and we support those that bolster the compliance and oversight regimes in place, while preserving the operational agility that is vital to keeping the nation safe.

Thank you for your patience and we look forward to your questions.

UNIDENTIFIED MALE: Thank you, Director Haines.

Let me go for members, and I appreciate it. I know we don't normally do these on Monday. I appreciate everybody coming in. We will be conducting a closed session after this open session, so members should hold any questions on a classified nature until after that. And after the chair and vice chair go through our first round of questions, we'll then recognize members in rounds of five minutes.

SANCHEZ: We've been listening to the Director of National Intelligence, Avril Haines as she's briefed members of the Senate Intelligence Committee on threats to the United States. We're, of course, going to keep monitoring what questions she and others on the panel are asked.

But briefly reviewing some of her remarks, she went through a series of overall threats to the United States, including strategic competition with China, the ongoing Russian invasion of Ukraine and we should note the conflict in Gaza. It struck me that during the beginning of her remarks, she was interrupted by a protester demanding a ceasefire in Gaza. She specifically said that that conflict has prompted complications and the dynamics across the Middle East. And she said that it would have a generational impact on terrorism. Obviously, a lot of threats to go over, a lot of hot spots around the world. KEILAR: That's right. And she went on to talk about Russia and

Ukraine. She said that when it comes to Vladimir Putin, his strategic goals remain unchanged. He continues to see NATO's enlargement and Western support to Ukraine is reinforcing his long held belief that U.S. and - the U.S. and Europe are trying to restrict Russian power, that they're trying to undermine him. And she, before Congress, was making the point that this aid to Ukraine is critical, that they're not going to be able to remain where they are in the war if they don't get it.

SANCHEZ: Yes, a significant point we expect will come up over and over again.

Let's dig into what we've heard so far with some key voices. We have Alex Marquardt and Beth Sanner with us. Thank you both for joining us.

Beth, first to you, you were comparing some of the remarks that we heard in this annual briefing of members of the Senate to last year. And you specifically pointed out that there was a difference this year in the way that the DNI connected some of the adversaries to the United States, being Russia, China, North Korea and Iran.

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That is significant, painting that picture.

BETH SANNER, CNN NATIONAL SECURITY ANALYST: Right, exactly. And Marco Rubio made the same point in his opening remarks. And so I think that this is something really important for people to understand. It was missing last year. Last year, it was kind of a country by country thing. And this year, she really did say, look, this combined effort and collaboration between our adversaries is making each one of them stronger. And I think that that's something that we're really going to have to pay attention to for a long time.

KEILAR: What stood out to you, Alex?

ALEX MARQUARDT, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, I mean, just generally, this is such a rare opportunity to see all these top officials who speak - I can count on one hand the number of times we hear from them publicly each year and to have them all together is such a rare opportunity.

So to some extent, it is going to be a laundry list of the various threats that the U.S. is facing from nation state actors, non-state actors, but then other things like climate change, health, the economy, that kind of thing. And I think to Beth's point, it'll be very interesting to see how they bring all of this together.

Now, I think they're really going to dig into the meat of these various subjects in the Q&A when the senators get to ask the questions. Then, as we just heard from Haines (ph), there's going to be a classified briefing afterwards. But this is two days, tomorrow there's a House version of this, of really a rare glimpse into what these people are thinking. And so what I really want to hear is their assessment of what has

happened in the past year and what they expect to come in the coming year. Specifically, these two wars that are raging in Ukraine and in Gaza, their assessment of where they think Russia is going to go in the coming year on the Ukrainian battlefield, but also in other - various other fora like cyberspace and interfering with our elections.

A lot of this will be through the prism of American politics. Of course, the Senate did approve supplemental funding for Ukraine. That is something that we have not seen in the House. And so I imagine these National Security officials are going to be encouraging these lawmakers to send more funding to Ukraine to ward off that Russian threat. And then, of course, the war in Gaza and where they think that is going.

This is, to some extent, they're not just looking at the past year, but they're also trying to give the American public a sense of things to come. But they don't have a perfect crystal ball. I was looking at the report from last year, there is no mention of Hamas. There is a mention of threat to Israel via Iran and its proxies, but nothing to indicate that we're going to see the scale of the war that we're going through now.

And then I think on the domestic front, they're also going to be asking Chris Wray about - the head of the FBI - about the threats that we're facing. And I would imagine that as a result of this war in Gaza, he's going to hone in specifically on the anti-Semitic threats and the Islamophobic threats as well that are so high right now.

SANCHEZ: You mentioned something that she said about a desire by these adversaries to interfere in U.S. elections. And she specifically mentioned something about the use of artificial intelligence making that easier. That's going to be the next frontier worth of challenges for the United States.

MARQUARDT: It really is.

SANNER: Yes.

MARQUARDT: And it's not something that came up. I don't recall how much it came up last year, but it's certainly going to be nothing compared to this year.

SANNER: Right.

MARQUARDT: I mean, this really is at the forefront. We're talking about deep fakes. We've already seen that kind of thing. And there is a question to what extent China will interfere in the election. They - I was just looking through some of her opening remarks, and she does talk about China actively wanting to exploit societal divisions here in the United States. That's essentially ripping off the Russian playbook.

SANNER: Yes, yes, right. And they hinted at this last year, but I think we've really seen over the past year China stepping up and mirroring this kind of approach to societal divisions with using AI generated images, like a picture of the Statue of Liberty fully armed and showing - trying to show that America is the perpetrator of unrest around the world. So it is definitely a different move by China.

KEILAR: How significant is this description of this cohesion of countries that are not friends of America at a time where you see Donald Trump previewing what he would like in another term, should he go back into the White House, we see him obviously kind of continuing his applause of authoritarians and his desire to pull America back from the world order post-World War II that it has benefited from so much that would counter sort of this cohesion of these nations that you're talking about, that Haines is describing here before the - this committee.

SANNER: Right. I mean, I think that this is - this whole idea of - that we can put up a wall around our country and somehow everything's going to be okay if we just like pull in and just let the world go because we're so powerful and strong.

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And as Warner - Sen. Warner brought out in his introduction, the world and the threats that face the United States, our whole vision of what national security threats are needs to change. We used to think about it as tanks and ships, but now we have to think about it as cyber. We have to think about it as economic warfare and all these things are coming to our homeland in different ways.

And if you allow one of these actors to go, it's kind of hard to say, oh, Russia do what you want and think that that doesn't have an implication with Iran. We're waiting right now for a state treaty between Russia and Iran to be finalized. And Iran and Russia are exchanging military capabilities that will only make Iran a stronger adversary against us and Israel. So how does that work? It doesn't.

SANCHEZ: When you were talking about rethinking National Security, I thought for a moment that you were going to mention TikTok because that may come up as part of the conversation today, given where things stand on Capitol Hill. There's a division where previously it seemed like lawmakers were more in line with this idea that it needed to be regulated. There's more division now, in part because former President Donald Trump came out in support of not banning it effectively, no?

SANNER: Yes, I mean, it's kind of an interesting thing. The way that the bill goes is kind of complicated, but it would only ban it on the app. So you could still get it on your computer. And what they're trying to do is force a divestiture to make ByteDance, the parent company, be owned by an American. And so a lot of this is about pressure tactics to get them to sell and I think that President Trump would support that. I think it's just - he knows how popular it is, and he's just playing the populist card, just like Biden is on TikTok. It's complicated.

MARQUARDT: It is remarkable also to see Marco Rubio and Sen. Mark Warner, the Republican and Democrats who lead this committee, very much on the same page when it comes to ...

SANNER: Yes.

MARQUARDT: ... the threat of TikTok and the fact that at the end of the day, they're obviously looking past the point that the fact that this is a very, very entertaining app, but it has a very powerful, clever algorithm that allows China to essentially to suck up this data. And we have seen the President essentially arguing that TikTok should not be allowed on government phones as a result. And then he's also getting blowback because he's very much using it as part of his campaign and talking to creators and influencers on TikTok for his political motivations.

KEILAR: It shows you how you have to do that if you're going to reach people, you know?

SANNER: Exactly right.

KEILAR: Welcome to our world.

SANCHEZ: We're watching for a House vote on that divestiture bill that passed the committee that should come later this week. We'll keep an eye on it for now.

Alex Marquardt, Beth Sanner thank you both so much.

SANNER: Thank you.

MARQUARDT: Thank you.

SANCHEZ: Appreciate it.

So still ahead, a royal apology. The Princess of Wales, Kate Middleton, now responding after several international news agencies pulled a doctored photo of her with her kids.

Plus, are teenagers starting to spend less time on their phones? A new study suggests, yes, why a lot of teens are starting to unplug more often. This is - we're talking about TikTok.

KEILAR: Good for them.

SANCHEZ: Well, we'll be right back.

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SANCHEZ: Just moments ago, we got pictures into CNN showing the Princess of Wales in a car leaving Windsor Castle alongside her husband, Prince William. You see them there. The images come amid growing concerns about her health after the first official picture of her since her January abdominal surgery was released. And it was pretty clear the image had been photoshopped.

Princess Kate says that she was the one who edited the picture of her and her kids celebrating Mother's Day in the U.K. And now she's apologizing for what she calls any confusion it sparked. Joining us now is Molly McPherson. She's a Crisis Communication

Strategist and contributor for forbes.com.

Molly, thanks so much for being with us. You've suggested that part of the palace's problem here is that they have different communication strategies for different members of the family. How might that factor into this?

MOLLY MCPHERSON, CRISIS COMMUNICATION STRATEGIST: This is a new royal family, much different from the time during Princess Diana's death in 1997. Instead of placating the public and giving them what they want, Queen Elizabeth II coming down and visiting Kensington Palace. Now it seems they were trying to engineer their way out of controlling the narrative against the public. They seem to be losing the story and everyone is noticing it.

SANCHEZ: So Molly, the princess tweeted that explanation for the photoshop snafu that she was responsible for it. It doesn't sound like you think that was enough to put this issue to bed. It seems like you think it needs more cleanup.

MCPHERSON: Yes, the challenge for the royal family right now is they are in a damage control situation. There is scrutiny from everyone, not just the press, not just from fervent royal watchers, but just the general casual public. People are literate enough to recognize that not only is the royal family engineering things behind the scenes, there seems to be some type of theater happening, but everyone can see the strings. They know what they're doing and what they're trying in these attempts to try and tell everyone that everything is fine with Princess Kate.