tv Election Interference from Shell Companies Virtual Currency CSPAN June 27, 2018 10:44pm-11:47pm EDT
government. government doesn't have to be a bad word. >> be sure to join us july 21 and 22nd where we will feature our visit to alaska. watch alaska weekend on c-span, c-span.org or listen with the free c-span radio app. >> a senate judiciary subcommittee examined the use of shop companies and virtual currencies as ways.countries are influencing u.s. elections. witnesses include a former director of the treasury department office of illicit finance. a representative with the cyber security firm called dark tower and the head of the center born politics. this is about one hour. >> the subcommittee will come to order. i appreciate senator whitehouse being in attendance
and coming up with an endless pool of good ideas. i learned a lot about crypto currency. let's see if i can put it into action for the purpose of this hearing today is to look at the problem the country faces in terms of how a shell corporation could be exploited by a foreign entity. how easy it would be to create a corporation in america and funnel foreign money through it to affect our democracy, and how these virtual currencies, big.in others, how they can be manipulated by foreign powers or other groups to influence our democracy. what i would like to do is introduce our panel and turn it over to senator whitehouse who will lay out the case better than i. that's why were doing it. i will say this, i got german grassley here and i appreciate
his attendance. were not talking enough about this problem. it's going to happen, it probably already has happened, and the good news is there's legislation that we can enact pretty quickly if we chose to that would make it easier to stop this and senator grassley has been terrific on the subject matter and i appreciate that. i will turn it over now to senator whitehouse. >> thank you very much for holding this hearing. this is one of a series of first that we have accomplished in the subcommittee under your leadership. i am grateful for it. some things are obvious like holding the first hearing on russian interference. some are not publicly known but are significant and i want to open with a word of appreciation to you. we had a hearing in april where mark zuckerberg testified before the judiciary committee about the new measures facebook was incrementing to make sure porn actors cannot five class on facebook and interfere in u.s.
elections. facebook, mr. zuckerberg told us, was going to require valid identification and verify the political ad purchaser. however, in response my question, he conceded that facebook would not look behind a shell corporation to determine the actual identity of the actual buyer. if a foreign there merely funnel money into a domestic shell corporation, which then purchases the ad, facebook would be none the wiser. unfortunately, the federal election commission and other campaign-finance regulators are no better equipped to detect foreign identity laundering in u.s. elections. while foreign corporations and foreign nationals are prohibited from spending money in elections, our lack of effective disclosure laws would allow foreign interest to set up shell companies, hide their identities and engage in illegal political
spending. we would never know it. quite simply, vladimir putin and his oligarchs can use the exact same tactics american special-interest used to spend anonymous money in our elections and secure influence. the crooks and criminals have long used shell companies to obscure ownership and hide ill begotten assets. as we learn more about russian interference in election and about their playbook abroad, thanks to subcommittee hearings, we now see how these same devices can be used to hide foreign meddling in our elections. last year at a judiciary committee hearing on russian interference, homeland security advisor to george w. bush noted, and i quote, it is critical that we effectively enforce the campaign-finance laws that would prevent this type of financial influence by porn actors. i couldn't agree with him more , but we don't and part of it
is because we don't look through shell corporations to see who is really there. it's the first step to help address the problem and i'm pleased to work with senator graham, german grassley and blumenthal to introduce the shell company abuse act. thit targets those who help establish these shell companies. it would make it a felony for an owner, officer or attorney or agent of a corporation company or business entity to establish or use a corporation company or business entity to conceal illegal political activity by a foreign national. separately senator dermot and blumenthal and i introduced the stop secret foreign interference in election fact. among other things that bill would require senior executive officers to certify that they have done their due diligence to ensure that no foreign money has been accepted for their put collectivity and
that they have not spent any foreign money on campaign related disbursements. that bill has been referred to the finance committee. i read it today is another example of the type of legislation congress should consider to defend against the clearly predicted threat of foreign interference in our election. our hearing will also examine whether crypto currency can be used to launder foreign money into the u.s. election. the growth of virtual currency raises a host of challenges for congress and regulators. i'm glad our subcommittee is beginning to examine it and gain a better understanding of how this emerging technology works but i'm looking forward to learning how anonymous various virtual currency are and about the risk and the anonymity of those currencies for hidden influence in our political system. alexander hamilton advised that corruption from the desire in foreign powers to
gain an improper ascendant in our counsel is one of the most deadly adversaries of republican government. this adversary is no less deadly today so while campaign-finance is often a hyper part on the hill, i think hamilton was right and we have a compelling interest in making sure foreign agents cannot sabotage and infiltrate our political arena. i think the chairman for holding this hearing and i hope this is a sign of good future work to protect our elections. thank you. >> i noticed the chairman, senator grassley, would you like to say anything. >> number one, to explain that i won't be here because of the
farm bill, number two to thank our witnesses because i know everybody that appears when this before this committee have to do a lot of work so thank you for doing that and thank you for the audience being interested in and besides thing thank you to the chairman or ranking member, congress continues to confront the election interference issue and find all the ways that we can to try to prevent in future elections the judiciary committee has taken a lead role in that effort. this is the seventh hearing we have had on this single topic over the past 19 months. we have heard from a number of witnesses on this topic who have made a ride range of recommendations on how to deal and approach 2018 midterms. i'm pleased that the witnesses here today have offered to lend their expertise and their own perspective. i've also cosponsored the shell company abuse act along
with senators white house, graham, durbin and blumenthal, the bill incorporates some of the recommendations we've heard from experts on both sides of the the bipartisan bill shows that we can work together across party lines, put politics aside for the good of the country and help secure our election infrastructure so i look forward to the hearing record as we will hear from today's witnesses about the official steps that can be taken to protect their elections and i will submit some questions for a response if you would respond to them in writing. thank you. >> mr. chairman, if i could, i overlooked expressing my appreciation to german grassley for his work also on the title corporation which is probably the broadest shell corporation disclosure measure in congress right now, focused obviously on foreign election spending but also on not having america become a haven
for criminals around the world. i appreciate very much, the chairman support on that legislation. i should've mentioned it. >> thank you chairman for your leadership. our panel is mr. david murray. he is a financial integrity networks vice president for product development and services. before joining fim master he was involved in all aspects of financial integrity policy at the treasury department. mr. scott is the director of secure transactions at dark tower a global advisory firm focused on fiber engineering. he is senior leadership at financial institution and law-enforcement involving alternative payment systems like crypto currency in the application about chain to the
financial health care supply chain industries, and last is ms. sheila. she is the executive director for the center for responsive policies, and nonpartisan watchdog that tracks money on its website open secrets.org. she briefly served as a research director supervising data analysis for open secrets.org. we all please stand and be sworn in. >> raise your hand. >> used solemnly swear the testimonies the truth, the whole truth and nothing but the truth so help got. >> thank you. >> be seated. you can lead us off. >> thank you chairman graham and ranking member for convening this hearing to discuss protecting our elections from.interference.
thank you for the invitation to be here today. it is an honor. interference in our democratic process is a critical national security threat. the american people are fortunate for your diligence in addressing it. as you noted ranking member white house, the concern about foreign interference in election predates the ratification of the constitution. since then congress has asked us to protect them from foreign interference but despite these efforts they remain vulnerable in the political and electoral processes and critical gaps in our transparency regime. for nava series have both low-tech and high-tech options to undermine democratic processes. among the low-tech options anonymous companies are the leading threat. among high-tech options, virtual currencies are emerging. today we will discuss how foreign actors have exploited the campaign finance laws. i will conclude by providing
ways to strengthen the transparency. in 2016 russia unleashed a campaign that was the boldest yet to target united states according to the u.s. intelligence community. it represented a significant escalation in directness, level of of activity and scope of effort aimed at the election. covert influence requires dark funding in order to remain covert. if the funding trail went back to the kremlin this component of the campaign would've unraveled in short order for the russians cover their tracks by funneling money through shell companies and financial accounts established using false identities. the 2015 covert influence campaign was not the only attempt by a foreign actor to intervene in the u.s. election in the past decade. less well-known is the case of josé, wealthy businessman. starting in 2011 he tried to buy influence in san diego through campaign spending. he funneled money through u.s. shell company to an independent expenditure
company. he was convicted along with his co-conspirators in 2017. shell companies are low established threat to transparency and as these cases illustrate the threat to transparency is in effect on campaign-finance. virtual currencies remain vulnerable to the society. they also can be used by a foreign adversary to thwart campaign-finance laws. some currency promote anonymity, to traits that are attractive to criminals. they also facilitate peer-to-peer transactions meaning there is no financial institution between the sender and receiver of funds. the absence of a financial intermediary makes it easy for them to conceal location outside the united states. it is vital that we have a regime that enables exposure in real-time, not a regime.
[inaudible] as much as successful prosecutions can satisfy our sense of justice, convictions are poor remedy for national security. i recommend three financial transparency measures to support interdiction. first we should be on anonymous companies read second, we should not delay enforcement of the due diligence role for financial institutions, and third we should require cross-border fund transfers to be recorded. although each of these recommendations would help protect the election from interference. if implemented together each would strengthen the other. thank you for having me here today. i look forward to answering your questions. >> i am honored to be testifying before you today on a critical topic on how to protect our elections through
the use of virtual currencies and shell companies for the relevance is the usage in an attempt to shield the identities of those using them, as was just described. for party state actors and others interested in infecting the u.s. political process need anonymity. for thus those currencies are tailor-made. : : number in the thousands. russia has been able to leverage
these currencies and has not apparently needed crypto currencies. facebook disclosed in september of 2017 that it had discovered more than 3,000 ads brought by 470 accounts run by russian troll farm st. petersburg reaching more than 11.4 million people. however these ads paid for as opposed to report that many of the employees aimed at influencing the election were paid for through the russian centralized version currency. the credit card giant partnered on a virtual wallet in 2011 and approximately 18.5 million visa wall of accounting that they are relatively easy way for russians to send money internationally. another major centralized virtual currency using well
protected servers, this service is chief among the channels for the funds to flow to their hackers. in the past several years the money has been not only ubiquitous in the russian speaking countries but also from vietnam to mexico they managed centralized currencies need not only the legitimate needs of our lifeblood of global organized crime. these into their systems are being used by the services who are advertising their ability to influence elections. one of my fellow private sector warriors told me last week we've identified cyber espionage agents who post short messages that last one to two hours and are then deleted. they are calling for hackers from anonymous and the organization circles to work as contract hackers for elections than we've seen interesting post
inquiring whether the systems are open or closed so there are some nasty folks out there that are eyeballing these currently. many are advertising their ability to target social media posts and their ability to sabotage them. the currency is the greatest threat reaching the coffers of the political candidates were to be used to fund other operations of th increasing numbers of liquidity of claims these are crypto currencies to identify the users and criminals are using them. they do not need to sta stay ine virtual and the origin of. thousands around the world are interconnected and do not necessarily need any kind of know your customer requirements for somebody that knows what they're doing and the skill it is almost impossible to follow them through this major matrix
of exchanges. as the identity entertainment association not-for-profit drives the public model for providing not only education but a platform for the market-driven approach to the regulation we are looking at how this can be used to a critically important way for the risking the under paint as well as managing some of these security risks. it is essential for purchases are based on a public-private partnership rather than a government only approach to the problem so in closing my recommendations revolt around identity. international cooperation is critical providing a cooperative government whether through interpol and other law-enforcement body regulatory organization or optimally through a public-private partnership focused on establishing identity this is how we will help protect our par institutions and industries from the illicit use of virtual
currencies. also to implement the proposed honest abstract knowing your customer should be required of advertisers that doesn't currently exist understanding where the money is coming from should be another requirement for you to answer associated with the use of the virtual currency political contributions or funding mechanisms can be answered through the authentication reporting. the approach cannot be limited only to the crypto currencies as a financial system that is thriving outside our control reaching every country and using systems that range from those meeting kyc and those that are opaque. we need to take steps to counter the risk while encouraging the growth of the new systems and the rule of law. the world is changing and we ought to change with it. identity is the key. thank you.
>> mr. chairman and ranking member whitehouse thank you for the opportunity to testify for the nonpartisan group to attract politics and policy. my testimony focuses on corporations and concerns raised about potential influences. most people acknowledged individuals and entities that contributed large sums of money for the candidate and political nonprofits gain priority access and influence concern about the disproportionate influence with congress to enact the federal election campaign act more than 40 years ago. contribution limits and requirements including prohibitions on donations and spending established to declare the use of money to unduly influence or corrupt government and to ensure the system is worthy of the voters trust and confidence. today that trust has been
shaken. the campaign-finance limits and disclosure provisions have been undermined by decisions that now allow nominally independent super packs and politically active nonprofits to raise and spend unlimited sums from sources and if they choose to do so in secret so-called organization's premier lien on disclosing nonprofits and super packs to receive donations of non- disclosing entities mean voters may not know who is bombarding them with ads and other political spending and in particular since the structure of limited liability often requires them to disclose only minimal information they've become a fecal other groups spending on selections without ever disclosing the source behind the money. this leaves open the possibility that they may secretly follow political spending using the non- disclosing nonprofit groups enabling them to effectively act with foreign actors whose influence under federal law.
history is littered with examples of legal donations by foreign nationals laundering money through those who are legally eligible to contribute. evasions that diminished public trust in the system and those serving in congress during the mid-1990s are studying were stug campaign-finance as i was may recall the scandals associated with attempts by foreign interests to inject funds into american elections. today he tears after citizens united unleashed a flood of secret money raised with national elections, the potential for the foreign money totaling and the system has grown larger and get another attempts to meddle in elections more serious. recent court decisions have meant unlimited contributions from a larger range of solutions for individuals and institutions are much more important. regulatory and action has led to much less transparency in terms of the original sources of funds and given that it would be foolish i think to think that
the same type of outside sources that sought to undermine the integrity and independence of this is than two decades ago would not be interested and perhaps even more confident in their abilities to manipulate outcomes to favor their own interest today. in 2012, we began using the form 990 tax forms in the politically nonfactor to make a profit even though they are politically active nonprofits didn't have to disclose the donors to the fcc when it engaged in the spending its nonprofit donors if it had any tickets )-close-paren to the group on the schedule of their own 90. an alphabet soup of untraceable present one roadblock in the research. in one case and erroneously entered employee identification number corresponded to a social welfare organization that we later found listed as a disregarded entity. that is the subsidiary of the parent group.
we piece together the network to show these nonprofits tied closely to a network that used the disregarded entities as a further obstacle to transparency without them we wouldn't have been able to track any of the money coming into the nonprofits which we are spending tens of millions of dollars on how they are doling out money to other networks forming subsidiaries in delaware they ensure little information about any of the people what the public. to give a recent example is notable this t this to be 1 million-dollar contribution to president trump inaugural committee that is anonymous. the group was formed just four months before it made the donation to the inauguration. the address was listed in its incorporation papers i and virginia as a virtual office and the only name on the document appeared to be a paralegal known for helping them cover their tracks. the sources of money and politics in the many paths money can take are now numerous and
frequently unknown and unknowable shortage of any inadvertent disclosure assigned or a leaked document given the money now flows through the campaign-finance system carries no way to know how much i'd be coming froseecoming from the fos and if so whether they are individuals, corporations or governments and that is the point it keeps all of us in the dark uncertain what their motivations may be and even whether they are foreign or domestic friend or foe to our form of self-government taking steps to ensure transparency for the spending isn't a partisan issue but foundational to the american sovereignty i appreciate the opportunity to speak and i'm happy to answer any questions. thank you. >> seems to me who's getting the money and what money is is the challenge here. iof the two challenges we can
pass the law to make it more obvious to the public how corporations gets its money. that's what we are trying to do here but when it comes to the money itself, this is something that is sort of new to me. how easy would it be for a foreign entity government and i will ask you the same thing, to funnel virtual money into the corporation if russia never cooperates in terms of its transparency they are looking for or china. do you need russia and china to make this work? >> you do not need russia or china to make this work and you wouldn't see the virtual money you may just need the shell company. it is a sizable voter apathy in the financial transparency
regime the anonymous companies come and it's one that needs to be closed off not just for campaign-finance purposes, but for general financial transparency purposes this is a voter ability that undermines the anti-money laundering regime. >> but you don't need the corporation of a foreign government to have the transparency that has been spoken of is that right? >> know you dno you do not neede corporatiocooperation to use thm whether it is to funnel money into a company which you can easily do with other funds as well, or from one individual to another. the aspect that's interesting is the degree to which what has heretofore been almost exclusively criminal systems, such as web money that existed in russia and i actually was at
a hearing conference at the hague six or seven years ago and they were participating in their version and went on to describe how the money was considered by them to be the primary money movement mechanism globally for the russian organized crime. crimea sanctions. suddenly the web money i web mot a de facto part of their core financial system. it's in the light now. it'life now.it's brought in. so, that points to a fundamental almost development of a shadow economy, a shot of system for the money movement that has been embraced by the russian
government and the thinks. >> is difficult to do much about it directly because they are not going to cooperate. however, what you can do is what i described in my testimony which is focused on identity, focus on these exchange planes. >> d >> do you need cooperation from to get to? >> the exchangers primarily. you probably own a significant bitcoin investment yourself. >> inaudible [laughter] if you were to buy bitcoin in the u.s., chances are you've used a very reputable company called claim base. they do very strong know your
customer vetting. they are not the problem. however, there are exchangers like them around the world that don't require any type of nodes or customer setting. this is where some sort of international cooperation i propose through the longer profit. >> you can create an approach where there will be those who want to be part. you could be published because you could be excluded. you have those that are included and those that are secluded. >> you think they would sign up for this pretty quickly? >> they've issued regulations
covering virtual currency and this is a problem they take very seriously. i also think it's important to note our regulatory reach for the virtual currency exchange service u.s. customers extends beyond the borders so if it is based in russia they are subject to the bank secrecy act because the financial crimes enforcement network an had given itself that jurisdiction and it's brought an enforcement action against the exchange located in the united states. there is someone under arrest right after running a virtual currency exchange did not adhere to the bank secrecy act. >> thank you very much to all the witnesses. when i was a boy they said there was a cancer on the presidency.
right now there's a cancer on our democracy and it is a dark force manipulates through dark money and i am adamant that we need to clean that up and pass disclosure legislation so i want to make that point on the record. this is not a bill. we are trying to focus on not just eliminating dirty special influence in politics, but at least eliminate dirty foreign special interest influence in our politics. that ought not to be too much to ask. i can remember when i was managing the disclosure bill several years back as we were on the floor a story emerged about a quotation that had been set up, given $5 million, dumped the
$5 million into a political by any campaign, closed up shop leaving only a layer behind who asserted attorney-client privilege and wouldn't talk wout what happened, such as they nobody knows who's $5 millio wht was that got dumped into the election and to this day nobody knows what the quid pro quo was, with the understandings were ord or the deal was behind such a transaction. what we do know is behind the darkness could lurk a foreigner that could be vladimir putin's $5 million as any other american special interest $5 million until we have cleaned that up, we are going to have a problem on our hands so we have two bills, one is the one on the subcommittee that is bipartisan that would make it a felony for that lawyer who asserted client
privilege to have facilitated a foreign influence spent through the corporation. you'd still have to prove it. you probably wouldn't disclose e that you have just stayed attorney-client privilege but at least she put on notice that it's not just a black mark on his character wit that a potentl handcuff moment and that would be a good disincentive for that's one thing we are looking at and that's the bill specifically before this committee. in finance, we would be requiring that individual to certify whoever gave the $5 million was not a foreign influence and to do due diligence and look behind the first quotation because people who play this game like those where you opened the first corporation and there's another you've got to the second and there's another one.
so they would be -- there's an easy solution for the lawyer in that situation if it looks too smiley don't take the money. and i think the combination would be a powerful combination. so, first off, i appreciate your recommendation and banning anonymous companies. i couldn't agree any more at the direction of the field that has security implications we shouldn't be a laggard as the city on the hill as the united states but pr. tell me about the size of the industry of the dirty shell corporation activities around the world as revealed for instance in the panama city and paradise papers. we are not going to know exactly because it is pretty dark itself, but just a general sense of scale. >> it is a massive industry.
there is a lot of no good there. look at the designation of entities related in north korea and you will see them all over the world that's absolutely nobody you see them all over the world somebody had to set those up. you look at the designations related to iran and you will see the companies all over the world of people that are up to no good. it's a very big industry. if you want to hide money somewhere in the world, there's a lot of options for you to do that you can use the overseas british territories, mall, london. >> and they are capable of using those quotations to funnel money into the american political influence. >> certainly. the people who create them may not know what they are going to be used for and that's one of the issues here is they don't
know. hear no evil see no evil. >> with your permission i will ask one more question. these crypto currencies you mentioned create the possibility for providing an anonymous means of payment by for instance in your example, russia to people who are either hackers or trolls engaged in election influence and manipulation in the united states and to try to hide the connection back to russia because the money connection is harder to prove. is that correct? would it be also possible for the crypto permanency to b currd to precipitate actual spending through shell corporations or other means where people actually put money into federal elections? you can't put a bitcoin into a federal account, but you can wash them through an intermediary use and to thereby
longer the identity, correct? >> there is a global game that is being played now. this is tailor-made for the money laundering. you have notes all over the world that are anonymous and don't ask questions like the law firm incentives that don't ask questions the exchange one form of virtual currency to another. blood money for bitcoin. bitcoin. currency in and couldn't see out. in between your multiple layers of these currencies that are going to be impossible to track if you know what you're doing and can -- inaudible >> us. >> thank you mr. chairman for letting me go over. >> enqueue for another important hearing of the subcommittee. you've been doing terrific work and i want to commend senator white house for his good work on the disclosure acting for the company and the fact just referenced. in your testimony you noted how
anonymous companies are the most critical threats to financial transparency, and you highlight the terrorism and ellis act being discussed in the house and how specifically to stay this proposal is the most direct to the use of anonymous companies to circumvent campaign finance laws and this proposal is actually supported by the delaware secretary of state. why do you believe this is the most direct approach for improving transplant the? >> simplput simply, it ends the problem, it prohibits the problem and is a direct attack on the money-laundering vote of ability and would do more than any other single proposal i think to shore up their anti-money laundering regime and includes important gaps. >> let me ask a couple questions about the facts we know of what happened as the areas of focus we had for a number of months. based on the special counsel's investigation, we know if the senior campaign officials
accepted money for lobbying without registering activities, national security adviser for, campaign finance manager, campaign manager dates. it's problematic for a foreign agent to be working on a u.s. presidential campaign and getting paid by foreign entities without disclosing those foreign interests. >> the key is the lack of disclosure and candor. coming from the government and not having been in the government too long ago, i know that one of the concerns with respect to security was always a lack of candor because if somebody discloses and you can see what they were up to in the past and what they may be up to now you can take steps to mitigate the risk, but it's really the lack of candor that is important there.
>> a playmate, the special counsel's indictment of the individuals on three companies asserts the warfare through fictitious u.s. personas by the social media platforms. we had hearings on this topic. one has only put guilty to fraud because he sold bank account numbers to those involved. how can store and bank accounts be used to allow foreign nationals to interfere in the other elections? >> stolen bank accounts are one more layer of confiscation that can be inserted into the process to hide the tracks of those moving from one place to another very simple and that additional notes makes it that much more difficult to follow the money as it follows through this. >> senator whitehouse and i in august of 2016 sent a letter to the then chair of the oversight subcommittee the junior senatorr
from texas expressing our grave concern regarding the potential interference. we were shocked then candidate trumpet openly encouraging hostile foreign power to act his candidate e-mails and we ask for an oversight going to consider whether existing criminal statutes address conduct related to the foreign entities that pose a threat do you believe they are sufficient to protect our elections from interference financed by foreign governments? >> no, i don't. i think there are structural gap which i've covered in my written testimony. i think that there are also gaps in the criminal statutes and the legislation ranking member whitehouse mentioned in his introduction would be a an important step to improving the transparency and shoring up our system. >> my last question is finite. the times just last month reported on august 2016 meeting
donald trump junior held in trump tower with an emissary in saudi arabia and the israeli social media specialist linked to the intelligence according to the report that purpose a multimillion dollar social media plan. deeply troubled he didn't provide any information about this meeting during his judiciary committee overview despite his being specifically asked about any foreign government or foreign nationals to assist the campaign, and i've asked them to testify abou aboue stand undisturbed athisand undie of 2018 we are still learning about these meetings between the trump campaign would it be lawful to provide services to support a u.s. presidential campaign? >> i am not an election lawyer
or a lawyer and also i should not practice without a license, but i would again thin. back to the comments made by my colleagues at the table to say we are lacking in interest in being forthright and candid about obvious conflicts of interest that could imperil our independence and sovereignty and integrity of the democratic process. there are teams at the very least that are unwise if not illegal for them not to divulge that information. >> she's careful because she's from the state of minnesota and she has prudence about her. welcome and thank you for being here.
my first question when i started my morning today with former director chertoff talking about russia and what he thought happened and what's coming in 2020 and i wondered if you agree with the national director who said russia will be bolder and more disruptive than its obligations in the next year. do you believe you are going to see continued attempts at interference in the elections? >> there's no question we will see these attempts to interfere. one is presented by the director and that is an issue we should trust and we can see the
evidence. number three, i have to think that they were pretty happy with the outcome. we are electing a particular candidate and it can be more modest than that. it can be successful but i think that they know the system is flawed and will never be as good as ours so the only way that they can catch up is to make the system worse because they know ours isn't -- bears isn't going to get much better. >> u. doing a lot of studying to track money and politics. how was the supreme court's decision in citizens united impacting the ability of the entities to influence? >> the citizens united decision that upheld the disclosure by a vote of 8-1 was made without
first guaranteeing the regimen and infrastructure was there to guarantee its implementation so that was unfortunate and false to our regulatory bodies commission an in the internal revenue service as well as congress of course. >> how would you assess the job congress is doing in changing the law to meet this threat? >> i regret it again because of the seriousness of the discussion today and its input for the health of the democracy, i regret that it is not speedy enough to protect us from foreign interference. >> do you think the rest of the world notices when we are not doing much? >> i think they never stop noticing the weaknesses that have cropped up and it's been a
bit of a kind of two steps forward, one step back chase to fill up the gaps in the ability to undermine the system. >> we've got money for the state elections which is good, a couple hundred million dollars and that's great and that is going out nocoming out now but s me is that one that you've raised in some of the topics on how money can be had in hand we have a bill on using a verified credit card and things like that. you can do that, but i will ask some questions about the shell corporation purchasing real estate and that is a big concern for me and i will ask you the later that we have nearly half of all homes in the u.s. with at least $5 million purchased using shell companies.
my concern this morning someone came up to me as if they were concerned were you -- would you agree about answering that in-depth? >> i agree we should be concerned about in purchasing real estate at the rate that they are. >> using some coul could be useo funnel in foreign money? >> it could be. i think there are better methods. >> okay. then my last question i want to ask, because you raised the act, is that we know in addition to the 21 states that russia attempted to hack into the system getting as far as the voter registration info we know they hacked into one presidential campaign and as we are learning more and more also played around in the republican primary, which i think is important for the republican colleagues to know senator graham understands this having been in the race himself with a big front row seat, but they
were messing around in that as well and it shows that it isn't just a one party versus the other and as we go into this next year with 1.4 billion having been spent on political ads in 2016 and the projected three to 4 billion in 2020 we have to change the rules of the road for social media and the companies are doing stuff themselves, facebook is picking uputtingup the ads now in the ae which is incredibly helpful and twitter is doing more, but those companies have now come around to separate the act. can you briefly comment on why that's important to have national rules of the road and placed? the >> national rules of the road are needed for this. i worked in the republican presidential primaries back in the 80s for the presidential campaign and it was hard. there were a lot of rules of the road. now it seems many have eroded or
have become irrelevant. the type of rules that are needed need to extend further because of the degree of the information campaigns have been waged against the american people not directly through political ads that other types of influence operations department to find the divisions and inflame passions like the federalist papers pointed to a about the dangeritabout the dane democracy at the time and they persist and become all the more relevant and evident so i think that this has to get down to an identity. we have to identify the people that are banning these claims whether it's through something direct and i think you are going to need to identify the advertisers that are buying these ab as well as have some
kind of way to identify those who are doing these big news or call it what you want but there are a lot being played in the american society right now and it's being done under this attribution and anonymity and that is what needs to have some mechanism and anonymity should always be there for people that want to use it, but there has to be consequences. if you are going to use it you can't use anonymity when you are buying a house so you have to use it to influence an election. >> thank you to both of you for doing this hearing. >> i want to ask a few wrapup questions. based on our conversation the answer to all these questions is going to be yes but i don't want to take anything for granted. do you agree there is a national security dimension to this
problem. let the record reflect three guesses. do you agree the anonymity of the corporations is the channel for mischief by the actor's? >> yes and yes. do you all agree foreign entities are ready, willing and able to use those channels to accomplish? >> yes. >> do you agree that gives us and congress responsibility to try to bring a remedy to the problem? >> yes. >> that about does it. let me close my time by thinking again our chairman for doing this. we began the hearings with a review of some of the expert understanding i would say of the
russian foreign influence playbook. we've considered the csi -esque kremlin report playbook and the atlantic council kremlin trojan horse report and we've seen groups across the ideological spectrum for the center for american progress to the thin institute and its initiative have all flagged this is a really important national security problem. i think having brought attention to it in the committee early on, we are in the position to have a recommendation to the colleagues to begin doing things about it with any luck and time to detour a little bit th of misconduct in the upcoming election. i appreciate very much how the chairman has led the subcommittee. i think this is real progress and i appreciate it very much. >> you have been terrific on this. you've obviously done your
this past week with the help of cable partners in the c-span bus traveled to juneau alaska and as a part of the 5 50 s. tor the bus continues a trip across alaska to the next stop in fairbanks. >> c-span programming is valuable for alaska. for most of u this is the only y to get to see delegations hard at work in washington. we are a proud carrier of c-span for a number of reasons especially for their emphasis on education. from lesson plans and handouts to timely teachable videos and educator conferences, the c-span classroom program offers so many resources to teachers and adds a great value to today's
classrooms. thank you for being part of this and bringing your awesome bus to fairbanks. the tour of that was incredible. i heard stories of driving up the camp from thcamp from the ft the bus here and do things baseball and the way coming to alaska with a nice trip from what i heard, and i understand. i've driven it a few times myself and it is an awesome trip and we here and using it as a tool to bring fairbanks nationwide. >> what i appreciate on c-span is, it is much older than me -- that's a joke by the way. [laughter] what i appreciate about c-span is that it isn't a partisan. you watch what takes place. you watch the delegations talk back and forth. it's extremely informative and very educational. one of the best things on the bus, and i'm a technical geek, so i hope they take me with them on their tour because i would spend hours on the bus, but if you look at the video screens,
they are interactive. people can learn come and kid can learn about government. government doesn't have to be a bad word. >> be sure to join july 21 in the 22nd feature the visit to alaska. watch a alaska weekend on c-span, c-span.org or listen on the free c-span radio app. >> assistant secretary of state for south and central asian affairs testified before the house floor about policy in afghanistan. topics include the taliban, how u.s. resources were being spent and the length of time the u.s. may be in the region. this is 90 minutes.