Thank you, Tammy, for that generous introduction. It is a privilege to be here with you and with the other distinguished members of this historic club.

You may not be aware that the FBI and the Press Club have a couple of things in common. Both of our organizations were founded in 1908. But most importantly, we both are committed to the pursuit of information: We in the FBI are tasked with discovering information. You in the press are also paid to discover information. We have investigators; you have investigative reporters. We do our best to keep our sensitive information secure. And, you do your best to put it on the front page. In all seriousness, the search for the truth is the heart of what we both do. We seek information, vet it, labor over its accuracy, and piece it together to make sense of the larger story. And now, in the year 2003, that information is increasingly global, relating to actions and events outside of the United States, that impact us within the United States.

Today, I want to discuss with you the threats we are facing and how the FBI is changing to address those threats.

THE THREAT

When I was sworn in as Director of the FBI in September 2001, I knew then that the FBI needed to change. I did not know, however, how quickly it needed to change nor the extent of that change. The September 11th attacks required that we dramatically shift our priorities. Overnight, the FBI's top priority became protecting Americans from terrorism.

Despite our progress since then, the war is far from over. The threat is real, and the threat is not just from terrorists. It is also from international organized crime, from computer hackers operating across global networks and from foreign companies trying to steal corporate secrets and technologies.

The threat of today and of the future is a dangerous convergence of terrorist, intelligence, and criminal groups, all operating to some extent over the Internet and through interconnected, sophisticated networks. In this environment, the traditional distinctions between organized crime, cyber crime, espionage, and terrorism have broken down. Organized crime may launder money for terrorists. Credit card fraud may be perpetrated by the Russian mafia or by al Qaeda operatives. Spies from enemies and allies alike may use hacker tools to reach into our computer systems and steal trade and defense secrets.

The number of countries engaged in espionage against the United States has increased with the end of the Cold War – some 19 countries are actively engaged in acquiring U.S. economic secrets. And the players are not just intelligence agents; they are university students, businessmen, and company insiders. Our enemies – and some of our allies – covet our technology, manufacturing processes, and trade secrets. Economic espionage is costing U.S. businesses more than $200 billion a year in intellectual property theft.

We are also seeing growth in the number of traditional crimes that have migrated online and exploded on company doorsteps: fraud, identity theft, and copyright infringement. At the same time, computer intrusions, denial of service attacks, and attacks on the Internet's root servers and domain system are taking wing. A London-based security firm determined that worldwide digital attacks reached an all-time high of nearly 20,000 in January, causing more than $8 billion in damages.

The common denominator in these expanding areas of criminal threat is their international dimension. When I began my career as a prosecutor in my first U.S. Attorney's Office in San Francisco in the seventies, rare was the case that had international connections. Now, it is unusual if an investigation does not have an international nexus. This is because crime now has worldwide reach with the progress of technology and communications; because terrorists have global reach and global networks; and because the dawn of the cyber world permits hackers and other cheats to commit their crimes remotely from the corners of the world.

The FBI is adjusting to keep pace with this global change. I would like to cover several of the ways that the FBI is changing to meet the threats of this new world.

HOW THE FBI HAS CHANGED

Our first effort since 9/11 has been to overhaul our counterterrorism program from top to bottom. This has been an ambitious and all-consuming effort – one that has caused our counterterrorism chief, Larry Mefford, to quote Churchill's admonition: "When you're going through hell, keep going."

Though difficult, this effort has dramatically improved our capacity to protect the nation in a number of ways. To improve effectiveness and accountability, we have centralized our counterterrorism operations and vested responsibility for the national program at Headquarters. We have increased the number of Agents devoted to terrorism by 1700, and we have hired nearly 250 new counterterrorism translators. We have quadrupled the number of counterterrorism analysts. And we have established specialized counterterrorism units to attack terrorist financing; to analyze and exploit recovered documents and intercepted communications; and to analyze incoming terrorist threats.

These efforts have paid off. Over the last 20 months, the FBI and our partners, both here and abroad, have identified, disrupted, and neutralized over a hundred terrorist threats and cells. Worldwide, we have apprehended almost 3000 Al Qaeda operatives, according to State Department figures. And more than one third of Al Qaeda's top leadership has been killed or captured. We have conducted over 70 investigations into terrorist money trails, and we have frozen more than 125 million dollars in assets. And most importantly, we have not fallen victim to another catastrophic terrorist attack.

We have also made significant changes to meet our second operational priority – the protection of the United States against foreign intelligence operations and espionage. As we did with counterterrorism, we are building a nationally directed program for counterintelligence, a program that will allow us to be more proactive in protecting critical national assets. The new counterintelligence program includes: (1) a highly trained counterintelligence workforce, with specialized squads in most of our field offices; (2) enhanced analytical support that is interwoven into the intelligence community as a whole; and (3) an improved capacity to develop the human intelligence that is essential to foiling foreign intelligence operations that target our interests.

After counterterrorism and counterintelligence, cyber crime is our next priority. Cyber investigations used to be done on an ad hoc basis in many different divisions and programs. Last year, we created a Cyber Division which consolidated responsibility for investigations involving cyber viruses, privacy invasions, child pornography on the Internet and fraudulent e-commerce. From February to May of this year alone, we have opened over 90 cybercrime investigations involving 84 thousand victims worldwide and losses exceeding $162 million. These cases have resulted in 97 arrests and 64 separate indictments for cybercrime offenses.

Key to the Bureau's transformation in all these areas has been the complete overhaul of our information technology systems to move the FBI from a paper-driven organization to one that employs the latest technology. We have brought in professionals from private industry to help pull, and push, the Bureau into the digital age. From new hardware, upgraded networks, to better investigative applications, we are making progress. Through initiatives already in the works, we will soon have systems that will better search and analyze data, and allow us to manage our case files and reports electronically for the first time in our history.

Meanwhile, terrorists, foreign governments and other adversaries continue to develop new technologies to target our national and economic security. To keep pace with their efforts, we in the FBI must continue to develop our technology and expertise. Instead of being a follower, the FBI must become a leader in technology.

I started off today talking about "information" and how it is at the heart of both of our operations. So I know I am talking to an appreciative audience when I say that sometimes the problem isn't lack of information, but rather nearly unmanageable amounts of it. We have nearly 12,000 special agents who collect information every working day and who are extremely good at it. For the FBI to identify and understand the threats against our nation – and do so in very
compressed time frames – it is essential that we have the personnel and the infrastructure to crystallize the actionable intelligence out of that ocean of information.

To this end, we are in the process of building a comprehensive intelligence program. First, we are building a highly-trained cadre of 700 analysts at Headquarters. Second, we are putting state-of-the-art technology and tools on their desks. And third, we are perfecting an integrated intelligence structure that centralizes program management oversight at Headquarters and establishes intelligence analysis units in every field office. These internal changes are transforming our intelligence effort from tactical to strategic, and enabling us to be a leader in intelligence sharing with our U.S. and international partners.

Aside from having the right tools, it is essential that we work closely with our counterparts. Because terrorists operate at every level – from local, to regional, to global – the terrorist threat must be fought at every level. Success depends on an extensive network of partnerships and alliances. One of our most important missions since 9/11 has been to strengthen our partnerships at all levels.

Our 66 Joint Terrorism Task Forces around the country are staffed with state and local police, along with personnel from the CIA and other federal agencies. Our Headquarters operations are staffed with employees from a myriad of law enforcement and intelligence entities. And now, FBI, CIA, Department of Homeland Security and other intelligence community employees are working side by side in the new Terrorist Threat Integration Center. Doing so to ensure that threat information from abroad is fused with our domestic intelligence. These efforts have paid off with successful operations from Portland, to Buffalo, to yesterday's conviction of an individual from Columbus, Ohio.

Now, we are poised to expand this cooperation overseas. Recently I traveled to the Middle East to meet with my counterparts in Jordan, Israel, Pakistan, Afghanistan, Saudi Arabia, Yemen, Tunisia, and Morocco. I visited the sites of several deadly bombings in Israel, and I met with Saudi and Moroccan officials to discuss the investigations into last month's attacks in Riyadh and Casablanca.

These visits reinforced my belief that our success against terrorism and international crime will be determined, in large part, by the quality of the relationships we develop with our counterparts overseas. Time and again, we commented that we have to stop meeting at crime scenes, after a terrorist attack, and that we need to meet more often to prevent these crimes from occurring.

As we have forged stronger law enforcement partnerships within the United States, so too must we now strengthen our relationships with our counterparts across the globe. We currently have about 200 employees in 45 different Legal Attache offices around the world. Last year, these employees handled over 53 thousand investigative leads, up from about 27 thousand the year before. That statistic alone tells us something about the increasing globalization of crime and the imperative for expanded international coordination. Only by sharing information and working directly with our law enforcement allies abroad will we have the opportunity to stop criminal and terrorist threats abroad, before they reach our shores.

A review of the FBI's progress would not be complete without mention of our greatest asset – our employees. The men and women who serve in the FBI are fully dedicated to protecting America. They are working night and day to do so.

I often hear people say that we need to change the "FBI culture." But they have it wrong. The "FBI culture" is the ethic of hard work, integrity, excellence and dedication to protecting the American public, all within the confines of the Constitution. I see this culture every day, in every FBI office, and in every FBI employee. We do, however, need to focus our limited resources on the most significant threats to the safety of our communities, and change the way we afford protection to those communities; understanding that we are doing so in a global environment.

I have covered a fair amount of territory today. So let me conclude now with a final thought, before responding to your questions.

One week after my first day on the job at FBI Headquarters, on September 11th, terrorists used our own commercial airlines to attack the American people. That day was – and will always be – a symbol of the devastatingly lethal threats that are pointed at America. In addition, it was a clarion call for change within the law enforcement and intelligence communities.

The FBI is a relatively small organization, but a determined one. We in the FBI – and I believe I speak for every man and woman in the organization – have committed ourselves to making the fundamental changes that are necessary to combat the terrorists and criminals who target our country. We have made a lot of progress; we are on the right track; and today's FBI will meet – and will defeat – all threats against the security of our nation.

Thank you for having me today. I look forward to your questions.