Spy threats
Chinese intelligence agents stepped up spying and technology collection activities against the United States last year, according to Director of National Intelligence Dennis C. Blair.

The problem of Chinese spying topped the list of foreign spy services targeting the United States that was disclosed by the retired Navy admiral during his annual threat briefing before the House Permanent Select Committee on Intelligence, highlighting what other officials have said is among the most serious counterintelligence problems.

China's main spy services are the Ministry of State Security and the military's Second Department, known as 2PLA. Both are among the most aggressive spy services, according to intelligence officials, in seeking government secrets and economic and trade data to boost China's military and civilian modernization.

Several Chinese intelligence-related cases were prosecuted by federal authorities in recent years, including cases that involved China's theft of Navy and Air Force weapons technology and secrets.

"During the past year, Chinas intelligence services continue to expand and operate in and outside the United States," Mr. Blair said in testimony made public Wednesday. "Its human collection services enhanced their collection and processing capabilities directed against the United States."

Other spy threats include Moscow's intelligence services, which he said continue to "strengthen its intelligence capabilities and directs them against U.S. interests worldwide."

Russian spies are engaged in espionage, technology acquisition and "covert action efforts to alter events abroad without showing its hand," he said.

Iran also is beefing up its focus on U.S. intelligence activities and is cooperating with other foreign spies to extend its reach, Mr. Blair said.

Cuban intelligence agents also are spying on U.S. operations and intentions around the world, and the Cuban spies are working with "a number of U.S. adversaries and competitors," Mr. Blair said, without naming them. North Korean agents are seeking U.S. technology, and Venezuelan spies are "working to counter U.S. influence in Latin America by supporting leftist governments and insurgent groups," he said.

The spying activities of al Qaeda are "effective but uneven and Lebanon's Hezbollah has shown "effective intelligence and counterintelligence capabilities and activities."

Drug traffickers and international organized crime networks also are improving their intelligence gathering efforts and "pose a growing threat to the United States," Mr. Blair said.

Climate threat?
The Pentagon's new four-year strategy review seeks to advance the Obama administration's effort to make climate change a key element of its domestic and international policies.

The Quadrennial Defense Review report, which is meant to guide defense and military policies and weapons purchases, lists global warming and energy security as among the four most important security priorities, despite recent reports suggesting the science behind climate change has been skewed.

The report stated that global warming will produce melting ice, heavy rain and other calamities that could produce disruptions worldwide. It said that according to intelligence reports, global warming will lead to increased poverty, environmental problems, natural disasters, the weakening of fragile governments, food and water scarcity, the spread of disease, and mass population migration.

"While climate change alone does not cause conflict, it may act as an accelerant of instability or conflict, placing a burden to respond on civilian institutions and militaries around the world," the report said.

Dennis C. Blair, the director of national intelligence, presented a less alarming view in his statement to the House Permanent Select Committee on Intelligence on Wednesday. He noted that U.S. intelligence does not conduct climate research and said spy agencies also don't evaluate "the science of climate change," nor the degree it will take place, or what is driving it, an apparent reference to the recent controversy about whether climate scientists were hiding data in an effort to hype the problem.

Mr. Blair said climate change is "highly unlikely to trigger failure in any state out to 2030" but could add to conflicts between or within states.

Retired Air Force Lt. Gen. Thomas McInerney said the administration's focus on climate change is misplaced.

"It is inconceivable that this administration would consider climate change, aka global warming, as a threat when they cannot even identify radical Islam at Fort Hood," Gen. McInerney said, a reference to the mass shooting that authorities say was carried out by Maj. Nidal Hasan at the Texas base.

"This is by far the most dramatic change in U.S. strategy since World War II and will make us very vulnerable," Gen. McInerney said.

The environmentalist veterans group Operation Free praised the climate change emphasis in the report. "With this statement, it is clear that action is needed to prevent climate change in the cause of American safety and security," said, Jonathan Murray, a spokesman.

China intel priority
Rep. Silvestre Reyes, Texas Democrat and chairman of the House Permanent Select Committee on Intelligence, told the director of national intelligence, Dennis C. Blair, that he wants China to remain a high intelligence priority.

Describing China as "an ally," Mr. Reyes said, "China still clearly poses a threat to our national interests."

"Although the president has promised a more conciliatory era in U.S.-China relations, we cannot ignore the Chinese-originated cyber-attacks and the continued and significant buildup of the Chinese navy," he said. "Despite reports to the contrary, I hope that China remains a top priority for our intelligence community."

Mr. Reyes was referring to a Jan. 20 report in The Washington Times that revealed that the White House National Security Council had ordered U.S. intelligence agencies to downgrade China as an intelligence collection requirement from "Priority 1" to "Priority 2." The policy change was made despite objections from Mr. Blair and CIA Director Leon E. Panetta, according to U.S. officials.

Cyber defenses
Defense Secretary Robert M. Gates said this week that U.S. military and defense systems designed to counter cyber-attacks from states like China need to be improved.

The Pentagon's four-year strategy report noted that each day more than 7 million Pentagon computers used to support war fighters and other defense operations are targeted in computer attacks. Sen. Susan Collins, Maine Republican, asked Mr. Gates on Tuesday about the problem, noting that "some of these attacks are from nation states like China."

Mr. Gates replied during a Senate Armed Services Committee hearing on Tuesday that computer systems holding secret information "are in good shape."

"Most of the attacks that we encounter [are] to our to unclassified systems," he said. "But, frankly, we're not happy with where we are, and particularly as we look ahead."

Separately, Director of National Intelligence Dennis C. Blair, told the Senate Select Committee on Intelligence that the recent Chinese computer attacks on Google and other high-tech companies highlight the threat.

"The recent intrusions reported by Google are a stark reminder of the importance of these cyber-assets, and a wake-up call to those who have not taken this problem seriously," Mr. Blair said.

The Pentagon is setting up a Cyber Command to deal with the problem and the Quadrennial Defense Review makes dealing with cyber-attacks a priority, he said.

"So I would say I think we're in good shape now, but we look with concern to the future, and we think a lot more needs to be done," Mr. Gates said.

Gay battle
While the battle over gays in the military kicked off in the Senate this week, over in the House, Republicans are quietly developing a strategy to keep a policy known as "don't ask, don't tell," reports special correspondent Rowan Scarborough.

Their approach will be absent of gay-bashing, and instead focus on two arguments: the policy to exclude open homosexuals since 1993 is working; and the country cannot jeopardize combat readiness in time of two wars, Iraq and Afghanistan, and of stressful overseas deployments.

"I strongly believe that the question of whether the law should be changed must ultimately rest on the matters of military readiness, cohesion, morale, good order and discipline," Rep. Howard P. "Buck" McKeon, the top Republican on the House Armed Services Committee, wrote Jan. 20. His letter went to Defense Secretary Robert M. Gates and Adm. Mike Mullen, Joint Chiefs chairman.

Mr. McKeon then asked 14 questions that put them on notice that they will have to prove that ending the gay ban, as proposed by President Obama, will help the military defeat enemies.

For example, "To what extent has the current law hindered the military's ability in a measurable way to recruit and retain qualified personnel to meet service manpower requirements?" The GOP thinks the answer should be that it has had no measurable effect.

And another, "To what degree and how would repeal of the current law improve military readiness?" Pro-ban legislators say it will be difficult for the Pentagon to assert that open homosexuality in the ranks will increase readiness.

The policy from 1993 states, in part:

"The presence in the armed forces of persons who demonstrate a propensity or intent to engage in homosexual acts would create an unacceptable risk to the high standards of morale, good order and discipline, and unit cohesion that are the essence of military capability."

Iran sanctions
Iran is preparing to counter tougher economic sanctions sought by the Obama administration for Tehran's refusal to comply with international controls on its uranium enrichment program.

According to written testimony by Dennis C. Blair, the director of national intelligence, on Wednesday before the House Permanent Select Committee on Intelligence, the Iranians plan to import gasoline from China and Venezuela to make up for shortages produced by new sanctions.

Current sanctions and pressure on Iran have hurt Tehran's economy by disrupting its trade and slowing some projects.

"Iran has made contingency plans for dealing with future additional international sanctions by identifying potential alternative suppliers of gasoline — including China and Venezuela," Mr. Blair stated.

To circumvent bank sanctions, Iran has begun using small, non-Western banks, and is dealing in non-U.S. currency for many financial transactions, he said.

Additionally, the paramilitary Revolutionary Guard and the Iranian intelligence service also have been engaged in smuggling crude oil to skirt sanctions and make a profit, he said.

Despite the sanctions-busting, "we nonetheless judge that sanctions will have a negative impact on Iran's recovery from its current economic slowdown," Mr. Blair said.