Obama spy choice sees opportunity on Iran, Muslims

By Randall Mikkelsen

WASHINGTON (Reuters) – U.S. intelligence agencies should seek ways to work with Muslim leaders and countries such as Iran on issues of mutual interest, President Barack Obama's choice for spy chief said on Thursday.

Retired Adm. Dennis Blair also urged a break with Bush administration policies on treatment of terrorism suspects in a Senate confirmation hearing on his nomination as director of national intelligence.

"Identifying opportunities as well as threats is an extremely important balance for intelligence agencies to strike," Blair told the Senate Intelligence committee.

"While the United States must hunt down those terrorists who are seeking to do us harm, the intelligence community also needs to support policymakers who are looking for opportunities to engage and work with influential Muslim leaders who believe (in) and are working for a progressive and peaceful future for their religion and their countries," Blair said.

On Iran, Blair said, "While policymakers need to understand anti-American leaders, policies and actions in Iran, the intelligence community can also help policymakers identify and understand other leaders and political forces, so that it is possible to work toward a future in both our interests."

Former President George W. Bush's Republican administration had sought to isolate Iran over its nuclear programs and suspected support for terrorism, but had some limited contacts.

Bush also drew enmity from many Muslims over the war in Iraq, U.S. abuses of terrorism suspects and a perceived bias toward Israel.

Obama, a Democrat, has said the United States should talk to Iran, and he pledged to improve U.S. ties with the Muslim world in his inauguration speech on Tuesday.

West Virginia Democrat Jay Rockefeller, the Senate committee's former chairman, said, "We have an opportunity to make a very sharp turn toward new intelligence policies."

REPUBLICAN CONCERNS

Blair is expected to easily be confirmed by the Democratic-controlled Senate, but some Republicans expressed strong concerns about Obama's plans to close the Guantanamo prison for terrorism suspects and to ban the CIA's use of harsh questioning techniques.

Republican Sen. Saxby Chambliss of Georgia said the closing means "mean nasty killers" would be brought to the United States and some could be freed on legal technicalities.

Blair said the administration was studying ways to handle prisoners who can neither be released or returned to their home countries or a third country, but he said closing Guantanamo was essential to restoring a tarnished U.S. image.

Any new policy must be "true to our ideals and to our safety," he said, but added, "I'd be kidding if I told you there was a magic solution."

He supported Obama's ban on harsh interrogation techniques by the CIA, which critics have denounced as torture. "Torture is not moral, legal, or effective," he said.

Addressing issues that have drawn criticism of his nomination, Blair acknowledged that he had erred in serving on the boards of defense contractors when he headed a nonprofit group that advised the Pentagon on weapons issues.

A Pentagon Inspector General found that the service had been a conflict of interest but did not influence his work.

Blair also denied accusations from human rights groups that when he was U.S. military commander for the Pacific, he gave tacit support to the Indonesian military at a time the United States was trying to prevent abuses in East Timor.

"There was no wink wink, nod nods from me ... I carried out government policy," Blair said.