House Panel Examines State Responses to Foreign Counterintelligence Threats

Why It Matters

The House Permanent Select Committee on Intelligence held a hearing July 15 to examine how states are responding to foreign espionage, influence operations and economic security threats. The hearing featured state fusion center directors, lawmakers and a nonprofit official discussing how state and local governments are expanding counterintelligence capabilities to address threats from China and other foreign adversaries.

The hearing comes as lawmakers consider the respective roles of federal and state governments in protecting elections, critical infrastructure, research institutions and supply chains from foreign intelligence operations.

The Big Picture

Witnesses testified that states are expanding counterintelligence efforts as foreign adversaries, particularly China, increase attempts to target state governments, universities, research institutions and critical infrastructure. Committee members cited FBI statistics indicating the bureau had been opening a China-related counterintelligence investigation roughly every 12 hours and maintained thousands of active counterintelligence investigations, many involving the Chinese government.

Witnesses described China's activities as including cyber intrusions, influence operations, economic espionage, supply chain vulnerabilities and research partnerships. Committee members also referenced the Justice Department's prosecution of individuals accused of operating an unauthorized Chinese government police station in New York.

Fusion centers, established after the Sept. 11 terrorist attacks, have expanded beyond counterterrorism to include counterintelligence responsibilities. Witnesses said the National Fusion Center Association recently created a counterintelligence subcommittee to improve information sharing and coordination among state and local partners.

What They're Saying: Witness Testimony on Counterintelligence

The hearing featured six witnesses discussing state-level counterintelligence challenges and legislative responses.

Jay Moseley, director of the Alabama Fusion Center, described fusion centers as focal points for intelligence sharing among federal, state and local agencies. Michael Lucci, founder and CEO of State Armor, testified that state governments should serve as the first layer of defense against Chinese Communist Party influence operations.

Lucci argued that technological competition with China has significant national security implications and described State Armor's work with governors, attorneys general, legislatures and law enforcement agencies on counterintelligence policy.

State lawmakers highlighted differing legislative approaches. Nebraska state Sen. Eliot Bostar, a Democrat, discussed LB644, which would establish a Foreign Adversary and Terrorist Agent Registration Act and a Crush Transnational Repression in Nebraska Act. Florida state Rep. Daniel Alvarez, a Republican, discussed HB 945, which would establish a statewide counterintelligence and counterterrorism unit within the Florida Department of Law Enforcement.

Bostar's testimony reflected bipartisan concern over foreign influence operations, although witnesses proposed different approaches for addressing those threats.

Political Stakes: Civil Liberties Concerns Clash With Security Imperatives

The hearing underscored ongoing debate over how states should expand counterintelligence capabilities while protecting civil liberties.

Florida's proposed counterintelligence legislation has drawn criticism from civil liberties organizations. The ACLU of Florida argued that HB 945 could be used to suppress protected speech, while other news outlets have reported concerns that portions of the proposal could expand state surveillance authorities.

Michael Sena, president of the National Fusion Center Association and executive director of the Northern California Regional Intelligence Center, testified about coordination during major events, including the APEC summit, the Super Bowl and FIFA World Cup matches in Santa Clara. He said fusion centers provide intelligence coordination without creating permanent surveillance programs.

Committee members also discussed challenges coordinating information between federal and state agencies. Witnesses testified that fusion centers complement FBI counterintelligence and Joint Terrorism Task Force operations but said improvements to information sharing remain necessary.

The Other Side

Some outside organizations have questioned whether expanding state counterintelligence authorities is the most effective approach.

Responsible Statecraft questioned whether State Armor's China-threat advocacy reflects genuine security concerns or a politically motivated threat-inflation campaign. The organization has promoted expanded state counterintelligence authority while benefiting from increased government contracting and policy attention.

Foreign Policy also criticized the 2026 U.S. Counterterrorism Strategy as representing a departure from the professionalism and seriousness afforded to previous counterterrorism strategies, arguing that the 2026 strategy appears to mis-prioritize the most imminent terrorist threats. These critiques suggest that threat assessments driving state action may not reflect balanced analysis.

Additionally, the Brennan Center for Justice argued that the depletion of staff and resources at various agencies leaves the government underprepared to respond to attempts to influence elections by China, Russia, and others. Rather than building state capacity, critics argue, the administration should restore federal counterintelligence resources.

Witness Profiles and Expertise

Amy Lay from the Northern Virginia Regional Intelligence Center testified about regional fusion center operations, though limited public profile information was available for her. Jay Moseley, director of the Alabama Fusion Center, received the National Director of the Year Award in 2017 and is a recognized figure in the national fusion center community. The Alabama Fusion Center operates as part of the Alabama Law Enforcement Agency's State Bureau of Investigation.

Michael Lucci has a background in state-level policy work and has positioned State Armor as a nonprofit focused on protecting critical infrastructure, protecting state government supply chains, and countering malicious foreign influence operations. Michael Sena serves as executive director of the Northern California Regional Intelligence Center and also serves as executive director of the Northern California High Intensity Drug Trafficking Area.

The Bottom Line

The hearing highlighted growing interest in expanding state counterintelligence capabilities alongside ongoing debate over the appropriate balance between national security, federal-state coordination and civil liberties. As states continue developing their own approaches, lawmakers will likely face continued questions about oversight, information sharing and the division of responsibilities between federal and state governments.

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