[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



 
      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                        APPROPRIATIONS FOR 1999

========================================================================

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND SESSION
                                ________

   SUBCOMMITTEE ON FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED 
                                PROGRAMS

                    SONNY CALLAHAN, Alabama, Chairman

JOHN EDWARD PORTER, Illinois         NANCY PELOSI, California
FRANK R. WOLF, Virginia              SIDNEY R. YATES, Illinois
RON PACKARD, California              NITA M. LOWEY, New York
JOE KNOLLENBERG, Michigan            ESTEBAN EDWARD TORRES, California
MICHAEL P. FORBES, New York          MARCY KAPTUR, Ohio
JACK KINGSTON, Georgia               
RODNEY P. FRELINGHUYSEN, New Jersey  

NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.

 Charles Flickner, William B. Inglee, and John Shank, Staff Assistants,
                     Lori Maes, Administrative Aide
                                ________

                                 PART 2
                                                                   Page
 Secretary of the Treasury........................................    1
 Security Assistance..............................................  127
 Secretary of State...............................................  297

                              

                                ________

         Printed for the use of the Committee on Appropriations
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
49-109                      WASHINGTON : 1998
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                       COMMITTEE ON APPROPRIATIONS                      

                   BOB LIVINGSTON, Louisiana, Chairman                  

JOSEPH M. McDADE, Pennsylvania         DAVID R. OBEY, Wisconsin            
C. W. BILL YOUNG, Florida              SIDNEY R. YATES, Illinois           
RALPH REGULA, Ohio                     LOUIS STOKES, Ohio                  
JERRY LEWIS, California                JOHN P. MURTHA, Pennsylvania        
JOHN EDWARD PORTER, Illinois           NORMAN D. DICKS, Washington         
HAROLD ROGERS, Kentucky                MARTIN OLAV SABO, Minnesota         
JOE SKEEN, New Mexico                  JULIAN C. DIXON, California         
FRANK R. WOLF, Virginia                VIC FAZIO, California               
TOM DeLAY, Texas                       W. G. (BILL) HEFNER, North Carolina 
JIM KOLBE, Arizona                     STENY H. HOYER, Maryland            
RON PACKARD, California                ALAN B. MOLLOHAN, West Virginia     
SONNY CALLAHAN, Alabama                MARCY KAPTUR, Ohio                  
JAMES T. WALSH, New York               DAVID E. SKAGGS, Colorado           
CHARLES H. TAYLOR, North Carolina      NANCY PELOSI, California            
DAVID L. HOBSON, Ohio                  PETER J. VISCLOSKY, Indiana         
ERNEST J. ISTOOK, Jr., Oklahoma        ESTEBAN EDWARD TORRES, California   
HENRY BONILLA, Texas                   NITA M. LOWEY, New York             
JOE KNOLLENBERG, Michigan              JOSE E. SERRANO, New York           
DAN MILLER, Florida                    ROSA L. DeLAURO, Connecticut        
JAY DICKEY, Arkansas                   JAMES P. MORAN, Virginia            
JACK KINGSTON, Georgia                 JOHN W. OLVER, Massachusetts        
MIKE PARKER, Mississippi               ED PASTOR, Arizona                  
RODNEY P. FRELINGHUYSEN, New Jersey    CARRIE P. MEEK, Florida             
ROGER F. WICKER, Mississippi           DAVID E. PRICE, North Carolina      
MICHAEL P. FORBES, New York            CHET EDWARDS, Texas                 
GEORGE R. NETHERCUTT, Jr., Washington  ROBERT E. (BUD) CRAMER, Jr., Alabama
MARK W. NEUMANN, Wisconsin             
RANDY ``DUKE'' CUNNINGHAM, California  
TODD TIAHRT, Kansas                    
ZACH WAMP, Tennessee                   
TOM LATHAM, Iowa                       
ANNE M. NORTHUP, Kentucky              
ROBERT B. ADERHOLT, Alabama            

                 James W. Dyer, Clerk and Staff Director


















      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                        APPROPRIATIONS FOR 1999

                              ----------                              

                                      Wednesday, February 11, 1998.

                       SECRETARY OF THE TREASURY

                               WITNESSES

HON. ROBERT E. RUBIN, SECRETARY OF THE TREASURY
DAVID LIPTON, UNDERSECRETARY FOR INTERNATIONAL AFFAIRS, DEPARTMENT OF 
    THE TREASURY

                 Chairman Callahan's Opening Statement

    Mr. Callahan. Secretary Rubin, we are happy to have you 
before our committee this morning.
    I know you have been spending a lot of time on Capitol Hill 
lately explaining the needs not only of the International 
Monetary Fund but of your proposed budget for 1999, and I know 
you have met with the leadership, and I know you have met with 
other responsible Members of Congress, both House and Senate. 
But you are at the right place now because, before anything can 
take place that you are requesting, it has to take place at 
this committee level. We are apologetic that we do not have as 
many Members as you would like.
    As you know, there was a retreat, both the Democratic and 
Republican retreat, the first part of this week. Many of the 
Members are attending that, and rightfully so, but this 
hearing, especially as it involves the IMF issue, is something 
we felt we could not postpone. Because if indeed the Congress 
is going to act upon this request, we are not going to have 
time to wait an additional month before we begin the committee 
process.
    I don't know whether the Asian crisis will stall our 
Nation's economic growth cycle, but I do know that it has 
impacted one industry, at least, in my home congressional 
district. We have a pulp mill in Alabama that announced a 2- to 
3-week layoff of the entire factory, a shutdown of the mill, 
simply because its primary customer was a company in Indonesia, 
and the Indonesians could not pay them for the pulp. So it has 
directly impacted my district.
    In addition to that, I represent a port, a major port, 
probably the best port in the entire United States, if not the 
world.
    Ms. Pelosi. Probably?
    Mr. Callahan. But, nevertheless, we ship a lot of products 
to and from our port that either begin in the Asian region or 
wind up in the Asian region, so it has very seriously impacted 
my district.
    You may know that the American people still do not 
understand the International Monetary Fund--they have no 
earthly idea what we are talking about. They most recently were 
made aware of the existence of such a fund in the Mexico 
crisis. They do not know the success of the Mexican bailout. 
They think that the $20 billion or so, maybe $30 billion we 
sent to Mexico was never repaid. They don't know the history of 
that or of the International Monetary Fund.
    You are receiving a lot of unfavorable publicity, or the 
IMF is, from a lot of prominent people who were formerly in 
responsible positions in the government who are indicating 
maybe the time has come to eliminate the International Monetary 
Fund. Those are problems we are going to have to face if indeed 
we present this to this subcommittee and to the full committee 
and to the U.S. House.
    I heard Secretary Albright in her presentation in Senate 
hearings yesterday indicating something to the effect that the 
International Monetary Fund was like a credit union. That is a 
very good analogy.
    I think you and the President, if you are going to be 
successful and if we are going to continue to participate in 
the International Monetary Fund, have to immediately describe 
this to the American people and describe its importance the 
impact it is going to have, rather than the national opinion, 
that all we are doing is bailing out a bunch of insurance 
companies and a bunch of banks. I know better than that, but 
most Americans do not, and someone is going to have to televise 
that message if indeed you are going to muster together the 
sufficient strength to add to the International Monetary Fund.
    Most people do not realize it is an international fund. 
They think that we, the United States, are putting up all of 
the money. They don't realize we are only a contributor to the 
International Monetary Fund. Nor do they realize the control we 
have over the International Monetary Fund.
    So someone has to get that message out, Mr. Secretary. I 
think that someone should be either you or the President or 
Madeleine Albright. But, at this point, the American people, in 
my limited capability of investigation, do not believe that the 
Congress should act favorably upon your request. Nor do they 
understand the need to impact or to contribute to the Asian 
monetary crisis because of the economic impact on the United 
States.
    So it is a very important thing that we are going to have 
to address in the not-too-distant future. But, before it can 
be, someone has to explain to the American people why we have 
to increase our quota another $14.5 billion.
    With respect to your budget, we are going to have to take a 
little bit more time on your appropriation request for 1999. 
There are some questions I will have that I will submit to you 
with respect to some of the increases you have requested, for 
example, the increase from $48 million to $300 million for the 
global environment facility.
    We are going to have to have answers with respect to the 
individual requests you have made for 1999.
    Your request for debt relief is $79 million, including $7 
million for the enhanced structural adjustment facility. Last 
year, we appropriated $27 million, so that is a big increase. 
As you know, this subcommittee, and especially this Chairman, 
have not been too receptive to increases with matters that are 
perceived to be foreign aid. We are going to have to live 
within our limitations of monetary constraints; and, although 
there will be some agencies or institutions that receive 
additional monies, we are going to have to have real 
justification for these increases.
    At the end of the day, this committee will have to convince 
a skeptical House of Representatives of the merits of your 
International Monetary Fund and the multilateral development 
banks as well, about our ability to work together. We have, as 
you well know, a working relationship with the Democrats, not 
only on this panel but on the full committee and in the full 
House of Representatives, too.
    We try to stay out of your hair. We don't want to run your 
department. We don't want to run foreign affairs. But we do 
have an obligation to our constituents and to the American 
people to make absolutely certain that the money is being spent 
in the most frugal way possible.
    I know you are aware of it and I know all the members of 
our committee are aware of it, but, since our subcommittee last 
met, we have been blessed with the appointment of a new member 
to our panel. I think she is joining us for the first time.
    Miss Kaptur, we certainly welcome you to our committee and 
look forward to a continuing working relationship with your 
side of the aisle.
    With that, I will close. I will submit to you my formal 
statement.
    I have already asked you privately a couple questions with 
respect to some parochial concerns I have, and I hope you will 
be able to respond to them in the not-too-distant future.
    With that, I would recognize the gentlelady from 
California, Mrs. Pelosi.

                     Ms. Pelosi's Opening Statement

    Ms. Pelosi. Thank you very much, Mr. Chairman. I am pleased 
to join you in welcoming Secretary Rubin to our committee on 
this the first of our hearings of the year. It is very 
appropriate Secretary Rubin lead off, because some of the first 
issues to come before the Congress will be from his department.
    First, though, Mr. Chairman, once again I want to commend 
you for your leadership and your courtesy in welcoming 
Representative Kaptur. I want the record to show we have a full 
complement of Democrats, including our Ranking Member on the 
committee, Mr. Obey, long-time chair of the subcommittee.
    Perhaps our conference ended earlier than yours. I am 
pleased that Representative Kaptur is with us, and I know she 
will make a valuable contribution----
    Mr. Yates. Or in advance.
    Ms. Pelosi [continuing]. To the committee. An advance.
    Mr. Callahan. Let the record reflect that you started 
before we did. That is why.
    Ms. Pelosi. Okay. In whatever case, I am certain every 
member of this committee understands the importance of the 
testimony that Secretary Rubin is to present today. I associate 
myself with the remarks of our Chairman about the need for the 
administration to educate the public about why we are involved 
with the IMF to begin with and why it is in our national 
interest to support it. I think this understanding will lead to 
support. Certainly there are many questions, as we have 
discussed, leading up to this hearing.
    But, before we start, I want to say that, with all this 
attention focused on the IMF replenishment, we must also 
continue to recognize the importance of and need to provide for 
the U.S. contributions to various international financial 
institutions.
    Of the $1.7 billion requested, $502 million is to pay for 
U.S. arrears. With the support of Chairman Callahan last year, 
the Congress agreed to provide over $600 million in arrears, 
including all outstanding arrears for IDA. As you know, this 
has enabled the U.S. to regain the strong leadership position 
it needs at the World Bank to continue its pursuit of reform.
    The request for $502 million, if granted, would almost wipe 
out U.S. arrears to the international banks and significantly 
strengthen the U.S. position on a host of policy issues at 
other institutions in addition to the World Bank. This 
Administration, I think, deserves a great deal of credit for 
negotiating U.S. commitments to these programs down by 45 
percent, saving the taxpayer $1 billion. That is a tribute to 
your leadership, Mr. Secretary.
    Arrears are requested, as our Chairman mentioned, in fiscal 
year 1999 for the Global Environmental Facility, the Inter-
American Bank, Asian Development Bank and African Development 
Bank. I am certain that, in your testimony, you will give 
justification for the need for this funding.
    I support this funding, but I do, again, say it is 
important for the Administration to explain the importance of 
these institutions and the need for the increase.
    With respect to the IMF replenishment and the request for 
the New Arrangements to Borrow, the Administration has 
requested both of these items in the 1998 supplemental. I 
support the need for these items in the supplemental, but I 
have a number of concerns to discuss with the Secretary. The 
essence of these concerns centers around the kind of lasting 
changes and reforms that will be achieved through these 
bailouts.
    And, yes, Mr. Chairman, I agree that Secretary Albright 
explained it clearly. I don't think most Americans know that 
this is not money given away; it is a loan. And, we do get an 
asset in return for it, so it isn't an opportunity cost in our 
budget that is taking the place of other expenditures we might 
want to make domestically. In fact, the United States must 
respond to the Asian financial crisis by supporting 
multilateral institutions set up to deal with such situations.
    The establishment of these institutions was predicated on 
the fact our economies would have an impact on each other, and 
they do. And when the situation arises, as in the Asian crisis, 
the IMF as a multilateral way to proceed is preferable to a 
bilateral way to proceed, but we must act. Mr. Chairman, you 
pointed out very eloquently a demonstration of the adverse 
impact of the crisis on your own district.
    I believe support of the IMF is necessary, primarily 
because of the detrimental effects on the U.S. economy that 
might occur as a result of entire countries in Asia going into 
default. I see this in three ways: What kind of reforms? How 
can we prevent this from happening again? How can the IMF 
operate its own house in a way that has more transparency, 
addressing some governance issues? How can it function in a way 
that there is a better understanding in the public as to what 
it is, what its purpose is and what the borrowing country's 
attitude is? There are internal reforms that need to be taken 
at the IMF.
    Then there are reforms that might relate to the IMF and its 
relationship to the borrowing countries and the conditionality 
it places on them. So much of the IMF activity is based on 
conditionality. It begs the question to me, if you can have 
conditions placed on IMF lending that affect the economy, why 
would we not be able to include as conditions issues relating 
to wages and workers rights in those countries, which also are 
a part of the economy?
    There are other people, and I share their concern, who 
believe that issues relating to the environment and human 
rights should be taken into consideration as well. I am willing 
to grant that that might be something we can do in a third 
category, which is what we, as the U.S., can take the 
leadership on to compensate for the impact of IMF restructuring 
in a country.
    So it is threefold: one, the IMF internally; two, the IMF 
in relationship to the borrowing countries; and, three, what we 
as a superpower and a main supporter of the IMF can do 
bilaterally in order to--at the same time but separately and 
not part of any IMF legislation--to mitigate for some of the 
impact of IMF restructuring in a country, to promote the 
environment and to promote human rights. I would hope that the 
issue of workers' rights would permeate all three of these 
arenas.
    Again, the economic effects of the crisis in Asia and its 
impact on Japan and China clearly loom as potential impacts on 
the U.S. economy. The consequences could even be greater than 
just in the countries already impacted. The conditions of and 
the further aggressive pursuit of export-led growth policies of 
China and Japan could undermine economic growth in this 
country. The question then becomes, how will the U.S. respond, 
what steps are we going to take in the IMF, the World Trade 
Organization and other institutional bodies to prevent 
disruption of our own economic growth? I will explore them in 
my questions this morning.
    I look forward to hearing your testimony, Mr. Secretary. 
Once again, may I commend you for your hard work and your 
dedication. I believe the Administration and indeed the country 
are well served by your continued presence and good judgment, 
especially now in this time of the crisis in Asia. There have 
been many other times when your leadership has gotten us 
through.
    With that, I join my distinguished Chairman in welcoming 
you and look forward to your testimony.
    Mr. Callahan. I thank the gentlelady and would like to 
recognize the ranking Democrat on the full appropriations 
committee who serves as sort of the vice chairman of every 
appropriations committee, one of the hardest working Members of 
the entire U.S. Congress, the gentleman from Wisconsin, Mr. 
Obey.
    Mr. Obey. Thank you, Mr. Chairman. I hadn't intended to say 
anything, but since you have given me the opportunity, I 
certainly will. I appreciate that.
    Mr. Secretary, let me simply make an observation that I 
find very troubling. The Congress last year had three very 
important issues which it left unresolved when we irresponsibly 
walked out of town.

                      Mr. Obey's Opening Statement

    The first issue was IMF funding, which is designed after 
all, in the last analysis, to protect our own economy from 
being affected by the collapse of Asian currencies.
    The second is the issue of U.N. arrearages, which is 
crucial at a time when we are trying to maximize a sense of 
unity on the part of the U.S. and our U.N. allies with respect 
to the Iraqi situation.
    And, third, the unrelated but nonetheless important issue 
of Mexico City policy and how it relates to the international 
family planning policy of the United States.
    In my view, last year, in an act of consummate 
recklessness, the Congress left town without dealing with the 
IMF and U.N. issues. That, in my view, has left us less able to 
effectively provide leadership at the United Nations. It has 
also enhanced the risk to the American economy by inaction on 
the IMF front.
    It seems to me that if Asian currencies were to resume 
their slide, if the Japanese government continues to follow its 
obtuse fiscal policy, that the result will be a flood of Asian 
goods into this country because of the cheapening of Asian 
imports into this country relative to U.S. goods because of the 
currency level changes.
    If that happens, once again, the persons who will be called 
upon to pay the economic price for the folly of financial 
elites and big boy investors and finance ministries in the 
various countries around the world, will be American workers, 
many of whom can't even afford to buy a single share of stock 
anywhere, in the United States or the Asian markets.
    Under those circumstances, I believe it is essential for 
this Congress to deal with the merits of each of those three 
issues, but not in the context of political blackmail, which 
creates artificial political linkages between the issues. I 
think we have an obligation to try to work out our differences 
on Mexico City. I think we have an obligation to deal with the 
U.N. arrearages. I think we have an obligation to deal with a 
number of the questions Mrs. Pelosi has raised with respect to 
how we provide support for the IMF in a way which will be 
conducive to reform of the international financial structure.
    But when I read in Congress Daily this morning that 
Representative Smith has indicated he has assurances that the 
House leadership will not support supplemental funding for the 
IMF unless the administration engages in an artificial deal on 
that issue and Mexico City, it seems to me that is a short 
route to chaos.
    Each of these issues deserves to be addressed on its 
merits. We have an obligation to try to respond to the 
legitimate concerns of persons such as Mr. Smith and others in 
the Congress on Mexico City but not as part of an overall 
political deal on Mexico City that would transform a political 
minority into a majority through political blackmail.
    These are big-league problems we are talking about, and it 
seems to me that if we don't deal with the issues like big 
leaguers then we shouldn't be dealing with them at all. It just 
seems to me that what we ought to be talking about is how we 
are going to provide assistance to the IMF in a discrete and 
effective way which not only meets the current economic crisis 
but does promote the kind of long-term change that we are 
talking about, and the way we deal with international financial 
issues.
    It seems to me we need to discuss the legitimate concerns 
that people have on Mexico City. But if this gets tangled up in 
one of these all-consuming three-legged deals, we are going to 
be sitting here all year fiddling while Rome burns.
    Obviously, I am concerned about what happens in Asia. My 
concern is not what happens to the Asian countries; my concern 
is what happens to the workers in this country if we don't meet 
our responsibilities on the IMF.
    So I would urge the administration to consider all of the 
concerns of those who have doubts about our IMF policy, those 
who have doubts about U.N. arrearages and those who have doubts 
about Mexico City. But I would urge the administration to deal 
with those issues the way they ought to be dealt with, 
separately, with dignity, on the merits, rather than as some 
kind of political sideshow that gets us involved in nothing but 
ships passing in the night for the next 6 months while the 
world economy goes to hell with American workers suffering the 
consequences.
    Thank you, Mr. Chairman.
    Mr. Callahan. Mr. Secretary, we will accept your statement 
in its entirety for the record and will invite you now to 
address the committee.

                     educating the american public

    Secretary Rubin. Thank you very much, Mr. Chairman.
    Let me start by addressing a comment you made, if I may. 
That is the need to educate the American people.
    I think you are exactly right. I think we are in a new era. 
I saw it developing when I was still in the investment banking 
business, and I think we are now in a global economy and a 
global financial market.
    People say the words, but I don't think there is a broad-
based understanding of what they mean. I think you capture it 
very well with that plant in your district, and I think 
Americans have benefited enormously from this globalization. 
But there are also risks, and there are problems. I think, as a 
Nation, our economic well-being is going to depend very much on 
how we learn to take advantage of the opportunities and manage 
the risks; and a lot of what I have to say deals with that.
    I think your subcommittee becomes extremely important 
because I think a lot depends on the work we do with these 
international financial institutions. It is during this period 
of, say, the last 10 or 15 years that the flow of capital into 
developing countries has increased to levels that one could not 
have imagined, say, 15 or 20 years ago; and that has, in turn, 
financed growth and financed investment and has resulted in 
developing countries absorbing something over 40 percent of our 
exports. But, on the other hand, it has also carried the kinds 
of risks with it that we have seen manifested first in Mexico 
and now, more broadly, in Asia.
    As I said a moment ago, I think all of us are going to be 
preoccupied--this committee, our administration, the 
administration to follow us--with the questions of how we as a 
nation provide leadership to the world in learning to deal with 
both taking advantage of the opportunities and managing the 
risks.
    We appreciate, Mr. Chairman, the spirit in which we worked 
with your committee last year. I think we accomplished a great 
deal in terms of providing effective leadership in the 
international financial institutions. We also worked to set 
priorities for the future, and that has been very helpful to us 
as we have moved forward to negotiate with and work with these 
institutions.
    As I think Congresswoman Pelosi mentioned, we cleared our 
arrears in the World Bank's IDA; and that clearly has greatly 
increased our ability to work effectively in that organization 
to promote views that the United States believes should be 
promoted by the World Bank.
    Mr. Yates. Would you please pull the mike closer?
    Secretary Rubin. Is that better?
    Mr. Yates. That is much better.
    Secretary Rubin. Too close?
    Mr. Yates. No, I want to get close to you.
    Mr. Rubin. Well, that is a different set of issues, which I 
think I will leave aside, if I may, Mr. Yates. I have got 
enough problems.
    Mr. Yates. I will withdraw that.

                                 reform

    Secretary Rubin. We have, as you know, negotiated a 40 
percent reduction, as Congresswoman Pelosi said, in our 
commitments to multilateral development banks; and so, once we 
clear up the arrears, we will then be on an annual funding 
scale of about $1.2 billion, which is less than our commitment 
had previously been to IDA alone. On the basis of that $1.2 
billion, we will have enormous leverage over institutions that, 
in the aggregate, lend roughly $45 billion a year.
    It is an enormously effective way for the United States to 
pursue its view of how developing countries should pursue 
reform and growth, which is all enormously, as I said a moment 
ago and Mr. Obey suggested, in our interests. At the same time, 
we have worked forcefully to reform these institutions.
    I think it would be fair to say the United States has been 
far and away the leading voice with respect to reform. We have 
provided leadership in reducing overhead and increasing 
transparency, created a far greater focus on corruption. We 
have worked with these institutions so that they have focused 
much more on promoting the private sector in developing 
countries and becoming more sensitive to environmental, labor 
and human rights concerns.
    The World Bank, as you know, is undergoing a major 
reorganization right now. The Asian and European Bank budgets 
have been frozen for several years; and the African Bank, with 
a great deal of discussion with the United States, has 
substantially cut its staff and, in our judgment, has engaged 
in a very serious reform program. We believe that the 
multilateral development banks are providing very good value 
for American dollars and better value than at any time in their 
history.

                                arrears

    Having said that, the arrears are still something over $600 
million. In addition, we have a $75 million shortfall on our 
pledge to the ESAF, the IMF's Enhanced Structural Adjustment 
Facility. Our 1999 budget includes $509 million toward these 
commitments.
    Our highest priority, having said that, is, as always, the 
current contribution; but these arrears that I just mentioned 
are critically important, too; and we feel very strongly they 
need to be satisfied.
    Let me touch, if I may, on a few items worthy of particular 
mention not because of priority but because I think their 
substance merits a few moments of discussion.

                                  gef

    The first is the Global Environmental Facility, which is 
referred to as the GEF. The GEF is really a unique instrument 
because it helps developing countries work on environmental 
problems that affect not just that country but, rather, have 
cross-border effects, very much including effects on our own 
country--for example, the state of the oceans or protecting the 
ozone layer.
    Our $300 million request for the GEF includes roughly $200 
million for arrearages, and we think it is very important we 
pay our arrearages and that we become current in this very 
important institution, that is going to affect our health and 
our prosperity very centrally.

                        african development fund

    Secondly, we are requesting $155 million for the African 
Development Fund. Over half of that request would go to pay 
arrears. The African Bank, as I mentioned a moment ago, has 
made very substantial reforms; and it is very importantly 
involved with us, the United States, as we look to focus more 
effectively on the continent that has lagged all the rest of 
the world with respect to economic growth, and that is Africa.
    We are requesting $5 million for Treasury technical 
assistance. I know that will sound like a minute number to this 
committee, and it is minute in the context of the budget, but 
it is a very important request. Treasury provides exceedingly 
professional technical assistance, and it is funded from 
outside of Treasury. It is a very difficult process to arrange.
    Fortunately, we have an effective process now with those 
who provide the funding for Central Europe and the former 
Soviet Union. But when you get away from that area, funding 
technical assistance is a very time-consuming process. In 
places like Asia, where there is a tremendous demand right now 
for our technical assistance with respect primarily to 
financial institutions and similar matters, we cannot get the 
funding quickly enough to get the technical assistance in place 
when it is needed and on a timely basis. So we have this $5 
million request to enable us to mobilize and deploy those 
resources on a rapid basis.

                                  ida

    Finally, as always, we strongly support the World Bank's 
International Development Association, IDA. IDA, as you know, 
is far and away the largest organization in the world that 
deals--in the international financial institution world--that 
deals with the problems of developing countries. I think it is 
a tremendously constructive force; and, under its president, 
there is both a reform program with respect to how it operates 
and also, we think, a more effective focus on the kinds of 
things we think IDA should be focused on--health, children, 
education--the underpinnings, if you will, for a market-based 
economy.

                            asia and the imf

    Mr. Chairman, let me comment briefly, if I may, about Asia 
and the IMF. There has been, as you know, a remarkable set of 
events in Asia which have been referred to by some as the first 
crisis of the 21st century.
    I said in my opening remarks that I think the kinds of 
issues we have seen in Asia and the kinds of issues that are 
going to be dealt with in this committee for a long time to 
come, as we all learn to deal with this new era, will 
critically affect our economic well-being. Financial 
instability, economic distress, depreciating currencies all 
very much affect our workers, our farmers, our businesses.
    Number one, these Asian countries are very large markets 
for our goods; and, number two, the depreciation their 
currencies affects the competitiveness of our goods in world 
markets and also here in the United States. Moreover, if the 
problems in Asia had spread to other developing countries 
around the world--and that had begun, as you may remember, at 
the beginning of this Asian crisis--and had those countries 
gotten enveloped in the same problem, then many more markets 
would have been affected. You would have had many more 
currencies depreciating and the effects on this country would 
have had the potential for being quite profound.
    As it is, even if the situation in Southeast Asia can heal 
and if the contagion does not occur, there will still be a 
palpable effect on our economy. I still think we will have 
solid growth and low inflation next year. However, there is 
always the possibility, though I think it is a relatively low 
probability, that the crisis could reignite, that the enormous 
risk contagion that had us so focused between Thanksgiving and 
Christmas could, in fact, take place.
    With all of the consequences that come from that, I think 
the leadership of the international financial institutions and 
the international community are very much catalyzed in many 
ways, by the United States. We were successful in preventing 
this thing from becoming what it could have become; but there 
is still some risk, although I think a low probability, that it 
could happen again.
    I think it is a risk we must not take. We are requesting 
the support for the funding as rapidly as possible for both the 
new arrangements to borrow and the IMF quota, so that if this 
low probability event should happen, the international 
community will have the capacity to deal with it rather than be 
left with an enormous crisis that could have profound effects 
on our economy without an effective mechanism for dealing with 
it.
    As far as the policies of the IMF themselves are concerned, 
the programs in these Asian countries have been very much 
focused on the problems that gave rise to the financial 
instability. That is to say, they have been focused on the 
structural issues in these countries that gave rise to these 
problems.
    I think they have been well constructed. I do not believe 
they are austerity programs. You can argue about how much 
macroeconomic content, that is to say fiscal policy and 
interest rate policy, they should have had, but these are 
certainly not traditional IMF austerity programs.
    Let me comment briefly, if I may, Mr. Chairman, on two 
concerns that have been raised with respect to these programs.
    First is the moral hazard question. The question is--well, 
the assertion is--that these programs, in effect, enable banks 
to come out whole from risky investments and that, in turn, 
creates perverse effects on behavior going forward.
    The principle is clear. Creditors and investors should bear 
the consequences of their investment.
    In Asia, vast numbers of investors and creditors have taken 
very large losses. You may have seen that Deutsche Bank 
reserved $777 million for losses anticipated in Asia. The 
Financial Times reported early last week, I think it was, that 
European banks are expected to have losses of up to $20 billion 
with respect to Asian loans.
    Having said that, there are some institutions that may come 
out better off than they would have been without these 
programs. That is a by-product--I have said many times, but I 
will say it again--we would not spend a nickel to protect a 
bank, but that is a by-product of programs whose purpose is 
financial stability and the rest, the recovery and 
reestablishment of economic well-being in these countries.
    The other issue is the issue Congresswoman Pelosi raised, 
which is the question of labor rights, human rights and the 
like, environmental protection.
    I don't think there is any question, if you look at these 
countries, at least there is no question in my mind. I come 
away with the view that when you look at the countries in 
Asia--effective human rights and labor rights regimes are very 
important with respect to having effective economies over time. 
So I think it is not just a social and moral issue. It is an 
economic issue.
    It still leaves us with the question of how much you can 
accomplish in these programs. It is my view, at least, as you 
go to implement and get sustained implementation of programs 
that are aimed at financial stability, which require wrenching 
changes in a very short period of time, there is a limit to how 
much you can accomplish--or attempt to accomplish--without 
greatly reducing the probability of success; and both the 
workers in those countries and the workers in our country are 
very much affected by whether or not we can achieve success. 
Moreover, success in this effort to reestablish financial 
stability and economic growth is, I think, essential for 
creating an environment conducive to pursuing human rights, 
worker rights and environmental protection, protecting 
objectives which we very much share with Congresswoman Pelosi.
    I think the challenge to all of us is the one you stated: 
how do we pursue these objectives while, at the same time, not 
vastly increasing the difficulty of reestablishing financial 
stability. As you know, we are working on this and trying to 
think the issues through in a very serious way. They are issues 
we are committed to as values and also because we believe they 
are essential to having effective economies over the long run.
    Final comment. I think the IMF is exceedingly well situated 
to be the central institution in this entire effort with 
respect to reestablishing financial stability. It has great 
expertise, and can internationalize the burden so it doesn't 
fall on the United States itself. It can require countries to 
do things, in terms of conditionality, that no bilateral 
provider of credit could.
    Having said that, there is clearly a need for great changes 
in the mechanisms and institutions that deal with the global 
economy and the global financial markets. The markets and the 
economy have developed very rapidly, and the institutions have 
not kept pace.
    Mr. Chairman, we have a process with the Federal Reserve 
Board right now which is very intensely focused on the 
architecture of the future. However, these are mind-bogglingly 
complex issues and it will take a substantial amount of time, 
in my judgment, to develop sound and sensible ideas, working 
with Congress and other nations around the world. We cannot, at 
least in my judgment, wait upon that process to be completed 
before we provide the funding for the IMF so that we will have 
the capacity to deal with what all of us hope will not happen, 
and what I think is a low-probability event, but will be a 
risk. In my judgment, we should not take the risk of either 
this crisis becoming far worse or a new crisis occurring 
elsewhere in the world.
    With that, we would be delighted--Under Secretary Lipton 
heads all international activities at the Treasury and would be 
delighted with me--to respond to any questions you may have.
    Mr. Callahan. Thank you, Mr. Secretary.
    [The statement of Mr. Rubin follows:]


[Pages 13 - 16--The official Committee record contains additional material here.]



                  mexico city language linkage to imf

    Mr. Callahan. First, let me respond to the issue of whether 
Mexico City language will be attached at some point in this 
process to emergency needs of the International Monetary Fund.
    Congressman Obey indicated we have a minority controlling a 
majority, and I most respectfully disagree with that, because 
the Mexico City issue is not going to be attached probably to 
our bill. If it comes through this committee with respect to 
the IMF, it is going to be attached by a majority of the 
Members voting on the floor of the U.S. House of 
Representatives.
    This issue is not going to go away. It is something other 
administrations have lived with, successfully, with respect to 
international policy in the past; and this issue is going to be 
attached to this bill in one shape or the other. So the 
administration must accept this fact, whether or not you agree 
with Mexico City language. This issue is going to be offered, 
in the least, as an amendment on the floor.
    History will tell you that the majority of the Members of 
Congress support Mexico City language. History will tell you 
that, on supplemental appropriations, it is always a 
temptation, especially in a crisis situation, that issues like 
this are attached to supplemental appropriation measures. So it 
is going to become an issue that the administration is going to 
have to negotiate, and you may as well accept that.
    While it is not going to be probably passed out of this 
subcommittee or even the full committee, when it gets to the 
floor it is going to be attached, so I think the administration 
is ultimately going to have to make a decision as to whether or 
not this international monetary crisis in Asia and the funding 
of International Monetary Fund is so necessary that it will 
stand in the way of the majority of the Members of Congress. 
But that is an issue that I am just telling you is going to 
come up.
    Congressman Obey mentioned this is the major league, but 
you have a lot of us minor league capability people playing in 
this ball game and, nevertheless, we are going to be a factor. 
I am pro-life, and I am not ashamed of that. I am right proud 
of that. That is my personal philosophy. I am going to vote for 
the Chris Smith amendment, even though I agree that maybe this 
is not the place for it.
    The attempts of the past have been unsuccessful in 
negotiating something through the Congress to tell the 
administration that we want Mexico City implemented. So it is 
going to be an issue. It is going to be attached, more than 
likely, if this is what the leadership decides; and whether the 
leadership decides or not, the attempt is going to be made, it 
is going to be attached to this issue. So you must prepare 
yourself to either accept that language or else come forward 
with some language that is acceptable to the Mexico City 
proponents of the legislation.
    With respect to IDA, Mr. Secretary, as you know, this 
committee and the Congress, a great majority of the Congress, 
were very concerned about the procurement arrangements that 
were negotiated by Chairman Wolfensohn; and we were told if 
indeed we were able to come forth with the necessary monies for 
IDA that the procurement would be revisited and the monies 
would not be spent unless the terminology of that agreement was 
changed. Have we arranged to repeal the procurement policies 
negotiated?
    Secretary Rubin. Yes, ITF has been terminated, and whatever 
is left in that--and I actually don't know the numbers. 
Whatever is left there is now fully available. As I understand 
it, roughly a billion dollars is fully available to American 
companies for competitive bids.
    Mr. Callahan. Very good.
    Mr. Frelinghuysen.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Good morning, Mr. Secretary, how are you?

                    IMF wall street journal article

    In an article in the Wall Street Journal from your 
predecessor, Bill Simon, also co-written by former Secretary of 
State, George Schultz, and also by Walter Wriston, even though 
I support IMF funding, when those three people get together to 
write an article, I take a close look at what they are talking 
about.
    One of their premises is that, when the IMF intervenes, the 
government and its--and lenders are rescued but not the people. 
I have examined some of your testimony before other committees, 
and I would like you to address that issue.
    I think the public perception is--and Wriston and Simon and 
Schultz seem to follow pretty much along that public 
perception--that the people in these countries are totally 
devastated by what is occurring.
    Secretary Rubin. Three comments, if I may.
    One is that I know and enormously respect Bill Simon and 
George Schultz. I talked to George yesterday twice about the 
Asian crisis. But, on this issue, we disagree.
    You will see an ad in the New York Times with something 
like 150 signatories supporting the IMF, including a large 
number I think you would have equal respect for, so it may give 
you a little more comfort in terms of the company one keeps.
    I also noticed in the article you referred to he said we 
should get rid of the IMF after it deals with the Asian crisis. 
It was sort of recognizing this is the way we can deal with 
crisis.
    Mr. Frelinghuysen. I am not an advocate of doing away with 
the IMF, but when these three persons make a comment, I think 
somebody needs to rebut the claims.
    Secretary Rubin. I agree with you.
    Look, I think the answer is as follows: The problems that 
the people of these countries suffer--and they do suffer 
problems--are not a function of what the IMF has done. They are 
a function of financial instability, loss of confidence, 
collapse of economies and collapse of the currencies.
    The IMF is, if you will, the cure, not the problem. When 
the IMF comes in with its assistance but also conditionality, 
what that does over time, and though it does take time--these 
things do not happen quickly or easily, unfortunately--the 
countries get back on track, if it works. Then you start to see 
incomes go back up. Growth starts. Incomes go back up, and the 
people begin to reestablish their economic well-being.
    Conversely, I don't think there is any question that if the 
IMF--if the international community--was not effective and 
successful in doing what it is now doing in Asia and did in 
Mexico, then most likely you would have a default either of the 
sovereign debt or maybe systemic failure of the banking system 
in which you would have vastly greater economic duress and 
currency depreciation. It would last for a vastly greater 
period of time, and the people would suffer far worse.
    So I think you have two difficult outcomes, but I think one 
is far better than the other.
    I think you have seen that in Mexico now, with the economy 
growing at 7 or 8 percent--well, growing 7 percent last year, 
expecting to grow 5 percent this year, in dollar terms. Real 
wages have increased something like 30 percent since the bottom 
of the crisis, and in dollar terms, Mr. Yates. They are not 
back where you want them to be yet, but they are a heck of a 
lot--I think very, very substantially better off--than they 
would be if Mexico had defaulted, in which case I think you 
would have years and years of terrible economic hardship.
    Mr. Frelinghuysen. The other issue they raise is the IMF 
can lull nations into complacency as a self-appointed lender of 
last resort, a function never contemplated by its founders.
    Secretary Rubin. I actually agree.
    There was a column today in the Post--I think he got half 
of this about right. He didn't address a piece of it, but he 
addressed that piece. I don't think any country would choose to 
get into the mess or the morass that Mexico and these Asian 
countries have been in when they get into trouble. So I don't 
think that government officials are going to be lured into 
making bad policy decisions because they feel the IMF will bail 
them out; and, therefore, they feel they won't have to suffer 
the consequence.
    I think the tragedy is what you said. You got it right. The 
tragedy is that the countries do go through a difficult time no 
matter what, even if the recovery program is effective, before 
recovery takes hold.
    I think where there is an issue is, to the extent that 
bankers and investors are better off because of the programs 
than they otherwise would have been, that, unfortunately, can 
create the perverse impact--could at least conceptually create 
the perverse impact--of causing people to be less conscious of 
the risk than they should be.
    Mr. Frelinghuysen. Then you would agree with the third 
premise.
    Secretary Rubin. I would agree with that.
    I do think in Asia you had vast losses. So I think this 
would be a good lesson to the banking community, but I do think 
we need to change mechanisms and architecture to try to prevent 
that from happening to the greatest extent possible.
    Mr. Frelinghuysen. Is it fair to say, to use their own 
words, that there is a good chance that those who have lent 
money will get, at some point in time, bailed out?
    Secretary Rubin. No, my guess will be you will find most of 
the creditors in Asia--I will see if David agrees with this--
most of the creditors in Asia and the credit extended in Asia, 
where there are problems, will wind up taking losses. But I 
think some will benefit. I think most will wind up taking 
losses, and equity investors have gotten very large losses.

                           opening up markets

    Mr. Frelinghuysen. The issue of opening up markets, I hate 
to to be provincial in this business, but I come from a State 
that represents a lot of pharmaceutical industries. The 
Chairman obviously has provincial interests as well.
    I have a letter in front of me from the Thai government 
that says that they require all Thai government agencies and 
semi-private industries to purchase only goods produced in 
Thailand. I thought part of what we were doing here is actually 
opening up markets--besides building sound financial practices 
that we wanted to open up markets.
    My question is, what guarantees do we have that these 
reforms, these markets, will open up?
    Secretary Rubin. Market opening is an objective we had when 
the President first walked into the Oval Office; and we 
accomplished a great deal, although there was an enormous 
amount left ahead.
    When IMF sets up the programs and we do play a substantial 
role in trying to help think through the content of these 
programs, what we try to do is to focus on the reforms that 
most directly relate to reestablishing financial stability. 
Because, as I said I think in reference to some other similar 
issues, it is a very difficult thing to do.
    You are asking countries or requiring countries to make 
wrenching changes, changes nobody has asked us to make, and I 
think we would have an extremely difficult time making 
wrenching changes in a very rapid period of time.
    I believe totally in opening markets abroad, and I believe 
in being very tough in opening markets. There are systemic 
things that we do do, and we could describe them if you like, 
in some of these programs that go to market opening. But I 
think if we try to accomplish a trade agenda, a United States 
trade agenda, through these programs, I think we then run into 
the problem of trying to do a whole other set of things which 
is going to make it much more difficult and therefore less 
likely to accomplish.
    Mr. Frelinghuysen. Speaking for myself, I think we ought to 
get something for our financial commitment.
    Secretary Rubin. Well, we do.
    Mr. Frelinghuysen. You have given us those assurances, but 
how do we actually have a guarantee?
    Secretary Rubin. No, no. I meant something different. What 
we get for what we are doing is, I think, in our dominant 
economic interest, which is to prevent--well, it doesn't 
necessarily prevent but does the best we can to prevent--these 
economies from continuing to be in free fall and therefore 
shrinking as markets, and from having depreciating currencies 
and undercutting the competitiveness of our goods around the 
world. That, in terms of our broadest economic interests, 
overwhelms everything else, and that is what we try to do.
    Now, we do try to do some market opening. David, do you 
want to add anything?
    Mr. Lipton. If I could just say----
    Mr. Frelinghuysen. We have other partners in the IMF. What 
is their impact? I mean, are they as interested in opening 
these markets as we are? We are the major lender here, so to 
speak.
    Secretary Rubin. Well, we are about 18 percent.
    Mr. Frelinghuysen. Well, 18 percent. Well, that is the 
highest percentage of anybody.
    Mr. Lipton. Congressman, a couple of points. I think that 
because there are other members in the IMF, we understand that 
the IMF will pursue broad systemic opening of economies, trade 
policy and capital account policy. It is difficult for them to 
pursue particular industrial or sectoral issues for fear that 
each of the member countries would want its particular 
interests advanced.
    What we have seen in the Asian country cases is opening in 
trade, tariffs being reduced in Indonesia for fruit and 
nonfruit products. We have seen pledges of export subsidies 
being eliminated, import-licensing restrictions being 
eliminated in Korea. These are changes that we think are 
important for these countries to undertake to fix their 
economies, to signal the direction that the country will go in.
    But there is one undeniable problem in the short run, which 
is that these countries are in a foreign exchange crisis 
situation. There is a shortage of foreign exchange, which is 
why the currencies have been so depreciated.
    Mr. Frelinghuysen. I understand they need an immediate 
transfusion. I am just saying, what guarantee do we have in the 
final analysis that we are going to have these markets opened 
up?
    Secretary Rubin. I think as you are dealing with these 
systemic issues, the guarantee--I don't think I would use the 
word guarantee--but they have committed to these programs, and 
they get the money in tranches, Congressman, so that hopefully 
they get it in tranches so that if they don't do what they are 
supposed to do, then, of course, they don't get the next 
tranche.
    This will solve some of the problems. It won't solve all of 
the problems because if we try to put all of our particular 
interests into each of these things, as Dave Lipton said, other 
countries do the same, and you would have an overload of trade 
issues you couldn't accomplish, and then we wouldn't accomplish 
our overriding objective, which is the financial stability and 
the----
    Mr. Frelinghuysen. And lastly, to conclude, to explain to 
the average citizen--and I will follow up with what the Speaker 
says, I think we need to do a better job of that using your 
bully pulpit. When a call is made for money, does the Treasury 
borrow the money, or do you create it by fiat?
    In other words, how is it literally done?
    Secretary Rubin. We have our little printing presses.
    Mr. Frelinghuysen. Well, I am sure that you do have the 
printing presses.
    Secretary Rubin. No, we use that for ourselves personally.
    No. I assume we borrow it.
    Mr. Frelinghuysen. You say here that we are not using 
taxpayer dollars.
    Secretary Rubin. Right. Well, we are not. It doesn't cost--
--
    Mr. Frelinghuysen. But in reality, how do you--what is the 
calling mechanism?

                                  imf

    Mr. Lipton. It is a swap of the dollars which go from the 
U.S. to the IMF and the IMF provides us an SDR certificate. So 
it is an asset swap, and they, in essence, call the dollars 
when they need them in order to extend loans to countries that 
are borrowing.
    Secretary Rubin. Let me try. Well, we pay interest on the 
monies that we borrow, when dollars need to be put up. At the 
same time, we get interest from the IMF.
    Mr. Frelinghuysen. Do they come from the general fund of 
the Treasury, from borrowing, or the creation of inflationary--
--
    Mr. Lipton. I don't know the answer to that.
    Secretary Rubin. Let us get back to you, Congressman, but I 
am sure the answer is they come from the general fund because 
that is only place dollars can come from, and since we are 
still in deficit--although only slightly in deficit--net 
dollars would have to come from borrowing.
    But as Dave Lipton said, there is no impact on the budget, 
for the reasons we have described, and so you are borrowing 
dollars, but then you are creating an asset of equal value when 
you get their claim back and the interest rates, roughly 
speaking, wash. So there is no cost to the taxpayers.
    Mr. Callahan. I would like to commend the gentleman from 
New Jersey for his knowledge of this issue. Without offending 
my great friend Mr. Obey from Wisconsin, he brought up the 
major leagues, so rather than plagiarize him, let me tell you 
that Rod Frelinghuysen has turned out to be the John Elway of 
this subcommittee, with all due respect to the problems that 
the gentleman from Wisconsin had with John Elway on specific 
issues.
    Mr. Obey. Well, if the chairman would yield, let me say I 
think the questions Mr. Frelinghuysen are asking are precisely 
the kinds of questions that we should be asking rather than 
looking for ways to blackmail each other on very important 
issues.
    Mr. Callahan. I certainly agree, and I am very appreciative 
of Rod Frelinghuysen for taking the time and the effort and the 
input that he has provided to me on this very, very complicated 
issue.
    The gentlelady from California.

                          mexico city language

    Ms. Pelosi. Thank you very much, Mr. Chairman. I am going 
to follow your lead and not use my question period now.
    I am very glad you didn't bring the hourglass. I don't know 
what system we are using here, the flexible 5, it seems like. 
But I am not going to use mine. I am going to have you 
recognize the gentleman from Illinois, Mr. Yates.
    But I am going to follow your lead in making a comment 
about the Mexico City language.
    I do not believe that the poor women of the world should 
have to pay the price for crony capitalism, corruption and 
other poor business judgment anyplace in the world.
    I listened very carefully as the Secretary talked about how 
there is conditionality at the IMF, but we don't want to bog 
down this supplemental because we need to move quickly in order 
to get the money out there. So it seems ironic to me that while 
we might not be able to put conditions that directly relate to 
the economies and the health of the economies of these 
countries on the IMF supplemental, we are going to put a 
condition that poor women, throughout the world, will not be 
able to receive information about their reproductive freedom.
    I think that that gag rule has no place, anyplace, in this 
Congress, least of all on an IMF replenishment.
    I have said that with the greatest respect, of course, for 
my chairman, as you all know, and also for the maker of that 
motion on the floor of the House, whoever he or she may be, and 
if it is Mr. Smith, he is my friend, I hold him in high regard. 
But this is a fight that we have to make and that we have to 
come to terms on, and it is important for the American people 
to know that no U.S. taxpayer dollars are spent on abortions 
anyplace in the world. That is the law.
    And it is important for them to know that the Mexico City 
language isn't about abortion. What we are talking about is 
family planning and not having a gag rule on the spread of 
information about family planning.
    With all the respect in the world for my distinguished 
chairman, sometimes I, too, wish we had a unicameral 
Legislature, as long as the one house was the House of 
Representatives. It just doesn't happen to be the case. And 
while there may be--and I hope there is not--some level of 
success for the Mexico City language on the floor of the House, 
that isn't the end of the game. The legislation has to pass 
through the Senate and be signed by the President, and then 
two-thirds of this body has to sustain that position.
    So it is a very difficult issue. We are all trying to work 
closely together to address the concerns that people have, 
where there are real reasons for opposing the Mexico City 
language. But if these concerns are just an excuse for 
antichoice policies, they have no place in this debate because 
this isn't a choice issue, it is a family planning issue. If 
they try to disguise themselves as something other than what 
they are, I think everybody should point to the gross 
irresponsibility, which I hope the Republican leadership will 
not exercise, in saying that these two issues are tied in 
perpetuity, as I believe the language has been used.
    And with that, Mr. Chairman, I will save my questions for 
later about the moral hazard argument and why we should be 
bailing out the private sector. I think the American people are 
very tired of privatizing the gain and nationalizing the risk. 
I appreciate what the distinguished Secretary said about why 
that is nonetheless in our interest, but my questions will go 
along that path.
    With that, I yield back my time, Mr. Chairman.
    Mr. Callahan. The gentleman from Illinois, Mr. Yates.
    Mr. Yates. Thank you, Mr. Chairman.
    Mr. Secretary, welcome to our committee. We are glad to 
have you here, with your very capable assistant.

                                  imf

    Here I have a letter from one of my colleagues. ``Say no to 
the IMF because the IMF has ample funds without Congress. Dear 
colleague, the recent Asian financial crisis and the IMF 
bailout have combined to put pressure on Congress to approve 
billions of dollars for the IMF. The fact is the IMF has ample 
resources right now without any new congressional 
appropriation,'' and there are other paragraphs, but that is 
the kind of thing that we were getting.
    It itemizes what seem to be an enormous amount of resources 
available to IMF: $45 billion in liquid resources; $25 billion 
credit line through the general arrangements to borrow; $37 
billion in gold reserves; blank billion in funds IMF can borrow 
from the private capital market.
    Let's suppose IMF were not in existence, Mr. Secretary. You 
have not indicated the possibilities of what will happen in the 
event that the Congress turns down the $18 billion. You have 
not indicated that, without IMF funds, how these countries are 
going to pull themselves out.
    Are there adequate resources in the private market in order 
to do this kind of a job for them? I would appreciate your 
giving those of us who support the IMF the arguments that are 
necessary to show that these are necessary.
    Secretary Rubin. Thank you, Mr. Yates. I think those are 
very important questions.
    Let me start with respect to the--I will go to the numbers 
in one second, but let me start, if I may, with respect to the 
question without the IMF, is there money in the private sector?
    The problem is in these kinds of crisis situations, this 
kind of capital does not exist in the private sector. In the 
first place, it has kind of an uncertain--there is kind of an 
uncertainty and a risk about it that would make it impossible 
to mobilize the amounts of money that are needed and needed 
very quickly for these countries.
    It just simply does not exist. It is not available. It 
could not happen.
    Secondly, the IMF, as mentioned in my testimony, imposes 
conditionality that is central, it is the central feature of 
these recovery programs, and private sector lenders, even if 
they exist--and they would not exist, but even if they 
existed--could not impose that kind of conditionality. So the 
answer is without the IMF, there would be no capital from any 
source.
    Mr. Yates. And what would happen to the countries then?

                                default

    Secretary Rubin. I think what you would have is a default, 
and once you had a default, there would be no access to the 
international capital markets, and the countries' economies 
would go into gridlock and would continue to depreciate very 
substantially, as would their currencies. And unfortunately--
well, that in itself would be terrible for the people there and 
for the people here, for the reasons we discussed before. But 
in today's interconnected economy, the probability is, I think, 
quite high that it wouldn't be limited to one country. You saw 
that in Asia back at the end of last year where a problem in 
one country then created problems in a number of countries in 
the region.
    As you may well remember, between Thanksgiving and 
Christmas, as I said in my testimony, the concern was that that 
would spread out beyond Asia to other parts of the world. So it 
could become a global problem.
    Mr. Yates. In other words, there is no private funding 
available without public funding to start it?
    Secretary Rubin. There is no--you have said it very well. 
That is correct. I couldn't say it better, so I won't repeat 
it. That is correct.
    Mr. Yates. Well, I wish you would repeat it.

                   reestablishing financial stability

    Secretary Rubin. There is no private funding available 
until the conditions have been reestablished that will make 
that an attractive thing for private creditors to do, and that 
isn't going to happen until there is some element of--some 
reasonable level of financial stability and confidence and 
reestablished, and that requires reform and requires this 
international financial institution funding to, in effect, 
provide breathing room to enable these countries to stretch out 
the short-term debt that is choking them.
    On the numbers, Mr. Yates, there is $45 billion right now 
of liquidity in the IMF, but about $30 billion of that is not 
usable. It is like a credit union. That is, I think, the right 
analogy. And just like a credit union, you have to have 
liquidity so that if your depositors want their cash, they can 
get it. And it has been estimated that roughly there is about 
$15 billion right now of usable money in the IMF. $37 billion 
of gold is simply the asset of the IMF that gives it the 
creditworthiness that enables us to put up our money, get back 
a claim of equal value because of the high creditworthiness of 
that claim.
    There is $25 billion, roughly--I have forgotten now whether 
it is $23 billion or $25 billion, it doesn't matter--$23 
billion or $25 billion in the GAB, as you mentioned. But it is 
that $25 billion, plus the, say, $15 billion or thereabouts in 
the IMF, that is the only money available right now. And if we 
were to have--and we are all working as hard as we can to 
prevent this, and we have to believe--and I do believe--it is a 
low-probability event, but if it were to happen that this 
crisis were to reignite and then spread out and bring in other 
parts of the world, that is a woefully insufficient capacity to 
deal with the problems that we would face.
    Mr. Yates. You indicated in your testimony that the 
Deutsche Bank has lost about $700 million, I think.
    Secretary Rubin. Well, I don't know what their losses are 
but they reserved--they announced they reserved--$777 million 
against either projected or possible losses.
    Mr. Yates. Will the loans of the IMF be used to pay back 
the amounts that the banks, that the various banks, have lost 
in their investments?
    Secretary Rubin. Well, the loans from the IMF are being 
used for different purposes in different countries. In Korea, 
originally, some of the IMF money was used to repay banks and, 
therefore, those banks came out whole who might--who would not 
otherwise have come out whole. That is why I said that while 
there have been vast losses taken, there are some people who 
will come out whole who would not otherwise have come out 
whole, and that is a by-product of this process.
    Mr. Yates. Mr. Frelinghuysen raised that point, coming out 
of the Schultz-Simon article.
    Secretary Rubin. Yes, but I think that the problem with the 
Schultz-Simon article is that what it did not acknowledge is 
that while there will be some people who will come out whole, 
there are vast losses that are going to be taken, both by 
creditors, bank creditors, and investors of all sorts. But 
there will be some--there will be some bank creditors that will 
come out whole or at least close to whole, that would not 
otherwise have come out whole, and that is a problem that is 
inherent in the system that we have right now.
    Mr. Yates. We are taking the lead in trying to reestablish 
the financial stability of these countries. Are we being helped 
by other nations, and in what respects are we being helped by 
other nations?
    Secretary Rubin. Oh, yes, this has been an international 
effort. If you take a look at the IMF, we have 18 percent of 
the, if you will, the ``capital'' in the IMF, so other nations 
have 82 percent. And then if you look at the so-called second 
line of defense, contingent agreements that we have made to 
provide additional money, although so far we have not actually 
disbursed anything, in Korea we committed $5 billion, Japan 
committed $10 billion, Europe committed $8 billion.
    Mr. Lipton. That is correct.
    Secretary Rubin. And that was about it, I guess.
    Mr. Lipton. There were a couple of others.
    Secretary Rubin. And there were a couple of other smaller 
ones. So this has been an international effort. This is not 
like Mexico. This has been a real international effort.
    Mr. Yates. You are in the global economy and in global 
competition with the nations that are helping. Do you find that 
that interferes in any way with your cooperation in 
reestablishing the financial stability?
    Secretary Rubin. With the nations that we are helping?
    Mr. Yates. No, with the--of nations that are joining you in 
helping the IMF.
    Secretary Rubin. I am sorry. I got it. No, because they all 
have the same economic interests we have. These are their 
markets. If these countries keep depreciating, it hurts their 
workers just like it hurts our workers.
    Mr. Yates. Okay. All right. Thanks, Mr. Chairman.
    Mr. Callahan. Mr. Wolf.
    Mr. Wolf. Thank you, Mr. Chairman. I appreciate it, and I 
want to thank Mr. Kingston for deferring the time. I have 
another appointment coming up.

                        east timor and indonesia

    Mr. Secretary, welcome. I have two questions. One with 
regard to East Timor, and Indonesia. Nowhere do you ever raise 
the issue of what is going on out there, and if the American 
taxpayer will be contributing money to the Indonesian 
Government to bail them out, which may very well be 
appropriate, you have never raised those issues.
    Now, they may have been raised privately, but I understand 
they are not even being raised privately. In East Timor, in the 
last year, more people have died. It is a reign of terror. 
Bishop Belo, the Catholic bishop, has received the Nobel Peace 
Prize. Wouldn't this be the opportunity to tell the Indonesian 
Government, please give the people of East Timor autonomy or 
independence, particularly since we are helping in a very 
critical issue like this?
    Secretary Rubin. Congressman Wolf, my understanding, and 
let me ask David to add to this, if he would, is that the East 
Timor issue has been raised aggressively by the State 
Department on a number of occasions with Indonesia. We have not 
raised it in the context of trying to work through this 
program. Look, I think you are right on East Timor. I think 
there is a serious problem, and I would identify with your 
concerns.
    On the other hand, if Indonesia goes into default, the 
Indonesian people are going to be--including the people of East 
Timor--vastly worse off than if we can reestablish--not we, but 
if the international community can help Indonesia reestablish 
financial stability, and that is itself proving to be a very 
difficult undertaking, as you know.
    Mr. Wolf. Well, I understand that, but the State Department 
really hasn't done very much, and the conditions are worse 
today than they were a year ago. I was out on the island. I 
mean, we saw young boys with their ears cut off, the 
atrocities, and the atrocities have continued.
    It would seem to me that with Treasury working with State, 
here is an opportunity to say to the Indonesian Government, we 
are coming to your assistance; we do expect--we are not linking 
these things necessarily, but we do expect progress, and we 
want something publicly said because the people of East Timor 
are suffering, and they have seen no improvement whatsoever. 
And I personally feel that if I am going to support something 
like this, I would like to see you speaking out both publicly 
as well as privately.
    There were reports several years ago that one American 
manufacturer was paying Michael Jordan more money for promotion 
of a particular product than they were all the salaries of all 
the Indonesian workers. There are some things like this, but in 
East Timor these people are dying. Forty-two, I think, have 
died since last year. There ought to be some linkage in the 
sense that you put pressure on the Indonesian Government to do 
the right thing and, in the process of doing it, I think will 
strengthen the Indonesian Government because businesses will 
see that they have made progress on a very sensitive issue, 
which has been recognized by the Nobel Peace Prize, by the 
Pope, by the American Catholic bishop, by Cardinals, and by 
people all over the world.
    Secretary Rubin. You know, I think you raise an interesting 
point--I may ask David to comment, if I may, Congressman, but 
let me just make one comment, if I may. I think that a case 
that we have to make more effectively, not just in Indonesia 
but elsewhere, is that human rights is actually good economics.
    I have come to feel rather strongly that when businesses 
look at countries in which to invest, they look at the 
political and social situations, and they are obviously 
concerned about political and social stability, and countries 
that have real human rights problems I think are less 
attractive, because people--there is a greater concern about 
the possibility, at some point at least, along the line of 
instability. I think that is an argument we need to make more 
effectively, and that is one of the things that we have been 
talking about how we can do it.
    As far as East Timor itself is concerned, I know the 
President--I think the President--yes, the President did raise 
that when he was in Vancouver with Soeharto.
    Do you have any other, David?
    Mr. Lipton. I didn't have any information beyond that 
point.
    Secretary Rubin. I know that he raised it with Soeharto. 
This was in Vancouver.
    Mr. Wolf. I think it is important to raise it again 
publicly as well as privately, since the IMF crises and the 
bailout and all these things have taken place. And I would 
respectfully urge you to publicly, either you or Mr. Summers, 
make a case to send a signal to the Indonesian Government and 
also to the people of East Timor that we do care.
    I am not saying there needs to be a direct linkage, that if 
you don't this, we won't do that, but the fact that we are 
doing this, we urge you to give them autonomy or independence. 
And I think you actually hold the key to the future of about 
500,000 people. And there were 700,000 people on the island 20 
years ago. Two hundred thousand have been killed; roughly 25 
percent of their population killed; not just that they have 
lost the right to vote and they can't go out at nighttime, but 
killed.
    And so I think Treasury and State together holds the key to 
unlocking their future, which I think, as you say, would be 
good business for the Indonesian Government. And I publicly 
make a request, and I am not conditioning my vote, obviously, 
but this does help drive how I deal with this issue, and 
publicly, for State and you together to say, to say something. 
And I would ask you to do that.
    Secretary Rubin. Let me do this, Mr. Wolf. Without 
commenting right now, I would like to discuss this with the 
State Department people and see how--in the context of 
everything there, what is going on, how they feel this would 
relate to everything else we are trying to do in the 
environment and everything else.
    I think it is a very sensible suggestion. Whether it is 
something they--all of us together think we should do at this 
moment or not, I don't know. But we will get back to you as 
soon as I have talked to them.
    [The information follows:]
                               East Timor
    The Administration monitors the overall situation in East Timor 
closely and has urged the Government of Indonesia to reduce force 
levels, curb human rights abuses, and improve human rights conditions 
there.
    The State Department continues its efforts to help bring about a 
resolution of the situation in East Timor and we strongly support the 
UN-facilitated initiative to reach a satisfactory settlement.
    We also welcome confidence-building measures being undertaken 
through the All-Inclusive East Timorese Dialogue in an effort to 
improve human rights, and promote peace and stability. The 
Administration supports proposals to give East Timorese greater control 
over their own affairs and accord recognition of their unique history 
and culture.
    The subject of East Timor has been raised at the highest levels, by 
President Clinton, Secretary Albright and other State Department 
officials.
    We will continue to press all sides to resolve this issue, which 
remains high on our bilateral agenda.

    Mr. Wolf. Yes, sir.

                                 sudan

    The other issue doesn't deal with IMF. It deals with Sudan, 
just a quick answer yes or no, and then I will move on.
    Please do not grant any waivers to the Sudanese Government. 
I know that Treasury is now looking at that issue. Some people 
want waivers on gum arabic extract, some people want waivers on 
other things.
    The administration did the right thing by putting sanctions 
on the Sudanese Government. If your waivers take away the 
sanctions, it would almost be like you got good credit for 
doing something right, and then by giving the waivers you would 
go the other way. There should be no waivers at all for the 
Sudanese Government.
    They were involved in the assassination attempt on Mubarak. 
Every major terrorist group has an operation in downtown 
Khartoum. You could have an international convention of 
terrorists in Khartoum, and nobody would have to come in from 
outside the country.
    There is slavery, whereby they enslave their own people, 
and so no waivers. And I would like you to tell me publicly, I 
mean, will you oppose granting any waivers to Sudan?
    Secretary Rubin. Let me do this, if I may, Mr. Wolf: We 
have discussed this, and, as you know, the State Department is 
very deeply involved with these issues as well.
    David, do you want to comment?
    Mr. Lipton. Well, first, one waiver that was granted was a 
very, very limited waiver for Citibank to be able to help 
finance the humanitarian efforts that are underway there.
    Mr. Wolf. I don't believe that that is valid, though, when 
you look at it. I think Citibank has really been funding the 
gum extract business, and I am really worried about this. And 
they hired high-powered lobbyists who come in. And what about 
the poor people in the south that are put in slavery?
    Mr. Lipton. We are very sensitive to the point that you are 
making. It is my understanding that trade finance has been cut 
off by the very restrictive nature of the waiver, and I can get 
information for you to see whether what has been done, in fact, 
is satisfactory.
    There were a set of, I believe, seven waivers granted for 
gum arabic trade that had commenced already with shipments 
underway.
    Mr. Wolf. That was moving forward, which is understandable.
    Mr. Lipton. Right. But there have been none granted since 
that point. There are a number of applications that have been 
put before the Treasury Department.
    Mr. Wolf. Yes.
    Mr. Lipton. And no action has been taken.
    Mr. Wolf. I would urge--one, when will you make a decision 
on that?
    Mr. Lipton. This is the Office of Foreign Assets Control 
that is in charge of this, and I am not sure what their 
timetable is for decision.
    Mr. Wolf. The poor people of Sudan, where there is slavery, 
and crucifixions both of Muslims and Christians, and animists, 
have not the money to hire the best law firms in Washington. So 
I know the other side has.
    I would ask you respectfully, as somebody who has been to 
Sudan three times in the south, please do not grant any waivers 
above what you have done, because it will basically wipe out 
the good that you have already done.
    We sent a letter commending the administration for its 
action. Do not grant waivers--in essence, that would make the 
sanctions meaningless. Please, grant absolutely, positively, 
categorically no waivers.
    Can you imagine, had their assassination attempt been 
successful on Mubarak, the impact on the Middle East? I mean, 
just do not grant any waivers which gives them economic ability 
to continue to do what they are doing.
    And I would appreciate it if you could kind of tell me when 
you make that decision, and I would hope, please, do not grant 
any.
    Secretary Rubin. Why don't we do this, David. We will meet 
with the people at OFAC. We have also--the State Department 
gets into this pretty heavily. Right?
    [The information follows:]


[Pages 31 - 32--The official Committee record contains additional material here.]



    Mr. Lipton. Uh-huh.
    Mr. Callahan. The gentlelady from New York.
    Mr. Wolf. Thank you very much, Mr. Chairman.
    Secretary Rubin. And we will get back to you on this, Mr. 
Wolf.
    Mr. Wolf. Thank you, Mr. Secretary.
    And I want to thank you Mr. Kingston for deferring the 
time.
    Mrs. Lowey. Thank you, Mr. Chairman.
    I do want to thank Secretary Rubin for your leadership. 
Many of us sleep better at night knowing that you are in 
charge, and we appreciate all your hard work and your 
commitment.

                              human rights

    Before I move to new areas of questioning, Mr. Secretary, I 
just wanted to associate myself with comments of several of my 
colleagues. First of all, with my colleague, Mr. Wolf, I feel 
very, very strongly that issues related to East Timor and Sudan 
should be a part of these negotiations. And, in fact, in your 
own words, where you are saying human rights is good economics, 
you said that human rights, worker rights, are important 
factors in a strong economy. The United States is strongly 
committed to the values, and they are key to successful 
economies in the long run. As you know, you and I have had many 
discussions, most recently concerning fast track. As someone 
who does believe in the global economy, who did want to support 
fast track, it was very disappointing to me that in the end, 
all those corporations that signed that ad today and included 
passing fast track as one of their priorities, and all of us in 
Congress and the administration who believe that our values are 
key and that we should take a role in advocating human rights 
and worker rights as leaders, could not put sufficient pressure 
on the part of the leadership of this Congress to give this 
administration the same fast track authority that the other 
Presidents had in the past.
    So I would just ask you, not only on this issue of the IMF, 
but all the other issues that you have been so involved in, if 
we really believe that human rights is good economics, then we 
have a responsibility, and all those corporations who signed 
that ad today, and I read every one of them, have a 
responsibility to say to the leadership, human rights is good 
economics, and that issues of worker rights and human rights in 
Sudan and East Timor are and should be part of this 
negotiation.
    So I ask you, again, to take some leadership in this area.
    Secretary Rubin. But Mr. Wolf distinguished, I think, 
Congresswoman Lowey, in a way that I think was very useful--his 
distinction, I think, related to my testimony.
    Mrs. Lowey. Right.
    Secretary Rubin. The question is, how do you accomplish 
these things? And what I said in my testimony, which I believe 
to be the correct case, is that as important as these issues 
are--I think they are very important to the economy, as well as 
for moral and social reasons--when you have to deal with a 
crisis and you have to accomplish wrenching changes in a very 
short period of time, I think if you try to accomplish these 
purposes in those programs, I think you are going to try to 
accomplish more than you can--are likely to be able to get 
done. And I think you are going to greatly reduce the chances 
of accomplishing your basic objective of reestablishing, 
achieving financial stability.
    So what I said in my testimony, I don't think you can link 
them in these negotiations, but I think what you need to do--I 
think you can certainly raise them in all kinds of ways, as the 
Congressman suggested, but I think if you try to link them as 
conditions, I think you really are very substantially reducing 
the chances of being successful.
    Mrs. Lowey. But, again, I would like to say in associating 
myself with the remarks of my colleague, I certainly respect 
your expertise and your wisdom on these issues. And I don't 
think anyone in the Congress is going to say we should be doing 
1, 2, 3, 4, 5, but then again, the administration shouldn't be 
precluded from discussing these issues during a negotiation.
    Secretary Rubin. Oh, I agree with that.
    Mrs. Lowey. I believe this is what many of us have been 
advocating and would like clarified.
    Secretary Rubin. There is nothing which exists today that 
would be preclusive.
    Mrs. Lowey. Which is what I wanted to clarify.

                        abortion linkage to imf

    Secondly, I did want to also associate myself with the 
comments of Mr. Obey and Ms. Pelosi in that I do respect my 
Chair and all those who have a prolife position on issues of 
abortion. But, again, zero funds in our bill goes to abortion, 
and I think it would be a real tragedy if we can't debate the 
issues concerning international family planning fully and 
thoroughly, and even having a vote in the Congress. But to link 
it to other issues doesn't do that issue justice and certainly, 
I think, is very damaging in holding these other issues 
hostage.
    So I would beg my colleagues here on this committee, who 
managed to avoid the linkage in holding up the foreign aid 
bill, and I would certainly urge those who have any kind of 
influence with the leadership in this Congress not to abide by 
what I also read in Congress Daily today, because I think there 
should be no linkage. And when you think about the importance 
of international family planning to the women of the world, it 
is absolutely outrageous that there should be any linkage. So I 
just wanted to mention those two points.

                     health and education programs

    I would like to ask you questions in a few other areas, Mr. 
Secretary. I have been concerned about recent reports that the 
World Bank's commitment to health and education lending fell by 
almost 50 percent from 1996 and 1997. These were the numbers 
that were given to me.
    I certainly believe that devoting resources to health and 
education programs is absolutely critical to our effort. So I 
would be very appreciative if you have any information 
regarding that, or if you could address this matter with the 
World Bank, because their commitment to health and education, I 
think, is vital.
    Secretary Rubin. I agree with your general statement. I 
think it is an essential mission.
    Mr. Lipton. In fact, I think what you are alluding to and 
what is responsible for this is that the lending of IDA in 
Africa has been low the last 2 years and below what the World 
Bank had projected under the IDA-11 replenishment. This is 
something that we have been discussing with them. I can assure 
you that other donors are very eager to see them lending 
aggressively in Africa.
    The share of IDA lending that is devoted to health and 
education issues has been growing, but the total has been----
    Mrs. Lowey. Right.
    Mr. Lipton [continuing]. Has been below projections.
    The problem we have is that one of the goals that the World 
Bank has is to be selective and to make sure that the programs 
that they are supporting with their money actually are put in 
place, that the countries are dedicated to reform. And so there 
is a bit of back and forth on that that I think is responsible 
for this. But the World Bank has assured us that they are going 
to work very hard to restore their operation level to what was 
intended in the IDA-11 pledging.
    Mrs. Lowey. I thank you.
    And, gentlemen, in the fiscal year 1998 foreign operations 
bill, we included the full administration request for IDA. And 
I would be interested in a response concerning the 
responsiveness of IDA to our concerns regarding child labor, 
the environment, and the need to reduce corruption.
    Have they been responsive to our request to focus on these 
areas as a response to our full funding of the program?
    Mr. Lipton. Yes, they have. I think there is a process on 
our part of trying not just to make sure that the institution 
is responsive, but to gather strong support from other member 
countries. I think this is an area where we are making 
progress, and more can be made.
    I think that, in particular, on the corruption side, both 
the IMF and the World Bank have made corruption a special focus 
in the last year. The issue has made its way into their 
operations, as well as into the rhetoric, into the speeches, 
and in the information that they provide publicly and to member 
countries.
    On child labor--and on labor issues more generally--I know 
that Jim Wolfensohn has taken a special interest in this 
subject. He has made a visit to the ILO. He has established 
special contacts between the World Bank and the ILO.
    There are a couple of in-country cases where the World Bank 
has begun to include child labor issues in negotiations. The 
other development banks have also taken this on seriously as 
well. I think it is an area where there is a lot more to be 
done and a lot more that we really have to do to press them to 
follow through.

                             Micro Lending

    Mrs. Lowey. In another area, Mr. Secretary, I know that you 
and your Department have been focused, as many of us are, on 
the effectiveness of microcredit lending. Could you share with 
us what kind of coordination is currently taking place between 
the Treasury and AID to ensure that this money is targeted in 
the most effective way?
    Secretary Rubin. You are right in your general comment. I 
actually don't know the answer to your question, Congresswoman 
Lowey. I think I actually visited a couple of microlending 
sites abroad to see how it was working--well, when I was there 
anyway; it wasn't a special trip, but when I was there anyway--
to see how microlending works in very poor neighborhoods. It 
was very impressive, it really and truly was, particularly when 
the money was combined with technical assistance.
    I don't know how we are coordinating with AID. Do you know, 
Dave?
    Mr. Lipton. I mean, we follow the AID programs and speak to 
them, in particular, about the countries where we have an 
active interest and involvement.
    I would say that another very important area, and I am not 
sure that you might be aware of it, is that the MDBs themselves 
have stepped into the microcredit area; the IDB in a 
particularly strong way. They are now going to dedicate $500 
million to small lending and microlending programs in Latin 
America. That is something that we have been supportive of and 
we hope will be successful.
    Mrs. Lowey. The reason I was interested in the 
coordination, I remember our last meeting with Jim Wolfensohn, 
and he is very interested in microcredit, microlending. In 
fact, he said it is really still less than 1 percent, a very 
small part, of their whole lending package.
    Everyone agrees it is very important. It has an important 
effect. There are still millions and millions of people who 
could use that help. So how USAID works with the World Bank to 
help the World Bank increase their investments in microcredit, 
I think, could be very helpful.
    Mr. Lipton. There have been collaborations between AID and 
the World Bank in cases where AID, in essence, does the pilot 
work and then the World Bank picks that up and follows through 
to develop a larger, more heavily funded program. I think that 
is a promising area for collaboration.

                                  IMF

    Mrs. Lowey. I thank you. And just lastly, Mr. Secretary, 
before--just to get back to the IMF for a moment, because we 
understand your case and you are very persuasive in making it, 
that this is crucial to the world economy. Could you perhaps 
elaborate on your statement that we have to change the 
mechanisms and architecture to prevent this from happening? How 
are we working to truly ensure that Indonesia will implement 
the critical reforms that we are demanding of them?
    Secretary Rubin. Oh, that is a slightly separate question.
    Mrs. Lowey. Okay.
    Secretary Rubin. Let me break it into two pieces, if I may. 
In terms of my comment about the architecture, I was really 
referring to the sorts of things that Mr. Frelinghuysen had 
raised from the George Schultz-Bill Simon article.

                             Global Economy

    We have institutions that were created 50 years ago. I 
think they are vital to our national interests, but the global 
market, the global economy, in the meanwhile, has developed in 
the last, say, 10 years at a very rapid pace, and we need to 
find better mechanisms for dealing with these problems, 
especially to deal with the moral hazard questions that were 
raised in that article, although I think they are far less in 
Asia than they were in Mexico because of the losses that have 
been taken.
    And the Federal Reserve Board and Treasury are working 
together right now in a very intensive fashion, but these are 
mind-boggling, complicated issues. Just to develop, sort out 
analytically, what we think, how much we can accomplish 
relative to what we would like to accomplish, I don't know, and 
once we develop our thoughts, we obviously need to work with 
Congress and we need to work with nations around the world to 
get consensus.
    So this is not a short-run process, but it is a process we 
are pursing. I have a meeting this afternoon, as a matter of 
fact. David Lipton is providing the leadership at Treasury. 
Plus Alan Greenspan, Larry Summers and myself have been very 
deeply involved.
    On the question of Indonesia, their economic self-interest 
lies in economic reform, both to deal with the problems that 
gave rise to this instability and to reestablish confidence. 
But I think you put your finger on it. There are no guarantees 
in life, and I think the only way you get assurance is by a 
sustained commitment on their part to these programs, and that 
is what the world is watching right now.
    Mrs. Lowey. Well, I think I have taken enough of my 
flexible 5 minutes. But just in closing, I want to say we were 
talking about the concerns that our constituents have and we 
have about money going--and you mentioned this in your opening 
remarks--to bail out the banks and to bail out the investors. 
If we are so quick to cover those losses, how will they behave 
in the next situation? And certainly in terms of Deutsche Bank, 
we talked about their losses. I don't know if we discussed 
their profits.
    Secretary Rubin. No. This was a question of were they 
absorbing the consequences of their credit extension in Asia.
    Mrs. Lowey. Uh-huh.
    Secretary Rubin. And the question of nationalizing losses 
and privatizing gains, which I think is a very serious and 
totally appropriate, and a very important issue. That was the 
only point of my comment.
    Mrs. Lowey. Well, I thank you, Mr. Chairman.
    I thank you, Mr. Secretary.
    Mr. Callahan. Mr. Secretary, the committee is going to 
stand in recess for 3 minutes, and we will be back in exactly 3 
minutes so Congressman Kingston can begin the questioning.
    Secretary Rubin. Good.
    [Recess.]
    Mr. Callahan. If we can keep our commitment, our 3 minutes 
has turned into 6 minutes, as usual. But if the committee will 
come to order.
    Mr. Kingston.
    Mr. Kingston. Thank you, Mr. Chairman.
    Mr. Secretary, let me start by complimenting the Department 
that you are running. You do a great job, and I think we are 
all proud, and you have a lot of bipartisan support here on the 
Hill.
    We have--a nuts-and-bolts kind of question right here. The 
assessment--the quotas are looked at and reviewed every 5 
years, and the last quota increase was 1992.
    Secretary Rubin. Right.
    Mr. Kingston. Is that correct?
    Secretary Rubin. 1992 was the last one, yes.
    Mr. Kingston. And then it was reviewed again, but not 
increased, but then in 1982 or 1983 it was increased again, 
correct?
    Secretary Rubin. 1983, I think, wasn't it, David?
    Mr. Lipton. Yes, 1983.
    Mr. Kingston. How much of this is----
    Secretary Rubin. Yes, 1983. It is not actually every 5 
years. It is--I don't know. How often?
    Mr. Lipton. It is based on need.
    Secretary Rubin. Yes, it is sort of a need-based thing, and 
it is negotiated and debated and stuff like that.
    Mr. Kingston. Okay. How much of this is triggered by the 
crisis versus the 5 years? You are saying it is the need more 
than the time?
    Mr. Lipton. The process of discussion had begun probably 
about a year before the crisis began.
    Secretary Rubin. But the urgency is a function of the 
amount that was used much more quickly or committed at least 
much more quickly than expected.
    Mr. Kingston. Okay.
    Secretary Rubin. And the danger that the crisis could 
reignite.

                         Special Drawn Account

    Mr. Kingston. Okay. Of the $14 billion now, that, I was 
thinking, was an assessment, but that is actually the amount of 
the special drawn account? Is that--would that be correct?
    Mr. Lipton. That is the increase in our quota.
    Mr. Kingston. For the special drawn account?
    Mr. Lipton. We have roughly $36 billion. It goes up by $14 
billion.
    Mr. Kingston. Okay. That would be, though, the special 
drawn account, correct?
    Secretary Rubin. You know what you can think of it----
    Mr. Kingston. Let me tell you where I am going, is how much 
of it in hard dollars is backed by gold? And the reason why 
that is important is because we hear so often it is very safe 
because it has great collateral, and that collateral is gold.
    Mr. Lipton. The pool of resources right now is about $197 
billion. With everybody's new contribution, it would go up into 
the $280 billion range. The IMF presently has about $40 billion 
worth of gold.
    Of course, all of the other money, when it is put forward, 
is not all spent. Some of it is on loan to countries, and the 
countries repay. There is a very good repayment record at the 
Fund.
    So what stands behind this is all of the assets of the 
Fund, including the outstanding loans, the unused resources, 
and the gold.
    Mr. Kingston. So it is--I think it is a relatively safe 
loan, but it is not fully collateralized; is that correct?
    Secretary Rubin. The way to think of it, if I could, is 
that--and remember, it is the Congressional Budget Office that 
makes this judgment, not the Treasury Department. But I think 
you have got it right--it is a very high-quality borrower, but 
it is not technically, no, it is not technically fully a 
collateralized loan.

                            Needs Assessment

    Mr. Kingston. Okay. The other thing is: The needs 
assessment, do you ever reduce the quota? And the reason why I 
am asking that is because we are always saying, well, this 
really isn't going to cost the taxpayers. It is not a budget 
outlay and so forth.
    However, it is almost like the purchase of land that you 
are never going to sell or perhaps it is an arrangement that 
you are never going to back out of. Or am I wrong on that?
    Mr. Lipton. Well, it is----
    Mr. Kingston. Because, even though the $14 billion isn't 
going away, it is no longer liquid.
    Mr. Lipton. Your question is a good one. The size of the 
quota pool has gone up, in essence, because the size of the 
world economy has gone up, and the IMF membership within the 
world economy has expanded as Russia and other countries have 
joined in, and so there has been--just by that happenstance--
there has been an ever-expanding need for resources.
    The IMF resources right now actually are a far smaller 
fraction of world GNP or world trade than they were 10 or 20 
years ago. So while there has been this expanding need, the IMF 
has, in a sense, made do with a smaller amount of financial 
resources relative to its membership's economic activity.
    Mr. Kingston. There are about 180 countries?
    Mr. Lipton. 182.
    Mr. Kingston. Now, what binds those countries, besides 
profit, to American lenders? Are they philosophically pro-
American? Do they vote with us at the U.N.? Will they be with 
us should we get into something with Iraq? And is that 
something that--Mr. Frelinghuysen mentioned the need for 
pharmacies to have lower tariffs and so forth, but in another 
sense we do have this global picture. Are we lending money 
inadvertently to our enemies just because some of our lenders 
are making profits on it?
    Secretary Rubin. No. This is not driven at all by U.S. 
lenders, by our lenders' profits. I think what binds people 
together here is a common interest in the health of the global 
economy and a perception, I think a correct perception, that if 
the global economy suffers, we will all suffer.
    The chairman mentioned a company in his district that laid 
everybody off for 2 weeks. I think there is a common perception 
around the world that if developing countries do well then they 
are very large new export markets for us, and if they do badly, 
that those markets shrink. They have the kinds of effects the 
chairman mentioned, and their currencies depreciate, which then 
reduces the competitiveness of our goods. It is that interest. 
It is that economic interest that binds people together here, 
not any of the other interests which in many cases may be at 
variance with each other.

                             global economy

    Mr. Kingston. Okay. Another question: We are, as you opened 
up, a global economy. But if you look back historically, a 
country like Great Britain, the English empire, was certainly 
run on a global economy often doing business with nonempire 
nations and so forth. How did the monetary system work pre-IMF? 
Because I know there were--you know, there is criticism where 
people could hoard gold or undervalue currencies of another 
nation on purpose and mess with each other economically, which 
is a tool the IMF kind of neutralizes. But is--what is the pre-
IMF picture? What did it look like?
    Secretary Rubin. Can I just make one comment and let David 
answer, because David can answer much better than I can.
    You didn't have, in the year that you are talking about, 
the kinds of global financial institutions, the global capital 
flows, the instantaneous transmission of truly vast amounts.
    Mr. Kingston. But you would within an English empire; not 
globally, but within certain nations, you would still have a 
highly integrated economic----
    Secretary Rubin. You had certain elements of economic 
integration, but you didn't have markets that could transmit 
billions, tens of billions, hundreds of billions, of dollars 
worth of trades within seconds because of technology.
    But, David.
    Mr. Kingston. And I would say, Mr. Secretary, that is a 
significant difference, too. So I am acknowledging that is 
huge.
    Mr. Lipton. Congressman, I think the genesis of the IMF is 
exactly the difficulties that arose in the 1930s. The world had 
been on a gold standard for quite a few decades, and it served 
well for a period of rapid growth for Europe and for the United 
States. But the gold standard, which was in essence a system of 
fixed exchange rates, broke down, and in the midst of worldwide 
depression, there were country defaults and deep recessions 
that were the result of these defaults and the inability of 
countries to reestablish creditworthiness.
    After World War II, the idea of the IMF was exactly to 
prevent that kind of thing from recurring. And when we talk 
today about how default might happen in the absence of some 
sort of system like we have or some sort of approach like the 
one we have today, default in Asia could lead to a protracted 
slowdown, protracted problems that would spread around the 
world, it is exactly the history before the creation of the IMF 
that informs that judgment.
    Mr. Kingston. Is that why all three of these Nations got in 
trouble simultaneously?
    Mr. Lipton. I think they had common problems. There had 
been common approaches to the way they managed their economies, 
and so it was, in a sense, logical that when the problems in 
one country were exposed, investors looked for similar 
weaknesses in other places. So it was in part because of the 
common management of the economy.
    Mr. Kingston. How absurd were the loans or the lending 
practices, the financial practices, and was IMF present in 
these countries 2 or 3 years ago and standing by quietly, as 
opposed to stepping forward and, you know, saying in 1994, hey, 
you are heading for disaster, you better change?
    Secretary Rubin. I think you had two sets of lenders that 
need to be looked at in the context of that question. You had 
the international lenders, and I think what happened there over 
the last 5 or 6 years is that, as good times continued, risks 
became--the weighting of risk--got to be less and less, and, in 
effect, markets went to excess, as they I think almost 
inevitably do. So credit was being extended with less attention 
to risk than should have been the case.
    In the three countries, you had banks making decisions on a 
noncommercial basis because of their ties with the government. 
It varied from country to country, but the governments were, in 
effect, directing credit or commercial enterprises that had 
special links with banks. And it was that combination of the 
excess of capital from the outside, and these faulty financial 
systems on the inside, that was very central to what happened.
    In terms of the IMF's presence, IMF does an annual review 
with each country. They were certainly focused on a lot of the 
issues, although I don't think anybody expected the combustion 
that occurred. That was the crisis.
    Mr. Lipton. Just to mention, in the case of the first 
country that came into crisis this last year, Thailand, the IMF 
had, in its consultation discussions with Thailand, identified 
the very same problems that came to spark this crisis and had 
suggested to Thailand that they take up these kinds of 
concerns.
    I think it was difficult, in a whole region that was 
growing at 8 percent and had been growing very rapidly for 
decades, for policymakers to understand the risks that they 
faced and come to grips with the kinds of changes that were 
necessary.
    Mr. Kingston. Thank you, Mr. Chairman.
    Mr. Callahan. Mr. Torres.

                    north american development bank

    Mr. Torres. Thank you, Mr. Chairman.
    Mr. Secretary, welcome; Under Secretary Lipton as well.
    Mr. Secretary, we have had ongoing discussions pertaining 
to the North American Development Bank. As you know, last 
year's funding completed the capitalization of the bank 
required in the agreement between Mexico and the United States. 
I am pleased to note the progress made on border project 
financing over the last year in particularly.
    However, there is one outstanding issue regarding the bank 
that simply must be resolved, that is a domestic window issue. 
As you are aware, our staffs have been talking about this issue 
at some length. Can you give me your commitment that the two of 
us can meet later on at some point to resolve this question?
    Secretary Rubin. Absolutely, Mr. Torres. I would be 
delighted to.
    We have met a number of times already, and I think it would 
be fair to say, after a period during which the appropriate 
attention was not paid to the bank, it was your energy--it was 
about a year ago, maybe, I have forgotten exactly when it was--
that got us refocused, and I think we have come a long way in 
that period. But I know there are issues that you feel are 
still unresolved. I would be delighted to meet with you.
    Mr. Torres. Thank you.

                              microcredit

    My colleague, Mrs. Lowey, has already commented on the 
issue, but I would like to do follow-up on microcredit.
    First, I want to thank you and the President for the 
enthusiasm you share for microcredit. The microcredit summit 
that was held over a year ago launched a plan to reach 100 
million of the world's poorest families with credit and other 
business and financial services by the year 2005. My 
understanding is that the World Bank and the other regional 
development banks are developing their institutional plans of 
action to achieve the summit's goal.
    I have a couple of questions. First, is the Treasury 
developing its own institutional action plan on microcredit? 
That is one question. And if I may just give you the second 
one, is there anything that you can do at this year's annual 
meeting of the World Bank and the IMF to further educate the 
finance ministers of the world about microcredit?
    I would think that particularly important issues would be 
the need to reach the poorest, especially women; the 
development of sustainable institutions; and the importance of 
assuring that governments don't administer the loans 
themselves.
    So if you could please give me some answers pertaining to 
those issues.
    Secretary Rubin. On the question of microcredit, we have 
been very intensely focused at the Treasury, not just 
internationally, but domestically and through the CDFI Fund we 
have launched a domestic program for inner cities and other 
distressed areas. I think it is an extremely promising area. We 
have also been working with the World Bank--working with them 
to help them energize their programs. But we agree with your 
views with respect to that. I am just trying to remember when 
this was. Sometime--and I don't remember when it was--G-7 
finance ministers meetings, we meet four times a year or 
something, we had a discussion of developing countries and the 
like, and I discussed there, with them, our views with respect 
to microenterprise lending, because we share the views you just 
expressed.
    I usually speak at the annual World Bank meeting. In fact, 
I always do. I think that is something I very readily should 
include in my remarks. So I will do that.
    Mr. Torres. I would prevail upon you to be almost succinct 
with the finance ministers. They seem to somewhat drag their 
heels on this question.
    Secretary Rubin. Finance ministers differ from finance 
minister to finance minister. We happen to be very interested 
and very focused on and believe deeply in these kinds of 
issues. Others are sort of--well, people have different 
orientations.

               fund for the special operations of the idb

    Mr. Torres. Perhaps something related to this, I want to 
make mention of the importance of the Fund for Special 
Operations of the Inter-American Development Bank. Full 
participation by the U.S. in the FSO is an important step 
towards overcoming the poverty and exclusion that have marked 
so many countries in Latin America and the Caribbean.
    So I would urge, Mr. Secretary, for you to work hard with 
us to provide the full $21 million contribution to the FSO that 
has been requested for fiscal year 1999. This amount would 
clear our U.S. arrearages and fulfill our commitment to FSO 
under its current eighth Replenishment.
    It is also important that you continue to work with the 
leadership of the IDB to come to an agreement for meeting 
future needs for concessional lending to the poorest countries, 
ultimately, without any new appropriations from donor 
countries.
    So I want to thank you, Mr. Secretary, and maybe you can 
comment on that.
    Secretary Rubin. As I understand it, David, that is where 
we are. If we can get our arrears paid, it is our view, I 
believe, the IDB can conduct the FSO activities without further 
donor contributions.
    Mr. Lipton. We are looking at ways to mobilize the 
resources that presently exist within the IDB that could make 
the resources of the FSO much more ample in supporting IDB 
activities in the FSO borrowing countries.
    Mr. Torres. As you are well aware today, there has been 
ample interest on the IMF issue. I think all of my colleagues 
have spoken about that question. I have some questions I would 
like to engage with, but I know we are limited in time today, 
so I am going to forgo those. Mr. Chairman, I ask unanimous 
consent that I might address the questions in writing to the 
Secretary.
    Mr. Callahan. Without objection, all members of the 
committee will have the same right to submit questions to the 
Secretary.
    Mr. Torres. Thank you, sir.
    Thank you, Mr. Secretary.
    Mr. Callahan. Thank you for your patience, Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman. Thank you for 
recognizing me. It is a pleasure to serve on this very esteemed 
committee.
    And I want to say to Ranking Member Pelosi, it is an honor 
to serve with you.
    And, Mr. Secretary, like the other members, I welcome you. 
It certainly is a distinct pleasure for us to have someone of 
your extensive experience in the private sector, but now also 
in the public sector, in the area of finance.
    Secretary Rubin. Thank you.
    Ms. Kaptur. I have enjoyed listening to you. While you are 
here, I have to take the opportunity to ask you how Wall Street 
is doing. I used to be on the Banking Committee. I kind of miss 
that.
    Secretary Rubin. I think they are doing well. Sometimes I 
wonder how I would have done if I had stayed there.
    Ms. Kaptur. I never thought I would live to see the day it 
would go over 8,000; maybe you did. This is unusual, a lot of 
returns there.
    Would you agree with me, we are living at a time when the 
banks--I am talking about our own domestic banks now that may 
lend internationally--have actually been doing quite well?
    I got to Congress in the early eighties, and we watched the 
history of these institutions and their profit levels. Would 
you agree with me that over the last couple years they had some 
of their highest profit levels in recent history?
    Secretary Rubin. The banks have done very well, and one 
reason we as an economy have done well is that the banks, after 
the problems in the early nineties, have strengthened balance 
sheets, have been able to lend and as a consequence have been 
able to promote growth in the economy.

                               imf crises

    Ms. Kaptur. I think so, too. That leads me into some of the 
issues you have testified on today, certainly on the IMF. And 
let me say, as a Member of the Congress, a new member of this 
subcommittee, someone who has been interested in our 
international involvements and who has been helped and who gets 
hurt in all these, let me say that as I read your testimony and 
as I have been thinking about this IMF replenishment, I think, 
for me as one member, the issue really isn't just the money 
but, rather, the policy that underlies the current set of 
structures we have set in place to deal with the global economy 
you reference several times in your testimony.
    In my own view, the Mexican peso situation that I term a 
bailout--I am sure you have another expression for it--helped 
to encourage the present crisis that we face in the Asian 
markets. I think it encouraged additional speculation; I think 
it encouraged greater risk-taking on the part of private 
institutions that felt they could then come to government, 
which they are, to be bailed out again.
    Now I understand how tender this is, so don't--do not 
misunderstand that, but if we look back at the Mexican 
situation--and I realize that was a government bailout, as 
opposed to private companies, it was a different kind of 
situation there. But if we look at Mexico's external public 
debt today, compared prior to the peso bailout, and especially 
if you compare it back to the 1980's, all you have are greater 
and greater debt levels. Even though Mexico technically has 
paid back the United States, we have merely built the house of 
cards higher.
    I am interested in supporting a system for the 21st century 
that gets speculators and investors to assume their own risk, 
and therefore I have some caution about supporting the 
administration carte blanche in what you are asking for here.
    I personally, for example, would favor a system that would 
provide the kind of funding that you are looking for, on the 
private side, by fees on the international financial 
transactions that occur on a daily basis. I guess it is over $2 
trillion a day that is moving there around the world. And I 
think what is troubling to me, as a long-tenured Member of this 
Congress, is we never get to that question. Whether it was 
Mexico the first time or the second time or the third time--now 
it is Asia; it will be someplace else a few years from now--we 
never get to the fundamental reform question on post-World War 
II structure.
    I think what is going to happen in the Congress this 
session is, we are going to face that debate, and you don't 
want to face that debate until after the replenishment. But I 
think if you look at the current politics, you are going to 
find you are enveloped in it prior to the vote. And I would 
only ask that you give some thought to what the structure might 
look like. I know you have given a great deal of thought to it 
yourself; it isn't reflected in your testimony. But I think a 
lot of members are looking for that reformed structure prior to 
the vote.
    So I just wanted to----
    Secretary Rubin. Can I respond to a bit of that?
    Ms. Kaptur. Please.
    Secretary Rubin. Let me try to take a few of the pieces. I 
think that had we not had the Mexican support program, which is 
what we characterize it as, I think what you would have had is 
a Mexico that would have almost surely gone into default and I 
think today what you would have is a Mexico in deep economic 
distress, with all the consequences that would have had.
    So while the support program was a far from a perfect 
solution, it was vastly better than the alternative, which is 
not to have done it.
    I share the moral hazard concern, and I think I have said 
that several times already. I think we have to find ways of 
dealing with it more effectively than we have, but I don't 
believe that the fact that banks were protected in the Mexican 
situation affected how they react in Asia.
    I know a lot of the people; I speak to them a lot; I have a 
pretty good sense of how they function. I think the conceptual 
problem is what you say it is. I don't think the fact they were 
protected in Mexico affected the behavior in Asia. I think what 
affected the behavior in Asia was too many good years. And the 
markets almost always go to excess in----
    Ms. Kaptur. You would not agree there was a lot of 
speculative investing in those markets?
    Secretary Rubin. Absolutely. I think there was a lot of 
speculative investment in these markets and a lot of other 
markets, and I think there always is after you had a good 
period of time. I don't think in most of the cases in Asia that 
the predominant pressure on the currencies came from the 
withdrawal, however speculative, of investors. I think most of 
it came from the residents of these countries either trying to 
convert their currencies into hard currency or corporations who 
were seeking to hedge their currencies, or the exporters who 
did not want to repatriate their hard currency.
    On the question of new architecture, I think it is vitally 
important to the interest of our country that this be 
developed. I do not think we should take the risk of waiting to 
do legislation, because I think it is going to take a long 
time. We have spent a lot of time on this.
    You mentioned the Tobin tax, the tax on transactions. There 
are a lot of suggestions around there, a whole bunch of ideas 
we have. The G-10 has done a pretty serious piece of paper on 
this to begin their study. This is going to take a long time if 
we come up with serious proposals that will have the kinds of 
effects we hope in some measure to achieve.
    And you may be right politically; I don't know. What I do 
know is, if we don't get the replenishment quickly, then we 
will be taking a risk that, while we are working on this--and I 
think this will take a long time to get done--we will take the 
risk of a crisis we won't be able to handle.
    Ms. Kaptur. There are some writers who contend, and 
thinkers who contend, and even if I read your testimony very 
carefully, you talk about this additional funding to deal with 
future crises.
    Secretary Rubin. This crisis, if it were to reignite, or 
future crises.
    Ms. Kaptur. That is right, and there are those who are 
arguing we don't need the replenishment right now. I am not 
saying I agree with that, but it is obviously out there, and 
others will use those arguments.

                          economic environment

    The other major point I wanted to make, and I only have one 
other one, and that deals with how you propose to inoculate the 
United States market against the flood of imports that have 
been coming in here but are likely to be exacerbated in this 
year, even with this happening, the trade situation.
    This, again, gets back to the paradigm we have been using 
since World War II, now leading to a point we have overcapacity 
and production in the world market, with the export-led 
development, where the United States becomes the residual 
importer because Japan will not open markets in a lot of other 
places, and it is causing a terrific crack inside the politics 
of this country, because of the people that have had to pay the 
price of that.
    Now that is going to happen more this year, and the--some 
of the militia groups in this country--and I don't mean to 
excuse any of their behavior, but I am sure if there are any 
researchers out there looking at who they are, they are 
disaffected white males whose incomes didn't go up and many of 
whom lost their jobs. Somebody has to pay attention to this. 
And we are about to have another wave.
    Now there is something wrong with the paradigm that creates 
these large levels of debt, continuing even in Mexico, and 
forces these trade deficits down the throats of the American 
people. We have got to reform this architecture. And I hear you 
saying you don't want to do it until after, but somehow in this 
debate we have to inoculate against those who are again going 
to have to pay the price.
    Secretary Rubin. If I may, Congresswoman, I think it is a 
somewhat different set of issues. In this period during which, 
as you say, we have had very heavy imports and exports, we have 
a fairly good-sized trade deficit, but we have 4.7 percent 
unemployment. The economy has created something like 14.5 
million new jobs over the last 5 years. There are many 
observers all across the political spectrum who say the 
economic environment in the last 5 years has been the best we 
have had in this country in decades. I think the actual system 
is working pretty well for this country right now.
    Having said that, there are dislocated people. There are 
people who haven't kept pace. I think the President said in the 
State of the Union, if we are going to maintain our social 
fabric, we have to focus on programs for dislocated people who 
are affected adversely by trade.
    So I think you are right in that, but I think the 
international trading system has worked well for the country, 
and, unfortunately, I do think our trade deficit will go up 
because of the problems in Asia, and there is no way to 
inoculate the country against that.

                                  gdp

    Ms. Kaptur. With all due respect, won't that knock off 
about an additional point off of our GDP growth for this year, 
looking at the best projections you can look at?
    Secretary Rubin. Most private sector estimates are around 
half a point or three quarters of a point. Look, there is a 
serious problem out there.
    Ms. Kaptur. Adding to that the point that the current trade 
deficit adds, which is an additional point, so you are between 
1 and a half and 2 points off the GDP because of accumulated 
trade deficit.
    Secretary Rubin. I believe if you didn't have the free 
trading system we have today, I think you would have much 
higher inflation and much higher interest rates, and I think 
that would have--at least I think--a more substantial adverse 
impact on the economy than the effect of the current trade 
deficit.
    Ours is not an economy that lacks demand. As I said, if you 
had said 5 years ago we could have unemployment under 6 percent 
and very low inflation, almost every economist in the country 
would have told you that that is not achievable, and instead of 
having it under 6 percent, we have 4.7 percent.
    I think you raise an exceedingly important question, which 
is, how do we deal with people who are dislocated in our 
economy of very rapid change? And we have done a lot less than 
we ought to in dealing with that. I think imports will go up in 
this period. Something very substantial has happened in the 
world economy. But I think the answer in that is to get the 
countries growing again.
    Ms. Kaptur. I don't want to abuse my time. I will say, if 
this year we are going to have that kind of an impact inside 
this economy, the answer, to me, is not sufficient that that is 
just going to happen and let it happen, because the current 
trade deficit knocks a point off of our GDP, affecting incomes 
of people who are working harder for less in my district and 
across this country. And I know the administration wants to 
increase the middle class, not decrease it. This is an 
opportune time in dealing with it in the architecture of the 
agreement you bring to us.
    I thank the Chairman.
    Mr. Callahan. Thank you.
    Mr. Obey.
    Mr. Obey. Mr. Secretary, when you indicated that 5 or 6 
years ago if anyone had asserted we could have unemployment 
this low and still have low inflation--and I did assert that 5 
or 6 years ago--when you say that most of the economists would 
have disagreed with this, that is true, they did. That is why I 
think the old farmer in my district is right, who observed 
once, did you know if you took every economist in the world and 
laid them end to end, that it would probably be a good thing.
    Secretary Rubin. There is that, Mr. Obey.
    Mr. Obey. Let me also say, as you know, in our caucus the 
other day, someone referred to you as the greatest Secretary of 
the Treasury in the history of the country. I understand after 
that he got an agitated call from Alexander Hamilton. I will 
let the record show, I think you are a pretty doggone good 
Secretary of the Treasury, one of the best in history, but I 
think Hamilton would rank right up there.
    Secretary Rubin. I think Hamilton's ranking is very, very 
safe by a very large margin.

                   mexico city policy linkage to imf

    Mr. Obey. Let me say, I am not a compulsive free trader. I 
do believe in an open trading system, but I am not a compulsive 
free trader. I think there ought to be certain rules 
established as part of the deal on retreat. But I am a 
committed internationalist, and I am one because I think it is 
necessary if we are to defend and promote our national 
interests in international affairs, militarily, economically, 
and politically.
    I want to go back to a remark I made earlier when I was 
talking about the efforts of a political minority to impose 
their will on this issue, when I was talking about Mexico City 
policy.
    The way our system of government works, at least last time 
I looked at the Constitution, it says that if you have an idea 
and you want it to become law, you have to get a majority of 
the House, you have to get a majority in the Senate, and it has 
to be signed by the President. And if the president vetoes it, 
then you have to have a two-thirds majority in the House, a 
two-thirds majority in the Senate, to overcome that 
Presidential veto.
    Now the last time I looked, the folks who are insisting on 
holding their breath and turning blue on Mexico City until they 
get what they want, trying to hold up everything else until 
they get what they want in Mexico City, they have a majority in 
the House, they do not have a majority in the Senate, they do 
not have the support of the President, and they most certainly 
do not have two-thirds of the vote in either the House or the 
Senate. So in my view, that is a definition of a political 
minority, based on the way our Government works.
    Now there is nothing wrong with being in the minority. I 
have been in the minority on issues all my life, regardless of 
which party is in control. But let me say that what I find 
illegitimate is a group of politicians trying to use this 
international crisis to force the Senate and the President to 
comply with their views on an unrelated issue, or else they are 
willing to let the House tumble down.
    Now the American people don't know a whole lot about the 
IMF or international finance, they are too busy making a living 
to have the luxury of having the time to learn about that 
stuff, but I think the average American does know that when we 
are dealing with international economic issues that affect the 
interests of the United States, they want those issues to be 
dealt with on their merits in a way which protects our economic 
interest. They know that there is something wrong with the idea 
of dragging in somebody's position on family planning into that 
kind of a discussion; they know that that kind of linkage is, 
with all due respect, a little bit whacko.
    Now we have had a lot of intelligent questions asked this 
morning about the IMF issue by Mr. Frelinghuysen, Ms. Kaptur, 
Ms. Pelosi, and others. They are asking the kind of questions 
that need to be asked before we reach a consensus on what we 
ought to do on the IMF.
    But what bothers me is when I read in Congress Daily this 
morning a quote by Mr. Smith on this unrelated Mexico City 
issue, and he is quoted as saying the following: Smith said he 
had discussed a continued impasse with the administration 
officials but has made no progress and predicted, quote, an 
absolute train wreck if his language is not accepted.
    Well, two years ago that is the kind of thinking that shut 
down this Government, and now, instead, you apparently have 
some Members who are willing to shut down this Government's 
ability to deal with a very serious world economic problem, a 
problem which could cost us, if it is not handled right, 
according to some estimates, half a million jobs in this 
country. That kind of ``my way or no way'' approach to the 
world is reckless, and it is irresponsible.
    That does not mean that the people who feel strongly about 
Mexico City, as Mr. Smith does, are all wrong on the issue of 
Mexico City; I don't happen to think they are. But I want to 
see the IMF issue decided in a way that protects our economy 
and protects our workers from the flood of artificially priced 
goods that could enter this country at depressed prices if we 
don't let a decent relationship exist and a realistic 
relationship exist between currencies worldwide.
    I think we ought to bring up Mexico City issues and debate 
them on their merits, up or down, and I think whether the 
administration likes it or not, it is going to have to work out 
a compromise with Mr. Smith on the issue, and Mr. Smith, 
whether he likes it or not, has to work out a compromise with 
the administration. Nobody ever gets 100 percent of what they 
want in this business.
    I happen to believe, for instance, that we shouldn't put a 
dime into United Nations population planning so long as they 
continue to work with the coercive abortion system in China, 
but I am not willing to run a risk that lots of my constituents 
are going to lose their jobs because the international economic 
system goes haywire because Congress is busy playing blackmail 
on unrelated issues.
    I am willing to take my chances up or down on trying to get 
the kind of policy I think we ought to have on the U.N. and on 
Mexico City. But you have to be prepared to have other 
imperatives impose themselves on your own set of priorities if 
you are a responsible member of this body, and that is why I 
object to this false linkage that is being attempted.
    I want IMF dealt with up or down, because I think the 
administration is going to have to agree to some kind of 
economic conditionality in order to get what they need here for 
the IMF. I do not happen to believe we can wait to do that 
until we have a new perfect world order and a new financial 
system, because I don't think you are going to be able to get 
those understandings worked out in time.
    But I do hope that we can get a clear understanding from 
the administration about what it intends to do to move forward 
to establish a new international understanding about new rules 
of the game for dealing with IMF and other institutions that 
are supposed to help arrange the world in a rational way.
    And I do hope that we can have a debate up or down on the 
kind of conduct that the U.N. is going to have to change in 
terms of its ridiculous administrative waste if we are going to 
get U.N. arrearages dealt with. But, I mean, groups on all 
sides have enough merit to their case on each of the three 
issues to take the issues on the merits. When they lose the 
country, and certainly when they lose me, is when they try to 
bring in all kinds of unrelated issues together and we engage 
in a game of institutional blackmail.
    I don't want a repeat of two years ago, when we had a train 
wreck because people felt that their own opinions were more 
important than the national interest. That is the point I would 
like to make.
    The only question I have of you is this. We talk about what 
kind of conditions we want to impose on Indonesia on human 
rights and all this other stuff. I am not even convinced 
Indonesia will exist as a country a year from now, I think they 
are such a basket case that you could have incredible 
unraveling there.

                                 japan

    My concern is Japan, because I think Japan bears a very 
large share of the responsibility for this mess. If somebody 
wants to call us Japan bashing, my reaction is, baloney, Japan 
is bashing the rest of the world right now because it refuses 
to conduct itself in an adult way as a major economic player.
    What bothers me is that Japan for years has refused to 
operate its own economy in a rational way. You have had huge 
surpluses of capital developed. That money has been invested 
all over the world. That has helped lead to an overcapacity in 
world markets in a number of areas. And if Japan does not 
recognize the need to open up its own economy, both in terms of 
what goods it allows into its country and in terms of its own 
fiscal policy and tax policy, to stimulate additional economic 
growth, they are going to be exporting their unemployment to 
the rest of Asia and to us.
    And I firmly believe if this country runs a $350 billion 
trade deficit, you are going to see the most awful 
protectionist reaction in this country since the twenties. 
That, to me, is the fundamental economic threat we face, along 
with the potential unraveling of Russia, Brazil, India, and 
other countries, if this thing really gets out of control.
    I guess my question is, how can we in the Congress and how 
can the major world trading partners convince Japan it has to 
grow up and recognize that it has to be a modern player on the 
economic scene now that it is a fully developed economy?
    Secretary Rubin. Mr. Obey, I think with respect to Japan, 
you raise a question that is exceedingly important. We have 
addressed it in many ways, some public, some not public.
    I think a Japan that was growing again and whose growth was 
led by domestic demand, not export driven, would be able to 
absorb imports from Asia which would help these countries grow 
again. It would be able to provide bank capital to Asia, which 
would again help, and it would have a confidence around itself 
that could then radiate out into Asia.
    And I think the most important thing Japan can do to help 
itself, Asia, and the rest of the world is to begin again to 
have a robust rate of domestic demand-led growth, and that is a 
point of view that we have expressed very strongly in many 
fora, some private, some public. It is a set of objectives that 
the Prime Minister of Japan set forth for the country early 
last year, but, certainly, to date, at least, that objective 
has not been met.
    So I think I would agree--I will agree with your 
observation stated my way. I think if I could make one other--I 
think it is something we need to continue to do, and I think 
the Members of Congress can determine for themselves whether 
speaking to this issue strikes them as being another--another 
useful method of attempting to have an effect on whether or not 
Japan meets its own objectives it set forth at the beginning of 
last year.
    I do think that your other issue, the other question you 
raise, is a very important question. You have three issues that 
are enormously important: U.N. arrears at a time when we are 
dealing with Iraq, the IMF at a time when there is at least the 
risk--I believe low probability, but the risk of something we 
must have the capacity to deal with in the interest of our own 
economy Mexico City, which people care a great deal about on 
both sides of the issue. Mr. Chairman, I don't have anything to 
do with decisions you all make in terms of how you do things. 
It does seem to me there is a lot to be said for debating those 
issues and deciding them each on their own merits, rather than 
conflating them, at least as it relates to Mexico City and the 
other two.
    Mr. Obey. Thank you, Mr. Chairman.
    Mr. Callahan. Mr. Secretary, I have all afternoon. I 
thought I had to leave earlier, but now my plans have changed. 
I know your schedule is more stretched than mine, but there are 
a number of questions the panel has asked to submit to you. But 
to the committee, let me tell you, the Chair has been most 
generous in the allocation of time by not gaveling anyone down 
because this is an important issue, and I want you to have the 
opportunity. But as we go into the second round of 
questioning----
    Ms. Pelosi. We are still in the first.
    Mr. Callahan. We are still on the first.
    Who has not yet gone?
    Ms. Pelosi. You and I.
    Mr. Callahan. I know, but we cannot take 15 minutes apiece. 
So I am willing to allow you to use your 5 minutes, or 15 
minutes, your usual 5 minutes, which is 15 minutes, but at the 
same time we must recognize that the Secretary does have other 
obligations, and I am going to once again reserve the right to 
submit questions to them and reserve the right for a brief 
closing statement. But we will go to Ms. Pelosi for her 
questions as brief as she can possibly be, and then we are 
going to try to get through our second round of one question 
from each member of the panel.
    Ms. Pelosi.

                               imf crises

    Ms. Pelosi. Thank you very much, Mr. Chairman. And, also, 
thank you for your responsiveness to the concerns of Members 
about not having enough time to ask questions by having the 
hearing start earlier, as well as giving us time to ask follow-
up questions regarding our concerns.
    It still isn't enough time because the IMF has dominated 
the discussions, and I know many Members have budget-related 
questions they want to ask. Listening to my colleagues discuss 
the full array of issues that have been brought up which are 
very important, it is unfortunate to see that funding for 
microlending, for which the administration has taken great 
leadership, and I commend the First Lady for her interest in 
showcasing this issue as well, comes drip, drip, drip, while 
the failout will be a flood of funds.
    As we know, the countries experiencing this crisis have 
different problems, and there are different reasons why the IMF 
needs to lend to these countries. I certainly would put South 
Korea in a different category than I would put Indonesia, for 
example, in terms of what conditions I would like to see placed 
on the loans. I have some suggestions in that department, but 
first I would like to make a couple of observations about other 
subjects.
    I have been asking this every year, and every chance I get 
I ask it, I hope that you will put the issue of AIDS on the 
agenda of G-7 meetings because it has an economic impact in the 
developing world. It is my understanding that the economies of 
the developing world are on the agenda of the G-7, and I hope 
global AIDS would appear at some point on the agenda of the 
heads of state as well.
    The concerns about the environment are real. You know what 
a dominant role capital plays in the economy, and the 
environment is impacted very directly. That is why so many of 
our constituents are concerned about how the IMF goes forward. 
The IMF has to have some sensitivity and accountability for the 
environment. Now, particularly regarding the environment, I 
want to ask you a budget question.
    Could you tell me or get for me the number of employees at 
the Treasury Department who are working on the multilateral 
development banks?
    Secretary Rubin. They work under David.
    Mr. Lipton. I don't know the number.
    Secretary Rubin. Twenty.
    Ms. Pelosi. How many staff persons with environmental 
training are now working within Treasury on the MDB?
    Mr. Lipton. Three.
    Ms. Pelosi. You have three environmentally-trained 
employees?
    Mr. Lipton. Who work for my colleague.
    Secretary Rubin. I didn't know the answer to the question. 
Apparently there are three full time.
    Ms. Pelosi. These are singularly working on the MDBs, they 
have no other responsibility. There are three in the Treasury 
Department for all the MDB's working on environmental issues, 
and they have formal environmental training; is that what you 
are telling me? They are not economists.
    I ask the question because I have serious concerns about 
the enforcement in the field, if you will pardon the 
expression, Mr. Chairman, of the Pelosi amendment. I know that 
the intentions of the Administration are good in this 
department. I am not convinced with some people leaving the 
department that there has been an addition of people 
commensurate with the need to enforce the terms of the Pelosi 
amendment, which calls, as you know, for environmental 
assessments on any project before our executive directors at 
the banks can tend to support a project. So I put that out 
there, and, again, I express an interest in the IMF being 
sensitive to these issues, which I know is a separate issue.
    Are you concerned about the defaults on loans to the Asian 
Development Bank or the World Bank because of the Asian crisis?
    Secretary Rubin. Oh, defaults on loans that the World Bank 
and Asian Bank themselves have extended?
    Ms. Pelosi. Yes.
    Secretary Rubin. In the context of this crisis?
    Ms. Pelosi. Yes, the ability of them to be paid.
    Secretary Rubin. I don't think it is very likely they are 
going to suffer defaults.
    Mr. Lipton. We want to distinguish between sovereign loans, 
loans the World Bank makes to governments, and loans the 
institutions like IFC make that are of a private nature. There 
are some concerns at the IFC about greater risks now to some of 
their loans, and that is something they are looking over.
    Secretary Rubin. But I don't think the sovereigns are----
    Mr. Lipton. Not with respect to first category.
    Ms. Pelosi. The Exim, or you are not into that?
    Mr. Lipton. I don't follow this closely, but I know Exim 
from time to time does experience defaults, and I think they 
are concerned about a couple of loans in Asia. Mr. Harmon has 
been to Asia in essence to get a better sense of what the risks 
are that Exim faces at this moment and what the prospects are 
for further support for U.S. exports to the region.
    Ms. Pelosi. Thank you. We have talked about this crisis, 
and it is a mystery to me how it took everybody by surprise, 
with all of the expertise that we have on this. Maybe it didn't 
take people by surprise, but it appears to have; at least we 
feel as if we have been sideswiped by it because of the 
magnitude of the need for the bailout. Books that are 
copyrighted 1997 are talking about economic opportunities in 
Asia. What else could go wrong? You have talked about what 
could go right if Japan did some things. Is it possible that 
the Chinese would devalue the yuan? If so, what impact would 
that have?
    Secretary Rubin. Let me say, Congresswoman Pelosi, I think 
that with enough expertise, you can try to identify problems in 
economies, and as David Lipton said with respect to Thailand, 
the IMF, and United States Treasury for that matter, were very 
much on top of the problems.
    I think, though, I would distinguish in identifying 
problems that could give rise to trouble and a crisis. I at 
least think, after I spent a lot of years doing this for a 
living before I came into this world I am in today, I don't 
think you can predict crises. I think you can identify 
problems, but crises are a result of a whole bunch of things 
happening at the same time and then combusting, for whatever 
set of reasons.
    In terms of countries going forward, the IMF on a regular 
basis, as you know, does surveillance, and we are very much 
involved with this, and I think there are a number of countries 
that have issues they need to deal with. I think I just as soon 
not discuss them in a public forum.
    You raised a question of the Chinese exchange rate. China 
has committed itself publicly and privately to maintaining the 
exchange rate.
    Ms. Pelosi. For how long?
    Secretary Rubin. I don't know if they put a time frame on 
it, have they David? But they certainly have persuaded us of 
the sincerity of their commitment and the grounding of their 
commitment and their own view of their own economic interest. 
But clearly it is very much in the world's interest that that 
happen, and one of the concerns one could have is if you had a 
widening of this crisis, which all of us think is a low-
probability event, but a widening of the crisis, and many other 
developing countries got involved, that obviously creates 
additional pressures on their exchange rate. I think that is 
another of very many reasons why it is so important to avoid 
the possibility you just raised.
    Ms. Pelosi. And it would have what kind of impact if they 
did devalue?
    Secretary Rubin. That would be a significant event.
    Ms. Pelosi. Okay. Do we have an if plan?
    Secretary Rubin. Our best if plan--truly, our best if plan 
is to work----
    Ms. Pelosi. Is to bail.
    Secretary Rubin. No, it is to work with countries around 
the world on the vulnerabilities they have and try through the 
IMF and through the World Bank and directly, bilaterally, to 
work with countries to repair the problems they have; at the 
same time get an IMF capacity that is sufficient to deal with 
the crisis if, in fact, it develops.
    Ms. Pelosi. I appreciate that.
    One quick question, and I have a couple observations, and I 
am being as brief as I can be, Mr. Chairman.
    Getting back to the moral hazard issue, because I see the 
issue in terms of contagion, how this might spread and affect 
our workers, are we, once again, nationalizing the risk and 
privatizing the gain? Regarding conditionality, what is the 
threshold to get in on those conditions in terms of workers' 
rights, the environment and other things?
    The contagion issue is, I think, an overwhelming one that 
argues to diminish the importance of the moral hazard argument 
because even if these banks and financial institutions do 
benefit, punishing them doesn't help us at all because of the 
contagion issue. But I would like to know in your professional 
and maybe in your former life, do you think any of these 
financial institutions make investment decisions based on the 
IMF standing back there?
    Secretary Rubin. No, I really don't, Congresswoman Pelosi. 
I still think the moral hazard issue is very important. I take 
considerable comfort from the fact that such large losses have 
incurred in Asia because I think that is helpful, but I sat 
around an awful lot of tables making an awful lot of decisions, 
and I never once heard someone say we ought to value the risk 
less highly because the IMF is there.
    Ms. Pelosi. I appreciate that.
    Secretary Rubin. We have to deal with the problem, but I do 
not believe the IMF's activities materially affect that 
decision-making.
    Ms. Pelosi. You probably don't know what exacta is.
    Secretary Rubin. Jai-alai.
    Ms. Pelosi. At the horse races. You know what that is, 
don't you, Mr. Chairman?
    Mr. Callahan. Yes, I do.
    Ms. Pelosi. If you win an exacta, the IRS is right behind 
you in line because they are going to collect on your winnings. 
However, if you have a pocketful of losing tickets in your 
pocket, you can somehow soften your tax blow by having--saying, 
well, I won this, but I lost all this money, so let's discuss 
it.
    In the reverse of that, we are talking about the losses, 
Deutsche Bank, not having an $800 million loss as you said, but 
preparing for that possibility. What about all the gains that 
all these companies have made, is anybody talking about that? 
What is this, in the context of what?
    Secretary Rubin. They are in the business to make money. I 
think the question is the one you raised before. If they are 
going to make their money, shouldn't they also take their 
losses? And the answer is yes, and to some pretty fair measure 
that is the way the system has worked. To some extent they have 
been protected. That is an undesirable by-product of these 
efforts to create financial stability. It is a by-product which 
should be resolved or reduced as much as possible.
    Ms. Pelosi. I appreciate that answer.
    Mr. Chairman, in conclusion, I would like to express some 
of the concerns that have been expressed to me by Members in 
the House, both Democrats and Republicans, and they are not 
going to be new to you, Mr. Secretary, because you have been 
very open in listening to our concerns.
    I was particularly pleased last week when Prime Minister 
Tony Blair was here and we had a chance to talk to him about 
the subject, and he placed a very strong emphasis on 
transparency at the IMF. On that score he was in agreement with 
many Members of the House of Representatives because increasing 
transparency of IMF activities, I think, is something we should 
see as we go forward with this.
    Members also want to establish a new Deputy Assistant 
Secretary of Treasury, whose sole responsibility would be to 
monitor IMF reforms and to report on social consequences of 
lending by multilateral organizations; provide for release of 
IMF funds in several tranches, I don't know if that is 
possible, depending on the effectiveness of the IMF in meeting 
concerns about labor rights and the environment; ensure a 
safety net is provided to address social consequences of 
austerity measures imposed by the IMF on South Korea--as I 
said, people see that as a little bit of a separate issue; 
broaden the IMF conditionality to include specific labor rights 
and environmental protections; and then in terms of Indonesia, 
supporting Mr. Wolf and my colleague, Congresswoman Lowey, a 
clear and forceful statement from the Administration concerning 
East Timor, emphasizing the Indonesian Government should begin 
discussions--and that isn't even a big deal--begin discussions 
through Bishop Belo and Gusmao; and the unconditional release 
of Indonesian labor leader Muchtor Pakpahan. I imagine this is 
in the works because it is so very obvious.
    With that, Mr. Chairman----
    Mr. Callahan. The gentlelady has not only consumed her 
time, but mine as well.
    Ms. Pelosi. The Chairman is very generous.
    Thank you, Mr. Secretary.
    Mr. Callahan. She brought up mutual gambling, so we will 
enter the quinella stage, which is something that comes in 
first and second. We are going to allow each panelist to offer 
one question first and give you a second to answer.
    Secretary Rubin. I remember quinellas from jai-alai, and it 
was legal, I might add, if you were over a certain age.
    Ms. Pelosi. In certain countries.
    Secretary Rubin. Where I lived.
    Mr. Frelinghuysen. This question falls into the lessons 
learned category. Ms. Pelosi sort of touched on it. Who was 
minding the store that allowed this Asian crisis to develop? I 
commend you for racing over there on a number of occasions to 
basically support the global market and making sure that the 
countries get through this cash crisis, but in reality, when 
something like this occurs as it did in Mexico, there ought to 
be some lessons learned.
    I assume you sent the message to the IMF and to whoever 
does their forecasting and judging of these various situations 
that this sort of situation can never happen again. I just 
wondered if you could make a general comment about the lessons 
learned from this crisis, maybe it is not over; what lessons we 
have learned and what we can anticipate in terms of reforms.
    Secretary Rubin. I think it is an extremely important 
question. Let me try to adhere to the 1-minute rule, but it is 
hard because it is a very important question.
    The rating agencies, the two private sector rating agencies 
that dominate the world market, both kept their very high 
ratings for South Korea until after the crisis was well 
underway and then lowered the ratings, as you know. I think 
there is an inherent unpredictability about crises we have to 
accept as reality, you know.
    Having said that, I think the question you raised is the 
right question. We need better disclosure. We need more 
transparency in these countries. We need better ways of having 
that disclosure affect investor decisions, and we have a lot of 
thoughts in this area we will be developing over time to become 
part of the architectural changes I was talking about.
    Mr. Callahan. Maybe Mr. Yates can--I don't know, Mr. 
Secretary, whether you compare with Alexander Hamilton or not, 
I assume you do. I didn't serve with Alexander Hamilton.
    Mr. Yates. I did.

                          holocaust survivors

    Mr. Secretary, I take seriously your justification for 
appropriations, and it is for the supplemental and for the 1999 
budget request. I don't remember any questions being addressed 
to you today about the budget, so I will ask one that is 
tangentially a part of the budget, and that is when you were 
last here, I asked you about the restitution procedures for the 
Holocaust survivors, and the reply I received from your office 
was really much less than satisfactory, and I wondered whether 
I can get greater cooperation from your office for this.
    I think what is happening in New York now with Secretary 
Morganthau trying to help a couple people get some of their 
confiscated art back, and there is also the question of real 
estate, there is a question of other assets. I know Stu 
Eizenstadt is in this, and I know that--who is the former 7-
foot chairman?
    Secretary Rubin. Paul Volcker.
    Mr. Yates. Paul Volcker, Chairman of the Fed, he is in 
there somewhere, but they still aren't getting anything. I 
noticed the $280 million fund of the Government in Switzerland 
has been paying 4,000 out of 19,000 surviving claims, giving 
them a first installment of $400. So, to me, 50 years later, it 
seems that there ought to be a greater activity. I don't know 
how deep you are in this, and I don't want to take you out of 
the mire that is Indonesia and Korea, but I would appreciate 
knowing whether there is anybody in your Department who works 
on this.
    Secretary Rubin. As you said, Stu Eizenstadt takes the lead 
for the United States Government. We have been actively 
involved.
    Mr. Lipton. We have someone who is following this for 
Treasury. As you mentioned, there are several initiatives 
important in this. You mentioned the Swiss fund. The Germans 
have created a fund to help Eastern European survivors. Paul 
Volcker is working on auditing the dormant accounts in 100 
Swiss banks. The Treasury has convinced the 10 country 
claimants to the tripartite agreement from the 1940s to 
relinquish their claims on remaining funds that were never 
claimed there, and that are going to be transferred to a fund 
for survivors as well. So there are a number of things that are 
going on.
    Mr. Yates. Who is doing it, David?
    Mr. Lipton. Stu Eizenstadt is----
    Mr. Yates. Is he out of Treasury or Commerce?
    Mr. Lipton. He is the main person coordinating--he has been 
coordinating----
    Mr. Yates. Who is doing it in Treasury?
    Mr. Lipton. Under me, there is one gentleman following this 
for us.
    Mr. Yates. If I want to get in touch with somebody at 
Treasury, I will get in touch with you?
    Mr. Lipton. Yes, please.
    Mr. Callahan. Mr. Kingston.

                                linkage

    Mr. Kingston. I am going to say a quick statement before my 
question. You know, linkage is only okay around here if you 
like what is being linked, and just as some Members of Congress 
push for environmental linkage and worker linkage, there are 
others who feel very strongly about the rights of the unborn. I 
would really recommend, if you are not doing it, to advise the 
administration to have a proactive task force to already be 
pulling folks into the same room and start talking about this, 
because for every hard-core believer on one side of the issue, 
as you know, there is another one on the exact opposite side.
    My question, though, is a good politician in a speech 
always tries to ``wif'' them, what is in it for me. As Ms. 
Pelosi and Mr. Callahan talk in these strange words, that is 
the only one I know. But the question is what is in it for me, 
for the American worker who is displaced or in a dead-end job 
that may be moving overseas? Why should his efforts in tax 
dollars be on loan or even at risk to countries who may be 
taking his job, and what is it directly that we could put on a 
bumper sticker to motivate him to say, I understand it is a 
good deal?
    Secretary Rubin. I think unfortunately--it is a good 
question. We have spent a fair bit of time thinking about this. 
I think it is difficult to put very complex issues on bumper 
stickers, which is one of the reasons I think there is so 
little public understanding of this. On a broader scale, I 
think American workers have had an enormous interest in seeing 
the countries do well again, that we not have instead some kind 
of terribly greater crisis than we have for the reasons we have 
already discussed.
    I think in terms of the displaced worker you are talking 
about, what we have done in the administration is a little bit 
different. What we have done in the administration is to 
promote a whole bunch of programs that are designed to deal 
with displaced workers in an economy of rapid change because we 
are going to have an economy of rapid change, more technology 
than these things, but these things as well.
    Having said that, the displaced worker will have a better 
chance of having access to jobs and having access to that which 
that worker needs to get back into the economy, in a good 
economy rather than a bad economy. That is where the worker's 
self-interest tries to connect to what we do. How you put that 
on a bumper sticker, I don't know.
    Mr. Callahan. Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman, and I want to make a 
brief response to my good friend Mr. Kingston that what we were 
trying to do is make the point that although it is acknowledged 
that there is some connection, some linkage, between worker 
rights, human rights, and the IMF, there doesn't seem to be any 
appropriate linkage. They are entirely different issues between 
IMF, the United Nations, and abortion. And while I do think 
that your recommendation that we all sit down is very 
appropriate, I just wanted to make that distinction, because 
the point we were making is each of these issues should be 
debated, thoroughly, fully, with due respect to everyone's 
personal views, and I do respect everyone's personal views.

                                  gef

    Just a brief question, with a 1- or 2-second response. I 
personally appreciate the administration's commitment to the 
global environmental facility, GEF. Your request for $300 
million, understanding 200 goes to arrearages. Perhaps briefly 
for my colleagues, could you give us some example of how our 
investment in GEF does help combat the competitive disadvantage 
of American companies with environmental laws in other nations, 
how it does put our companies at an advantage and that is why 
investment is good for our business here?
    Mr. Lipton. We think GEF is good for America and American 
business generally because it is going to promote better 
environmental understanding and better environmental practices 
around the world, and it has already been put to good use in 
Poland, in Africa, in Latin America, to try to improve 
environmental practices, even where the benefits don't 
strictly, only, go to the people in those countries, but, say, 
because of improvements in air quality or because of decreases 
in gases that would harm the ozone, that these things start to 
be taken into account.
    But I think that the work of the GEF is also going to 
improve environmental understanding and, in time, I think 
environmental standards and laws in the countries, as they come 
to see the logic, the inherent logic, of taking care of the 
environment. I think while it might be a slightly longer-term 
process, in that sense, it addresses a question you raised 
about American business.
    Mrs. Lowey. Thank you very much, and thank you, Mr. 
Secretary.
    Mr. Callahan. Mr. Obey.

                              U.S. Workers

    Mr. Obey. Mr. Chairman, I guess I would just observe in 
response to Mr. Kingston's question that here is what I think 
workers have at stake. If we cannot manage to stabilize these 
Asian currencies at a reasonable level with U.S. currencies, 
and if as a result those currencies drop by a very large 
amount, what that does is artificially deflate the cost of 
goods which those countries can export to the United States, 
and that makes it very much more difficult for American workers 
whose products are in competition with those goods to stay 
employed. So I think that is why we need a stabilization 
effort.
    Mr. Secretary, I don't have a question. I have a request of 
you. I have about six companies in my district who have just 
closed up shop over the last year. In Ashland, two weeks ago, I 
had a major U.S. company shut down a paper mill. When the mayor 
and the Governor asked the company for consideration in the 
form of keeping the equipment, the old paper machines, in that 
plant because they felt they might have a buyer or two for it 
which could help keep the plant open and avoid the loss of 
almost 300 jobs, the mayor was told that that was 
nonnegotiable, that the equipment was simply going to be yanked 
out of the plant, and cannibalized for spare parts elsewhere.
    I would simply observe corporations, justifiably so in my 
view, get a very large assist from society when they are able 
to write off depreciation costs for equipment, and plants as 
well. I don't ask Treasury to necessarily agree with what it is 
I am trying to do, but I would appreciate it if you would tell 
me to whom I can go in your agency to get technical help in 
drafting legislation which would expand plant closing 
legislation, so that if a company does close its doors in a 
community, and if it refuses to negotiate with the Governor and 
with the local municipality about the possible retention of 
equipment in those empty plants to save some jobs locally, that 
those companies would be ineligible to participate in any 
depreciation benefits for the next 10 years anywhere in the 
country.
    Mr. Yates. All roads lead to David.
    Secretary Rubin. No, not this road.
    Mr. Obey. I would simply appreciate the help of Treasury in 
drafting that kind of a piece of legislation so it would at 
least make structure sense, even if Treasury itself does not 
agree with policy.
    Secretary Rubin. We will be happy to do that, and Don 
Lubick is our new assistant--well, he has not been as of this 
morning yet, but Don Lubick is the right person to speak to.

                             linkage factor

    Mr. Callahan. Mr. Secretary, Mr. Frelinghuysen, as I 
mentioned, has done more work and research, is probably more 
knowledgeable at least than anyone on our side of the aisle, 
and I am going to have to rely upon him heavily during this 
process to get me the answers we are both going to need if 
indeed we are going to assist in this endeavor. I would like 
for your office to be very responsive to his questions, to meet 
with him when he calls, in a timely fashion, so we can have the 
answers as we go through this process.
    Let me just address, in closing, the linkage factor, Mr. 
Secretary. Whether we like it or not, whether it is right or 
wrong, this is not the first time in history that linkage of an 
issue has been used. I can recall during the Persian Gulf 
crisis when the only way we could go into the Persian Gulf and 
the use of Egyptian air space and assistance was to forgive 
debt. There were some in the House at that time, including Mr. 
Rostenkowski, who decided if we are going to forgive Egyptian 
debt, we are going to forgive Polish debt. That was linkage in 
a time of crisis. Certainly you can't compare this crisis to 
the crisis in the Persian Gulf at that time.
    This is not the first time in history linkage has been used 
by Members of the Congress, it is not going to be the last 
time, but it is going to be an issue, and I admonish you to 
take this message to the President. You all have got to decide, 
number one, I don't think we have the votes to pass the IMF 
moneys, the new arrangements to borrow, unless we have the 
support of those people that form the coalition of Mexico City. 
Maybe we do. Maybe you know something I don't know. But without 
that, we are not going to possibly have the votes. That is 
something to think about, so you might tell the administration, 
and tell the President, that he must be thinking about the 
seriousness of this issue. Is the Asian crisis a crisis or not? 
Is it such a crisis that you are going to have to accept some 
Mexico City compromise or not?
    You all are going to have to make that decision, but the 
decision is going to have to be made before we can muster 
together the votes in the House. It is as simple as that. Right 
or wrong, David, that is not the issue at this point. The issue 
is can we muster together a sufficient number of votes in the 
House of Representatives to provide you with the moneys you say 
you need to eliminate this crisis that ultimately is going to 
impact us.
    So our message is, number one: you have got to establish 
some vehicle to explain to the American people what the IMF is. 
You have got to tell them why. You have got to give the 
Kingston answer to that. You have got to convince the American 
people so Members of Congress can feel safe in an election year 
voting for this. That is number one. You have to convey and 
amplify the justification for the IMF strategy.
    Number two, you have got to recognize the linkage is a 
reality that is going to be there, whether anybody likes it or 
not.

                       new arrangements to borrow

    My one question is, Mr. Secretary, that the proposed new 
arrangements to borrow are modeled after the old general 
arrangement to borrow, which was created in 1962, and the 
committee agreed to expand the GAB by $23 billion in 1983. It 
is my understanding this year it has already been appropriated, 
but it has not been utilized. Why don't you use the old 
arrangement, rather than to come to us with a new arrangement?
    Secretary Rubin. The reason for the new one, Mr. Chairman, 
is we were able to get a substantial additional--I think it is 
fourteen additional countries to get involved in the burden 
sharing, so we thought that was a very strong step forward, and 
Congress has rightly urged----
    Mr. Callahan. Is it possible then maybe we can rescind the 
old arrangement?
    Secretary Rubin. No. They are two separate questions. One 
is the capacity of the international financial institution to 
deal with the issues. At the present time we have roughly $15 
billion of what is the real capacity in the IMF, we have the 
roughly $23 billion in the GAB, and we are requesting the NAB 
and the quota. I thought you were asking a different question 
which we had talked about.
    Mr. Callahan. I am asking, since the $23 billion out of the 
GAB has not been utilized, why do you need new authority?
    Secretary Rubin. Because all of this is being done in the 
event, as I have said before and I will say it again, is a low-
probability event, at least right now, but nevertheless, if it 
happened, a very serious event, which is that the crisis we are 
hopefully working our way through, although it has a long way 
to go and a lot of uncertainties, will reignite and envelope 
countries around the world. If that were to happen, we need to 
have a capacity that is at least reasonably commensurate with 
the problem we have to deal with, that will take both the 
existing IMF, the GAB, the NAB and the resources we would get 
from the quota.
    Mr. Callahan. Once again, there are a lot of questions the 
Members are going to have to have you respond to.
    Secretary Rubin. We would be delighted to.
    Mr. Callahan. Under the new order, we will give the Ranking 
Democrat on the panel the opportunity to close.
    Ms. Pelosi. No, Mr. Chairman, you will have the last word, 
that is for sure, today and in the end. However, I did want to 
ask one question.
    First, though, I want to say, Mr. Secretary, that while we 
are asking about questions that are problems to us, I want to 
commend you and the administration for some progress in the 
last year on African debt relief, your commitment to GEF, and 
to the environmental issues. Following up on last year's 
testimony, in fact, in our questions there, the Treasury has 
been very supportive on extending the inspection mechanism to 
the IFC and MIGA. The U.S. Executive Director of the World Bank 
has been very supportive in thwarting a tax from developing 
countries on the current Inspection Panel. Treasury has been 
very helpful in pressing the bank to make a country assistance 
strategy publicly available, and I appreciate that.
    I commend you once again, as I did in my opening statement, 
on the reforms to the MDBs and the savings that they represent 
to the American taxpayer and the opportunity it provides for 
the U.S.
    And just in closing on the IMF, I understand what you said 
about how we watch financial situations, and I certainly don't 
think anybody has to answer for what is possible, because 
almost anything might be there are so many variables, but the 
predictable is more of our responsibility. I think we owe those 
answers to the American people about how we can be better 
prepared in the future to predict what could happen and what 
the impact might have on American workers, because while we are 
all saying the contagion factor argues for the bailout, 
nonetheless we would rather not be in this position to begin 
with.
    Secretary Rubin. Prevention has to be a very central focus 
as we go forward.
    Ms. Pelosi. I thank you again for your testimony and for 
your leadership and extend that thanks to Secretary Lipton as 
well. Thank you, Mr. Chairman. Last word.
    Mr. Callahan. The meeting is adjourned.
    [Questions and answers for the record follow:]


[Pages 63 - 125--The official Committee record contains additional material here.]



                                      Wednesday, February 25, 1998.

                          SECURITY ASSISTANCE

                               WITNESSES

JOHN HOLUM, ACTING UNDER SECRETARY OF STATE FOR ARMS CONTROL AND 
    INTERNATIONAL SECURITY AFFAIRS
WALTER B. SLOCOMBE, UNDER SECRETARY OF DEFENSE FOR POLICY

                 Chairman Callahan's Opening Statement

    Mr. Callahan. The subcommittee will come to order.
    First of all, I would like to welcome both Secretary Holum 
and Slocombe here this morning and thank you for taking time 
out of your busy schedule to appear before the subcommittee. I 
am going to give each of you a copy of my opening statement 
and, thus, not put you through the boring reading of such a 
statement. But, overall, the security assistance portion of the 
1999 budget appears to reflect a shifting of resources away 
from security assistance to other foreign affairs, such as 
export enhancement, support for Russia and the newly 
independent states and multilateral assistance.
    And, while the President's overall budget for foreign 
operations represents an increase of about 9 percent over last 
year's level, security assistance rises only about 2 percent: 
Specifically, military assistance which is reduced; IMET, which 
remains steady; and the Economic Support Fund, Peacekeeping and 
other nonproliferation accounts each receive increases.
    And on balance the President's security assistance request 
represents the status quo and that is not all bad. In this 
regard, the budget does not recognize one of this year's most 
important developments. And that is the request by Israel to 
begin to readjust the Economic Support Fund that we have been 
providing them for a great number of years.
    I know the Prime Minister has not yet submitted to us his 
formal plan of action to reduce the Economic Support Fund. 
Nevertheless, we did discuss with the Finance Minister the 
reality of this becoming effective in this budget. I know that 
you did not know the particulars and, thus, you could not do 
that. But that is going to be a favorable factor.
    I commend the Israeli Government for their bold step in 
that direction by recognizing the success of our economic 
support for Israel. That is why we have been contributing all 
these years is to bring their economic status to the point 
where it is today. They are in great economic condition in 
Israel.
    I have not made it a secret that I do not necessarily agree 
with the wisdom of a percentage of what one country gets going 
to another country. I think that is not a good policy. I think 
some Administration some day has got to take the initiative to 
recognize that and, if you have one country who has needs 
greater than an other country, then we ought to consider with 
available funds the money for the country with the most needs, 
not based upon what another country gets.
    But I have been talking about this for a great number of 
years and have not heard a peep out of the Administration with 
respect to wanting to change that policy. But it is a policy 
that should be looked at. And I applaud the Israelis once again 
for coming forward with the initiative to say that the billions 
of dollars we have contributed over the last couple of decades 
has worked.
    And that they are going to begin to reduce their economic 
support needs and we are going to be taking this into 
consideration when we put together our budget.
    But, in your defense since you do not know what, I do not 
imagine, what they are proposing then you could not include 
that in your recommendations.
    I want to call your attention also to KEDO and the growing 
debt. I guess you both know this is something that I was 
unaware of until the debt was probably $25 million. I 
complained at this point that I did not think we ought to be 
borrowing money against pledges that other countries have given 
us. And now, that debt is at $47 million and now you are 
requesting more money for KEDO.
    We probably have contributed 50 percent of the cash that 
has been sent to that program and that was not the intent of 
the program. There has got to be some major change in direction 
there and we have to stop borrowing money.
    I notice in the budget request that you requested a $5 
million increase for KEDO basing it on the increased price of 
heavy fuel oil. And, yet, every indication I get from the Wall 
Street Journal and other publications is that the price of 
crude oil is going down. You know, maybe it costs more in 
Korea, I do not know, but we are going to have to look at that.
    And I do not want to put any restrictions on the 
Administration about prohibiting them from borrowing additional 
money but I am growing more and more concerned that that debt 
is going up. I know you have pledges from countries to pay this 
off, but that is not sufficient. They ought to be putting the 
money up if, indeed, they agreed to do it, just like we have 
put up what we agreed to put up.
    So, that is going to be a concern I think of this committee 
and certainly is going to be my concern. So, with that I am 
going to yield now to Mr. Yates and, at the same time, provide 
each of you with copies of my opening statement.
    [The information follows:]


[Pages 129 - 131--The official Committee record contains additional material here.]



    Mr. Callahan. Mr. Yates.

                      Mr. Yates' Opening Statement

    Mr. Yates. Thank you, Mr. Chairman.
    I want to welcome Under Secretary Slocombe, and I want to 
welcome Under Secretary Holum this morning. I, too, have a long 
statement which I do not propose to read and we can put that 
into the record later on.
    I want only to say that the United States is the only 
country in the world that is in a position to provide effective 
leadership on issues of global economy and the issues of our 
independent world, in this world in which we live in today.
    And it is my belief that if we are going to continue to 
effectively exercise our role in international affairs, we are 
going to have to fully participate on a long-term basis in that 
by demanding that those nations that receive our security 
assistance abide by internationally recognized standards in the 
area of labor, civil and human rights, and to assist the United 
States to help us to enforce international conventions on the 
production of chemical and biological weapons of mass 
destruction.
    I will have other questions as the hearing proceeds and I 
look forward to a constructive discussion, not only with the 
witnesses but, with my good friend, the Chairman, Sonny 
Callahan.
    Thank you, Mr. Chairman.
    [Mr. Yates' written statement follows:]


[Pages 133 - 135--The official Committee record contains additional material here.]



    Mr. Callahan. Once again, Secretary Holum, we appreciate 
your coming, especially at this time of crisis in your family, 
but we understand that you are going back home immediately 
after that. So, we appreciate the extra effort you have made to 
be here with us today and we will get you out of here just as 
quickly as we can.

                     Mr. Holum's Opening Statement

    Mr. Holum. Thank you, Mr. Chairman.
    I will take the cue that you and Mr. Yates have set and 
keep my remarks brief. I have a longer statement for insertion 
into the record.
    A year ago Secretary Albright and Assistant Secretary 
McNamara and Under Secretary Slocombe appealed to the members 
of this committee for a bipartisan approach in providing 
resources for protecting America's vital security and 
geopolitical interests. Through your leadership, Mr. Chairman, 
and the committee's support, we have worked together 
successfully over the past year to advance American interests 
and sustain American leadership.
    During that time there has been important progress. Europe 
remains peaceful, free and undivided as the Cold War recedes 
further into history; peace and security and prosperity are 
taking firmer root in Bosnia; security cooperation in Asia is 
on the rise, after slowly being transformed by new leaders and 
fresh thought; and the rule in the Western Hemisphere is 
interdependence, democracy and cooperation. I think we have 
also undertaken to adapt and strengthen key alliances, major 
bilateral relationships and regional organizations to these new 
realities.
    Taken as a whole, these efforts are paying dividends. 
America is prosperous at home and is leading the world into a 
promising 21st Century. Yet, while we thrive at home, we should 
not become complacent or ignore the challenges beyond our 
borders. Regional conflicts, the proliferation of weapons of 
mass destruction, persistent attempts to undermine or overthrow 
legally constituted governments, the ongoing crisis in Iraq 
should serve to remind us that tyrants and terrorists endure 
and that threats to democracy, justice and stability persist.
    If Americans are to be secure in such a world, if our way 
of life is to continue to prosper, if the freedom we treasure 
is to remain as a beacon for others, then we must be willing to 
dedicate our resources to protecting and enhancing America's 
national interests. And, so, I am here this morning to ask once 
again for your support.
    In Europe, expanding NATO and cultivating peace in Bosnia 
are two elements necessary for a secure and undivided Europe. 
Our security assistance request focuses on assisting our 
friends in Central Europe and the Former Soviet Union through 
programs such as the Partner For Peace, low-cost Central 
European Defense Loans, and Military Education and Training.
    In the Middle East, we seek to continue our work for a 
comprehensive and lasting peace where both Israel and her Arab 
neighbors are secure enough to take risks for peace and can, 
together, reap its benefits.
    Accordingly, I ask the committee to support military and 
economic assistance for Israel and Egypt, while also backing 
our proposals for a Middle East and North African Development 
Bank, and for providing assistance to the Palestinian people 
and to Jordan, where King Hussein has been an unshakable and 
courageous supporter of peace.
    In Asia our budget request supports U.S. interests in 
fortifying our core alliances, maintaining our forward 
deployment of troops, continuing implementation with our 
partners of the Agreed Framework, which is dismantling North 
Korea's dangerous nuclear program, and working with ASEAN and 
other regional leaders to encourage a return to representative 
government in Cambodia.
    Latin America continues to make great strides. Today except 
for one lonely exception, every government in the hemisphere is 
freely elected. Central America is without conflict for the 
first time in decades and Peru and Ecuador are making 
significant progress to end their border dispute. However, the 
region still faces many challenges. Our budget request supports 
continuing market-based economic reforms, strengthening 
democracy and the rule of law, building regional cooperation on 
defense and security matters, and working with the region's 
militaries to develop sound military strategies and doctrines.
    In Haiti, the challenges of shaping democratic institutions 
and a market economy have been especially difficult. 
Unemployment, hunger, poverty and adequate education and poor 
health all continue to hold Haiti back. Our request reflects 
increased assistance to help our neighbor in the Caribbean join 
the rest of the region on the path to prosperity and stability.
    In Africa, a new era is emerging. Today many old conflicts 
are being settled, countries are beginning to modernize, 
centralized economies are giving way to open markets and civil 
societies are beginning to flourish. However, we need to stay 
engaged to achieve the peace within reach in Angola, to 
consolidate peace in Liberia, to nurture a thus far elusive 
peace in Sudan and Somalia, to encourage justice and 
reconciliation in the face of conflict and violence in the 
Great Lakes region and to cultivate the African Crisis Response 
Initiative so that African militaries can better respond to 
humanitarian and peacekeeping crises on the continent.
    We will continue to champion a cause that I know is of 
great concern to many on this committee and in the Congress. 
Through the President's Demining 2010 Initiative we are 
committed to ensuring that civilians in every country, on every 
continent are secure from the threat of land mines by the end 
of the next decade.
    Mr. Chairman, many of our programs and concerns are 
addressed to particular countries or parts of the world but 
there are threats, such as land mines, that defy borders and 
regions and can best be considered in global terms. The 
proliferation of weapons of mass destruction, delivery systems 
and advanced conventional weapons now pose the principal direct 
threat to the security of the United States, our forces and our 
allies and friends.
    The arms control and nonproliferation efforts remain a key 
part of our foreign policy strategy to keep America safe. We 
are engaged in strenuous efforts to limit and reduce 
destabilizing forces, curb the spread of weapons of mass 
destruction, and build confidence through transparency and 
verification of arms control compliance.
    In Iraq our work is focused on containing Saddam Hussein's 
desire for nuclear, chemical and biological weapons. We must 
also ensure that no other nation takes Iraq's place as a menace 
to peace and stability.
    The United States is determined to take these threats head 
on and we request your assistance in providing us the necessary 
resources. Working bilaterally through the science centers in 
Russian and Ukraine, though export control programs and the 
Nonproliferation and Disarmament Fund, and multilaterally 
through the IAEA, KEDO and the CTBT Preparatory Commission, we 
seek to stem the unrestrained flow of sensitive materials and 
technology that risks the well-being of the American people and 
our friends and allies, both now and in the future.
    The funding of our security assistance budget has a 
quantifiable impact. It protects American lives, it allows all 
Americans to thrive and prosper in a stable, peaceful, and open 
international system. U.S. security depends on restrengthening 
our alliances, resolving regional conflicts, limiting the 
proliferation of destabilizing weapons and assisting democratic 
forces in emerging or threatened democracies. We are fortunate 
to have both the will and the resources to fulfill our goals. 
And the work of this committee has enhanced American leadership 
around the world.
    Mr. Chairman, I wish to thank the members of the committee 
for this opportunity and I will do my best to answer your 
questions.
    [Mr. Holum's written statement follows:]


[Pages 139 - 159--The official Committee record contains additional material here.]



    Mr. Callahan. Thank you, Mr. Secretary.
    Mr. Slocombe.

                    Mr. Slocombe's Opening Statement

    Mr. Slocombe. Mr. Chairman, this is, if I remember 
correctly, the fourth time that I have had the honor and the 
pleasure of appearing before this subcommittee with respect to 
the security assistance appropriations.
    I want to begin by once again expressing the Department of 
Defense's appreciation for the leadership that this 
subcommittee and you, in particular, Mr. Chairman, have shown 
in support for the security assistance program.
    Like the rest of this bill it is not a particularly popular 
program, but it provides essential instruments by which we 
protect our national interests worldwide and advance our 
national security.
    As in the past, I will focus my discussion primarily on the 
parts of the account which are either administered by the 
Department of Defense or are of special interest to the 
Department of Defense. But I want to make the point that the 
overall appropriation for foreign operations is an important 
part of our national security effort. In the Department of 
Defense we focused, obviously, on the military component of 
protecting national security but the broad non-military 
instruments which are provided for in this bill are also 
critical and in almost all cases preferable.
    The security assistance budget, in particular, provides us 
with the tools with which we can stay engaged in the world and 
help to shape events in regions vital to American interests.
    Let me just identify a few parts, in particular, that I 
want to call the subcommittee's special attention to. Let me 
begin with the International Military Education and Training 
Program, IMET. This is perhaps our most cost-effective security 
assistance program. It fosters military to military relations 
and promotes military professionalism, both of which are key to 
our ability to quickly and effectively conduct joint operations 
with friendly countries and to contribute to the ability of 
those countries to defend themselves.
    In addition to the regular IMET which provides military 
training, the expanded International Military Education and 
Training Program addresses issues of military justice, respect 
for human rights, effective defense resource management and 
improved civil/military relations.
    All of the courses provided under this program contribute 
to our objectives of building democracy and broadening respect 
for American values in such areas as Central America, Africa, 
and the newly independent states.
    Recognizing that the recommendations are controversial, I 
want to be clear that the Department of Defense supports the 
funding request for IMET for Indonesia and Pakistan. Both of 
these countries are of critical importance in their development 
in the coming years; in Indonesia, in particular, with the 
Asian financial crisis.
    There are also countries in which for better or for worse 
the military plays a key role in the politics and in the 
development of and stability of those countries. It is in our 
interests that the rising generation of officers in those 
countries be trained in the United States rather than in other 
programs.
    Across the world, graduates of both the regular and the 
expanded IMET programs frequently rise to positions of 
significant responsibility in their home countries. This is a 
factor that can be of considerable importance in building 
positive government-to-government and military-to-military 
relationships.
    For this reason and for the broader purposes I outlined 
before, the Commanders-in-Chief of the Unified Commands have 
consistently identified IMET as a key tool for carrying out 
their mission of building solid military relationships with the 
countries in the regions of which they are responsible.
    Under Secretary Holum has mentioned the requests for 
support for our allies and friends in Europe. This is 
significantly the first year in a very long time that there is 
not a request for security assistance funding for Greece and 
Turkey reflecting the developments that have taken place in 
those countries.
    Reflecting the changes since the end of the Cold War, we 
are requesting funding of both grant funding and support for 
loans for countries in Central and Eastern Europe. This funding 
supports NATO's Partner for Peace program and is critical to 
helping ensure that Poland, the Czech Republic and Hungary can 
be ready to accept the military burdens of NATO membership. It 
also helps keep the door open to countries that are not yet 
invited or that have no particular interest in joining NATO but 
in whose stability, independence and freedom we have a strong 
national interest.
    The bulk of the money in the security assistance program, 
of course, goes to the Middle East. We support those requests. 
I understand the great attention that the subcommittee has 
devoted to this issue and your concerns that you identified, 
Mr. Chairman, in your opening statement. I want to make 
particular reference to the funding which is provided for 
Jordan.
    We are requesting in the Fiscal Year 1999 budget $45 
million in FMF for Jordan to support the squadron of 16 F-16 
aircraft for which Congress has appropriated funds in recent 
years. I simply want to make the point that that program is on 
schedule and within the budgetary constraints which were 
established when we came up and made the extraordinary request 
which the subcommittee supported some years ago.
    There is also funding in the so-called NADR account which I 
can never remember what it stands for. It is nonproliferation 
anti-terrorism, demining and related programs. One part of that 
supports the State Department funded demining program which is 
an important aspect of President Clinton's Demining 2010 
Initiative. The accomplishments of this program and the related 
programs conducted through the Department of Defense have had a 
striking impact on dealing with the very serious problem of 
land mines left over from conflicts in the Third World.
    There is funding also requested for enhanced peacekeeping 
authority for the Africa Crisis Response Initiative and for 
other programs that are of concern to the Department of 
Defense.
    I also want to make reference to the funding request for 
KEDO. The problems which you identify in the financial support 
for KEDO are real and need to be dealt with and I fully endorse 
your proposition that other countries should be making expanded 
contributions to this program and that they should pay the 
amounts that have been pledged so that KEDO does not have to go 
into the market and borrow money, and also so that with more 
regular financing they are able to buy the heavy fuel oil on a 
more regular basis. One reason the costs are high is that they 
tend to have to buy in the spot market which drives the price 
up. However, all that said, the Agreed Framework is a very 
important element of our security posture in Northeast Asia.
    As you know, the two areas where we focus on the so-called 
major regional contingencies, the major theater of wars, are 
the possibility of renewed aggression in the Korean Peninsula 
and the possibility of renewed aggression by Saddam Hussein. In 
the Korean case, the problems will be vastly increased if the 
North Korean regime were able to continue to produce nuclear 
material at the Yongeyon facility which has been closed down as 
a result of the Agreed Framework and continued support for the 
KEDO effort which is an integral part of the Agreed Framework 
is extremely important to our security in that region.
    There are a number of other issues that I am sure the 
subcommittee will want to ask about, but for you and Mr. Holum, 
Mr. Yates set a distinguished example in brevity, so I will 
stop now.
    [Mr. Slocombe's written statement follows:]


[Pages 163 - 170--The official Committee record contains additional material here.]



                      middle east development bank

    Mr. Callahan. Well, thank you, Mr. Secretary.
    First, let us talk about the Middle East Development Bank. 
I do not know why the Administration keeps coming up here with 
a request for monies to fund the Middle East Development Bank 
since there is no Middle East Development Bank participation by 
the United States and I assume that you just put that in there 
to give us something to cut. [Laughter.]
    I do not know whether that is the case or not but if, 
indeed, that is the case here, your wishes are going to be 
granted. [Laughter.]
    You know, this committee is not supportive of that Bank or 
the expansion of development banks. I think we provide 
financing capabilities for the Middle East, all countries in 
the Middle East, and certainly some of them are financially 
able to support themselves. So, I do not think we are going to 
make any contributions to that.
    This goes all the way back to Secretary Warren Christopher. 
I can recall in my first committee hearing with Secretary 
Christopher request I instructed him not to buy any green eye-
shades which is a connotation that people who work in banks 
wear green eye-shades. I know they do not any more but I would 
not expect that you ought to go out and spend any money on 
green eye-shades for employees of the new bank.
    I have already expressed my concern about KEDO and I want 
to encourage you, Mr. Secretary, that before you borrow any 
more money you come back before this committee. We are not 
going to put it in bill language requiring you to do that, but 
I do not think this debt ought to grow substantially more in 
size without this committee at least being aware of what is 
going to be perceived some day as an obligation of the United 
States.
    And I know that we are not signing the note, or we are co-
signing the note but we are putting up collateral of an 
agreement that the other countries are not coming forth with, 
with respect to cash monies. And you know the economic problems 
in the Far East and they have got all these problems and we are 
having to enhance the International Monetary Fund to go in and 
bail them out and then we are borrowing money and signing our 
names to it and saying, well, they are going to give us some 
money.
    Anyway, I think you get the gist of it. And we are going to 
have to request, respectfully, that before you borrow any more 
money for this program that you come back to this committee to 
at least inform us of your intent rather than letting this 
thing grow to $200, $300 million and then coming in here like 
they do with everything else saying, this is an arrearage and 
we owe this money and we have got to pay our debts. We do not 
want to get in that position.
    So, with that I am going to yield to my colleague, Mr. 
Yates.
    Mr. Yates. Thank you, Mr. Chairman.
    Gentlemen, last week we were on the verge, we, the United 
States was on the verge of a strike against Iraq, and Saddam 
Hussein. You are State and Defense and you connect the foreign 
operations program with the Administration. Are you lonesome? 
Does the White House consult with you? Why is it that you are 
not more persuasive with some of our Arab neighbors in 
persuading them to permit us to use bases and other things, as 
well?
    Mr. Slocombe. In each case when we ask for what we needed, 
we got it. We did not ask for what we did not need. But when we 
asked, we were given the various clearances and information 
that we required.
    Mr. Yates. Is that true of landing rights in Saudi Arabia 
or did you not want that?
    Mr. Slocombe. We, of course, operate hundreds of airplanes, 
combat airplanes out of Saudi Arabia on a daily basis.
    Mr. Yates. I know.
    Mr. Slocombe. On a continuing basis.
    Mr. Yates. But none would be permitted to strike.
    Mr. Slocombe. I do not want an open session to discuss in 
detail what arrangements we have with a particular country.
    Mr. Yates. I see, all right, I respect that.
    Mr. Slocombe. I do want to make the point that----
    Mr. Callahan. I guess the question that Congressman Yates 
is asking is do they consult with you? I mean do we use our 
economic support and our military financial support, do they 
consult with you or do they just ignore you and go do on their 
own whatever they think is necessary?
    I think he is asking the question about consultation, do 
they include you?
    Mr. Slocombe. They being?
    Mr. Callahan. They being the President or whoever makes the 
decision, the Secretary of State.
    Mr. Slocombe. As to where we spend the money or----
    Mr. Callahan. Well, are they saying to you, we need the 
assistance of Saudi Arabia, we need the assistance of other 
nations that we provide military financing for. Do they consult 
with you and say, are these----
    Mr. Slocombe. There is very close consultation between the 
State Department and the Defense Department, both in 
constructing these budgets----
    Mr. Callahan. I am sorry.
    Mr. Yates. No, you are absolutely right.
    Mr. Slocombe [continuing]. Both in constructing these 
budgets which, of course, is a long-term matter which is done 
as a part of the general budget preparation, and also in terms 
of coordinating in the case of a crisis like this. There have 
been literally virtually daily meetings of the so-called 
principals committee, which is the Secretary of State and 
Secretary of Defense, National Security Advisor, the Chairman 
and Joint Chiefs of Staff, the Director of Central 
Intelligence, going over such issues as making the necessary 
appeals, the necessary requests, getting countries to help.
    Some two dozen countries have contributed forces or pledged 
to contribute forces that are on the way to the region.
    Mr. Yates. Can you list those for the record, please, or is 
that classified?
    Mr. Slocombe. Again, I can list some, certainly. The best 
thing to do is to list the ones that are already there that I 
am sure are already there. The British have a carrier and a 
couple of other ships, several fighter aircraft which are in 
Saudi Arabia on a continuing basis and they have augmented that 
capability. But when Secretary Cohen was at Al-Jabar Air Field 
in Kuwait there were British planes on the air strip.
    There is an Australian SAS, which is Special Air Services 
Detachment, which has arrived in Kuwait. Its mission would be 
to help participate in the combat search and rescue, to rescue 
downed pilots.
    Mr. Yates. This is the British Empire then that is joining 
with Tony Blair.
    Mr. Slocombe. The British are a good ally.
    Mr. Yates. Okay.
    Mr. Slocombe. The Argentines----
    Mr. Yates. Who else can we say the same for?
    Mr. Slocombe. All of the NATO countries----
    Mr. Callahan. Australia.
    Mr. Yates. Australia. [Laughter.]

                                  nato

    Mr. Slocombe. Who are good allies. I thought you meant who 
else was contributing. All of the NATO countries have 
cooperated in one way or another (even Iceland) with the single 
exception of Greece, which has its own relationship to the 
Middle East, and Luxembourg which has a rather modest military 
capability.
    We have been in discussions with a number of other 
countries outside Europe, although there is no question that we 
have received the strongest backing from the European 
countries.
    Mr. Yates. I have a feeling that you must be feeling kind 
of lonesome. I mean we, the United States must be feeling kind 
of lonesome after the coalition that President Bush built when 
we went into the Gulf War. Of course, this is not as massive or 
as majestic an engagement as the Gulf War. And presumably a 
surgical air strike is a smaller mission, something that you 
use and then you are through with. Although I do not know that 
will suffice in the case of Saddam Hussein.
    And I wonder where is your influence? Where is the 
influence as the Chairman was asking you, where is the 
influence of this program in persuading people? Does it have 
any or do you not use it?
    Mr. Slocombe. It does have substantial influence and one 
way in which, for example, we build our relationships with the 
Arab countries who, obviously, do not get any--the countries in 
the Arabian Peninsula in the Gulf, obviously, do not get any 
foreign assistance money--is through our foreign military sales 
program, through our training programs, most of which are paid 
for. So, that these programs are an important part of the way 
in which we build relationships.
    The IMET program, in particular, is a matter of building 
long-term relationships and it is striking how often when we go 
out and visit these countries and their people come here the 
senior officers have participated in American training 
programs. That means that they speak English, it means that 
they have the knowledge of the United States, it means that 
they have friends in the United States.
    Mr. Yates. Good. How much cooperation are you getting from 
Egypt?
    Mr. Slocombe. The Egyptians have provided over-flight and 
clearance rights, which is obviously essential. We have not 
asked them, because for the reasons you state, we do not think 
that for the kinds of operations we had in mind there was any 
meaningful contribution that the Egyptians could make.
    And I will not beat around the bush, it would have been 
difficult for the Egyptians to agree. We do not, being 
sensible, ask people for things that we do not need when we 
know it would be difficult for them to do it. The fact is 
that----
    Mr. Yates. The Arab League, in this case, is sacrosanct, is 
it not?
    Mr. Slocombe. I am not sure I understand what you mean by 
that.
    Mr. Yates. Well, I mean the unity of the Arab League in 
that they do not want to attack another Arab nation.
    Mr. Slocombe. Well, nobody wants to attack Iraq and they 
are----
    Mr. Yates. Well, I used the wrong word.
    Mr. Slocombe. Their problem is that they have to deal, even 
countries that are not in any sense democratic, with the 
opinion of the mass of their population. They are not eager to 
be seen as joining in an attack on another Arab country. 
However, and I want to repeat this, we got basing rights in a 
number of Gulf countries, we got rights to fly aircraft over 
their air space, we have got the various kinds of support and 
participation that we actually need.
    We will have to be ready to launch a very, very substantial 
strike if it turns out--if there had not been an agreement we 
would have done it--and if it turns out that he is not, Saddam 
Hussein is not going to do what the agreement requires, we will 
do it. We have that capability today.
    Mr. Yates. The one question that seems to be predominant 
among my constituents is, assume you make your strike, what 
happens after that? You have a massive strike. I do not know 
whether you are able to eliminate the biological and chemial 
weapons as a result of that strike.
    What happens after that? You are not going to occupy Iraq, 
are you?
    Mr. Slocombe. From the President on down, the 
Administration has been candid in saying there is no way that 
any military strike can eliminate all of Iraq's weapons of mass 
destruction program. That six weeks of bombing during Desert 
Storm did not and obviously a more limited, though large 
attack, would not.
    What we would be able to do and what the strike which is 
planned would do is deal a very, very heavy blow to that 
program and, in particular, to its, central nervous system and 
its ability to deliver the weapons. It would not permanently 
eliminate it.
    Mr. Yates. That would assume you know their location then 
and inspectors can go there.
    Mr. Slocombe. Again, I do not want to go beyond what I just 
said in terms of what the target plan is in an open hearing. 
But, no, by definition we do not know the location of all of 
the elements of his program because that is what the dispute 
about inspections and UNSCOM access is.
    We do know where key parts of the program are and in 
particular we know a lot about what he would have to do if he 
wanted to go from a potential program, which he may have 
retained limited--certainly has retained the capability to have 
a program--and he may have retained limited amounts of stocks 
and so on.
    But to have a large-scale program that would be militarily 
significant we know a lot more about where the facilities that 
would be necessary to support that kind of a program are and 
they are much more susceptible to targeting.
    Mr. Yates. Thank you, Mr. Chairman. I have taken enough 
time.
    Mr. Callahan. Mr. Wolf.
    Mr. Wolf. Thank you, Mr. Chairman.

                          indonesia/east timor

    I have a question with regard to Indonesia and East Timor. 
I want to give you a brochure, if you take a look at it, 
showing the Indonesia military torturing people on East Timor. 
I was in East Timor last January and we saw young men who had 
their ears cut off and terrible atrocities. There was also a 
report that the U.S. Green Berets continue to train Indonesian 
Kopassus, their so-called Special Forces and U.S. Marines are 
training Indonesian Marines and the Kopassus forces have been 
implicated.
    Why can we not just--particularly since I heard on the 
radio today that President Clinton has spoken to the President 
of Indonesia twice in the last several weeks with regard to the 
IMF--why cannot we just tell them both through our military and 
State Department, draw down the forces on East Timor and allow 
the people there to have relative freedom. Why cannot we do 
that? And I am worried that our military effort is in essence 
resulting in more violations. And I would ask you to look at 
that brochure and to get back to me if you would on your 
comments and thoughts with regard to that.
    Could you tell me that?
    Mr. Slocombe. There is, of course, no military assistance 
program for Indonesia. And the United States has consistently 
made clear that we object in the strongest possible terms to 
human rights abuses by the Indonesian regime. We have tried to 
work with them to put a stop to those abuses and it has not--
they have, by no means, entirely stopped.
    I think it is something that the Indonesian military is 
aware that it is a problem that they need to address. Just 
telling them to do it does not make them stop.

                                  imf

    Mr. Wolf. No. But we are bailing them out on the IMF. The 
rupiah has dropped about 80 percent in the last several months. 
We are giving them assistance. I understand former Vice 
President Mondale is going out there this weekend. Is there not 
the mechanism though--this would be good for Indonesia.
    This would actually help Indonesia. One, the forces that 
are on the island are taking a lot of money. Secondly, I think 
that from a publicity point of view, PR, it would be good for 
the Indonesian government and help strengthen them if they were 
to draw down the forces on East Timor and just allow the people 
to have relative autonomy, but, certainly, not pulling people 
out in the middle of the night.
    We were told that at 1 or 2 o'clock in the morning, 
military was coming in and hauling young kids out and moms and 
dads not seeing them again. And our government has a good 
relationship, our military. When I met with their military they 
like our military. And we have a good relationship. We should 
use that relationship to make things change for the better on 
East Timor.
    More than just speak out once or twice about it. Bishop 
Belo, the Catholic Bishop, got the Nobel Peace Prize, and a 
year has gone by and more killing and it continues to take 
place.
    Mr. Slocombe. We have repeatedly raised these issues with 
the Indonesian government and with the Indonesian military and 
I think that in part the issue is how best to influence a 
regime like that. One approach is to say that these--and they 
are genuinely shocking and inexcusable--that they are so bad 
that we should have nothing to do with the regime or the 
government or the military, even though in many other areas we 
have common interests with Indonesia and we certainly have an 
interest which is a hard-headed domestic economic interest----
    Mr. Wolf. I agree.
    Mr. Slocombe [continuing]. Of not seeing Indonesia collapse 
economically.
    Mr. Wolf. I completely agree with that.
    Mr. Slocombe. And the question having to do, for example, 
with whether or not to provide IMF funding for Indonesia, is 
the question of what is the best way to build the kind of 
relationship with the Indonesian military where when you convey 
a message like this, which I completely agree with is the 
message, it is listened to?
    Mr. Wolf. I think we can talk, I would like you to comment 
on that and also I think the answer is for the Secretary of 
State to publicly speak out. I think Indonesia is a friend. We 
want them to prosper, we want their economy to do well. We also 
want the 550,000 people on East Timor to be able to live in 
freedom and have relative autonomy.
    I think by doing that and drawing the forces down you 
actually help Indonesia. So, the recommendations is as a friend 
you come along side and say, you are out of control, this is 
not a good idea, stop it. And I think--but we never hear any 
comments. And, you know, Web Hubbell was hired by people 
connected to the Riady family and went out to East Timor after 
he left the Justice Department. So, there is a feeling that 
this Administration is not willing to publicly speak out on 
these issues.
    So, if you could, you know, get back to me. I do not want 
to take too much time on that, but if you could comment on both 
that I would appreciate it.
    The other thing is that on the $5 million with regard to 
the Ethiopia and the countries surrounding Sudan, have you 
actually expended that money? Last year, you were helping 
Uganda, Ethiopia, Eritrea, what is the status of that effort?
    Mr. Slocombe. I will have to get you the precise numbers 
but I know at least part of it has been expended, yes.
    [The information follows:]

    For FY97, $4.75 million was allocated to the Front Line 
States program. Of the $4.75 million, Ethiopia receive $1 
million; Eritrea received $1.75 million; and Uganda received $2 
million. Ethiopia is using the funds to support their C-130 
program. So far, Ethiopia has obligated $862,000 of $1 million 
allocated. Eritrea has not obligated any of $1.75 million 
allocated. Uganda has obligated $476,000 of $2 million 
allocated which transported their FY96 equipment from the U.S. 
to Kampala.
    For FY98, $5 million has been allocated to the Front Line 
States program. To date, State Department has not made actual 
country allocations.
    In response to your question if we are doing enough, 
program funding is sufficient. For FY99, $5 million has been 
requested for the Front Line States program.

    Mr. Wolf. Part of it. Do you know how much of it?
    Mr. Slocombe. I do not have the exact figures.
    General Davison. We do not have that at our fingertips but 
the expenditures involve the training assistance of their 
cadres on demining, and those kinds of things that are going 
on.
    Mr. Wolf. Are we doing enough? The assassination attempt on 
President Mubarak came from people who are back inside of Sudan 
now. Are we doing enough to help with that?
    Mr. Slocombe. I think the problem is not money, is not 
dollar limited. It is not an easy problem to deal with the 
threat that Saddam poses to his neighbors. And I understand 
your point that it ought not to be dollar-limited and I think 
it is not dollar-limited.
    Mr. Wolf. Okay. If you could come back and tell me how much 
has been expended and what----
    Mr. Slocombe. Let me make sure I understand the question. 
There is a certain amount that is allocated for the front-line 
states, and how much of it is actually been expended?
    Mr. Wolf. Right. And is that level enough and should we be 
doing more?
    Mr. Slocombe. That is a readily determinable question but 
even in this type of stuff I am pretty sure I do not have the 
answer.

                                 bosnia

    Mr. Wolf. The last thing is just a comment. You do not have 
to even comment on it. In December we went to Bosnia--it was my 
sixth trip there--to kind of spend some time with a National 
Guard unit from my district and also with the troops up in 
Tuzla. They are doing an amazing job but they are stretched so 
much. The average man or woman that we spoke to had been in 
Somalia, Haiti, Desert Storm----
    Mr. Slocombe. Is this civil affairs unit?
    Mr. Wolf. No. Some had been back in Bosnia for the second 
time and many were telling me that the impact on their families 
was very, very difficult. I believe that the divorce rate was 
very, very high. They were telling me stories, whereby, they 
would listen at the telephone where somebody was talking to a 
loved one back home and the difficulties.
    And I really believe that they are stretched so thin and 
have been gone so long that this is something that I think that 
the military really is going to have to address. And it is just 
not enough to say that, you know, they are doing a great job, 
as they are, but I think the personal impact on their families 
is so great that I think there is going to be great pain.
    Mr. Slocombe. There are particular high-demand, low-supply 
units. Some of them in the reserves, some of them in the active 
forces. But this is a particularly serious problem. And I know 
that Secretary Cohen and General Sheldon are very conscious of 
it as are the service Chiefs. It tends to take time to fix 
because you have got to create more units of the relevant kind.
    Mr. Wolf. Thank you, Mr. Chairman.
    Mr. Callahan. Mrs. Lowey?
    Mrs. Lowey. Thank you, Mr. Chairman.

                                  imet

    Welcome, Mr. Secretaries. Before I get back to the Middle 
East, I would just like to follow-up on my colleague, Mr. 
Wolf's question regarding IMET. What has puzzled me and I would 
appreciate your comment and some of us are thinking of 
legislation in that regard, is why we would allow countries to 
purchase IMET training, military assistance, if, in fact, we 
have had a compelling reason to prohibit them from being part 
of our grant program?
    Would you respond to that, please? And I am specifically 
referring to our Fiscal Year 1998 Foreign Operations Report 
which suggests the development of global guidelines to screen 
IMET participants for human rights abuses. So, if they cannot 
be part of our grant program, it seems to me a problem if we 
can allow them to purchase this assistance?
    Mr. Slocombe. First of all, everybody who participates in 
any of our military training programs, IMET and other kinds, 
will now be subject to the process which was established in a 
cable which went out in December which has been reported to the 
subcommittee where the host government is required to make 
inquiries about human rights abuses, other kinds of drugs, 
crimes, corruption, that kind of thing.
    And then the embassy in the sending country also has to 
follow-up and make its own inquiries and keep records. So, that 
that issue applies to both purchased IMET and to grant IMET.
    We are certainly aware of the concerns of the committee and 
that Indonesia has purchased in Fiscal Year 1997 a total of 12 
courses at the Defense Institute for Security Assistance 
Management, the international defense management course, the 
advanced language instructor course, the one basic officer's 
training course and one international hydrographic management 
and engineering program course.
    It has been the position of the Department of Defense--
those were all in Fiscal Year 1997--it has been the position of 
the Department of Defense that in the absence of a specific 
provision in the statute the restrictions on grant IMET do not 
apply or are not understood to apply to purchased IMET. 
However, we are conscious of the subcommittee's concern in that 
respect.
    I believe that it is in the interest of the United States 
that programs of these kind should be made available to 
countries that are prepared to put their own funding into 
paying for them. And it is in our interest to have those 
programs continued. I think there is a difference and a 
legitimate difference between the relationship that you are 
prepared to pay for a foreign country to have and the situation 
where they are using their own funds. That is the rationale for 
the decision.
    Mrs. Lowey. I will not pursue this now, but at some other 
opportunity I would appreciate some additional information 
because it has been brought to my attention that a lot of the 
screening is ad hoc, it is inadequate, it is certainly not 
thorough. And I would appreciate the opportunity to talk with 
you further about it.

                              middle east

    Back to the Middle East because certainly that has been the 
focus of this Congress and this Administration in the last 
month or so. I would like to say personally that I think that 
the Administration was firm, kept on target and it has ended 
for the time being in a satisfactory way.
    Many of us have been very concerned about the flow of new 
technologies, many from the United States, that have entered 
the arsenal of Arab States in the region. In fact, often before 
Israel even buys the same systems. We have always felt, as the 
important ally in the region and a solid democracy in the 
region, it was very important for Israel to maintain its 
military security.
    I wonder if you could discuss with us Israeli Finance 
Minister Neeman's recent proposal? What is your reaction to it? 
Keeping Israel's military expertise in balance is very 
important to the stability of the region. Could you discuss it 
with us?
    Mr. Slocombe. We are certainly committed to maintaining 
Israel's qualitative edge. And in addition to the very 
substantial funding, which dwarfs that which goes to any other 
country in the world, which is provided through this program, 
we have, as I am sure you know, a number of other cooperative 
programs to support Israel's security.
    That includes importantly the very substantial funding for 
the Israeli aero-tactical missile defense program, which is a 
cooperative program we do because we receive benefits as well. 
It is not a part of the funding which is in this program.
    Mrs. Lowey. Could you comment on the acceleration of that 
program in light of what is happening in terms of proliferation 
in that region?
    Mr. Slocombe. The Israelis are proceeding with the program. 
They would like funding for an additional battery. And that is 
one of the subjects which we are discussing with them as a part 
of our continuing discussion on their long-range programs. We 
also provide support for the nautilus--was the popular name for 
it--which is an anti-katyusha system, which is outside this 
program. There is, as you know, very close cooperation on 
intelligence and other issues.
    So, I think we give a very strong priority to maintaining 
Israel's qualitative edge. We also believe that it is in our 
interests and, indeed, in an important sense, in Israel's, that 
the moderate Arab states be able to provide for their own 
defense. And, so, we provide substantial, we have substantial 
sales programs with those countries.

                  proliferation of military technology

    Mrs. Lowey. Another area that I personally and many of us 
have been concerned about is the proliferation of military 
technology into the region by countries such as China and 
Russia. I know the Administration had some successful 
negotiations with China. Has China honored its commitment on 
proliferation? Can you give us some accounting? And what are we 
doing to ensure that the proliferation of nuclear technology is 
not actually happening? And, in fact, that it has been 
completely shut down, certainly with Iran, and also with the 
entire region.
    Mr. Holum. Well, we are pursuing relations with China, 
discussions with China, on a whole range of proliferation 
concerns. These concerns are central to our relationship with 
both China and Russia.
    Since October 1984, we have no evidence that China has 
violated its agreement not to provide MTCR-class missiles to 
any country.
    There are some concerns that they may have a slightly less 
restrictive evaluation of what the specifics of the coverage 
are but----
    Mrs. Lowey. How do we evaluate their description of their 
coverage?
    Mr. Holum. Those are issues we continue to pursue with 
them. And it is not that we had an agreement in 1994 on missile 
technology so that we can forget about it. It is something that 
we followup on on a regular basis. Whenever there is an export 
or any indication through intelligence or other sources that 
something worrisome is going into the Middle East or to any 
other region, we followup on it. We go directly to senior 
officials in their government and ask for an explanation.
    Mrs. Lowey. What about with Russia? There have been 
articles in the New York Times, my colleague just mentioned it, 
about the Russian technology being transferred to Iran which 
seems to be sent with the express approval of the Russian 
security agencies?
    Mr. Holum. If you are referring to the missile----
    Mrs. Lowey. Right.
    Mr. Holum [continuing]. Which has been the focus, let me 
start by saying that that specific issue has had more attention 
at every level of our Government with the Russians than any 
other issue I am aware of in the last five years. It has been 
raised repeatedly and routinely. Ambassador Wisner, as you 
know, has been the special representative of the President to 
engage with Mr. Koptev, the head of the space agency in Russia.
    There have been some significant developments. On January 
22nd, the Russian Government issued an executive order signed 
by Prime Minister Chernomyrdin that specifically limits and 
controls exports, not only of relevant technologies, which 
would be covered by the Russian membership in the missile 
technology control regime, but also any other assistance to a 
missile program that might be helpful, the so-called catch-all 
provision that we have been pushing.
    There have also been--and I cannot go into detail for you 
in an open session--but there have been some indications since 
then of actual practical impact on the ground of all these 
representations. We still have a lot more to do. We are still 
working. It will be a major item of conversation during the 
Gore/Chernomyrdin discussions on March 9th and 10th because the 
Russians still have to live up to the undertakings that they 
have made in our discussions.
    We also have to keep in mind that a great deal of 
technology has already gone. It is unclear whether there was 
actually Russian Government acceptance of the transactions but 
some technology has gone in the past to Iran and has allowed 
for greater progress, as George Tenet, the CIA Director, has 
testified, than he had earlier expected in their missile 
program.
    But these new Russian programs are vitally important now 
and can substantially delay Iranian capability to mount an 
offensive missile capability.

                              middle east

    Mrs. Lowey. And just lastly, if I can go back to the 
question before. I know the Chairman welcomed the proposal by 
Neeman, which followed up on Prime Minister Netanyahu's 
commitment to eventually wean away the economic assistance. I 
think this committee understands the complexity of that area of 
the world and the importance of bolstering the security 
assistance to Israel, be it from this budget of the security 
budget, through Nautilus or through Arrow, could you comment on 
this?
    Mr. Holum. The chairman, I think, summed it up exactly 
correctly both in understanding that we do not have all the 
details yet, but also welcoming what the Israeli Government is 
proposing. We certainly do welcome the proposal. It is, in 
fact, as the Chairman said, a direct reflection of the success 
of the economic part of our relationship with Israel over the 
years that they are now in a position to phase down the 
economic portion of the aid package.
    As I understand the plan, this would be phased down over a 
period of years, 10 to 12 years, and during the same time frame 
they would like to have the military assistance part grow. That 
is something that we will look at very closely in consultation 
with the Israelis and also obviously in consultation with this 
committee.
    Mrs. Lowey. Well, thank you, and I would just like to 
reiterate again that as the peace process moves forward we 
hope, although with a great deal of difficulty, the security of 
that region depends a great deal on the strength of the Israeli 
military and I have felt in a time like this that our support 
for increases in that budget are absolutely defensible.
    I thank you very much. I think I have taken enough time, 
Mr. Chairman.
    Mr. Callahan. Mr. Knollenberg.
    Mr. Knollenberg. Thank you, Mr. Chairman.
    Welcome this morning, gentlemen.

                                  kedo

    I want to go back to KEDO. KEDO has become more significant 
lately because of the financial crisis in that area of the 
world. And as both you gentlemen know very well, part of the 
agreement was to provide for two light water reactors. The fact 
that is troubling to me and I think maybe to members of this 
committee is the fact that, under the terms of that agreement, 
the North Koreans did not have to dismantle the plutonium 
producing capacity at that site until both nuclear reactors are 
running.
    Now, that is what the word----
    Mr. Slocombe. They have to keep it shut down.
    Mr. Knollenberg. Pardon?
    Mr. Slocombe. They cannot operate it. They do not now 
operate it.
    Mr. Knollenberg. I have been impressed by briefings where 
that is a little questionable, too.
    Mr. Slocombe. With respect, sir, there are IAE inspectors 
who live at Yongeyon. In fact, there is no question that the 
facility is shut down.
    Mr. Knollenberg. Let me go a step further then. In light of 
the problem we are having right now, the fact that South 
Korea's President-Elect and he may be the president by this 
time--has stated that Japan and the U.S. must contribute more 
to KEDO. He states that South Korea cannot afford to contribute 
its share, and he is under IMF pressure as well.
    And, so, the concern is that who, if South Korea cannot, is 
going to pick up the slack here to ensure that this agreement 
does not topple, because if it does topple, I know they 
mentioned already the chaos it would create.
    My concern is, who then is going to pick up the slack? And 
then secondly, is there not some kind of possible non-nuclear 
solution to this problem, because North Korea still has the 
capacity to produce plutonium and plutonium, of course, is the 
danger here. But they have not reached that point in the course 
of that agreement where they have to stop producing plutonium 
in other parts of the country. So, is there any non-nuclear 
solution that could be possible and then what is going to do, 
and who is going to pay for it?
    Mr. Holum. They do--again, let me go back to what Secretary 
Slocombe said--they do, under the terms of the agreement, have 
the plutonium reactor shut down. In fact, the fuel has been 
removed from the reactor. And 97 percent of the fuel rods, 
there were roughly 8,000 fuel rods that were in that reactor, 
have been canned under our supervision.
    So, that reactor is not operating. My understanding is that 
it is deteriorating, it is rusting. It is not being maintained 
or tended. I would have to confirm that but they are not 
allowed to produce anything in that reactor.
    Mr. Knollenberg. Well, they may be not allowed to, but is 
there any plutonium being produced? Do you know that? If the 
reactor is not yet dismantled, could they not produce it?
    Mr. Holum. If they have reloaded the fuel or somehow gotten 
access to the fuel rods, but those are canned and they are 
under supervision by U.S. personnel who are engaged in the 
canning operation, who have been on site at the facility.
    Mr. Knollenberg. Can you say that North Korea is not 
pursuing any kind of nuclear build-up?
    Mr. Slocombe. You cannot prove what you do not know. We 
know that----
    Mr. Knollenberg. That we do not know is what bothers the 
hell out of me.
    Mr. Slocombe. We know that they had at Yongeyon the 
capacity to produce, I forget the exact numbers, but it was on 
the order of, plutonium for on the order of half a dozen 
Hiroshima-style nuclear weapons every year. That has been shut 
down. There is no question that it has been shut down. There 
may be a question of whether the reactor has sufficiently 
deteriorated that it would not be practical to start it up 
again. I do not think we can claim that for sure.
    But there is no question but that the production has been 
shut down and, therefore, the plutonium separations plant which 
is adjacent to the reactor, is not separating plutonium. And 
the plutonium which is embedded in the spent fuel rods which 
were removed, and if you remember, generated a crisis, is in 
these canned rods and it is a part of the agreement that at a 
stage those rods will be exported out of Korea, out of North 
Korea so they will not be there, not be available.
    We cannot say authoritatively what is going on that we do 
not know about but the program which was the focus of concern 
which appears to be, as far as we know, is where they were 
producing the material for which they could make nuclear 
weapons has been closed down, is closed down and has been 
closed down since the agreement was signed in what, 1994 or 
1995?
    Mr. Knollenberg. Another question. Are you done?
    Mr. Slocombe. Well, you are entitled to an answer to your 
question about who is going to pay for the light water reactor.
    Mr. Knollenberg. That is the next question.
    Mr. Holum. I can go back to that. There is no secret of the 
fact that the Koreans and the Japanese have been interested in 
having the United States undertake at least a symbolic or token 
commitment to the cost of constructing the two light water 
reactors, and the cost will be roughly $5.2 billion. There is 
also no secret to the fact that we have said ``no'' to that and 
the Congress has made clear that that is our answer and that is 
what we have said.
    We also are operating on the understanding that both the 
ROK and Japan expect to undertake most of the funding costs of 
those two reactors and they have reconfirmed their commitment 
to KEDO. In terms of the----
    Mr. Knollenberg. Is that a recent announcement that they 
have made? Is that a reiteration of their previous position?
    Mr. Holum. Keep in mind that the financial crisis is, we 
hope, short-term, and will have a short-term impact. The 
sequence of development here obviously is that the cost that is 
being incurred now, as the Chairman referred to earlier, is for 
heavy fuel oil deliveries. We have undertaken, to take the 
primary responsibility for funding that and raising funds for 
that.
    The ROK and Japan have the lead in building the reactors. 
Our part is first and it continues until the first reactor is 
completed. They held the groundbreaking in August for the first 
reactor. The Japanese have put up the funds for that, have 
loaned the funds for that initial work. They need to have a 
contract negotiated between KEDO and the Korean Electric 
Company, which will be in charge of building the reactors, the 
primary contractor.
    But that funding cost will obviously ramp up dramatically 
as construction proceeds. This will take us into the middle of 
the next decade before the first reactor is completed. So, the 
current financial crisis is unlikely to have any significant 
impact on their ability to fund the long-term, time consuming 
part of this process, which is the construction of the actual 
reactors. That is just beginning.
    Mr. Slocombe. It is also relevant that most of the costs, 
not all, but most of the costs would be incurred in Japan or 
Korea. So, this, unlike some other issues, is not a question of 
getting foreign exchange.

                                  imf

    Mr. Knollenberg. This is an off the wall question but I 
must ask it. Is there any way that in this whole IMF 
structure--I know that it is not entirely your bailiwick, but 
it is connected--is there any way that if some agreement is 
reached and we do construct an IMF-funding agreement that has 
something that is passable by this Congress, I do not know what 
that is going to be but whatever it is, is there any chance 
that there might be some linkage in there to a bailout of the 
KEDO program?
    Is there any talk of that? I know speculation has occurred 
in the newspapers, but I am just asking if you have any comment 
about the potential for some drive to bring that about?
    Mr. Slocombe. I think the interest the Department of 
Defense does have in the Asian financial crisis and in the IMF 
bailout, if you want to use that term, is that we have as a 
country a huge interest in stability in the region.
    And North Korea is going through an economic, maybe it is 
an economic death throes. It is certainly an economic crisis. 
And one of the important reasons why the success of the Korean 
economic recovery program, which is actually going quite well, 
is so important is that if it works, as we expect it will, it 
will allow Korea to recover economically and, therefore, be 
able to fund the KEDO project.
    As far as I know, there has not been any direct discussion 
of a linkage of that kind. But I think the linkage is very much 
there.
    Mr. Knollenberg. Thanks, to both of you.
    Thank you, Mr. Chairman.
    Mr. Callahan. Thank you, Mr. Knollenberg.
    Mr. Obey, I thought out of respect for your seniority and 
for your----
    Mr. Obey. I appreciate that.
    Mr. Callahan. And your age. [Laughter.]
    Mr. Torres.
    Mr. Torres. Thank you, Mr. Chairman.
    Thank you, Mr. Obey, for yielding.

                                colombia

    Secretary Holum, I wanted to ask you what is the present 
status of the provisions that were covered in the Fiscal Year 
1998 foreign operations bill to provide three Black Hawk 
Helicopters to Colombia?
    Mr. Holum. I would like to get back to the committee with 
the specific details on that. But let me say, in general, that 
the financial plan for our narcotics efforts indicates that we 
do intend to comply with that Congressional requirement. At the 
same time, as you know, there is substantial doubt by General 
McCaffrey, for example, that those are number one, necessary; 
and number two, weigh as heavily as the amount they would cost 
in the scale of priorities for the overall anti-narcotics 
effort.
    Obviously, Colombia plays a central part in our efforts but 
there is some doubt about both the inflexibility associated 
with earmarking and about the priorities attached. But the plan 
indicates we intend to comply.
    I would like to get back though with more detail.
    Mr. Torres. You mean not in a public hearing, as such?
    Mr. Holum. No. I just would like to give you a more 
detailed description in writing of where we are on that.
    Mr. Torres. Could you possibly elaborate on how this 
particular provision affects other countries?
    Mr. Holum. Well, just the----
    Mr. Torres. You are taking money from the general pot to--
--
    Mr. Holum. Yes. We have an overall total available and if 
we devote--I cannot remember the total cost--$36 million or 
something to--which is a pretty big chunk out of the total.
    Mr. Torres. Bolivia would be a country in question here. We 
have an interdiction program there. Is this not taking money 
out of that program to cede to Colombia?
    Mr. Holum. That is the sort of thing I would have to get 
back to you about. How we will assemble the necessary funds to 
pay for the Blackhawks.
    Mr. Torres. Thank you.

                                  imet

    Secretary Slocombe, you mentioned in your statement 
regarding the IMET issues that the program is designed to 
address issues of military justice, respect for international 
recognized human rights, effective defense resource management 
and improved civil/military relations. You go on to cite that 
this is important in meeting objectives of developing democracy 
and American values and you cite such countries as Central 
America, Africa, and the newly independent states.
    I do not want to nit-pick this, but is there any reason why 
you do not mention Latin America as a region?
    Mr. Slocombe. No.
    Mr. Torres. I wanted to ask you in line with that then, the 
November 1997----
    Mr. Slocombe. It would apply just as much to Latin America. 
The proposition applies just as much to Latin America.
    Mr. Torres. The November 1997 Department of Defense 
Inspector General's Report on the School of the Americas 
detailed serious systemic flaws in the evaluation and the 
oversight of the school's curriculum. Why is this still true, 
given the intense controversy over the school? What will be the 
procedures in the future for reviewing curriculum at the School 
of the Americas?
    Another question, will a regular external review be 
instituted? Is there a list of the evaluation criteria used at 
the school to ensure that no teaching materials violate human 
rights and democratic standards as we would like to see done? 
Could you provide an answer for me?
    Mr. Slocombe. It is certainly the case that there is a 
regular evaluation procedure and that one of the focuses of the 
oversight of the school is to ensure the standards you meet are 
met but I would like to take the questions and answer them in 
detail.
    [The information follows:]


[Pages 187 - 192--The official Committee record contains additional material here.]



    Mr. Torres. If I sent those in writing to you, would you 
respond?
    Mr. Slocombe. Yes.
    Mr. Torres. Another question not related necessarily to the 
school but it might be. At any given time I understand that 
there are 150 to 200 U.S. military advisors in Colombia and 
Mexico. Is this the case and, if so, what are they doing there 
in such large numbers?
    Mr. Slocombe. There are a number of American military 
people in Colombia, almost all involved in the anti-drug effort 
and a significantly smaller number in Mexico. I do not have in 
my head or in these materials the particular numbers. We can 
get you the exact numbers of who is where and who is doing 
what.
    But the answer is that most of the American military 
personnel who are in Colombia at any given time will be 
involved in the radars which are operated and other aspects of 
the counter drug effort.
    Mr. Torres. In Mexico?
    Mr. Slocombe. Well, in Mexico they are mostly involved in 
the counter drug effort. But they are relatively few American 
military personnel in Mexico at any one time, far fewer than in 
Colombia. And then there are also periodic training activities, 
exercises which we have as we have in a lot of other countries. 
So, there would be spikes where the numbers would go up but I 
can get you the sort of steady state numbers.

                                chiapas

    Mr. Torres. And perhaps you could be more specific, do we 
have any American troops in Chiapas?
    Mr. Slocombe. I have absolutely no reason to believe that 
there are any American military personnel in Chiapas.
    Mr. Torres. That is a succinct answer. You do not 
reasonably believe.
    Mr. Slocombe. Well, I mean there are a 1.3 million American 
military personnel in the world. There are few American 
military people in Mexico, very few. I have no reason to 
believe that any of them are in Chiapas on any continuing 
basis. Whether one has ever been to Chiapas, I assume the 
answer would be, yes. But let me, again, let me check and get 
you the exact answer but I would be surprised if the answer is 
other than, no.
    [The information follows:]

    There are approximately 172 unformed personnel in Colombia 
and 31 uniformed personnel in Mexico. These numbers include 
those permanently assigned to the Military Group, the Defense 
Attache's Office, the Embassy's Marine Security Guard, and 
personnel in country on temporary assignment dedicated to 
counternarcotics efforts. The level of military personnel in 
country can fluctuate from month to month depending on the 
current mission. There are no U.S. uniformed personnel in 
Chiapas.

    Mr. Torres. Thank you. That is all I have, Mr. Chairman.

                         school of the americas

    Mr. Callahan. I might on the School of the Americas tell 
you that we dispatched our subcommittee staff people to the 
School of the Americas to make absolutely certain that there is 
no educational opportunity afforded for anything other than 
what this committee has instructed.
    If the gentleman feels we should send the committee staff 
back down there to make absolutely certain that this is not the 
case, it is my understanding that they are not violating the 
instructions of this committee and if the gentleman suspects 
there is some need to re-check that, I would be happy to 
dispatch the staff. I have been one of the supporters of the 
School of the Americas and I am going to continue to support 
them but they are not going to be permitted to violate the 
wishes and the instructions of this committee with respect to 
their curriculum.
    Mr. Torres. Well, thank you, Mr. Chairman.
    Mr. Slocombe. If I could, Mr. Chairman, as the subcommittee 
will be aware--I do not know the exact date--but recently the 
various certifications which were required have been made and 
one of them is that the instruction training provided by the 
School is fully consistent with American training and doctrine, 
particularly with respect to the observance of human rights.
    Mr. Callahan. Mr. Frelinghuysen.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.

                          persian gulf crises

    I would like to get back, gentlemen, to some of the 
questions that Mr. Yates raised and the Chair raised. The 
nature of our business is that we are collectors of, in many 
ways, of public perceptions. And the public perception in my 
district is that we have a lot of fair-weather friends and this 
Persian Gulf crisis I think has showed that to be fairly 
accurate.
    This is a committee that deals with a budget. There is 
nothing more important in this budget pie than the security 
aspect. All of what we spend money on here in terms of 
environmental, health, humanitarian, economic is linked to the 
security aspect.
    Why, after all these vast expenditures for good public 
purposes, across the world, could we not have counted with more 
reliability on our allies?
    Mr. Slocombe. There is no question that we would always 
like it if our allies were more responsive and quicker to say, 
yes. All I can say is that we got in the Gulf region, 
particularly which is where I think most of the controversy 
arises, the requests which we made for things that we needed 
and we made the requests because we needed them, and we got 
what we needed.
    Mr. Frelinghuysen. Well, from our constituents' viewpoint, 
besides England, where was Germany, where was France? We are 
pumping all this money into NATO, our military alliance. These 
are natural allies. Many of our constituents question the Saudi 
regime, Jordan. I mean when push comes to shove and we put a 
lot of economic and humanitarian support into a lot of these 
countries, what are we getting if, indeed, both the Secretary 
of State and you, say that our top priority is to protect the 
security and vital geo-political interests of the United 
States, what are we getting for that type of financial 
investment by the taxpayers?
    And I think that is the basic question. It may be 
rhetorical but that is really what we are here about.
    Mr. Slocombe. First of all, we are not going around--none 
of us have said this morning and none of us have said any of 
the times that the reason that we do this is so we are strictly 
unlimited but we are buying support for the Persian Gulf. For 
example, something like three-quarters of the troops in Bosnia 
are provided by, mostly by the European allies and other 
countries other than the United States.
    So, that in areas like the Persian Gulf, there is no 
question that we would like to have more support from our 
allies and more support from the countries in the region, for 
that matter. We have what we need but we could always be 
pleased to have more.
    The reasons why these countries are, particularly the Arab 
countries, are reluctant to get out in front are the ones which 
Mr. Yates identified. The Arab street, wrongly but genuinely, 
was not sympathetic to the war in 1991 and has not been 
sympathetic to the position of the United States in this issue 
since. And that makes it complicated for the Arab regimes to 
take the lead in the way that I believe their interests would 
suggest that they should.
    All that said, Saudi Arabia, for example, a country which 
does not welcome foreigners, and does not welcome military 
involvement is on a day to day basis is the host to thousands 
of American, British or French troops. Kuwait, Kuwait is in 
many ways obviously a special case, but Kuwait has American and 
other coalition troops there. We will be having support 
aircraft and strike aircraft based in other Arab countries.
    Look, I do not dispute that it would be nice if they were 
more enthusiastic. But I think that it is also not correct to 
say that either that we are not getting any support or that 
they are just being feckless or something like that, in not 
providing support.
    Mr. Holum. I have one point, too. It is important, I think, 
to keep in perspective the fact that the specific issue here 
was over the strategy of military strikes and when they would 
occur.
    Mr. Frelinghuysen. But wait a second, in reality, what we 
are doing and have been doing in the Gulf over the years has 
been protecting our vital oil supplies which, indeed, are very 
important to some of our closest allies. Some are wholly 
dependent on that source.
    Mr. Holum. This is part of a strategy we are dealing with 
to get rid of Saddam Hussein's weapons of mass destruction and 
make sure he cannot use them to threaten his neighbors. Over 
seven years there have been periodic votes in the UN Security 
Council as to whether there should be sanctions on Hussein. Not 
one country in seven years has ever voted to lift sanctions. 
They may argue about the timing or the strategy of the military 
strikes, but the world is united on this issue.
    And constituents or no one, certainly not Saddam Hussein, 
should get the impression that there is a division and that 
somehow he can just wait this out. He is going to incur----
    Mr. Yates. What question is the world united on?
    Mr. Holum. On the question that Saddam Hussein needs to 
comply with the Security Council Resolutions and comply with 
the inspections. They have never voted, never voted to lift 
sanctions in the United Nations Security Council. As we sit 
here, Iraq is suffering complete and total economic sanctions 
of the kind that no country has ever experienced before. And he 
has not had those lifted because the world is united on the 
fact that he has got to give up his weapons of mass destruction 
before the embargo is lifted, before the sanctions will be 
lifted.
    So, all I am doing is adding a dimension to the argument of 
international support. He is isolated.

                                  nato

    Mr. Frelinghuysen. The dimension is appreciated. Just one 
question on NATO. I have read every conceivable material that 
is put in front of me in terms of the cost of NATO expansion.
    Is there not a potential here, a strong probability that in 
the overall budget of which we are talking about here, that at 
some point in time you are going to come to this committee and 
say, well, you know, Department of Defense had one, the State 
had another, that we may be--and let me say I support NATO, it 
is an important alliance--but is there not a potential here and 
would you like to comment on it that we may have a budget 
buster of no small proportions?
    Mr. Slocombe. I think that is an extraordinary remote 
probability. Let me explain why.
    Mr. Frelinghuysen. Given all the evidence that is out there 
from people who are probably equally qualified in these areas, 
I mean it seems to me that there is quite a lot of material to 
the contrary. All right, it is your time.
    Mr. Slocombe. What the United States will provide in 
connection with enlargement is, first of all, our contributions 
to the NATO common budgets. Our present estimate is that the 
increased contributions will be on the order of about $40 
million a year for the U.S.
    Some of those are in the defense budget, in the 050 
account, and some are in the 150 account. This is because there 
are three different NATO common budgets which go through three 
different subcommittees of the Congress. Two are in the 050 
account and one is in the 150 account.
    Mr. Packard. Would you yield to me for just a moment, 
because that was my question and I would like to simply not ask 
the same question twice. I am sorry that I am late. I just 
finished a hearing on my own subcommittee. I chair the military 
construction subcommittee and we also have a significant budget 
amount for the NATO expansion, probably more than you have here 
in this subcommittee.
    Mr. Slocombe. I would expect that it is because that is the 
NATO Security Investment Program which goes----
    Mr. Packard. Does your total NATO expansion budget take 
into consideration the other committees or is it just limited 
to this subcommittee?
    Mr. Slocombe. No. It is all--the estimate is that the total 
incremental costs to the NATO common budgets--and I want to 
come back to why that qualification is important in a minute--
but the total incremental costs to the NATO common budgets over 
the course of a decade would be about a $1.5 billion. The 
United States pays about a quarter of the common budget. That 
is $150 million a year, a quarter of a $150 million is about 
$40 million a year.
    Mr. Yates. Why a quarter?
    Mr. Slocombe. Because the Europeans pay the rest. There is 
a long-standing formula by which the different countries pay 
amounts which are----
    Mr. Yates. And that will continue?
    Mr. Slocombe. It goes down a tiny bit. For all the current 
members, it goes down a tiny bit because of the new members 
make small contributions. Broadly speaking the contributions 
are proportionate to national income with some allowance for 
rich countries and poor countries. But it is just mathematics 
that the Poles, the Czechs and the Hungarians will pay a----
    Mr. Yates. Will you yield for a further question on this 
question? When we start building under the military 
construction program for NATO expansion, will the costs of that 
construction be borne as well by the other countries who are 
expanded into NATO?
    Mr. Slocombe. Everything that goes through the NATO common 
budgets is paid for three-quarters by the Europeans. So, the 
answer is, yes. The Europeans would pay--if you upgrade a 
communications system in Poland, and that qualifies for NATO 
common budget funding and there is an arcane set of rules for 
what----
    Mr. Callahan. Are you saying that if we build barracks in a 
NATO country that the other participating members of NATO 
contribute to the construction of that barracks?
    Mr. Slocombe. Barracks, in general, are not eligible for 
common funding. But, for example, and this, I think, people 
find surprising, we have built in the United States facilities 
which are associated with reinforcement capability for Europe 
that have qualified for NATO common funding and have been paid 
for three-quarters by the Europeans. Now, most of them, 
obviously, are in Europe but it does not depend on where they 
are.
    Mr. Yates. What is an example of that?
    Mr. Slocombe. There are port facilities that are used that 
were identified as used for reinforcements. Let me, if I could, 
explain. You know, we are talking about numbers which are, by 
anybody's perception in absolute terms, very large, but 
relative to the Federal budget and even the foreign affairs 
budget they are small.
    The reason we get these huge numbers is if you assume that 
we are going to go back to the Cold War and we are going to 
have a massive Russian threat to Central Europe and presumably 
worldwide then, obviously, we would be making huge changes in 
our assumptions about security and about what was required for 
defense, what was required for national security in general. 
And these very large numbers are in general that tend to 
estimate what it would cost to refight the Cold War. No 
question that is----
    Mr. Frelinghuysen. So here today you are ruling that out as 
a potential----
    Mr. Slocombe. We do not rule it out. We----
    Mr. Yates. Mr. Chairman, I have a question following Mr. 
Frelinghuysen's question about where were they when the whole 
world was united and still continues these sanctions. Will that 
be true, as well, after, as a result of the Kofi Annan 
agreement?
    Mr. Holum. I have no doubt that it will be true. I think 
the world is watching with a great deal of suspicion to see 
whether Saddam actually fulfills the commitment he made to Kofi 
Annan.
    We are in the same position. We are maintaining our 
capability to respond promptly and with powerful force if this 
agreement is not kept.
    Mr. Callahan. With respect to overall percentages of the 
budget that is not a good response. Percentage-wise my salary 
is not a huge percentage of that budget but perception-wise in 
Alabama it is. [Laughter.]
    Mr. Slocombe. The only point I am making, sir, is that----

                              middle east

    Mr. Callahan. Well, the point is that perceptions are 
powerful, and from perceptions come your appropriations. 
Because we have to respond to the people in our respective 
districts. Now, following up on Congressman Frelinghuysen's 
theme that the perception is that Saudi Arabia turned us down. 
The perception is that during the Persian Gulf War when we went 
to Egypt, as much as we give to Egypt, that they agreed to 
participate but only after we forgave them $6 billion in debt. 
You know, the perception is that we are being used. That they 
want their money--I mean we do not have any trouble, we do not 
have to go to Netanyahu and say, we need your help. We know 
that. We only have to pick up the phone.
    Now, here we are contributing to King Hussein and Jordan 
and trying to increase that and now, we are saying that well, 
we ought to be cautious now we do not want to get him in any 
uncomfortable position. So, perception-wise we have a problem 
with Saudi Arabia. When it was apparent that Saddam Hussein was 
going to invade Saudi Arabia after he went through Kuwait, we 
did not have to plead with them too deeply to let us land our 
planes there.
    So, we have a perception problem of a total lack of support 
of anybody but Israel in that region, when it came time to 
protect them. I mean this biological, chemical warfare, we are 
not concerned about them sending a missile to Washington, D.C. 
but to Israel, yes, and to Jordan, yes, or to any other area. 
They are the ones who have the exposure, and they are the ones 
who ought to be concerned, more so than we are.
    So, you have a perception problem or the Administration 
does that these are fair-weather friends who come to us and 
tell us what great allies they are, send us billions and 
billions of more dollars and then in a time when we need them, 
they say, well, we do not want to get involved because it is an 
Arab brother or something of that nature. We are talking about 
billions of dollars to protect them from an aggressor like 
Saddam Hussein and then when we do that, that is fine, but when 
it is not to their political liking they turn their back on us.
    So, he is absolutely right, perception is very important 
towards our success in being able to get you enough money for 
all the foreign military financing program. So, it is a very 
serious problem.
    You have been very patient, Ms. Kaptur.
    Mr. Slocombe. Mr. Callahan, I only want to say that I think 
the points you make are entirely valid, both as to the 
perception and, to some degree, the reality. But I also want to 
make the point that they did provide support.
    Mrs. Kaptur. Thank you, Mr. Chairman.
    I want to invite both secretaries--I have to tell the 
Chairman that was a brilliant statement, by the way.

                            nuclear weapons

    I wanted to ask a question about the Partner for Peace and 
the newly independent states. How much confidence should I have 
or the American people have that the--and we will take 
Chornobyl as an example--that that reactor is sufficiently 
contained and that there is no trafficking either from spent 
material from that plant or any other plant in that country or 
any of the other republics?
    Mr. Holum. Well, that is an another case of, as Secretary 
Slocombe said earlier, of we cannot prove what we do not know, 
we cannot confirm what we do not know. We do know----
    Mrs. Kaptur. Sir, that is my very point. I am wondering 
what do we know about the safety of a number of those 
facilities? I know our own Department of Energy is involved in 
this, but I am very interested from a defense standpoint, what 
is going----
    Mr. Slocombe. Chornobyl is in the Ukraine, and I think we 
are highly confident about Chornobyl because----
    Mrs. Kaptur. You are highly confident?
    Mr. Slocombe. Yes. I do not know how confident I am about 
the--I would not want to live in the community--but in terms of 
misappropriation of the material out of Chornobyl, I think we 
are highly confident about that, as we are in a lot of other 
areas.
    Mrs. Kaptur. Are you confident about the containment of the 
facility against future mishaps?
    Mr. Holum. There is an effort underway through the G-8 and 
G-7 to fund a new sarcophagus, a new containment for the 
facility. No. It is not safe over the long-term.
    Mr. Slocombe. Safe for the local community.
    Mr. Holum. That is right. But it is a different question 
from whether special nuclear material or the fuel might be 
taken out and used for nuclear weapons, potentially, for 
example. I think there is no realistic prospect that that would 
occur. It would not be the sort of target where terrorists or 
others seeking plutonium or highly enriched uranium would go.
    Mrs. Kaptur. All right. As a lay person--and I am sure I am 
expressing the concern of others in my community and 
elsewhere--there is some desire for clarification regarding the 
containment of the existing Chornobyl facility, as well as 
others that may have been designed similarly in that country or 
others. There are several under the same design. And how 
confident are we as a Partner for Peace in that region that 
similar mishaps will not occur and that spent materials are 
properly guarded against any type of trafficking?
    Mr. Holum. I think the first part of your question is 
better answered in writing and in more detail than I can 
provide here because there are a number of similar type 
reactors in a number of former Soviet states that need----
    Mr. Slocombe. What we are trying to do is distinguish the 
danger of a nuclear accident, like what happened at Chornobyl, 
from one of other plants of the same design and the possibility 
that from those reactors or any other places in the Former 
Soviet Union people steal the materials to make a nuclear 
weapon.
    And they are quite different problems.
    Mrs. Kaptur. Is this a high priority for our military 
cooperative efforts?
    Mr. Slocombe. It is a very high priority. It is one of the 
ones that we focused on. The obvious place if you want to steal 
a bomb, do not steal the contaminated fuel rods from a wrecked 
reactor. Go find a bomb and steal the bomb. That is what we 
worry about. And we have been working with the successor 
regimes and with Russia to keep the control over their nuclear 
materials.
    The most important accomplishment, which if you look back 
on it, is quite remarkable is when I came into the Government 
in 1993, the Ukraine, Belarus and Kazakhstan, all had nuclear 
weapons. Not nuclear materials, nuclear weapons--missiles, 
bombs, airplanes.
    Those are now all removed from those countries. That is a 
major accomplishment in terms of keeping control over the 
successor nuclear material. Some of them, most of them were 
dismantled, some went back to Russia. We have been providing 
funding, technical assistance, and support for the dismantling 
of Former Soviet nuclear weapons and also for improving the 
safety and security of the nuclear weapons that they still 
retain and of the, you know, research reactors, power reactors, 
safety and control procedures and so on.
    Some of it is done by the Department of Defense and some is 
done by the Department of Energy and some of it is done 
internationally. The Germans have put a lot of money into these 
programs. So, it is a very high priority and it is also one of 
the areas where we have good cooperative relations with the 
Russian military.
    General Haberger, who is the commander of the strategic 
command, has had a series of visits between his people and his 
Russian counterparts working on the problem of assuring the 
safety and security of the Russian nuclear weapons and nuclear 
materials. It is a very high priority and a very high concern.
    We have also worked----
    Mrs. Kaptur. Do you have, personally you have a high level 
of confidence then in what we have done to date----
    Mr. Slocombe. I have a high level of confidence but the 
problem is so serious that you want to have a very, very high 
level of confidence. This is a problem on which 99 percent 
assurance is not good enough and we are working to get that 99 
percent up higher and higher.
    Some of the other things we are doing just to explain. John 
should talk about the export control effort. We have, for 
example, you may remember a thing called Project Sapphire, 
where we took some nuclear material that was in one of the 
Central Asian republics under conditions we thought were 
inadequately safe-guarded and got that out of the country so it 
was not available to be picked up by the wrong people.
    This is a very high priority for the United States 
Government, including for the United States military.
    Mrs. Kaptur. Are those facilities, not having visited any 
of them, are those facilities guarded? The Russian military, 
the Ukrainian military, the----
    Mr. Slocombe. This is an area where the United States and 
Russia have an exact commonality of interest. The Russians have 
even less desire to have somebody steal their nuclear weapons 
and nuclear materials than we do because they are more likely 
to be stolen by Chechneyans or something like that than by 
people who would be an immediate problem for us.
    And, so, it is something where we work very closely with 
the Russian Government and it is a very high priority for the 
Russians. The Russian military is in a terrible mess. But they 
have very wisely continued to give top priority to funding and 
paying and providing for the safety of their nuclear weapons.
    Mrs. Kaptur. What worries me is when you see people who 
work in these plants march on Moscow because they have not been 
paid in nine months or more. And the economic pressure is so 
great on many families that, you know, you cannot guarantee 
what any one individual will do. I guess because I am a lay 
person I am not quite as confident as you are at the 
permutations and combinations that can result in mischief.
    And I will tell you what also did not build confidence in 
me is when I had to see these nations begging one another up at 
the UN to raise $30 million or something for another 
sarcophagus on that Chornobyl facility, I was thinking, you 
know, I thought we already did that. You know, I thought how 
much does the world really know about how to contain this and I 
am sort of afraid to even ask the question, but I guess I am 
not quite as comfortable as you are not having all the details.
    Mr. Slocombe. Well, and as I say, I think I probably have a 
reasonably high level of comfort but I know that there are 
enough--this is so important that it--we have what we call in 
the American nuclear business, one-point safety. That is the 
probability that this is safe has to be one-point-zero, not 
point 999999 something. And anything less than that, if you are 
at anything less than one-point-zero assurance in this 
business, you should keep working on it.
    If I may say, it is one of the reasons why it is so much in 
our interest to continue things like the non-nuclear program, 
the cooperative debt reduction program even when we have other 
problems with the Russians that this is not something that we 
are doing to be nice to the Russians. This is because we do not 
want this system to fall out of control. And it also is very 
much a lever on what the Russians spend money on.
    The amount that the Russians spend on the safety and 
security of their own nuclear weapons is vastly larger than 
what we provide. But this provides a window into what is going 
on, and it helps us have assurance that the standards that they 
are working towards are secure.

                                  nis

    Mrs. Kaptur. I am sure that Mr. Obey has some questions but 
if I could just say that if you could use your influence in 
whatever that might be, if we look at the prostitution slave 
trade that is occurring now in the NIS going to countries like 
Israel, if there is any pressure that can be brought to bear to 
get at the people who are doing this, and it is not just you 
and DoD but it is AID in a lot of these other places, to get 
information out to people through television to the girls, I am 
saying and to the villagers, because a lot of them really do 
not know what is happening.
    This is a priority of the First Lady, I know. But a lot of 
the so-called recipient countries are hosts to what is 
happening. I said, well, maybe all these genius intelligence 
people are letting it go to Israel because Israel is our 
friend. And, therefore, if we are going to catch the thugs, 
that is a better place to find them. I do not know. That is 
trying to put a good face on it.
    But it seems to me that because of our inability as a world 
to deal with democracy building, we have got people who are 
being treated as chattel as we are almost in the 21st Century 
and somehow the military has got to use some of its power to 
get attention of this at the highest levels and help to stop it 
and apprehend those involved in it.
    And I would just encourage you within the executive circles 
that you deal within over there at the Administration to talk 
about this and try to get a more coherent effort underway to 
stop it.
    Mr. Slocombe. That is a very good point and I will take 
that very seriously.
    Mr. Yates. We have a few mobs in Russia, have we not?
    Mr. Slocombe. The problem of organized crime in Russia is 
very, very serious.
    Mr. Callahan. Mr. Packard and then Mr. Obey. I am going to 
go vote in the interim.
    Mr. Packard. If this question has been asked of all of you 
then I apologize but last year we fixed our assistance to 
Russia based upon, at least in part, upon them withholding 
sending nuclear weapons to Iran. And that was based upon 
certification by the President. Do you anticipate that the 
President will be able to certify?
    Mr. Holum. Fifty percent of the funds still have been 
withheld from obligation because the waiver has not been 
exercised. And the President has not yet decided on the 
outcome. This is an issue that will be discussed with Prime 
Minister Chernomyrdin by the Vice President and others during 
Gore/Chernomyrdin meetings March 9th and 10th.
    But I cannot prejudge what the President's decision will 
be. I can tell you that as of now 50 percent of the funds that 
were provided by the legislation are fenced and have not been 
obligated.
    Mr. Knollenberg. Would the gentleman yield. This is a 
question on the article that appeared in the Washington Times 
that is kind of relevant to what we are talking about there, 
which alleges that there is a continuation of nuclear materials 
that is moving from Russia into Iran. Do you have any comment 
on that article, very quickly as to its authenticity? It was 2-
23-98, so it was in the last couple of days.
    Mr. Holum. Yes. I have seen the article. And I cannot talk 
about the specifics of what the article says. It draws on 
intelligence sources and the answer would draw on intelligence 
sources and I cannot go into it. What I will say is that what 
has been in the press is not a full and fair account of what 
has actually been underway in our efforts and in the Russian 
response.
    We, particularly Ambassador Wisner and others, have been 
available a number of times on the Hill to come up and brief in 
a classified context on where we stand on this issue. We would 
be happy to do that if the members here want to explore that 
further. It is a very important issue.
    Mr. Knollenberg. Thank you.

                          turkey/greece/cyprus

    Mr. Packard. I notice that we have not reflected any 
funding for Turkey or Greece. I visited those countries 
recently, not too recently, and I think that is a step in the 
right direction, frankly. Are they in agreement with that 
proposal? They have not shown a resistance to the refunding.
    Mr. Holum. We consulted with both and neither has 
protested. Both have accepted the decision with equanimity.
    Mr. Packard. Cyprus was a part of that overall equation and 
they are being funded by $15 million or at least that is the 
request. In Cyprus there is only one side of the conflict there 
that has participated in the bi-communal activities. What kind 
of problems are they running into there? We will only have one 
side that will be participating and there will be funding the 
other side? How is that, where does the $15 million go?
    Mr. Holum. I will have to take that question back because I 
do not have the information and give you a detailed response.
    Mr. Packard. I just do not understand how that fits into 
Cyprus, the realities in Cyprus relative to the Turkish versus 
the Greek components there.
    Mr. Holum. In the broader context, I would say that the 
graduation of Greece and Turkey from military assistance is 
related to, in the case of Turkey in particular, the growth of 
their economy, the size of their economy. Similarly with 
Greece, it reflects a maturing of our relationship and their 
ability to do without this kind of assistance. That same kind 
of consideration does not apply in the case of Cyprus.
    Mr. Packard. Cyprus, the economy of Cyprus I think is such 
that they also can probably give up on any assistance but maybe 
it is being used for student or other purposes that are not 
military. I presume it is.
    Mr. Slocombe. I will get you that. It is ESF so that it is 
not directly used for military.
    Mr. Packard. It is not for military purposes. And, thus, 
does not affect really the dispute between the Greek and the 
Turkish elements there.
    Mr. Slocombe. I do not know what it is. I only know what it 
is not.
    Mr. Packard. Very good. Mr. Chairman, I appreciate that.
    Mr. Callahan. Mr. Obey.
    Mr. Obey. Thank you, Mr. Chairman.

                                  nato

    Mr. Slocombe, let me just ask a couple of quick questions 
about NATO. Last year, my understanding is that the 
Administration came to Congress with a cost estimate for the 
whole ball of wax, everything somewhere between $27 and $35 
billion over the next 12 years, and that the U.S. share would 
be less than $2 billion. And that most of the cost would be 
borne by the European members.
    This year, your testimony indicates that the budget 
includes an additional $13 million for FMF grants to the Warsaw 
Initiative for making of a new NATO invitees, ``truly 
interoperable with U.S. and NATO forces.''
    Laying aside questions about the wisdom or the timeliness 
of NATO expansion, is that money accounted for in the 
Administration's original cost estimate?
    Mr. Slocombe. Yes, it is.
    Mr. Obey. Secondly, Defense News reported that----
    Mr. Slocombe. You mean the assistance, the so-called Warsaw 
Initiative money, yes, was reflected in the report.
    Mr. Obey. So, I mean this $13 million is not in any way 
above your cost estimates?
    Mr. Slocombe. No.
    Mr. Obey. Okay. Secondly, in Defense News it reports that 
NATO's military assessment of our new members indicates that 
the militaries are far from reaching interoperability. What is 
the Administration's latest estimates for how much those three 
new members will have to spend on their own to achieve 
functional interoperability and readiness as NATO fully 
participant States?
    Mr. Slocombe. We have not made any new assessment of that 
issue which is what those countries will have to spend on their 
own forces since the estimate that you referred to about a year 
ago. So it is the number which it was last year. And the only 
way I can remember this is to say in round numbers it was $10 
billion in each of the three categories so it is around that 
number. That is not exact but that is the order of magnitude.
    Mr. Obey. Okay. Let me----
    Mr. Slocombe. During a period of 12 years.
    Mr. Obey. All right. Just one other question then.
    Mr. Slocombe. Those countries understand that they have a 
lot to do to create modern, effective militaries that are fully 
capable of operating with NATO. That said, they have done a lot 
and talked a lot about whose contributed what. Each of those 
three countries were among those making contributions to the 
coalition force for the Persian Gulf.
    Mr. Obey. Just one other question, Mr. Holum. On page four 
of your statement, you have a paragraph which relates to the 
PFP program of $20 million for CEDL. And you indicate that that 
program will enhance defense and military capabilities of 
Poland, Hungary, the Czech Republic and other NATO candidates 
to move quickly in achieving NATO compatibility by assisting in 
the acquisition of defense equipment such as and then you go on 
to list what they are.
    This means that we are providing additional assistance for 
countries that have not yet been determined to be future NATO 
members. If we approve this money for those countries does not 
that put the Congress in a position where we are slowly but 
surely making it inevitable of the determination that other 
countries will, in fact, join NATO?
    Mr. Holum. No. As you know no decisions have been made 
beyond the initial three countries. That funding has a 
Partnership for Peace purpose, as well as a possible NATO 
enlargement purpose, because there is a security connection and 
a value to interoperability and closer military relationships 
between NATO and countries that remain in the Partnership for 
Peace. So, I think your concern about prejudging the question 
is not valid.
    Mr. Obey. Well, I am more concerned about Congress supinely 
avoiding all necessary thought about whether we should be going 
down this road at all. And not that it will do a damn bit of 
good for anybody including me, but at least I want to get on 
the record again my view that while I generally try to be 
supportive of this and all administrations in foreign policy I 
deeply believe that the decision of the West to proceed to 
expand NATO is historically the most arrogant act that the West 
has taken since the end of World War II.
    I think that that decision makes more difficult the lives 
of Soviet reformers who want to reach out to the West and we 
had our own ``Who lost China'' debate which gutted sections of 
the State Department for years and poisoned the domestic 
political atmosphere in this country, led by the sickest man in 
Wisconsin ever sent to the United States Senate--he has a good 
friend there who said, good old Joe----
    [Laughter.]
    Mr. Obey. But, it seems to me that we have helped make it 
more likely down the line that the forces in Russia most 
friendly to us will be more vulnerable to the question, ``Who 
Lost Central Europe'' then they would have been absent our 
arrogant actions.
    And I think we have also made it easier for the 
rejectionist forces in the Duma to justify their resistance to 
arms control treaties, and it just seems to me that Congress 
provided virtually no, absolutely no platforms for the 
discussion of this issue before the Administration and our NATO 
allies agreed to let the three new members in. I think that the 
Congress will probably have even less debate about the 
advisability of moving that line even further East in the 
future.
    That is why I am very reluctant to see this funding here 
because I think that Congress will flaccidly and uselessly sit 
by and simply allow this to happen without ever debating it. It 
serves no useful purpose for the Senate to debate the issue 
after the decision has been made by NATO because then we would 
look like damn fools if we reverse our course.
    But I just think this is part of an action which we will 
come to deeply regret and I, for one, want to be on the record 
again expressing my profound misgivings about what the 
Administration has done on this issue and what NATO, in 
general, has done on this issue.
    I find it amusing almost to the point of nausea that people 
wring their hands about the fact that we did not have a vote 
about whether we were supposed to engage in a few days of air 
attack on Iraq and, yet, people will not raise a single voice 
for a single second on Congress' obligation to debate in a full 
way the long-term consequences of our moving to expand NATO 
over the objections of the Russians.
    And I think it is a decision which, in the long-term, we 
will come to regret because it could help create, at least it 
makes it more likely that we will, in fact, create a 
resurrection of the very threat to Central Europe that we are 
supposedly trying to avoid by expansion of NATO.
    And I know that I do not expect you to even respond but I 
just wanted to get that in the record so that at least 10 years 
from now it is clear that I did not participate in the idiocy.
    Thank you, Mr. Chairman.
    Mr. Callahan. Two or three questions with respect to your 
budget request.
    One, you are requesting a $25 million increase for the 
Palestinians. You know, that is going to be very difficult 
under the circumstances until such time as an agreement is 
finally reached and the controversy that is taking place 
between the Palestinian Authority and Israel is resolved. We 
are going to have to come up with some strong justifications if 
you expect this committee to increase or even to maintain funds 
for the Palestinian Authority. So, I just want to forewarn you 
that that is going to be a problem area.

                                 haiti

    The second area of concern is you are asking to double the 
economic support assistance to Haiti. The subcommittee went to 
Haiti and we met with Preval, we met with the leadership, if 
there is any in Haiti, and we were not impressed with what we 
saw. We spent billions of dollars there including the military 
aspect of Haiti and, yet, very little has been accomplished.
    You have really no privatization. When we were there we met 
with the Privatization Committee and they told us last spring 
that it was just going to be a month or so before some 
advancement was going to be made with respect to the flour mill 
and the cement factory and the telephone company and still 
nothing has been done.
    Government corruption is so prevalent that nothing can be 
done unless some former members of the active government 
participates in it, and while I recognize that we must do 
everything we can to build that community up, by doubling the 
economic support to Haiti we are having to take away economic 
support from other needy areas in this hemisphere that really 
could make some significant advances.
    I met with the ambassador yesterday, our ambassador to 
Haiti, and I know that he is new on the job and none of the 
past problems can be attributed to him but Haiti is a country 
that has made no significant advancement. The government will 
not cooperate. They met with the military people, they are 
building a road in Haiti and the only thing the Haitians had to 
do was provide an available source of rock and gravel. And 
while we had hundreds of people down there to build the damn 
road, we could not even get the Haitians to deliver the rock.
    So, I mean we are getting no cooperation from the current 
government and they are making absolutely no advances on our 
demands and so we are going to tell the rest of the countries 
that really could make some serious advances to helping their 
people and their democracy building efforts and yet the 
Administration comes and asks for the only increase with 
respect to this hemisphere is to double the economic support 
funds for Haiti.
    And that gives me heartburn, I will tell you that. Maybe 
there is justification for it, maybe there is hope, maybe you 
know something the ambassador does not know, but to come and 
ask to double ESF and ignore the needs of other countries which 
pose the same threats such as Jamaica, with respect to illegal 
immigrants coming in here and the problems that exist in other 
areas in Central and South America. This committee has been 
insisting to the Administration to recognize the potential we 
have to develop partnerships and create true democracies and 
stop internal strife within those countries and look at the 
trade potential. And, yet, we are ignoring them and pumping all 
of our money into a bottomless pit in Haiti which has made no 
significant advancement that I can see from the day we first 
went in there.
    So, that is going to be a problem area for me and I think 
for our subcommittee.

                     comprehensive test ban treaty

    The Comprehensive Test Ban Treaty, as you know, is a 
responsibility of Commerce, State and Justice subcommittee. And 
Chairman Rogers has not seen fit to fund that through his 
committee in as much as he says, you do not need the money yet. 
And we wonder if you are trying to go around Mr. Rogers, why 
would you make the request of this committee for the 
Comprehensive Test Ban Treaty when it is not our jurisdiction 
and when we have limited funds available for your other 
programs. Why would you request the monies coming from this 
committee rather than Commerce, State and Justice?
    Mr. Holum. Can I respond to those three in the order you 
raised them?
    Mr. Callahan. Yes.
    Mr. Holum. First, on the Palestinian increase. I want to 
underscore that none of the funds would go directly to the PLO 
or to the Palestinian Authority. This funding is concentrated 
on an expansion of assistance to the private sector, 
particularly private trade organizations and to help 
enterprises meet international product standards.
    It is also assistance, additional assistance in the water 
sector, which as you know, is an enormous problem on the West 
Bank--wastewater treatment, reuse of agricultural water and 
those kinds of projects. And we think this is part of a broader 
endeavor that is essential to the peace process and that is to 
build the economic constituency for peace, to give them an 
economic stake in resolving the dispute.
    There has been an economic decline in the Palestinian area 
where per capita income is down by one-third since 1993. So, 
these are really urgently needed funds.

                                 haiti

    On Haiti, I recognize certainly your concern about the 
increase. Part of the reason for this is that the political 
impasse in Haiti means that the international financial 
institutions have reduced their aid. Our approach is to bypass 
the government and based on some of the concerns that you have 
raised, to go through NGOs to reach grassroots areas.
    The economy of Haiti is recovering very slowly. There is no 
question about that. It is still the poorest in the hemisphere 
and per capita income in Haiti is $300 annually.
    And the aid does go to the poorest people. This is not 
funding to prop up the government. It is aimed at, in 
particular, building economic bases and secondary communities 
around the country to stop the migration into Port au Prince 
and to develop the economy on a more diversified basis.
    In terms of what the government is doing, there are some 
signs, I think, of positive intentions. They have passed 
legislation on privatization, on trade liberalization, on civil 
service reform. And they have, over opposition, pushed programs 
to privatize nine inefficient government-owned entities. And as 
I understand it, the state-owned flour mill, one of those nine, 
has now been sold. With respect to the state-owned cement 
company, it will be sold when the president signs the decree.
    So, there is some progress. I do not for a minute minimize 
the challenges ahead in Haiti but I think it is in our 
interest--recognizing the overall context of this problem and 
the fact that we have known for a long time that if we did not 
solve the problems in Haiti we would have to solve them later 
in the United States--that it is in our interest to stick with 
this program and try to build the economy outside of Port au 
Prince and to reach the poorest people.
    On the CTBT we have concluded, based on the need for 
significant programmatic type funds, that Preparatory 
Commission funding is more logically placed in the NADR 
account, where we have consolidated a number of proliferation 
related programs. Chairman Rogers did provide some funding last 
year. We are anxious to have the international monitoring 
system in place when the treaty enters into force. It is a 
valuable addition, even before the treaty enters into force, to 
our capabilities to monitor nuclear weapons related activities 
by other countries. This is a case where we are not just 
building an infrastructure, an administrative body. We are 
building a number of sensors around the world, some 400 
sensors, seismic, hydro-acoustic, and others, that will 
increase monitoring of potential nuclear explosions.
    You may recall last August when there was a dispute about 
the seismic event that occurred in the Kara Sea, near the 
former Russian test site, the seismic stations around the 
region were indispensable to our ability to decide over a 
period of time that that was not a nuclear explosion. That is 
very important. That is true whether or not the treaty ever 
goes into effect.
    We want to keep pursuing the construction of the monitoring 
regime; it is in our own interests to do so. I understand your 
concerns about moving the funding. I think it makes sense to 
put this into the NADR account, but it is something we should 
obviously discuss further.
    Mr. Callahan. Well, it would appear to me that Chairman 
Rogers is going to have a better ability to increase his 
overall appropriations than Chairman Callahan is when it comes 
to 602 allocations. And since he, as you say, has already 
chosen to partially fund something for this Fiscal Year maybe 
we ought to keep it on that track and since he is more familiar 
with it.
    Maybe you ought to suggest to him that you suggested to us 
that we put it in ours but it might be better to put it in his.
    Mr. Holum. Well, I would, before doing that, prefer to 
consult further with you on why it makes sense to put it in 
your account.
    Mr. Callahan. Yes. Mr. Ambassador and Mr. Secretary, we 
appreciate especially under the circumstances, Mr. Itolum's 
father died last week and he has to get back to his family, 
which is where he should be. And let me tell you or anyone else 
connected with the State Department who comes before this 
committee that we would always consider a family crisis a 
priority over anything we have to do here and any time 
subsequent that it might happen, any of you are invited to 
request to delay the hearing.
    But thank you so much for coming, we appreciate that.
    Mr. Holum. Thank you, sir.
    Mr. Slocombe. Thank you.
    [Questions and answers for the record follow:]
                 Submitted to the Department of Defense
            Questions for the Record Submitted by Mr. Porter
                       e-imet for latin american
    Question. Has the goal of 30% of IMET spending going towards 
Expanded IMET (E-IMET) courses for Latin American students been met? 
What efforts are being undertaken towards achieving that goal?
    Answer. DSAA conducted a review of the Southern Command (SOUTHCOM) 
region in February 1998 to determine how Latin American countries were 
responding to this goal. We examined courses that are ``funded'' and 
those that are ``programmed.'' ``Funded'' means that countries have 
actually spent IMET allocations on courses and that these courses have 
already been conducted or about about to commece. ``Programmed'' 
indicates what training a country has selected for all of Fiscal Year 
'98. As of February, 13.92% of ``funded'' courses for the region were 
E-IMET while 36.25% has been ``programmed'' for E-IMET courses 
throughout Fiscal Year '98. ``Programmed'' courses and the percentage 
associated with them may not be achieved.
    We are endeavoring to meet the 30% goal by encouraging the 
countries to take advantage of E-IMET courses and by encouraging the 
use of Mobile Education Teams (METs) to provide in-country training. In 
a recent message to all countries in the Southern Command, we indicated 
priority will be given to E-IMET requests for reprogramming of IMET 
funds.
    We will continue to emphasize to Latin American countries the 
importance of meeting the 30% funding goal.
                                colombia
    Question. What is our role, particularly from a military 
perspective, in fostering peace talks between the government and the 
guerrillas? Do our personnel in Colombia emphasize the importance of 
civilian authority and control over the military? Has our military 
encouraged the Colombian military to carry out civilian orders to 
apprehend members of paramilitary death squads, which are responsible 
for some of the most serious abuses?
    Answer. From a military perspective, history has shown that 
successful resolutions to such conflicts have generally only come about 
when the insurgents are under pressure to negotiate. Clearly the 
Colombian armed forces and police have a role to play in enforcing the 
rule of law and restricting the insurgency's access to drug money and 
pressing them to negotiate in good faith.
    Not only do U.S. Government personnel in Colombia emphasize the 
importance of civilian authority and control over the military, the 
recently established Center for Hemispheric Defense Studies just 
concluded its first three-week seminar on ``Defense Planning and 
Resource Management'' with attendees from Colombia as well as other 
nations in the hemisphere. This Center was established as a result of 
the first Defense Ministerial of the Americas in an effort to improve 
the capacity and effectiveness of civilian defense authorities charged 
with overseeing their nation's military forces. The training programs 
at major U.S. military installations also include themes related to 
military deference to civilian authority in its professional 
development programs as well as other IMET-funded training in the 
United States.
    We regularly emphasize the need for the Colombian military to make 
every effort to confront the paramilitary threat in Colombia, divest 
itself of personnel known or believed to be sympathetic to the 
paramilitaries, and prosecute those who collaborate with them. This was 
a recurring theme during the recent visit of Colombian Armed Forces 
Commander Gen. Manuel Jose Bonett to Washington. We note that the 
Colombian Army recently arrested several paramilitary members, and we 
will encourage the Colombians to sustain this effort.
                       turkey--end-use monitoring
    Question. Will the United States continue to vigorously monitor the 
end-use of U.S.-issue military equipment by the Turkish military to 
ensure that it is not diverted from its intended purpose?
    Answer. The Administration will continue to monitor the end-use of 
U.S.-origin defense articles and services provided to Turkey, as well 
as to other foreign recipients, to ensure that such articles and 
services are used only for the purposes authorized, as required by law 
and regulation and with attention to Congress' particular interest in 
equipment provided to the Turkish military. The Administration's 
efforts in this regard are most recently detailed in the report, U.S. 
Military Equipment and Human Rights Violations, submitted to the 
Committees on Appropriations in July, 1997.
                                 turkey
    Question. Are U.S. military ties with Turkey being used towards 
positive resolution of long-running issues such as the Cyprus problem, 
overflights in the Aegean, the Kurdish separatist conflict and the 
Nagorno-Karabagh conflict?
    Answer. The U.S. enjoys close and productive relations with the 
Turkish defense establishment. These relations allow us to speak 
candidly and productively with our Turkish friends about issues of 
mutual concern. Tensions in the Aegean and on Cyprus, human rights 
issues associated with Turkey's struggle against PKK terrorism, and 
instability in the Caucasus and other areas are of much concern to both 
the U.S. and Turkey and are discussed frequently with Turkish defense 
officials. For example, these issues were discussed at length during 
the November 1997 U.S.-Turkey High-Level Defense Group. Secretary Cohen 
had a productive discussion of human rights and U.S. arms transfer 
issues with Turkish Prime Minister Yilmaz in Washington in December 
1997 and when Secretary Cohen visited Turkey in April 1998. We believe 
that these discussions make an important contribution to ongoing 
efforts to reduce tensions and resolve underlying disputes between 
Turkey and Greece, to reinforce the Turkish government's efforts to 
improve human rights in Turkey, and to promote stability in the 
Caucasus and other troubled areas in the regions that Turkey borders.
           Questions for the Record Submitted by Mr. Packard
                            nato--expansion
    Question. As Chairman of the Military Construction Sub-committee, I 
share a portion of the NATO expansion costs in my sub-committee. When 
the Administration calculates the overall cost of expansion, is this 
Sub-committee's funding included in that overall total?
    Answer. Yes. In the context of both the Administration's February 
1997 cost report, and NATO's December 1997 cost estimate, the U.S. 
annual contribution to NATO common military budgets was included in the 
calculation.
    There is about $41M in DOD's FY99 budget request for direct 
national contributions to the NATO commonly funded Military Budget and 
the Security Investment Program (NSIP). When this request was 
finalized, none of this money was earmarked for enlargement-related 
requirements. (In this regard, DOD's FY99 funding request for military 
construction appropriations to support U.S. contributions to NSIP will 
total $185M. We hope to obtain your support for full funding of this 
request.) The U.S. expects to incur about $10M in enlargement costs in 
FY99, which will be met from the $412M budget request.
    In our recently-released Cost Report to Congress, we reported that 
NATO and DOD estimated that from 1998 through the first few years 
following the accession of new members, some or all of the costs 
associated with enlargement are expected to be met from within 
currently-planned budgets.
    Based on NATO's agreed cost estimates, DOD has assessed that the 
resource implication of enlargement for NATO's three commonly funded 
budgets would be $1.5B over the decade after accession, of which the 
U.S. national share is estimated to be abut $400M.
    Beginning in 2002, as the bulk of enlargement costs begin to be 
incurred, DOD expects that virtually all of predicted enlargement costs 
will have to be reflected in increased DOD budget requests for 
contributions to NATO common military budgets.
    Beyond 2003, the funding picture is less clear, because NATO only 
assessed the impact of enlargement on common-funded budgets in detail 
out to 2002. Thereafter, NATO expects that common-funded enlargement 
costs will peak in 2005. Considering this likely expenditure profile, 
DOD believes that most or all of these predicted costs will require 
resources above current budget levels.
            Questions for the Record Submitted by Mr. Yates
               ``leahy language''--school of the americas
    Question. While the ``Leahy Language'' applies to funding from our 
bill, what is the Administrations policy with regard to DoD programs?
    Answer. Section 570 of the 1998 Foreign Operations, Export 
Financing, and Related Programs Appropriations Act (P.L. 105-118) 
applies only to programs funded through that Act. Section 570 does not 
apply to DoD programs funded through other Acts.
                            the imet program
    Question. Could you please provide a list of the number of students 
from each country who took courses and the location of the courses and 
a description of the course?
    Answer. The U.S. Military Training Program consists of over 2,000 
courses at approximately 150 military ``schoolhouses.'' This extensive 
training infrastructure is maintained primarily for the training and 
instruction of U.S. military and civilian defense personnel. However, 
this military training infrastructure may also be used to provide 
training to foreign military and civilian defense personnel. With a few 
exceptions for certain classified or sensitive courses, nearly every 
course available to U.S. personnel is also available to foreign 
students. In most cases, foreign students are incorporated into the 
student body and receive training alongside U.S. military personnel. 
Foreign student quotas for each course are requested at annual Training 
Program Management Review (TPMR) sessions.
    A foreign government may pay for training services with its own 
funds through a Foreign Military Sales (FMS) case or, if available to 
the country, it may use grant funds appropriated by the Congress under 
the International Military Education and Training (IMET) program. 
(Countries receiving grant Foreign Military Financing (FMF) funds may 
also purchase training through the FMS system with those grant funds.) 
Comparative figures for fiscal year 1997 are as follows:

------------------------------------------------------------------------
                                              No. of          $ value   
                                             students       (millions)  
------------------------------------------------------------------------
IMET training...........................           7,994         $43.475
FMS training \1\........................      \2\ 10,743         446.869
------------------------------------------------------------------------
\1\ Training purchases through FMS are more expensive than grant        
  training provided under the IMET program. Since under the AECA the    
  U.S. must recoup all costs associated with the training for foreign   
  students via FMS, the course cost/tuition is higher. The IMET rate    
  only covers those costs expended over and above costs associated with 
  training of U.S. DoD personnel. Also, IMET does not fund more         
  expensive categories of technical training, such as pilot training.   
\2\ This figure does not include numbers of students trained outside the
  CONUS through Military Training Teams (MTTs).                         

    The IMET program was established in the 1950's as a low-cost 
foreign policy program to provide training in U.S. military schools to 
military students from allied and friendly nations on a grant basis. In 
1990, the Congress (in P.L. 101-513) directed the DoD to establish a 
program within IMET focused on: (1) Training foreign military and 
civilian officials in managing and administering military 
establishments and budgets; (2) creating and maintaining effective 
military judicial systems and military codes of conduct (including 
observance of internationally-recoginzed human rights); and (3) 
fostering greater respect for the principle of civilian control of the 
military. To comply with this directive, the DoD refined some existing 
U.S. training and began creating new courses (a process which continues 
today). This initiative became the Expended IMET (E-IMET) program.
    It is important to note the E-IMET is not a separate program from 
IMET, but is rather a classification for U.S. training programs that 
meet the goals of the Congressional mandate established by P.L. 101-
513. Training at courses qualifying for classification as E-IMET may be 
funded with grant IMET or may be purchased through the FMS system. Some 
E-IMET courses have been developed that are foreign-only courses; that 
is, they were not developed with the attendance of U.S. military 
personnel in mind, but were developed specifically to meet the needs of 
foreign students and E-IMET objectives. Examples include the 
International Defense Resource Management Course and the International 
Health Resources Management Program, and programs in disciplined 
military operations and the rule of law (Military Justice) and civil-
military relations. E-IMET programs are also presented outside the U.S. 
in a host country through Mobile Education Teams (METs). METs allow 
large numbers of high-level officials to receive economical training in 
their own language and in their own country or region.
    In FY97, IMET sub-allocations to the military services were as 
follows:

Army....................................................     $16,264,385
Navy....................................................      16,245,673
Air Force...............................................      10,964,942

    Breakout of training conducted in the U.S. (CONUS) and training 
conducted outside the U.S. (OCONUS) for fiscal year 1997: CONUS 
Training--$33,862,678 (77.89% of the IMET program); OCONUS Training--
$9,612,322 (22.11% of the IMET program),\1\ Travel and Living Allowance 
(TLA) costs represent a portion of most IMET course costs. For FY97, 
TLA costs were $16,917,277.\2\
---------------------------------------------------------------------------
    \1\ 99% of OCONUS training is for E-IMET Mobile Education Teams 
(METs).
    \2\ TLA is primarily used for students undergoing CONUS training, 
but on occasion it is used for students attending a regional MET 
outside their own country.
---------------------------------------------------------------------------
    The FY97 IMET appropriation of $43.475M may be broken down into the 
following categories:
    PME, Management, and Postgraduate training at 59.50% (or 
$25,867,625).
    Technical training at 17.89% (or $7,777,678), which includes 
$7,390,750 for English language training (17% of the program).
    Mobile Education Teams (METs)/Mobile Training Teams (MTTs) at 
22.11% (or $9,612,322), of which 99% ($9,516,199) is for E-IMET METs.
    Orientation tours at 0.50% (or $217,375).
    Approximately 27% of the program (or $11,681,143) was expended for 
E-IMET courses which were spread over all types of training.
    The FY98 IMET program is broken out as follows: PME, Management and 
Postgraduatue Training: 70%; Technical training, to include English 
language: 17%; METs and Orientation tours: 13%; E-IMET: 30%. We expect 
that the FY99 IMET program will have a similar training percentage.
    Due to the enormity of the FY97 IMET program (approx. 8,000 
students), it would be an onerous task to provide course locations and 
course descriptions. Please see attachment for number of students, by 
country, which took IMET courses in FY97, as derived from the document 
entitled FY99 Congressional Presentation for Foreign Operations. In the 
future, the Department of Defense encourages specific questions about 
country IMET programs. We are happy to provide the information in 
writing or provide a briefing team at your convenience.


[Pages 213 - 215--The official Committee record contains additional material here.]



               foreign military financing (fmf) pipeline

    Question. Why is there still so much old money in the pipeline for 
Foreign Military Financing?
    Answer. We define ``pipeline'' as being uncommitted funds, that is, 
the amount of monies not programmed for a specific defense article or 
defense service. Since the early 1960s, a total of $96,279B in FMF has 
been apportioned among 141 countries and international organizations. 
Of that amount, $751M (or 0.78%) remains uncommitted to date, and only 
$427M (0.44%) represents funds apportioned in FY96 and prior. Moreover, 
$288M of the $427M in prior-year uncommitted funds relates to loans 
apportioned for Greece. We do not believe a program that has been over 
99% committed is under-utilized. A total of 23 countries/organizations 
have not received any new FMF apportionments since FY95 and five 
countries are restricted from using FMF (e.g., Brooke Sanctions).
    Question. Is that money ever transferred for other uses and what 
are the uses?
    Answer. Legally, the money could be transferred to another account/
agency as long as the funds were uncommitted, undisbursed (meaning 
bills have not been paid from the FMF account) and were apportioned 
within five years of the transfer date. (Ref: Sec 632, FAA and 31 USC 
1551) In practice, however, funds have not been transferred to other 
accounts. Moreover, the transfer of FMF funds among countries has 
occurred only once: in FY94, $2.190M of FY90 funds were deobligated 
from Guatemala and reobligated to Bolivia. We are currently prohibited 
from exercising ``deob-reob'' authority (Ref. Sec 510, P.L. 105-118).
    Question. Can you please supply this Committee with a new estimate 
on FMF monies still in the pipeline?
    Answer. A report identifying current uncommitted FMF monies is 
attached.


[Pages 217 - 219--The official Committee record contains additional material here.]



                            the imet program
    Question. Is there a book that lists all IMET courses available to 
foreign students? Can you make it available to this Committee?
    Answer. There is no single book or publication that lists all IMET 
courses available to foreign students. However, the U.S. Military 
Services recently made available all of there course catalogs available 
via the Internet. The Army Formal Schools Catalog is available via the 
Army Training Requirements and Resources System (ATRRS) at: http://
www.asmr.com/atrrs/catalog.html. The catalog of the Navy Training 
Courses (CANTRAC) is available at: http://www.cnet.navy.mil/netpdtc/
cantrac. The Air Force Formal Schools Catalog, AFCAT 36-2223, is 
available at: http://afpubs.hq.af.mil/elec-products/pubs/af/36/
36222300/36222300.pdf.
    The following attachment provides a lengthy listing of all courses 
that are scheduled currently for the FY98 IMET program, as of 15 March 
1998. Please note that many changes (additions, deletions) will occur 
throughout the rest of FY98. The ``course title'' and ``military course 
number'' provided in the attached listing can be used to locate a 
course description in the course catalogs found via the Internet.


[Pages 221 - 242--The official Committee record contains additional material here.]



                            chemical weapons

    Question. Mr. Slocombe, last year you paraphrased Clausewitz, 
saying that war is the continuation of policy by other means. You also 
stated that it is the policy of the United States that if any country 
uses chemical weapons against the United States they will be met with a 
prompt and overwhelming response. I know that it was our public 
position during the Gulf War, but does that remain our position today?
    Answer. Yes, that remains our position today. As Secretary Cohen 
said to the National Press Club on March 17, ``We've made it very clear 
to Iraq and to the rest of the world that if you should ever even 
contemplate using weapons of mass destruction--chemical, biological, 
any other type--against our forces, we will deliver a response that's 
overwhelming and devastating.''
                  chemical weapons--deterrence policy
    Question. Would you assess the effectiveness of this policy as a 
deterrent?
    Answer. Effective deterrence depends on a combination of our 
ability to respond to threats of use of biological or chemical weapons 
against U.S. or coalition forces with a devastating retaliatory blow, 
and our ability to carry out military operations successfully, even in 
the face of widespread energy use of chemical and biological weapons.
    In deterring the threat of use of biological or chemical weapons 
use against U.S. or coalition forces, we depend on strong conventional 
military forces that are trained and equipped to operate effectively in 
a chemical-biological warfare (CBW) environment, and a powerful, 
flexible nuclear capability. Effective counterforce combined with 
improving active and passive defenses can deny the tactical, 
battlefield advantages that an adversary might otherwise perceive it 
could gain by employing chemical or biological weapons. We have, in 
fact, a broad spectrum of credible force options available. From these 
we can choose the appropriate option for delivering a devastating and 
overwhelming response to NBC use against us.
                         chemical weapons--iraq
    Question. Could this type of response be applied to Iraq?
    Answer. Yes. We have made it very clear to Iraq and the rest of the 
world that if you should ever even contemplate using weapons of mass 
destruction--chemical, biological, any other type--against our forces, 
we will deliver a response that's overwhelming and devastating.
                          security assistance
    Question. How can our security assistance programs help our allies 
to deter ``rogue nations'' from developing chemical, biological and 
other weapons of mass destruction?
    Answer. Our security assistance programs help train and equip U.S. 
allies to become more capable coalition partners and improve their 
ability to survive and sustain military operations under the threat of 
chemical or biological weapons. Strengthening the chemical and 
biological defense capabilities of our allies--including passive 
defense hazard avoidance, protection and decontamination equipment, as 
well as theater missile defense systems--enhances deterrence by denial: 
that is, our potential adversaries are less likely to use chemical and 
biological weapons in the face of strong defenses because the benefits 
of any such attack would be greatly reduced. The Secretary of Defense 
places a high priority on improving the defense capabilities of likely 
partners in future U.S.-led coalitions so that they can provide basing 
and host nation support, as well as sustain operations alongside U.S. 
forces under chemical or biological attack. Toward this end, the United 
States has undertaken discussions with regional allies in Europe, the 
Middle East and East Asia to improve their chemical and biological 
defenses. An important aspect of these discussions will continue to be 
the role of U.S. Security assistance programs, particularly the Foreign 
Military Financing (FMF) and International Military Education and 
Training (IMET) accounts.
                           wmd proliferation
    Question. What is our first, last, and best line of defense in 
dealing with the proliferation of chemical, biological, and other 
weapons of mass destruction?
    Answer. The primary objective of U.S. policy is to prevent 
countries from acquiring NBC weapons and their delivery systems or to 
roll-back proliferation where it has occurred. To accomplish this 
objective, we utilize diplomacy, and the Defense Department contributes 
to U.S. efforts to prevent the acquisition of NBC weapons and their 
delivery systems by supporting the Department in negotiating and 
implementing various arms control and non-proliferation regimes, such 
as the Chemical Weapons Convention and the Wassenaar Arrangement. Since 
the dissolution of the Soviet Union, the Department's Cooperative 
Threat Reduction (CTR) program has assisted Belarus, Kazakhstan, 
Russia, and Ukraine with the elimination (or, in the case of Russia, 
reduction) of weapons of mass destruction and their delivery systems, 
proliferation prevention efforts, and the dismantlement and 
transformation of infrastructure associated with these weapons.
    Howver, we recognize that despite our best efforts, we will not be 
fully successful in preventing such proliferation. The goal, failing 
that, of the Defense Department's Counterproliferation Initiative is to 
deter and prevent effective use of chemical and biological weapons 
(CBW). We do that by posing a credible threat of swift, devastating, 
and overwhelming retaliation and by ensuring that U.S. and coalition 
forces are trained, equipped, and prepared to fight and win in a CBW-
contaminated environment.
    Prevention, deterrence, and protection strategies are mutually 
reinforcing. There is no single, simple counter to chemical and 
biological weapons. Instead, an integrated counterproliferation 
strategy is required, because each component will have its limits and 
failings. The strategy must include attempting to stop the 
proliferation of threatening capabilities, increasing the risks the 
adversary may face for the use of NBC weapons, and seeking to deny the 
gains an adversary might hope to achieve.
    Support for international nonproliferation regimes is also an 
important component of U.S. policy. International cooperation that is 
consistent with U.S. nonproliferation objectives offers a broader base 
to combat proliferation. Proliferation of weapons of mass destruction 
and their delivery systems is not solely the concern of the United 
States; it is an issue that affects every nation.
                           imet for guatemala
    Question. What IMET or Expanded-IMET funding was used in Guatemala 
in FY97?
    Answer. As directed by Section 567 of the 1997 Omnibus Consolidated 
Appropriations Bill, all of the Guatemalan IMET allocation ($205,000) 
was spent on Expanded-IMET (E-IMET) courses. The emphasis in E-IMET is 
typically placed on upper level professional military education, 
military justice, civil-military relations, and defense resource 
management.
    In FY 97 the following E-IMET courses were provided to Guatemalan 
students:
    Civil Military Relations (Mobile Education Team [MET] in 
Guatemala);
    Company Grade Officer Professional Development Course;
    Defense Resource Management MET (in Guatemala);
    Legal Aspects of Military and Peace Operations;
    Managing English Language Training;
    Phases I and II of the Military Justice MET (in Guatemala);
    The Rule of Law and Disciplined Military Operations MET (in 
Panama).
    Two American Language Courses were offered in FY97 to one student. 
While not specifically E-IMET courses, they were critical to 
establishing an English language laboratory in Guatemala. This 
laboratory will enable Guatemala to send English-language proficient 
students to the United States and give them a wider variety of E-IMET 
courses from which to choose. (Spanish-speaking only students are 
limited to E-IMET courses provided at the School of the Americas.) The 
two American Language Courses included discussion of topics which are 
E-IMET objectives (i.e., human rights, civilian control of the 
military, reading the U.S. Constitution and the Bill of Rights, as well 
as other literature that educates students in the democratic process.)
    The 1998 Foreign Operations Bill continues to restrict Guatemala to 
E-IMET coursework.

            Questions for the Record Submitted by Ms. Pelosi

                       cooperation with pakistan
    Question. How many official military visits and joint military 
exercises have occurred between the U.S. and Pakistan?
    Answer. During FY96 and FY97, the following official military 
visits occurred between the U.S. and Pakistan:
    GEN Peay, CINCCENTCOM, 23-26 May 96;
    LTG Arnold, CDR ARCENT, 18-23 Jul 96;
    GEN Peay, CINCCENTCOM, 18-20 Jan 97;
    VADM Fargo, CDR NAVCENT, 18-19 Mar 97;
    GEN Ralston, VCJCS, 14-16 Jul 97;
    GEN Peay, CINCCENTCOM, 20-22 Jul 97;
    LTG Franks, CDR ARCENT, 5-8 Aug 97;
    VADM Fargo, CDR NAVCENT, 27-29 Aug 97.
    Joint exercises: With the implementation of the Pressler sanctions 
and DESERT SHIELD/DESERT STORM, the U.S.-Pakistan exercise program was 
suspended during the period 1990-1992. Since the suspension, the 
following joint military exercises were conducted between the U.S. and 
Pakistan:

----------------------------------------------------------------------------------------------------------------
               Exercise                         Dates                     Type                   Remarks        
----------------------------------------------------------------------------------------------------------------
INSPIRED SIREN 93-2..................  unknown................  SURFEX.................  note 1                 
INSPIRED VENTURE 93..................  7 Feb-7 Mar 93.........  SOF FTX................  note 2                 
INSPIRED VENTURE 94..................  1-31 Jan 94............  SOF FTX................  note 2                 
INSPIRED ALERT 94-1..................  26-30 Jan 94...........  AIREX..................  note 3                 
INSPIRED SIREN 94-1..................  30 Jan-2 Feb 94........  SURFEX.................  note 1                 
INSPIRED ALERT 94-2..................  11-17 Mar 94...........  AIREX..................  note 3                 
INSPIRED SIREN 94-3..................  21-25 Aug 94...........  SURFEX.................  note 1                 
INSPIRED SIREN 95-2..................  11-15 Mar 95...........  SURFEX.................  note 1                 
GAMBOL VENTURE 95....................  1-31 Apr 95............  SOF MTT................  note 4                 
INSPIRED SIREN 95-3..................  14-18 Mar 95...........  SURFEX.................  note 1                 
INSPIRED ALERT 95-3..................  27-31 May 95...........  AIREX..................  note 3                 
INSPIRED VENTURE 95..................  13 Jul-15 Aug 95.......  SOF FTX................  note 2                 
INSPIRED ALERT 95-4..................  26-30 Aug 95...........  AIREX..................  note 3                 
INSPIRED GAMBIT 95...................  17-30 Sep 95...........  FTX....................  note 5                 
INSPIRED ALERT 96-1..................  13-17 Jan 96...........  AIREX..................  note 3                 
INSPIRED ALERT 96-3..................  26-30 May 96...........  AIREX..................  note 3                 
INSPIRED SIREN 96-2..................  14-18 Feb 96...........  SURFEX.................  note 1                 
EAGER DANCER 96......................  2-26 May 96............  JCET...................  note 6                 
INSPIRED SIREN 96-3..................  26-30 Jun 96...........  SURFEX.................  note 1                 
INSPIRED VENTURE 96..................  4-23 Aug 96............  SOF FTX................  note 2                 
INSPIRED ALERT 97-1..................  18-22 Feb 97...........  AIREX..................  note 3                 
INSPIRED SIREN 97-2..................  4-9 Apr 97.............  SURFEX.................  note 1                 
INSPIRED GAMBIT 97...................  6-22 Jun 97............  FTX....................  note 5                 
INSPIRED UNION 97....................  7-12 Aug 97............  SURFEX/AIREX...........  note 7                 
----------------------------------------------------------------------------------------------------------------
Note 1. INSPIRED SIREN is a surface exercise conducted between U.S. and Pakistani navies and normally conducted 
  two to three times a year. INSPIRED SIREN normally includes two Pakistani destroyers and one to two U.S.      
  ships.                                                                                                        
Note 2. INSPIRED VENTURE is a special operations field training exercise conducted between U.S. and Pakistani   
  SOF forces (Army and Navy).                                                                                   
Note 3. INSPIRED ALERT is a naval air exercise conducted between USN and USMC fixed wing aircraft and Pakistani 
  Air Force.                                                                                                    
Note 4. GAMBOL VENTURE was a one time SOF MTT that trained Pakistani SOF on static line and free fall jumping.  
Note 5. INSPIRED GAMBIT is a ground FTX conducted between a U.S. light Infantry company and a Pakistani         
  conventional Army  battalion (-).                                                                             
Note 6. EAGER DANCER is a Joint Combined Exchange Training (JCET) conducted between U.S. and Pakistani SOF.     
Note 7. INSPIRED UNION is the exercise name when INSPIRED SIREN and INSPIRED ALERT are conducted simultaneously.

            Questions for the Record Submitted by Ms. Kaptur

                                 bosnia
    Question. How much money has the U.S. expended to date from all 
accounts for Bosnia-related activities?
    Answer. The incremental costs of DoD participation in operations in 
and around the Former Yugoslavia, predominately Bosnia, totaled $2.5 
billion for FY 1996 and $2.3 billion in FY 1997. The current projection 
for FY 1998 through June is approximately $1.6 billion. These Bosnia 
costs cover the preparation, deployment and sustainment of U.S. forces, 
as well as the costs associated with enforcement of the no-fly zone 
over Bosnia, and support of other UN observer related missions in the 
AOR.
    Incremental costs totaling $347.4 million in FY 1995, $292.0 
million in FY 1994, $138.8 million in FY 1993, and $5.8 million in FY 
1992 were incurred by the DoD to support humanitarian related mission 
in, and aircraft operations over, the Former Yugoslavia.
    The Department of Defense only has oversight and visibility for the 
DoD related programs being executed in Bosnia by other government 
agencies, including State and AID. We are informed by the listed 
agencies that their expenditures in Bosnia are as follows:

                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                               Fiscal year--                    
                                                         -------------------------------------------------------
                                                                                                     Est.   Est.
                                                           1992   1993   1994   1995   1996   1997   1998   1999
----------------------------------------------------------------------------------------------------------------
State/AID...............................................     47    343    387    181    641    448    405    382
----------------------------------------------------------------------------------------------------------------

    Question. How much have other nations expended?
    Answer. There is no source of information to answer this question 
as it applies to military costs. Different accounting systems and rules 
make it virtually impossible to accurately report other country 
expenditures in Bosnia. Additionally, most countries are reluctant to 
openly report their military expenditures. This has been a continuing 
problem due to disclosure issues, accounting practices, and the lack of 
a common accounting baseline. NATO, GAO, DOS, OMB, DoD Comptroller, and 
the Joint Staff were all contacted to address this issue; no one was 
able to address the issue of foreign military expenditures in Bosnia.
    Question. What percentage of all troops deployed in Bosnia are U.S. 
forces?
    Answer. The following chart depicts current contributions to SFOR 
from all contributing nations:
MND (N) (U.S. Sector)
    Denmark: 1,000 (2.83%)--Mech Infantry Battalion in Nordic Brigade.
    Estonia: 41 (.116%)--Infantry Platoon in Danish Battalion.
    Finland: 341 (.968%)--Mech Battalion.
    Iceland: 6 (.017%)--Security.
    Latvia: 39 (.110%)--Infantry Platoon in Danish Battalion.
    Lithuania: 40 (.113%)--Infantry Platoon in Danish Battalion.
    Norway: 615 (1.74%)--Infantry Security Co.-SFOR HQ Battalion-Nordic 
Brigade.
    Poland: 400 (1.13%)--Mech Infantry Battalion in Nordic Brigade.
    Russia: 1,400 (3.97%)--Airborne Brigade.
    Sweden: 480 (1.36%)--Mech Infantry Battalion in Nordic Brigade.
    Turkey: 1,520 (4.31%)--Mech Infantry Brigade.
    United States: 8,500 (24.13%)--1st Armor Division
MND (SE) (French Sector)
    Egypt: 270 (.766%)--Mech Infantry Battalion in French Brigade.
    France: 2,500 (7.09%)--French-German Brigade.
    Ireland: 50 (.141%)--MP Company, SFOR HQ.
    Italy: 1,790 (5.08%)--Mech Infantry Brigade.
    Jordan: 10 (.028%)--Special Forces Contingent.
    Morocco: 650 (1.84%)--Infantry Battalion in Italian Brigade.
    Portugal: 320 (908%)--Airborne Battalion in Italian Brigade.
    Spain: 1,550 (4.40%)--Mech Infantry Brigade.
    Ukraine: 380 (1.07%)--Mech Infantry Battalion.
    Germany: 2,470 (7.01%)--French-German Brigade.
MND (NW) (UK Sector)
    Bulgaria: 30 (.085%)--Engineering Construction Platoon, Attached to 
Netherlands Battalion.
    Canada: 1,250 (3.54%)--Mech Infantry Battalion.
    Czech Republic: 640 (1.81%)--Mech Infantry Battalion.
    Malaysia: 925 (2.62%)--Mech Infantry Battalion.
    Netherlands: 1,080 (3.06%)--Mech Infantry Battalion
    United Kingdom: 5,000 (14.19%)--7th Armored Brigade.
Multinational combat support elements--SFOR logistics command
    Albania: 40 (.113%)--Attached to German Brigades below.
    Austria: 230 (.653%)--Transportation Co. in Beluga Battalion.
    Belgium: 50 (.141%)--Support Element.
    Germany: 850 (2.41%)--Logistics, Medical, Transport Brigade 
Battalion, Engineering Battalion, Aviation Regiment (these numbers are 
reflected in the Germany totals above).
    Greece: 210 (.596%)--Transportation Co. in Beluga Battalion.
    Hungary: 255 (.724%)--Engineering Battalion.
    Luxembourg: 18 (.051%)--Transportation Platoon in Greek Co.
    Romania: 200 (.567%)--Engineering Battalion.
Commonwealth nations contributing to United Kingdom total
    Australia: 5 (.014%)--Part of Armored Brigade.
    New Zealand: 8 (.022%)--Part of Armored Brigade.
    South Africa: 3 (.008%)--Part of Armored Brigade.
Other
    Slovenia: 50 (.141%)--Security forces based in Slovenia.
    The final size of the follow-on force is being determined by the 
NATO force generation process that is on-going at this time.
    Question. What is the percentage of troops deployed by other 
nations?
    Answer. Percentages of troops deployed by nation are listed in the 
previous answer.
                                  nato
    Question. With future expansion of NATO, can you tell me if our 
European allies have increased their contributions to aid in this 
effort.
    Answer. We are confident that our European allies will pay their 
fair share of the costs of NATO enlargement. Our confidence is based on 
an established track record of nearly fifty years during which our 
allies consistently fulfilled their NATO financial obligations. We are 
further encouraged by the fact that NATO political leaders, both in 
Madrid and in Brussels acknowledged that there will be costs associated 
with NATO enlagement, and confirmed their nations' willingness to meet 
these costs.
            Questions for the Record Submitted by Mr. Torres
                         school of the americas
    Question. How does DoD and the School of the Americas intend to 
track the career of SOA graduates?
    Answer. It is not administration policy to track the careers of the 
attendees at any U.S.-sponsored training, including attendees of the 
U.S. Army School of the Americas. U.S. country teams will vet 
thoroughly all candidates according to U.S. State Department guidance 
and maintain these background checks for 10 years. The Administration 
recently reported to Congress on careers of some students that had 
achieved prominence after taking courses at the U.S. Army School of the 
Americas, and we anticipate this type of information will continue to 
be available.
    Question. How do the Defense Department and the SOA intend to track 
the careers of SOA graduates to understand the impact of training on 
human rights? What sources will be used? How actively will this kind of 
evaluation be pursued?
    Answer. It is not Administration policy to track the careers of the 
attendees at any U.S.-sponsored training, including attendees of the 
U.S. Army School of the Americas. U.S. country teams will vet 
thoroughly all candidates according to U.S. State Department guidance 
and maintain these background checks for 10 years. The Administration 
recently reported to Congress on careers of some students that had 
achieved prominence after taking courses at the U.S. Army School of the 
Americas, and we anticipate this type of information will continue to 
be available.
    Question. The November 1997 DoD Inspector General's report 
mentioned that the SOA was still, at the time of the report, 
circulating a list including 40 outdated manuals for sale to Latin 
American militaries. Four were military intelligence manuals. Can you 
make those four available to me?
    Answer. All 40 of the outdated manuals discovered during the 
Inspector General's visit were immediately destroyed and are no longer 
in possession of the School of the Americas. We, therefore, are unable 
to make the four manuals available.
    Question. The Defense Department has stated that the SOA has added 
an additional human rights course, ``Human Rights Train the Trainer''. 
How was this curriculum developed? What are the requirements for 
teachers of this course? Please provide a copy of this curriculum. What 
students are currently enrolled in this course?
    Answer. The Human Rights Train the Trainer Course was developed in 
1997 to fill the specific needs of nations who need qualified trainers 
with an expertise in Human Rights training. The course combines the 
Instructor Training Course curriculum with the Human Rights Awareness 
training to provide students with the ability to competently present 
instruction based on Human Rights scenarios. In 1997, the course was 
validated in Paraguay by teaching twelve students during the course of 
a Human Rights Exchange Seminar.
    The course uses as its principal source documents, the U.S. Army 
field manual, FM 27-2, Conduct in Combat Under the Law of War and the 
U.S. Army's Staff Judge Advocate's Handbook.
    The Human Rights portion of the course is taught by a School of the 
Americas Staff Judge Advocate, an U.S. Army Lawyer, and the School 
Chaplain, an ordained minister. The technical aspects of instructional 
techniques are taught by the instructors of the SOA Instructor Training 
Course.
    A copy of the curriculum is attached.
    We have had no requests for attendance at this course in FY98.


[Pages 249 - 251--The official Committee record contains additional material here.]



    Question. The certification report provided to our subcommittee, as 
well as many previous references by the Defense Department and the SOA, 
state that the training manuals used at the SOA which advocated human 
rights abuses contained only ``24 inappropriate or vague statements 
inserted throughout six publications (1,100 pages) that were otherwise 
completely consistent with U.S. law and human rights policy.'' Who made 
this determination that all but 24 passages of these manuals are 
(un)objectionable? What criteria were they using to evaluate the 
manuals?
    Answer. During its 1991/1992 investigation regarding improper 
material in Spanish-language intelligence training manuals in use in 
the U.S. Southern Command area of responsibility and the School of the 
Americas, the Assistant to the Secretary of Defense for Intelligence 
Oversight (now the Special Assistant to the Secretary of Defense for 
Intelligence Policy) directed a review of the seven training manuals, 
totaling 1169 pages, that reportedly contained objectionable language. 
The review was carried out by numerous U.S. Army language-qualified 
subject matter experts working independently of one another. Their 
conclusions were reviewed and certified by U.S. Army legal officials.
    The review concluded that five of the seven manuals contained two 
dozen short passages which contained material that could be interpreted 
as to not be consistent with U.S. government laws, regulations, and 
policy as articulated in: 1949 Geneva Convention, Articles 3 and 18; 
Title 18 United States Code (USC), Sections 872 and 875; Title 22 USC, 
Sections 2304(a)(3), 2347b and 2349 aa-1; Executive Order 12333, 
paragraph 2-11; and DoD Directive 5240.1-R, procedures 2, 3, 4.
    Question. A directive was supposed to be issued to ensure that no 
foreign military intelligence training materials used at the SOA or 
anywhere else advocate human rights abuses. What is the status of this 
directive? If it is finalized, please provide a copy as well as an 
explanation of how such a directive will be distributed, explained and 
implemented to all relevant agencies.
    Answer. On 27 August 1992, the Assistant Secretary of Defense for 
Command, Control, Communications and Intelligence issued a policy 
memorandum entitled ``DoD Policy on Intelligence and 
Counterintelligence Training of Non-United States Persons'' to the 
Secretaries of the Military Departments, the Chairman of the Joint 
Chiefs of Staff, and the Directors of the Defense Intelligence Agency 
and the National Security Agency. In its Evaluation Report on Training 
of Foreign Military Personnel--Phase I (Report Number PO 97-007 dated 
21 February 1997) the DoD Inspector General recommended that the policy 
memorandum be reissued as a DoD Directive. That Directive is currently 
being coordinated and it is expected to be published later in 1998. A 
copy of the Directive, along with the plan for dissemination, will be 
provided once it is signed.
    Question. In the Army's SOA certification report received in 
January, on page 34-37, is a list of the graduates of the School who 
currently hold various positions of prominence in their respective 
countries. Specifically, who is the Army referring to, can you please 
attach names to the titles supplied in these pages?
    Answer. A list of the names of those prominent former students and 
their titles referred to in the Army's SOA certification is attached.


[Pages 253 - 256--The official Committee record contains additional material here.]



                         u.s. military training

    Question. There has been an increase in U.S. military assistance to 
Mexico, primarily for counternarcotics training. Is there any end-use 
monitoring with regard to the activities of the Mexican Army personnel 
trained by the U.S. Government? Is there end-use monitoring of the UH-
1H helicopters transferred to Mexico?
    Answer. DoD provides counternarcotics training to individuals who 
serve in a variety of assignments upon their return to Mexico, and they 
are further assigned periodically thereafter to a wide variety of jobs. 
As a practical matter then, it is impossible to monitor those 
individuals. However, there is a UH-1H End-Use-Monitoring agreement 
with Mexico. On a bi-monthly basis, pursuant to this agreement 
negotiated by the U.S. Embassy and the Government of Mexico (GOM), the 
Mexicans provide the U.S. Military Liaison Office (MLO) a summary of 
their use of the 73 UH-1H helicopters that DoD provided to the Mexican 
Secretary of National Defense under authority of the Foreign Assistance 
Act. In addition, the MLO conducts quarterly visits to installations 
where these aircraft, pilots, and maintenance personnel are located to 
check aircraft, to interview personnel, and to verify and corroborate 
information.
    Question. Who are the foreign officials trained by the Special 
Operations Forces?
    Answer. The majority (80 percent) of Special Operations Forces 
(SOF) training missions focus on the junior, tactical-level leadership 
(Captain and below) of the host nation armed forces and 
counternarcotics forces. Larger SOF exercises (2-3 per quarter) also 
incorporate the Battalion and Brigade level leadership (Lieutenant 
Colonel/Colonel level). During some Humanitarian Civic Action (HCA) 
missions and the Counterterrorism Enhancement Program (CTEP), the host 
nation national-level civilian and military leadership is also 
included.
    Question. What are the counternarcotics operation that SOF have 
carried out?
    Answer. None. SOF have not directly participated in any 
counternarcotics operations in Latin America. DoD policy specifically 
precludes such involvement by any DoD personnel; personnel are not 
authorized to accompany U.S. or host nation law enforcement forces on 
actual field operations or, during the course of their activities, 
intentionally expose themselves to situations where hostilities are 
imminent. SOF have conducted counternarcotics training at various 
locations in Latin America and in the United States.
    Question. What are the ``miscellaneous other-than-war activities'' 
that SOF have carried out?
    Answer. SOF activities include providing training and logistical 
support to the Organization of American States' deminining program in 
Central America (MARMINCA) (1995 to present). SOF continues to provide 
the U.S. peacekeeping contingent assigned to the Military Observer 
Mission Ecuador-Peru (MOMEP) formed following the February 1995 Peru-
Ecuador border conflict. SOF provided camp coordinators and security 
support to the Cuban Displaced persons (10,000) during Operation SAFE 
HAVEN in Panama (Sept. 94-Feb. 95). During UPHOLD DEMOCRACY, Haiti, SOF 
teams deployed to rural towns throughout Haiti to provide stability to 
local communities. Following Operation JUST CAUSE, Special Forces teams 
provided that same stability to rural Panama in Operation PROMOTE 
LIBERTY (1990-91). SOF is also prepared to conduct and assist in 
Disaster Relief, Non-Combatant Evacuation and Search and Rescue 
missions. Recently (Feb. 98), for example, SOF deployed 18 personnel 
and 2 MH60 helicopters to Costa Rica to rescue an American citizen who 
had been lost four days in the jungle.
    Question. What are the ``direct actions'' that SOF have recently 
carried out?
    Answer. Operation JUST CAUSE in Panama (Dec. 89) and Operation 
UPHOLD DEMOCRACY (Sept. 94) were the recent SOF direct actions. During 
H-Hour of JUST CAUSE, SOF elements serviced 20 targets in support of 
the larger invasion force, The Ranger Battalions conducted Airborne 
Assaults into the two principal targets of Torrijos/Tocumen Airport and 
Rio Hato Airfield. During UPHOLD DEMOCRACY, SOF elements secured 
Haitian military and Police bases and disarmed Gen. Cedras' forces.
    Question. What paramilitary forces have recently been (during this 
decade) and/or are currently being trained, advised, or helped by SOF?
    Answer. Special Forces trainers in El Salvador helped establish the 
Civil Defense training school (1984-91). SOF filed advisers ensured 
that Civil Defense units were properly supported. The Costa Rican Rural 
Frontier Police receive training though the JCET (Joint Combined 
Exchange Training). The training focuses on land navigation and 
patrolling. Rural Counternarcotics police units in Colombia, Ecuador, 
Peru, Paraguay, and Bolivia are trained by Special Forces units. These 
police units have the primary counternarcotic role in their country. 
These units need light infantry skills to succeed in their missions. 
Latin American national terrorist response forces, some of which are 
police units, do participate in counterterrorism enhancement and 
interoperability exercises with U.S. special operations forces in order 
to heighten the respective host nation's ability to assist in the 
protection of official USG personnel and facilities.
                       other security assistance
    Question. What U.S. security assistance is being provided to which 
countries through channels not covered by the Foreign Operations Act? 
Please differentiate between training and the provision of goods and 
specify what those channels are.
    Answer. Security assistance, as defined by Section 502B of the 
Foreign Assistance Act, is funded solely through the Foreign Operations 
Appropriations Act. Of course, the U.S. engages numerous countries in 
cooperative programs other than security assistance. We are happy to 
provide a briefing team to address specific countries and relevant 
programs at your convenience.
                    Submitted to Department of State
            Questions for the Record Submitted by Mr. Porter
                               guatemala
    Question. Given the delicate peace process in Guatemala and the 
vital importance of ending impunity for human rights abuses in 
maintaining that peace, will Guatemala continue to be limited to 
expanded IMET courses only for fiscal year 1999? Is Guatemala able to 
purchase regular IMET courses for its students? Given the apparent 
inability of the civilian authorities to deal with these problems, what 
steps--beyond asking for information from these same civilian 
authorities--are being taken to ensure that persons who have been 
involved with human rights abuses--past or present--are not permitted 
to participate in IMET training?
    Answer. Currently, Guatemala is legislatively restricted to 
expanded IMET only. Because the Guatemala peace agreement remains 
tenuous, the training regimen should continue to focus on expanded IMET 
courses. However, we believe Guatemala would reap greater benefits if 
it had access to the full range of courses offered by the IMET program. 
Over the past year, the Department has worked with DoD to put in place 
more comprehensive, fail-safe procedures to guard against participation 
by individuals who have been involved in activities such as human 
rights abuses, drug trafficking, and corruption and other behaviors 
that would render them ineligible. Accordingly, more definitive 
guidance was provided to training program managers in Latin America 
which specifies the criteria to be used in screening nominees and 
requires long-term monitoring and record keeping on graduates. We are 
confident that this additional emphasis on the screening process will 
ensure the continued integrity of all our training programs.
    Question. How successful have efforts to enhance donor 
participation in the Clarification Commission been?
    Answer. The Historical Clarification Commission of Guatemala (HCC), 
charged with investigating human rights abuses that occurred during the 
internal conflict, had its mandate expanded by two months, brining it 
to a year. The HCC expects to issue its final report by the end of July 
1998. The USG is proud to have contributed $1 million to support the 
HCC in its goal of helping Guatemalans come to terms with the past and 
reinforcing the peace process. Additionally, the USG has declassified 
and turned over approximately 3,000 pages of official documents to the 
HCC.
    The total budget for the HCC is $7.7 million. When the HCC recently 
appealed for international help to make up its $1.9 budget deficit, it 
received pledges from Austria and Holland to bring the projected 
deficit down to $1 million. The USG is in the process of making an 
appeal to several European allies and the European Union to bridge this 
budget gap.
                                colombia
    Background. Despite recent dramatic increases in the portion of the 
counter-narcotics budget under our jurisdiction, the flow of illegal 
drugs into the United States has been virtually undiminished and the 
use of drugs among America's young people continues to occur at high 
rates. Cheap, extremely high quality heroin and a new generation of 
amphetamine-based designer drugs are readily available to our young 
people. In Colombia--a key supplier nation--coca cultivation is 
actually up this year, despite increased efforts by the Colombian 
government and the U.S. government. In addition, Colombia is currently 
facing one of the worst human rights crises in the region due to the 
deadly mix of counter-insurgents, violent drug traffickers and 
paramilitary forces--often acting with government knowledge or 
cooperation. By focusing on a military solution to the war on drugs, 
the U.S. inadvertently reinforces a belief that military institutions, 
rather than civilian ones, are the most important ones in Colombia.
    Question. How does our approach towards assistance to Colombia seek 
to deal with the underlying issues of state-sanctioned violence, 
impunity and systemic poverty that create an environment where the drug 
trade flourishes? In particular, do we have a holistic approach to 
Colombia that includes support and training to assist the judiciary in 
dealing with political and drug-related human rights abuses in a fair 
and systematic manner, as well as elements which reinforce civilian 
rather than military solutions to Colombia's problems? Have positive 
reinforcement programs, such as crop substitution, received increases 
proportional to other elements of our counter-narcotics efforts in 
Colombia and the region?
    Answer. Our efforts in Colombia are focused both on 
counternarcotics assistance and democratic institution building, to 
help Colombia develop the infrastructure it needs to address the many 
serious problems it faces.
    Our counternarcotics program aims to meet the US national security 
objective of reducing the flow of illegal drugs into the United States, 
but it also benefits our other objectives. Counter-drug programs erode 
a primary source of financing for Colombia guerrillas' violent 
terrorist acts, limiting their ability to commit such acts over the 
longer term.
    On human rights, US pressure on the Colombian government for reform 
has helped lead to: a significant drop in reported abuses committed by 
Colombian security forces; legislation to reform the military justice 
system; and the arrest of paramilitary leaders and Army members accused 
of collaboration. In addition, we signed an End Use Monitoring 
agreement with the Colombian government in 1997 to ensure that no US 
assistance is provided to security forces whose members have committed 
gross violations of human rights, unless we can determine that the 
Colombian government is taking appropriate measures to investigate and 
prosecute the offenders.
    Other US initiatives to strengthen Colombia's civilian structure 
include Administration of Justice programs to train investigators and 
prosecutors in more efficient processing of casework; and support of 
Colombia's private sector, which is in the forefront of Colombian 
society in lobbying for government reforms.
    Our programs in Colombia do not at this time include crop 
substitution. In our judgment, conditions in Colombia are currently not 
appropriate for a successful program. For a program to succeed, the 
Government of Colombia must have the area proposed for the project 
under its firm control. Local leadership must also be capable of 
providing effective support for the program. We recognize the value of 
alternative development as part of an overall counternarcotics 
strategy, and hope to establish such a program when conditions permit. 
In the meanwhile, Colombia is a beneficiary of the Andean Trade 
Preference Act, which grants duty-free access to the US market for a 
variety of non-traditional Colombian agricultural products. Colombia 
uses this program, particularly in the cut flower industry, to develop 
these sectors as employment alternatives to the drug trade.
    Finally, we note that the President's February 26 decision to grant 
Colombia a vital national interests counternarcotics certification will 
lift the restrictions on assistance programs which had been imposed by 
decertification. OPIC, EX-IM, and TDA funding can now resume for, inter 
alia, infrastructure development, and the US is no longer required to 
vote against loans to Colombia in the multilateral lending 
institutions.
                                cambodia
Background
    I am also pleased to see the Administration making an expanded 
commitment to efforts to eliminate the deadly scourge of landmines and 
unexploded ordnance which continue to endanger civilian populations 
long after a conflict has ended. Last year, when I sought to gain 
additional funds for the Cambodian Mine Action Center (CMAC) to expand 
their excellent work in mine removal and education, I was told that the 
well-developed program there had virtually reached the limits of the 
assistance that could be provided under the training-oriented program 
that was in place.
    Question. Will the increased resources in the NADR account for 
demining make it possible to expand into providing more--both 
quantitatively and qualitatively--advanced technology and equipment to 
organizations such as CMAC, which have reached their training capacity 
but not their operational capacity? If yes, what procedures are in 
place or will be implemented to ensure that these cutting-edge 
technologies will be made available to those countries where they are 
most seriously needed and can be used most effectively?
    Answer. The Cambodia program is considered one of the most 
successful. The Cambodian Mine Action Center (CMAC) is a Cambodian 
organization that actively manages landmine clearance activities in 
Cambodia. We are requesting additional resources in the NADR account to 
expand the concept to other country programs, and to sustain ongoing 
programs in countries such as Cambodia.
    NADR funding to sustain the Cambodia program is used to purchase 
equipment according to the priorities of CMAC. To date, CMAC has 
requested standard equipment from the U.S. in order to field additional 
demining platoons. As new and more effective technologies become 
available, CMAC continues to review and evaluate those new technologies 
that are best suited to the Cambodian landmine problem.
    The Department of Defense and other organizations continue their 
work to develop and test promising technologies in actual mine-affected 
countries. This operational evaluation not only heightens awareness of 
developing technologies, but also assists in removing mines in the 
process. However, the humanitarian standard of landmine clearance 
requires that all landmines be removed; this level of reliability will 
be essential in any further technological development for humanitarian 
demining. Technology provides a tool box of options for mine clearance 
which differs from mine-affected country to country.
    The President's Demining 2010 Initiative, announced by the 
Secretaries of State and Defense last October 31, is designed to 
accelerate global humanitarian demining operations, including landmine 
survivor assistance, to eliminate the threat to civilians of anti-
personnel landmines by the year 2010. This initiative aims to gain 
consensus on international coordination for research and development of 
demining technologies.
    Question. Will any of the funds available for this account be used 
to accelerate research and development of technologies?
    Answer. Consistent with the basic objectives of Congress in 
appropriating these funds, funds in the NADR account are used to 
establish and sustain actual indigenous operational demining programs 
in mine-affected countries to remove landmines from the ground. 
Technological research and development are conducted by the Department 
of Defense with DoD appropriated funds.
    Question. I anticipate that there will be substantial cooperation 
between the Defense and State Departments on this issue. Can you 
provide us with detailed information about the mechanism for ensuring 
that the efforts of the two departments will be coordinated so as to 
facilitate maximum utility of the available funding? Who will be 
responsible for setting priorities and designing expanded programs?
    Answer. The U.S. Government Humanitarian Demining Program functions 
under the auspices of the Interagency Working Group (IWG) for 
Humanitarian Demining, charied by the State Department. The Department 
of Defense designates the Vice Chair. I enclose a copy of a recent 
Congressional Report which describes in detail the coordinating 
mechanism. The IWG and its member agencies are responsible for setting 
priorities and designing expanded programs, as detailed in the report.
           Questions for the Record Submitted by Mr. Packard
                                 russia
    Question. Will the Administration be able to certify that Russia 
and Ukraine are not providing nuclear information and materials to 
Iran?
    Answer. The Administration is required to certify Russia and 
Ukraine every six months. That certification has been made in the past. 
We are currently in the process of making the determination required at 
the beginning of May. That process is not yet complete and I can not 
say whether the certification will be made this time.
    Question. Why is funding for the International Science Centers 
shifted from FREEDOM Support Act to the NADR account? Have these funds 
been effective? With all of the accusations about the leaking of 
nuclear technology and information from Russia to Iran, how can these 
merger funds compete with the open market for such information?
    Answer. The International Science Centers program is a 
nonproliferation activity and fits logically into the group of security 
activities funded under the NADR account. The program has been shifted 
to NADR in the State Department's efforts to work cooperatively with 
Congress to rationalize the organization and funding of these 
activities.
    The International Science Centers continues to be one of our most 
effective nonproliferation tools. Recent reports from our embassies in 
Moscow and Kiev attest to this, as do independent assessments, 
including the General Accounting Office and the National Research 
Council. If anything, programs such as this are more important now than 
they were when we began them. We started them as an attempt to stem an 
anticipated brain drain of weapons of mass destruction expertise. They 
performed extremely well in this respect, engaging more than 22,000 
scientists and engineers in more than 600 projects over the past 4 
years. In that time, the centers have become real tools of 
nonproliferation policy, giving us the ability to focus our resources 
and engagement on facilities of highest proliferation concern. Their 
tax and customs exempt operation also makes them an attractive venue 
for a variety of USG-funded programs that share the centers' overall 
objectives. In this case, programs of the Department of Energy and 
Department of Defense, for example, may conduct projects under the 
centers' umbrella, maintaining technical responsibility for the work 
done, but enjoying the tax, customs, and on-site administrative 
benefits of the centers.
    The International Science Centers are a programmatic 
nonproliferation tool. When dealing with an issue as vital to our 
security as sharing of nuclear technology with Iran or any other 
country of proliferation concern, the United States utilizes every 
means at its disposal. Interdiction is one approach; government-to-
government dialogue is another; international pressure is yet another 
dimension. The centers' programmatic activities strongly complement 
these other approaches. Each addresses the nonproliferation issue from 
a different perspective, but the overarching nonproliferation objective 
is the same.
    Question. What does our PFP funding for Russia go toward? What 
about any proposed FMF funding? Why should the U.S. provide such funds 
for our largest competitor on the international arms market?
    Answer. U.S. PFP funding is used to support Russian participation 
in PFP exercises and other activities.
    FMF funding will be used to purchase non-lethal items necessary for 
more effective Russian participation in international peacekeeping 
operations. We anticipate these funds will be used for English language 
instruction, language labs to support this instruction and radios for 
troops involved in peacekeeping functions. Russian military radios are 
not compatible with NATO radios, a fact that has hampered our 
cooperation in Bosnia and in PFP exercises.
    These are very limited programs, both in the dollars involved and 
the kinds of equipment contemplated. They are aimed at ameliorating 
specific problem areas affecting Russian military participation in PFP 
exercises and other cooperative activities with the alliance. Our 
ultimate goal is to improve trust and cooperation between the Russian 
military and those of the West.
    Question. To follow on to those questions, is the administration 
considering providing Excess Defense Articles to Russia, and if so why?
    Answer. The Administration intends to make Russia eligible to 
receive certain limited types of EDA. Like all EDA, it would be 
available on a first come, first served basis and it is not clear that 
Russia will be able to benefit from the program.
    We are making Russia eligible for EDA as a possible means of 
supplementing the limited FMF funds allocated to Russia. For example, 
if radios were available as EDA, Russia might be able to acquire the 
requisite number faster than if it had to rely solely on available FMF 
funds. We intend to subject Russia's potential acquisitions under EDA 
to the same limitations placed on FMF purchases.
                                  kedo
    Question. With the current economic crisis in Asia, what will be 
the impact on KEDO? The United States has already pumped over $2.5 
billion into it, will we be asked to provide more? Will South Korea be 
able to live up to its commitments?
    Answer. The U.S. has contributed a total of $86.5 million to KEDO, 
including our FY 1998 appropriation, and in addition has spent roughly 
$27 million on the canning of the DPRK's spent nuclear fuel.
    We do not anticipate that the financial crisis in Asia will have a 
long-term impact on the ability of the ROK and Japan to fulfill their 
commitments to fund most of the cost of the light-water reactor (LWR) 
project. Since the project's estimated 5.2 billion dollar estimated 
cost would be spread out over a number of years, yearly payments by the 
ROK and Japan to the project should be manageable, despite the current 
financial situation in Asia. LWR burden-sharing discussions with South 
Korea and Japan continue and we expect both countries to honor their 
previous commitments to provide most of the funding for the project.
                               indonesia
    Question. How has or will the loss of IMET effect our relationship 
with Indonesia?
    Answer. What we lose by not having full IMET for Indonesia is an 
opportunity to positively influence future military leaders relatively 
early in their careers and enhance access to them after they have 
assumed positions of broad authority. These are of course intangibles 
which are impossible to quantify but are nevertheless important for 
American interests.
    As Indonesia faces its current crisis, proper military conduct is 
essential. The IMET program represents an opportunity to expose the 
Indonesian military to U.S. culture and values, and resumption of IMET 
would complement Indonesia's efforts to instill professionalism, proper 
conduct and respect for human rights in its military. IMET graduates 
have played prominent roles in investigating human rights abuses and 
are likely to be major players in future military reforms.
    Congress has limited Indonesian participation to Expanded IMET (E-
IMET), which focuses on senior military and civilian officials and thus 
does not allow us to reach the key target audience of mid-level 
military officers in Indonesia. Based on past experience in a number of 
countries, we have found that foreign officers who are exposed to 
multiple training opportunities over the course of their careers are 
those upon whom American training has the greatest impact.
                                vietnam
    Question. Is the Administration close to making a determination on 
Jackson-Vanik as it applies to Vietnam? If so, when can we expect that 
determination?
    Answer. On March 10, 1998, the President signed a determination 
authorizing a waiver of the Jackson-Vanik Amendment for Vietnam. At 
that time, he also waived the prohibition on Export-Import Bank 
operations in Vietnam. The waiver of Jackson-Vanik, in combination with 
related waivers, will permit us to make available to Vietnam and U.S. 
businesses operating in Vietnam U.S. export promotion and investment 
support programs. The Secretary of State approved national interest 
waivers February 23 to two provisions of the Foreign Assistance Act 
that prevent the United States from furnishing assistance under the act 
in Vietnam. These waivers permit the Agency for International 
Development (USAID) and the Overseas Private Investment Corporation 
(OPIC) to initiate bilateral assistance and investment support programs 
in Vietnam.
                                 egypt
    Question. What is or has Egypt contributed to the military build-up 
in the Gulf? Considering our large annual FMF contributions, I hope 
it's a lot.
    Answer. The United States maintains a strong, comprehensive, 
friendly, and mutually beneficial relationship with Egypt.
    The benefits of this relationship were most recently demonstrated 
by Egypt's crucial support during the recent Iraq crisis. On the 
military front, Egypt provided timely critical assistance in providing 
Suez Canal transit, overflight clearances, and refueling services. 
These arrangements were essential to our preparedness to face all 
possible contingencies in the Gulf.
    Additionally, President Mubarak--even as Arab public opinion was 
running strongly against possible action against Iraq--set the tone for 
other Arab leaders and the Arab League in calling for Saddam Hussein to 
comply with United Nations Security Council Resolutions. Mubarak also 
made clear in public statements that Saddam would be responsible for 
whatever consequences ensued from a failure to comply. This action 
deprived Saddam of key diplomatic support.
    President Mubarak has also made clear his opposition to Saddam 
Hussein and Iraq's efforts to acquire weapons of mass destruction and 
long range missile capabilities.
                                 haiti
    Question. How much money has the U.S. contributed to Haiti in the 
last ten years and if it is as much as I think, how do you justify 
doubling the $70 million we provided last year?
    Answer. Based upon available data, USG assistance (excluding 
Department of Defense costs) from FY 1988 through FY 1998 totals 
approximately $1.1 billion. Since the restoration of democratic 
government in October 1994, total USG spending (excluding Department of 
Defense costs) through FY 1998 is about $680 million. With this 
assistance, Haiti has taken important steps toward development of a 
democratic society. Haiti's progress has a profound impact on the U.S. 
According to the U.S. Coast Guard, over 67,000 Haitian migrants were 
interdicted at sea from FY92-FY94, the period of the de facto regime: 
in 1994 alone, the U.S. spent $400 million dealing with 25,000 
interdicted Haitian migrants. Since October 1994, fewer than 5000 
migrants have been interdicted, a dramatic reduction in illegal 
migration from Haiti.
    Our strong national interest in Haiti's progress toward democracy, 
stability and economic growth requires our engagement, patience and, 
where necessary, increased assistance. Our proposed increase will focus 
on the rural areas and secondary cities outside of Port-au-Prince, 
areas where the majority of Haitians live and where development is most 
lacking. To the greatest extent possible, we will bypass the Haitian 
government and rely on NGOs and local structures to implement programs 
such as agricultural development, democracy building, public health, 
education, and environmental reconstruction. For instance, such 
programs would include planting of fruit and coffee trees which would 
revitalize Haiti's ecologically-devastated hillsides and provide income 
to local farmers. We would support Haitian orphanages, immunization 
programs for children, and nutrition programs for pregnant women and 
infants.
                                 cyprus
    Question. I understand that one side on the Cyprus conflict has 
chosen to stop participating in bicommunal activities. Is that 
affecting our efforts in Cyprus and if so is it wise to continue to 
provide funding for such activities?
    Answer. The U.S. provides $15 million annually to Cyprus for 
bicommunal activities aimed at the reunification of the island and 
designed to reduce tensions and promote peace and cooperation between 
Greek Cypriots and Turkish Cypriots in a wide variety of fields.
    The bicommunal assistance program brings together people from both 
sides to meet face-to-face and to plan and implement concrete projects 
that benefit the island as a whole. Most, but not all, of these 
activities take place on Cyprus. Last December 27, however, the Turkish 
Cypriots suspended bicommunal contacts in ``retaliation'' for the 
European Union's decision, at its December 14-15 Luxembourg Summit, to 
open accession negotiations with Cyprus. Since then, no bicommunal 
meetings on the island have taken place, although a few bicommunal 
activities have been allowed to take place outside of Cyprus--most 
notably a January study tour of the U.S. by water experts from both 
communities.
    The U.S. has been very critical of the Turkish Cypriot suspension 
of bicommunal contacts. Ambassador Brill, Special Cyprus Coordinator 
Miller, and other U.S. officials have pressed the Turkish Cypriots 
repeatedly and forcefully to lift the suspension. Bicommunal contacts 
serve Turkish Cypriot interests well, as they reduce the international 
isolation that the Turkish Cypriots themselves complain about and 
provide opportunities for Turkish Cypriots to articulate their 
positions. In addition, they bring concrete, practical benefits to the 
Turkish Cypriots, in key areas like water conservation and management, 
sewage treatment, and cultural preservation.
    Despite the ban on bicommunal meetings, our assistance program 
remains an important tool in our efforts to resolve the Cyprus dispute. 
Funds that cannot be used for bicommunal meetings can be used to 
support the many bicommunal groups that remain active in both 
communities. We will continue to plan important bicommunal activities 
outside of Cyprus. Of course, we will continue to press the Turkish 
Cypriot leadership to lift its suspension. Ultimately, we expect to see 
a resumption of on-island bicommunal activities. Thus the U.S. should 
continue to fund the bicommunal Cyprus assistance program.
         Questions for the Record Submitted by Mr. Knollenberg
                                  kedo
    Question. The U.S., Japan, and South Korea established KEDO in 1995 
to implement the Agreed Framework between the U.S. and North Korea. 
Under KEDO, the U.S. is responsible for providing annual shipments of 
heavy fuel oil, and South Korea for arranging the financing and 
construction of two light water reactors (LWRs) in North Korea. The 
Asian financial crisis and its effects on the economies of both South 
Korea and Japan has rasied doubts about whether these countries will be 
able to make good on their commitments to fund the bulk of the $5.1 
billion LWR project. Since North Korea is not committed to dismantling 
its nuclear facility until after the second of the two reactors is 
ready, how would a possible delay impact the Agreed Framework, which so 
many claim has ``frozen'' North Korea's nuclear weapons program?
    Answer. The commitments made under the Agreed Framework, including 
the DPRK's nuclear freeze, remain in effect. The freeze has been 
monitored and verified by our National Technical Means and by IAEA 
inspectors, who have maintained a continuous presence at North Korea's 
nuclear facilities since the signing of the Agreed Framework. We are 
confident that we can continue to monitor effectively the DPRK's 
compliance with the Agreed Framework.
    We see no signs that the North is backing away from its 
commitments, including its commitment to dismantle its frozen nuclear 
facilities upon completion of the LWR project, even if completion is 
delayed beyond the target date specified by the Agreed Framework. While 
the DPRK has complained of slow progress on the LWRs and irregular oil 
deliveries, we believe that the DPRK continues to see the 
implementation of the Agreed Framework as its best option.
    We do not anticipate that the financial crisis in Asia will have a 
long-term impact on the ability of the ROK and Japan to fulfill their 
commitments to fund most of the cost of the light-water reactor (LWR) 
project. Since the project's estimated 5.2 billion dollar estimated 
cost would be spread out over a number of years, yearly payments by the 
ROK and Japan to the project should be manageable, despite the current 
financial situation in Asia. LWR burden-sharing discussions with South 
Korea and Japan continue and we expect both countries to honor their 
previous commitments to provide most of the funding for the project.
    Question. The Agreed Framework committed North Korea to freeze 
plutonium production at only one site discovered by the International 
Atomic Energy Agency (IAEA) in Yongbyon. Yet the Administration has 
lauded this accord for stopping North Korea's nuclear program. If the 
agreement only pertains to one facility, and the IAEA is prohibited 
from inspecting the country for other nuclear sites, how can we be sure 
that the nuclear program has stopped? Do you have any guarantees that 
North Korea is not continuing plutonium production at other undisclosed 
sites?''
    Answer. The nuclear freeze which North Korea agreed to under the 
Agreed Framework is in place and under constant monitoring by the IAEA. 
All of the DPRK's known nuclear facilities with the capacity to 
contribute to a weapons program, including the 5 MW(e) reactor at 
Yongbyon and two unfinished reactors at Yongbyon and Taechon, their 
ancillary facilities, spent fuel reprocessing facility and nuclear fuel 
fabrication facility are frozen. In addition, to IAEA monitoring the 
U.S. uses its National Technical means to survey the entire country for 
signs of clandestine nuclear activity. While no amount of surveillance 
can ever provide absolute certainty, we have seen no evidence that the 
North has an ongoing clandestine program.
           Questions for the Record Submitted by Mr. Kingston
                         weapons proliferation
    Question. Just as alarming to me is the recent revelation of 
evidence that Russia arranged to sell sensitive equipment to Iraq for 
the use of manufacturing biological weapons. I have also read the 
Russian embassy's cleverly evasive rebuttal. Last year's act, of 
course, placed strong conditions on aid to Russia, requiring its 
cessation of missile technology assistance to Iran. Other legislation 
has taken the government's lack of control into consideration by 
targeting individuals and companies who proliferate. This new 
revelation in Iraq, however, clearly would have required governmental 
involvement. Has Russia provided a more complete account of the deal to 
the U.S. than they did in their press release on Feb. 12? In what way 
does the administration propose to hold the Russian government 
accountable for this example of gross violation of the embargo?
    Answer. We have no information indicating that Russia entered into 
an agreement to provide Iraq with either technical knowledge or 
equipment that would advance the Iraqi biological warfare program. The 
press reports to which you refer relate to contract negotiations in 
1995 between a Russian entity and Iraq--negotiations that neither the 
U.S. nor the press reports indicate ever resulted in a contract or any 
deliveries. Nonetheless, the U.S. Government did raise this issue with 
the Russian Government, which also has been engaged in discussions with 
UNSCOM.
    Question. What effect are these specific proliferation problems 
having on the regional balance of power?
    Answer. We remain very concerned about the large imbalance in the 
size and military capabilities of Iraq and Iran compared to those of 
our friends in the Gulf. Having militaries many times larger than those 
of the Gulf Cooperation Council (GCC) countries, Iran and Iraq are in a 
position to threaten the use of force and to apply strong coercive 
pressures on our friends in the Gulf. U.S. force presence in the region 
and the strong cooperative relationship with the United States, 
including strong military sales and training programs, are essential 
elements in helping the Gulf states resist coercion, and also in 
ensuring the security of other friends in the region, such as Israel, 
Egypt and Jordan. The prospect of the acquisition of weapons of mass 
destruction by Iran and Iraq, and by others such as Libya and Syria, 
would materially affect the regional balance contrary to U.S. interests 
across the entire region and would strengthen the coercive pressures 
any of these states could bring to bear against any of the countries 
friendly to the U.S. in the region and potentially beyond it.
    Question. Can you also assess the resulting change in the threat 
environment for Israel, which may also face a range of new conventional 
weapons acquired by Syria from Russia?
    Answer. Because of declining economic resources, Syria cannot 
easily maintain or modernize its rapidly aging military equipment in a 
way that threatens Israel's qualitative edge. Syria's traditional 
military relationship with Russia has been dormant since 1991. Recent 
reports of renewed Russian-Syrian military cooperation are of concern. 
We have made it very clear to the Government of Russia that such 
assistance should not go forward. Russia is a partner in the Middle 
East Peace Process and is committed to maintaining peace and stability 
in the region.
    Because Syria has been designated, since 1979, as a state sponsor 
of terrorism, shipments of lethal weapons to Syria by foreign 
governments may trigger provisions of U.S. law that subject those 
foreign governments to sanctions, specifically the curtailment of some 
U.S. Government assistance to those governments.
    We are aggressively investigating the situation and intend to fully 
and conscientiously implement the requirements of U.S. law. It would be 
premature now to comment on whether U.S. sanctions are warranted.
    Question. What is the status of U.S. cooperation with Israel on 
development and deployment of joint missile defense systems?
    Answer. We are committed to continuing to support and cooperate 
with Israel on security matters in order to preserve Israel's 
qualitative military edge and to reduce the security threat posed by 
WMD and missile systems.
    The U.S. and Israel are currently jointly funding the ARROW 
deployability program designed to integrate, test, and evaluate the 
complete ARROW weapons systems at a cost of $616 million between 1996 
and 2002. The first ARROW battery is scheduled for full deployment in 
2002 with an initial operating capability in early 1999. The President 
has just signed legislation that will provide an additional $45 million 
for ARROW research and development this year, which will help free up 
Israeli national funds to help pay for a third ARROW battery.
    We have also engaged in joint research programs on other weapon 
systems such as the boost phase intercept concept, which would destroy 
ballistic missiles in boost phase, and the Tactical High Energy Laser 
(THEL), designed to counter the threat to Israel from Katyusha rockets. 
We are also cooperating closely with Israel in the areas of missile 
early warning and increasing interoperability between our theater 
missile defense forces.
                        aid to israel and egypt
    Question. Israeli Finance Minister Ne'eman recently presented to 
the U.S. a proposal to restructure Israel's foreign assistance over the 
coming years. In the weeks since this proposal was announced, what 
reaction has the Administration developed to the overall structure and 
the details of the plan? Can we expect a similar proposal from Egypt 
soon?
    Answer. In late January, Israeli Finance Minister Yaacov Ne'eman 
began discussions with Members of Congress and Administration officials 
on a proposal that would gradually reduce Israel's annual $1.2 billion 
economic assistance to zero, while phasing in a $600 million increase 
in military assistance over the same 10-12 year period.
    We agree that it is time to adjust the level of assistance, but are 
still formulating our response to Israel's offer. The Israeli proposal 
calls for all increases in FMF to be made in the form of off-shore 
procurement (OSP), as opposed to direct purchases of U.S.-sourced 
equipment. We understand there may be congressional concerns about this 
aspect of the Israeli proposal, and are carefully studying the 
implications. We have asked the Israelis for programmatic 
justifications of additional OSP and will take those into account when 
formulating our position.
    We have asked the Egyptian government for its thoughts on future 
assistance levels, focusing on the Egyptian economic situation and 
priorities. We want to ensure that any proposed reduction in assistance 
does not affect our regional security interests. We depend on Egypt for 
rapid naval access to the region through the Suez Canal, for overflight 
clearance and for air access to Egyptian facilities. In addition, 
Egyptian contributions to coalition operations substantially reduce the 
drain on our own resources.
    U.S. economic assistance helps sustain Egypt's economic reform 
program. Egypt continues to face major economic challenges including 
creating jobs for nearly half a million new workers annually. Reform-
generated economic growth contributes to a strong and stable Egypt.
    Question. I continue to be concerned about U.S. contributions to 
the KEDO. (I am not convinced the whole ``agreed framework'' approach 
is appropriate for that matter. Obviously we're not interested in 
duplicating it for Iraq's WMD programs.) What is the rationale for 
another increase (excluding the debt repayment last year) for KEDO? Is 
fuel consumption going to increase by 14 percent next year?
    Answer. Although the yearly U.S. HFO commitment to North Korea 
remains fixed at 500,000 metric tons, the annual U.S. contribution to 
KEDO's heavy fuel oil (HFO) program has never been sufficient on its 
own to fully fund the program, which has cost about $60-65 million per 
year since it began in 1995. While the European Union has emerged in 
the last year as a major fellow contributor, our Asian allies have, 
under present economic circumstances, found it difficult to step up 
their contributions to the HFO program. The increases are necessary for 
the continued viability of KEDO's HFO program. Continuing strong U.S. 
financial support for the program will also assist us in our efforts to 
approach other countries for HFO funding.
                         school of the americas
    Question. I appreciate the thorough report prepared by the 
Department of the Army regarding certification requirements for the SOA 
outlined in last year's act. I would like to ask for some fellow-up 
information, however, on a couple points. Can you please further 
describe the U.S. embassies' vetting process of potential student 
candidates? The annexed cables in the report did not clearly define 
measurable criteria for this process. What constitutes a thorough check 
and screen of candidates? What specific, quantifiable criteria are 
used? I also understand from the cable the standards may continue to 
vary from post to post. To what degree are they allowed to vary and on 
what types of points? Why shouldn't we maintain consistent standards--
regardless of unique national situations?
    Answer. Guidance has been provided to embassy training program 
managers that incorporates certain core criteria in screening plans, 
while still allowing some flexibility to accommodate unique 
circumstances such as variations in the size, composition, and 
expertise among country teams in Latin America. This guidance 
facilitates standardization and uniformity among the various country 
programs in the critical area of record keeping on participants and 
certifying background checks on nominees. Training program managers 
specifically have been tasked to develop or amend existing screening 
plans to include the new guidance and to forward their plans to us for 
review. In addition, as one of the first steps in the process, 
embassies have been instructed to ensure the host country fully 
understands the criteria and U.S. laws governing eligibility. The 
involvement of all relevant country team members in the screening 
process and requirement to maintain student files will assist in 
scrutinizing candidates, guarantee long-term continuity among training 
managers, and more importantly, prevent participation by ineligible 
personnel. We are confident that, over time, these adjustments will 
serve to further strengthen the process for screening nominees and 
guarantee the continued integrity of U.S. training programs.
                         economic support fund
    Question. Part of the stated mandate to support democracy under ESF 
in Mr. Holum's testimony is to provide judicial training and to assist 
in the administration of justice. Can you further describe this 
training efforts?
    How does the U.S. measure success in our assistance for 
administration of justice?
    Answer. The rule of law (ROL) is a critical element of democracy; 
it serves as a foundation for the other elements. The ROL is required 
to hold leaders and institutions accountable. It supports free and fair 
elections and provides the breathing space for civil society. The ROL 
also ensures the protection of human rights through a fair, effective 
and efficient legal system headed by an independent judiciary.
    U.S. assistance programs that provide judicial training and help 
improve the administration of justice are focused on developing an 
independent judiciary and improving the ROL in recipient countries.
    Training programs include helping judges establish independent 
judicial associations and create judicial training institutes, advice 
on legislative reform, as well as training for prosecutors, defense 
attorneys, and law enforcement officials.
    Administration of justice programs are focused on improving the 
overall legal process--how a justice system operates. Through this 
assistance, we try to identify the causes and recommend solutions to 
such problems as judicial delay, limited access to courts, case backlog 
and judicial corruption.
    As with other democracy building programs, strengthening the ROL 
through judicial training and improvements in the administration of 
justice is a long-term process. Therefore, evaluating the success of 
our ROL assistance must be done over an extended period of time and 
with the caveat that the political will for change in recipient 
countries must come from the recipients themselves. That said, by 
helping to create new institutions like independent judicial 
associations or training institutes, by shrinking judicial backlogs and 
increasing the use of courts to resolve disputes, we can show that our 
assistance is having a positive impact on strengthening the ROL.

        Questions for the Record Submitted by Mr. Frelinghuysen

                                 haiti
    Question. To date, what is our total spending for programs in 
Haiti? How do we judge progress, if any, that we are making? What 
effect, if any, will a doubling of aid have now after all the millions 
that have already been spent there?
    Answer. Since the restoration of democratic government in October 
1994, total USG spending (excluding Department of Defense costs) 
through FY 1998 is about $680 million. With this assistance, Haiti has 
taken important steps toward development of a democratic society. A 
popularly-elected President peacefully succeeded another for the first 
time in Haitian history and democratic institutions such as an 
independent and popularly-elected parliament play an increasingly 
important role in public life, another first for Haiti. Haitians of all 
walks of life enjoy unprecedented freedom of association and expression 
and the Haitian media operate unhindered by governmental censorship or 
restraint. Haiti's first civilian police force has been trained and 
fielded. This progress has a profound impact on the U.S. According to 
the U.S. Coast Guard, over 67,000 Haitian migrants were interdicted at 
sea from FY92-FY94, the period of the de facto regime: in 1994 alone, 
the U.S. spent $400 million dealing with 25,000 interdicted Haitian 
migrants. Since October 1994, fewer than 5000 migrants have been 
interdicted, a dramatic reduction in illegal migration from Haiti.
    Our strong national interest in Haiti's progress toward democracy, 
stability and economic growth requires our engagement, patience and, 
where necessary, increased assistance. Our proposed increase will focus 
on the rural areas and secondary cities outside of Port-au-Prince, 
areas where the majority of Haitians live and where development is most 
lacking. To the greatest possible extent, we will bypass the Haitian 
government and rely on NGOs and local structures to implement programs 
such as agricultural development, democracy building, public health, 
education, and environmental reconstruction. For instance, such 
programs would include planting of fruit and coffee trees which would 
revitalize Haiti's ecologically-devasted hillsides and provide income 
to local farmers. We would support Haitian orphanages, immunization 
programs for children, and nutrition programs for pregnant women and 
infants.
                            demining program
    Question. This year, you are requesting an increase in demining 
from $20 million to $50 million. To date, what is the total U.S. 
commitment to demining? To put that in context, what is the total 
international commitment to demining to date? And, what is our 
commitment expected to be over the next five years under the 
President's budget projections?
    Answer. For FY 98, we requested $15 million for demining in the 
NADR account and received $20 million. From FY 93 through FY 98, the 
total U.S. commitment to demining, from all accounts totals $153 
million. We estimate that this constitutes approximately half of the 
total international commitment to demining to date.
    The President's demining 2010 Initiative, announced by the 
Secretaries of State and Defense last October 31, is designed to 
accelerate global humanitarian demining operations, including landmine 
survivor assistance, to eliminate the threat to civilians of anti-
personnel landmines by the year 2010. This Initiative aims to raise $1 
billion annually worldwide--from public and private sources--for global 
humanitarian demining efforts, including landmine survivor assistance 
and research and development.
    Our expected commitment over the next five years, and through the 
year 2010, will require modest amounts to sustain established U.S. 
Government-supported humanitarian demining programs and to provide 
additional funding for incremental increases in humanitarian demining 
operations in newly established country programs, and to transition 
into more demining infrastructure and landmine survivor assistance and 
rehabilitation activities.
    Question. In real terms, what do these dollars actually accomplish 
in number of mines that are dug up and deactivated. How and where do we 
decide to use U.S. demining dollars?
    Answer. The overall objective of the U.S. Government Humanitarian 
demining Program is the establishment of a sustainable, indigenous 
demining capability that will continue to conduct demining operations 
after direct U.S. involvement declines. The principal goal is returning 
to peaceful, civilian use land and other infrastructure believed to be 
mined. In fourteen countries, landmines are being destroyed now; we 
have recently expanded our program into five additional countries with 
others under active consideration. The U.S. has trained one quarter of 
all active deminers in the world today. Several countries, including 
Namibia and Rwanda, are making progress towards mine-free status.
    Our Central America program functions in Costa Rica, Honduras and 
Nicaragua, under the auspices of the Organization of American States 
and the Inter-American Defense Board, with Guatemala recently added to 
the program. The Honduran demining unit has cleared ten discrete areas 
totaling more than 167,000 square meters, locating and destroying more 
than 1,925 mines, 10 booby-trapped hand grenades, 48 82mm mortars and 
five 120mm mortars. The Costa Rican demining unit has cleared a total 
of over 33,000 square meters of land, destroying a total of 37 mines in 
the process. Nicaraguan deminers have cleared over 17,400 square meters 
of land, destroying over 1,650 mines.
    These efforts are paying off. In those parts of Cambodia where 
U.S.-supported demining is taking place, the death rates from landmine 
injuries have dropped by one half. In Namibia, the casualty rate has 
fallen 90 percent. But the current pace of demining is clearing 
inadequate. For this reason, last October 31, Secretary of State 
Madeline Albright and Secretary of Defense William Cohen announced the 
President's demining 2010 Initiative to rid the world of all landmines 
threatening civilians by the year 2010. Under this initiative, the U.S. 
will be working with other donor governments, international 
organizations, non-governmental organizations and mine-affected 
countries to develop a mechanism to match needs to resources and ensure 
more effective global humanitarian demining efforts.
    Question. Are you also working with ``mine experts'' in DOD to 
develop better ``technologies'' to deactivate mines rather than digging 
them up one by one? I hope you are taking advantage of the expertise at 
Picatinny Arsenal in my district which has the history and know-how on 
mine technology. In fact, I included report language in last year's 
bill on this issue.
    Answer. All U.S. Government-supported technology research in 
humanitarian demining is conducted or coordinated by the Department of 
Defense under the auspices of the Interagency Working Group (IWG) on 
Humanitarian Demining. The DoD has several mechanisms in place to 
ensure thorough coordination among all agencies, including Picatinny 
Arsenal, that have technology that could aid in humanitarian demining. 
I refer you to the Department of Defense for further specific details.
            Questions for the Record Submitted by Ms. Pelosi
                                pakistan
    Question. Since mandatory economic and military sanctions were 
imposed on Pakistan in October 1990, and counting through the end of 
January 1998, what is the total dollar value of military goods that the 
State Department has approved for export to Pakistan and what portion 
of those goods was actually delivered?
    Answer. According to the Office of Defense Trade Controls, the 
total value of commercial licenses and assistance approved for Pakistan 
from Oct 1990 through Feb 1998 totals $461,338,402. As our system does 
not effectively track deliveries, we cannot provide accurate 
information on the value of goods actually delivered. Licenses are 
valid for four years from issuance and deliveries can be made at any 
time within that period.
    For foreign military sales (FMS), the Defense Security Assistance 
Agency (DSAA) reports $445,300,000 worth of equipment and spare parts 
were approved for export to Pakistan over the same period with 
$392,000,000 worth reported as delivered. DSAA reports that delivery of 
all FMS equipment was put on hold beginning in October 1990. The FMS 
equipment was subsequently released through the Brown Amendment in 
1996. The FMS equipment released under the Brown Amendment in 1996 is 
the only FMS equipment delivered to Pakistan over the period of concern 
(October 1990 through February 1990).
    Question. When is the last time the U.S. approved the export of 
spare parts and technology or capability upgrades for Pakistan's F-16 
aircraft?
    Answer. In March 1998, the State Department approved the export of 
release assemblies, equipment used primarily for safety of flight, for 
Pakistani F-16s. This is consistent with our policy of providing spare 
parts and support for the F-16s, but not capability upgrades.
    Question. Have U.S. military exports to Pakistan since January 1996 
increased or decreased?
    Answer. In terms of commercial export approvals, they have 
decreased. In 1996 we approved $99,540,523 in hardware and assistance. 
In 1997, we approved $54,702,477. For the first two months of 1998, 
$28,896 has been approved. DSAA did not provide any data for foreign 
military sales (FMS) items over the same period, but reiterated that 
the only FMS equipment delivered to Pakistan for the period of October 
1990 through February 1998 was the equipment released for delivery to 
Pakistan by the Brown Amendment.
    Question. Is the U.S. now proposing to relax existing arms export 
controls to Pakistan to permit even more military assistance to 
Pakistan?
    Answer. The Department has decided to take modest, limited steps 
regarding USG provision of defense equipment and services in areas the 
Brown Amendment specifically exempted from Pressler Amendment 
sanctions. Thus, we intend to renew the lease of aging T-37B trainer 
aircraft now in Pakistan, as permitted by Brown's ``training'' 
exception to Pressler. Further, we hope to conclude a submarine rescue 
agreement with Islamabad--along the lines of agreements reached with 
India and several other states--permitted by Brown's ``humanitarian 
assistance'' exception to Pressler.
    In both instances Pakistan would use its own national funds to pay 
for these items.
    The Department also has aligned its commercial munitions export 
policy with the Brown Amendment, allowing case-by-case consideration of 
potential commercial sales related to military-to-military contacts, 
training, humanitarian and civic assistance projects, counter-
narcotics, anti-terrorism, and peacekeeping and other multilateral 
operations.
    Our current restrictive commercial export policy otherwise will be 
maintained with a few narrow exceptions. For example, we will allow 
case-by-case consideration of additional commercial exports as systems 
become obsolete and only can be replaced by currently produced items 
(where a reopening of the assembly line for the original product would 
prove infeasible or prohibitively expensive). In such circumstances, 
only the lowest generation upgrade would be considered. Other 
exceptions include modest increases in items held by Pakistan in 1990 
or transferred subsequently under Brown; items not in the 1990 
inventory or transferred under Brown but of lesser capability than 
items in the 1990 inventory; items, although new to Pakistan's 
inventory, the primary purpose of which is safety; defense services and 
technology associated with the above exceptions.
    Question. Does the U.S. expect any conceivable level of U.S. 
conventional arms shipments to Pakistan in any way to give Pakistan 
strategic military parity with India, and if not, what is the military 
purpose of these shipments?
    Answer. India enjoys a marked quantitative and qualitative 
advantage in most conventional weapons categories. For example, India 
has more than 1,300 BMP 1 and 2 infantry fighting vehicles while 
Pakistan hold approximately 850 less capable M 113 armored personnel 
carriers. New Delhi maintains a nearly 2:1 edge in combat aircraft; 
Indian Air Force assets include advanced Russian Su-30s. Clearly, 
limited U.S. commercial munitions exports, principally spares and 
munitions, will not help Islamabad attain strategic military parity.
    Our basic commercial munitions export policy for Pakistan was 
instituted in 1990. In permits licensing, subject to strict case-by-
case review, of items which would permit Islamabad to maintain its 
military capabilities at 1990 levels. Key elements of Pakistan's arms 
inventory, such a anti-armor capabilities, now are beginning to degrade 
below 1990 levels, further skewing the existing regional military 
imbalance. We are concerned that continuing, serious degradation of 
Pakistan's conventional arms inventory ultimately could affect regional 
stability. Recently implemented updates to our commercial munitions 
export policy therefore constitute a limited, common sense response to 
these circumstances.
    Even so, the Department still will consider negatively sales of new 
systems or significant upgrades except in a few narrowly drawn areas, 
such as substitutes (the lowest generation upgrade) for items in 
Pakistan's 1990 inventory which no longer are being manufactured.
    Question. Since mandatory economic and military sanctions were 
imposed on Pakistan in October 1990, and counting through the end of 
February 1998, U.S. exports to Pakistan requiring validated licenses 
under the Export Administration Act and the subtotal of such items that 
were specifically on the U.S. nuclear referral list?
    Answer. For the period October 1, 1991 to May 20, 1998, Commerce 
Department records show 373 approvals of validated licenses for exports 
to Pakistan for a total value of $151,546,304. The Commerce did not 
have the computer capability to recall separately files on nuclear 
referral list items until November 1996. Since that date, Commerce 
Department records show only two approvals of nuclear referral list 
items; one involving spare parts for a chemical plant and the other for 
supply of an oscilloscope to the Ministry of Defense. Commerce 
Department did not have information for the period October 1990 to 30 
September 1991.
    Question. Does the U.S. still regard these F-16s as Pakistan's 
probable nuclear weapon delivery vehicle, as U.S. officials have 
repeatedly testified?
    Answer. We believe Pakistan potentially could deliver nuclear 
weapons using fighter aircraft, but increasingly are concerned about 
the possibility that it could attempt to mate a nuclear warhead with a 
ballistic missile. In concert with Indian development of ballistic 
missiles, this would substantially reduce reaction time during a crisis 
and consequently increase prospects for New Delhi and Islamabad 
misreading each others' actions and intentions.
    Question. Since mandatory economic and military sanctions were 
imposed on Pakistan in October 1990, and counting through the end of 
February 1998, what is the total dollar value of financial assistance 
projects approved for Pakistan with U.S. consent by multilateral 
financial institutions?
    Answer. Between October 1990 and February 1998, development 
assistance projects for Pakistan approved by international financial 
institutions with U.S. consent include:
    (1) Development assistance of $3.1 billion by the World Bank Group 
(IDA and IBRD). As of the end of Fiscal Year 1997, social sector 
projects targeting education, health, and nutrition accounted for the 
largest share (25 percent) of the Bank's portfolio in Pakistan, and 
projects targetting rural development accounted for the next largest 
share (21 percent).
    (2) Private sector loan and equity financing of $1.1 billion for 
Pakistan by the world Bank Group's International Finance Corporation 
and investment guarantees of $95 million for the world Bank Group's 
Multilateral Investment Guarantee Agency (MIGA).
    (3) Development assistance by the Asian Development Bank to 
Pakistan totalling $3 billion. During the period between 1990 and 1998, 
the ADB has increasingly focussed on projects in education, health, and 
water supply and sanitation.
    (4) Between 1990 and 1998, the International Monetary Fund (IMF) 
entered into two financial arrangements with Pakistan totalling $2.2 
billion. Pakistan's performance in implementing program targets has 
been uneven; the IMF has disbursed only $598 million of potentially 
available funds.
    Question. Nucleonics Week reported on 2/26/98 that China is 
considering the supply of a second nuclear power reactor to Pakistan to 
follow the 300-MW Chasnupp (sic) reactor. How will China's decision to 
supply this second reactor without full-scope safeguards, along with 
other nuclear assistance to Pakistan's nuclear fuel cycle, affect the 
future of U.S./China nuclear cooperation?
    Answer. Chinese and Pakistani officials have discussed the possible 
supply by China of a second nuclear power reactor to Pakistan for 
several years. But, to date, the parties have apparently not concluded 
any formal agreement or contract for such supply.
    If China were to supply such a reactor, we would expect it to 
require the same conditions of sale that covered the first reactor, 
namely application of IAEA safeguards to the facility and its fuel 
supply. Any such sale would not affect the course of U.S./China nuclear 
cooperation inasmuch as foregoing peaceful safeguarded cooperation with 
Pakistan was not a U.S. condition for making the requisite 
certifications for implementing the U.S./China Peaceful Nuclear 
Cooperation Agreement.
    A key factor in determining the future of U.S./China nuclear 
cooperation will be China's compliance with its May 1996 commitment not 
to provide assistance to unsafeguarded nuclear facilities, in Pakistan 
or anywhere else. The Chinese appear to be taking this pledge very 
seriously. We are not aware of any transfers of equipment or material 
by Chinese entities to Pakistan's unsafeguarded nuclear program since 
the pledge was made. While China has not adopted full-scope safeguards 
as a condition of supply as a general policy principle, the U.S. will 
continue to urge that it do so.
                                 mexico
    Question. Human rights organizations, church organizations and 
observers have reported an intense military buildup in Chiapas since 
the massacre of 45 children, women and elderly in Acteal. According to 
reliable reports, this military presence is being used to intimidate, 
harass and persecute church workers and communities of the indigenous 
population. It is also reported, from credible sources, that 
paramilitary groups, like the one that was responsible for the massacre 
in Acteal, are being supported and supplied with arms by the military. 
What end-use monitoring is in place to ensure that U.S. military and 
counter-narcotics assistance is not being used to supply or train 
paramilitary groups and is not being used against the innocent civilian 
population?
    Answer. When the U.S. provided 73 UH-1H helicopters to the Mexican 
military under authority of the Foreign Assistance Act, we negotiated 
with the Government of Mexico exacting end-use monitoring procedures. 
The purpose of these procedures is to ensure that the equipment is used 
only for the counternarcotics purposes for which it was supplied.
    Under the end-use monitoring procedures, Mexico furnishes bi-
monthly reports indicating the use to which each aircraft was put and 
its operational status. In addition, personnel of the U.S. Embassy in 
Mexico make quarterly on-site observations at installations where these 
helicopters are located to check the aircraft, interview personnel, and 
verify and corroborate information.
    These procedures are working well, with no indications that any 
U.S.-supplied equipment has been diverted to unauthorized uses. We are 
confident that this equipment is being used for the counternarcotics 
mission for which it was furnished to Mexico.
    As to the allegation that the Mexican military has supported and 
armed paramilitary groups in Chiapas, we note that the most recent 
report from the Mexican Attorney General's detailed investigation of 
the Acteal massacre indicates that such groups were advised and 
supplied with arms by local public security forces, not the Mexican 
Army.
    We have not seen any evidence that the Mexican Army is advising or 
supplying such groups. We are aware that one of the missions of the 
Mexican Army in Chiapas is to attempt to separate and prevent further 
confrontations between the Zapatistas and their supporters and those 
armed groups that oppose them.
                             african crises
    Question. The Administration is requesting $5 million for continued 
assistance to the African Crisis Response Initiative, and an additional 
$5 million has been requested for military assistance to East Africa. 
Please explain why these funds continue to be necessary and provide an 
update on recent operations of the African peacekeeping forces at work 
in East Africa.
    Answer. For Fiscal Year 1999, the Administration is requesting $5 
million in Foreign Military Financing (FMF) and $15 million in 
Peacekeeping Operations (PKO) to continue the African Crisis Response 
Initiative (ACRI), the Administration's program to enhance African 
peacekeeping capacity. The Administration's vision for the ACRI is a 
greatly enhanced African capacity to perform peacekeeping and 
humanitarian relief operations in a timely, professional competent 
manner. The ACRI aims to provide equipment and training to 10,000-
12,000 African soldiers in well-prepared companies and battalions, 
commanded by trained African officers and capable of deployed 
operations with consistent doctrine and procedures, using interoperable 
communications. Fiscal Year 1999 funding is for the third year of the 
proposed five-year funding for the ACRI; $15 million was allocated in 
FY 1997 and $20 million was allocated in FY 1998. The combination of 
FMF and PKO funding provides the most efficient process to address 
expenses associated with the ACRI. Training expenses for U.S. Special 
Forces trainers involved in initial (70 trainers for 70 days) and 
sustainment (30 trainers for 30 days) training events are paid for by 
FMF. A sustainment training event will take place in each ACRI partner 
country approximately every six months, during a total training period 
that extends over 36 months for each ACRI unit. Equipment costs 
(approximately $1.2 million per battalion) are funded by PKO monies.
    The ACRI program is on schedule. By the end of 1998, the ACRI will 
have equipped and provided initial training to approximately one-half 
the 10,000-12,000 African peacekeepers that represent the ACRI`s 
objective. The United States has completed initial training with 
battalion-sized contingents from Senegal, Uganda and Malawi and began 
training a Malian battalion in early February, 1998. Training with a 
Ghanaian battalion is scheduled for early April, in cooperation with 
Belgian military trainers. Later this year, training will begin in 
Ethiopia, the first country to commit two battalions and a brigade 
staff. The first sustainment training session began in Senegal in early 
March, 1998; a similar session with Uganda will run from mid-March to 
mid-April, 1998, followed by sustainment training in Malawi. In 
addition, in order to help our African partners develop regional and 
sub-regional command and control capabilities, we will invite 
international observers to training events and exercises, help sponsor 
peacekeeping and complex humanitarian emergency meetings, and we will 
also help sponsor joint and combined peacekeeping staff and field 
training exercises.
    The Administration is requesting $5 million in FY 1999 for the East 
Africa Regional program. This program, separate from the ACRI, provides 
non-lethal assistance to Ethiopia, Eritrea, and Uganda to bolster their 
defense capabilities and to help them resist regional destabilization 
being promoted by the Government of Sudan. Sudan, an immediate neighbor 
of these three states that have each cooperated closely with the United 
States on numerous regional and international issues, remains a 
destabilizing factor in the Horn of Africa and the world because of its 
policies and actions, ranging from support of terrorism to disruption 
of humanitarian assistance. This funding will address the priority 
needs for defensive security assistance for Sudan's neighbors.
               turkey/greece: abandoning loan assistance
    Question. Why is the Administration not pursing the provision of 
loans to Greece and Turkey in 1998? Is this decision based on Turkey's 
economic situation?
    Answer. A drop in Turkey's commercial credit rating would have 
required us to charge higher interest rates that would have eroded the 
usefulness of the loan subsidy for Turkey. Despite structural problems 
that have affected its credit rating, however, the Turkish economy is 
growing at a rate of over 6% per year, and the Turkish Government's 
payment record on loans from U.S. is spotless. For both Greece and 
Turkey, the provision of grant rather loan makes our assistance dollar 
more cost-effective.
                     turkey: why grant assistance?
    Question. What is the policy justification for providing military 
grants to Turkey, and how does that square with the recently reported 
incident in which Turkish planes ``buzzed'' the plane carrying the 
Greek Minister of Defense on a recent trip to Cyprus?
    Answer. The post-Cold War evolution of NATO and the Alliance's 
increasing emphasis on security on the southern flank have made the 
security partnership with Greece and Turkey more important than ever 
before. We encourage both countries to use their grants to improve 
their ability to meet alliance obligations.
    We view the tension between Greece and Turkey with the utmost 
gravity. Both countries have engaged in provocative behavior toward 
each other. We do not believe, however, that disputes between these two 
Allies should preclude our helping them meet their NATO obligations. We 
are working with our Greece and Turkey allies to develop mutually 
acceptance avenues through which they can resolve their disputes.
                turkey: defense spending and the economy
    Question. Given Turkey's economic problems, what guidance have both 
the Departments of State and Defense given the Turks with respect to 
their level of defense spending and extensive plans to upgrade their 
weapons inventory?
    Answer. Turkey not only major NATO responsibilities, but faces 
serious threats to its security elsewhere, including instability in the 
Caucasus, an ongoing terrorist threat from the Kurdistan Workers' Party 
(PKK), and neighbors--Iran, Iraq, and Syria--that support terrorism and 
seek to acquire weapons of mass destruction. The Turkish economy is 
dynamic and is growing at a rate of greater than 6% per year. We have 
no reason to suppose that Turkey cannot afford to defend itself. It 
cannot afford not to. A secure environment is the essential foundation 
of a healthy economy. Moreover, Turkey's credible defense posture vis-
a-vis aggressive states in the Middle East supports U.S. interests and 
lessens our own need to commit assets to the region.
            Questions for the Record Submitted by Mr. Yates
                            counternarcotics
    Question. Please provide a breakdown by country of what aid goes to 
military vs. police forces?
    Answer. The following is a breakdown by country, as presented in 
our FY 1999 budget request, of what counternarcotics aid goes to 
military vs. police forces:

------------------------------------------------------------------------
    Counternarcotics assistance           Police            Military    
------------------------------------------------------------------------
Bolivia...........................        $11,575,000         $4,900,000
Colombia..........................         40,000,000          2,000,000
Ecuador...........................            800,000            390,000
Peru..............................         13,600,000          2,000,000
------------------------------------------------------------------------

    Question. What part of these funds goes to training and what for 
equipment?
    Answer. The funds identified for the military will go primarily for 
training, fuel and POL with some monies for minor repairs, aviation and 
boat spare parts and operational support. The support provided to the 
police will mostly fund commodities, air support costs, Training, 
telecommunication equipment and operational costs.
    Question. During the past two fiscal years, which countries 
benefited from INL interregional aviation programs? How much equipment 
was used in each country?
    Answer. INL interregional aviation programs benefited the countries 
of Colombia, Peru, Bolivia, and Guatemala during the past two fiscal 
years. The number of the INL owned aircraft used in each country was as 
follows:
    Colombia: Early in the period in question, seven T-65 aircraft and 
one Cessna 208 were employed in Colombia. This was expanded to where 
today there are eight T-65s, two Casa 212's, five OV-10's, one Cessna 
208, six Bell 212's and UH-1's in Colombia being supported by the INL 
contract
    Peru: 16 UH-1 helicopters.
    Bolivia: In FY 97, there were 22 UH-1 helicopters employed in 
country. As of FY98, this number has been reduced to 16.
    Guatemala: Previously five Bell 212 helicopters were employed in 
Guatemala, but these have since been relocated to Colombia.
    Question. Could you please provide the funding levels for the INL 
interregional aviation programs by country?
    Answer. The following approximate amounts are provided for FY 1998. 
Please note that these amounts include a prorata share of Main 
Operating Base (Patrick AFB) costs which are all incurred for the 
ultimate benefit of overseas country programs.

                        [In millions of dollars]                        
------------------------------------------------------------------------
                                                               FY 1999  
                                                  FY 1998      planned  
------------------------------------------------------------------------
Colombia......................................        $23.7        $29.5
Bolivia.......................................          6.4          5.5
Peru..........................................          7.9          6.0
                                               -------------------------
      Total...................................        $38.0         41.0
------------------------------------------------------------------------

    Question. Much of our military assistance to Mexico is for 
counternarcotics training. How do we know that those troops we helped 
train for counternarcotics are not used instead for counterinsurgency?
    Answer. In response to Mexico's interest in improving the skills 
and capabilities of military personnel being assigned to newly-created 
counter-drug units, the US arranged for training by the US Army Special 
Forces. This training has emphasized skills and discipline useful for 
personnel engaged in counter-drug activities or other low-intensity 
conflicts. The Mexican Secretariat of National Defense selects 
personnel for US training who are most likely to be assigned to 
counter-drug units, or to units which regularly perform counter-drug 
missions.
    Both of the Mexican states currently experiencing insurgencies are 
also major drug-trafficking and producing states. Therefore, it is 
likely that some of the personnel who receive US training will, at some 
point, be assigned to units or missions relating to those insurgencies. 
However, we are not in a position--nor would we presume--to tell a 
sovereign nation where it can or cannot assign its military or civilian 
personnel.
    Recipients of US Special Forces training are exposed, however, to 
internationally-accepted concepts of protection of human and civil 
rights, the rule of law, and appropriate interaction between military 
forces and civilian populations in conflictive situations. A key aspect 
of such training is knowing when to refrain from use of force.
    Question. Is there any ``end use monitoring'' of the 
counternarcotics training programs?
    Answer. The U.S. Government attempts to conduct post-training 
assessments or evaluations to determine the impact of the training and 
to be able to make changes in curriculum or training methods to make it 
more effective in the future. We are also very interested in 
ascertaining if personnel receiving specialized U.S. training are 
assigned to positions where they can make use of it. This will affect 
where we invest limited training resources in the future. We are not 
able, however, to follow up on each and every individual around the 
world who receives U.S. training.
                  fmf--improving our allies' security
    Question. In the Congressional Presentation for Foreign Military 
Financing (FMF), it is stated in the United States Foreign Policy 
Objectives that ``* * * diplomacy and international programs go hand in 
hand with military force to prevent and resolve conflicts * * * our 
security assistance programs help U.S. allies to become capable 
coalition partners * * *''
    How have these programs improved the security of our allies, our 
partners in the Middle East Peace Process, and our friends in the 
states of Eastern Europe and throughout the world?
    Answer. Our Foreign Military Financing (FMF) programs have improved 
the security of our allies worldwide by supporting the acquisition of 
U.S. defense equipment, defense services, and military training.
    In the Middle East, for example, our annual $1.8 billion in FMF for 
Israel and $1.3 billion for Egypt enabled these two central peace 
process partners to modernize, expand, and sustain their defensive 
force capabilities. Israel maintains its qualitative edge through FMF 
purchases of major defense systems such as F-15 fighter aircraft, AIM-
120 missiles and combat systems for SAAR-5 corvettes. Israel's security 
posture in the region, bolstered by FMF purchases, is a critical 
prerequisite for advancing the peace dialogue with its Arab neighbors. 
Similarly, FMF has given Egypt the confidence to take risks in support 
of the peace process, assist us in containing well-armed regional rogue 
states, and resist terrorist coercion. As a result of major FMF-funded 
and sustained programs including the F-16 and Apache program, frigate 
acquisition, and Hawk modernization, Egypt remains the only friendly 
Arab state capable of making a strategically meaningful military 
contribution to any future regional coalition combat operation, as they 
did during Desert Shield/Storm with a contribution of 33,600 combat 
troops. Finally, the U.S. commitment to enhancing the Jordanian Armed 
Forces' self-defense capabilities is demonstrated by our expanding FMF 
program to support the refurbishment of F-16s.
    In Europe, we have used FMF to support Central European and former-
Soviet states' participation the Partnership for Peace. These funds 
have helped improve recipient states' security by preparing and 
equipping national forces to participate in PFP exercises and NATO 
peace support, humanitarian, search & rescue, and peacekeeping 
operations. Under PFP, these countries have procured much-needed 
equipment and training, including: communications equipment, search and 
rescue equipment, the Regional Airspace Initiative in seven countries, 
and English language training for thousands of soldiers.
    Elsewhere, our FMF has bolstered the internal defense capability of 
states bordering the Sudan, strengthened the Southern Flank of NATO, 
and helped develop a credible peacekeeping capability among select 
African nations.
             fmf: supporting american freedom and security
    Question. How do these [FMF] programs support American freedom and 
security?
    Answer. By helping friendly and allied countries to defend 
themselves, FMF programs help to deter and, if necessary, to defeat 
aggression which could otherwise threaten vital American interests. By 
strengthening NATO allies and helping to prepare Poland, the Czech 
Republic, and Hungary to become NATO members, FMF helps to build a free 
and peaceful Europe, where twice in this century the United States has 
fought in World Wars to protect vital interests. In the Middle East, a 
region of vital importance and chronic instability, military assistance 
to countries like Israel, Egypt and Jordan helps to deter aggression 
and to supports progress in the Middle East Peace process.
    In addition to these obvious tangible benefits derived form our FMF 
programs, the American people also enjoy benefits that may not be 
outwardly apparent. Because FMF is used to purchase U.S. defense 
articles and services, these funds directly support a strong U.S. 
industrial base and create jobs for Americans, may lengthen production 
runs, and can help reduce unit costs of equipment procurement for our 
own military. Additionally, implementation of the FMF program requires 
coordination and contact between the U.S. and the recipient government 
during all phases--from developing the request for a particular defense 
article or service to training the foreign military how to operate and 
maintain the equipment. As a result, not only will the foreign 
government's systems be compatible with ours during times of crisis, 
but the relationships established at all levels between our military 
and that of the foreign government builds and strengthens alliances 
beyond the formal, official ties. It is not uncommon for the U.S. to 
rely on these personal and professional contacts in times of crisis to 
provide support critical to our own military--such as access to ports 
and airfields. Together, the spectrum of tangible and intangible 
benefits derived from our FMF program support the freedom and security 
of the American people.
   international security assistance: strengthening american security
    Question. Would you expand on how FMF and security assistance in 
general strengthens the security of the United States.
    Answer. by helping friendly and allied countries to defend 
themselves, U.S. security assistance programs help to deter and, if 
necessary, to defeat aggression which could otherwise threaten vital 
American interests. By strengthening NATO allies and helping to prepare 
Poland, the Czech Republic, and Hungary to become NATO members, our 
assistance helps to build a free and peaceful Europe, where twice in 
this century the United States has fought in World Wars to protect 
vital interests. In the Middle East, a region of vital importance and 
chronic instability, military assistance to countries like Israel, 
Egypt and Jordan helps to deter aggression and to supports progress in 
the Middle East Peace process.
    The range of U.S. security assistance programs--from Foreign 
Military Financing, to the International Military Education and 
Training (IMET) program, to the peacekeeping operations programs--
serves to strengthen our own national security. Because FMF is used to 
purchase U.S. defense articles and services, these funds directly 
support a strong U.S. industrial base and create jobs for Americans, 
and can help reduce unit costs of equipment procurement for our own 
military.
    Additionally, implementation of both the FMF and IMET programs 
involves coordination and contact between the U.S. and the recipient 
government during all phases--from senior level visits, to developing a 
request for a particular defense article, service or training program 
to actually training the foreign military in a wide range of technical 
and professional issues. As a result, not only will the foreign 
government's systems and standard operating procedures be compatible 
with ours during times of crisis, but the relationships established at 
all levels between our military and that of the foreign government 
builds and strengthens alliances beyond the formal, official ties.
    It is not uncommon for the U.S. to rely on these personal and 
professional contacts in times of crisis to provide support critical to 
our own military--such as access to ports and airfields. Even in times 
of peace, our security assistance programs help give the U.S. military 
access to a host of unique training environments that would otherwise 
be unavailable. Finally, by helping teach other militaries how to 
conduct successful peacekeeping and humanitarian operations, our 
programs help reduce the likelihood that our own troops will be called 
into action--thereby protesting U.S. lives and resources. Together, the 
spectrum of tangible and intangible benefits derived from the range of 
international security assistance programs support U.S. diplomatic 
objectives and strengthen the security of the American people.
                          general foreign aid
    Question. How has our foreign aid improved our ability to function 
in the world? More specifically, how has it helped us in our recent 
troubles with Saddam Hussein?
    Answer. U.S. foreign assistance plays a role in maintaining strong, 
comprehensive, and mutually beneficial relationships with key regional 
partners. Foreign assistance helps enable our partners to participate 
in international peacekeeping efforts, as well as combating terrorism. 
During the Iraq crisis, we forged a coalition of like-minded nations 
determined to see the UNSC's resolutions enforced and to counter the 
threat posed by Iraqi weapons of mass destruction. Not one country 
reversed its commitment to us. Our allies understood that our combined 
resolve and steadfastness brought us to the point of agreement.
    Question. Did our former coalition allies and recipients of 
security assistance reduce the drain on our own resources, physical and 
financial, during the recent build up in the Arabian Gulf?
    Answer. Eighteen countries offered military assets for the 
coalition and another twelve offered basing and overflight rights. More 
than 70 governments spoke out about the need for Iraq compliance with 
the obligations they accepted at the end of the Gulf War as part of the 
UN cease-fire resolution. With our coalition partners standing by, the 
robust force currently deployed in the region will stay in place until 
we are confident that Iraq will comply fully with its obligations.
    Question. Could we depend on Egypt, Jordan and other Middle East 
nations or was our access limited?
    Answer. Our Middle East partners played an important role in the 
Iraq coalition. We worked closely with Bahrain both in the region and 
on the UN Security Council to address the threat to the security of the 
Gulf and the authority of the United Nations posed by Saddam's pursuit 
of weapons of mass destruction. King Hussein of Jordan called 
repeatedly for full Iraqi compliance with all relevant UN resolutions. 
Egypt provided timely critical assistance in providing Suez Canal 
transit, overflight clearances, and refueling services. We consulted 
closely with the Saudis during the Iraq crisis and were confident of 
their support. We have a cooperative defense relationship with Qatar 
and several other regional partners.
                                demining
    Question. Demining is an area of utmost importance to many of us on 
this subcommittee. The removal of landmines is a major challenge 
requiring a very long term commitment. It is, indeed, one of the most 
important initiatives in the world today. The United States recently 
failed to sign the international agreement banning landmines, which was 
very disappointing to me and many of my colleagues. However, the 
Administration's request for demining programs has been increased from 
$20 million last year to $50 million for FY '99. Would you please 
comment briefly on why the United States failed to sign this agreement, 
and explain the increase for the program.
    Answer. The United States is committed to the elimination of anti-
personnel landmines (APL). In September 1994, President Clinton became 
the first world leader to publicly call for a global ban on landmines. 
The U.S. UNGA resolution on APL, passed overwhelmingly in 1996, has 
consistently been cited by Ottawa Process supporters and others as the 
basis for their work in establishing an APL ban. in 1996, the United 
States led negotiation of the Amended Mines Protocol (Protocol II) to 
the Convention on Conventional Weapons (CCW), including creating the 
requirement that unmarked APL self-destruct and self-deactivate. On 
January 17, 1997, the President announced that the United States would 
observe a permanent ban on the export and transfer of APL. Also in 
1997, the United States worked vigorously to establish negotiations for 
an APL ban in the Conference on Disarmament (CD), the preeminent 
multilateral forum for arms control negotiations. Unable to achieve 
hoped for progress in the CD at that time, we attended the Oslo 
Conference in September 1997 determined to make every effort to 
negotiate an effective, comprehensive global APL ban that would also 
address the security concerns of participants. At Oslo, we attempted--
and failed--to negotiate two changes that would have allowed us to sign 
the Ottawa Convention: A nine-year transition period to phase out the 
APL (not including anti-personnel submunitions in mixed anti-tank 
systems) we now use to protect our troops, giving us time to devise 
alternatives; and a provision permitting continued use of our mixed 
anti-tank munitions systems. (These systems have self-destructing anti-
personnel submunitions which protect anti-tank munitions from being 
easily breached, but which are deemed APL under the treaty.)
    Our self-destructing, self-deactivating mixed anti-tank munitions 
systems are the safest anti-tank systems from the perspective of 
protecting civilians. They are also the most militarily effective. They 
are set to self-destruct in as little as 4 hours, at most in 15 days. 
The mechanism is extremely reliable: in more than 32,000 tests, all 
except one destroyed itself on schedule or earlier; one was one hour 
late. Self-destruction leaves these mines completely harmless after 
hostilities have ceased. At the same time, these weapons are essential 
to protect American forces where they may be greatly outnumbered and 
facing attack by enemy armored forces. We estimate our casualties to be 
as much as 30% higher if we are denied the use of these devices.
    Despite our best efforts to negotiate an exemption for our self-
destructing mixed anti-tank munitions systems, we were unsuccessful, 
even though the Ottawa Convention permits continued use of non self-
destructing mines (anti-tank mines with anti-handling devices) which 
will explode upon contact with a human being and are a humanitarian 
problem. Rather than expose our troops and the civilians they may be 
sent to protect to additional risk by banning self-destructing mixed 
anti-tank munitions that do not cause a humanitarian problem, we have 
not signed the Ottawa Convention.
    (Part II: Demining) As President Clinton, the Canadian Prime 
Minister and Foreign Minister, and the United Nations Secretary General 
have said, a ban on anti-personnel landmines is only a first step. The 
critical task before us is to remove the mines currently emplaced and 
threatening innocent civilians. Even if an international ban takes 
effect today, landmines will continue to remain in the ground in some 
60 countries worldwide. These hidden killers need to be removed in 
order for the land and infrastructure to be returned to peaceful 
civilian use and economic development and progress. For that reason, 
the Secretaries of State and Defense announced on October 31, 1997, the 
President's Demining 2010 Initiative, designed to accelerate global 
humanitarian demining operations, including landmine survivor 
assistance, to eliminate the threat of anti-personnel landmines to 
civilians by the year 2010. Working with others, the U.S. aims to 
create an effective international coordinating mechanism to ensure that 
sustained public and private resources for demining are directed, in an 
organized and rational manner, to programs in the mine-affected 
countries. We have requested $50 million for FY 99 to expand the 
program into additional countries, and to enhance and sustain ongoing 
indigenous demining efforts in nineteen countries, including the five 
countries added to the program in FY 97 and FY 98.
    Question. What is the next step?
    Answer. In addition to our extensive efforts in demining, the 
United States has taken many steps toward ending the APL problem. The 
CCW Amended Mines Protocol, a treaty which ensures responsible use of 
APL, was submitted in January 1997 to the Senate for advice and 
consent. The major historical APL producers and exporters who have the 
majority of the world's APL stockpiles and have not participated in 
Ottawa have approved adoption of this protocol. The President announced 
on September 17, 1997 that we would redouble our efforts to establish 
serious negotiations for a global APL ban in the CD. We will start by 
seeking an export ban on APL to capture the major mine producing 
countries in order to stop the spread of landmines which are causing 
the humanitarian problem. The President also directed the Department of 
Defense to develop alternatives to APL (not including anti-personnel 
submunitions in mixed anti-tank systems) so that by the year 2003 we 
can end the use of these weapons outside Korea. As for Korea, the 
objective is to have alternatives to APL ready by 2006.
    In addition, in January 1997, the President announced that the 
United States would observe a permanent ban on the export and transfer 
of APL and would cap its APL stockpile at current levels. In May 1996, 
the administration announced the destruction of non-self-destructing 
(NSD) APL not designated for the defense of Korea or for training. 
Since May 1996, we have now destroyed 3 million such weapons and are 
expected to destroy the remaining stocks by the end of 1998.
    Question. How can we get a truly effective global ban on landmines?
    How do we negotiate a realistic ban?
    Answer. We share a common goal with Ottawa Process supporters: the 
elimination of landmines worldwide. While the Ottawa Process is to be 
commended for the progress it has made, there is much left to be done.
    A truly effective global ban on APL would have to capture both 
those states who are most affected by the scourge of APL and the 
principal producers and exporters of APL. We hope to make progress 
toward this end in 1998 by negotiating an export ban on APL in the CD. 
It is our belief that the CD offers the best possibility of capturing 
those major APL exporting and producing states who have not signed the 
Ottawa Convention. In order to stem the supply of APL worldwide, not 
just to states but to non-state parties in civil conflicts, it is 
critically important to bring in the major producers and exporters.
    The U.S. was also a leader in negotiating the Convention on 
Conventional Weapons Amended Mines Protocol. Once it enters into force 
(possibly this year), it will address the humanitarian problem caused 
by APL by strengthening restrictions on landmine use and transfer and 
by also capturing key landmine states that are not party to the Ottawa 
Convention. Specifically, CCW mandates that non self-destructing APL--
the true ``hidden killers'' which are responsible for civilian 
casualties worldwide--must be marked and monitored wherever they are 
used. Those who willfully violate and cause death to civilians will be 
subject to penal sanctions and/or extradition. CCW also bans the 
transfer of APL to non-state parties--who make up a large proportion of 
the humanitarian problem in zones of civil conflict--and carries strict 
proscriptions against the use of non-detectable mines. The CCW Amended 
Mines Protocol goes directly to the heart of the humanitarian problem 
associated with APL. It is certain that if it had been observed by all 
the key states for the past 40 years, the number of post-combat 
civilian casualties from the indiscriminate use of APL would be very 
dramatically reduced. The CCW Amended Mines Protocol was submitted to 
the Senate for advice and consent to ratification in January 1997.
    Question. Does the United States intend to commit to working for a 
global ban on landmines?
    Answer. Again, the United States is and has long been committed to 
working for a global ban on anti-personnel landmines. Since 1994, when 
President Clinton called for the comprehensive global elimination of 
APL at the United Nations, the United States has been at the forefront 
of active efforts to ban them. The United States led efforts to adopt 
the Convention on Conventional Weapons Amended Mines Protocol (Protocol 
II). The U.S. UNGA resolution urging states to pursue an agreement to 
ban anti-personnel landmines passed overwhelmingly (155-0) on December 
10, 1996, helped set the Ottawa Process in motion. On September 17, 
1997, President Clinton committed the United States to redoubling 
efforts to establish serious negotiations for a global APL ban in the 
CD, beginning with an export ban.
    It is important to note that U.S. APLs are not causing the 
humanitarian problem. Long before the Ottawa Process began, the United 
States developed and began using self-destructing, self-deactivating 
short-duration mines in order to eliminate residual casualties from 
emplaced APL. These U.S. mines self-destruct within 4 hours to 15 days 
after activation with a reliability rate better than 99.99%. On May 16, 
1996, the President banned U.S. use, production, and export of non 
self-destructing APL (the type which can last for decades and which is 
almost exclusively responsible for the humanitarian problem) worldwide 
except for training purposes and for the Korean Peninsula, where NSD 
APL are imperative to the security of U.S. and Korean forces. Since 
then, we have unilaterally destroyed 3 million such weapons and are 
expected to destroy the remaining stocks by the end of 1998.
    On January 17, 1997, the President announced that the United States 
would observe a permanent ban on the export and transfer of all APL 
(including even self-destructing/self-deactivating APL) and would cap 
its APL stockpile at current levels.
    On September 17, 1997, the President directed the Department of 
Defense to develop alternatives to APL (not including anti-personnel 
submunitions in mixed anti-tank systems) so that by the year 2003 we 
can end even the use of our self-destructing APL outside of Korea. As 
for Korea, the objective is to have alternatives ready by 2006.
    In 1997, the U.S. actively pursued a comprehensive and global APL 
ban in the CD. Also in 1997, the U.S. was leading sponsor of an UNGA 
resolution calling on the CD to ``intensify its efforts'' on APL. We 
are continuing these efforts during the current CD session, working to 
establish a mandate for negotiation of an export ban.
    Question. How far off in the future do you expect such a ban could 
take place?
    Answer. It is difficult to predict how long it would take to 
establish an effective comprehensive global ban. The CD has agreed to 
establish a Special Coordinator for APL for the '98 session, and we 
hope to begin negotiations for an export ban this year. The CCW Amended 
Mines Protocol requires 20 nations to ratify in order to enter into 
force and may reach 20 within a few months (it has been submitted to 
the Senate for advice and consent to ratification).
    A principal reason the U.S. is not signatory to the Ottawa 
Convention is that it prohibits U.S. mixed anti-tank systems, which are 
necessary to protect our forces and which pose virtually no risk to 
non-combatants. We have made clear that the U.S. reserves the right to 
use mixed systems indefinitely. However, this could change if we find a 
viable and affordable concept for replacing these systems with an 
alternative that is comparable in terms of military effectiveness, 
safety of use, and minimal risks for non-combatants. As of now, we have 
not identified any operationally viable concept. We will keep Congress 
informed as administration policy develops in this area.
    Question. To follow up on my initial question, wouldn't it have 
been easier for the United States to sign the Treaty and work from the 
inside, that is if we are trying to reach the same goals?
    Answer. Our nation has unique responsibilities for preserving 
security and defending peace and freedom around the globe. As 
Commander-in-Chief, the President will not send our soldiers to defend 
the freedom of our people and the freedom of others without doing 
everything he can to make them as secure as possible.
    For that reason, the United States insisted in the treaty 
negotiations in Oslo that two provisions be included in the treaty. 
First, we needed an adequate transition period to phase out the APL we 
now use to protect our troops, giving us time to devise alternative 
technologies. Second, we needed to preserve the self-destructing mixed 
anti-tank munitions systems we rely on to slow down an enemy's armor in 
a battle situation. In neither case was there a willingness on the part 
of the Ottawa process nations to accept these provisions.
    If we had become a party to the Ottawa Convention, from that moment 
on we would have been unable to use self-destructing mixed anti-tank 
munitions and our troops would have been exposed to additional risk 
despite the fact that self-destructing mixed anti-tank munitions do not 
cause a humanitarian problem. Despite our best negotiating efforts, the 
United States could not sign the Ottawa Convention. In the Oslo 
negotiations of the Ottawa Convention, we went the extra mile and 
beyond in an attempt to negotiate an effective agreement that would 
protect our forces. As the President has said, there is a line that 
simply can not be crossed, and that line is the safety and security of 
our men and women in uniform. The offer we made at Oslo remains on the 
table.
                             latin america
    Question. It is my impression that some of the embassies are not 
taking the ``Leahy Language'' seriously. For example, in Bolivia. The 
State Department's Bolivian section of the Country Reports on Human 
Rights Practices for 1997 raises questions about the U.S. Embassy's 
human rights reporting and its implementation of the amendment. The 
report states that ``* * * 14 civilian were killed in the course of law 
enforcement operations that encountered armed resistance. The precise 
cause and circumstances of these deaths have not been officially 
determined, but it appeared that some resulted from the use of 
excessive force by authorities.''
    I would like to know what was the Embassy's conclusion about these 
deaths?
    How were these 14 people killed?
    What information did the U.S. Embassy use to evaluate and reach its 
conclusions?
    Were any of those security forces receiving U.S. counternarcotics 
aid?
    It is my understanding that there is credible evidence regarding 
human rights violations and abuses provided to the Bolivian embassy by 
the Andean Information Network, an NGO on the ground in Bolivia.
    This is very important to note, because our ambassador to Bolivia 
has moved on to Colombia, a country where this committee has expressed 
its grave concerns in the past with regard to human rights violations, 
and if this policy is not fully embraced on the ground then the will of 
Congress, as expressed in the ``Leahy Amendment,'' is being defied.
    Mr. Holum, could you please investigate this and report back to 
this committee at the earliest possible change.
    Answer. Nine of the 14 civilians, and one police officer, were 
killed in December 1996 after police and military forces were ordered 
to the Amayapampa area in Potosi department to dislodge miners who had 
seized a privately owned mine in a dispute with the mine's management. 
The Bolivian Government requested an investigation by the Inter-
American Commission on Human Rights (IACHR). The IACHR reported that 
five civilians died of gunshot wounds, one from a crushed skull, one 
bled to death from an untreated bullet wound and the other two deaths 
were not explained.
    The IACHR concluded that some of the civilians killed in the 
Amayapampa area were not active in the conflict. It called upon the 
Government of Bolivia to complete a full investigation, punish those 
officials responsible and make fair compensation to the victims or 
their survivors.
    The U.S. Embassy reviewed the IACHR and police reports, had 
conversations with government officials and reported this information 
to the Department. In a February 1997 meeting with the Bolivian 
Minister of Government, Assistant Secretary Gelbard raised the 
potential implications of unresolved investigations of human rights 
abuses and echoed Ambassador Kamman's concerns over the Bolivian 
government's handling of the Amayapampa incidents. None of the police 
or military units involved in the Amayapampa violence receive U.S. 
counternarcotics aid or funds appropriated under the FY-98 Foreign 
Operations Appropriations Act, nor are we considering providing such 
assistance to these units. As such, no further actions were necessary 
under either the Leahy Amendment or section 570.
    The remaining five of 14 civilian deaths occurred at the time of 
clashes, which began on April 17, 1997 in the Chapare region, between 
coca farmers and Bolivian government coca eradication units. A 300-man 
force from the Ecological Police and UMOPAR (the specialized police 
unit that enforces counternarcotics laws) was ambushed by a mob of 
about 1,500 peasants, wielding firearms, stones and dynamite. Three 
civilians and one policeman died of gunshot wounds. Justice Ministry 
human rights investigators found that the fourth civilian death, which 
had initially been attributed to gunfire, was caused by the victim 
falling from a roof. The fifth civilian death, that of an infant 
allegedly overcome by tear gas fumes, was attributed to a severe 
infection, undernourishment, and dehydration.
    The Embassy used police reports and conversations with government 
officials and the Andean Information Network to investigate this case. 
From this information it appears that the Chapare deaths were a result 
of the police protecting themselves in the course of a legitimate law 
enforcement operation from a coca growers' ambush and that the police 
did not use excessive force. There are no neutral or objective 
eyewitness accounts of this incident and we have encouraged the 
Bolivain government to carry out a thorough and professional 
investigation. The Ecological Police and UMOPAR receive U.S. 
counternarcotics aid.
    These incidents were reported to the Department, and we have 
pressed the Government of Bolivia to more thoroughly investigate this 
and any other such incidents. Pending receipt of any further 
information developed in this case as a result of the GOB's or our own 
investigations, the Department concurs with the Embassy's conclusion. 
We note that the information initially received in this case was not 
processed strictly in accordance with established procedures. The 
Department has since established a committee for the purpose of 
regularizing the mechanism for review of such incidents.
    u.s. embassy procedures for implementing the ``leahy amendment''
    Question. What procedures are the U.S. embassies using to implement 
the Leahy language?
    Answer. In February 1997, the Department of State sent a cable to 
all diplomatic posts regarding the ``Leahy Amendment'' provision 
included in Title II of the FY 97 Foreign Operations Appropriations Act 
(FOAA), under the heading ``International Narcotics Control'' (INC). 
That cable instructed posts to establish specific and detailed 
procedures for review at post of reported incidents of human rights 
violations by security forces, to correlate that information with INC-
funded programs, and to report all such information to the Department 
in order to help ensure compliance with the provision. In March 1998, 
the Department sent a similar cable to all posts regarding section 570 
of the FY 98 FOAA. That cable instructed posts to follow similar 
procedures with regard to all FY 98 FOAA-funded assistance to be 
provided to host nation security forces. Because the size and personnel 
resources of each embassy varies, the specific procedures used to 
implement Leahy and section 570 are tailored to each post. 
Nevertheless, we have encouraged posts to rely on both unofficial and 
official sources when gathering information about human rights abuses.
                   sources on human rights violations
    Question. What sources are consulted about human rights violations 
committed by the military?
    Answer. We rely on a wide range of sources. Here in Washington, we 
keep in touch with human rights organizations who monitor these issues. 
We maintain good contacts with the best known international 
organizations, such as Human Rights Watch and Amnesty International, as 
well as a large number of smaller organizations that focus on specific 
issues, such as religious freedom, or on specific regions.
    Overseas, our Embassies rely on both official and unofficial 
sources for information about all kinds of human rights abuses, 
including those allegedly perpetrated by the military. Embassies meet 
with representatives of the Ministries of Justice or officers of the 
court to obtain information about possible indictments or ongoing 
trials. In Embassies where there is a defense attache, he or she will 
maintain contacts with a variety of officials in the host country 
military and will consult with them about allegations of human rights 
violations. Embassy officers often visit the scene of abuses, or meet 
with family members or representatives of victims.
    Local non-governmental organizations and human rights commissions 
or ombudsmen remain among the most important sources of information 
about violations by the military and other human rights assets. There 
has been an increase in the number of locally-based organizations of 
this kind, often linked to larger international human rights NGO's, and 
our Embassies regularly report on the findings of these groups.
                               guatemala
    Question. During the past year, I requested from your office 
information regarding pipeline military aid. DOD sent me a chart 
indicating that there is still military aid in the pipeline for 
Guatemala. In 1994, the committee expressed its clear intent that 
pipeline FMF monies should be transferred to a peace fund. If you could 
clear something up for me I would appreciate it. It seems to me that 
some of the money was transferred to the transition peace fund, why not 
all of it?
    Answer. In 1994 we did transfer $4.6 million of suspended FMF and 
MAP funds to the ESF account as a Guatemala Peace Fund. The $4.6 
million included all funds for Guatemala obligated but not committed to 
specific Letters of Offer and Acceptance (LOAs). The remaining $2.45 
million of suspended FMF and MAP funds was attributable to already 
completed, but undelivered, transactions such as the acquisition of 
barracks and buses. Those ``monies'' clearly would not have been 
transferred to the Peace Fund. At that time DOD began an effort to 
liquidate as many as these Guatemalan LOAs as possible through sale of 
the goods to alternate buyers and the cancellation of contracts. The 
proceeds from these efforts were then placed in a DSAA Guatemala 
Holding Account which now totals approximately $2.58 million. The funds 
remain uncommitted.
             nato enlargement and the partnership for peace
    Question. Please explain the extent of our military assistance to 
Poland, the Czech Republic, and Hungary?
    Answer. Since the beginning of PFP funding in FY 95, the USG has 
provided $98.6 million in Foreign Military Financing (FMF) to Poland, 
the Czech Republic, and Hungary. Since FY 91, we have also provided 
approximately $19 million in International Military Education and 
Training (IMET) funds to these three countries. The total for direct 
military assistance to these three countries is just under $120 
million.

                        [In millions of dollars]                        
------------------------------------------------------------------------
                                                       FMF        IMET  
------------------------------------------------------------------------
Poland............................................      $45.7       $6.9
Czech Rep.........................................       24.1        4.4
Hungary...........................................       28.8        6.7
------------------------------------------------------------------------

    These countries have used FMF primarily for the purchase of defense 
equipment and training to improve their militaries' interoperability 
with NATO forces. For example, funds have supported the Regional 
Airspace Initiative, English language labs, Search and Rescue 
Equipment, NATO-standard mapping equipment, tactical field radios, 
navigation and safety aids and similar uses. IMET funds have provided 
training for officers, NCOs, and civilians from these countries at U.S. 
military education institutions in the areas of defense resource 
planing, doctrine, civil-military relations, language, leadership, and 
other core military science disciplines.
    In addition, we have offered these countries low-cost loans under 
the Central European Defense Loan (CEDL) program. Although none of the 
three took advantage of the loan program in FY 97, they have expressed 
interest in the program and we will offer them loans again in FY 98. We 
obligated $18.24 million in FY 97 subsidy for loans to Poland and the 
Czech Republic and have set aside $20 million for the program in FY 98.
    The above levels do not include DOD programs and funding in support 
of Partnership for Peace (PfP) program. Because most of these programs 
are open to all Partners, DOD is unable to provide country-specific 
costs for the participation of the three states invited to join NATO. 
Examples of the DOD programs include the Joint Contact Team Program, 
which puts military liaison teams in Partner country MODs; the 
Partnership Information Management System (PIMS); the Defense Resource 
Management System (DRMS); Marshall Center programs; Exercise Support 
Funds; and other programs designed to maximize interaction between 
Partner militaries, U.S., and NATO forces, as well as to promote 
familiarity and interoperability with NATO forces.
    Other USG programs, such as cooperation between the militaries of 
these three countries and National Guard units in the U.S., have 
exposed thousands of Central European soldiers to U.S. military 
personnel, procedures, and perspectives. Poland, Hungary and the Czech 
Republic have taken only limited advantage of the Excess Defense 
Articles program, largely due to the cost of transporting, upgrading, 
and maintaining EDA equipment.
    Question. What is the out-year plan for our military assistance?
    Answer. The President's budget requests $80 million in Foreign 
Military Financing (FMF) for FY 99 to support the Partnership for Peace 
(PfP) program. Of this, we plan to allocate $25.0 million to assist 
Hungary, Poland, and the Czech Republic in achieving NATO standards and 
improving their interoperability with NATO forces as they prepare for 
membership. We are also requesting $4.45 million in IMET funds for 
these three countries to continue U.S. military training opportunities 
for an expanded number of military and civilian personnel. Finally, we 
are requesting $20 million in loan subsidies to support the Central 
European Defense Loan (CEDL) program, which will allow those countries 
to address deeper infrastructure needs.
    Beyond FY 99, we intend to continue providing FMF grants to 
Hungary, Poland, and the Czech Republic at reduced levels to facilitate 
their integration with NATO.
    With regard to IMET, we intend to maintain current levels for the 
next several years to ensure that critical training needs are met.
    Question. What is the status of military loans to these countries 
and what are they being used for?
    Answer. The Central European Defense Loan (CEDL) program was 
designed to assist creditworthy Central European nations in improving 
their NATO interoperability by providing low-cost loans to remedy 
military infrastructure deficiencies.
    Fiscal Year 1997 was the first year of the CEDL program. We offered 
loans to Poland, Hungary, and the Czech Republic. Both Poland and the 
Czech Republic stated their desire to take out loans of $100 million 
and $80 million, respectively, to finance procurement of advanced 
radar, air defense systems, and safety and navigation upgrades for 
military airfields. However, last-minute problems in gaining 
parliamentary approval in the Czech Republic and a sensitive political 
climate in the lead-up to the Polish parliamentary elections prevented 
both governments from signing a loan agreement before the end of FY 97. 
Hungary withdrew its request for loan assistance in August 1997.
    We intend to use the remaining FY 97 funds, to offer comprehensive 
loan packages to the Czech Republic, Hungary, Poland and Slovenia. A 
joint State Department/Defense Security Assistance Agency (DSAA) team 
will visit Poland, Hungary, and the Czech Republic in April 1998. The 
team will brief the governments on the CEDL program, alert them to 
changes in the program (specifically a decrease in the loans' interest 
rate), and answer technical questions on procurement procedures and 
financing under the program. We are optimistic that these countries 
will find the CEDL program a sound mechanism to help themselves prepare 
for NATO membership.
    Question. Explain the reasons for the military grants to the PfP 
countries. What purposes are these funds used for?
    Answer. The State Department provides grant Foreign Military 
Financing (FMF) funds to support the Partnership for Peace (PfP) 
program. PfP's primary objective is to establish strong, enduring 
security ties between NATO and all its PfP Partners, and to assist 
those Partners interested in joining NATO to meet the obligations of 
membership. PfP strengthens the forces of Partner countries, and thus 
their contributions toward our common goals of securing peace 
throughout Europe, deterring aggression, preventing, defusing and 
managing crises, and supporting the new democracies in Central Europe 
and the NIS.
    State's FMF program funds the purchase of defense articles, 
services, and training to assist partners in improving their 
compatibility with and understanding of NATO practices and terminology, 
strengthening democratic control of the military, and improving defense 
planning, structure, and budgeting processes. It facilitates military 
preparedness, and provides critical English language training--the 
baseline requirement for functioning in a NATO environment--for 
thousands of soldiers. Additionally, PfP has:
    Helped Poland, Hungary and the Czech Republic prepare for NATO 
membership through the purchase of equipment, services, and training to 
improve interoperability with NATO;
    Provided continued support for the Baltic Peacekeeping Battalion;
    Helped the newly created Central Asian Peacekeeping Battalion 
(Centrasbat) gain crucial experience and equipment;
    Prepared and equipped national forces to participate in PfP 
exercises and NATO peace support, humanitarian, search & rescue, and 
peacekeeping operations;
    Taught partners how to participate more actively in European 
security matters, including new operations or crisis management 
efforts;
    Trained PfP states to become active and engaged partners with the 
United States and other NATO Allies on critical issues of Euro-Atlantic 
security;
    Funded the Regional Airspace Initiative in the NATO selectee 
countries, Romania, Slovakia, Bulgaria, the Former Yugoslav Republic of 
Macedonia, and the Baltics;
    Increased the size, depth and complexity of PfP and ``in the spirit 
of'' exercises, leading to interoperability and even deployability with 
NATO forces;
    Trained partners for real life operations including IFOR/SFOR/SFOR 
II and the Iraq Deployments; and
    Provided the technical wherewithal for cooperation (such as 
tactical radios, Search & Rescue equipment) that permit NATO 
interoperability for exercises and real world operations.
                                 russia
    Question. $1.5 million has been requested for military aid to 
Russia in FY'99. This is in addition to $2.25 million allocated in 
FY'98. What is the purpose of these funds?
    Answer. FMF funding will enable Russia to purchase non-lethal items 
necessary for more effective Russian participation in international 
peacekeeping operations. We anticipate these funds will be used for 
English language instruction, language labs to support this 
instruction, and radios for troops involved in peacekeeping functions. 
Russian military radios are not compatible with NATO radios, something 
that has hampered our cooperation in Bosnia and in PFP exercises.
    This is a very limited program, both in the dollars involved and 
the kinds of equipment contemplated. It is aimed at ameliorating 
specific problem areas affecting Russian military participation in PFP 
exercises and other cooperative activities with the alliance. Our 
ultimate goal for this program is improving trust and cooperation 
between the Russian military and those of the West.
    Question. What is the Administration's position with regard to 
President Yeltsin's outspoken opposition toward our policy in Iraq and 
his statements that military actions could trigger World War III?
    Answer. While we differ over tactics, senior Russian officials have 
assured us that Russia shares our goals of keeping Iraq from developing 
weapons of mass destruction. In February, the United States and Russia 
were able to come together on a set of principles that UN Secretary 
General Annan could take with him to Baghdad. Both Russia and the 
United States, along with other members of the UN Security Council, 
supported the agreement Secretary General Annan worked out with Iraqi 
officials, and called upon Baghdad to comply with the terms of that 
agreement.
    However, Russian officials, including President Yeltsin and Foreign 
Minister Primakov, publicly stated their opposition to the use of force 
against Iraq. They stated the Russian view that no country or countries 
has the authority to use force against Iraq to bring about Iraqi 
compliance with UNSCOM without a new review and authorization by the 
Security Council.
    The U.S. does not share Russia's interpretation of UN Security 
Council resolutions (UNSCR's) and the need for a new review by the 
Security Council. The U.S. believes strongly that resolutions already 
in effect authorize the use of force. The use of force might prove 
necessary now or in the future, if Iraq's failure to comply with 
UNSCR's intended to impede Iraq's development of weapons of mass 
destruction and to compel Iraq's full compliance with all Security 
Council resolutions would constitute a serious violation of the cease-
fire agreement. Frankly, we do not agree that military action taken 
against Iraq to secure its compliance with relevant UNSCR's would 
trigger a world war.
                 comprehensive test ban treaty prepcom
    Background. ``The Administration has requested $28.9 million for 
the development and installation of international monitoring systems to 
detect nuclear explosions. It is my understanding that a portion of 
this $28.9 million is to fund the United States share of the costs of 
the Provisional Technical Secretariat for the Comprehensive Nuclear 
Test Ban Treaty.''
    Question. Why should we provide funds for this purpose prior to the 
Senate's ratification of this Treaty?
    Answer. The CTBT mandates that the verification regime be capable 
of meeting verification requirements at the Treaty's entry into force. 
This requires us to start now to build the global monitoring networks 
and other verification capabilities provided by the Treaty. A 
Preparatory Commission (Prepcom), composed of states signatories to the 
Treaty, was established in November 1996 to carry out this task. The 
Prepcom directs the work of the international staff of the Provisional 
Technical Secretariat.
    The requested funds are to pay the balance of the U.S. 1998 
contribution and 1999 contribution to the Prepcom. The Prepcom budget 
includes the costs of establishing the International Monitoring System 
and the International Data Center, as well as the operation and 
expenses of the Provisional Technical Secretariat.
    The prompt establishment of the verification regime is in the 
United States interest. To the extent we develop the verification 
regime, we augment our ability to monitor the current global testing 
moratorium, we ensure we have the benefit of the Treaty's monitoring 
capabilities at entry into force, and we facilitate entry into force by 
maintaining the international community's commitment to the Treaty.
    Question. What national security benefits do we get from upgrading 
these monitoring sites as opposed to waiting for Senate ratification?
    Answer. We need not, and should not, seek a delay in the Prepcom's 
work to establish the International Monitoring System (IMS). The U.S. 
needs to monitor worldwide testing activity, with or without a CTBT. 
The IMS augments U.S. national monitoring capabilities. It provides us 
with access to data from sensitive locations that we would not 
otherwise have, and with global monitoring coverage. For example, under 
the terms of the Treaty, 31 monitoring stations will be installed in 
Russia, 11 in China, and 17 in the Middle East.
    The CTBT Prepcom will save taxpayer dollars by requiring other 
nations to pay for most of the costs of deploying and upgrading certain 
monitoring stations that the U.S. would otherwise be paying for 
entirely. For example, the Air Force originally intended to pay 100% of 
the cost of deploying a seismic station in Egypt required for national 
purposes. Since this station will be part of the IMS, and will be 
funded as such, the U.S. will be paying only about 25% of its costs.
    Question. The Congress placed restrictions on the use of the 
initial program funds in the FYs '98 Commerce-Justice-State 
Appropriations Bill. Have these restrictions hindered your operations?
    Answer. We have been assured by the Provisional Technical 
Secretariat that it would satisfy the conditions placed on past U.S. 
contributions. We are not aware of any hindrance arising from these 
conditions.
    Question. Would you oppose a continuation of such conditions in FY 
'99?
    Answer. Yes. We believe that setting conditions on the use of our 
funds is inappropriate and ultimately counterproductive. The U.S. 
participates actively with other signatories in developing the 
Prepcom's program of work and budget. To selectively fund only specific 
portions of that agreed program undermines this collaborative process 
and reduces our credibility. Moreover, we cannot know whether such 
conditions, if imposed on U.S. contributions to the 1999 budget, would 
hinder PTS operations. If other signatories follow suit and earmark 
their contributions, operations could be severely affected.
                                georgia
    Question. What can you tell the Committee about the recent 
assassination attempt on President Shevardnadze of Georgia in terms of 
who might be responsible?
    Answer. The evidence indicates that the assassination attempt was 
perpetrated by supporters of former Georgian President Gamsakhurdia and 
Chechen mercenaries.
    On March 19, Russia extradited to Tbilisi Guram Absnadze, a former 
Georgian finance minister under Gamsakhurdia. Georgian authorities are 
currently holding Absnadze, who is accused of organizing and financing 
the February 9 terrorist act against President Shevardnadze, as well as 
assisting the infiltration of terrorist groups into Georgia. Others 
involved with the attack are also under detention.
    Question. As you know, the Committee vastly increased resources to 
Georgia last year partly to help them bolster border security. What is 
the status of these programs.?
    Answer. In FY 1998, under the FREEDOM Support Act, the U.S. 
Government will allocate up to $20.1 million for programs to enhance 
Georgia's border security, law enforcement and export control 
capabilities by providing equipment, training, and services to 
Georgia's Border Guards, Customs Service and other law enforcement 
officials. The priority objectives of this assistance program are to:
    Assist Georgia in gaining control of its seacoast, particularly the 
Poti Port; establish a transparent land border regime, focusing on the 
Azeri and Armenian borders; and then on the Russian and the Turkish 
borders;
    Enhance the Georgian Border Guard and Customs export control 
capabilities to prevent, deter, and detect potential weapons of mass 
destruction smuggling;
    Improve capabilities of the Georgian national law enforcement and 
legal authorities to investigate and prosecute internal and 
transnational criminal activity; and
    Develop the law enforcement, legal and regulatory infrastructure in 
Georgia to help establish a society based on the rule of law and 
respect for individual human rights.
    The Special Georgia Border Security and Related Law Enforcement 
program will be implemented through two program elements. First, the 
United States Customs Service will implement the majority of the 
program including almost all equipment procurement, delivery, support 
and related training, with policy oversight by the Department of 
State's Bureau of Political Military Affairs Arms Transfer and Export 
Controls office (PM/ATEC) and the International Law Enforcement and 
Narcotics Bureau (State/INL) respectively, subject to overall 
coordination by the U.S. NIS Assistance Coordinator (S/NISC) to ensure 
no duplication of programmatic efforts. The Coordinator will rely on 
the Departments of State, Defense, Commerce, Energy, the U.S. Embassy 
in Tbilisi, and other USG agency experts for guidance as appropriate.
    Question. Is the United States exploring other ways to help the 
Georgians with their security?
    Answer. Other U.S. Government programs that focus on assisting 
Georgians with their security include:
    The DOD Cooperative Threat Reduction (CTR) program, the U.S. is 
purchasing two patrol boats for Georgia (delivery expected in mid-1998) 
to help the Georgian border guards patrol the black sea coast and 
independently assume more control of Georgia's maritime borders. 
Georgian officials also participated in a Nuclear Defense Fund funded 
legal, regulatory and enforcement forum organized by the Department of 
Commerce.
    The DOD/FBI Counterproliferation program will focus on training law 
enforcement officials including the police, judiciary, procuracy, 
customs officials, appropriate parliamentary entities, defense and 
foreign affairs officials. Georgian officials are expected to be 
invited for a two-week basic course on weapons of mass destruction 
(WMD) smuggling issues, probably at the Budapest International Law 
Enforcement Academy (ILEA).
    The DOD/Customs Counterproliferation program plans to provide 
training to assist Georgia's customs service and border guards over the 
next two years. The program includes training, both in-country and in 
the U.S., as well as provision of appropriate equipment to enhance 
Georgia's border security.
    The Department of Energy/Export Control is working with 
multilateral partners to develop a regional workshop which will focus 
on nuclear export control issues in the region, including Georgia.
    The Department of State/Export Control assistance plans to provide 
an automated export licensing system which will improve the abilities 
of export licensing officials to control the transit and export of 
strategic materials from the territory of Georgia.
            Questions for the Record Submitted by Mrs. Lowry
                               israel fmf
    Question. While the annual FMF amount for Israel has remained 
constant over the last decade, the cost of U.S. weapons systems has 
increased considerably and inflation has risen over that same period. 
The real value of the $1.8 billion we are giving to Israel this year is 
substantially lower than its worth a decade ago in constant dollars. I 
have been a vocal proponent of an increased U.S. military commitment to 
Israel to keep pace with its changing and growing security needs. What 
can we do about this situation? What is the Administration prepared to 
do to help Israel accelerate development and deployment of joint 
missile defense programs such as the Arrow system?
    Answer. The United States has an ironclad commitment to Israel's 
security and well-being and to sustaining and enhancing its qualitative 
military edge. We believe that strengthening Israel's capability to 
defend itself is important to regional stability and security and 
serves the broadest range of U.S. national interests as well as 
Israel's. The cornerstone of our military assistance to Israel is an 
annual $1.8 billion Foreign Military Financing (FMF) grant. While this 
amount has remained constant, it represents an increasingly large 
portion of our shrinking military aid budget. In FY-97, Israel received 
approximately 56 percent of all U.S. FMF grants, compared to 43 percent 
in FY-91.
    To assist Israel in meeting its defense needs, we have been able to 
supplement its FMF through a number of extra steps, such as early 
disbursement of its annual FMF which allows Israel to collect interest 
on its allotment. Israel's FMF account earned $103 million in FY-97. A 
total of $61.5 million in excess defense articles was notified to 
Congress for delivery to Israel in FY-97, and last Fall we agreed to 
preposition an additional $115 million worth of military equipment in 
the War Reserve Stockpile in Israel and to earmark $100 million in 
munitions in the U.S. for use by Israel in a crisis. Additionally, in 
FY-97, DOD procured over $295 million worth of goods and services from 
Israel, an increase of over $69 million over FY-95.
    The FY-98 Defense Appropriations Bill contains more than $320 
million in funding for joint programs which augment our security 
assistance and reinforce the strength of our relationship. Included in 
this sum is $61 million for the Theater High Energy Laser Program and 
$50.7 million for the Arrow anti-tactical ballistic missile program. 
The U.S. and Israel are jointly funding development of the Arrow 
missile system and the U.S. has committed to contribute $248 million 
over six-years (through 2001) for the integration, test and evaluation 
of the Arrow and to insure interoperability with U.S. theater missile 
defense forces.
                                  imet
    Question. I would like to pose a question about the fundamental 
benefits of the IMET program: The Administration has testified time and 
again that the IMET program, and especially the Expanded IMET 
component, is intended to teach human rights, civilian control of the 
military, and democracy building. We have been providing IMET and 
Expanded IMET to Indonesia for many years, but that country's military 
is still categorized by atrocious human rights violations. When will we 
see this predicted pay-off for our military assistance? When can we 
expect the millions of dollars we have put into the IMET program to 
result in a greater respect for human rights in Indonesia? And I might 
add that Indonesia is just one of several countries that this question 
can apply to.
    Answer. As you note, greater respect for human rights, 
professionalism, and proper conduct are among the many benefits that we 
see flowing from the IMET program. While it is impossible to quantify 
the human rights ``pay-off'' from IMET, we believe that engagement with 
the Indonesian military through IMET has produced some progress in this 
regard.
    IMET provides the opportunity for Indonesian military personnel to 
be educated in the United States, to observe our commitment to rule of 
law and American values, and to acquire additional skills. IMET 
graduates are more professional, more committed to improving their own 
armed forces, and more likely to be at the forefront in reforming their 
own services. Indonesian IMET graduates return home with an 
understanding of what we Americans stand for and what we stand against. 
IMET graduates have been prominent in investigating and punishing the 
failures of discipline that cause human rights abuses.
    We would neither claim that the Indonesian military's human rights 
record is spotless, nor that IMET is responsible for all improvements. 
However, there have been some significant steps in the right direction. 
Citing just a few examples, Indonesian graduates of the IMET program 
have:
    Chaired the Military Honor Council that disciplined officers 
involved in shooting civilians in East Timor in 1991;
    Drafted and disseminated rules of behavior for Indonesian soldiers 
confronting civil disturbances;
    Drafted the ``Basic Human Rights and Respect for Law'' handbook for 
officers serving in Irian Jaya; and
    Instituted training programs on international law.
                       latin american arms sales
    Question. I was extremely disappointed at the Administration's 
decision last year to lift the twenty-year old ban on high technology 
arms sales to Latin America. This ban has served U.S. interests well in 
Latin America by helping promote stability and democracy in the region. 
Now is the time to flood that region with expensive weapons systems 
that will divert scarce resources from poverty eradication and provoke 
a regional arms race. I have introduced legislation to codify this ban, 
but it is not too late for the Administration to reverse its ill-
advised decision to lift the ban. What is the current status of this 
policy? What potential arms sales are currently being discussed and 
what is the timetable for these sales?
    Answer. On August 1, 1997, the Administration decided after a two 
year review of security policy in Latin America to establish a process 
for case-by-case consideration of requests for advanced arms transfers. 
That process is in place today.
    This decision puts U.S. arms transfer policy toward Latin American 
on par with the rest of the world and reflects the significant 
political, economic, and military transformation that has occurred in 
the region. It also reflects the new level of maturity, cooperation and 
dialogue we have reached in our partnership with the country's of the 
region. Our former policy of presumption of denial on advanced arms 
transfers to Latin America, while appropriate and successful for its 
time, is, in the Administration's view, no longer the right policy for 
today's situation in the hemisphere.
    Nonetheless, restraint remains the fundamental principle of U.S. 
arms export policy. In considering arms transfer to Latin America we 
take into consideration our guiding goals of strengthening democracy 
(including civilian control of the military), encouraging concentration 
of resources on economic and social development, avoiding an arms race, 
supporting transparency and confidence-building, and ensuring that 
responsible defense modernization occurs in a manner appropriate to 
each country's legitimate security requirements.
    Our change in policy has not resulted in a significant increase in 
advanced arms sales to the region to date. The only significant sales 
of advanced weaponry currently under consideration are the possible 
sale of fighter aircraft and associated weapons systems to Chile and 
two used F-16B models to Venezuela to replace lost aircraft. The 
Government of Chile has yet to decide if it will choose a U.S. fighter 
(F-16 or F/A-18) over competing Swedish and French aircraft.
    The current modernization plans underway in some Latin American 
countries are a result of aged and obsolete inventories of weapon 
systems. We do not believe the decision by some civilian elected 
leaders in South America to modernize their defense forces represents 
the beginning of an arms race nor do we believe that a unilateral U.S. 
ban on advanced arms transfers would alter modernization plans as non-
U.S. suppliers are ready and eager to sell.

            Questions for the Record Submitted by Mr. Torres

                   blackhawk helicopters for colombia
    Question. It is my understanding that the amount of funding 
available to the Bolivian government was substantially reduced in order 
to provide Colombia with the additional three Blackhawk helicopters 
while maintaining another $30 million for antinarcotics efforts in that 
country. What impact do you think this transfer of money is going to 
have in interdiction, or in your overall counternarcotics plan? What 
will be the political fall-out of cutting aid to Bolivia by nearly two-
thirds? How will the $12 million for Bolivia be divided up among the 
different antinarcotics programs?
    Answer. The $50 million Congressional earmark for FY 1998, 
requiring INL to purchase Blackhawk helicopters for Colombian 
counternarcotics operations, would force INL to cut the Bolivian budget 
for FY 1998 from a planned $45 million level to $12 million (a 75% 
reduction). At this level, neither INL nor the Bolivians will be able 
to sustain the current counternarcotics programs or maintain the tempo 
of eradication and interdiction operations.
    The Bolivians see this as our dismantling of the partnership 
between our two countries. The Bolivians have invested heavily in 
changing public opinion from favoring and supporting the coca growers 
to seeing them as criminals who are destroying the fabric of Bolivian 
society and hindering economic progress. The new government's five-year 
plan to eliminate all illegal coca will not work without the backing of 
the Bolivian people and the economic support of the U.S.
    At the $12 million level of funding for Bolivia counternarcotics 
programs, we will be able to fund just over half of the eradication 
program, very little of the interdiction/law enforcement operations, 
only a third of the alternative development program (unless we take 
funds from yet another country program), and none of the balance-of-
payment program. Cuts must also be made in Program Development & 
Support and Infrastructure, which will require us to fire employees, 
break leases for some facilities, and significantly reduce maintenance 
for vehicles and aircraft--making them unavailable for operational use. 
At this level of funding, we can expect to see significant reductions 
in levels of eradication, and significantly fewer seizures and 
prosecutions.
    Question. Seven new Blackhawk helicopters were purchased by the 
Colombian Army in 1996 with their own funds. In addition, the Colombian 
Air Force has had Blackhawks in their inventory since the late '80s. 
Where are these helicopters and what are they being used for? Which 
units are using them?
    Answer. The Colombian Air Force has 20 Blackhawks--8 ``L'' models 
and 12 of the older ``A'' models. Fourteen are with the 31st Combat Air 
Command. Six are with Combat Air Command 1. The Army's seven new 
Blackhawks are with the 10th Airborne Infantry Brigade.
    To date, virtually all available Blackhawk flight hours or ``blade 
time'' has been devoted to air support of the military's counter-
insurgency efforts against the leftist guerrillas.
    We are in the process of negotiating with the Colombian Ministry of 
Defense for some Blackhawk flight time for support of the National 
Police's counternarcotics missions. In exchange we have offered to 
provide the Colombian military with assistance in developing 
maintenance programs and spare parts inventories to enable them to have 
their aircraft up and operating on a more regular basis.
                                colombia
    Question. Has a list of units been drawn up for the provision of 
aid to the Colombian army? What is the timeline for making a decision 
on whether aid to the Colombian army can go forward?
    Answer. Six units in the Colombian Army were initially identified 
as potential recipients of U.S. counternarcotics assistance.
    Pending negotiation of an end-use monitoring agreement with the 
Government of Colombia, and the provision of information regarding 
Colombian security force units, assistance was withheld from these 
units.
    The Government of Colombia has provided information regarding these 
units, under the terms of the agreement, and we are evaluating it. 
Based on that information and other information available to us, we 
determined to provide assistance to one of the six units immediately, 
and to another unit upon removal from that unit of two individuals who 
are under investigation for alleged human rights violations committed 
prior to their joining that unit. We are still evaluating the 
information provided regarding the other four units, and have requested 
additional information in order to clarify some points. We anticipate 
that we will soon have sufficient information to enable us to either 
proceed with assistance to these units, or to make recommendations to 
the Secretary, for determination in accordance with the Leahy Amendment 
and/or Section 570 of P.L. 105-118, as appropriate.
    Question. Has a list of units been drawn up for the provision of 
aid to the Colombian army? What is the timeline for making a decision 
on whether aid to the Colombian army can go forward?
    Answer. Six units in the Colombian Army were initially identified 
as potential recipients of U.S. counternarcotics assistance.
    Pending negotiation of an end-use monitoring agreement with the 
Government of Colombia, and the provision of information regarding 
Colombian security force units, assistance was withheld from these 
units.
    The Government of Colombia has provided information regarding these 
units, under the terms of the agreement, and we are evaluating it. 
Based on that information and other information available to us, we 
determined to provide assistance to one of the six units immediately, 
and to another unit upon removal from that unit of two individuals who 
are under investigation for alleged human rights violations committed 
prior to their joining that unit. We are still evaluating the 
information provided regarding the other four units, and have requested 
additional information in order to clarify some points. We anticipate 
that we will soon have sufficient information to enable us to either 
proceed with assistance to these units, or to make recommendations to 
the Secretary, for determination in accordance with the Leahy Amendment 
and/or Section 570 of P.L. 105-118, as appropriate.
                 implementation of the leahy amendment
    Question. What is the process for determining that the human rights 
conditionality, known as the Leahy Amendment, included in last year's 
foreign operations bill, will be complied with? In understand that good 
instructions have been sent out to embassies regarding their reporting 
requirements, but am interested in how the process will work in 
Washington. Is an interagency process in place? Will Dr. Shattuck be 
heading that up, as he indicated in testimony recently? Where will 
final decisionmaking authority rest? When will we be able to review the 
list of units to receive or receiving assistance?
    Answer. The Department of State sent a cable to all diplomatic 
posts in mid-March, informing them of the new requirements of section 
570 of the Foreign Operations Assistance Act (FOAA); instructing them 
to formulate and submit to the Department of State an action plan to 
ensure that U.S. assistance would not go to human rights abusers; and 
mandating that any credible allegations of gross human rights 
violations by security forces receiving U.S. assistance be reported 
immediately to the Department of State.
    Since section 570 of the FOAA requires the Secretary of State to 
make a determination as to whether (a) there is credible evidence that 
members of a security force unit receiving U.S. assistance have 
committed gross human rights violations and (b) the local government 
has taken effective measures to bring alleged abusers to justice, 
ultimate authority rests with her. In that regard, there is no 
interagency decisionmaking process in place. State Department officials 
from the affected regional bureau, the Bureau of Legal Affairs, the 
Bureau of Democracy, Human Rights, and Labor, the Bureau of Political/
Military Affairs and other affected bureaus meet to (a) discuss an 
allegation of gross human rights violation committed by a security 
force unit receiving U.S. assistance, (b) decide whether the 
information is credible, and (c) if it is, draft a memorandum to the 
Secretary of State so that she can decide whether the local government 
is taking effective measures to bring alleged abusers to justice or 
whether the U.S. Government should move to cut off assistance to the 
unit in question. Recommendations will be submitted to the Secretary to 
State, who will be the final decision maker, as required by law. At 
present, we have no worldwide list of units proposed to receive 
assistance or already receiving it. Each of our embassies has 
information regarding to which units it is providing assistance.
    Question. Was there a single unit anywhere in the world whose 
funding has been cut off as a result of the Leahy Amendment? If yes, 
which ones?
    Answer. So far, assistance has not been cut off for any security 
force units anywhere in the world as the result of the Leahy Amendment. 
However, a mechanism has been established for reporting to the 
Department by posts throughout the world of possible human rights 
violations by security force units that are receiving or proposed for 
U.S. assistance. A committee has been formed within the Department to 
evaluate any such reports and monitor distribution of U.S. assistance. 
Among the matters under review by such committee is that of 
counternarcotics assistance to Colombia. Pending negotiation of an end-
use monitoring agreement with the Government of Colombia, and the 
provision of information regarding Colombian security force units, 
assistance was withheld from six Colombian Army units that have been 
proposed for U.S. assistance.
    The Government of Colombia has provided information regarding these 
units, under the terms of the agreement, and we are evaluating it. 
Based on that information and other information available to us, we 
determined to provide assistance to one of the six units immediately, 
and to another unit upon removal from that unit of two individuals who 
are under investigation for alleged human rights violations committed 
prior to their joining that unit. We are still evaluating the 
information provided regarding the other four units, and have requested 
additional information in order to clarify some points. We anticipate 
that we will soon have sufficient information to enable us to either 
proceed with assistance to these units, or to make recommendations to 
the Secretary, for determination in accordance with the Leahy Amendment 
and/or Section 570 of P.L. 105-118, as appropriate.
    Question. The Leahy Amendment for FY 97 prohibited aid under the 
International Narcotics Control Account (DOS) to security force units 
if the Secretary of State has credible evidence that such a unit has 
committed gross violations of human rights. It was apparently expanded 
by the Administration to cover all forms of counternarcotics aid. Can 
you tell us in which instances the Secretary has received this 
evidence? What is the procedure to forward the Secretary such credible 
evidence? Who is involved in assessing the evidence for the Secretary's 
review?
    Answer. To date, the Secretary has received no credible evidence of 
gross human rights violations committed by security force members of 
units which receive U.S. assistance; however, we have received 
information from the Government of Colombia which we are evaluating. 
The procedure to forward such information to the Secretary is by 
memorandum from an intra-Department of State team which has thoroughly 
reviewed the information and deemed it to be credible. The team 
assembled to review this information will at a minimum include members 
of the Human Rights Bureau, the Legal Bureau, the Narcotics Bureau (if 
applicable), the Political/Military Bureau, and the affected regional 
bureau. This team will, if necessary, request additional information 
from any or all of the following sources: our embassy, human rights 
NGO's, the host government, our intelligence agencies, and DOD, until 
sufficient information is available to determine whether or not an 
allegation of a gross human rights violation committed by the unit 
receiving U.S. assistance is credible.
    Question. The Amendment also stated that the aid can go forward if 
the Secretary determines and reports to the Committees on 
Appropriations that the government of such country is taking effective 
measures to bring the responsible members of the unit to justice. In 
which instances did the Secretary make this determination? Who else was 
involved in making the determination? Could we have copy of such 
reports?
    Answer. To date the bureaus responsible for reviewing reports of 
violations of human rights abuses have presented no recommendations to 
the Secretary regarding determinations under either the ``Leahy 
Amendment'' or Section 570 of the FY 98 Foreign Operations 
Appropriations Act. However, the Department is withholding proposed 
U.S. assistance to five Colombian army units due to allegations of 
gross human rights violations. The Department is reviewing the evidence 
with respect to the allegations and is requesting more information on 
them.
    Question. This Amendment was re-adopted for FY98 and expanded to 
cover ALL forms of security assistance. In the future, what will be the 
procedure that will lead to the Secretary reviewing the credible 
evidence?
    Answer. Section 570 of the FY 98 Foreign Operations Appropriations 
Act (FOAA) is a provision similar to the ``Leahy Amendment'' included 
in the FY 97 FOAA. Under procedures established to help ensure 
compliance with this legislation, reports of incidents of gross human 
rights violations received by the Department are examined by Department 
personnel, including representatives from the affected regional bureau, 
the Office of the Legal Adviser, the Bureau of Democracy, Human Rights 
and Labor, the Bureau of Political-Military Affairs and, as 
appropriate, the Bureau of International Narcotics and Law Enforcement 
Affairs. Additional information is requested when needed, and when 
appropriate, recommendations would be made to the Secretary.
    Question. Assistant Secretary Shattuck testified before the 
International Relations Committee (Country Reports and US policies, 
February 3, 1998) that he would be asking ``diplomatic posts to provide 
an action plan for implementing this legislation.'' How will this build 
on procedures established for the implementation of the original Leahy 
amendment?
    Answer. This procedure is very similar to those established for the 
implementation of the original Leahy amendment. A telegram was sent to 
all of our diplomatic and consular posts in March, informing them of 
the requirements of Section 570 of the FY 98 Foreign Operations 
Appropriations Act and instructing them to provide an action plan to 
the Department of State explaining the procedures they have in place to 
monitor reports of gross human rights violations by security forces 
units and to correlate such information with ongoing or planned U.S. 
assistance to such units. We are reviewing incoming responses to our 
telegram to ensure every post (1) is aware of and understands this 
legislation, (2) is collecting and reviewing information regarding 
allegations of gross human rights violations by security forces, and 
(3) is promptly reporting to Washington any allegations of gross human 
rights violations committed by members of security forces receiving or 
proposed to receive U.S. assistance.
    Question. The instructional cable to all diplomatic posts detailing 
the procedures for the implementation of the original Leahy amendment 
stated that ``In the first instance, posts must be responsible to 
correlate country human rights reporting with individual recipient 
units of INC-funded assistance.'' Who will determine the methodology 
for obtaining this information?
    Answer. Each embassy has a designated human rights officer. In 
addition, some embassies have representatives of FBI, DEA, and the 
Defense Department. These individuals are all tasked with monitoring 
the flow of U.S. assistance to security force units in their country 
and with reporting any allegations of gross human rights violations 
committed by them or by units proposed to receive U.S. assistance. Our 
embassies are well-connected to local police and military sources, as 
well as to human rights NGO's, religious groups, and others who 
routinely report allegations of gross human rights violations. Our 
diplomatic posts have been instructed to immediately pass this 
information to Washington by telegram. This is the standard methodology 
for obtaining and reporting to Washington this information.
    Question. This same cable instructed all diplomatic posts to 
``report promptly to (the State Department any information which the 
post may have concerning gross violations of human rights committed by 
units of host government security forces that could bear on a unit of 
these forces that may receive INC-funded assistance for FY97...'' and 
other clear instructions for the immediate reporting back to the 
Department of such information. What happened to this information from 
the moment it was received in State to the moment that a determination 
was made on taking this before the Secretary? Were any units cut-off? 
If yes, which ones?
    Answer. When information is received from posts alleging gross 
human rights violations committed by security forces receiving or 
proposed to receive U.S. assistance, a Department of State term from 
the Bureau of Democracy, Human Rights and Labor, the Office of the 
Legal Adviser, the Bureau of Political/Military Affairs, the regional 
bureau, and other affected bureaus will meet to review the information. 
The team will decide whether the information is credible, not credible, 
or insufficient to make such a determination. In the latter case, more 
information will be requested. If the information is deemed credible 
and the security force unit is receiving U.S. assistance, a memorandum 
will be prepared for the Secretary who will make a determination 
whether to cut off assistance or whether to continue it, based on 
whether the local government is taking effective measures to bring the 
perpetrators to justice. To date, no memorandum has been forwarded to 
the Secretary. However, proposed U.S. assistance to five units of the 
Colombian army is on hold while we review information regarding alleged 
gross human rights violations committed by their members, and the 
status of ongoing investigations or other judicial proceedings in their 
cases.
                       end use monitoring report
    Question. The End Use Monitoring Report for calendar year 1994 was 
published in March 1996; the one for calendar year 1995 was published 
in February 1997.
    What is the reason for the consistent hold-up on the End Use 
Monitoring Report produced by INL?
    Can we expect the EUM Reports for calendar years 1996 and 1997 this 
year?
    Answer. The drafts of the 1994 and 1995 End Use Monitoring reports 
encountered unusual delays in the internal clearance process. Most 
prior reports were issued in the summer or early fall of the following 
calendar year. The report for calendar year 1996 was issued in 
September, 1997. The target date for the 1997 report is July, 1998.
              international law enforcement academy (ilea)
    Question. I would like more information on the new Western 
Hemisphere Law Enforcement Academy. Where is it going to be located? 
What is its mandate; only counterdrug? Will it train only civilian 
students, or military as well?
    Answer. As part of the Administration's objective of strengthening 
international law enforcement efforts, the Department of State is 
establishing regional law enforcement academies to provide training and 
enhance cooperation. In 1995, the first International Law Enforcement 
Academy (ILEA) was created in Budapest, and it has proved to be a 
successful model, drawing on the expertise of U.S. law enforcement 
agencies and participating nations.
    President Clinton announced a proposal at the San Jose Summit in 
May 1997 to establish an International Law Enforcement Academy for 
Latin America, or ``ILEA South.'' The goals of ILEA South are to expand 
relationships with the among foreign law enforcement officials from the 
region, support democracy by stressing the rule of law in international 
and domestic police operations, and raise the professionalism of law 
enforcement and judicial officials.
    We began negotiations to locate the facility in Panama, where we 
hope it will complement other counterdrug activities which might be 
based there after 1999. The first course of the academy was held in 
Panama in November-December 1997, and the second in March 1998. The 
Administration believes it must be located within the region in order 
to encourage broad participation and a sense of ownership by countries 
in the region, which are essential to the success of the academy. 
Another key concern is the ability to offer significant contributions, 
so that the United States does not bear all the costs.
    ILEA South's mandate is not limited to counterdrug issues, but 
includes the broad range of law enforcement and judicial concerns. 
While primarily concerned with training civilian students, training of 
appropriate military personnel at ILEA South is not excluded.
                         u.s. military training
    Question. The 1997 Report to Congress on U.S.-Mexico Counterdrug 
Cooperation by the Office of National Drug Control Policy details the 
training of Mexican military personnel consisting of approximately 300 
for 1996 and over 1500 for 1997. Are there other Mexican military 
personnel receiving other training? What is the vetting process to 
ensure that no trainees have been implicated in human rights 
violations? What does the human rights component of their training 
consist of?
    Answer. DoD provided 300 training slots for Mexican personnel in FY 
1996 and 1300 in FY 1997. By the end of FY 1997, 829 Mexican personnel 
had received training. As the ONDCP report indicated, DoD is providing 
counter-drug training to Mexican military personnel who may be assigned 
to newly-created special units, one of whose primary missions is 
counter-drug. DoD also trained over 250 Mexican Navy personnel in 
maritime operations or skills. There are small numbers of Mexican 
military personnel receiving other kinds of training through the 
International Military Education and Training (IMET) program, and a few 
military officers participate annually in military academy exchange 
programs.
    Personnel selected by the Mexican military to receive U.S. training 
are chosen from those who have performed well in their own academies 
and in their military duties. U.S. trainers have given them high marks 
for professionalism and military conduct. In addition to Mexican 
government screening, the U.S. routinely screens all foreign students, 
whether civilian or military, before issuing appropriate visas. This is 
not a fail-safe process, but has proven to be a practical procedure.
    Promotion of human and civil rights is an important part of our 
counternarcotics and military policies overseas, including Mexico, and 
is also a standard component of all U.S. training. These concepts are 
embedded in the program of instruction taught by the U.S. Army Special 
Forces.
    Mexican President Ernesto Zedillo has publicly affirmed his 
Administration's commitment to uphold internationally-recognized human 
rights. The independent National Human Rights Commission is playing an 
increasingly-important role in investigating abuses by military and 
police personnel.
    Question. I understand that the agreement between the United States 
and Mexico prohibits the use of U.S.-supplied helicopters in the states 
of Chiapas and Guerrero. Is that correct? If so, how are we 
guaranteeing that this is the case?
    Answer. As required by our legislation, the Government of Mexico 
has provided us with binding assurances that any equipment transferred 
to Mexico will be used only for the purposes for which it is intended--
in this case counternarcotics. These are the same required legal 
assurances provided by all recipients of U.S. excess military 
equipment, and Mexico will be held to the same standards as all other 
recipients.
    While both Guerrero and Chiapas are states with serious drug 
production and trafficking problems, they are also conflictive zones, 
and Mexico has agreed informally not to assign U.S.-provided aircraft 
to those areas. We are, of course, following closely the situations in 
these states. We regularly discuss human rights issues with the 
Government of Mexico, as we do with many other governments.
    The U.S. Embassy, by agreement with the Government of Mexico, 
conducts regular end-use monitoring of the aircraft and equipment 
provided to Mexico, as is done worldwide. Under the end-use monitoring 
procedures, Mexico provides bi-monthly reports indicating how each 
aircraft was used and its operational status. In addition, personnel 
from the U.S. Embassy in Mexico make quarterly on-site observations at 
installations where the aircraft are stationed to check the aircraft, 
interview personnel, and verify the information provided.
    These procedures are working well, with no indications that any 
U.S.-supplied equipment has been diverted to other than authorized 
purposes. We are confident that this equipment is being used for the 
intended counternarcotics missions.
    Question. Are any of the INL funded programs actually implemented 
by the Defense Department? If so, which ones?
    Answer. There are no INL funded programs implemented by the Defense 
Department. INL does reimburse DOD for foreign participant training 
costs related to various courses offered by DOD such as for pilot 
training, mechanics training etc.
    Question. Are any of the INL (International Narcotics and Law 
Enforcement) funded programs actually implemented by DOD? If so, which 
ones?
    Answer. No. INL and DOD have a close partnership in international 
drug control training and support. INL frequently funds the training of 
foreign personnel, generally civilians, in DOD training facilities--
such as pilot and mechanic training--and purchases spare parts from DOD 
for UN-1H and other aircraft. Likewise, DOD has provided significant 
material and training support to INL and to many of our international 
programs. However, DOD does not manage any of INL's programs.
           Questions for the Record Submitted by Mrs. Kaptur
                                 bosnia
    Question. How much money has the United States expended from all 
accounts for Bosnia-related activities? How much have other nations 
expended?
    Answer. The set of financial benchmarks used in accounting for 
expenditures in support of nonmilitary Bosnia-related activities is 
complex. The World Bank has the most comprehensive database for the 
international effort. That database is broken out into committed, under 
implementation, disbursed and expended categories. Under expenditures, 
by yearend 1997 the United States had expended $347.45 million, 
approximately 20.3 percent of the international total of $1.7 billion.
    For military expenditures, the calculation uses fiscal rather than 
calendar year, but the numbers are more clear.
    The Department of Defense Comptroller reports the FY96 cost for 
U.S. support operations in and around Bosnia to have been $2.5 billion. 
The FY97 cost for IFOR/SFOR operations was approximately $2.3 billion. 
FY98 costs for SFOR are projected to be $2.0 billion.
    (Note: The President's $1.5 billion FY98 budget request for Bosnia 
assumed a reduction from 8,500 to 5,000 in U.S. troops by the end of 
FY97. Higher force levels were required due to the delay in municipal 
elections to September 1997. The extension of the 8,500 troop level 
through June 1998 added $487 million to the projected budget.)
    The FY99 estimate to maintain 6900 troops in Bosnia as a follow-on 
force is $1.9 billion. This FY99 requirement was identified to Congress 
as a non-offset emergency budget amendment for FY99.
    Calculating the expenditures of other nations' support of IFOR/SFOR 
peacekeeping activities in Bosnia is problematic. There is little 
relevant public information on such spending and few of the 
participating nations use comparable accounting methods.
    Nevertheless, we can state that U.S. troops today comprise less 
than 25 percent of the international forces in Bosnia and Herzegovina 
overall and that that percentage will decline as our troop strength 
drops.
    Question. What percentage of all troops in Bosnia are U.S. 
forces? What percentage of troops in Bosnia are deployed by 
other nations?
    Answer. U.S. troops comprise approximately 24 percent of 
the military force deployed in support of peacekeeping 
operations in Bosnia and Herzegovina. The balance is provided 
by the other nations participating in this international 
effort.
   nonproliferation: security of nis nuclear facilities and materials
    Question. How confident are you with the safety and 
security of NIS nuclear plans and the material associated with 
them?
    Answer. We have been concerned about the security of 
nuclear materials in the nations of the former Soviet Union. We 
are working cooperatively with these countries to ensure that 
the nuclear materials are safe and secure. Together we have 
already made substantial improvements, and must continue to 
provide support through completion of these projects several 
years from now.
    Several Administration programs are involved. The 
Department of State administered Nonproliferation and 
Disarmament Fund provides grants that support a variety of 
efforts, including strengthening export control regimes to 
prevent illicit trafficking of nuclear materials.
    The Department of Energy Materials Protection, Control and 
Accounting Program works with NIS nuclear facilities to improve 
security, physical protection, and safety. They are working 
with each facility which has weapons-usable nuclear material 
(unirradiated plutonium and highly-enriched uranium).
    The Department of Defense Cooperative Threat Reduction 
Program promotes nonproliferation of weapons materials, and was 
critical in the programs to help Belarus, Kazakstan, and 
Ukraine become nuclear weapons-free states.
    Question. How confident are you with the containment and 
remediation of the Chornobyl reactor and site?
    Answer. U.S. concerns at Chornobyl rest largely with the 
20-story steel and concrete ``Shelter'' built to cover the 
radioactive remains of the destroyed Chornobyl-4 reactor. Built 
in just seven months, under difficult and hazardous conditions, 
the shelter was never intended to serve as a long-term solution 
for the problems posed by the destroyed reactor. The unstable 
condition of the shelter is now a source of serious concern and 
requires prompt international attention.
    In the 1995 Memorandum of Understanding (MOU) between the 
G-7 and Ukraine on Chornobyl Closure, Ukraine agreed to 
permanently close the remaining operational units at Chornobyl 
by the year 2000. To help Ukraine develop a plan to stabilize 
the shelter over the destroyed reactor, Ukraine and the G-7 
nations approved the internationally prepared Shelter 
Implementation Plan (SIP). At the G-7 Denver Summit in June 
1997, the G-7 nations pledged to contribute $300 million toward 
the $760 SIP million project cost. The U.S. share of this 
pledge is $78 million. Ukraine has pledged $50 million in kind. 
As of March 23, 1998, countries have agreed to provide over 
$400 million over the next 5-6 years to implement the SIP. This 
total is sufficient to initiate work while additional pledges 
are sought. Public sector fundraising will continue, and the 
private sector fundraising effort is expected to kick off 
within a year.
    Bilateral funding by the European Union and by the United 
States was also provided in 1996 to enable early work on the 
shelter to take place. U.S. bilateral assistance are focused on 
improving safety at the site, and include provision of a 
nuclear safety monitoring system, provision of occupational 
safety equipment, and provision of equipment for shelter 
operations. The U.S. is working to strengthen the capabilities 
of Ukraine's Nuclear Regulatory Authority, which plays an 
important role in reviewing and approving implementation of the 
SIP.
    In addition to our bilateral activities at the Chornobyl 
shelter, the U.S. has contributed funds through the Nuclear 
Safety Account (NSA) at the EBRD to construct two facilities 
(for liquid radioactive waste management and safe spent fuel 
storage) which will support decommissioning of the Chornobyl 
plant. The NSA is also funding four small projects to improve 
the near-term safety of Chornobyl Unit 3 prior to its closure 
in 2000. As a contributor to the NSA, the U.S. sits on the NSA 
Assembly of Contributors and has a vote in determining how 
projects are implemented. The U.S. is also funding completion 
of a partially-built heat plant at Chornobyl which will support 
the site during decommissioning activities, after the last 
Chornobyl reactor is closed.
    Question. How confident are you with the safety and 
security of Newly Independent States (NIS) nuclear power plants 
built to the Chornobyl design?
    Answer. The Chornobyl-style RBMK reactor is a Soviet-
designed boiling water, graphite-moderated, pressure-tube 
reactor which contains fundamental uncorrectable safety 
deficiencies which would prevent these reactors from ever being 
licensed to operate in the U.S. These deficiencies include a 
susceptibility to power instabilities; lack of a modern 
containment system to prevent release of radioactivity to the 
environment; and inadequacies in the emergency core-cooling 
systems, fire protection systems, and electronic control-and-
protection systems.
    There are a total of 14 RBMKs operating in Russia, 
Lithuania and Ukraine. The U.S. has strongly urged these 
countries to close them down as soon as possible. In Ukraine, 
we have seen excellent progress with the closure of Chornobyl 
Unit 1 in 1996 and Ukraine's commitment to close the remaining 
operational reactor at Unit 3 by 2000. In Ukraine, Russia, and 
Lithuania, the U.S. Agency for International Development (AID) 
is working with the host country to identify safe, 
environmentally acceptable and least cost options which will 
permit other RBMK reactors to close. The programs of DOE and 
the Nuclear Regulatory Commission to reduce the risks of a 
serious accident at these RBMK reactors and to strengthen the 
nuclear regulatory authority in these countries continue.
    Question. With the many questions of biological weapons 
proliferation, who has the final say if a country should get the 
possible ingredients that could be used for military purpose? I asked 
this question, because I watched one of the news shows and was stunned 
to hear a former DOD official say that ingredients that were eventually 
shipped to Iraq, which he had blocked, were overridden by the State 
Department and the Commerce Department. What is the current procedure?
    Answer. All export licenses for Commerce-controlled dual-use 
biological weapons-related items are reviewed by the interagency, 
including the Departments of State, Defense, and the Arms Control and 
Disarmament Agency. Each agency provides the Commerce Department with a 
recommendation to approve or deny a license application.
    Taking into account interagency views, the Department of Commerce 
determines whether a license should be approved or denied. On those 
occasions when agencies disagree with the disposition of a license, 
they may appeal the decision to Commerce-chaired interagency review 
board.
    A mechanism exists--but it is rarely used--whereby an agency may 
continue to appeal a license decision to the Export Administration 
Review Board--which is composed of Cabinet-level officials--and 
ultimately to the President.
                                demining
    Question. Your budget shows a 700% increase over the last two years 
for humanitarian demining. I recognize the importance of this work, but 
can such a rapid ramp-up actually be used effectively?
    Answer. Within the last year, we have expanded the program from 
fourteen to nineteen countries and are seriously examining several 
additional countries. We are also continuing our support to existing 
country programs which continue to remove landmines from the ground. 
Commitments to sustaining existing country programs, and expanding into 
new country programs, have already utilized the $20 million received 
for FY 98. The worldwide U.S. Government Humanitarian Demining Program 
is managed and monitored by the Interagency Working Group (IWG) on 
Humanitarian Demining which ensures effective use of the funds. Actions 
within the State Department are increasing our oversight and program 
management which we believe will effectively monitor and manage these 
resources. In addition, with the announcement of the President's 
Demining 2010 Initiative on October 31, 1997, we will be working to 
accelerate all global humanitarian demining operations, including the 
U.S. program, to eliminate the threat to civilians of anti-personnel 
landmines by the year 2010.
    Question. What commitments do we have for similar contributions 
from our allies?
    Answer. We estimate that approximately half of all international 
demining assistance comes from the U.S. with the European Union as the 
next largest donor. Other major donors include Norway, which has 
committed $100 million over five years, Japan ($80 million over five 
years), Canada ($100 million Canadian over five years), Sweden ($23 
million in 1998), the United Kingdom (10 million British Pounds per 
year for the next three years and Finland ($6 million in 1998). The 
1998 edition of the State Department report Hidden Killers will include 
information on international contributions to the worldwide 
humanitarian demining effort.
    With the announcement of the President's Demining 2010 Initiative 
on October 31, 1997, the U.S. will be hosting a conference in May, 
bringing together key donor governments and others to create an 
effective international coordination mechanism to ensure that sustained 
public and private resources for demining are directed, in an organized 
and rational manner, to programs in the mine-affected countries, with 
the goal of eliminating the threat to civilians of anti-personnel 
landmines by the year 2010. The Demining 2010 Initiative has challenged 
the international community--public and private sectors--to raise $1 
billion annually for global humanitarian demining.
    Question. Who administers international demining programs?
    Answer. The U.S. Government Humanitarian Demining Program is 
administered by the Interagency Working Group (IWG) on Humanitarian 
Demining, chaired by State. The Department of Defense designates the 
Vice Chair. A recent Congressional Report (copy attached) explains the 
IWG process.
    Question. Do we directly fund demining operations or is the funding 
funneled through NGOs?
    Answer. In most cases, our goal is the establishment of a 
sustainable, indigenous demining capability to manage and conduct 
demining operations in a landmine-affected nation, rather than funding 
ongoing demining operations. The first step is to establish a Mine 
Action Center, which is an office of the host nation government 
responsible for solving the landmine problem in that country. U.S. 
Government assistance is provided in-kind through the host government 
Mine Action Center. Where a direct, government-to-government military 
relationship is not appropriate, we have functioned through the United 
Nations (in Afghanistan and Angola) and through USAID (in Angola and 
Rwanda). In the future, new funding through the Nonproliferation, 
Antiterrorism, Demining and Related Programs (NADR) account will 
provide additional resources and administrative flexibility to consider 
accomplishing overall objectives through NGOs as well.
    Question. Can you please explain to what extent Laos and Cambodia 
will benefit this year and succeeding years from this program?
    Answer. We plan to provide Cambodia with $2.0 million in NADR funds 
in FY 98 and $3.0 million in FY 99 (out of the $50 million requested). 
We plan to provide Laos with $2.0 million in NADR funds in FY 98 and 
the same amount in FY 99. In both cases, the program has successfully 
established a sustainable, indigenous demining and unexploded ordnance 
(UXO) clearance capability in each country. Ongoing funding provides 
additional equipment to sustain and expand the program.
    Question. How does this compare to the past support?
    Answer. In FY 97, we provided both Cambodia and Laos with $1.0 
million each in NADR funds. We have increased our support together with 
increased managerial capability in each country.
                                          Wednesday, March 4, 1998.

                        U.S. DEPARTMENT OF STATE

                                WITNESS

HON. MADELEINE K. ALBRIGHT, SECRETARY OF STATE

                    Mr. Callahan's Opening Statement

    Mr. Callahan. Good morning, Madame Secretary, and welcome 
back to our subcommittee. Between the 1998 request and the '99 
request, the Administration, you and the President, have 
requested that we consider a total of about $31 billion dollars 
in requests this spring.
    And in order to give our members adequate time to discuss 
these issues with you, we appreciate very much you coming 30 
minutes earlier than usual. We respect your tight schedule, and 
we will try to get you out as quickly as we can.
    But, as you can imagine, the members of the subcommittee 
have a great deal of interest in many of the things you are in 
charge of, and I am sure there will be a lot of questions.
    Since your last visit, we have a new member of our 
subcommittee. Congresswoman Kaptur I do not think is here yet, 
but she is very knowledgeable on international affairs and I am 
sure when she gets here she will have some very strong 
questions, especially about the Ukraine.
    I am not going to read a formal statement. I invite you--
and I have had the opportunity to review your statement--to use 
as much time as you like, but we will accept your full 
statement for the record.
    And let me just say we hope that you will address 
especially the Middle East and certainly the problem in Iraq. 
We have talked with some members of the Executive Branch, some 
of the under secretaries, in subcommittee hearings.
    I think I got from the attitude of the members of the 
subcommittee that some of us are grossly disappointed that some 
of the very countries you are requesting aid for this coming 
year and countries that have been huge recipients of American 
aid in the past, both military and other aid, did not readily--
or at least the perception was that they did not readily come 
to your side when you visited them.
    Conceivably you know something that we do not know, but it 
is disheartening to me and to many members of our subcommittee 
when we send the billions of dollars we send to these foreign 
countries, and when we entertain their leaders as they come to 
the United States, that they did not readily respond to your 
request.
    It would appear that either we had a flawed policy or a 
flawed program or a flawed plan. Or, if that was not the case, 
it appeared as if maybe they were fair weather friends.
    So we are interested to know what took place. I do not 
imagine you had to call Mr. Netanyahu twice when you went to 
him for his support of our latest Iraqi venture. But we were 
very disappointed that other nations did not seemingly come 
immediately to your side, especially since you went to the 
tremendous effort you went to in going to visit with them to 
explain the problems.
    Our perception is that what we were trying to do primarily 
was to protect the very countries who sit in the middle of the 
most dangerous area--the very countries that refuse to publicly 
come out and say we are with you 100%.
    But we respect your professionalism, and we know that you 
may have had private conversations with some of the leaders of 
these countries. But nevertheless, it is a sincere concern. And 
as these leaders come to visit us, especially this spring in 
their quest for additional aid, I am certain that some of them 
are going to have to answer some very tough questions from 
members of this committee.
    I know you just came back from Africa, and I know the 
President is going to visit Africa sometime in the near future. 
I am real happy to see that you have taken our advice and have 
not gone over there promising them the moon.
    The President, I think, is indicating there is an 
additional $60 million for Africa.
    While Latin America is still problematic or some areas of 
it, your request asks for a sizeable increase in assistance to 
Haiti. I see no progress has been made in Haiti. As a matter of 
fact, after our visit there last spring, there was no 
progress--zero progress that we could see.
    And reports that have come back give us an indication there 
is still very little progress. As a matter of fact, it has 
deteriorated to the point now that you cannot even safely land 
a commercial airplane on the international airport because of 
the cows grazing on the runway.
    And there has been no privatization to our knowledge even 
though they have repeatedly promised us that privatization 
would immediately begin. To the best that we can understand, 
there has been no privatization in Haiti.
    Other areas in South and Central America--you know of our 
concerns about this area of the world. We think that more 
concentration should be put on Central and South America and 
the Caribbean rather than on some of the countries we are 
spending so many billions of dollars on.
    So we hope that you will continue your direction of giving 
assistance to countries in this hemisphere and priorities to 
countries in this hemisphere because they naturally, because of 
their proximity to the United States, are countries that can 
mean the most to us not only in trade, but from a national 
security point of view.
    Russia still has tremendous problems. I know that you are 
going to visit Ukraine. I think you are leaving tonight or 
tomorrow to visit Ukraine. We have had reports, this committee 
has, with respect to business people doing--trying to do 
business in the Ukraine.
    And yet, corruption and the hardship that some of the 
people in Ukraine give to our American business people gives us 
heartburn. And I hope that when you go to Ukraine, you will 
tell them of the Congress' concern about American business 
people being mistreated in the manner in which they are.
    And that if indeed this continued and some of the problems 
they have created is not corrected, then you are going to have 
difficulty getting this subcommittee to afford you any money 
for Ukraine.
    I know that you are concerned about that as well. And I 
hope that before you go to Ukraine, you will discuss some of 
these problems business people and then address their 
particular problems with the leaders of Ukraine.
    I just want to forewarn you that the request for the 
additional appropriation is going to be difficult to come by. 
The chairman and the ranking member of our full committee are 
here, and we understand that there probably is going to be some 
kind of highway program, but we are not going to take it out of 
the surplus.
    We are going to, to the best of my knowledge, apply that 
surplus to pay off some of the national debt. And we are going 
to have to come up with monies for the IMF or any increased 
monies you have with the limited amount of resources because I 
think we are also going to have a highway program that we are 
going to have to come up with several billion dollars to fund.
    And I think, based upon information I have received, that 
we are going to take the highway monies out of some existing 
spending capability. So monies are going to be extremely 
limited. But let me tell you that I personally appreciate the 
kindness and courtesies you have shown to me, especially during 
this last year; that you are a very responsible and forceful 
leader; and that your respect not only here in the United 
States but worldwide is certainly a feather in the cap of this 
Administration.
    So we thank you.
    And at this time, I would like to yield to the full 
committee chairman, and then to the ranking member, and then to 
the ranking person from California, Ms. Pelosi.

                   Mr. Livingston's Opening Statement

    Mr. Livingston. Thank you very much, Mr. Chairman. I will 
be brief because I know the members want to get into questions.
    But Madame Secretary, I want to welcome you. I have not had 
a chance to formally welcome you to the second session of the 
105th Congress appearing before the various committees, but I 
will take that opportunity now.
    You have been very busy. You are covering the world and 
have a lot of problems confronting you and, of course, 
confronting this Nation as well. And please understand that if 
the questions get a little tough from time to time, we all 
share the same goals and do wish you all of the best of success 
as you undertake prospective solutions to these very difficult 
problems.
    I would associate myself with the remarks of the chairman, 
Mr. Callahan. Add only that I will have a number of questions 
which I would like to ask later on. And if I am not here, 
forgive me, but I will submit them for the record.
    But highlighted among my interests are, in fact, the cost 
for doing business in Iraq, Bosnia and Haiti. I feel that the 
Administration and the request has underestimated those costs 
if not totally in this bill, but certainly when you consider 
the defense bill in which they did not even make a request for 
Bosnia, let alone the process in Iraq in the President's 
request which means we just have to, for fiscal year '99, take 
it out of thin air or create that money out of other programs.
    The chairman mentioned the problems in Ukraine. The fact is 
we are very much concerned about the lack of security of 
American investment in Ukraine. And worse than that, the safety 
of investors as they travel to Ukraine.
    That is a very serious problem.
    Thirdly, it appears that the Administration has removed the 
IRA from the list of known terrorists or the terrorist list 
that we have carried forth from year to year. We removed it 
last year, and now we find out that the IRA is engaged in acts 
of terrorism once again.
    We will be curious to see how the State Department intends 
to deal with that problem.
    And finally, we do want to cooperate with you, Madame 
Secretary, but we have some very tough issues in dealing with 
the IMF and UN funding and others that will be incorporated 
presumably in the supplemental bill that will go through 
Congress within the next few weeks.
    And I am concerned that the Administration has taken an 
awfully hard nosed, inflexible attitude to the very simple 
request that we made last year to forego the advocacy of 
abortions around the world and blame the Congress for being 
intransigent.
    The fact is that the pro-life advocates in this Congress 
made tremendous concessions to reducing their request to that 
one forbearance, not to lobby for abortion internationally.
    And for the Administration to say well that is so totally 
off the table when we have so many other--much more serious, 
significant problems on the table before us in the coming weeks 
is just unfortunate and unwise.
    The Department allowed the UN Fund For Population 
Activities to renew its program in China. That is not only 
unwise; it is just plain dumb. So I hope that you will deal 
with these problems in your statement and that we can have a 
dialogue that can resolve these issues.
    We have got a lot of significant and difficult problems to 
negotiate through the mine fields, and it is going to have to 
be a two way street. We are going to have to have some give and 
take if we are going to get adequate solutions for the American 
people.
    With that, thank you, Mr. Chairman. I will have questions 
later on. And if I do not have an opportunity to ask them 
myself in person, I will submit them.
    But thank you again, Madame Secretary.
    Mr. Callahan. Thank you very much.

                      Mr. Obey's Opening Statement

    Mr. Obey. Well, thank you, Mr. Chairman.
    In the interest of time, I had not planned to make any 
comments; but I nonetheless, as I often do, find myself 
required to respond to some of the comments of my friend, the 
distinguished gentleman from Louisiana.
    Let me simply say, Madame Secretary, I do not believe that 
the Administration's position has been inflexible at all on the 
question raised by the chairman.
    I think what the Administration's position has been is 
simply this: the Administration is saying that we have national 
interests that have to be dealt with with respect to our 
funding of the International Monetary Fund.
    I think the Administration is saying we have national 
interests that have to be dealt with with respect to cleaning 
up the arrearages at the United Nations so that we do not wind 
up asking an organization to do a lot of the work that we want 
to see done even though we are technically a deadbeat in that 
institution.
    And I think the Administration is saying that those 
interests ought to be dealt with on their own without being 
linked to a side bar issue which happens to be the divisions 
within the Congress on the questions to how we ought to conduct 
our family planning issues around the world.
    I think the Administration is simply saying that each of 
those issues are legitimate issues, but they all ought to stand 
on their own. They ought not be artificially linked 
politically. They ought not to held hostage to one another.
    And as adults, we ought to be able to work them out on a 
stand alone basis, and I hope that we can. It would be 
preposterous for us to refuse to defend our economic interests 
on the IMF front.
    It would be preposterous for us to continue to disarm 
ourselves and our ability to effectively influence the United 
Nations by getting that tied up into a separate issue involving 
what our family planning policy ought to be in some country a 
thousand miles away.
    It just seems to me that reasonable people ought to be able 
to find reasonable solutions on each of those fronts, but they 
ought not be linked in some kind of a political hostage 
fashion, and that is all the Administration has been saying, 
and I think it is correct to do so.
    I would simply hope, Madame Secretary, that as you pursue 
your duties, I would hope that we can find a way to persuade 
parties on both sides in the Middle East that, for the good of 
the region and the good of the world, that they need to be more 
forthcoming in their negotiations with one another.
    I would certainly think the Iraqi situation has emphasized 
once again the need for us to make progress on the core problem 
in the Middle East, which is the continuing disagreement 
between the State of Israel and its neighbors and the 
Palestinians as well.
    So I know that it is very difficult for us to prod two 
parties to negotiate under these circumstances, but I hope that 
we will do all we can because, after all, not only is their own 
national interest at stake, so is our own.
    Mr. Callahan. Ms. Pelosi.

                     Ms. Pelosi's Opening Statement

    Ms. Pelosi. Thank you very much, Mr. Chairman.
    I am pleased to join you in welcoming Secretary Albright to 
our subcommittee. And I want to say that I believe our country 
is well served by and is very proud of Secretary Albright and 
the job that she is doing.
    The Administration's request of $14.1 billion represents 
about a $900 million dollar increase over FY98. However, even 
with this increase, I think this amount is the bare minimum 
necessary to conduct a foreign policy that preserves the 
national security of the United States.
    I want to spend a moment on the budget because that is what 
this hearing is about. This budget is largely a status quo 
request. In fact, the only increases of any significance in 
State Department run programs are for narcotics control, 
assistance to the New Independent States and in the 
proliferation, anti-terrorism and demining account.
     Overall resources for the conduct of international affairs 
remain as only one percent of the U.S. budget. Secretary 
Albright will, I am sure, present us with compelling 
justification for every penny today.
    As I have said, before, it is the least we can do.
    I was not going to bring up the subject of the Mexico City 
policy, but since our distinguished chairman did, I associate 
myself with the remarks of Mr. Obey. I believe that we can have 
that debate separately and let it stand on its own weight.
    I commend the Administration for not allowing the poor 
women of the world to be held hostage to the politics of the 
Congress of the United States, and opposing any kind of gag 
rule that some would want to impose on organizations regarding 
what they do with their own money. We are not talking about 
U.S. taxpayer dollars being spent on these activities.
    We are talking about what they do with their own money. 
That is a standard I do not think we would want to apply to all 
of the funding that the Federal Government does domestically or 
internationally.
    We spent a good deal of time discussing the IMF with 
Secretary Rubin. I know that it is his domain, however it 
certainly does have State Department involvement even beyond 
the Mexico City language. I am sure we will touch on that 
today.
    The concerns that I will raise today range from China to 
Chiapas and everything in between. I am concerned about what is 
happening in terms of the UN Commission on Human Rights in 
Geneva regarding a resolution on China's human rights 
practices.
    And I am very concerned, Madame Secretary, about recent 
press reports that significant numbers of Mexico Army troops 
are being trained at U.S. bases and that some individuals from 
the Mexican Armed Forces are receiving intelligence training.
    This training is supposed to be used in the drug war. My 
questions will relate to how this training may be being used 
for counterinsurgency purposes in Mexico.
    I support the President's leadership and policy in Bosnia, 
and I know you will give us a justification for the $225 
million dollar request. My concern centers around Bosnia war 
criminals or, as we now call them, persons indicted for war 
crimes, PIWC's.
    And of course, I share the concern of my colleague, Mr. 
Obey, about a resolution of the Middle East situation as well 
as the situation in Nagorno-Karabakh.
    Your brief is a very full one, Madame Secretary, and I do 
not want to go into all of it in my opening statement. Suffice 
it to say that I think we will have a lively discussion today.
    In closing, I again want to commend you for your many, 
many, many successes and the distinction with which you serve 
our great country.
    Thank you, Madame Secretary.
    Mr. Callahan. Madame Secretary.

                 Secretary Albright's Opening Statement

    Secretary Albright. Thank you very much, Mr. Chairman and 
members of the subcommittee.
    We clearly do have an awful lot to cover. Even though I 
have covered many issues in my statement, I clearly have not 
addressed all the questions, thus we will have a great deal to 
talk about.
    I am very pleased to be here to ask for your support for 
the President's request for funds for the Foreign Operations 
Program of the United States. I want to acknowledge at the 
outset that this subcommittee and its members have been leaders 
in supporting a principled and purposeful U.S. foreign policy.
    I think that our record of working together has been great, 
and I appreciate the fine work that we have been able to do 
together. I do think that we have been able to move the process 
forward.
    And Chairman Livingston, I am especially pleased to see you 
here. I cannot resist saying something about your recent 
decision. As you know, when I became a diplomat, I had all my 
partisan instincts surgically removed.
    But, as a citizen, I am very pleased to say hallelujah. We 
do not always agree, but I do know a true public servant when I 
see one, and I am very grateful to you for having made the 
decision that you made and am very happy to have you here this 
morning.
    Thank you.
    Mr. Chairman, the budget request before you seeks to ensure 
that we will have the foreign policy tools we need to sustain 
American leadership and serve American interests.
    It includes funds for programs that help us promote peace 
and maintain our security; work overseas to build prosperity at 
home; promote democratic values and strengthen democratic 
institutions; respond to the global threats of international 
terrorism, crime, drugs and pollution; and provide humanitarian 
aid to those in need.
    I will not read my written statement, but I encourage you 
all to review it. It deals with some of the vital issues and 
parts of the world that I cannot include in my oral remarks and 
still honor any semblance of your time.
    Let me instead review a few front burner foreign policy 
issues where strong American diplomacy is critical for American 
leadership and American lives.
    Ten days ago, Iraq promised UN inspectors immediate, 
unconditional and unrestricted access to all sites inside the 
country, including those previously kept off limits. This step 
back by Iraq is a step forward for our policy of containing the 
threat posed by Saddam Hussein.
    If Iraq lives up to its agreement, we will have achieved 
our goal of maintaining an effective and professional 
inspection and monitoring regime inside Iraq. If Iraq violates 
the agreement, there will be greater international 
understanding and diplomatic support than there would have been 
previously for a forceful response.
    Either way, the forces of law and stability are 
strengthened.
    We are working with the Security Council and UNSCOM to 
ensure that the agreement is implemented in a manner that 
reflects the core principles upon which we insisted: that 
Security Council resolutions are obeyed; that UNSCOM's 
integrity is preserved; and that UNSCOM is not prevented from 
doing a full and professional job.
    In the days ahead, UNSCOM will be testing Iraq's 
commitments thoroughly and comprehensively. And under the 
agreement, there is no question that operational control for 
all inspections rests with UNSCOM.
    To keep a lid on Saddam's military options, we will 
continue to enforce the no fly and no drive zones. We will 
insist that UN sanctions against Iraq be maintained until there 
is full compliance with all relevant Security Council 
resolutions.
    As President Clinton has said, our soldiers, our ships and 
our planes will stay in the region in force until we are 
satisfied Iraq is complying with its commitments.
    If Iraq does not comply, we have made it clear that we have 
the responsibility, the authority, the means and the will to 
respond. I am convinced that this is the best policy to protect 
our interests and those of our friends and allies in the Gulf.
    It embodies both our desire for peace and our determination 
to fight if necessary. It takes into account current realities 
without, in any way, ruling out future options. It presents the 
leaders in Baghdad with a clear choice, and it reflects 
principles that are vital to uphold not only in the Gulf now, 
but everywhere always.
    In the Middle East, the United States has been working hard 
to encourage the parties to make the hard decisions that will 
move the peace process forward. This matter is urgent and the 
stakes are high.
    Under the Oslo Accords, a permanent status agreement is 
mandated by May 4, 1999, less than 14 months from today. We 
take that deadline seriously. The parties must tackle the hard 
issues now.
    I hope as we strive to move ahead on the diplomatic front 
that we will have the subcommittee's support for our requests 
for assistance to our partners in peace, including Israel, 
Egypt, Jordan and the areas under Palestinian self rule.
    Over the years, the level of assistance provided to this 
region has been the subject of scrutiny. This is appropriate, 
and we welcome Israel's discussions with the Executive Branch 
and Congress on a gradual reduction and eventual phase out of 
economic support funds coupled with the proposed increase in 
security assistance.
    I look forward to coordinating closely with you as 
consultations on this subject continue. In Bosnia, we must 
finish what we started and continue helping the parties to 
implement the Dayton Accords.
    The nation remains deeply divided, but multi-ethnic 
institutions are once again beginning to function, economic 
growth is accelerating, more refugees are returning, and more 
indicted war criminals are facing trial.
    Perhaps most importantly, a new Bosnian-Serb Government has 
been elected that is committed to implementing Dayton and has 
begun to make good on this pledge.
    In response, I have waived restrictions on our assistance 
with the understanding that our support is designed to help the 
builders of peace, not those determined to undermine it.
    In order to continue the progress that has been made, we 
and our allies have agreed that NATO will continue to lead a 
multi-national force in Bosnia after SFOR's current mandate 
expires. We have already held informal briefings with members 
of Congress on these consultations, and you can expect to hear 
more from us on that in the days ahead.
    Mr. Chairman, the infrastructure of Bosnian peace is 
gaining shape and the psychology of reconciliation is taking 
hold, more slowly than we foresaw, but as surely as we hoped.
    The funds we request for Bosnia in fiscal year 1999 will 
help make this welcome process irreversible by strengthening 
democratic institutions and bolstering the rule of law. These 
monies will also help ensure that when our forces do leave 
Bosnia, they do so for good.
    Let me also take this opportunity to reiterate the 
Administration's deep concern about recent violence in Kosovo. 
We have made clear to President Milosevic that making progress 
on Kosovo is a precondition to lifting the so-called ``outer 
wall'' of sanctions against his country, and that the use of 
force to resolve what is a political problem can only deepen 
the isolation of his regime.
    We also expect the Kosovo-Albanian leadership to distance 
itself from those who use violence for political ends.
    More broadly, we are working with our European partners to 
make further progress toward a continent whole and free. We are 
adapting NATO to new challenges and seeking Senate support for 
admitting three of Central Europe's new democracies.
    With respect to Russia, we are working to keep economic 
reforms on track while urging START II ratification by the 
Duma, pressing for new measures to prevent proliferation and 
continuing our support for Russian membership in the WTO.
    We are also supporting Ukraine's fragile economic and 
political reforms.
    As you said, Mr. Chairman, tomorrow I will travel to Kiev 
where I will bring a strong message of friendship, but also a 
warning. As you know, later next month I must certify that 
Ukraine has made significant progress in resolving complaints 
by U.S. investors or see our aid cut by 50%.
    I hope that I will be able to indicate to this body that 
progress has been made.
    Throughout the new independent states, the construction of 
stable market democracies remains a work in progress. Our 
contribution through the Partnership for Freedom will not 
remake the region overnight.
    But this program provides essential help to a process that 
is vital to the stability of this region and has major 
implications for our own long term prosperity and security.
    In our own hemisphere, we have important interests dictated 
not only by proximity of geography but by proximity of values.
    And next month, President Clinton and the democratic 
leaders of this hemisphere will gather for the Second Summit of 
the Americas to set an agenda for the 21st Century, an agenda 
of education, trade, economic integration, fighting poverty, 
the war on drugs, judicial reform, the environment and human 
rights.
    In Haiti, the job of creating a democratic culture and 
market economy where neither has ever existed is especially 
daunting. Other young democracies have taken years and endured 
much violence to sort out tensions similar to those Haitians 
now face.
    If we turn our backs now on Haiti, we run the risk of 
creating a Haitian future that mirrors the past. Accordingly, I 
ask your support to continue and increase our investment in 
Haiti to respond to basic human needs, strengthen civil 
society, expand opportunities for free enterprise, and give 
democracy a chance to put down deeper roots in Haitian soil.
    In Africa, we have a rare opportunity to bring newly 
democratizing partners into the world economy and gain valuable 
allies in the fight against terror, narcotics trafficking and 
other global threats.
    As we prepare for the President's visit later this month, I 
urge the subcommittee's support for our initiative to promote 
justice and development in the Great Lakes region. I also ask 
your support for our request for funds for education, 
development and a substantial new program of debt relief.
    In Asia, we are working to promote stability during a time 
of great economic uncertainty. The approach we have taken to 
the East Asian financial crisis is clear. To recover, a nation 
must reform its economy. And if a nation is willing to work 
seriously on reform, it will be in our interest to help.
    In South Korea, the new President, Kim Dae Jung, has built 
his career and staked his life on the idea that democratic 
development and economic growth go hand in hand. He is working 
now with the IMF to restore financial confidence, promote 
better governance and encourage greater openness in decision 
making.
    In Thailand, both the leaders and the people have taken 
strong steps to put their fiscal house in order and to enact a 
more democratic constitution.
    In Indonesia, however, it is plain the government must do 
more. Former Vice President Mondale has delivered to Jakarta 
our message that full implementation of the IMF agreement is 
essential. If Indonesia is to restore confidence and growth, it 
must address the problems of its financial sector and attack 
longstanding structural problems, including corruption and a 
lack of democratic accountability.
    As people throughout the region look for reassurance about 
the future, it is vital that timely support from the 
international community be forthcoming. This matters to us 
economically, but the IMF reforms also promote better 
governance and thereby stronger democracies.
    The IMF's programs are a ``hand up,'' not a hand out. These 
programs are loans that will be repaid with interest as our 
trade with the Asia-Pacific region recovers and grows. Thus, I 
hope we can work together to contribute our full share of the 
IMF's quota increase which will support economic recovery in 
East Asia and help prevent similar crises elsewhere.
    Our supplemental request would also extend to the IMF a 
line of credit for use in the event of a serious financial 
crisis. These requests are for budget authority only. They 
require no outlay of funds and have no effect on calculations 
of Government spending.
    Mr. Chairman and members of the subcommittee, in addition 
to this IMF request we have unfinished business which includes 
arrears to the UN, which undermine our diplomatic leadership 
and cost U.S. taxpayers money.
    I ask your support for prompt action that is not tied to 
any unrelated issues on our supplemental appropriations request 
for UN arrears. Let us act quickly and put this issue behind us 
to enable us to restore American influence within the UN 
system, pursue our reform agenda and get on with America's 
diplomatic business.
    Mr. Chairman, when we help end conflicts; pursue arms 
control; fight terrorism, drugs and crime; promote child health 
and support democracy, we advance the long term interests and 
safety of Americans. In each of these areas, we ask your 
support in exercising U.S. leadership and promoting the values 
our people cherish.
    Mr. Chairman, half a century ago a Democratic President and 
a Republican Congress worked together to help forge the 
institutions that have shaped our foreign policy and defined 
the history of our age; institutions that proved instrumental 
in the defense and spread of freedom, the growth of prosperity, 
the defeat of Communism and the confirmation over and over 
again of America's standing as a leading force for justice and 
law around the world.
    Our predecessors were not prophets. But because they stood 
tall, they were perhaps able to see a little bit further into 
the future than others. They also had faith in our people and 
in the principles upon which our Nation was founded.
    Today we have a responsibility to honor their faith, to 
reject the temptation of complacency and to assume 
uncomplainingly, the leader's role established by our forbears.
    For only by living up to the heritage of our past can we 
fulfill the promise of our future and enter the new century 
free and respected, prosperous and at peace.
    Mr. Chairman and members of the subcommittee, thank you 
very much for listening to my statement. And now I am very 
pleased to respond to your questions.
    [The statement of Secretary of State Madeleine Albright 
follows:]


[Pages 308 - 334--The official Committee record contains additional material here.]



                                 haiti

    Mr. Callahan. Thank you, Madame Secretary.
    Let me just comment briefly on some of the things that you 
expressed in your opening statement. Number one, and I know 
today we do not have time to go through an elaborate and 
detailed discussion of Haiti; but as I mentioned in my opening 
statement, we see very little progress there.
    The subcommittee has visited Haiti. We have met with the 
president of Haiti. We have met with the leaders of Haiti. We 
see zero progress, and yet we see a request nearly doubling the 
assistance to Haiti while we see countries like Bolivia who are 
trying to do the right thing with respect to the drug situation 
have their funds dramatically cut.
    So Haiti is going to be a problem with this committee. It 
is going to be a problem with me. It is not that I do not think 
we should help. I think we have other priorities in this 
hemisphere, and I doubt very seriously if we are going to be 
able to come forth with this additional money for Haiti.
    And I see little justification. If there was an indication 
of progress in Haiti, it would be different. But there is no 
progress being made in Haiti. You have huge unemployment. The 
only economy they have is foreign assistance and our military.
    When we were there, we were trying to assist Haiti, for 
example, on their road building problems. Their roads are in 
horrible condition. We had the U.S. Army Reserve down there 
building them a road. And according to the commander of that 
force, we could not even get the Haitians to deliver rocks to 
help build a road for them.
    So we, I think, are going to have to tell Haiti that we are 
sorry; but in the absence of any progress, we might have higher 
priorities in this hemisphere.

                                  kedo

    Kedo is still problematic. The fact that they are borrowing 
money and borrowed it without any notification to this 
committee--and I realize they have the collateral backed up by 
promises from other countries.
    We are concerned about the increased borrowing taking place 
in Kedo.
    Bolivia, as I mentioned, is a problem. We are going to have 
to find some resolve to the tremendous cuts which appear to be 
some type of punishment for Bolivia when they are making 
progress and when they have a new Administration there that has 
pledged to eliminate the growing of cocaine leaves by the year 
2002.
    We should encourage this, not discourage it.
    The vice president of Bolivia was here this week. He met 
with some of us. He told us that it was an insult to his 
country after the cooperation they had pledged, the progress 
they have made for us to cut them as dramatically as we did.
    I know that some of the instructions of that came from this 
committee and this Congress when we instructed you to provide 
Blackhawk and Huey helicopters for Colombia. But we will 
correct that this year.
    But we must find something immediately in the form of 
relief for Bolivia.

                                  imf

    The IMF, as we told Secretary Rubin a couple of weeks ago, 
has serious perception problems. People in America do not 
understand the IMF. They think it is a slush fund for the 
President. They do not understand, as you so, I think, 
diplomatically explained to the Senate committee, it is a 
credit union--that we are a member of the credit union and that 
we are not providing all of this aid, but it is important that 
we participate.
    They do not understand the Mexico bail out when we promised 
Mexico $30 billion dollars, that Mexico paid all of that money 
back, that we have never lost money on any IMF endeavor.
    As a matter of fact, on Mexico I understand we even made a 
profit because they paid us back immediately. But still, the 
American people do not understand, and someone has to get the 
message out.
    Now you mentioned in your statement not to tie anything to 
the IMF issue. But it is going to be tied. It is not 
necessarily the will of all of the members or even a majority 
of the members of this committee, but the issue is going to be 
there.
    We are going to have to face the reality of whether or not 
this Mexico City language or something along those lines is 
more important with respect to the Administration than IMF. 
That issue is going to be there. It is not going to be put on 
in this subcommittee; but when we get to the full, we are going 
to have to address Mexico City language. Other administrations 
have lived with Mexico City language and it has not impeded 
their ability to have an effective foreign policy.
    And I know the White House has a strong feeling with 
respect to that, and I know a lot of members of this 
subcommittee and the House and Senate have strong feelings. But 
it is an issue that is here. And it is something that we cannot 
do anything about.
    But we have to recognize that the issue is here and that a 
great majority of the members of the House feel that way and we 
are going to have to address it in some form or fashion.
    I am really happy to see that the Administration has 
finally come to their senses on child survival. It was created 
in this committee, and, for the first time, you requested that 
it be funded.
    Albeit, you did not request the full funding of last year, 
but we are going to give you more than you requested in the 
child survival account this coming year.

                                  iraq

    With respect to the perception of problems you faced with 
the leaders you went to see on your visit prior to the Iraqi 
situation, I think you should address that to make certain that 
we fully understand the responses, if that is something we can 
publicly talk about.
    If some of the conversations are classified or you would 
rather do that in a closed meeting, we would be happy to 
accommodate you there. But once again, perception in this 
industry we are in, you are in, is very important.
    And the perception is that our allies turned their backs on 
you. And that aggravated me not only for you, but for this 
country. It aggravated me when a similar thing happened to 
Secretary Baker when he went to the Philippines and they 
refused to meet with our Secretary of State.
    We are not going to tolerate that. And the only vehicle we 
have to respond is the fact that we are the ones who hold the 
purse strings for the money that you get to provide to these 
countries.
    So I wish you would address the perception of the lack of 
support of our endeavors in Iraq with the leaders you visited, 
if you can.
    Secretary Albright. Yes.
    Thank you very much, Mr. Chairman.
     First of all, let me say that the perception is wrong 
because we are confident that we have the support that we need 
if in fact we have to pursive a military option. But there 
clearly is a perception, and therefore let me address at that.
    First of all, I think that we have to understand that the 
threat this time is less concretely visible than it was when 
there was an attack by Iraq into Kuwait; an attack by one Arab 
country and an invasion by one Arab country into another Arab 
country, which I think was a concrete act that was easier for 
people to understand and to react to.
    We have maintained very close contact with all the Arab 
countries, especially in the Gulf. I went there, as you know, 
and so did Secretary Cohen. We actually got what we considered 
good statements of support at a time when many of those 
countries believe that our sanctions policy is hurting the 
Iraqi people.
    That is a perception that I believe is wrong. If I might 
parenthetically say it here, the United States has done and 
cares more about the Iraqi people than Saddam Hussein does. And 
we have made provision for humanitarian assistance by allowing 
the Iraqis to sell oil in order to buy humanitarian assistance.
    These Arab countries were concerned about the fact that 
they believe that our policies were hurting the Iraqi people.
    Also, the threat of weapons of mass destruction and 
instability in the region I think is something that we need to 
pursue. It is a national interest issue for the United States, 
but it is harder, I think, for these countries to understand 
than we feel about it.
    The main point, though, and I must say this, is that in 
private, I felt that I had very good assurances, which we can 
discuss if you like in some other setting. But you have to 
understand that thoese countries' public statements are geared 
to the fact that they are in the neighborhood with the bully.
    We are there as the main protector, but we are not there 
all the time. They are in the neighborhood with Saddam Hussein, 
and therefore their statements, to some extent, are tailored to 
that reality.
    But I have to tell you that both Secretary Cohen and I feel 
comfortable with the support that we are getting from these 
countries.

                            Monetary Support

    Mr. Callahan. Imagine how disappointing though when these 
leaders of these nations come and they tell us how much they 
need and how badly they need our monetary support both from a 
military and an economic support factor only to read, and 
perception though it may be--only for us to read that you were 
not warmly received.
    I am sure personally they warmly received you, but your 
message was not warmly received. So it is a concern to me. And 
I intend, as they come to visit us this spring, to press this 
question.
    You know, our attitude, or at least my attitude, Madame 
Secretary, is that you are the voice of the United States of 
America. And they must respect that. And either they must tell 
you why your plan is flawed, or they must stand beside you.
    As I mentioned, I do not imagine you had to call Mr. 
Netanyahu twice before he immediately responded. I do not 
imagine you had to call the leaders of Kuwait twice because 
they remember very vividly how protective we were to them in 
the Persian Gulf encounter.
    But some of these leaders we are giving hundreds of 
millions of dollars to should recognize that the reason we are 
doing that is for their securit. At the same time, in return 
for that, if we are going to protect them, we expect them to 
stand beside us in our endeavor.
    The message they send by being silent, even though they 
could possibly have some political problems in responding 
openly, it is the wrong perception. And if we are going to give 
them monetary support, we expect in return their full support 
anytime you call on them or any endeavor we might undertake.
    Secretary Albright. Mr. Chairman, if I might say, I did in 
fact make statements such as the one that you have just made 
and made quite clear that not only the Administration but our 
friends in Congress would make that message quite clear.
    So I would be very happy if you made those statements.
    Mr. Callahan. Thank you.
    And now I will yield to my colleague from California, Ms. 
Pelosi. And after Ms. Pelosi, I am going to ask the committee 
members to respect each other and to limit their questions, 
including the response time, to five minutes and we will try to 
get through twice.
    So Ms. Pelosi, I kept mine to six minutes, but the floor is 
now yours.
    Ms. Pelosi. Thank you, Mr. Chairman.
    Mr. Chairman, I just wanted to defer to the ranking member 
of the full Committee.
    Mr. Obey, I do not know if you have other committees you 
have to cover this morning and if you wanted to go first.
    Okay, thank you very much. Thank you, Mr. Chairman.

                                 Haiti

    Chairman Callahan and I share a different view of the 
Administration's successes in Haiti, but one would have to 
admit that we still have a long way to go in reaching the 
success we would like to see there, and I look forward to 
working with you on that issue.
    I visited Haiti with the chairman last Easter and his 
characterization of what we saw is correct. However, I believe 
that the President has done the right thing by being involved 
in Haiti.
    We just have to make sure that our policy is more 
effective, including in terms of the cooperation we receive 
from the Haitian leaders. But I do not think we can walk away 
from that situation.

                                  Iraq

    I want to go directly to the Iraq situation because I did 
not mention it in my remarks except to associate myself with 
the remarks of others.
    I really want to commend the Administration for making a 
diplomatic solution possible. I hope that Saddam Hussein will 
comply. In the last few weeks, I have had the occasion to be in 
several different churches and the sermon was always the same, 
a rejection of the use of violence.
    My pastor has a different responsibility than the President 
of the United States, but I think the American people very much 
want a diplomatic solution to this conflict.
    I know that requires carrying a big stick, but I was 
pleased that the Administration gave the opportunity to Saddam 
Hussein to comply. I hope and pray that he does.
    You have explained, if he does not comply, what some of the 
options are. Since you set up that ``if he does not comply,'' 
structure, I have a different ``if they do not comply'' 
question for you.

                      Weapons of Mass Destruction

    In your statement, you mentioned some of the successes that 
you see in Asia, and you count China's commitment to strictly 
control nuclear exports, its assurances on nuclear cooperation 
with Iran as steps in the right direction.
    Last year, the U.S. Navy identified China as one of the 
most active suppliers of Iran's nuclear, chemical and 
biological weapons program.
    In a March 1997 report, the Office of Naval Intelligence 
stated that ``Discoveries after the Gulf War clearly indicate 
that Iraq maintained an aggressive weapons of mass destruction 
procurement program. A similar situation exists today in Iran 
with a steady flow of materials and technologies from China to 
Iran. This exchange is one of the most active weapons of mass 
destruction programs in the Third World and is taking place in 
a region of great strategic interest to the United States.''
    The statement goes on to talk about the C802 ballistic 
missiles which are not weapons of mass destruction but delivery 
systems. I was disappointed in the Administration's 
certification that China is cooperating in halting 
proliferation, and I hope that Congress would act on that.
    However, I do believe that placing an emphasis on weapons 
of mass destruction is very important. There is probably 
nothing more important to our national security. I think our 
voice on it would be more respected if it were more consistent.
    Since you mentioned what would happen if Iraq did not 
comply, I wondered if you would comment on what would happen if 
China did not comply with the promise. Certification in the 
past has really been built on performance, not promises.
    And in this case, the Administration certified on the 
promise that China would act in a way completely different than 
the Office of Naval Intelligence has described them acting. If 
they do not comply with restrictions on the export of weapons 
of mass destruction technology to Iran, especially in the 
nuclear area, what action would the Administration take?
    Would that lead to a decertification of China? Would the 
sanctions which the law requires be put into effect? Or what 
other option would you suggest?
    Secretary Albright. Well, first, Congresswoman, thank you 
very much for your statements. And let me say that China has 
acted consistently with its May 1996 pledge not to assist 
unsafeguarded nuclear facilities.
    And it is also agreed, as you have stated, to end nuclear 
cooperation with Iran, and we believe that China is serious 
about this commitment. We are strongly encouraging China to 
complete their nuclear related dual use export control 
regulations which the Chinese have said would be issued by mid 
1998.
    We are also stressing to China the importance of using 
effective export controls to block any transaction which would 
be inconsistent with their pledges.
    I also believe we should look at how far China has come in 
the last years in developing a whole set of initiatives--of 
being part of the NPT, the CTBT and the chemical weapons 
convention. They are systematically moving to put themselves 
within the international regimes of weapons of mass 
destruction.
    We are going to keep pressing them on this subject and 
making them live up to their obligations. If they do not, they 
will be subject to the series of potential actions that you 
have stated.
    But what we are doing now is pushing them very hard on 
these issues because we do consider them of major importance, 
and would not certify or take action that we believe was 
contrary to the promises or pledges that they have made.
    Ms. Pelosi. Well, I think you are being very generous. I 
just repeat--because you say they are honoring what they said 
in May '96--that one year later, the Office of Naval 
Intelligence says, ``A similar situation exists today in Iran 
with a steady flow of materials and technology from China to 
Iran. This exchange is one of the most active weapons of mass 
destruction programs in the Third World and is taking place in 
a region of great strategic interest to the United States.''

                       UN Human Rights Commission

    On another subject, the President said when he delinked 
trade from human rights with China that the U.S. should step up 
efforts to insist that the UN Human Rights Commission pass a 
resolution dealing with serious human rights abuses in China.
    I just wondered what the plan was for the Administration 
this year because, as you know, the meetings begin March 16th, 
very soon.
    Secretary Albright. Yes.
    First of all, again, I think that you know how strongly the 
President stated the case to President Jiang Zemin when he was 
here making very clear publicly that China was going to be on 
the wrong side of history if it did not live up to greater 
responsibilities as far as the human rights issues are 
concerned.
    As far as the UN Commission, we are currently consulting 
about our next steps on a resolution's introduction.
    Ms. Pelosi. So this begins March 16th. This is what, the 
4th of March now, and we are still consulting. I mean, does not 
it seem like a decision should be soon if we are going to make 
something more than a pathetic or feeble attempt at this, that 
this should be something that we had been working on for a 
longer period of time than--what is this, is this the 4th?
    Secretary Albright. Yes, yes.
    Ms. Pelosi. Eleven days before the----
    Secretary Albright. We have been very actively consulting 
on this. We will have an answer very soon. What is happening, 
Congresswoman, is that the EU countries are basically thinking 
that this is not the best approach.
    We know that we have a very difficult row to hoe here. We 
are dedicated and committed to pushing on the human rights 
issue in China and will continue to do so.
    Ms. Pelosi. Well, all I can say is that when the President 
rejected one approach, he suggested another. And I would 
suggest to you that the United States be a leader and not a 
follower of the EU.
    We know that China has, ironically, used the surplus that 
it makes out of U.S.-China trade to buy peace with smaller 
countries on the UN Commission, as well as with countries they 
trade with in Europe.
    So the trade issue now, instead of delinkage in the U.S., 
has been linked to the Human Rights Commission. And I would 
hope that we would not be followers in the UN Commission but 
leaders there.
    Mr. Chairman, how am I doing on time? One more minute? 
Okay.
    Thank you, Mr. Chairman. I will have to go to the next 
round.
    I think I have shared with you our concerns about Bosnia, 
and you spelled out why you issued the waivers. You know of 
those concerns and I support your overall policy in Bosnia. I 
think you have made an enormous difference in saving lives and 
helping to bring a civilized resolution to that issue.
    I am going to come back later on questions on the Middle 
East, but I did want to ask about Chiapas because I have 
concerns that I raised earlier about whether we are sure that 
the money that is targeted for the drug war is not being used 
against the Mexican people in Mexico.

                                Chiapas

    Secretary Albright. Well, on this, we are not engaged in 
any counter insurgency training. And the Mexican Government has 
not requested such training, nor do we expect it to. And the 
Mexican Government has said it wants to reach a negotiated 
settlement on Chiapas, and we welcome their efforts to do so.
    We discussed that with them. But I will--I know that you 
raised many questions on this, and we will get back to you with 
more of the details.
    Ms. Pelosi. Thank you, Madame Secretary. I would be 
particularly interested in the end use monitoring of the 
assistance that is going supposedly in the drug war.
    I think my time now has expired. Thanks again, Madame 
Secretary.
    Mr. Callahan. Mr. Porter.
    Mr. Porter. Thank you, Mr. Chairman.
    Madame Secretary, thank you for the outstanding job you are 
doing for our country and for the energy and commitment that 
you bring to your job.
    Secretary Albright. Thank you.

                                  Iraq

    Mr. Porter. I would like to talk to you about Iraq, 
Armenia-Azerbaijan, Turkey and Cyprus.
    Critics say that we have placed all of our peaceful 
approaches in Iraq in one basket, the UN basket; and that 
Saddam Hussein has had seven years to comply and is not going 
to comply, and that he obviously cares more for his weapons 
programs than he does his own people.
    Madame Secretary, why do we not pursue an alternative 
approach to declare Saddam Hussein a war criminal and provide 
support to the opposition within Iraq, the Kurdish groups in 
the north and the Shia in the south and southwest?
    Why do we not prevent any movement of military material or 
personnel within Iraq from the air, no fly, no drive, no 
movement whatsoever? And why do we not set up and begin 
immediately broadcasting a PR message, both within and outside 
of Iraq, through Radio Free Iraq, to reach the American people 
and the people of this world. Broadcasting the truth about this 
regime will help to undermine Saddam. It is obvious that he is 
not going to comply with UNSCOM and so, are left not only 
looking weak in the UN but attacking when people do not want us 
to attack.
    Secretary Albright. Well, first of all, I think that it is 
very important to understand that actually the policy that we 
have been following in terms of getting rid of weapons of mass 
destruction has been working.
    UNSCOM itself, when it is able to do its work, has been 
able to get rid of more weapons of mass destruction than were 
gotten rid of during the Gulf War. I think that in the course 
of this last couple of weeks that this fact has been forgotten 
because UNSCOM has not been able to do its work.
    But when it can, I think UNSCOM has been very effective. We 
also have managed to keep Saddam Hussein in his strategic box. 
He has not been able to threaten his neighbors, and we have 
lessened his abilities to do so.
    What has created this most recent crisis was Saddam's 
attempt yet again to break out of his box and our pushing him 
back.
    In March 1996, I gave a speech in which I made quite clear 
that we were ready to deal with a post-Saddam regime. And we 
would like to do that. We have been working with opposition 
groups. We are looking for ways to work with them more 
effectively.
    Some of the suggestions that you have made are suggestions 
that we have in fact been looking at and are exploring. The 
indictment campaign, the war criminal concept, I think is 
something that bears looking into. It is not simple because he 
is the head of a state, but we are looking into that.
    Also, in terms of looking at different ways to strengthen 
some of the points that you have been making, I think that, 
however, we should not forget that the containment policy of 
the no drive, no fly zones has been working while, clearly, in 
the last couple of weeks we have been frustrated by UNSCOM's 
inability to go into Iraq.
    UNSCOM should be able to do that very soon. And what I am 
very pleased about is that Chairman Butler has stated now many 
times that he feels comfortable with the arrangement that has 
been made; that he is in operational control of these new teams 
that will be going in and of the arrangements, and we will have 
to test.
    At the same time, Congressman, we are looking into the 
kinds of suggestions that you have made.
    Mr. Porter. Thank you, Madame Secretary.

                                 Turkey

    I just returned from, among other places, Turkey with a 
congressional delegation looking at human rights because in my 
judgement, human rights are preventing Turkey from moving into 
partnership with the EU, gaining a good relationship with their 
neighbors and destroying the fabric of Turkish society within 
by using only military means to address social and economic 
problems that I believe exist.
    Prime Minister Yilmaz has put forward a five point program 
which he announced here. He has vowed first to decriminalize 
free speech; to release imprisoned journalists and 
parliamentarians, of which there are more journalists in the 
world in prison in Turkey than anywhere else; to reopen human 
rights NGO's and to end the state of emergency in the six 
southeastern provinces where the fighting has occurred; and to 
provide some social and cultural and economic support and 
development in that area.
    Are you hopeful that this can be accomplished politically 
within Turkey? Also, what is the United States doing to help 
the Prime Minister get from where Turkey is to where they need 
to go and help them become a member of the EU and be accepted 
there as they should be?
    Secretary Albright. First of all, let me say how much I 
agree with you in terms of the importance of Turkey becoming a 
part of the EU. I think it is very important to make sure that 
Turkey stays turned westward.
    In my visits to Turkey, I have made that clear, as well as 
in my discussion with Prime Minister Yilmaz when he was here 
and my very frequent discussions with Foreign Minister Chem.
    We do continue to urge the Turkish Government to make 
systemic human rights reforms. I will not repeat them because 
you stated them, and I think it is a case that we make very 
loudly to them.
    The Turkish Government has taken some positive steps in 
1997. They lifted the state of emergency in three provinces, 
and they have reduced the maximum pre-arraignment detention 
period in the southern part of the country, and they have 
granted some provisional amnesties to six jailed editors; 
however, they do have a ways to go.
    Now what has happened is that I asked Assistant Secretary 
Shattuck to visit Turkey--he did that last month--to deliver a 
very firm message and to review our concerns, including the 
recent arrest of some Kurdish politicians.
    We expect his Turkish counterpart to visit the U.S. soon, 
and we will continue to keep our focus on these human rights 
issues. They are of great concern to us and obviously of great 
concern in other parts of the world.
    I do think that some of the reasons that Turkey is not a 
member of the EU are other than those associated with human 
rights concerns, and we are talking to our EU friends about 
this.

                            Nagorno-Karabakh

    Mr. Porter. Madame Secretary, can we talk for a moment 
about Armenia and Azerbaijan and Nagorno-Karabakh because it 
seems to me this is a place where, with the right negotiations, 
there can be a win-win-win situation.
    And by that, I mean a win for Azerbaijan in terms of its 
relationship with Armenia and vice versa; a win for Armenia in 
terms of sharing in the economical development of the Caucasus 
oil fields; and a win for American oil companies who can 
develop those oil fields for the Azeris.
    This is a very difficult part of the world where people do 
not think in terms of winning; they only think in terms of one 
side winning and the other side losing. There have been some 
very pronounced developments, particularly politically, within 
Armenia very recently with the resignation of President Ter-
Petrosian and the elections that are about to occur.
    Congressman Wolf has been very concerned about the 
situation with Azeri refugees. And we are both concerned about 
reports that humanitarian aid intended for Azeri refugees has 
been improperly diverted by the government agency in Azerbaijan 
which is responsible for distributing that aid. Further, there 
are reports that the Azeri government does little to assist 
these persons.
    The Azeri refugees number pretty close to three quarters of 
a million or maybe more than three quarters of a million people 
living in very, very difficult circumstances.
    So I would ask if you would comment upon what Congress did 
to encourage the Minsk process in this fiscal year? What hope 
do you have for that process working and what can we do to 
assure that the humanitarian assistance that this country wants 
to provide to the people displaced by the conflict in Nagorno-
Karabakh actually gets to these people and helps them.
    Secretary Albright. Yes, thank you.
    Again, this is one of these disputes that we have been 
involved in trying to resolve through a number of methods. One 
is the Minsk process. Also, the United Nations has tried to 
support that process.
    What I think is very important to understand is that 
despite the fact that there have been these attempts, the peace 
efforts have generally made little progress. There have been 
four Security Council resolutions that have not been abided by.
    What has happened is that Nagorno-Karabakh, which is backed 
by Armenia, retains a lot of the military advantage; whereas 
Azerbaijan has the economic clout and leverage; thus they are 
at a stalemate to a great extent.
    What we have tried to do, given that we do believe that we 
have a strategic energy interest as well as an understanding of 
the importance of strategic this area, is to try to make the 
Minsk process work as well as provide aid to Armenia and 
Azerbaijan, though aid to Azerbaijan is limited, as you know, 
by legislation.
    We are starting a direct aid program to Nagorno-Karabakh. 
We are seeking a negotiated end to the conflict. And we are now 
pursuing a tripartheid approach, and Strobe Talbot is the co-
chair of the conference along with Russia and France.
    And that had been working to some extent in 1997.
    Mr. Porter. That may be part of the problem, Madame 
Secretary, I am sorry to say.
    Secretary Albright. The fact that there are three of them?
    Mr. Porter. No, the fact that Strobe Talbot is in charge.
    Secretary Albright. I would dispute that because I think 
that he is taking great interest in it and working very hard on 
it.
    The co-chairs presented a new peace proposal in May 1997. 
But given the intractability of the process, they proposed an 
interim agreement to liberate the occupied territories, allow 
the displaced persons to return and guarantee security to 
permit the sides to negotiate on status with no threat of 
resumed hostilities.
    Now, Armenia and Azerbaijan accepted this proposal as the 
basis for negotiations. But Nagorno-Karabakh rejected it 
because they were determined to trade land directly for a 
status amounting to independence.
    Now we have the added dimension of the change of government 
in Armenia. And the Minsk co-chairs have met in February to try 
to develop some new steps. They are going to be briefing the 
OSCE chairman and office this week, and then further 
negotiations await the inauguration of a new Armenian president 
and the establishment of a new government.
    It has been a process that was not exactly marching forward 
before and now has the added issue of the Armenian elections. 
That is where we are on that.
    In terms of assistance to Nagorno-Karabakh we have tried to 
work through a coordinators office to make sure that the 
assistance is properly distributed. Before giving approval to 
spend any of the funds, you all asked the coordinator in 
December, to send an assessment team to the region.
    In January, a USAID team went to Armenia and Azerbaijan, 
including the Nagorno-Karabakh region, and that report is still 
in draft. It concludes that there are no acute humanitarian 
crises in the region, but it does identify several humanitarian 
needs that we should address.
    The first assistance program will be an effort to treat 
tuberculosis, including preventative immunizations for children 
under five. And USAID has identified a non-governmental 
organization to implement that.
    When we get the final report, we will talk to you again 
about this. Moreover, I will look specifically into the Azeri 
displaced issue.
    Mr. Porter. Thank you, Madame Secretary.
    Mr. Callahan. Mr. Yates.
    Mr. Yates. Thank you, Mr. Chairman.
    Madame Secretary, I join my colleagues in welcoming you. I 
am in favor of the work that you have done and the 
Administration's foreign policy in general.

                                  Iraq

    I do have a question with respect to Iraq. I could agree 
with you as far as the bombing to enforce the ceasefire 
agreement with Iraq. But what happens after that? What are you 
going to do after the bombing? Provide foreign aid to Iraq? 
Then what happens--do you put a government in there? I do not 
believe you can install a democratic government in Iraq.
    Secretary Albright. Well, first of all, I think that we do 
hope that this diplomatic approach will work.
    Mr. Yates. I join you in that.
    Secretary Albright. What has been very interesting, as a 
former professor of international relations, is that now I am 
practicing what one always reads and writes about--to try to 
have diplomacy backed by the threat of the use of force; that 
that is sometimes where diplomacy can make its greatest 
contribution.
    I was very pleased that Secretary General Kofi Annan has 
made quite clear that the presence of American and British 
forces in the region added a lot of clout to his diplomacy. And 
the diplomacy that he carried out was very much guided by the 
red lines that the United States had put down.
    We hope very much that the agreement made will in fact bear 
fruit. But, as the President said and I have said, it has to be 
tested. We will be testing to make sure that Saddam Hussein 
does live up to allowing these inspectors to go forward and do 
their jobs unfettered, unconditioned and be able to go to all 
the sites.
    If we have to take military action, it will be for the 
purpose of diminishing his weapons of mass destruction threat 
and his threat to his neighbors. At the same time, as I 
responded to Congressman Porter, we are looking at ways to work 
with the opposition groups more effectively and at some of the 
other suggestions that he made.
    But we believe that a continued approach of containing him 
is the best way to go.
    Mr. Yates. That answer does not quite satisfy my curiosity. 
How are you going to enforce the agreement? I mean, all right, 
we have bombed Iraq and the teams are now looking for the 
chemical and biological weapons sites.
    Are you going to put any U.N. troops with the teams in Iraq 
to look for the weapons of mass destruction? Are you going to 
put occupation forces in there--in there, in Iraq? How are you 
going to do it?
    And suppose Suddam Hussein does not cooperate with you? 
What then?
    Secretary Albright. First of all, I am hoping that the 
diplomatic route will work, and the questions that you are 
asking are indeed hypothetical. I think that if he breaks the 
agreement now, there will be much greater support for our use 
of force than there was before, and therefore more support 
potentially in terms of pressing Saddam Hussein to allow the 
inspectors to go back in even after a bombing.
    I am not going to discuss any further what the operational 
aspects of the bombing would be. But basically, as I have said, 
the purpose of that would be to diminish his weapons of mass 
destruction threat.
    We have no intention of having an occupying force. We would 
continue to work through various sanctions regimes and the 
support of the international community which I am convinced 
would be much greater if Saddam Hussein now does break the 
agreement that he made.
    Clearly part of the issue here is how one gets him to live 
up to what his obligations are. We cannot do that alone. We 
need international support to do that.
    Mr. Yates. Well, I believe that is true. Have France, 
Russia and China indicated they would support you in the event 
of a breach now of Kofi Annan's agreement?
    Secretary Albright. They have in fact said that the 
atmosphere would be so different if he broke with the agreement 
that they--they have described it that way, that they--I do not 
want to commit them here, but they have made quite clear that 
they would view a breaking of this agreement as a completely 
different situation and that they would be supportive of us.
    Mr. Callahan. If the gentleman would yield just for a 
second.
    Madame Secretary, Saddam Hussein broke the agreement that 
the UN drafted when he surrendered after his invasion of 
Kuwait. He has already broken the agreement. So that is a point 
that I think they are laying a lot of blame on us.
    The UN drafted the agreement. Saddam Hussein signed it and 
agreed to it in his surrender policy. And then he totally 
ignored it. So we go and negotiate another one saying we hope 
he does not break this one.
    I am sorry, Mr. Yates, I just wanted to make that point.
    Mr. Yates. That is all right.
    Secretary Albright. I agree with you, Mr. Chairman.
    Mr. Yates. How do you reply to the chairman?
    Secretary Albright. I mean that Saddam did sign an 
agreement. And for seven years the international community has 
been able to carry out its task. It was only in the last few 
weeks that he totally impeded it. He has now signed an 
agreement that actually has his--as Chairman Butler has said--
``his thumbprint on it.''
    Saddam has been part of negotiating it. And I think it will 
be even clearer to the international community that he has 
broken his word. The United States, as I said in my statement 
and we have said repeatedly, is prepared to act if he does not 
follow through.
    Mr. Yates. Did not he break his word to the international 
community, as the Chairman indicated?
    Secretary Albright. He did, and that is why we took the 
action that we did and are prepared to continue to take that 
kind of action. We were not opposed to what Kofi Annan was 
trying to do based on some red lines that we provided.
    We now have another opportunity to give diplomacy a chance 
and have the inspectors test the agreement. And, as I said, if 
Saddam Hussein does not pass this test, we are prepared to use 
force again.
    It is my considered opinion that, were that to happen, the 
countries would be with us on supporting the use of force.
    Mr. Yates. Countries would be with us--does that include 
Egypt, for example?
    Secretary Albright. Well, we have talked to the Egyptians 
and they I think, and others all wanted to provide one more 
chance. In discussions that I have had in the last 48 hours, I 
think that they all agree that the severest consequences, which 
is what the Security Council resolution said, which in fact is 
code word for the use of force, would apply.
    Mr. Callahan. If I just might comment in following up on 
what Congressman Yates is saying.
    You know, we keep talking about perception here, Madame 
Secretary. And the agreement that was broken was a UN 
agreement. And if any agency or any group should have initiated 
this type of response and retaliatory efforts toward Iraq, it 
should have been the United Nations.
    Instead, the United States took the leadership because this 
was a threat not only to the Middle East, but to the entire 
world. Why in the world the United Nations did not initiate the 
threat of military activity before we had to force the issue is 
a mystery to me.
    Now you are coming and saying we must come forward with 
some arrearage monies to fulfill our obligation to the United 
Nations. But what General Secretary Annan did was to give the 
perception that the United States are warmongers and that the 
UN are the peacekeepers.
    But they were the ones that should have initiated the 
action. It was a threat to the world. Saddam Hussein does not 
have the missile capability of bombing the United States of 
America. We were trying to protect the members of the United 
Nations from the activity that no doubt would come if we allow 
him to continue to develop this.
    So while all heaps and praise are being placed upon the 
United Nations Secretary General, in my opinion he should have 
been the one initiating the original military threat to Iraq if 
he did not cease to break the agreement he signed with the 
United Nations.
    So maybe Secretary General Annan is going to get the Nobel 
Peace Prize for his efforts, but he was derelict in not 
initiating the threat to Iraq if indeed they would not permit 
the continued inspections as they agreed to do.
    So a lot of activity and a lot of focus is placed on his 
efforts to peacefully trust a man that you cannot trust. But at 
the same time, he was derelict, as was the United Nations, when 
they permitted this to take place without the threats other 
than some type of agreement that ultimately was negotiated.
    I do not want to get you embroiled in that international 
controversy, but once again, perception is there, Madame 
Secretary. The United Nations failed. The United States of 
America did not fail in foreign policy.
    We did exactly the right thing by utilizing our force 
capabilities, stationing them there and threatening him with 
military action if he did not comply with the UN agreements.
    So while the Secretary General is accepting all of this 
praise worldwide for his peacekeeping activities from keeping 
the warmongers in the United States from bombing innocent 
people, that is the wrong perception.
    The United Nations was wrong in not initiating this 
insistence that we threaten Saddam Hussein if indeed he 
continued to denounce the capability of further inspections 
that he agreed to.
    Mr. Packard.
    Mr. Packard. I'll try to be brief because I came in late. I 
was conducting a hearing of my own. We were, fortunately, able 
to conclude in time to be here. I'm sorry I missed your 
testimony, Madam Secretary.

                                ukraine

    I'd be interested to know--I'm aware that you will be going 
to the Ukraine shortly--tomorrow, I believe it is, is it not?
    Secretary Albright. Correct, yes.
    Mr. Packard. And we have been fighting this battle with the 
Ukrainian government and business over there, the joint 
ventures, and, in specific, on the Gala Radio issue. That has 
gotten worse, rather than better, in my judgment. And it will 
be your responsibility to make a decision as to whether the 
Ukraine has literally made progress in corruption and impeding 
of joint venturing in their country by U.S. business and 
industry.
    I would be interested in knowing how you plan to follow up 
on that. I've got a press release that shows that the Ukrainian 
government is actually now retaliating against the Gala Radio 
because they have used their right to arbitrate their disputes 
through the process that has been set up.
    And now that they have initiated arbitration proceedings, 
the government of the Ukraine is literally retaliating by 
investigating, on three separate fronts, their employees in the 
company, and really things have deteriorated and gotten worse 
rather than better. It's almost unconscionable for us to send 
$200 million to the Ukraine when they are literally impeding 
American joint venturing in their country.
    I'd be interested in a response and what you intend to do 
as you go visit there tomorrow.
    Secretary Albright. Thank you, Congressman. At some point, 
I would like to respond to what the Chairman said in his last 
remark, but I probably won't get another chance.
    Mr. Packard. You're welcome to do that before you answer--
--
    Secretary Albright. All right. Let me just say this. I 
think, Mr. Chairman, that we need to separate the United 
Nations per se from some of its member states. There clearly 
were members of the Security Council that did not want us to 
take action forcefully. The Secretary General, I believe, was 
doing the job that he is mandated to do--to try to help resolve 
some disputes.
    I also do not like the fact that the United States is being 
portrayed as the warmonger while others are taking credit for 
peace, when I believe that the United States is the greatest 
force for peace. And statements that the Secretary General made 
in which he said that his diplomacy was aided by the use of 
force I think are the appropriate statements to make.
    I believe that the United Nations per se is one part, and 
some of the member states with whom we disagree are another. I 
also think that it's very clear that this should not be an Iraq 
versus U.S. struggle but an Iraq versus the world struggle.
    And it is my considered opinion and belief that this is not 
a matter of trusting Saddam Hussein. It is testing him. And if 
he fails this test, then the international community will, once 
again, see his actions as causing the disruption of peace, and 
the U.S. actions as those supporting peace.
    Now, let me say that on the Ukrainian issue, we have been 
very concerned about the issues that you are raising in terms 
of investment disputes. Vice President Gore, Ambassador 
Sestanovich, Ambassador Morningstar, and others have raised 
these issues with Ukrainian officials, and I will do so on 
Friday when I am in Kiev.
    I am going to be meeting with the business community there. 
President Kuchma assured Vice President Gore that the Ukrainian 
government would act in a forthright manner to seek the 
resolution of these disputes, and we're determined to do 
everything to get these matters settled.
    We are concerned about the fact that while there has been 
some progress in macroeconomic stabilization and privatization, 
we are concerned about the fundamental pace of economic reforms 
in Ukraine. I will be raising those subjects there. Private 
investors do continue to face major hurdles. Some of the 
unresolved investment disputes are responsible for the 
government's inability to create a favorable climate.
    We very much have a chicken and egg problem--that they have 
serious economic problems because they are not able to attract 
investment. One of the reasons they're not is that they haven't 
been able to undertake all of their economic reforms. It would 
be premature for me to speculate on what decision I'm going to 
make on certification, but I clearly am going to raise these 
points.
    On the Gala Radio issue specifically, the U.S. Government 
has weighed in strongly on behalf of the company with all 
levels of the Ukrainian government, and I will do so again. 
Ambassador Pifer, on February 27th, expressed serious concern 
to the government about the actions against Gala that have 
occurred since the government of Ukraine was served notice of 
Mr. Lemur's filing under the Bilateral Investment Treaty in mid 
January. We will continue to press on that, and I can just 
assure you that I will personally do so.
    Mr. Packard. I hope that you will bring up the concern that 
we have that--if the Bilateral Investment Treaty is to resolve 
these kinds of disputes. If a company uses that process in an 
effort to resolve the dispute, only to find that the government 
retaliates against the country, then that process is of no use.
    And that would be very frustrating to any company, whether 
it be American or any other country that is investing in the 
Ukraine--to simply not be able to use the system in place to 
resolve disputes because it will invite retaliation. I would--
--
    Secretary Albright. We'll make that point.
    Mr. Packard. I would hope that you would--I'm not just 
looking at the one company. That's the most obvious example of 
the macro problem that exists there on corruption.
    Mr. Callahan. It might be a good idea, Madam Secretary, if 
you met once again, if your time permitted, with some of these 
American companies with complaints before you visited with the 
political leadership in the Ukraine.
    I think there have been some new developments since they 
last talked with you, and maybe you should be aware of them.
    Secretary Albright. We'll try that.
    Mr. Callahan. So if your schedule permits, it would be 
best.
    Mrs. Lowey.
    Mr. Packard. Thank you, Mr. Chairman.
    Mr. Callahan. Yes.
    Ms. Lowey. Thank you. Mr. Chairman, may I defer to my 
colleague, Ms. Kaptur, for just 10 minutes, since I was just 
informed I have to rush off. We're always pulled in different 
directions. But I did want to ask you some questions. And if I 
could defer to my colleague, and then I will return in just 
about 10 minutes. Is that okay?
     Mr. Callahan. That would be good.
    Mrs. Lowey. I thank you, Mr. Chairman.
    Mr. Callahan. Ms. Kaptur.
    Ms. Kaptur. Thank you, Mrs. Lowey.
    Welcome, Madam Secretary. We're so proud of the work that 
you're doing. I know that I'm watching living history, I guess, 
and it's pretty exciting.

                                 cyprus

    I wanted to ask three or four different questions. One 
concern in your statement on page 5 which you mentioned is 
Cyprus. And our country--the administration--has taken a really 
strong stand on the United Nations security resolutions 
concerning the Iraq situation. However, the Security Council 
also, over the years, has passed a number of resolutions 
concerning Cyprus. And there appears to be a less vigorous 
enforcement of those than perhaps others that have been passed.
    And so my question to you is: Since you mentioned Cyprus in 
the testimony, what is the administration doing to resolve that 
particular situation? When you were at the U.N., you affirmed 
the territorial integrity of Cyprus; in fact, quoted as saying 
the illegality of the Turkish army's occupation. I am very 
interested in what the administration intends to do to resolve 
this particular situation.
    Secretary Albright. Well, this has been, I think, one of 
the longest-running and most troublesome disputes that we have 
had to deal with, and that has been on the United Nations 
docket. We place a very high priority on resolving the Cyprus 
dispute, and we are actively engaged from the President on down 
on this.
    We have assembled a very strong negotiating team led by 
Ambassadors Richard Holbrooke and Tom Miller. What we are doing 
is supporting U.N. efforts to resolve the Cyprus dispute on the 
basis of the bizonal/bicommunal federation through direct talks 
between the Greek and Turkish Cypriot leaders.
    We have been working very hard to create a positive climate 
in which the U.N. settlement talks can resume. I took part in 
this when I was U.N. Ambassador, and I have tried to be 
involved in it at this stage. We have been somewhat delayed for 
the moment because of the elections in Cyprus, which are now 
over. With President Clerides reelected, I think that we are 
now reengaging very actively to get them to talk to each other.
    Part of the issue, as you know, has to do with Cypriot 
accession to the EU and the various problems in trying to 
assemble a delegation, and trying to get those two processes 
working together. But I can just assure you that it is high on 
our agenda. Now that the elections there are over, I think we 
will be able to reengage more actively.
    Ms. Kaptur. Thank you. We would hope to see that as soon as 
possible.
    Secretary Albright. Thank you.

                                demining

    Ms. Kaptur. Your budget includes now in southeast Asia the 
demining issue. Your budget shows a 700 percent increase over 
the last two years for humanitarian demining. One of my 
questions is to what extent Laos and Cambodia will benefit this 
year and succeeding years from this program. Will it be an 
increase in those particular countries compared to past years?
    Secretary Albright. I have to get you the specific numbers 
on that. But generally our approach here is to add a great deal 
to demining. We have a demining project going. Ambassador 
Endrfirth is heading that up. It is our major effort, to 
dealing with the horror of land mines. And we will be 
elaborating more with you what the various parts of that 
program involve. I'll have to get the numbers Laos and Cambodia 
for you.

                                ukraine

    Ms. Kaptur. We'd be very interested in that.
    I am very interested in your upcoming trip to Ukraine. Our 
family traces its roots to the western part of that country. Of 
course, it has been five different nations, and at one point 
the area in which our family came from was occupied, et cetera, 
by other nations.
    But I guess by traveling back several times long before 
independence, and now after independence, I have a growing 
concern about our ability at the village level. I know how it 
is to travel as a Congresswoman. You're insulated from so much. 
It's a real hindrance. It's a handicap in traveling. I can only 
imagine what it must be as the Secretary of State in traveling 
for the United States in many of these countries.
    But I am more and more concerned about the ability of 
people at the village level to feed themselves and to sustain 
life because of the complete breakdown of agriculture in the 
old system. Production in Ukraine has gone down by about 85 
percent now compared to prior years in the breadbasket.
    This will sound so simple. We talk about these big ideas 
and big projects, but I think one of the most important aspects 
of stability in Ukraine right now is to get seed into the hands 
of those who own private plots, not with 150 horsepower 
tractors to till up the land, but little rototillers, anything, 
to let people at the village level feed themselves over this 
most difficult transition. It isn't very romantic. It isn't 
very exciting. You don't make the front page by doing it.
    However, what I have found in my recent travels is that 
people are literally crying at the village level for the 
ability to feed themselves. It has become harder, even though, 
our agricultural efforts in that country are very well meaning, 
I don't think they're having the kind of impact that they need 
to have at the most local of levels.
    So I would just encourage you in your capacity, if you 
could, to meet perhaps with some of our agricultural 
specialists over there while you're there to think about a 
project this spring using some of our money from this country 
and other nations that are trying to help, working perhaps 
through the churches and the philanthropic groups that have a 
presence at the local level to get good seed, which we can 
absolutely do, with some minimal amounts of fertilizer, into 
the hands of the private plot owners. We do not even have to 
deal with these largely privatized collective farms yet because 
it is going to take us a while to turn those around. But just 
making this available, so people at least can have potatoes and 
perhaps some tomatoes and things to feed themselves over this 
period of time.
    The other point I wanted to raise--I also serve on 
Agriculture Appropriations Subcommittee and I talked with 
former Congresswoman Jill Long Thompson, now Under Secretary of 
Agriculture, yesterday. There is going to be a large conference 
of women in agriculture and rural development here in our 
nation's capital in June. I would hope that as you meet with 
people in Ukraine you might suggest that some of the women 
leaders of that country who are involved in agriculture might 
send a delegation. I know about the Gore talks, and some of the 
people have been appointed to these international bodies.
    I just wonder how many women are involved since they're the 
ones that are holding things together at the village level. 
They're trying to feed their families, take care of sick 
children or incapacitated husbands, or just being heads of 
families themselves. And I just think if we could reach out 
more to the women farmers of Ukraine, since they're the ones 
working these private plots, we could do an enormous amount to 
hold things together while we try to assist in fixing the rest 
of that system.
    In that regard, I know one of Mrs. Clinton's priorities is 
ending the slave trade and prostitution in all of those states, 
including Ukraine. And many of these are village women have 
been taken in on these schemes. The very women I'm talking 
about would be much better back home in weaving co-ops, and 
planting on these private plots to support their families.
    I would hope that you could be as supportive as possible to 
Mrs. Clinton's efforts, and hopefully our efforts on this 
subcommittee, to try to stem that tide and to give these women 
better alternatives.
    I think it's very hard sometimes to communicate between 
Kiev and the villages. But Ukraine is the breadbasket, and, in 
my judgment, her future is in agriculture. We have to help her 
get there as soon as possible, starting from the private plot 
level on up. I think this is worth mentioning.
    My own observation in meeting with many well-meaning people 
from the western world over there is that our presence is too 
fragmented. It is too short term. In other words, you send 
somebody in; they're out in six months. We have a lot of very 
well-meaning Peace Corps workers--God bless them--but they 
don't have the experience that is needed in agronomy in the 
kind of concentrated effort to start at the grass roots level.
    In my humble opinion, too many of our people end up in 
Kiev. They make $325 a day as consultants, and that's great, 
but the future of Ukraine has to be built in the countryside. 
So I would encourage you to advocate such a position.
    Secretary Albright. Thank you very much for that statement 
because in my previous life, before becoming Secretary of 
State, I spent a lot of time in Ukraine actually at the village 
level doing a lot of surveys. I have seen what you're talking 
about. And, in fact, I went to one place called Ushagarod that 
had been in five different countries at different times. So I 
know of what you speak.
    I think you've made some very, very important suggestions, 
and Ambassador Morningstar is going to be with me, who does our 
aid programs. And I will direct that we spend much more time 
talking about some of these village issues, which I think 
you're absolutely right about.
    I think the great sadness of Ukraine as you drive through 
is that you do actually see this black earth, and you know what 
it could produce. And I think I will take up everything that 
you've said, including the issue about the women leaders.
    Ms. Kaptur. Thank you very much, Madam Secretary.
    Thank you, Mr. Chairman.
    Mr. Callahan. Mr. Knollenberg.
    Mr. Knollenberg. Mr. Chairman, thank you.
    Madam Secretary, welcome. In going along with my 
colleagues, I, too, want to say that I'm impressed by the way 
that you handle yourself, speaking straightforward, and your 
grace and your grit. You've got both and you need both in that 
job.

                         blackhawk helicopters

    A very quick question--I have a couple--it has to do with 
Colombia. The Chairman alluded to this comment on the 
helicopters. As you know, the FY 1998 Foreign Operations 
Appropriations Report included $36 million for three Blackhawk 
helicopters, for the Colombian National Police, because they 
need them at that altitude. It is one of the few helicopters, I 
think, that can fly at that altitude.
    Congress directed this action because of the dramatic 
influx of heroin, etcetera. What is the status of this 
procurement? Are you continuing to hold funds because you are 
thinking about reprogramming them for some other expenditure? 
Or what is the status of that?
    Secretary Albright. Yes. This is a very important issue, 
and it has to do with the difficulties of Bolivia and our 
narcotics budget. First of all, we're reviewing very carefully 
the report language and the technical issues relating to the 
helicopters.
    We understand the need to conduct these kinds of missions 
and the altitude, need to fly at a higher but we've developed a 
more cost effective way to deal with this. Over the weekend I 
was down at South Com, where they handle a lot of the drug 
aspects of it. They do not believe that these helicopters are 
essential to the program, nor does General Barry McCaffrey. And 
the cost of procuring the Blackhawks, and the much greater 
expense of operating them, would seriously reduce our budget to 
support operations against cocoa and opium in Columbia.
    To take $36 million out of our total budget would hit the 
other programs terribly hard. That is, in Bolivia and Peru. 
While we do think that there is obviously the need for greater 
attention to Columbia, the Blackhawk helicopters are not the 
best use our funds, and so we are studying this.

                            nagorno-karabakh

    Mr. Knollenberg. Thank you. Let me also associate myself 
with the comments of Mr. Porter in regard to Nagorno-Karabakh. 
As you know, he and I authored the language that did designate 
$12.5 million in humanitarian aid that would be used 
specifically for Nagorno-Karabakh. And you had said--if I am 
paraphrasing you wrongly, you can tell me--but that you will 
work to ensure that the Nagorno-Karabakh assistance is properly 
delivered.
    My question is: delivered to whom? And will it be done in 
accordance with the intent of Congress? Madam Secretary, this 
is March. This was done last fall. And to my knowledge, I don't 
think there is a single program that has been placed in effect 
by the administration. We want to work with you on this. But 
one of the things you mentioned, too, was the needs assessment 
that took place recently, and it has yet to be finalized.
    According to information that I have, there is some interim 
reporting that has taken place at least that indicates there 
are some very, very major concerns that the people of Nagorno-
Karabakh have. Shelter is a vital need, refugee housing 
obviously, there are serious sanitary problems, there are 
infrastructure problems, there are problems with hospitals and 
medicines.
    And I also believe that the medicines are housed in a 
single building that makes it very difficult to transport 
throughout the region. Stepanakert happens to be that 
particular city, and the warehouse is in that city. So a lot of 
this isn't getting out. They do need help. And my question is--
and we want to work with you on this--but can you respond with 
what do you intend to do, and when is the first money going to 
be distributed in Nagorno-Karabakh?
    Secretary Albright. Well, I would expect that this NGO that 
is going to be handling the issue of the tuberculosis would be 
giving children in the region their TB shots next month. Based 
on the final assessment of this team, we will be submitting 
additional projects to you very shortly for approval.
    I think that based on all of your and Congressman Porter's 
question, I will make an additional effort to see what is 
exactly going on.
    Mr. Knollenberg. We'd appreciate that. We want to work with 
you on it. We know that there are significant problems, and 
some of those obviously you're more aware of than I. But we 
both have traveled there in the last year, and we feel strongly 
about movement in the direction of seeing something happen on 
the basis of what was in the report language.
    Thank you, Madam Secretary.
    Mr. Callahan. Mr. Obey.
    Mr. Obey. Mr. Chairman, before I ask my two questions, I'd 
simply like to note we have our friend James Bond in the room, 
who used to be the counsel for the Senate Subcommittee. 
[Laughter.]
    I see Jim Bond in the room, but I don't see Sean Connery. 
[Laughter.]
    Just kidding, Jim.

                              middle east

    Madam Secretary, let me ask about the Middle East. As you 
know, I strongly believe in pushing the peace process forward. 
But as you also know, there are a good many members of the 
American Jewish community who are concerned about that process. 
I'd like to ask you, how do you assess that peace process at 
this point?
    And what would you say to those in the American Jewish 
community who are concerned about what they see as insufficient 
action by the Palestinians and the PLO to respond to Israel's 
security concerns, who think that Israel's security may be put 
at risk by further Israeli concessions?
    Why is it in the United States' interest as well as 
Israel's interest for this peace process to continue to move 
forward, and for us to continue to deal directly with the PLO? 
I think it's important that they understand why, and I think 
it's important that this committee understand why.
    Secretary Albright. Let me say that, clearly, 1997 was not 
a good year for the peace process. We had been pressing all 
along to try to get two things accomplished.
    If I might just take a minute to put this into context, the 
Oslo agreement set up a process to have some interim agreements 
take place before the final status talks would begin. The 
purpose of those agreements was really so that the two parties 
would work together, would learn to have confidence in each 
other, and be able to develop some not only confidence but 
imagination to go to the permanent status issues.
    What happened was that, in fact, as the process began to 
move forward with the Hebron Agreement, and some of the 
subsequent acts, rather than working to build confidence, the 
interim process began somehow to erode it. And yet there are 
various parts of it that need to continue to take place in 
order to move to final status.
    There are questions about an airport in Gaza, a Gaza 
industrial state, a seaport, trying to get further 
redeployments of territory from the Israelis to the 
Palestinians. Those things have all been held up because of 
this lack of trust and ability of the leaders to deal with each 
other on some very serious problems.
    We do think--and I gave a speech last year that indicated 
that perhaps the way to move forward now was to marry the 
interim process to the final status process in order to begin 
to eliminate these frictions in order to be able to get to the 
permanent status.
    We have been working on trying to do two very specific 
acts. There is no question that security is a sine qua non, 
that it is essential for the Palestinians to take all of the 
steps necessary to make sure that there is not a security 
issue. You cannot negotiate in an atmosphere where there is 
concern as to whether security is being taken care of. And we 
have insisted that the Palestinians make a 100 percent effort 
on the security issues.
    We have pressed Arafat repeatedly on this, and we're going 
to continue to do that. We also have talked about the 
importance of a timeout in terms of issues by either side where 
there is a certain unilateral act that, in fact, kind of 
corrodes the atmosphere. We have been trying to make sure that 
those kinds of steps are not taken, and we are working to get 
the parties to move forward on the further redeployment 
schedule.
    We've had a number of meetings with both Prime Minister 
Netanyahu and Chairman Arafat. Dennis Ross has been meeting 
with people at other levels, and we are going to do everything 
we can now to reinvigorate the peace process.
    We deal with the PLO because it is the authoritative body 
that is, in fact, moving things forward and has made some 
progress. And we believe that Chairman Arafat is in a position 
to exert the effort on security, as well as be able to make the 
decisions necessary.
    What has to happen, Mr. Chairman, is that they have to do a 
great deal, but we cannot make the hard decisions for the 
leaders. They have to make the hard decisions, in terms of what 
the security issues are and the further redeployment, and then 
move to final status. That is what we're going to be trying to 
do is to reinvigorate it.
    And I sure hope that 1998 is better than 1997, because our 
national interest is based on the fact that we need to get this 
peace process moving.

                                  nato

    Mr. Obey. Thank you. Let me just not so much ask a question 
but simply raise, again, my concern about one issue with which 
I profoundly disagree with the administration, and that is 
expansion of NATO.
    As you know, I have minimum high regard for that decision. 
And I simply noted this morning in the paper a comment by Alton 
Frey, and I'd simply like to quote some of the points he made 
in that article this morning. First of all, he said, ``There is 
no near-term threat to the three candidates' security''--the 
three countries who have been invited to join.
    Second, he said, ``Modernizing their economies will do far 
more to shore up their democratic institututions than symbolic 
association with NATO.''
    Thirdly, he said, ``Meeting the military requirements of 
NATO membership will divert resources from the urgent economic 
transformations needed for admission to the European Union.''
    Fourthly, he said, ``Phasing them into NATO after they join 
the European Union will greatly strengthen their economic 
capacity to meet the substantial procurement, training, and 
operational costs alliance membership imposes.''
    And lastly, he said, ``Their active participation in NATO's 
Partnership for Peace already affords them the full range of 
effective military cooperation for which they are prepared.''
    And then three paragraphs later he asserted this, he said, 
``Without rejecting the three pending candidates, the Senate 
can stipulate that final admission to NATO should await entry 
into the European Union. Indeed, by linking the two processes, 
the Senate would be applying useful leverage to encourage the 
European Union to expedite accession negotiations with the 
three countries. That would, in fact, serve Poland, Hungary, 
and the Czech Republic better than prematory admission to 
NATO.''
    I agree with that, and I note that Senators Moynihan and 
Warner are evidently offering an amendment in the Senate that 
would provide exactly that. And while I would not presume to 
lobby the Senate to adopt the amendment, I would certainly 
state that I think that's a good idea.
    And I, again, would simply say that I am concerned. The 
defining moment in my life, in terms of my view of 
international affairs was watching what happened in this 
country when we went through a ``who lost China'' debate, and 
McCarthyism ran rampant in this country and destroyed decent 
dialogue between all kinds of people in this country for a good 
almost a decade.
    I am afraid that the way in which we have approached the 
expansion of NATO eastward could, in fact, down the line 
contribute to a similar debate within Russia with virulent 
nationalist forces directing the same kind of vicious attacks 
against those elements in Russia most friendly to us as were 
directed against very responsible parties in the State 
Department years ago when we had the debate about China.
    And so it just seems to me that it is a mistake, and that, 
in fact, we might be stimulating the very threat that we're 
trying to prevent by extending NATO membership. And I guess I 
would just ask you, since you have a right to reply, what would 
be wrong with requiring the action that is contemplated in the 
Moynihan amendment before they actually join.
    Secretary Albright. Well, first of all, let me say that all 
of the arguments that you read I clearly disagree with. I think 
that while there is no specific army standing on the borders of 
those countries at the moment, I do think that what we're 
trying to do is widen the area in which there would not be 
instability and a military threat.
    When we don't have the best way to prepare for not having a 
military threat is to try to deal with it at a time of peace. 
We already know that the major problem in Central and Eastern 
Europe are problems among the countries, and they have already 
dealt with a whole series of their border disputes, just on the 
hope of getting into NATO, and it has been a very positive 
action.
    In terms of their economies, I think that they would have 
to provide for their military defense anyway, and they find 
this is actually a better way, even as we are pressing them to 
fulfill their budgetary obligations toward an expansion of 
NATO.
    Now, on the specific issue of the EU, I think it would be 
great if these countries got into the EU, but we are not a part 
of the EU and we cannot force their pace. We also know already 
that there are certain questions about some of the products 
that the new countries are strong in, that are creating 
problems within the EU. So it is very hard to tie one process 
that we think is moving at the appropriate pace, in which we do 
have an influence, to one that we have no influence on, while I 
do believe that ultimately it would be very good for these 
countries to get into the EU.
    On the question of Russia, let me just say that I deal with 
this on a daily basis. While there are Russians who are not 
happy about NATO expansion, it is not preventing them from 
having a positive relationship with us on a whole series of 
issues, and they are, through the NATO-Russia Founding Act, 
very much more drawn into discussions that they were not a part 
of before.
    I think that the best way to strengthen the forces of 
reform in Russia is through our various assistance programs 
that we are going to be talking about, or have talked about, 
understanding their status in the world as a powerful, 
diplomatic force, and they did play, I think, a positive role 
on the Iraq issue. I think, generally, supporting the forces of 
reform, not giving in to the forces of looking inward and 
backward is the best policy for the United States.
    Mr. Callahan. Mr. Kingston.
    Mr. Obey. Yes. I would just say I think you're right. I 
mean, I hope you're right on the latter.
    Secretary Albright. My first answer was good. [Laughter.]
    Mr. Obey. No, I was--I think I misspoke. But let me simply 
say that I do really find it ironic that the Europeans ought to 
have at least as much interest as we do in the welfare of 
Central Europe. The Western Europeans ought to have at least as 
much interest in their welfare as we do.
    I do find it interesting that for a variety of very self-
seeking reasons, some of which relate to agriculture, that the 
Western Europeans are saying to the United States, ``Oh, go 
ahead. You let them into NATO, and you spend the money that you 
have to spend to help effectuate that process.'' But no, we 
won't let them into the economic union, which, after all, ought 
to be, in my view, the very first step that is taken if we're 
to actually integrate those countries into our----
    Mr. Callahan. Mr. Obey, if I might interrupt, your 20 
minutes is up. [Laughter.]
    We have some people who have been waiting all morning, and 
I think we ought to make certain they have the opportunity.
    Mr. Kingston.

                             latin america

    Mr. Kingston. Thank you, Mr. Secretary--excuse me, Mr. 
Chairman, Madam Secretary. Switching hemispheres.
    The congressional presentation refers to the importance of 
human rights in several places in the international narcotics 
section for Latin America, yet in Ecuador, according to your 
U.S. Department of State January 30, 1998, report, it just 
says, ``In Ecuador, people are subject to arbitrary arrests. 
Once incarcerated, they may wait years before being convicted 
or acquitted, unless they pay bribes. More than half the 
prisoners in jail have not been formally sentenced.''
    Then, a New York Times article from August 22, 1997, goes 
into more of that. It says that human rights groups and 
government investigations have scrutinized the system which 
finds that judges demand payoffs to move a case toward trial. 
Defendants found not guilty remain in jail, are tortured. One 
statistic is that some 60 percent of Ecuador's inmates are 
eventually found not guilty. Of 2,700 inmates, 80 percent who 
have not been sentenced have an average waiting period of 400 
days before they come to trial.
    Should an American citizen find himself, unfortunately, in 
this situation, what sort of support can he count on from the 
State Department?
    Secretary Albright. The support they would get is obviously 
from our embassies and consular services. We work very hard to 
try to give all the support we can to Americans that find 
themselves in a legal situation abroad.
    Mr. Kingston. To get into that a little bit, if an American 
in that situation is not satisfied that the embassy is looking 
out for his interest, or believes that signals from Washington 
prevent the embassy from looking at his interest, is there a 
way to redress it?
    Secretary Albright. Well, I think that part of the issue 
here is we know how to handle our people. But the problem is 
that in each country there are sovereign laws, and they apply 
them to people regardless of their nationality, and many times 
they can be inefficient or corrupt.
    Now, our role is to ensure that the rights are observed. 
While we can't get every American citizen released, we do our 
best to try to figure out how to move the process forward. We 
are prohibited by law from acting as legal counsel, but we can 
be present in the court to monitor and report on legal 
proceedings, and we visit incarcerated citizens, which we have, 
in fact, done. We do this quarterly in Ecuador as you 
mentioned, and once a month in Peru. We can provide dietary 
supplements and various other items.
    But it clearly is a difficult situation when we are 
operating within the laws of another country, but we do the 
best we can to assist.
    Mr. Kingston. In some conversations with officials from 
Ecuador, it has been suggested to us that--I mean, in my 
office--that sometimes the United States really pushes for 
convictions and arrests, and in doing so can sometimes put that 
in front of human rights or due process. How would you respond 
to that?
    Secretary Albright. I would respond that I do not think 
that is true. I think that what we try to ensure is that the 
rights of Americans arrested under foreign law are fully 
observed, and that they are treated humanely and according to 
international standards, and any violations we protest.
    You're saying that we push for convictions?
    Mr. Kingston. Excuse me?
    Secretary Albright. That the U.S. pushes for convictions?
    Mr. Kingston. Well, there has been some suggestion that 
sometimes, if it's an international drug ring, that it might be 
easier--if United States doesn't have a good enough case 
against the citizen, that it might be okay, not necessarily by 
the State Department, to let somebody sit in jail as a pawn in 
a foreign country to maybe get them to testify against somebody 
else in another country as part of an international drug ring.
    Have you ever heard of that? Does that--I mean, that 
doesn't sound like the good old U.S. of A. to me, and I would 
expect that you would react strongly in agreement.
    Secretary Albright. Well, I have not heard of that, but I 
will look into that.
    Mr. Kingston. We have written--our office--and 13 other 
members of Congress have written a letter to your office on 
December 2nd, which now is three months, regarding one case. 
And I would really hope that you could get us a response to 
that letter as soon as possible, because, you know, it's been 
three months.

                                  iraq

    Let me switch to Iraq. And forgive me for not knowing the 
exact fact, but I understand that there was an increase in the 
allowable oil sales to Iraq very recently, prior to the 
agreement. Are you familiar with what I'm talking about?
    Secretary Albright. Yes.
    Mr. Kingston. How much was that?
    Secretary Albright. I think it's very important that people 
really understand what this is all about. As I stated earlier, 
there are those who believe that the people of Iraq are 
suffering greatly as a result of the sanctions. We have never 
had any argument with the people of Iraq; we have an argument 
with their leadership.
    The various sanctions have never prohibited humanitarian 
assistance going into Iraq. The problem has been that the Iraqi 
government says that it does not have enough money in order to 
purchase the food and medicines necessary.
    In order not to allow Saddam Hussein to use his people as 
pawns in front of the international community, saying that we 
are starving them, we have for some time been pressing a regime 
that would make it possible for him to sell oil in order to buy 
food and medicines, which then are distributed in a very 
specific way to the people that need it and not to his cronies.
    It's a way, basically, for the United States and other 
countries to show the fact that we have no argument with the 
Iraqi people. What has happened is that recently that Oil for 
Food Program has been increased to--what is it? $4 billion I 
think is the figure.
    Mr. Kingston. I think it was $8 billion.
    Secretary Albright. I think it was $4 billion.
    Mr. Kingston. I'm not certain.
    Secretary Albright. Basically, the thing that needs to be 
made absolutely clear about this is that this in no way goes 
into Saddam Hussein's hands. It is a way, actually, to get 
around him so that the ordinary people of Iraq are benefited.
    Mr. Kingston. Okay. Also, in an exchange with the Chairman 
and Mr. Yates----
    Mr. Knollenberg [presiding]. Mr. Kingston, if I could, can 
you close in about one minute? We have someone to get to, and 
we're trying to exercise getting----
    Mr. Kingston. Before we vote?
    Mr. Knollenberg [continuing]. Everyone through before we 
all have to go. Yes.
    Mr. Kingston. Okay. Well, I'll tell you what. Let me go 
ahead and close now. We're having a second round, correct? 
Correct?
    Mr. Knollenberg. I'm not at liberty to say. I guess as long 
as the Secretary can--it would be a very quick round, yes.
    Mr. Kingston. If everybody was held to five minutes, we 
would--but I----
    Mr. Knollenberg. Right.
    Mr. Kingston. I notice time gets shorter on the further 
edge of the platform up here. I'm going to yield for right now.
    Mr. Knollenberg. The Chair recognizes Mr. Frelinghuysen.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.

                      supplemental budget request

    Madam Secretary, good morning. We are figuratively reaching 
high noon, and literally as well. Thank you for the work you do 
and for using your bully pulpit around the country to speak on 
behalf of American interests.
    I'd like to return off the global tour for a minute back to 
the President's supplemental budget request. Congress is about 
to take up the President's request for a supplemental. I'd like 
to review it very briefly. We've got $18 billion for IMF. We've 
got money that is needed for U.N. arrears of about $921 
million. We've got up to--and this is--I anticipate it's going 
to be coming from the White House--$1.3 billion for the 
existing deployment in the Persian Gulf. We've got another $600 
million to cover the Bosnia mission from July through 
September. And I understand we have somewhere in the 
neighborhood of $380 million for recent storm damage.
    Since the hour is late, I'd like to give you your last best 
shot at why it's important that we get this supplemental 
through, because if you match the supplemental--and I know that 
you say that the IMF money is not out of pocket--and you 
compare it to our foreign aid budget, to the American taxpayer 
it is their money regardless of whether it's taken from the 
treasury for the IMF or whether it's supplemental. I just want 
to get your last best shot on why we need to have these 
critical dollars.
    Secretary Albright. Well, first of all----
    Mr. Frelinghuysen. And if these dollar figures are 
accurate.
    Secretary Albright. First of all, let me say that this 
supplemental is composed of the items that you have mentioned, 
and they are all very important to us. The IMF issue, I think, 
is one where it is very clear that the Asian financial crisis 
is a deep one and one that could, in effect, have an effect on 
the American economy. The IMF, we believe, is the best vehicle 
for trying to get these countries to reform. They underpin the 
whole support for an orderly financial system that is critical 
to our own financial system.
    On the international organization aspect, I think it is 
essential that the United States be a member in good standing 
in an international organization that we founded, and that 
normally, if you have large bills to pay, you pay them. As a 
result of having held back last year on the U.N. arrears, it 
has cost us about $100 million a year, because one of the 
things we were trying to do was to renegotiate our assessment 
rate.
    And because we missed the deadline on that, we missed 
saving $100 million this year. Hopefully we can get this 
supplemental passed. Otherwise, we don't get a chance until the 
year 2000.
    On Bosnia, I really do think that we have to be able to 
deal with success. I think that we've done very well in Bosnia. 
As Senator Dole said, we're in the third quarter and we're 
ahead, and it seems kind of crazy to walk off the field. 
Therefore, what we need for Bosnia is a way to have the 
military force continue there in a way to provide security so 
that the civilian implementation can go forward.
    On Iraq, I believe that the presence of our forces there 
has given us the possibility of a diplomatic solution. If we 
cannot have a diplomatic solution, then it is in our national 
security interest to use force in order to diminish the threat 
of weapons of mass destruction and our security in the region.
    Mr. Frelinghuysen. Thank you, Madam Secretary. I think 
we've got a deadline. Thank you for your time.
    Secretary Albright. Thank you.
    Mr. Knollenberg. The Chair sitting in calls for a temporary 
recess until the Chairman returns. We do have a vote on, as you 
all know. We'll proceed with that. We'll take a recess for a 
few moments. When the Chair returns, hopefully we can open up, 
so that if anybody does have a question--I think Mrs. Lowey is 
returning--then we'll have the continuation of questioning. 
Until that time, thank you.
    [Recess.]
    Mr. Callahan [presiding]. I am sorry, Madam Secretary, but 
congressional activity sometimes is necessary. I'm sure that 
some committees will be interrupted when we're trying to 
convince the Congress to vote for the appropriation bill for 
the Department of State and for foreign affairs. So I know you 
understand.
    Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman. And I do appreciate 
the Secretary's patience and staying with us, and I'll be 
brief.

                             nato expansion

    I did mention to the Secretary that I, too, had some 
questions about NATO expansion, and I won't discuss them now. 
But I think it would be very important, Mr. Chairman, if we can 
perhaps have an informal discussion--it doesn't have to be a 
formal hearing--to satisfy many of our questions, such as the 
amendment that's being brought up in the Senate and others as 
well.

                              middle east

    So I'll move on, back to the area of the Middle East, 
because I do want to have a discussion with you on some of 
those issues.
    I know also that our leader, Mr. Obey, had an in-depth 
discussion on some of the areas with regard to the Middle East. 
I personally wanted to express my appreciation to you. I think 
this administration, your leadership, and that of your 
Department, has been absolutely persistent and determined in 
moving the process forward. And I know that because of the 
complexities of the issue, and the long-standing difficulties 
in the region, it has been very, very difficult. But most of us 
really appreciate your efforts, and I do want to personally 
express that to you.
    I am concerned, however, about the discussions that the 
administration is going to publicly issue a plan, issue an 
ultimatum. I have always felt--and I know in our discussions 
you have expressed your views--that the role of this 
administration is to facilitate, to bring the parties together. 
Behind the scenes, maybe, it is appropriate to push the parties 
together in discussing various options. But in the final 
analysis, the parties have to talk to each other, and have to 
agree that they are ready to move the process forward. And in 
many of your statements, you have talked about the United 
States as a facilitator.
    I just feel strongly that public pressure sets the process 
back. And I am not convinced that it is productive, and we all 
are committed to moving the peace process forward. Could you 
comment?
    Secretary Albright. Yes. First of all, I did make the 
statement that 1997 has been a bad year for the peace process. 
Unfortunately, when you're standing still on the peace process, 
in many ways you are going backwards, because it's something 
that needs to have momentum to it. And we are very concerned 
about the fact that there is not enough traction at the moment.
    There is no such thing as an American plan. We have some 
ideas that we have been proposing, and I have said over and 
over again that it is essential for the leaders to make the 
hard decisions. They have not been making them, and it has been 
a source of disappointment to all of us, because we can have 
nine million ideas of various levels and of various complexity, 
but ultimately the leaders themselves have to make the 
decisions.
    The pressure is not by us. The pressure is because the 
people of Israel and the Palestinians want peace. And I think 
what's essential is for the leaders to figure that out and make 
the hard decisions, and we are going to continue to press in 
the best possible way we can.
    Mrs. Lowey. Well, I thank you. And I just wanted to 
emphasize again that moving the process forward, bringing the 
parties together, pressing the parties to talk and take action, 
as you've said in the past, is the best way to proceed. I am 
just very concerned about perception or reality, that the 
United States is exerting pressure publicly because, in my 
judgment, this could lead to a real stalemate. And we all want 
to see the process move forward.
    You have also said in the past that the peace process will 
not succeed without security cooperation between the Israelis 
and the Palestinians, and I agree. There are reports that there 
have been some violations and that the Palestinians have been 
not living up to their commitments. Could you discuss with us 
your current assessment of security cooperation in that region?
    Secretary Albright. I think that, clearly, security 
cooperation is essential, and we have been pressing Chairman 
Arafat to have 100 percent effort in terms of cooperation, 
generally with what needs to be done to make sure that there is 
not violence, and that every effort is made.
    I believe that there has been progress. More can be done, 
but we are constantly in touch with Chairman Arafat and his 
people pressing for even more progress in this area, and want 
to make sure that he does continue to show 100 percent effort 
on it.
    Mrs. Lowey. The Chairman, I know, has met with Israeli 
Finance Minister Neeman, who came with a proposal. He discussed 
it with this administration and many of us here on the 
committee. Following up on the Prime Minister's speech to the 
Congress talking about cutting back and weaning Israel from 
economic assistance, Finance Minister Neeman talked about 
bolstering the security assistance while cutting back on 
economic assistance.
    Now, certainly we've seen--and our Chairman mentioned 
before that in this latest crisis, as the Chairman said so 
well, the administration didn't have to call Israel twice. They 
have been, certainly, our allies in the region. Could you 
discuss with us some reaction of the administration to the 
Neeman proposal?
    Secretary Albright. Yes. We very much welcome Israel's 
initiative for the Neeman proposal, and we have launched a 
dialogue. We are looking forward to working with them on this 
and trying to sort out exactly how to make this work. And we 
also would very much like to see Egypt take some kind of a 
similar step that would allow us to restructure our economic 
program.
    And we're going to consult very closely with you all in 
terms of how to work the Israeli aspect of it out. We want to 
maintain our unshakable commitment to Israel's security, and 
also maintain our strong support for Egypt. But we think that 
this proposal, if properly carried out, will allow us to free 
up funding for other regional priorities. We do want to spend a 
lot of time working this through with you. And, as I said, we 
welcome the initiative.
    Ms. Lowey. This administration has consistently reiterated 
its commitment to uphold Israel's qualitative military edge, 
and we certainly understand the complexities of that region and 
how important that is. And this commitment was most recently 
underscored in meetings last November between Defense Secretary 
Cohen and Israeli Defense Minister Mordechai.
    There has been concern that a flow of new technologies to 
the region, even sometimes before Israel has been the recipient 
of some of these same systems, has developed problems in 
maintaining the qualitative edge. Could you comment on your 
judgment? Do you feel that Israel's qualitative edge can be 
maintained while too often shipments are going to other 
adversaries in the region? And we know that Israel's security 
and Israel's strength gives it the option of taking risks for 
peace. Could you comment?
    Secretary Albright. Well, let me say that, as I've said, we 
are committed to having Israel have a qualitative edge. We work 
with them very closely. It is my belief that they have it and 
will continue to have it. We are very conscious of various 
aspects of military deployments in the region and continue to 
be committed to Israel's security.
    I do hope, in fact, that the fact that they do have a 
qualitative edge, and will continue to have it, will allow them 
to move forward in the peace process. Obviously, as you pointed 
out, that is a relationship that exists, and we are totally 
committed to Israel. We've made that very clear. But we also 
believe that it is just necessary, as I said in the previous 
response, to move the peace process forward.

                     international family planning

    Ms. Lowey. Well, let me just say we are certainly in 
agreement, and let us be optimistic that the year 1998 is more 
positive than certainly the year before. And another area, 
Madam Secretary, there has been a good deal of discussion in 
this committee and in the Congress about not linking 
international family planning to the issues of the IMF and U.N. 
arrears and new arrangements to borrow.
    Could you share with this committee your view of the 
importance of international family planning and why that issue 
should be dealt with on its merits alone?
    Secretary Albright. Well, let me say that we worked--all of 
us--very hard last year to get a package together that included 
United Nations arrears and the IMF and reorganization of the 
State Department, and I think that everybody really devoted a 
great deal of effort to it.
    The issue of family planning is one that is of huge 
importance to an awful lot of people on both sides of the 
issue. I happen to be on one side, and other people are on 
another, but I do think that there are very good people on both 
sides of this discussion.
    I, as you know, believe in family planning and the 
importance of it for domestic as well as foreign purposes, 
because population expansion is one of the huge problems that 
we face as we move into the 21st century. The United States 
Government does not promote abortion. I think that is a 
misunderstanding. No taxpayer funds are used to promote 
abortion.
    We have supported organizations that deal in family 
planning, and what compromises were offered would not allow 
organizations that do not use taxpayer money for this to even 
attend conferences at which family planning is discussed, or 
the abortion laws of the countries in which they are taking 
place are being discussed. It's an international gag rule. 
There's no other way to describe it.
    But my feeling is that since this is an issue of such major 
import, it's an issue of principle to both sides, that the 
point that should happen is to vote on it. Let's have a 
separate vote on this issue, because it is important and people 
should be allowed to discuss it, and we should do it in a 
democratic way--vote--and not shut down our foreign policy 
because of this particular issue.
    I give credit to people on both sides of this. Let's 
discuss it and let's vote it up or down.
    Ms. Lowey. Probably lastly, Mr. Chairman, right, or is it 
two lastlies or----[Laughter.]
    Mr. Callahan. One lastly.
    Ms. Lowey. And then I'll submit the rest of the questions 
for the record.

                                 russia

    But we remain very concerned about Russia's delivery of 
ballistic missile technology to Iran. There are reports that 
the Russian intelligence community is aware of it. There is 
other information that Russia is working to stop it. Could you 
clarify for us recent reports, frankly, that the intelligence 
community is aware of it? The threat is very clear.
    Secretary Albright. This is an issue of major import, and 
we have been working it at all levels. The President has been 
talking to President Yeltsin about it; Vice President Gore to 
Prime Minister Chernomyrdin. I discuss it on a regular basis 
with Foreign Minister Primakov, and we have established a 
channel whereby Frank Wisner has been dealing with Mr. Koptev 
on this, and I think that there have been some very good and 
serious results.
    The Russians have issued an executive order making sure 
that their government is not involved in this kind of trade, 
and the Vice President is reviewing the subject. It again will 
be a subject at the Gore-Chernomyrdin meetings, which will take 
place next week. And we see some progress. We're monitoring 
this very carefully because it is a serious issue, and we will 
continue to do so. I think that in these Gore-Chernomyrdin 
meetings we will get some additional information on it.
    Mr. Callahan. Mr. Kingston.
    Mr. Kingston. Thank you, Mr. Chairman.
    Madam Secretary, on Chernomyrdin's recent decree, are there 
punishments involved in that, do we know, and has that decree 
been implemented?
    Secretary Albright. Well, the decree has been published, 
and they will have their own processes in Russia to deal with 
it. We watch it because, from our perspective, there are 
sanctionability punishments that would go with it.

                                  iraq

    Mr. Kingston. Okay. I want to get back to you on Iraq. You 
had said earlier in an exchange with Mr. Yates that--and I 
don't want to put words in your mouth, but here is the way I 
understood it--is that Iraq had followed the U.N. peace 
agreement for six or so years and only in recent weeks started 
violating it. Did I hear that?
    Secretary Albright. No. What had been established was an 
inspection regime, which had been working more and more 
intensively and following out a string of clues. Iraq had lied, 
in fact, about its biological weapons possibilities until 
Saddam Hussein's son-in-law defected and told them that there 
was a biological program.
    What has happened is that UNSCOM, in its work, has been 
able to destroy more weapons of mass destruction than during 
the Gulf War. And the figures are really quite astounding about 
what they were able to get at. But at all times UNSCOM was 
pushing up against the Iraqi government that was basically 
trying to develop excuses for not providing the information 
that UNSCOM should have.
    When I was Ambassador to the U.N., I spent a great deal of 
time listening to reports by Chairman Ekeus, the first Chairman 
of UNSCOM, talking about the difficulties of getting 
inspections taken care of. But the inspections did proceed. 
They would be stopped, and then they would move in again and 
they would require certain documents, and after a lot of 
arguing they would get the documents.
    What happened several months ago was that the Iraqis 
prohibited the inspectors going in to do these jobs. What has 
happened as a result of this agreement is that there were 
certain sites that were never part of what the Iraqis were 
allowing any inspectors to go into. Now, as a result of this 
agreement, they have said that there would be unfettered, 
unconditional access to all sites--something that UNSCOM never 
had before.
    Now, the question is whether, in the testing of this, this 
will actually happen.
    Mr. Kingston. Okay. One of the parts of the Annon Agreement 
is that there would be a new inspection team, and I think a 
two-tiered level with some new appointees on there. And one of 
the concerns that I've heard is that there would be pro-Iraqi 
folks on there who would, in fact, because of the two-tier, 
warn Iraq up front that there is going to be an inspection, and 
so the element of surprise would be out of it. How do you feel 
about that?
    Secretary Albright. Okay. If I can take a minute to 
describe the structure, I think it might clarify things. There 
is the Chairman of UNSCOM, and underneath him there is a group 
of experts that have been divided all along, from the time they 
were formed, into committees dealing with whatever issue they 
have--chemical, biological, et cetera.
    Then, there are a group of commissioners who meet a couple 
of times a year--experts--who review the work. Chairman Butler 
is in charge of both. What this agreement has done is create a 
group within the group of experts whose job it will be to do 
presidential sites. Those are these eight designated sites.
    That group is under the overall control of Chairman Butler, 
and there is going to be a commissioner from this other part 
that will also be directing the special group under Chairman 
Butler. Chairman Butler has made it very clear that he feels 
that he is in operational control of this group.
    The inspectors themselves, the experts, will be selected 
from UNSCOM or IAEA experts--the atomic energy experts. They 
would be accompanied by a small group of diplomats, who would 
be chosen by the Secretary General in consultation with 
Chairman Butler. Their only role in this is to be observers. 
They will have nothing to do with the inspection.
    Kofi Annon last night, in fact, on TV said that part of 
what they would be doing would be also observing to see if the 
Iraqis are making the access possible and are not standing in 
the way of the inspectors coming in.
    I have spoken to Chairman Butler, and so has Ambassador 
Richardson, so have others; basically, there will be a system 
set up whereby the diplomats will not be in a position to warn 
anybody. I can't go into the details of this, but this is one 
of the things that we have been concerned about, and Chairman 
Butler is working on a mechanism whereby they will not know 
ahead of time.
    Mr. Kingston. Okay. I think that's the essence of it.

                        human rights in ecuador

    Mr. Chairman, if I could have one more minute, certainly of 
great interest to me personally, the situation, again, in 
Ecuador, an American in a jail as described by your January 
30th report. We would very much like to have--and I don't want 
to put you on the spot and ask for your commitment, but we'd 
love to have maybe a little more proaction on the State 
Department to try to help us with the constituent who has found 
himself in an Ecuadoran jail with apparent human rights 
violations.
    As you know, all of these cases are very long and 
complicated, and there is lots of back and forth on all sides. 
But we do have a constituent who, since September '96, has been 
in jail. And it has just absolutely ruined the family, and 
we're trying to work through it.
    I would like to see a little higher energy level by the 
State Department. But let me say this, more the State 
Department in Washington than in Ecuador, because I think your 
folks in Ecuador have been pretty good. But I'm under the 
impression--just a gut feeling--that their hands are tied at a 
certain level, and they can only do so much.
    Secretary Albright. Well, let me look into it more.
    Mr. Callahan. Mrs. Pelosi?
    Mr. Kingston. Okay. Thank you.
    Ms. Pelosi. Thank you, Mr. Chairman.

                            nagorno-Karabakh

    Madam Secretary, the Chairman has told me I have two 
minutes, not one second more, so I'm going to just associate 
myself with the concerns expressed by my colleagues about 
Nagorno-Karabakh. I hope that in making the decision about aid 
that we will be respecting the process and I support the 
administration in that. But in order to build support for the 
process in Nagorno-Karabakh, we must give as much aid as we 
legally can under the legislation.

                                  iraq

    And in terms of Iraq, I want to convey to you the concern 
that my constituents have. I said earlier, no use of violence, 
but Mr. Porter also mentioned Radio Free Iraq. I wondered if 
there was any way we could drop food into Iraq, too. There is 
grave concern about the Iraqi people. I know that Saddam 
Hussein is the cause of those problems, but nonetheless, the 
problems exist.

                                 africa

    And I just have one question, and that is on Africa. I 
don't think any questions have been asked today about Africa.
    The Africa Growth and Investment Act--I'm sure you're 
familiar with that--the centerpiece of the administration's new 
Africa policy--was strengthened by Representatives Gilman and 
Smith, who amended the bill to require that participating 
countries must respect the rule of law, they would be 
ineligible to participate in programs to receive assistance or 
other benefits, if the President determines that they engage in 
gross violations of human rights.
    Has the administration endorsed this amendment to the bill? 
And if so, why so, or why not?

                              human rights

    Secretary Albright. I don't have an answer on that yet, but 
let me just say that we obviously feel very strongly about 
making sure that the rule of law and human rights are abided 
by. In fact, we have an initiative on a whole rule of law 
initiative in the Great Lakes. It's one of the things that I 
was pressing on my last trip.
    Ms. Pelosi. And speaking of that area, I want to commend 
you for raising the case of opposition leader Etienne Tsiseked: 
directly with Mr. Kabila. What other concrete actions is the 
U.S. taking, publicly and privately, to underscore the concern 
about the deteriorating human rights situation in the Congo.
    Secretary Albright. I told Mr. Kabila that I would call him 
when I needed to deliver such a message. I have done that. We 
will continue to press him to have a better understanding of 
what it means to run a democratic government. We are very 
concerned about what is going on in the democratic Republic of 
Congo, and believe that it's essential for the system to be 
opened up.
    Ms. Pelosi. And just, in closing, I understand also that 
you are very concerned about the resurgent genocide that could 
happen in Rwanda. I also understand that the administration may 
be considering providing security assistance to the Rwandan 
military. What concrete measurable steps is the U.S. taking to 
encourage the military to investigate and prosecute its own 
officers who may be responsible for serious rights violations?
    Secretary Albright. Again, when I was in Rwanda, I made a 
very strong point of the fact that they had to do more in terms 
of their own investigations. We are trying to provide them with 
additional judicial technical expertise and telling them about 
the importance of--obviously, the Rwanda war crimes tribunal is 
operating. It's not operating as well as the Bosnian one. But 
we are encouraging them to do that, and also doing more on the 
rule of law in Rwanda.
    Ms. Pelosi. Thank you, Madam Secretary. I am very pleased 
with the focus that the administration is placing on Africa. 
Sometimes I think that there is no southern hemisphere when I 
hear all of the big talk around here. I'm not talking about the 
administration, and I'm so glad that our Chairman is leading 
the way on the Latin American initiatives, and the 
administration is doing that as well with Africa. I think 
that's the right thing to do. I commend you for it, and thank 
you for your testimony.
    Secretary Albright. Thank you.
    Ms. Pelosi. And for your leadership.
    Mr. Callahan. Madam Secretary.
    Ms. Pelosi. Thanks, Mr. Chairman----
    Mr. Callahan. I'm sorry. We're----
    Ms. Pelosi [continuing]. For your leadership, too. If I had 
more time, I'd talk about you, Mr. Chairman. [Laughter.]
    Mr. Callahan. Well, I will yield to the lady for----
    [Laughter.]
    Let me try to get you out of here. I'm going to close with 
a few statements, Madam Secretary, but to remind you that a lot 
of the questions that have come up today have revolved around 
policy as much as appropriations.
    I notice that you had four hours with the International 
Relations Committee, and that's commendable. However, in the 
absence of the ability to fulfill a total passage of 
legislation, sometimes it falls upon the shoulders of this 
committee to handle the responsibilities of both, and thus your 
four hours with them is not quite as--it's a little bit longer 
than the three and a half hours you spent with us.

                                ecuador

    But nevertheless, let me echo my concerns about Ecuador 
that Congressman Kingston was talking about. I, too, have a 
personal interest in that case, and I am really concerned about 
that situation. I would appreciate and echo the concerns of 
Congressman Kingston. I would also like for you to look into 
one in Honduras, the same type of situation where I have first-
hand knowledge of an American citizen, Gustave Valle, who has 
been imprisoned in Honduras for five years without a trial, 
huge abusive human rights violations, I'm going to ask the 
State Department to get personally involved in that.
    It's very difficult for us to justify continued support to 
these countries who treat our citizens in such a manner. We're 
not prejudging guilt or innocence. We're just simply saying we 
cannot tolerate a country who permits an American citizen to 
remain in jail for five years without a trial and under the 
most inhumane of circumstances. So I'm going to ask you to look 
closely--personally at the Gustave Valle case.

                                  iraq

    We talked a lot this morning about Saddam Hussein and the 
problems there, and I don't think we have different 
philosophies. And maybe we should change directions. There are 
a group of us who feel that Saddam Hussein has violated so many 
international situations, such as human rights, of his own 
people, such as the breaking of his commitment of surrender to 
the United Nations, that maybe it's time our mission should be 
to indict Saddam Hussein.
    If we cannot bomb him out, maybe it is time for the United 
States and the Secretary General of the United Nations, who 
wants to negotiate with that mad man, maybe it's time to bring 
this man to some type of international court and have him stand 
trial rather than have us face these problems we have with him 
from time to time.
    Ms. Pelosi. I agree with you, Mr. Chairman.
    Mr. Callahan. Thank you.

                            family planning

    With respect, I'm going to say something you're not going 
to agree with--with respect to family planning. You say why 
don't we have an up or down vote on this. Madam Secretary, I'll 
remind you that the Republicans have not always been in charge 
of the Congress. We have not always been in a majority. And 
when we had a Republican administration and a Democratic 
Congress, it was not uncommon at all to attach things that 
President Bush or President Reagan disagreed with, or that the 
minority disagreed with to very important legislations.
    So this is not something that is happening for the first 
time in history. This is a very, very important issue to a 
majority of the members of the House. We know that if we pass 
that legislation single-handedly, the President would veto it, 
and we do not have the votes. So we have to use every piece of 
ammunition we have in order to get some of our points across.
    And the administration--I'll echo what I said earlier--has 
got to recognize this and to recognize that a government such 
as the United States can live with Mexico City policy, without 
tremendous interference into their ability to have an effective 
foreign policy. I know you'd like to debate me on that, but 
time is of the essence.

                                 bosnia

    Bosnia--once again, we have cooperated. This committee has 
been to Bosnia. We fulfilled the President's request for 
reconstruction monies in Bosnia. We did everything we've been 
asked, and now we're being asked to even extend what was 
originally asked, and there has to be some type of definite 
time limitation put on it.
    Now you want $200 million more in additional reconstruction 
assistance, and sooner or later we're going to run out of 
patience, unless there is a more definitive plan of withdrawing 
from Bosnia.

                                  imf

    The IMF--I have expressed our concerns about that and the 
perception that the American people have of IMF. I agree with 
the importance of funding the IMF. I agree with the importance 
of helping correct the situation in Asia, with respect to 
Indonesia especially.
    A plant in my district has been forced to shut its doors 
idling 900 people for several weeks because a business in 
Indonesia was one of their largest customers. The economic 
situation there is causing problems that only IMF can hopefully 
correct.
    Haiti--once again, big problem. Bolivia--we must find a way 
to convey to the Bolivian people that we were not penalizing 
them for doing the right thing with respect to drug 
interdiction.

                              middle east

    The Ukraine--you've heard from us on that. Let me echo that 
we want to work with you. We don't want to interfere with you. 
We have supported you in your every endeavor. We think that you 
did an outstanding job on the Middle East with respect to the 
most recent problem with Iraq. It is no reflection upon your 
activities.
    It is a reflection of our disappointment that our allies 
that we support so aggressively, that we take from needy 
programs here in the United States, turn their back on you. So 
we are incensed that you didn't get what we feel is the total 
respect you deserve as our diplomatic representative in that 
region. So we're going to be supportive of you.
    We're going to work with you with respect to the budget you 
have submitted. We're going to forewarn you that there is not 
going to be enough money allocated to this committee to fulfill 
all of your needs. And it's going to be very difficult.
    But, nevertheless, we appreciate you keeping us informed as 
you do. I notice when you went to the Middle East, prior to 
your visit to the leaders there to talk about Iraq, you called 
and briefed me on what your mission would be. But the President 
has been extremely silent to members of Congress.
    Normally, when there is a problem, he calls some of us who 
support the philosophy of the constitutional charge that gives 
responsibility of foreign policy to the executive branch. He 
calls us to the White House and explains, but he has been 
extremely silent, or at least he has not contacted me with 
respect to what he expected in Iraq.
    So maybe there should be more communication between the 
President and some of us in Congress who support his endeavors 
in foreign policy. But let me, once again, tell you that the 
American people are proud of you. And as you well know, the 
people of South Alabama are proud of you. They speak very 
kindly of you there and with every good reason.
    So we are sorry to detain you as long as we have today, 
but, once again, we thank you for appearing before our 
committee.
    Secretary Albright. Thank you very much, Mr. Chairman and 
Ms. Pelosi. I think this is a great committee to work with, and 
I think we went through a lot of issues. And I'm very grateful 
to all of you for the fine support and the great working 
relationship. Thank you.
    Mr. Callahan. The meeting is adjourned.
    [Questions and answers for the record follow:]
        Questions for the Record Submitted by Chairman Callahan
  organizations that received funding from mra and erma in fy 1995-fy 
                                  1997
    Question. Please provide a list of organizations that received 
funding (grant, contract, or otherwise) through the account ``Migration 
and Refugee Assistance'' and the account ``Emergency Refugee and 
Migration Assistance Fund'' for the fiscal years 1995, 1996, and 1997; 
the amount of funds provided for each fiscal year, and the purposes for 
which the funds were made available.
    Answer. The attached charts outline the information requested. 
Please contact the Department of State's Bureau of Population, 
Refugees, and Migration if additional clarification on any of the 
attached materials is desired.


[Pages 374 - 403--The official Committee record contains additional material here.]



                   decline in ``persons of concern''

    Question. Since 1994, the number of ``persons of concern'' has 
declined from approximately 27,400,000 to approximately 22,700,000. Why 
hasn't the budget for ``Migration and Refugee Assistance'' fallen 
during that period?
    Answer. 1994 marked a year where the vast majority of the world's 
refugee populations were in first asylum countries and required 
assistance (e.g., food, shelter, protection) from the international 
community. Due to political resolution of some of the crises, 
repatriations are now underway for a significant number of refugees. 
Repatriation programs constitute additional costs for a period of time 
following the actual return of refugees. Such costs include 
transportation and reintegration assistance.
                    u.s. financial support for unrwa
    Question. Please provide a list of the funding provided for each of 
fiscal years 1995, 1996, and 1997 to the United Nations Relief and 
Works Agency for Palestine Refugees in the Near East (UNRWA); 
anticipated funding levels for fiscal years 1998 and 1999; and the 
purposes for which the funds have been used--by project, if possible.
    Answer. During fiscal years 1995, 1996, and 1997, the State 
Department's Bureau of Population, Refugees, and Migration (PRM) made 
the following voluntary contributions to UNRWA using funds from the 
Migration and Refugee Assistance Account (MRA).
    FY 1995: $74,821,120 Total:
    $70,000,000 for UNRWA's Regular Program Budget.
    $2,000,000 for costs associated with UNRWA's Headquarters Move to 
Gaza.
    $2,821,120 for various UNRWA Peace Implementation Projects (PIPs) 
in Jordan, Syria and Lebanon.
    FY 1996: $77,000,000 Total:
    $74,000,000 for UNRWA's Regular Program Budget.
    $1,000,000 for costs associated with UNRWA's Headquarters Move to 
Gaza.
    $2,000,000 for various UNRWA Peace Implementation Projects (PIPs) 
in Jordan, Syria and Lebanon.
    FY 1997: $79,153,869 Total:
    $75,000,000 for UNRWA's Regular Program Budget.
    $1,000,000 for costs associated with UNRWA's Headquarters Move to 
Gaza.
    $1,500,000 for UNRWA's 1997-1998 Special Appeal for Palestine 
Refugees in Lebanon.
    $1,653,869 for various UNRWA Peace Implementation Projects (PIPs), 
primarily in Jordan, Syria and Lebanon.
    U.S. contributions to UNRWA's Regular Program Budget help cover the 
costs of the Agency's 637 schools, 123 health clinics, 7 vocational 
training centers and numerous relief and social service programs 
serving over 3.4 million Palestinian refugees living in Jordan, the 
West Bank, the Gaza Strip, the Syrian Arab Republic and Lebanon.
    (Note: In addition to the MRA funding listed above, UNRWA also 
received funding from USAID from 1993 to 1997 for specific PIP projects 
and other development activities, principally in Gaza. USAID 
contributions during this period totaled $29.2 million.)
    Thus far in FY 1998, the United States has provided in initial 
contribution of $70,000,000 to UNRWA for its Regular Program Budget 
(the same level as the initial FY 1997 contribution). The United States 
may make additional contributions to UNRWA's Regular Program Budget 
and/or specific Peace Implementation Projects later this year, 
following an analysis of prioritized needs. U.S. contributions to UNRWA 
in FY 1999 are expected to be at similar levels.
    u.s.-funded projects under unrwa's peace implementation program
    Question. What are the ``specific projects'' identified in the 
budget justification that the United States has supported through the 
UNRWA Peace Implementation Program? Please identify these projects by 
purpose and by funding provided through ``Migration and Refugee 
Assistance.''
    Answer. Since FY 1994, the United States has provided UNRWA a total 
of $12,547,379 in funding from the Migration and Refugee Assistance 
account for specific UNRWA Peace Implementation Projects (PIPs). Nearly 
all of these projects have been targeted to benefit Palestinian 
refugees in Jordan, Syria and Lebanon.
    The attached table provides a summary of each projects including 
year, location, purpose, cost and number of expected beneficiaries.
                     u.s. assessment rate with iom
    Question. The United States pays an assessment of almost 30 percent 
to the International Organization for Migration (IOM). Why is this 
assessment above the general assessment for United Nations 
organizations of 25 percent? If the U.S. contribution is in Swiss 
Francs, what are the savings due to exchange rate gains that are 
anticipated for fiscal year 1998 and 1999, compared to the budgeted 
levels?
    Answer. IOM is an intergovernmental organization separate from the 
UN. IOM's membership, while expanding in recent years, is much more 
limited than that of the UN's (IOM currently has 60 member states while 
the UN has 185). Hence, mathematically every member government receives 
a higher assessment percentage than in the UN.
    For 1998, we anticipate a total exchange rate savings of $900,000 
from the budgeted level of $7.6 million. The FY 1999 request includes 
$7.8 million for the 1999 U.S. assessment, based on an exchange rate of 
1.3 Swiss Francs to 1 $US. As the overwhelming majority of the MRA 
budget provides voluntary contributions, any savings or shortfalls are 
allocated to/from other MRA Overseas Assistance requirements.
                             audits of iom
    Question. Has the United States commissioned, or been involved in 
reviewing, audits of IOM finances in the past three fiscal years? If 
so, please provide copies of the executive summaries of these audits.
    Answer. As a member of the IOM governing body, the U.S. reviews 
annually audits of IOM, as well as participates in the selection of the 
Board of Auditors. For the years 1998-2000, member states selected the 
Austrian Court of Audit to audit IOM's accounts.
    Attached for your review are the Executive Summaries of the audits 
for the past three years.


[Pages 406 - 460--The official Committee record contains additional material here.]



             mra: why increase in multiregional activities

    Question. Why are funds for multiregional activities with the 
account ``Migration and Refugee Assistance'' projected to increase by 
$10,940,000 in fiscal year 1999?
    Answer. The increase in Multiregional Activities is composed of the 
following components:
    $5,940,000--UNHCR. This increase is for the multiregional 
categories of the UN High Commissioner for Refugees General Program. 
This category includes such items as UNHCR's Emergency Fund, the 
Voluntary Repatriation Fund, the Program Reserve, and other components 
of UNHCR's General Program that are not region specific.
    $3,500,000--Children's programs. Report language accompanying the 
1998 appropriation bill recommends $5 million for increased attention 
to children's activities. Of this amount, $1.5 million was in the base 
of the FY 1998 budget; the additional amount incorporates the 
committee's full recommendation into the FY 1999 MRA request.
    $1,000,000--Migration Activities. Increased funds are requested to 
support migration activities that promote international cooperation on 
migration issues.
    $500,000--ICRC/IOM. This increase provides for increased 
headquarters costs of the International Committee of the Red Cross and 
the International Organization for Migration. These items fulfill 
statutory requirements.
                 mra: regional delegations in east asia
    Question. The budget justification for ``Migration and Refugee 
Assistance'' indicates that part of the funds allocated to assistance 
programs in East Asia is projected to ``support ongoing programs such 
as regional delegations throughout East Asia * * *'' What does that 
mean? What specific activities are supported?
    Answer. This references the regional delegations (i.e., offices) of 
the International Committee of the Red Cross (ICRC), which currently 
has regional delegations in Bangkok, Manila, and Jakarta.
    In addition to the administration of emergency activities and early 
warning of impending crisis, ICRC's regional delegations have specific 
tasks and objectives that can be grouped under two main headings: 
``operations'' and ``humanitarian diplomacy''.
    To meet their operational objectives, regional delegates (i.e., 
staff) must respond to emergencies caused by outbreaks of violence in 
countries covered by the delegation, and to needs created by active or 
sporadic conflicts or by tensions that can affect a region even in 
times of peace. Staff working in regional delegations can be called 
upon to act as neutral intermediaries, carry out visits to security 
detainees, provide tracing services or conduct limited, short-term 
emergency operations.
    Regional delegations also have major objectives that can be met 
through humanitarian diplomacy, i.e., developing and maintaining 
regular contacts with governments, regional organizations, local Red 
Cross and Red Crescent Societies, and senior officials in all the 
countries in their regions.
                       andean eradication results
    Question. What have been the eradication goals, eradication 
results, total production levels; and net changes in production in 
Colombia, Peru, and Bolivia in each of the years 1993-1997?
    Answer. The table below provides the information requested:

                                                     BOLIVIA                                                    
----------------------------------------------------------------------------------------------------------------
                                                                           Eradication   Production    Percent  
                                                                Goal \1\    (hectares)   (hectares)     Change  
----------------------------------------------------------------------------------------------------------------
1993........................................................        5,000        2,400       47,200           +4
1994........................................................        5,000        1,100       48,100           +2
1995........................................................        5,000        5,493       48,600           +1
1996........................................................        6,000        7,512       48,100           -1
1997........................................................        7,000        7,026       45,800           -5
----------------------------------------------------------------------------------------------------------------
\1\Only Bolivia has mutually agreed upon eradication goals. The minimum eradication goal is 5,000 because       
  Bolivia law 1008 requires yearly eradication of 5,000 to 8,000 hectares.                                      


                                COLOMBIA                                
------------------------------------------------------------------------
                                   Eradication   Production    Percent  
                                    (hectares)   (hectares)     Change  
------------------------------------------------------------------------
1993.............................          793       39,700           +6
1994.............................        4,910       45,000          +12
1995.............................        8,750       50,900          +12
1996.............................        5,600       67,200          +24
1997.............................       19,000       79,500          +16
------------------------------------------------------------------------


                                  PERU                                  
------------------------------------------------------------------------
                                   Eradication   Production    Percent  
                                    (hectares)   (hectares)     Change  
------------------------------------------------------------------------
1993.............................            0      108,800          -16
1994.............................            0      108,600            0
1995.............................            0      115,300          +66
1996 \2\.........................        1,259       94,400          -18
1997.............................    \2\ 3,462       68,800         -27 
------------------------------------------------------------------------
\1\ These are manual eradication figures separate from the widespread   
  coca cultivation abandonment in Peru. In previous years, the security 
  situation did not allow manual eradication operations.                

                  opium poppy eradication and colombia
    Question. What have been the eradication goals and eradication 
results for opium poppy eradication in Colombia from 1993-1997? What 
are the anticipated goals for 1998 and 1999?
    Answer. Illicit opium poppy cultivation, while documented as early 
as the mid-1980's gained a foothold in the early 1990's.
    1993--The Government of Colombia sprayed 9, 821 hectares in 1993; 
environmental experts monitored the aerial application of herbicides to 
opium poppy.
    1994--Progress throughout the year was not exceptional, but in 
early November 1994, the Colombian National Police reinvigorated 
operations with an aggressive plan to eradicate more than half the 
opium poppy in Colombia, in the shortest period of time. Nevertheless, 
total opium eradication was about 50 percent less than in 1993.
    1995--The first-ever scientific survey of Colombia's opium poppy 
cultivation was carried out in 1995. The result indicated that 
approximately 2,180 hectares were under cultivation, not 20,000 as had 
previously been estimated. The Colombian National Police reported it 
sprayed 3,970 hectares of opium poppy during 1995, but this amount 
could not be verified.
    1996--The Government of Colombia sprayed 6,028 hectares in 1996.
    1997--The Government of Colombia sprayed 6,972 hectares in 1997.
    1998--Anticipated Goals--informal discussions with the Colombian 
Government have been underway, however, formal demarches to the 
government and resulting agreements have not been finalized.
    1999--Anticipated Goals--same as above.
             funds for opium poppy eradication in colombia
    Question. How much was budgeted for opium poppy eradication in 
Colombia in fiscal years 1993-1998, and how much is anticipated to be 
spent in fiscal year 1999?
    Answer. 1993--$5,100,000; 1994--$5,483,000; 1995--$6,080,000; 
1996--$6,035,000; 1997--$5,985,000; 1998--$5,985,000--estimated if we 
only get $30 million of Total Budget; and 1999--Anticipated Funds--
$5,985,000.
                   restitution to holocaust survivors
    Question. The Administration has requested $10,000,00.00 for the 
Holocaust Victim's Trust Fund for fiscal year 1999. How will these 
funds be used? What is the authority for this program. How will this 
program be administered? What other nations are contributing to this 
effort, and how much has been pledged to date? How many individuals 
will benefit from this program? What will be the average benefit per 
person, from contributions by all donors? Where do individuals live 
that will benefit from this program? How will their identities be 
verified? How will the State Department ensure that only qualified 
individuals benefit from this program?
    Answer. On Friday, Feb 13, the President signed S. 1564, the 
``Holocaust Victims Redress Act'' into law. The law authorizes, among 
other things, a U.S. contribution of $25 million dollars to the Nazi 
Persecutee Relief Fund, an international fund intended to provide 
relief to aging survivors of the Holocaust, particularly those in 
Central and Eastern Europe who have received little or no compensation 
to date. The Fund can also be used to support education and other 
awareness programs related to the Holocaust.
    Creation of the Fund was announced at the London Historians' 
Conference on Nazi gold, held last December. The United States joined 
with the united Kingdom in encouraging a number of the countries still 
holding claims with the Tripartite Gold Commission (TGC), voluntarily 
to donate the amount of these claims to the new fund. To date, the 
Netherlands, Austria, Greece and Luxembourg have agreed to contribute 
their claims to the Fund and a number of other claimants are 
considering contributions as well. Other countries, including those 
countries that were neutral during the War, or participated in the 
collection and distribution of these assets, were also invited to 
contribute.
    The Fund is designed to work along the lines of the Combined 
Federal Campaign, with minimal administrative overhead. Contributors to 
the Fund will have one year from the time of their deposits to 
designate an approved non-governmental organization (NGO) to carry out 
a program consistent with the objectives of the Fund. A list of 
approved NGOs is included in the Fund documents. Other NGOs can be 
added to this list with the agreement of the Fund members. No 
determination has yet been made concerning the application or use of 
the projected U.S. contribution. This matter is now under discussion.
                     bosnia economic reconstruction
    Question. Madame Secretary, two years ago I led a Congressional 
Delegation to Bosnia to review the prospects for peace in that nation, 
and to determine whether we should support an economic reconstruction 
effort.
    Although I had doubts about our mission in Bosnia, I put my 
credibility on the line and pledged to support the President's request 
for $600 million in economic reconstruction funds. I did so with the 
understanding that $600 million would be the total required from the 
United States for these activities.
    In the past two years, I have met my commitment to the President, 
and more. Not only have we appropriated every penny of the $600 million 
for economic reconstruction, we've provided funding for police 
training, assistance to refugees, contributions for elections, and 
contributions to the war crimes tribunal. From 1995 through 1998, the 
Administration has received approximately $1.1 billion from this 
subcommittee for all aspects of the Dayton Peace Accords.
    For 1999, you are asking for an additional $200 million for 
economic reconstruction, despite earlier assurances that $600 million 
would be our total commitment.
    a. Why are you asking for additional funds?
    Answer. The Administration is extremely appreciative of the efforts 
by the Chairman, other Subcommittee members, and the Committee's staff 
to provide the necessary resources for the economic reconstruction of 
Bosnia in this and the past two fiscal years. It is appropriate that 
there have been few differences between the Congress and the 
Administration on this, because it is clearly in the U.S. national 
interest to seek peace and stability in the Balkans. Our engagement and 
leadership in Bosnia is the right thing for America to be doing.
    We, our allies and, most unfortunately, the people of the former 
Yugoslavia have paid a terrible price for the rampant nationalism that 
overcame rational behavior in 1991 and 1992. We must make certain that 
a lack of engagement in Bosnia and other parts of the former Yugoslavia 
by the U.S. and others does not trigger another round of senseless 
destruction and violence.
    We have made a tremendous amount of progress in Bosnia, but the 
gains we have made these past two years are unfortunately still 
reversible. To disengage prematurely either militarily or economically 
would jeopardize our substantial investment in peace and stability in 
Bosnia and the region.
    The reconstruction effort in particular has made good process, in 
our view. USAID has done an outstanding job with the SEED funding 
provided by this Committee. USAID's programs have served as models for 
other donors and spurred increased commitments to refugee return 
programs, among others. Other donors have done their fair share. But in 
spite of this good start and broad international support, Bosnia is 
nowhere near having a self-sustaining economy and will need continued 
large amounts of external assistance to achieve economic self-
sufficiency.
    Question. Will other nations, especially European nations, be 
making additional contributions as well? How much has been pledged by 
these nations for 1999?
    Answer. We cannot give you a precise answer to that, because the 
European states, like the U.S., are going through their budget 
processes. We have discussed funding levels with officials of the 
European Union and a number of significant European bilateral donors, 
and their intention at this point is the same as our own: to maintain 
1999 levels of assistance for Bosnia at roughly 1998 levels. They have 
indicated that obtaining these levels of funding will be easier 
politically if the U.S. is able to obtain funding levels at the level 
of our FY 99 budget request for Bosnia. Accordingly, we believe that 
there will be no significant change in the patterns of assistance 
established over the past two years, which have the EU and nations of 
Europe funding about 50 percent of Bosnia's reconstruction costs and 
the U.S. share about 15 percent. Other donors, most notably the 
international financial institutions and the Government of Japan, pick 
up the rest. In summary, there is a continuing international commitment 
to share the burden of Bosnia's reconstruction.
    Question. What is the ``exit strategy'' for the phase-out of our 
economic reconstruction program, and when will this termination occur?
    Answer. We have developed criteria and benchmarks for a self-
sustaining Bosnian economy which include elements common to the other 
transitional economies of Central Europe, plus a heavy focus on 
reconstruction required by Bosnia's unique war-time destruction.
    We cannot predict precisely the pace at which Bosnia will reach 
these benchmarks but, with the change in Governments in the Republika 
Srpska, the pace has certainly accelerated. The April 10, 1998 
announcement in Sarajevo of the successful negotiation, after long 
delays, of an IMF stand-by arrangement will clear the way for Paris 
Club settlement and greater private investment in Bosnia. Similarly, we 
have seen, in the last few weeks, the removal of barriers to real 
privatization in both entities. Each is now working towards 
implementation of that key stage of economic transformation.
    But many elements necessary for a self-sustaining economy clearly 
won't exist for a number of years. Industry, which used to employ one 
out of every two Bosnians, is slow to restart because Bosnia has lost 
its markets and must replace its old industrial behemoths with more 
efficient companies. Much key infrastructure, such as the 
telecommunications system, has yet to be repaired.
    The World Bank estimates that Bosnia's economy has the potential to 
continue to grow at double-digit rates over the next several years if a 
number of conditions are met. These include substantial reconstruction 
financing, debt relief from creditors, effective use of external 
assistance, and good progress in institution building and in 
implementation of economic reforms. If this growth scenario is 
followed, Bosnia will recover its relatively low pre-war GDP by the 
year 2003 or 2004.
    It is too early to predict the economic recovery of the Bosnian 
economy with sufficient precision to give you a year-by-year estimate 
of reconstruction assistance and a date certain when Bosnia can move to 
a normal SEED program which focuses on technical assistance instead of 
reconstruction assistance. But neither do we believe that U.S. 
reconstruction assistance at the $200 million plus level will be 
necessary until the early years of the next century. The job remains a 
big one requiring the continued combined efforts of International 
Financial Institutions and other donors.
              colombian heroin--where do we go from here?
    Question. Madame Secretary, last year the Congress provided $36 
million for the purchase of 3 Blackhawk helicopters for the Colombian 
National Police. It is intended that these helicopters be used to 
support the eradication of opium poppy crops at high altitudes in the 
Andes mountains.
    The Huey helicopters currently used by the police cannot operate 
effectively at high altitudes, which is where the opium poppies are 
grown. Operating at lower altitudes, closer to the ground, they are 
more likely to be shot down by drug traffickers. Unlike coca plants, 
which grow everywhere, opium poppies are grown in relatively small 
amounts; therefore they are more easily controlled and eradicated.
    Heroin has re-emerged as a serious problem in America; the 
historical estimate of 600,000 heroin addicts in the United States has 
recently been increased by 200,000. Approximately half of these addicts 
are in the Northeast, and most of the heroin used by these addicts now 
comes from Colombia.
    The funding for the Blackhawks was an attempt to address the heroin 
epidemic in the United States. It provides much-needed support to the 
Colombian police, who put their lives on the line for us in the effort 
to stem the flood of cheap heroin coming into the country.
    This may not be the only answer, but it was an attempt to address 
the growing heroin problem. I understand the use of these funds has 
been frozen.
    I would also say I am distressed that the unintended consequence of 
providing these funds has been a decision by the Administration to 
reduce funds for Bolivia, despite the fact we've doubled funding for 
international narcotics control activities in the past several years. I 
want to work with you to address this shortfall, including exploring 
the possibility of reallocating monies with the Economic Support Fund 
that are available due to the decision by Turkey not to accept 
assistance from the United States. Where do we go from here? How does 
the Department and the Administration intend to address the growing 
problem of Colombian heroin?
    Answer. Regarding BlackHawk helicopters for the Colombian National 
Police (CNP); we understand and share your concern regarding the CNP's 
need for helicopters with greater lift capability at high altitude, 
primarily to eradicate opium poppy in Colombia. We are reviewing 
carefully the Foreign Operations Appropriations Act report language and 
technical issues related to the helicopters.
    However, we have a great many concerns. BlackHawks cost $8 million 
each and are more than twice as expensive to operate as the aircraft 
currently in CNP's fleet, and due to the need for additional training, 
they would require considerable time to integrate into the CNP force 
structure. The cost of procuring and operating the BlackHawks would 
seriously reduce our ability to support operations against coca and 
opium in Colombia and elsewhere. The $36 million directed by the report 
language would shrink our available funding and, as a result, would hit 
other programs hard, particularly in Bolivia and Peru. The impact upon 
our Andean source country strategy to fight narcotics trafficking would 
be significant. Over the past two years, coca cultivation in Bolivia 
and Peru has declined dramatically. As much as 110 tons of potential 
cocaine production, most of it destined for the United States, has been 
removed from the pipeline. Now is not the time to reduce funding for 
these programs which are having such a dramatic effect.
    We are developing a more cost-effective alternative to provide the 
improved lift capability the CNP needs while still allowing us to meet 
other critical counternarcotics objectives. Our program to upgrade the 
existing CNP air fleet, over the next 2 years, will provide significant 
high-altitude capability at less than one-third the cost of the 
Blackhawks. In addition, the Colombian Air Force and Army already have 
BlackHawks, and other heavy lift aircraft, and we are exploring 
arrangements for their use in direct support of CNP operations.
    Colombia accounts for less than an estimated 2 percent of the 
world's opium production. Persistent eradication has kept Colombia's 
opium poppy crop from expanding overall cultivation. Cultivation levels 
have remained stable for the third straight year.
    Colombian heroin is a serious threat to our national interests, 
although the emergence of this threat has not diminished the threat 
posed by Colombian cocaine. In 1997 eradication of opium poppy improved 
significantly with assignment of greater aviation resources, despite 
continued incidents of hostile ground fire. We agree that eradication 
is the most efficient, but not the only, method for stopping the flow 
of heroin. Given that opium poppy is grown at high altitudes, improved 
performance helicopters are necessary to eradicate effectively.
    The Colombian National Police participated in the creation of a 
joint US/Colombian heroin task force that has provided intelligence to 
effect drug seizures in Colombia and assist in US-based investigations. 
Overall, Colombian National Police seizures of heroin were higher in 
1997 than 1996.
                   initiatives for sub-saharan africa
    Question. The 1999 budget includes a number of initiatives of sub-
Saharan Africa, including:
    $30 million for a trade and investment initiative for Africa;
    $25 million for an Africa Great Lakes Initiative;
    $2 million for a South Africa Development Community Initiative;
    $21 million for a food security initiative;
    $26 million for an education initiative; and
    $35 million to fully forgive debt owed to U.S. government agencies.
    You add these initiatives up, and you reach $139 million--and we 
have missed a few in our initial review of your budget request. While 
some of these are to be funded from within base funds, $107 million of 
this total represents an increase above last year's level.
    The only initiative in Latin America is $20 million for something 
to do with the Summit of the Americas--and only $5 million of that is 
new money.
    What are the details of these initiatives for Africa? Is there some 
logic and relationship among each of these requests?
    Answer. All of the Africa initiatives emerge from the changing 
development reality in Africa, what some have called the ``African 
Renaissance,'' and the new partnership between the United States and 
Africa. Development Assistance for the Food Security Initiative ($21 
million) and the Education Initiative ($26 million) falls within FY 98 
base levels. Only the $30 million in Development Assistance for the 
Trade and Investment Imitative represents an increase over last year's 
request. Economic Support Funds for the Southern Africa Development 
Community Initiative ($2 million), the Great Lakes Imitative ($25 
million) and the Education Imitative ($10 million) as well as $35 
million for the Treasury Department for debt forgiveness also represent 
an increase over last year, bringing the total increase over FY 98 to 
$102 million.
    These initiatives center on two of the Administration's major 
foreign policy goals for Africa--bringing Africa into the global 
economy and reducing the incidence of violence. Three of the 
initiatives mentioned--trade and investment, food security and debt 
relief--are connected to the President's partnership for Growth and 
Opportunity launched in 1997. Along with opening American markets to 
African exports and creating a new forum for high level discussion of 
these issues between the United States and reforming states in Africa, 
these three initiatives are the major elements of this new partnership. 
The Southern Africa Development Community (SADC) Initiative is designed 
to provide technical assistance to SADC to assist the organization in 
achieving regional economic integration, as well as policy coordination 
on political and security concerns. The Education for Development and 
Democracy Initiative is built on the recognition that for the fragile 
political and economic transformations taking place in Africa to be 
sustained, much more attention has to be paid to African education. 
Finally, the Africa Great Lakes Justice Initiative is designed to 
promote the rule of law in the area and to help strengthen judicial 
institutions in an effort to address the cycle of impunity and 
bloodshed which the President spoke about in Rwanda.
    These initiatives allow the United States to promote our objectives 
more fully by expending more resources in a concerted way. The 
initiative for food security, for example, will help USAID expand its 
programs in agricultural technology development and agricultural 
marketing in five countries. Similarly, through the education 
initiative, we will be building on past successes, particularly in the 
area of university partnerships, but we will be trying some new ideas 
as well. Although we have supported rule of law projects bilaterally 
throughout Africa, under the Africa Great Lakes Initiative we will 
pursue a more comprehensive, coordinated approach to improving the rule 
of law and respect for human rights among countries in the central 
region.
                         asian financial crisis
    Question. What is industry doing during the Asian financial crisis? 
Are they assisting or just standing by and watching?
    Answer. At the State Department and at our Embassies, we have met 
with representatives from industry groups such as the International 
Business Council, the U.S.-ASEAN Business Council and others, along 
with numerous representatives from individual firms doing business in 
the region. Industry has provided policy makers important insights, 
built over years of engagement in Asia and with an eye to doing 
business in the region over the long term. As the affected countries 
follow through on their agreed economic reforms, we fully expect 
businesses to resume investing in the region, demonstrating renewed 
confidence in the prospects of those countries, and providing the 
financing for renewed economic growth. Businesses are already exploring 
such possibilities.
    Question. Who would be taking the lead to organize U.S. business 
interests, you or Secretary Daley at the Department of Commerce?
    Answer. State, Commerce, Treasury and USTR have been working 
together closely with the White House to address concerns of the U.S. 
business community regarding the Asian financial crisis. We have an 
effective interagency process to ensure good coordination.
    Question. Why can't we just stand back and hope the crisis will 
work itself out?
    Answer. The financial crisis in Asia has the potential to cause 
contagion beyond the region. The United States, together with the 
international financial community, seeks to stem panic, stabilize 
markets, and restore confidence and growth as quickly as possible. 
Success is important to the affected countries and to all countries 
around the world, including the United States. The International 
Monetary Fund and the other international financial institutions have 
tremendous expertise and experience to resolve such crises. We cannot 
leave such matters to chance.
    We have a responsibility to our friends and allies in the region to 
engage through existing institutions. We do so not out of charity, as 
President Clinton has pointed out, but because these are our customers, 
our competitors and our allies. We have important national security 
interests in the region which are best protected by stable, recessions 
almost certainly would be deeper and their recoveries take longer. That 
outcome would mean smaller markets for our exports and a weaker global 
economy. We benefit from prosperity abroad.
    Question. How come the free market system will not self-correct 
itself in this instance?
    Answer. The rationale behind the IMF-led programs in Asia is to 
work with governments to produce good policies that will be convincing 
to market participants, and thus accelerate the pace of reform and 
recovery. Absent such efforts, market forces might lead to the same 
outcome. There is also a very real danger that the added uncertainty of 
the free market self-correction option would exacerbate political and 
social tensions in the region which could produce negative effects and 
further stall recovery efforts.
    Question. Developing countries now account for what percent of 
United States exports?
    Answer. Exports to developing countries accounted for roughly 44% 
of all U.S. exports in the second quarter of 1997. Forty-three percent 
of U.S. exports to developing countries went to Asia in the same 
quarter. It is striking that in 1996 51% of California's exports alone 
went to Asia. For Oregon and Washington state, and ratios were even 
higher (57% and 58%, respectively). The fastest growing markets for 
U.S. exports are the developing countries of Asia and Latin America. 
(Source: Direction of Trade Statistics Quarterly, International 
Monetary Fund).
    Question. How much have U.S. firms exported in goods and services 
to the very poor countries eligible for IDA assistance?
    Answer. According to preliminary figures from the U.S. Census 
Bureau's International Trade Statistics, U.S. firms exported $6.3 
billion in manufactured goods to 53 IDA-only recipient countries in 
1997. (Comprehensive figures for services exports are not available.)
    Question. How about those countries that are IDA graduates?
    Answer. According to preliminary figures from the U.S. Census 
Bureau's International Trade Statistics, U.S. firms exported $68.8 
billion in manufactured goods to the 21 countries which have graduated 
from IDA since its inception in 1960. (Comprehensive figures for 
services exports are not available.)
        Questions for the Record Submitted by Congressman Porter
                    turkey: human rights assistance
    Question. I am cautiously optimistic that the Turkish government is 
committed to addressing the serious human rights situation and the 
other internal problems that currently threaten the Turkish state. For 
fiscal year 1998, this subcommittee worked to make $20 million in ESF 
funds available to be spent on projects in these areas, but Turkey 
unfortunately rejected these funds. Given the new willingness of the 
Turkish government to address these issues, has the Department explored 
the possibility of using these funds to help implement the human 
rights, governance, and economic development goals that the Yilmaz 
government has put forth?
    Answer. Based on my own and the President's conversations with 
Prime Minister Uilmaz, there can be no doubt of this government's 
commitment to address the human rights problems it faces.
    We do not, however, see a possibility for using the ESF funds for 
these purposes.
    The key to Turkey's human rights problems is not so much resources 
as political commitment, which we now have from the Turkish government. 
Even more important is follow- through; we are actively pressing for 
concrete, significant improvements;
    We also regret the Turkish government's refusal of ESF. However, 
that action was not based on disagreement with the worthwhile goals of 
the legislation, but on other factors that have not changed; and
    In prioritizing assistance funds, the $20 million was allocated to 
other high priority projects in our budget one the Turkish government 
rejected it.
    We are considering providing assistance, including training, that 
furthers our human rights and democracy goals at modest cost.
    We already provide assistance to the human rights NGO community 
through programs administered by the International Republican 
Institute, the National Endowment for Democracy, and the U.S. 
Information Agency.
                             cyprus policy
    Question. Last year, as in years past, I asked you about the latest 
``big initiative'' that was underway with regard to Cyprus. Despite the 
opportunities created by European Union accession, the situation 
continues to deteriorate. I am increasingly pessimistic about the 
prospects of solving this problem, and I believe that bold action is 
required to break the current deadlock.
    (A) What new approaches are being considered by our Cyprus team? 
How are we working with other players on the Cyprus issue, such as the 
European Community an the United Nations, to spark innovative 
approaches to this problem?
    Answer. This Administration places a high priority on resolving the 
Cyprus dispute. Special Presidential Emissary Richard Holbrooke and 
Special Cyprus Coordinator Tom Miller are focused on resolving the core 
issues of a Cyprus settlement: powers and authorities of a federal 
government; territory; property rights; and security issues. During 
their April 2-5 visit to the region, they discussed with the leaders of 
both communities some ideas for addressing these core issues. 
Ambassador Miller will return to the region this month and Ambassador 
Holbrooke will follow in May.
    We work very closely with other key players on the Cyprus issue. 
Ambassadors Holbrooke and Miller consult frequently with British 
Special Cyprus Representative Sir David Hannay and other EU 
representatives and with the UN Secretary General's Special Advisor for 
Cyprus, Mr. Diego Cordovez.
    Question. What is the current status of efforts to bring the 
Turkish Cypriot community back into participation in the bicommunal 
projects?
    Answer. We have been pressing Turkish Cypriot authorities to life 
their suspension of bicommunal contacts from the moment they announced 
the suspension on December 27, 1997. We have pointed out to them that 
the suspension is contrary to their interests because it has cut off 
significant opportunities for Turkish Cypriot individuals and non-
governmental organizations to articulate their positions and concerns 
to Greek Cypriots and others. The suspension, combined with separate 
measures to impose travel restrictions across the cease-fire line, has 
also severely limited the freedom of movement of Turkish Cypriot 
individuals.
    Our efforts have had some success. In January the U.S. Geological 
Survey hosted a bicommunal group of water managers and engineers from 
Cyprus on a two-week study tour of water management sites in the U.S. 
During his April 3-6 visit, Ambassador Holbrooke hosted a meeting of 
the Greek Cypriot and Turkish Cypriot leaders of the Brussels Group, a 
bicommunal Group of business people he first brought together in 
November 1997.
    In addition to our approaches to Turkish Cypriot authorities, we 
have also urged the Turks, EU partners, the UN, and others to us in 
pressing the Turkish Cypriots to lift the suspension.
                                caucasus
    Question. I am also concerned about reports that State Department 
personnel have indicated to various officials in the region and to 
subcommittee staff that the $12.5 million which this subcommittee 
intended for Nagorno Karabakh will be or should be spent outside of 
Nagorno Karabakh. Such statements are contrary to the intent of this 
subcommittee in providing the funds and have served to unnecessarily 
create conflict and confusion in an extremely volatile region. What is 
the content of the guidance provided to department personnel regarding 
this issue?
    Answer. Our guidance is taken directly from the law: that the funds 
are to be used for humanitarian assistance for ``refugees, displaced 
persons had needy civilians affected by the conflict in the vicinity of 
Nagorno-Karabakh''. The Congressional statement of the managers of the 
appropriation provides further guidance, saying that the Coordinator 
should ``move forthwith to provide assistance of $12,500,000 for 
victims of the Nagorno-Karabakh conflict''.
                 u.s. troops in bosnia and herzegovina
    Question. The President promised on at least three occasions that 
U.S. forces would be withdrawn by a specific date. However, those dates 
came and went without a U.S. withdrawal. How long are we going to be in 
Bosnia? What will it take for the U.S. to be able to pull out of 
Bosnia? What is the Administration doing to facilitate a peaceful 
withdrawal?
    Answer. The President has decided that the U.S. will participate in 
a NATO-led force in Bosnia beyond June 1998 and that the Follow-on 
Force should have a mission and size similar to SFOR, though the number 
of U.S. troops should decline from twenty-five to twenty percent of the 
total. The size of SFOR will be progressively reduced based on periodic 
review of the security situation in Bosnia and the progress of 
implementation of the Dayton Accords.
    While the U.S. has not proposed, and NATO has not adopted, and 
fixed end-date for the deployment, it will not be open-ended. 
Experience demonstrates that arbitrary deadlines tend to encourage 
those who would wait us out.
    The goal of SFOR is to establish conditions under which Dayton 
implementation can continue without the support of a large NATO-leg 
military force.
    The Administration has developed benchmarks that, once achieved, 
will allow the peace process to continue without the presence of a 
major NATO force. The Administration is actively pressing civilian 
implementation so that the peace process becomes self-sustaining.
    Specific examples include working with Bosnian election officials 
to design and produce an electoral law and model that will permit them 
to conduct elections without international supervision; working with 
the parties to develop the joint and central governmental institutions 
called for in Dayton; working with Federation partners to fully 
integrate governmental structures and abolish pre-war institutions of 
governance; working with police structures to bring them into line with 
democratic norms and practices; working with media to produce a more 
responsible and less ethnically-driven information system; and, of 
course, continuing to encourage the parties to deliver on their 
responsibility to surrender war criminals. All these are steps that 
will reinforce the stability of Bosnia and Herzegovina, so that when 
our troops depart, we can be sure they will not have to return.
      Questions for the Record Submitted by Congressman Livingston
    Question. Haiti has little economic freedom. It remains one of the 
most repressed economies in the world. While some trade barriers have 
been reduced of late, there has been little effort to improve their 
current economic policies. Crime, corruption and bad economic policies 
still plague the island. What is the Administration doing to ensure 
that Haiti is taking steps to combat corruption and encourage greater 
economic freedom?
    Answer. We agree with you that economic and political freedom lie 
at the heart of efforts to improve conditions in Haiti. That is why we 
have directed USG assistance at building Haiti's fledgling democracy, 
developing microenterprises, privatizing, providing technical 
assistance for small holders, and creating an apolitical, professional 
civilian police force and an independent judiciary.
    Under our democracy and governance program, we support elections, 
police training, judicial reform, local government development, 
Parliament, and community-based civic groups. Our assistance also 
supports economic policy reform, including public administration reform 
and privatization. One parastatal has been sold and another awaits the 
signature of a prime minister. Since 1995, the Government of Haiti has 
made substantial progress in stabilizing the economy. It has reduced 
its tariff structure from a range of 5 to 50 percent to a range of from 
0 to 15 percent as part of its liberalization reforms. Other reforms 
designed to promote economic freedom are underway. Haiti can now face 
its future based on a market oriented economy and democratically 
elected government.
    We continue to receive the highest assurances from the Government 
of Haiti that they are committed to fighting corruption wherever it may 
occur. The USG has been encouraged by the work of the Haitian National 
Police's Director General and Inspector General in pursuing 
investigations against police officials who are involved in illicit 
activities. These changes are not yet fully institutionalized. We must 
remain committed to helping Haiti modernize if we are to see permanent 
change.
                                ukraine
    Question. Will you meet with the aggrieved U.S. investors during 
your visit to Ukraine? And if so, will you meet with them before you 
meet with Ukrainian officials?
    Answer. During my March 6 visit to Kiev, I met with a group 
representing the U.S. business community in Ukraine, including a number 
of businesses that have raised complaints with the U.S. Government 
about problems they are having in Ukraine, such as Gala Radio and R&J 
Trading. The businessmen reviewed for me both company-specific problems 
and broader systemic obstacles to doing business in Ukraine.
    This meeting followed my meeting with President Kuchma, at which I 
raised directly our concern over the treatment of U.S. businesses and 
investors and the need for action to improve the investment climate in 
Ukraine.
    Question. What are your thoughts on certification? Do you believe 
there has been substantial progress on the business disputes for which 
we conditioned aid?
    Answer. On April 29, 1998, I decided to certify that the Government 
of Ukraine has made significant progress toward resolving U.S. investor 
complaints. We have worked very closely with the Government of Ukraine 
over the past year to push for resolution of investor complaints, 
including the twelve specific complaints covered by the legislation. 
Seven of the cases were resolved or there was significant progress 
toward their resolution.
    Since I announced my decision to certify, the government of Ukraine 
has continued to work with us to resolve the remaining cases, and we 
continue to make progress.
    We remain concerned, however, about the remaining investor 
problems, and more generally about Ukraine's poor investment climate 
and the slow pace of economic reform. In conjunction with my decision 
to certify I directed the withholding of certain assistance funds to 
the government of Ukraine in areas where reforms have stalled and such 
assistance cannot be used effectively. These funds will be redirected 
to the private and non-governmental sectors in Ukraine unless the 
Government of Ukraine implements the necessary reforms in these sectors 
and takes additional steps to resolve outstanding business cases in 
Ukraine.
    Question. The European Union is currently instigating dispute 
resolution procedures against Ukraine. This came about because Ukraine 
ignored both EU and WTO requests and implemented new tariffs on the 
auto industry that violate trade agreements and treaties they have with 
the EU. Do you think it is time for the U.S. to take similar action to 
protect U.S. investors?
    Answer. The EU announced on February 20 that it would undertake 
consultations with a view to using the dispute settlement procedure of 
the EU's Interim Trade Agreement with Ukraine. More recently, an EU 
delegation visited Kiev in March to discuss this dispute with the 
Government of Ukraine. However, we have not been informed that the EU 
has implemented the dispute settlement procedure. Ukraine is involved 
in negotiations to join the WTO, and is expected to adhere to WTO 
principles while it pursues those negotiations. The EU has charged that 
Ukraine's auto regime violates WTO disciplines, as well as its 
bilateral agreement with Ukraine. We are examining this issue as well. 
We have complained to Ukraine about trading practices which contravene 
WTO rules and we have raised these issues in the Trade and Investment 
Committee of the Gore-Kuchma Commission, as well as in the context of 
Ukraine's WTO accession process.
    Question. My constituent, Joe Lemire, has been threatened and 
employees at GALA Radio have been intimidated--without cause--and have 
been physically harassed and threatened with arrest. What is the 
Embassy doing to protect U.S. citizens such as Mr. Lemire in Ukraine?
    Answer. GALA Radio is one of the investment dispute cases we 
consistently raise with the highest officials of the Government of 
Ukraine. The U.S. Ambassador in Ukraine, Ambassadors Morningstar and 
Sestanovich, and numerous other U.S. officials continue to press the 
Ukrainian Government to honor the ICSID arbitration process and desist 
from retaliation or any kind of physical abuse against Mr. Lemire and 
his employees. I raised the GALA case with President Kuchma when I 
visited Kiev on March 6. We will continue to press our concerns with 
the Government.
    Embassy officers have met regularly with Mr. Lemire since he first 
informed us of his complaint against the Ukrainian government. I 
understand Mr. Lemire had an in-depth meeting with Ambassador Pifer on 
May 15. Embassy officers have responded promptly to protests from GALA 
of alleged harassment by Ukrainian Government agencies. In fact, Mr. 
Lemire expressed his strong appreciation for the physical presence of 
Embassy personnel when such events have occurred. In addition, embassy 
officials have frequently accompanied Mr. Lemire to meetings with 
Ukrainian officials during efforts to resolve this problems.
    While the Embassy is unaware of any direct threats to Mr. Lemire's 
life, they are keeping a close watch on events. The Regional Security 
Officer has also been working closely with Mr. Lemire on the recent 
burglary at his residence.
    To the knowledge of Embassy Kiev, no workers for Gala radio have 
been arrested.
                             saddam hussein
    Question. Secretary General Annan stated that Saddam Hussein can be 
trusted. Do you believe Saddam can be trusted?
    Answer. No, Saddam Hussein can not be trusted. In his March 2 
statement to the Security Council, Secretary General Annan said that 
Iraq's agreement to cooperate with UNSCOM and IAEA inspections must be 
tested and confirmed. We agree. Accordingly, it is necessary to 
continue the deployment of military forces in the Gulf at levels 
appropriate to ensure Iraqi cooperation with weapons inspections.
                                iraq/un
    Question. Some say the real winner in this latest showdown with the 
U.S. was Iraq because they were able to defy the U.S. Without a clear 
policy on Iraq--the UN, Iraq, and Russia were able to set the agenda 
throughout the crisis. Why did the Administration allow the UN to 
conduct crucial parts of U.S. foreign policy?
    Answer. The United States conducted an active diplomatic campaign 
centered on the United Nations, designed to compel Iraqi compliance 
with its own commitments under Security Council resolutions and bolster 
the central goal of our policy toward Iraq: to make certain that Iraq 
is not in a position, now or in the future, to threaten its neighbors 
or U.S. interests in the region. The agreement reached in Baghdad by 
the Secretary-General is a win-win situation for the United States and 
the United Nations. UNSCOM has said cooperation from Iraq under the 
Annan-Aziz MOU so far has been good. If that continues, it will mark an 
important victory for the international community.
    But if Iraq violates the MOU, it will be clear to all that Iraq has 
reneged once more on its commitments under Security Council resolutions 
and reneged on the terms of the 1991 ceasefire. And the Council has 
made it clear that that will have the severest consequences. The United 
States is prepared to take whatever actions necessary, including 
military action, to respond to the breach of the ceasefire established 
by the Security Council.
                  unscom: secretary-general's comments
    Question. It has been reported in some papers that Secretary-
General Annan thought that some UNSCOM inspectors were ``cowboys'' who 
have thrown their weight around and behaved irresponsibly. Was that the 
case?
    Answer. The Secretary-General described this characterization of 
UNSCOM inspectors as an Iraqi characterization, not his own.
     military action in response to prior interference with unscom
    Question. As Chairman of the House Appropriations Committee, I was 
not formally briefed on the military aspects of the mission until I 
made a request for such a briefing. To be honest, I was troubled by the 
timing of the mission. Why was the President not making a stronger case 
for military action last year when UNSCOM inspectors were first denied 
access?
    Answer. Iraq has interfered with UNSCOM ever since weapons 
inspections began following the Gulf War. There have been at least 
seven prior major incidents of interference, one of which required a 
military response.
    Iraq's most recent confrontation with the Security Council occurred 
in two phases. On October 29, 1997, Iraq demanded the withdrawal of 
American members of the UN weapons inspection teams. This led to 
withdrawal of all UNSCOM personnel and a diplomatic effort by Russia to 
secure Iraq's agreement to UNSCOM's unconditional return.
    Iraq then pursued efforts to limit UNSCOM's access to so-called 
``Presidential sites.'' The crisis came to a head when UNSCOM Chairman 
Butler reported to the Council in January that UNSCOM was effectively 
blocked from carrying out its mandate by Iraq's twin refusal to provide 
access and information to his inspectors.
    The U.S. approach throughout the crises was to seek a diplomatic 
solution if possible and to build international support for a recourse 
to military action if that proved necessary. This approach allowed us 
to put maximum pressure on Iraq, while rebuilding the coalition of 
concerned nations that would join us in military action. Our readiness 
to employ military force was evident from the outset, but it was 
important--and ultimately effective--to demonstrate that we would 
pursue all viable diplomatic options first.
            ira and list of foreign terrorist organizations
    Question. My understanding is that the Administration did not 
include the IRA on the list of terrorist organizations when that list 
was promulgated last year. This decision, as I understand it, was made 
despite a recommendation by the FBI that the IRA be so listed.
    a. Is this true?
    b. If not, why not?
    c. In light of several recent terrorist incidents attributable to 
the IRA, is the Administration reassessing that decision? If not, why 
not?
    Answer. Last October, we took note of the IRA's cease fire 
announcement of July 19 and the subsequent decision by the British 
government that the cease fire was ``genuine in word and deed'', 
permitting Sinn Fein to join inclusive, all-party talks in Belfast. 
Under those circumstances, the Secretary, who has authority under the 
law to designate a foreign terrorist organization, decided not to 
designate the IRA at that time but to continue to hold the matter under 
review.
    Since then, the all-party talks resulted in an agreement reached in 
Belfast in April. We hope that the goal of a democratically-reached 
peace agreement will be confirmed by the voters.
    We deplore the incidences of terrorism in both Ireland and Northern 
Ireland, acts that apparently were committed by extremist elements on 
both sides in an effort to disrupt the agreement. We will continue to 
monitor the situation and review the IRA and any other groups that may 
have committed violence in the past.
   ireland/no. ireland: background on international fund for ireland
    Question. Why does the United States continue to provide a portion 
of its limited foreign assistance funds to the International Fund for 
Ireland?
    Answer. The U.S. contribution to the IFI is a tangible and highly 
visible expression of our desire to promote peace and reconciliation in 
Northern Ireland through economic regeneration. The Fund, established 
by the British and Irish governments in 1986, receives contributions 
from the European Union, Canada, Australia, and New Zealand, as well as 
ours.
    The Fund has provided support for over 3,500 projects throughout 
Northern Ireland and the border counties in the areas of urban 
development, education, tourism, community infrastructure, and 
assistance to small businesses. Fund projects encourage reconciliation 
between nationalists and unionists by operating on a cross-border and 
cross-community basis.
   ireland/no. ireland: u.s. contribution to international fund for 
                     ireland only aid to eu country
    Question. What other members of the European Union currently 
receive bilateral economic assistance, and what are the fiscal year 
1998 and 1999 assistance levels if such aid is provided?
    Answer. The U.S. contribution to the International Fund for Ireland 
is a unique case designed to address the unique circumstances in 
Northern Ireland and the border counties of Ireland. The U.S. is 
committed to assisting in the resolution of the centuries-old conflict 
there. Other EU members do not receive bilateral economic assistance.
                    ireland/no. ireland: gdp figures
    Question. What are the gross domestic product (GDP) figures for 
Northern Ireland and the Republic of Ireland for 1994, 1995, 1996, and 
1997, and what have been the economic growth rates for both during the 
same period?
    Answer.

----------------------------------------------------------------------------------------------------------------
                                                                  GDP (in billions)         Growth (percent)    
                                                             ---------------------------------------------------
                                                                Ireland     N. Ireland    Ireland     N. Ireland
----------------------------------------------------------------------------------------------------------------
1994........................................................        $52.2          $21          9.8          3.0
1995........................................................         62.0           22          7.8          3.5
1996........................................................         67.4           23          8.5          2.5
1997........................................................         68.8          n/a        1 7.3        1 3.0
----------------------------------------------------------------------------------------------------------------
1 denotes estimate.                                                                                             

       Questions for the Record Submitted by Congressman Kingston
    Question. I continue to be extremely concerned about the 
proliferation of dangerous and sensitive weapon technology by Russia, 
China, and others to ``rogue'' states, and I am very Supportive of the 
Administration's efforts to prevent its continuance. I know the 
President has not yet made the necessary certification required by last 
year's act that Russia has ceased this activity to fully obligate their 
aid. What are the chances of this certification?
    Answer. Every six months, the Administration is required to 
evaluate whether to certify Russia. We are currently in the process of 
making the determination required at the beginning of May for Russia. 
That process is not yet complete and I cannot say whether the 
certification will be made.
    Question. Recently, Russian Prime Minister Victor Chernomyrdin 
apparently issued a government decree making the unrestricted transfer 
of dual use technology to other nations illegal. What kind of legal 
weight does a Prime Ministerial decree have? Have any steps been taken 
to implement the decree? What, exactly, are the punishments involved 
for companies which violate the decree?
    Answer. On January 22 the Russian government took an important step 
when then-Prime Minister Chernomyrdin signed an executive order 
substantial strengthening the Russian export control process. The 
executive order gives the Russian government new legal authority to 
stop all transfer of goods and services to foreign missile programs and 
programs for weapons of mass destruction.
    The Russian Constitution gives the Russian government the power to 
issue such executive orders. This Russian government has taken such 
steps to implement this order as publication of the order and outreach 
efforts to explain its significance to Russian industrial 
organizations. In addition, Russian agencies have conducted 
investigations based on the new controls. Our analysis leads to the 
conclusion that the executive order is an appropriate vehicle for 
regulating export controls.
    Putting this legal authority in place was an important step. Now 
our attention has turned to Russian implementation and enforcement. We 
are monitoring this closely. Ambassador Gallucci will focus on these 
issues during his upcoming talks with Russian space agency head Koptev 
to end cooperation between Russian entities and Iran's missile program. 
The U.S. and Russia also convened their first meeting on implementation 
of export controls as agreed to at GCC X and discussed a full range of 
export controls, including catch all.
                   egypt--foreign military financing
    Question. To what extent is Egypt, a primary recipient of U.S. 
Foreign Military Financing, obligated to procure U.S.-made equipment? 
Does FMF provide a near total proportion of Egypt's procurement?
    Answer. Egypt is a key U.S. all in the region and the most 
prominent political player in the Arab world. A strong relationship 
with Egypt affords us political and security benefits that no Arab 
state can provide. We share regional and international interests, 
including the pursuit of a comprehensive peace in the Middle East, 
regional development, international stability and peacekeeping, and the 
stemming of terrorism. Providing security assistance to Egypt enables 
to us to pursue our joint interests and reinforces Egypt's stabilizing 
role in the region and in international peacekeeping efforts.
    Egypt's FMF is spent in the U.S. or for U.S. goods and services. 
FMF-funded direct commercial contracts enable Egypt to purchase U.S.-
made equipment and U.S.-provided services. Occasionally, an exception 
to the ``buy American'' rule is made, such as in conjunction with Corps 
of Engineers contraction projects, for heavy materials such as sand or 
cement.
    It is difficult to estimate the proportion of Egypt's total 
procurement represented by FMF purchases since the Egyptian defense 
budget is not made public. However, we believe that U.S. FMF represents 
between 35 and 40 percent of Egypt's annual defense budget. Overall, 
Egypt has used U.S. FMF to modernize, consolidate, and create an 
Egyptian defense force capable of interoperating with U.S. forces, as 
was the case during Desert Shield and Desert Storm.
                          the korean peninsula
    Question. I understand that the North Korean government has taken 
steps to initiate a diplomatic dialogue with South Korea. This is 
obviously a very significant step. How far has this progressed? Is or 
will the United States be involved in any capacity if and when talks 
progress?
    Answer. We have long supported dialogue between South and North 
Korea as key to reducing tensions on the Korean peninsula. The United 
States is also a participant in the Four Party Talks (U.S., PRC, South 
Korea, North Korea) designed to replace the Armistice and reduce 
tension on the peninsula. This process, proposed in 1996 by President 
Clinton and then-President Kim Young Sam, was intended, in part, to 
facilitate dialogue between the South and the North and is 
complementary to such bilateral dialogue. If high-level North-South 
talks are successfully initiated, South Korea would inform, and consult 
with, the United States, but we would have no immediate direct role.
    Recent developments in North-South dialogue include a February 15 
announcement on North Korean radio that North Korea had established a 
registry listing vital information on North Korean citizens who had 
been separated from family members as a result of the Japanese 
occupation and the Korean War. According to the radio report, members 
of divided families will be allowed to apply to the registry for 
information in order to locate their relatives still living in North 
Korea and ``abroad.'' It is not clear if all members of divided 
families (i.e., those living in South Korea or who fled North Korea) 
would be allowed to apply for information.
    North Korean organizations, clearly at state direction, also 
invited representatives of non-governmental groups in South Korea to a 
``dialogue'' and ``negotiation''. These invitations are similar to 
previous North Korean offers of negotiations between North Korea and 
private groups in South Korea, selected by North Korea. All such 
proposals have failed due to concern that they implicitly questioned 
the legitimacy of the South Korean government.
    President Kim Dae-jung is seeking to broaden meaningful contact 
with the North, including an exchange of envoys. The South Korean Red 
Cross has just concluded an agreement with its Northern counterpart on 
the distribution of South Korean food aid to North Koreans. South Korea 
also continues to press for the implementation of the 1991 Basic 
Agreement it signed with North Korea, which would help re-establish 
high-level dialogue with North Korea.
    Question. The severe famine in North Korea is continuing, and the 
United States has continued to mitigate the disaster through 
contributions of food for the citizens. How thoroughly has the famine 
penetrated the population? Is food (I don't mean our assistance here) 
being rationed by the government in any way, for example by providing 
for the government and the military at the expense of the citizens?
    Answer. North Korea is an opaque society and reliable, 
comprehensive information is difficult to obtain. The food crisis is 
clearly severe and deeply affects the society. Certain regions, such as 
the northern part of the country, appear to be more severely affected, 
but we have only limited quantifiable information.
    Food rationing to the population at large has long been practiced 
in North Korea. Farmers hand over a certain amount of the food they 
produce to the Public Distribution System. It is charged with 
distributing set rations to the non-food producing population, 
including factory workers, urban dwellers in general, and the military. 
Rations vary depending on the availability of supplies. This system has 
always differentiated among age groups and classes of labor. Urban and 
certain privileged populations, including the military, apparently fare 
better than others.
    International assistance providers, including UN agencies, foreign 
NGOs and other international donors, have negotiated the ability to 
target their aid to vulnerable population groups (such as young 
children, pregnant and nursing women, and hospital patients). The 
rations for these individuals are determined jointly by the aid 
organizations and North Korean authorities.
                       weapons inspection in iraq
    Question. Will the inspection teams be able to reach all the new 
sites they need to inspect before the U.S. force withdraws to avoid an 
identical crisis and mobilization a few months down the road? Would it 
have been possible for Iraq to relocate highly sensitive equipment and 
documentation during this standoff, making it necessary to start the 
inspections over from scratch?
    Answer. It is important to remember that the Annan-Aziz MOU 
reaffirms, in writing, that Iraq must provide immediate, unconditional, 
and unrestricted access to all sites in Iraq. The UN is in the process 
of intensively testing Iraq's commitment to provide such access.
    It is important that U.S. forces in the region remain at a 
heightened state of readiness until Iraq's intentions in this regard 
are clear. In any event, we will want to continue to maintain a 
significant military presence in the region--as we have for several 
years--to protect our vital interests and to deter aggression.
    During the recent standoff, it is quite likely that Iraq was able 
to relocate sensitive material to new sites. This is the game Iraq has 
been playing for the last seven years. Neither we nor UNSCOM are under 
any illusions about the need to continue intensive, surprise 
inspections until all such material is tracked down, fully accounted 
for, and, if necessary, destroyed. By making clear that Iraq must grant 
access to UNSCOM at all sites at any time--including the so-called 
``presidential sites'' Iraq previously declared off-limits--the Annan-
Aziz MOU should make it more difficult for Iraq to continue its pattern 
of concealment and deception.
                                iraq/un
    Question. What can the Administration do to ensure compliance with 
Secretary-General Annan's inspection plan? When will the inspections 
begin? Is there a timetable for Iraqi compliance?
    Answer. The United States conducted an active diplomatic campaign 
centered on the United Nations, designed to compel Iraqi compliance 
with its own commitments under Security Council resolutions and bolster 
the central goal of our policy toward Iraq: to make certain that Iraq 
is not in a position, now or in the future, to threaten its neighbors 
or U.S. interests in the region. The agreement reached in Baghdad by 
the Secretary-General is a win-win situation for the United States and 
the United Nations. Inspections under the new MOU took place in March. 
UNSCOM has said cooperation from Iraq under the Annan-Aziz MOU so far 
has been good. If that continues, it will mark an important victory for 
the international community.
    But if Iraq violates the MOU, it will be clear to all that Iraq has 
reneged once more on its commitments under Security Council resolutions 
and reneged on the terms of the 1991 cease-fire. And the Council has 
made it clear that that will have the severest consequences. The United 
States is prepared to take whatever actions necessary, including 
military action, to respond to the breach of the cease-fire established 
by the Security Council.
                              results act
    Question. Regarding the layout of the performance plans in the 
Congressional Presentation, why don't ``objectives'' in each region or 
program always address all aspects of the ``strategies''? For example, 
on page 380 of the Congressional Presentation, the strategy says, `` 
Press governments to respect land rights of indigenous people, freedom 
of religion, and remain alert for any signs of religious persecution,'' 
yet none of the objectives reflect that part of the strategy. And then, 
likewise, there don't always seem to be indicators to clearly address 
each aspect of the overall strategy and each listed objective. And 
finally, it seems that in many cases the indicators are simply 
restatements or rewording of the strategies and goals. Are there more 
specific reports available that clarify these area?
    Answer. The application of strategic planning and performance 
measurement to foreign affairs is an extremely complex undertaking. It 
involves the activities of multiple U.S. Government agencies and the 
range of Function 150 programs to achieve dozens of objectives 
organized around the 16 strategic goals of the International Affairs 
Strategic Plan in over 150 countries. This is going to take several 
years and enormous effort to get right.
    The Regional Program Plans contained in the FY 1999 Congressional 
Presentation for Foreign Operations represent our first effort to link 
Function 150 resources to our international affairs goals. Much needs 
to be done to improve the technical rigor of these plans. The case 
cited on indigenous rights is a good case in point. The identification 
of performance indicators for many international affairs goals remains 
open. This is particularly true for those that are not exclusively 
defined by program activities and are not inherently quantifiable, such 
as promotion of democracy and human rights. In addition, it was not 
possible to include in the Regional Plans country-specific objectives 
for every strategy. For the FY 2000 Congressional Presentation, our 
intention is to provide more specific performance information on 
priorities and resources at the country level, along with a more fully 
developed set of performance indicators.
                        international narcotics
    Question. How can the United States take a more constructive 
cooperative approach to the international anti-drug effort?
    Answer. Cooperation is the hallmark of our approach towards 
international antidrug efforts. We base it on the need for countries to 
adhere to and comply with broad international agreements, such as the 
1988 United Nations Convention Against Illicit Traffic in Narcotic 
Drugs and Psychotropic Substances. We provide leadership and financial 
contributions to a wide range of multilateral antidrug institutions in 
the UN, OAS, and elsewhere and we continue to provide substantial 
bilateral narcotics control assistance--training, equipment, and 
economic and technical support--to the major drug producing and transit 
countries.
    We are intensifying our efforts within this framework. For 
instance, the Latin American and Caribbean countries have endorsed our 
Summit of the Americas proposal to develop and implement a multilateral 
counternarcotics monitoring and evaluation process as part of Western 
Hemisphere alliance against drugs. We are also working to create a 
multinational counternarcotics center in the hemisphere and we are in 
the process of establishing International Law Enforcement Academies 
around the world to provide antidrug and crime training for 
investigators and prosecutors. Finally, we are seeking greater levels 
of foreign counternarcotics assistance for the most important drug 
producing and trafficking countries that demonstrate a willingness to 
cooperate with us.
    We use certification judiciously but effectively to ensure that 
governments have the political will to abide by their international 
commitments and use the assistance we provide effectively. We have 
taken several steps in recent years to make the certification process 
increasingly transparent including identifying specific certification 
objectives for the governments of every major drug producing and 
transit country with whom we have relations and providing them a mid-
term report on their progress. Our goal has been to give cooperating 
countries a greater sense of ownership for our common counternarcotics 
objectives and improve international cooperation.
    Question. What are the specific requirements or standards used to 
determine whether a country's cooperation merits certification? What 
are the measurable `'indicators'' for that determination? are they 
uniform country to country and region to region? If not, why? Where are 
these requirements spelled out?
    Answer. The Standards for determining whether a country's 
cooperation merits certification are set forth in a federal statute: 
Section 490 of the Foreign Assistance Act of 1961 as amended (``FAA''). 
That law establishes that the country must have fully cooperated with 
the United States or taken adequate steps on its own to achieve full 
compliance with the goals and objectives established in the 1988 UN 
Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic 
Substances (the ``Vienna Convention''). The determination of whether a 
country has ``fully cooperated'' is based on that country's record of 
compliance with the requirements of the Vienna Convention, of bilateral 
counternarcotics agreements with the United States, and measures taken 
to combat corruption.
    The ``fully cooperating'' standard can be a potentially broad 
requirement; its vagueness raised concerns by some countries that the 
United States was ``moving the goal posts'' from year to year. To 
overcome these concerns, the United States has taken several steps to 
make certification a more transparent and joint process. For instance, 
we now identify through demarches, meetings, and other contacts with 
major producer and transit countries, the counternarcotics areas and 
objectives we consider most important for certification. These 
objectives, such as crop eradication, criminal investigations, and drug 
interdiction, vary from country to country depending on their roles in 
the drug trade and the capabilities of their antidrug institutions. We 
also provide these countries a mid-year progress report that alerts 
them to any potential certification problems.
    The certification standard is fair. Countries are not asked to 
achieve more than they are capable of achieving. They are judged on the 
basis of their cooperation with the United States on common objectives 
and their willingness to abide by international agreements to which 
they are parties.
    Question. The Congressional Presentation refers to the importance 
of human rights in several places in the International Narcotics 
Section for Latin America. In fact, improving respect for human rights 
is mentioned prominently in several of the overarching strategy 
statements. If this is a major foreign policy goal for the region even 
within the context of our anti-drug programs, shouldn't our 
certification requirements include indicators of human rights? For 
example, if we are going to exert full court pressure on these 
governments to ``cooperate fully'' with us to stop drug activity, 
shouldn't we also make clear our expectation that their cooperation 
include fair, independent, timely, and uncorrupted adjudication? If it 
is a major part of the objective (as the CP states it is) do you 
believe we should add indicators for human rights to the certification 
process?
    Answer. Improving respect for human rights and the rule of law is 
an integral part of our international narcotics control program. The 
program includes and expectation, articulated explicit frequently 
through our embassies, that counternarcotics operations should take 
place within a timely, independent and uncorrupted administration of 
justice is a necessary component of an effective counternarcotics 
program. For that reason, we fund justice sector reform programs in 
many of the countries which receive our counternarcotics assistance, 
offering training to judges prosecutors and public defenders.
    The State Department already has a highly effective mechanism for 
evaluating the human rights performance of host nations in our annual 
Human Rights report. This report is comprehensive and covers the 
performance of all government entities involved in counternarcotics 
efforts. Through it, end-use monitoring mechanisms, and our ongoing 
human rights dialogue, we believe we are already adequately monitoring 
and providing feedback to host countries on human rights performance.
    Question. To build on the previous question, unfortunately, the 
message we may be sending through the INL programs may seem 
inconsistent to the countries we work so hard to influence. I think 
there are inherent conflicts of interests in our efforts. Not only do 
we insist on the highest levels of cooperation thought our strategy (p. 
376, CP) to strengthen the political commitment of host government to 
counter-narcotics efforts,'' but we are also actively working with them 
to ``enact and improve'' their counternarcotics legislation. (p. 376, 
CP) I am concerned that that may present very clear expectations when 
it comes to the judiciary, especially when one of the indicators for 
success (p. 377) is the number of narcotics sentences. (To illustrate 
this point I can tell you that in Ecuador, for example, it has been 
found that up to 80 percent of prisoners have not been sentenced 
according to a New York Times article on August 22, 1997. The average 
waiting time for a trial is over 400 days, while Ecuadoran law places 
definitive (and short) time limits on time allowed to elapses before 
sentencing. About half of all prisoners there are held on drug-related 
charges.) Will you please respond to this concern about conflicting 
efforts?
    Answer. We see no inherent contradiction between a strong 
committment to an effective and aggressive counternarcotics law 
enforcement effort and respect for due process in implementing that 
effort. We continue to urge nations cooperating with us on 
counternarcotics to arrest, prosecute, and sentence drug traffickers 
and money launderers to sentences commensurate with the seriousness of 
their crimes. We also work with those nations to improve the 
effectiveness of their criminal laws against traffickers and launderers 
by strengthening, modernizing, and removing loopholes in their 
substantive law. Equally, we work with them to improve their codes of 
criminal procedure, to ensure that they conform to internationally 
recognized norms of legal and human rights.
    Question. I believe the United States should be very assertive, 
open, and unmistakable in communicating to countries that participate 
in our International Narcotics Control Program that protection of legal 
and human rights is equally important (to other aspects of cooperation) 
in the prosecution process. In fact, report language to that goal was 
included in last year's Foreign Operations Act at my request. I have 
been told directly by various Latin American officials that U.S. 
pressure to be tough on drugs is absolutely pervasive. However 
unfounded this view may seem to us, we seem to be dealing with a 
dangerous perception that we demand arrests and convictions above all 
other considerations. The perception may be much more influential than 
the reality. What steps has the Department of State taken since the 
enactment of the FY 98 legislation to make such clarifications on 
human/legal rights? Will the U.S. assert to ``host'' countries that we 
never have predisposed expectations on verdicts and sentencing (even 
though it is used as an official indication of success)?
    Answer. Section 570 of the FY 98 Foreign Operations Appropriation 
Act (FOAA) contains language similar to the human rights-related 
limitations on International Narcotics Control (INC) funds contained in 
the FY 97 Foreign Operations Appropriations Act. However, Section 570 
applies to all FY 98 funds, not just INC funds.
    In implementing the legislation, U.S. missions abroad were 
instructed to establish specific and detailed procedures for reviewing 
reported incidents of human rights violations by ``host nation'' 
security forces, correlating that information with INC programs, and 
reporting all such information to the Department of State in order to 
ensure compliance with the law.
    In March of this year we directed U.S. missions abroad with such 
procedures already in place to ensure that they apply to all FY 98 FOAA 
funds, in addition to FY 97 INC funds. We also directed all other 
missions to develop such procedures.
    U.S. missions in the drug producing and transit countries emphasize 
three mutually reinforcing goals: promoting democracy, advancing human 
rights, and fighting illegal drugs. Our expectation is that such ``host 
nations'' will prosecute offenses vigorously within the bounds of the 
law and the rules of due process, and such expectation is communicated 
frequently to such nations' officials. However, we have always sought 
to make clear to ``host nations'' our concern that the rule of law 
should govern in all prosecutions, including those of drug traffickers 
and money launderers. We will remain alert for cases in which our goals 
are not understood and use diplomatic contacts, rule of law training 
programs, and other technical assistance to promote a better 
understanding.
                    judicial reform in latin america
    Question. I have reviewed some of the State Department's country 
reports on Human Rights Practices for 1997 which outline the concerns I 
have about many Latin American judicial systems more specifically than 
I have here. What specific programs does the State Department/USAID 
implement to increase judicial independence in countries we work with 
through INC? What are the indicators of success for this? How have 
those programs helped alleviate the concerns about respect for legal 
and human rights which your reports describe?
    Answer. The State Department and USAID, often with the support of 
the Department of Justice or representatives of the Judicial Conference 
of the United States, are engaged in numerous activities throughout 
Latin America and the Caribbean to strengthen the administration of 
justice (AOJ), including the independence of judiciaries. While some of 
these projects are implemented with INC funds (e.g., USAID AOJ projects 
in Bolivia, Colombia and Mexico), most are funded directly by USAID or, 
in the case of the International Criminal Investigative Training 
Assistance Program (ICITAP), by the Department of the State.
    Over the last ten years, approximately $300 million has been 
invested throughout the region in projects of all kinds. With regard 
specifically to the issue of judicial independence, trends in the 
region that we have supported include the establishment of new and more 
open methods of judicial selection, strengthening of court 
administration to enable judiciaries to manage their own budgets and 
otherwise cease to depend upon executive agencies for administrative 
support, and the creation of judicial schools to provide training for 
judges and judicial personnel.
    USAID and ICITAP are working together in an increasing number of 
countries to bring together judges, prosecutors, police investigators 
and public defenders to improve the handling of investigations. An 
overall goal is to change the current police practice of first 
arresting a suspect and then beginning the investigation. If police 
worked instead with prosecutors to develop cases, and arrested suspects 
only when sufficient evidence existed to charge them with crimes, there 
would be a substantial drop in the number of pretrial detainees 
throughout Latin American jails.
    Indicators of success are required for each individual project. 
Examples of indicators currently in use are: citizen perception of 
fairness in the justice system, access to legal information/services in 
the criminal justice system, favorable rating by polls of due process 
under law, new judicial codes adopted by national assembly, percentage 
of judges reappointed on the basis of merit by the new judicial 
council, and number of cases handled by public defenders throughout the 
country.
                        drug report to congress
    Question. The FY98 act also included bill language requiring a 
report from the Department of State containing a list of all countries 
in which the United States carries out international counternarcotics 
activities, the number, mission and agency affiliation of U.S. 
personnel assigned to each such country, and all costs and expenses 
obligated for each program, project or activity by each U.S. agency in 
each county within 60 days of enactment. This report is about seven 
weeks overdue. When will that report be submitted to Congress?
    Answer. The report was completed and delivered last month (March 
1998) to the Senate and House Appropriations Committees, the Senate 
Foreign Relations Committee and House International Relations 
Committee. Please let us know if you need another copy from the State 
Department.

       Questions for the Record Submitted by Congresswoman Pelosi

                              global aids
    Question. Many experts who focus on infectious diseases, 
particularly AIDS, are encouraged by recent reports that access to 
drugs and new technologies can, at a relatively low cost, make inroads 
into [reducing] the transmission [rate] of infectious diseases around 
the world. Does the State Department coordinate its efforts and 
activities to fight infectious diseases, including AIDS, with other 
U.S. agencies and departments including the Agency for International 
Development, the National Institutes of Health, the Centers for Disease 
Control and the Department of Defense? How can we ensure that our 
domestic and international efforts to develop effective and accessible 
technologies to fight epidemics are coordinated and taking advantage of 
the initiatives on which each agency is working?
    Answer. The Department of State has made the reduction of diseases 
one of its strategic foreign policy goals and coordinates the efforts 
of the National Institutes of Health and the Centers for Disease 
Control and Prevention in enhancing global preparedness in prevention, 
detection, research, surveillance and response to disease worldwide. In 
December 1997, I issued the first-ever statement by a U.S. Secretary of 
State on the World AIDS situation. In 1996 for the Lyon Summit, the 
Department of State successfully negotiated the inclusion of HIV/AIDS 
and other infectious diseases onto the global economic agenda in the G-
7 (now G-8) forum. Discussion of these issues was a centerpiece of the 
Denver Summit hosted by President Clinton last summer, and will 
continue to be important to our international discussions with 
leadership.
    The Department of State also chairs a U.S.-EU Task Force on 
Communicable Diseases which has developed a prototype network for the 
international reporting of foodborne diseases, and which we soon expect 
to be expanded to each of the other continents. Under the leadership of 
the Department, all major bilateral initiatives have a health component 
which focuses on HIV/AIDS and infectious diseases. The Department of 
State continues to support international organizations such as the 
World Health Organization, UNAIDS, and the World Bank, whose 
participation in addressing these issues is critical in the battle 
against these diseases and to our U.S. International Strategy for 
reducing the spread of diseases worldwide.
    The USG through the US Agency for International Development is one 
of the largest international donors for HIV/AIDS, providing nearly $1 
billion since 1986 to fight HIV/AIDS around the world. Over the last 10 
years, HIV/AIDS projects have been established in 42 countries, and 
have helped more than 600 private voluntary organizations implement HIV 
prevention programs that have reached more than 22 million people. In 
addition, more than 200,000 educators, counselors, and clinicians have 
been trained.
    With funding of $50 million recently made available to work on 
infectious diseases worldwide, USAID has developed a new strategy which 
concentrates on TB, malaria, antimicrobial resistance, and surveillance 
and response. This approach is consistent with the Department of 
State's International Affairs Strategic Plan and will complement 
USAID's on-going activities to improve child survival and the health of 
women worldwide. The strategy was developed in coordination with key 
partners such as the Centers for Disease Control and Prevention, the 
National Institutes of Defense, and the Department of State. In 
addition, the implementation of USAID's strategy will be coordinated 
with these agencies' own infectious disease efforts.
                                 mexico
    Question. The U.S. is reportedly currently training large numbers 
of Mexican military personnel in counternarcotics techniques. Mexico is 
also a nation with at least two significant insurgent groups, the 
Zapatista Army and the EPR (Popular Revolutionary Army). Some areas of 
the country, like the states of Chiapas, Oaxaca, and Guerrerro, have 
both insurgent activity and narcotics trafficking. What assurance is 
there that the soldiers who we have trained and are training do not use 
their new skills for counter-insurgency purposes? Is there any end-use 
monitoring of training?
    Answer. In responses to Mexico's interest in improving the skills 
and capabilities of military personnel being assigned to newly-created 
counter-drug units, the U.S. arrange for training by the U.S. Army 
Special Forces. This training has emphasize skills and discipline 
useful for personnel engaged in counter-drug activities. The Mexican 
Secretariat of National Defense selects personnel for U.S. training who 
are most likely to be assigned to counter-drug units, or to units which 
regularly perform counter-drug missions.
    Some of the Mexican states that have recently experienced insurgent 
activities are also major drug-trafficking and producing states. 
Therefore, it is likely that some of the personnel who receive U.S. 
training will, at some point, be assigned to units or missions in those 
states. However, we do not intend to attempt to direct the Government 
of Mexico where in its territory individual officials should be 
assigned.
    Recipients of U.S. Special Forces training are given thorough 
grounding in internationally-accepted concepts of protection of human 
and civil rights, the rule of law, and appropriate interaction between 
military forces and civilian populations in conflictive situations. A 
key aspects of such training is knowing when to refrain from use of 
force.
    The U.S. Government attempts to conduct post-training assessments 
or evaluations to determine the impact of the training and to be able 
to make changes in curriculum or training methods to make it more 
effective in the future. We are also very interested in ascertaining if 
personnel receiving specialized U.S. training are assigned to positions 
where they can make use of it. This will affect where we invest limited 
training resources in the future. We are not able, however, to follow 
up on each and every individual around the world who receives U.S. 
training.
    Question. On December 8, 1997, Mexico and the European Union signed 
the so-called ``democracy and human rights clause'' as a part of their 
growing commercial relations. The clause establishes democratic 
principles and respect of human rights as the cornerstone of the EU-
Mexico relationship. How would you characterize the place that 
democracy and human rights have in U.S.-Mexico relations? Are we 
willing to make promotion of democracy and human rights a centerpiece 
of our relationship with enforceable standards?
    Answer. Promoting democracy and protecting human rights are major 
components of our Mexico policy. These issues were major themes during 
the President's May 1997 visit and our August 1997 high-level human 
rights consultation with the GOM. Our continuing dialogue on democracy 
and human rights is a visible manifestation on the breadth, depth, 
complexity and maturity of our relationship as well as of our ability 
to deal with issues in a cooperative manner. This continuing dialogue 
also demonstrates the importance of human rights in our bilateral 
relationship, as do our similar high-level human rights dialogues with 
Canada, Russia and the EU.
    Question. Over the last three years there has been an alarming 
growth in paramilitary groups like the one that carried out the 
December massacre of 45 peasants in Acteal, Chiapas. Leading Mexican 
non-governmental human rights organizations have reported collaboration 
between the Federal Army and these vigilante organizations. In its 
January 4, 1998, edition, the magazine ``Proceso'' published what it 
claimed was an Army document outlining a strategy to ``create and 
support paramilitary groups.'' The Army has vehemently denied these 
assertions and claims the published document is a sophisticated fake. 
Clearly, however, any evidence of linkage of Army support for these 
groups would be a matter of grave concern for the U.S. What evidence 
does the U.S. have regarding these serious charges?
    Answer. The evidence we have seen does not support the allegations 
that paramilitary groups in Chiapas were created or supported by the 
Mexican military. Many of these groups appear to have originated as 
``self defense'' groups connected to one side or another in the 
multiple conflicts that divide Chiapas. The most recent interim report 
of the Mexican Attorney General's investigation of the Acteal massacre 
describes how local political leaders and public security officials--
not the Mexican military--collected weapons and provided them to these 
``self defense'' groups. It was one such group, using weapons acquired 
legally and illegally as well as some home-made weapons, that carried 
out the Acteal massacre.
         congo and rwanda (human rights and africa growth act)
    Question. The Africa Growth and Investment Act, the centerpiece of 
the Administration's new Africa policy, was strengthened by Reps. 
Gilman and Smith who amended the bill to require that participating 
countries must respect the rule of law and that they would be 
ineligible to participate in programs or receive assistance or other 
benefits if the President determines that they engage in gross 
violations of human rights. Has the Administration endorsed this link 
between human rights and trade benefits in Africa? If not, why not?
    Answer. The Administration endorses the link, and we strongly 
support the bill as it was approved by the House of Representatives on 
March 11. As amended, the bill states:
    ``It is the sense of the Congress that a sub-Saharan African 
country should not be eligible to participate in programs, projects, or 
activities, or receive assistance or other benefits under this Act if 
the government of that country is determined by the President to engage 
in a consistent pattern of gross violations of internationally 
recognized human rights.''
    A country must also observe the existing statutory criterion on 
internationally-recognized worker rights as a condition for eligibility 
for duty-free benefits under the Generalized System of Preferences 
program.
                bosnia--need for reconstruction funding
    Question. The Administration has based the renewal of the SFOR 
mission in Bosnia on a series of benchmarks, where continued U.S. and 
NATO troop involvement revolves around the benchmarks being met. Most 
of the benchmarks involve the reconstruction funds approved by this 
Subcommittee, such as establishing an effective judiciary and police, 
independent media, conduct of free and fair elections, free market 
reforms and cooperation in prosecution of war criminals. You are 
seeking $225 million for the continued reconstruction of Bosnia. Please 
comment on the need for these funds in relation to the benchmarks.
    Answer. The funding already provided by this Subcommittee, and that 
which we are requesting in FY 99, is critical to achievement of the 
benchmarks which will permit the departure of NATO forces from Bosnia. 
SEED programs in Bosnia, administered through USAID, Treasury, Justice, 
and USIS, give the U.S. the means to lead on police and judicial 
reform, reform of the media, the holding of free and fair elections, 
economic transition to a self-sustaining market economy, minority 
returns, and the resolution of Brcko. U.S. assistance has contributed 
significantly to the political success of moderate leaders in the 
Republika Srpska, leaders who have demonstrated their willingness to 
implement Dayton commitments, such as return of refugees and 
cooperation with the International Criminal Tribunal for the Former 
Yugoslavia.
    This funding is important because it also permits us to leverage 
money and support from other donors for key U.S. goals, including 
achievement of the benchmarks we have established. The U.S. provides 
only 17.5 percent of the total funding pledged for Bosnia's 
reconstruction. But our example helps prompt other donors to commit 
over four times as much money to these priorities as does the U.S.
    You identified in your question several of our most important 
benchmarks. Here is a brief update on the progress being made in each:
    War Criminals. Since March of 1997, the number of publicly-indicted 
war criminals in the Hague has gone from 8 to 31. Three are dead, and 
32 remain at large. The U.S. is a major provider of funding to the 
Tribunal to insure that it is able to give those charged speedy and 
fair trials.
    Police Restructuring and Reform. In the Federation, 10,000 of the 
12,000 authorized police have been certified by the International 
Police Task Force. In the Republika Srpska 7,000 out of the 8,500 
police have been certified. In areas where police have undergone the 
certification process, human rights complaints against the police have 
dropped dramatically.
    Judicial Reform. In the Federation, a new criminal code has been 
drafted which contains clear human rights safeguards. It is expected 
that this law will go into effect before the end of June and we and 
other donors will train judges and prosecutors how to apply the new 
law. The RS has asked for similar assistance in redrafting its criminal 
code.
    Conduct of Free and Fair Elections. The OSCE has supervised three 
sets of elections and will supervise a fourth set of elections for most 
major national and entity offices this Fall. With each set of elections 
has come increased democracy, as evidenced by the steady losses of the 
former nationalist political parties. In the November, 1997 RS Assembly 
elections, the Pale hard-liners lost their Parliamentary.
    Development of Independent Media. Considerable progress has been 
made in the development of independent media and media standards. 
Extremist nationalist broadcast media have been taken off the air, an 
FCC-type licensing and standards board is being established by the 
Office of the High Representative with U.S. and other donor funding. 
State-run T.V. is being severed from party control. The Open Broadcast 
Network, the only truly independent cross-entity television station 
which is supported by the international donor community, is increasing 
its footprint over the next several weeks to reach 80 percent of the 
country, and recent polls show that it has become one of the most 
trusted sources of news in Bosnia.
    Privatization and a Free Market Economy. Agreement has been reached 
between the IMF and the Government of Bosnia which will shortly provide 
funding to back a single Bosnian currency which will serve to unify the 
economies of the two Entities. The IMF Agreement will open the way for 
Paris Club settlement, which will pave the way for full international 
creditworthiness for Bosnia. With considerable U.S. technical 
assistance, the Federation has prepared and passed all major 
privatization laws and could begin privatizing small state enterprises 
this summer. The RS has scrapped its flawed privatization law and 
should pass the necessary Entity laws on privatization this summer.
       bosnia--legislative prohibition on housing reconstruction
    Question. Last year, Congress again prohibited the use of our funds 
for housing reconstruction in Bosnia, with some exceptions. How has 
this prohibition affected our reconstruction efforts? Should the 
restriction be lifted?
    Answer. The Administration has consistently opposed this 
restriction on the use of SEED funds. It limits our ability to lead on 
this issued, which is one of the keys to large-scale returns of 
refugees and displaced persons. The damage to housing in Bosnia during 
the war was extensive, with nearly half of all housing either severely 
damaged or totally destroyed. This lack of housing greatly exacerbates 
ethnic tensions and prevents return of refugees and displaced person to 
their homes. In FY 1996, prior to the imposition of the legislative 
restriction, USAID put together an innovative program, working through 
NGOs, to repair over 2,500 private houses in Bosnia. It was an 
enormously successful program implemented ahead of schedule and under 
budget.
    At that time, no other donor was willing to tackle private housing 
repair, due to the difficulties caused by ethnic cleansing, which meant 
that much of Bosnia's housing was occupied by families other than 
owners (privately-owned housing made up 80 percent of the pre-war 
housing stock in Bosnia). USAID, by requiring the agreement of the 
local authorities, the current residents and the legal owners before 
agreeing to fund repairs, established a model for dealing with 
ownership problems. By showing the way, the U.S. program spurred other 
donors to tackle the housing problem.
    In a few crucial areas, such as Brcko, the legislated restriction 
has probably delayed progress by some measurable amount. It is critical 
to restore Brcko to a multi-ethnic city, but it took the U.S. precious 
time to find other donors willing to repair housing there. Even now, 
there is a serious problem with a lack of transitional housing for 
Bosnian Serbs, which would permit ethnic Croats and Muslims to return 
to their homes in Brcko city. It has been difficult to recruit 
individuals to serve in the multi-ethnic city government, in the 
absence of this housing. We have, over time, been able to work our 
arrangements with other donors for them to repair housing while we 
repair related infrastructure, such as water and electricity.
                         bosnia--krajisnik veto
    Question. What is the role of Bosnian Co-President Momcilo 
Krajisnik and representatives of the Pale government in determining 
where any portion of international financial institution loans of other 
economic assistance goes within Republika Srpska? What is the statue of 
the so-called ``Krajisnik veto,'' which allows Krajisnik to dictate 
that a certain portion of all loans to the RS goes to Karadzic-
controlled towns?
    Answer. Details of the Entity component for IFI loans are 
negotiated with the respective Entity Prime Ministers, usually 
accompanied by their Finance and other relevant Ministers. While in 
theory any member of the Tripartite Presidency, including President 
Krajisnik, could block World Bank or EBRD loans out of dissatisfaction 
with the location of projects, they have never done so. We have never 
been able to confirm the exercise of the ``Krajisnik veto.'' The World 
Bank, which certain human rights non-governmental organizations allege 
was subject to this type of coercion, vehemently denies that such 
attempts were ever made. The Bank insists that the municipalities in 
the Republika Srpska which have benefited from Bank assistance were 
chosen solely on the basis of objective economic or humanitarian 
criteria. The NGOs who insist that Krajisnik has dictated that a 
certain portion of all loans to the RS go to Kraradzic-controlled towns 
have never presents any evidence to support their claim.
                assistance for palestinians and menabank
    Question. The Administration has requested an increase in 
assistance to the Palestinian Authority, from $75 million to $100 
million, along with $52 million for the first U.S. contributions to the 
Middle East Development bank. Why is this increase needed? Is the 
Middle East Development bank ready for funding, and what priority does 
it occupy for the Administration?
    Answer. The Administration is requesting an increase from $75 
million to $100 million for USAID assistance programs in the West Bank 
and Gaza because economic development for the Palestinians is key to 
building peace in the Middle East. Neither the current $75 million nor 
the contemplated increase involves direct financial assistance to the 
Palestinian Authority or to the PLO.
    The increase in USAID funds would maintain the aid level 
established when the U.S. pledged $100 million per year to the 
international donor effort for the Palestinians for 1993-98. The 
original five-year pledge comprised $75 million per year for USAID 
activities in West Bank/Gaza and $25 million per year for OPIC project 
finance and loan guarantees. Unfortunately, the OPIC component has been 
underused by American business, and, for this reason, the 
Administration seeks to replace it with expanded USAID assistance.
    The additional USAID funds would be used for water projects and 
private sector activities. These initiatives will help build a 
constituency for peace in the Middle East while maintaining American 
leadership in the international donor effort for the Palestinians.
    The Middle East Development Bank (MENABANK) is ready for funding; 
it is a high priority for the Administration.
    Over the last year, an international transition team in Cairo has 
completed most of the work necessary to get the bank up and running. 
The team has prepared operational and financial policies and identified 
an impressive pipeline of potential projects.
    With other members looking to the U.S.--by far the largest 
shareholder in the bank--to fund its first year of capital 
contributions, the Administration is seeking the money necessary to 
enable MENABANK to meet key regional economic needs. The bank will 
provide capital--and political cover--for important regional projects, 
thus creating a forum for regional economic dialogue and cooperation. 
MENABANK will offer equity and loans for undercapitalized sectors, 
resulting in the creation of new jobs and promotion of economic growth.
                         new independent states
    Question. The Administration is requesting an increase of $155 
million for the NIS. Most of the increase would go for Russia, which 
would go from $129 million this year to $225 million in 1999. What is 
the rationale for an increase of this magnitude?
    Answer. The straightforward rationale for increased assistance to 
Russia is that our national security is dramatically enhanced if Russia 
is a market-based democracy; our engagement with Russia is among the 
highest foreign policy priorities of this Administration. Beyond our 
diplomatic contacts, our assistance activities help us stay engaged 
with Russians as they continue the generational, historic and difficult 
transformation of their society.
    Congressional earmarks for other parts of the NIS in the last three 
appropriations have resulted in dramatic underfunding of our assistance 
to Russia and Central Asia. Last year the NIS appropriation was so low 
and the earmarks so high that assistance to Russia was the same as to 
Armenia. Per capita assistance to Armenia this year is $25 per 
Armenian; per Russian it is 86 cents. It is this anomaly that we are 
trying to remedy with our FY99 request.
    Further, we have restructured our assistance to Russia to focus 
nearly exclusively on Partnership for Freedom activities: exchanges, 
partnerships, support for non-government organizations, emphasis on 
small business, trade and investment, grass roots activities that build 
support for economic and democratic reform from the bottom up. We have 
begun an important effort to encourage investment and economic growth 
in the regions of Russia, away from Moscow, in Novgorod, Samara and 
Khabarovsk. Through these activities, we seek to build lasting and 
healthy relationships between Russians and Americans so as to enhance 
our national security and pursue our national interests.
    Question. How much of the $900 million you have requested for the 
NIS will go for programs for Health, Population and the Environment and 
what level of increase does this represent? Given the vast needs in 
this area, particularly in the family planning area, why have these 
programs occupied such a low priority in the past? And, to what extent 
will health, population and environment programs be a priority if 
Congress only provides $770 million for the NIS program, the same as in 
FY 98?
    Answer. Assuming Congress approves our budget request of $925 
million for the NIS in FY 99, we have budgeted $149 million for health, 
population and environment, which represents an increase of $50 million 
or 51 percent over the FY 98 budget of $99 million (which is itself up 
from the $80 million budgeted in FY 97).
    We agree that the needs are vast in these areas, and that is why we 
have increased the amounts budgeted for these programs over the last 
two years. USAID's reproductive health programs in the NIS, for 
example, are trying to address problems ranging from poor quality of 
services and inadequate client counseling to limited choice of family 
planning methods and ignorance of how to avoid sexually transmitted 
diseases, including HIV/AIDS. One of our major goals is to reduce the 
high rates of abortion--and the associated maternal deaths, infertility 
and other physical damage to women--in the NIS.
    If Congress does not approve the $925 million request for NIS 
assistance in FY 99, budgeting for these programs would have to be 
reduced, as it would for all other programs. That said, we will 
continue to support activities in these areas because we believe they 
can have an important impact at the grassroots level, which is central 
to the goals of the President's Partnership for Freedom initiative. Our 
support for these programs was highlighted recently during the First 
Lady's trip to Russia, Ukraine and Central Asia, where she paid 
particular attention to programs in the health and family planning 
sectors.
                                ukraine
    Question. I understand that you will travel to Ukraine soon to 
discuss the status of economic reform and the treatment of American 
investors there. What can you tell us of this situation and do you 
anticipate being able to certify by April 30, 1998 that the government 
of Ukraine has made significant progress toward resolving the 
complaints of American investors, as required by law?
    Answer. We remain very concerned about the slow pace of economic 
reform in Ukraine and about its poor investment climate. During my 
March 6 visit to Kiev, I met with a group representing the U.S. 
business community in Ukraine, including a number of businesses that 
have raised complaints with the U.S. Government about problems they are 
having in Ukraine, such as Gala Radio and R&J Trading. The businessmen 
reviewed for me both company-specific problems and broader systemic 
obstacles to doing business in Ukraine. This meeting followed my 
meeting with President Kuchma, at which I raised directly our concern 
over the treatment of U.S. businesses and investors and the need for 
action to improve the investment climate in Ukraine and the pace of 
economic reform.
    As you know, on April 29 I announced my decision to certify that 
the government of Ukraine had made significant progress toward 
resolving U.S. investor complaints. We have worked very closely with 
the Government of Ukraine over the past year to push for resolution of 
investor complaints, including the twelve specific complaints covered 
by the legislation. Seven of the cases were resolved or there was 
significant progress toward their resolution.
    Since I announced my decision to certify, the government of Ukraine 
has continued to work with us to resolve the remaining cases, and we 
continue to make progress.
    We remain concerned, however, about the remaining investor 
problems, and more generally about Ukraine's poor investment climate 
and the slow pace of economic reform. In conjunction with my decision 
to certify I directed the withholding of certain assistance funds to 
the government of Ukraine in areas where reforms have stalled and such 
assistance cannot be used effectively. These funds will be redirected 
to the private and nongovernmental sectors in Ukraine unless the 
Government of Ukraine implements the necessary reforms in these sectors 
and takes additional steps to resolve outstanding business cases in 
Ukraine.
                indonesian labor leader muchtar pakpahan
    Question. Has Muchtar Pakpahan's case been raised with President 
Soeharto during U.S. bilateral discussions with President Soeharto? If 
not, why not? If so, to what result?
    Answer. President Clinton and Secretary Albright raised Pakpahan's 
case with President Soeharto and Foreign Minister Alatas, respectively, 
at the November 1997 APEC Leaders Meeting in Vancouver, and urged that 
he be permitted to receive medical treatment overseas. Foreign Minister 
Alatas gave Secretary Albright explicit assurances that a Canadian 
medical team would be allowed to examine Pakpahan and, if the doctors 
recommended it, Pakpahan could be treated overseas. In December the 
team of Canadian doctors examined Pakpahan and concluded that 
Pakpahan's treatment in Indonesia was adequate for his condition.
    Ambassador Roy and the American Embassy in Jakarta are active in 
their support for Pakpahan and regularly raise the issue of his 
imprisonment with senior Indonesian officials, up to and including 
Foreign Minister Alatas and Coordinating Minister for Politics and 
Security Feisal Tanjung. Embassy officials regularly attend Pakpahan's 
weekly trial sessions and are able to communicate with him and his 
supporters. Assistant Secretary of State Stanley Roth has also met with 
Pakpahan during his visits to Indonesia. The Embassy's Labor Attache 
discusses the Pakpahan case in frequent meetings with Ministry of 
Manpower officials, the Red Cross, and other embassies in Jakarta.
                                thailand
    Question. Please describe the new bilateral aid package to 
Thailand.
    Answer. U.S. assistance to Thailand will be worth $1.7 billion and 
involves nine U.S. agencies. We hope it will strengthen business 
confidence and demonstrate our support for the Thai people.
    To increase bilateral trade flows, the U.S. Export-Import bank (EX-
IM) has announced its intention to increase short-term trade financing 
by up to $1 billion.
    The United States also is seeking to assure that other official 
export credit agencies, including those of the G-7, remain open to 
Thailand.
    The U.S. Overseas Private Investment Corporation also will provide 
$400 million in support of two Thai electric power projects and will 
make available $45 million in OPIC guarantee investment funds for 
equity investment in Thai companies.
    The U.S. Trade Development Agency (TDA) will finance feasibility 
studies for State Railways of Thailand and provide technical assistance 
to upgrade communications networks. The TDA also will afford technical 
assistance to Thailand's National Electronics and Computer Technology 
Center to assist in developing a nation-wide, high capacity information 
network for government services.
    The United States will relieve the Thai government of its remaining 
financial liability for the 1996 contract to purchase eight F/A-18 
aircraft.
    The United States will provide scholarships for 165 Thai students 
to come to the United States for university studies.
    The U.S. Information Agency (USIA) will enhance its Fulbright 
program in Thailand.
    The U.S. Immigration and Naturalization Service (INS) will relax 
its rules to temporarily permit students from Thailand (and other 
countries affected by the economic crisis) to finance their studies 
through employment in the United States.
    The United States will provide immunization shots for children and 
assist in the operations of rural health programs in Thailand.
    The United States will consider favorably a Thai request for the 
United States to join the humanitarian de-mining program along the 
Thai-Cambodian border.
    In cooperation with the Thai government, we are prepared to help 
establish an international law enforcement academy in Bangkok to 
enhance regional cooperation on legal assistance matters, extradition 
and the administration of justice.
    The academy will be open to law enforcement officials from 
throughout the Southeast Asia region and will offer programs to train 
officials to combat transnational crime, including narcotics 
trafficking, money laundering and other financial crimes, 
counterfeiting, firearms trafficking, vehicle theft, and alien 
smuggling.
        Questions for the Record Submitted by Congressman Yates
             swiss bank holocaust fund restitution payments
    Question. Are you aware of the February 6 Washington Post story 
that the Swiss banks' Holocaust Fund is paying 400 elderly Jews, out of 
19,000 eligible, about $400?
    Answer. The major commercial Swiss banks, together with other 
private sector firms and the Swiss National Bank, have so far 
contributed nearly $200 million to a Special Holocaust Fund to assist 
needy survivors. Representatives of prominent Jewish organizations are 
on its board. Since November of 1997, the Fund has been making initial 
distributions to victims in Latvia and Hugary.
    Since February 6, the pace of distribution has accelerated. By now, 
assistance has been provided to around 15,000 Holocaust survivors, 
primarily in Latvia and Hungary. As many as 20,000 Hungarian survivors 
may eventually be eligible for assistance. The Fund expects to grant 
many victims about $1,000 each. The Fund's priority was to take care of 
``double victims''--Nazi victims who have lived behind the Iron 
Curtain. Now the Fund is poised to start making payments to American 
survivors as well.
                insurance benefits for holocaust victims
    Question. Can you tell me what State is doing, if anything, to help 
the rightful owners recover lost art or collect benefits on insurance 
policies?
    Answer. The State Department attaches great importance to the 
restitution of property to rightful owners. We have encouraged states 
to restitute property swiftly and in a non-discriminatory manner. We 
have also encouraged all countries to open their archives covering this 
period. This is an on-going effort.
    The Department of State will co-host, with the United States 
Holocaust Memorial Museum, an international conference on Holocaust 
assets next fall that will focus attention on both art restitution and 
Holocaust related insurance issues. We are in close contact with a 
number of expert groups and regulatory agencies on these issues.
                   restitution to holocaust survivors
    Question. Are you working with other departments and international 
institutions?
    Answer. Under Secretary Eizenstat has led an interagency effort, 
which includes the Departments of Treasury, Commerce, Justice, the CIA, 
the Department of Defense, the NSC, the National Archives and the 
Holocust Memorial Museum, to declassify and publicize materials in the 
U.S. archives pertaining to Holocaust-related assets, including art and 
insurance. There has also been close consultation on this with Senate 
and House principals and staff.
                      role of the state department
    Question. Can you envision a role for the Department of State and 
the whole United States Government?
    Answer. The State Department will remain engaged in pursuing the 
just restitution, including compensation and reparations, for Americans 
and others who suffered egregiously from the Holocaust. We will 
continue to address the art restitution and insurance issues within 
this framework.
                      suggestion on how to proceed
    Question. How would you suggest we proceed in this matter?
    Answer. Our principal strategy has been to focus attention on 
restitution issues and to encourage opening of archives and full 
disclosure regarding the disposition and handling of Holocaust-related 
assets. The upcoming Washington Conference on Holocaust Assets will 
provide an important opportunity for us to advance these objectives. We 
must recognize, however, that coming to terms with these issues is a 
difficult and painful process for states which have only recently 
emerged from years of communist rule and are still going through both 
political and economic reform. Countries in the West also have great 
difficulty in coming to terms with this difficult period in their 
history.
                            g-7 involvement
    Question. Because we have enormous influence on banks in our bill, 
is it not an appropriate subject for the major banks or the G7 members 
themselves to get involved? Can the G7 get involved?
    Answer. Under Secretary for Economic Affairs Stuart Eizenstat has 
sought to engage the parties in the Swiss banking dispute in 
constructive discussion on a possible settlement. We believe that 
further sanctions or threats of sanctions are not appropriate at this 
time when the parties to the dispute are seeking in good faith to reach 
a settlement. We have encouraged all parties and entities to closely 
review their role during this period and to provide full disclosure 
regarding dormant accounts, insurance claims, or other asset questions. 
These issues are best dealt with through bilateral relations that take 
into account the specific situation in each country.
                          holocaust survivors
    Question. I would think that, just as the United States wants to 
bring some help to these people who suffered these insufferable pains 
and discrimination at the hands of the Nazis, that there ought to be 
pressure brought by all U.S. Government agencies as well as by the 
Department of State? What do you think?
    Answer. Our objective continues to be to bring a measure of justice 
and assistance to the Holocaust survivors in this country and 
elsewhere. We believe that the best approach is one that recognizes the 
complexities of the issues and the difficulties that each country must 
face in dealing with this tragic period. Our best role is to encourage 
these countries to address Holocaust-asset related claims in an 
equitable and non-discriminatory manner.
                         post-air strike plans
    Question. Let's assume that United Nations Secretary General was 
unable to reach an agreement with Saddam Hussein. We would have 
launched air strikes to reduce Iraq's ability to produce weapons of 
mass destruction. What would we do then?
    Answer. Active diplomacy and the credible threat of force were the 
key factors in persuading Saddam to agree to cooperate with UNSCOM and 
IAEA inspectors, so we achieved our goals without the necessity of 
launching air strikes. If Iraq had continued to violate its obligations 
and we had launched air strikes our further actions would have 
depended, to a great extent, on how Saddam responded to the air 
strikes. He could have responded in innumerable ways. We considered his 
options and identified a variety of military and other options open to 
the coalition, depending on his response.
                  post-air strike diplomatic strategy
    Question. I assume Saddam Hussein would not allow UNSCOM to come 
back into Iraq and keep looking for these weapons. What would be the 
diplomatic tack that you and the Administration would take?
    Answer. I am reluctant to speculate about actions we would have 
taken if Saddam had continued to defy the international community, if 
we then launched air strikes and if Saddam then refused to permit 
UNSCOM to continue its work. Iraq has, in fact, agreed to cooperate 
with the weapons inspectors. The UN is now testing that agreement. We 
were prepared to use force had Iraq not so agreed. The goals of air 
strikes would have been to diminish the threat posed by Iraq's weapons 
of mass destruction program and reduce Iraq's capacity to threaten its 
neighbors. We cannot assume that Saddam would have refused to permit 
UNSCOM to return to Iraq following air strikes.
              post-air strike sympathy dividends for iraq
    Question. Wouldn't air strikes play into the hands of Saddam 
Hussein, because of the sympathy generated throughout the world? Plus, 
he could then continue his weapons program without having to be 
concerned with UNSCOM.
    Answer. The goal of the air strikes would have been to diminish the 
threat posed by Iraq's weapons of mass destruction program and to 
reduce Iraq's capacity to threaten its neighbors. Air strikes would 
have significantly reduced Iraq's capacity to develop weapons of mass 
destruction and threaten its neighbors. We cannot assume that Saddam 
would have refused to permit UNSCOM to return to Iraq following air 
strikes. Air strikes might have generated some publicity adverse to the 
coalition and favorable to Saddam, but Saddam appears to have decided 
that the cost to him of military action outweighed any such advantage.
                          ongoing air strikes
    Question. Would we be committed to continuing revolving air strikes 
against Iraq?
    Answer. I am reluctant to speculate about our military options had 
we launched air strikes against Iraq. In fact, we did not have to 
because Iraq agreed to cooperate with weapons inspections. Had we 
commenced air strikes we would not have been committed to continuing 
them indefinitely, but neither could we rule it out. Our subsequent 
actions would have depended, in large part, on the Iraqi government's 
reaction to the initial strikes.
    Our goals, obtaining Iraqi cooperation with weapons inspections and 
reducing Iraq's capacity to threaten its neighbors, would remain the 
same. If we determined that continuing air strikes were necessary to 
achieve those goals, they might have continued.
          nuclear deterrent to chemical and biological weapons
    Question. During the Gulf War it was stated that, ``it is the 
position of the U.S. that if any country uses chemical weapons against 
the US they will be met with a prompt and overwhelming response.'' I 
know that was our public position, but does that remain our response 
today?
    Answer. Yes, that remains our position today.
    If any nation were to attack the U.S., our allies, or our forces 
with chemical or biological weapons, our response would be swift, 
devastating, and overwhelming.
    We have worked hard to fashion non-nuclear responses to the threat 
or use of weapons of mass destruction, in order to give military 
commanders and the President a range of options from which to choose.
    Question. Would you assess the effectiveness of this policy as a 
deterrent. How has this type of possible response been applied toward 
Iraq?
    Answer. Effective deterrence depends on a combination of our 
ability to respond to the use of chemical or biological weapons (CBW) 
against U.S. or coalition forces with a devastating retaliatory blow, 
and our ability to carry out military operations successfully, even in 
the face of widespread enemy CBW use.
    In deterring the threat of CBW use against U.S. or coalition 
forces, we depend on military forces that are trained and equipped to 
operate effectively in a CBW environment, and on a powerful, flexible 
force employment capability. Effective counterforce combined with 
improving active and passive defenses can deny the tactical, 
battlefield advantages than an adversary might otherwise perceive it 
could gain by employing chemical or biological weapons. We have worked 
hard to make available to military commanders and the President a broad 
spectrum of credible force options. From these we can choose the 
appropriate option for delivering a devastating and overwhelming 
response to NBC use against us.
    We have made it clear to Iraq and the rest of the world that if it 
used chemical, biological, or nuclear weapons against our forces, we 
would deliver a response that is overwhelming and devastating.
          nuclear deterrent to chemical and biological weapons
    Question. How can we assist our allies in deterring ``rogue 
nations'' from developing chemical, biological and other weapons of 
mass destruction?
    Answer. We currently engage in a variety of activities to help our 
allies deter rogue states from developing chemical, biological, and 
other weapons of mass destruction. In particular, we:
    Work with our allies to encourage all nations to join all 
multilateral agreements related to weapons of mass destruction (WMD), 
such as the Chemical Weapons Convention, the Biological Weapons 
Convention, and the Nuclear Nonproliferation Treaty, with a view to 
establishing international legal norms and isolating the few who wish 
to maintain such options;
    Work with our allies to develop comprehensive and effective export 
controls to prevent proliferators from acquiring dual-use materials and 
technology for WMD programs;
    Work through regimes like the Australia Group and the Missile 
Technology Control Regime to harmonize export controls on sensitive 
dual-use materials and technology;
    Inform allies about transactions of concern, to enable them to take 
appropriate action to prevent items from reaching WMD programs;
    Share information on trends in proliferation, procurement networks, 
and procurement practices; and
    Work through entities like the International Science and Technology 
Center (ISTC) to employ scientists in civilian fields to dissuade them 
from providing their technical know-how and expertise to countries or 
programs of concern.
    Question. What is our first, last, and best line of defense in 
dealing with the proliferation of chemical, biological, and other 
weapons of mass destruction?
    Answer. There is no single, simple counter to the proliferation of 
chemical, biological, and other weapons of mass destruction (WMD). Our 
primary objective is to prevent countries from acquiring WMD, and to 
make their procurement efforts harder, more expensive, and more time 
consuming.
    We encourage countries to adopt responsible nonproliferation 
policies and practices by joining arms control and nonproliferation 
regimes such as the Nuclear Nonproliferation Treaty, the Biological 
Weapons Convention, and the Australia Group.
    Through export controls we seek to deny proliferators key materials 
and technology needed to acquire or advance their WMD program. The 
international harmonization of these controls--through the Australia 
Group, for example--helps achieve this goal.
    Finally, the availability of accurate and timely information about 
procurement activities and programs of concern is invaluable to all our 
nonproliferation efforts.
                                 russia
    Question. Although the former Soviet Union signed and ratified the 
1972 biological weapons ban, it has been reported by the New York Times 
on 25 February, 1998, that the one time second in command of the Soviet 
Union biological Weapons program, Kenajtan Alibekov, who defected to 
the United States in 1992 and now goes by the name Ken Alibek, believes 
that the Russians are continuing to develop new biological weapons. The 
Russian Foreign Ministry has stated that the Russian Government was 
``strictly'' fulfilling all its obligations. Even as the United Nations 
inspectors have uncovered circumstantial evidence that there is a 
connection between the Russian and Iraqi weapons program. Can you 
answer these claims.
    Answer. Dr. Alibek, who came to the U.S. in 1992, was last actively 
engaged in the Soviet program in 1991 when he was Deputy Director of 
BioPreparat. His statements are personal assessments--he has no direct 
information pertaining to current Russian activities.
    Regarding the alleged connection between the Russian and Iraqi 
weapons programs, we have no information indicating that Russia entered 
into an agreement to provide either technical knowledge or equipment 
that would advance the Iraqi biological warfare program.
    Question. Why did the Russian Ministry of Foreign Affairs make a 
point that they are ``strictly'' fulfilling their obligations?
    Answer. The Ministry of Foreign Affairs was responding to 
allegations made, including in the U.S. press, that the Russian 
Government has been involved in activities contrary to the Biological 
Weapons Convention.
    Question. Is there wiggle room in the 1972 Treaty which could allow 
them to continue an offensive biological weapons program under the 
guise of defensive policy?
    Answer. The Biological Weapons Convention (BWC) is clear: State 
Parties are committed not to develop, produce, stockpile, or otherwise 
acquire or retain biological weapons (BW) for offensive purposes.
    However, the BWC currently provides no mechanism to help detect and 
deter cheating. Since 1995, the U.S. has been involved in negotiations 
to develop a compliance and transparency mechanism to the BWC. In 
January 1998, President Clinton announced that the U.S. would seek to 
conclude the framework of a protocol by the end of 1998. Such a 
protocol could assist in detecting and deterring violations of the BWC.
    Question. What are we doing to safeguard our people from the 
continuing threat posed by Weapons of Mass Destruction?
    Answer. We are engaged in a variety of activities to deter states 
from developing chemical, biological, and other weapons of mass 
destruction (WMD), and to safeguard U.S. citizens from the threat of 
WMD. In particular, we:
    Work with our allies to encourage all nations to join all 
multilateral agreements related to weapons of mass destruction (WMD), 
such as the Chemical Weapons Convention, the Biological Weapons 
Convention, and the Nuclear Nonproliferation Treaty, with a view to 
establishing international legal norms and isolating the few who wish 
to maintain such options;
    Work with our allies to develop comprehensive and effective export 
controls to prevent proliferators from acquiring dual-use materials and 
technology for WMD programs;
    Work through regimes like the Australia Group and the Missile 
Technology Control Regime to harmonize export controls on sensitive 
dual-use materials and technology;
    Inform allies about transactions of concern, to enable them to take 
appropriate action to prevent items from reaching WMD programs;
    Share information on trends in proliferation, procurement networks, 
and procurement practices;
    Work through entities like the International Science and Technology 
Center (ISTC) to employ scientists in civilian fields to dissuade them 
from providing their technical know-how and expertise to countries or 
programs of concern;
    Educate our personnel throughout the world and teach them how to 
respond to WMD attacks; and
    Work with other agencies to prepare our medical and emergency 
personnel to address threats in a prophylactic manner.
    Question. What is the Administration's position with regard to 
President Yeltsin's outspoken opposition toward our policy in Iraq and 
his statements that military action could trigger World War III?
    Answer. While we differ over tactics, senior Russian officials have 
assured us that Russia shares our goals of keeping Iraq from developing 
weapons of mass destruction. In February, the United States and Russia 
were able to come together on a set of principles that UN Secretary 
General Annan could take with him to Baghdad. Both Russia and the 
United States, along with other members of the UN Security Council, 
supported the agreement Secretary General Annan worked out with Iraq 
officials, and called upon Baghdad to comply with the terms of that 
agreement.
    However, Russian officials, including President Yeltsin and Foreign 
Minister Primakov, publicly stated their opposition to the use of force 
against Iraq. They stated the Russian view that no country or countries 
has the authority to use force against Iraq to bring about Iraqi 
compliance with UNSCOM without a new review and authorization by the 
Security Council.
    The U.S. does not share Russia's interpretation of UN Security 
Council resolutions (UNSCR's) and the need for a new review by the 
Security Council. The U.S. believes strongly that resolutions already 
in effect authorize the use of force. The use of force might prove 
necessary now or in the future, if Iraq's failure to comply with 
UNSCR's intended to impede Iraq's development of weapons of mass 
destruction and to compel Iraq's full compliance with all Security 
Council resolutions would constitute a serious violation of the cease-
fire agreement. Frankly, we do not agree that military action taken 
against Iraq to secure its compliance with relevant UNSCR's would 
trigger a world war.
                         iran: nonproliferation
    Question. Has Iran acquired weapons of mass destruction and does it 
have the missile technology to deliver them?
    Answer. Iran continues its efforts to develop a nuclear weapons 
capability, but has made little progress to date due to the reluctance 
of most nuclear suppliers to provide any assistance to Iran. 
Multilaterally, through the Nuclear Supplier's Group and bilaterally 
through discussions with supplier governments, notably Russia and 
China, we are working to end cooperation with Iran's nuclear programs. 
We object to any nuclear cooperation with Iran on the grounds that any 
cooperation, even for peaceful, civilian uses, will add to the pool of 
Iranian knowledge and experience and provide Iran with commercial 
access to more sensitive nuclear technologies that the Iranian 
government may draw on to further its weapons program. China informed 
the U.S. in October 1997 that it would not engage in any new nuclear 
cooperation with Iran, had terminated assistance to Iran on a uranium 
conversion facility, and would complete work on its two remaining 
Iranian nuclear projects--neither of which raises proliferation 
concerns--in a relatively short period of time. We continue to 
encourage Moscow and other suppliers to terminate nuclear cooperation 
with Iran.
    Iran continues to develop its chemical and biological weapons 
programs. We believe these programs have progressed much further than 
the nuclear program. Through the Australia Group, the Biological 
Weapons Convention and the Chemical Weapons Convention, we seek to 
limit Iran's access to the components, equipment and technology 
necessary to develop these weapons. The Administration uses other 
tools, such as sanctions to combat proliferation. Most recently, in May 
1997, the U.S., in accordance with the Chemical and Biological Weapons 
and Warfare Elimination Act of 1991, sanctioned seven Chinese entities 
and one Hong Kong company for knowingly selling CW-related materials to 
Iran's CW program.
    Iran is pursuing a multi-track effort to develop both liquid--and 
solid--propellant missile systems. We believe Iran possesses an 
extensive inventory of 300-kilometer range and 500-kilometer range Scud 
missiles. Iran purchased Scud missiles and related technology from 
North Korea and is probably close to achieving Scud production 
capability, if it has not already done so. Iran also is developing a 
medium-range ballistic missile. Once Iran's indigenous missile 
production capability is fully developed, Iran would pose a new 
proliferation risk if it were to begin to export Iranian produced Scuds 
and production technology.
    Question. Does the Administration support the Iran Missile 
Proliferation Sanctions Act as passed by the House?
    Answer. No, the Administration does not support this legislation. 
Current law provides an adequate basis for the United States to impose 
sanctions on foreign entities that contribute to Iranian ballistic 
missile capabilities. The Administration is committed to fighting 
terrorism and taking steps to halt the transfer of missile technology 
to countries of concern, such as Iran. We believe, however, that the 
bill in its current form would weaken the U.S. ability to persuade the 
international community to halt such transfers to Iran. Because of the 
bill's requirement to impose sanctions based on an unworkable, low 
standard of evidence, its broad scope of covered transactions and lack 
of a meaningful waiver provision, we believe the President would be 
required to impose sanctions worldwide in a manner likely to undermine 
U.S. nonproliferation goals and objectives. We believe the bill would 
be counterproductive in convincing foreign governments to control 
missile-related trade with Iran. For example, the standard of evidence 
is so low it could result in the imposition of an untold number of 
erroneous sanctions on individuals or business entities. Imposition of 
erroneous sanctions on a large scale could dissuade foreign governments 
or persons from cooperating with the U.S. to prevent the transfer of 
missile technology to Iran and harm U.S. foreign policy goals and U.S. 
commercial interests with other nations.
    Although the proposed sanctions law is of global scope, it is 
intended to deal with Russian entities involved with Iran's missile 
program. We have made progress with the Russian government on key 
aspects of its companies' cooperation with the Iranian missile program. 
Then Prime Minister Chernomyrdin signed an executive order on January 
22 substantially strengthening the Russian export control process, 
providing new authority to stop transfers of dual-use goods and 
services to missile programs and programs for weapons of mass 
destruction. We have been discussing with the Russians steps necessary 
to implement the order and ideas for U.S.-Russian cooperation in the 
development of export control systems. We have received assurances that 
the new government will honor Chernomyrdin's commitment. Some concerns 
remain and we will continue to press our case at the highest levels of 
the Russian government.
                       european moves toward iran
    Question. The European Union moved to normalize relations with 
Iran. Is this move seen as an attempt to challenge our policy toward 
Iran?
    Answer. There is general agreement among the industrialized nations 
on the need to change Iran's unacceptable policies, but we differ on 
how to reach this goal.
    Until the Mykonos verdict in April 1997, the EU pursued a policy of 
limited engagement, through continued trade and the ``Critical 
Dialogue.'' In the wake of Mykonos, the EU suspended the Critical 
Dialogue; reiterated its commitment to banning arms sales to Iran; 
suspended official bilateral ministerial visits; and agreed to work 
together to curtail Iranian intelligence presence in EU states. This 
year, the EU lifted its ban on bilateral ministerial visits and decided 
to initiate an official dialogue with iran at the sub-ministerial 
level. The Iranian government has not yet agreed to have an official 
dialogue with the EU. Other measures remain in effect.
    We have stressed to the EU at the highest levels the need to 
coordinate a multilateral approach toward Iran. We continue to meet 
with the EU and Canada to explore ways to harmonize our policies toward 
Iran. We generally agree on the areas of concern; we are working on 
identifying additional measures to constrain WMD and counter-terrorism 
policies.
                           middle east: iran
    Question. Has the Administration decided if the $2 billion gas 
development deal between France and Iran is sanctionable under current 
law?
    Answer. The issues raised by the Total deal are complex and require 
careful and thorough consideration. It would not be appropriate to 
speculate when our review will be complete. However, it is important to 
note that we are investigating the impact of the Asia financial crisis 
on the continued viability of the Total deal. We will factor the 
findings of that investigation into our ultimate determination of this 
case.
           khatami's desire for dialogue with american people
    Question. The Iranian President Mohammed Khatami, recently spoke on 
CNN of his desire for an open dialogue with the American people. Have 
you seen any tangible proof of this?
    Answer. Yes. While private exchanges among Americans and Iranians 
have taken place for the past ten years, the Iranian government has 
taken a more active role in orchestrating academic, athletic and 
cultural exchanges since the election of President Khatami. For 
example, in February, the Iranian government hosted the U.S. national 
wrestling team in Tehran for an international tournament, and a group 
of American Scholars and ex-officials for a conference on Gulf 
security. Both visits went well. The U.S. wrestling team is due to 
return to Iran in the fall for the World Cup tournament. The Iranian 
wrestling team and several Iranian scholars have visited the United 
States. The Iranian wrestling team will return to the United States in 
July.
                 fracture between khamenei and khatami
    Question. The Supreme Leader Ayatollah Khamenei has continued his 
anti-American rhetoric. Is there any sign that there is a fracture in 
relations between Khamenei and Khatami?
    Answer. It was apparent from the conflicting messages Khamenei and 
Khatami delivered at the Organization of Islamic Conference Summit in 
Tehran in December that there are differences between the two, 
particularly regarding Iran's relations with the West. The divergence 
between the fractions they head was most recently seen in the arrest of 
the mayor of Tehran, a supporter of Khatami, by the head of the 
judiciary, who supported Khatami's conservative opponent in the 
presidential elections last year.
           khatami's power to redirect iranian foreign policy
    Question. Assuming that President Khatami wanted to, is there proof 
that he can redirect Iranian foreign policy?
    Answer. No, there is no proof that Khatami can redirect Iran's 
foreign policy, particularly in the sensitive areas of relations with 
the United States and Israel, which remain under the control of the 
Supreme Leader, Khamenei.
    There are, however, signs that Khatami and his Foreign Minister are 
attempting to exert greater control over foreign policy in other areas, 
and have had some success. For example, one of Khatami's foreign policy 
goals is to improve Iran's stature in the international community and 
reduce tensions with neighboring states, particularly the Gulf 
monarchies. To this end, the Iranian government worked hard to ensure 
that the summit meeting of the Organization of Islamic Conference held 
in Tehran in December would be a success, and has initiated several 
high-level official visits with Saudi Arabia and other Gulf 
governments.
                      iranian support of terrorism
    Question. is there any sign that Iran is not supporting and 
exporting terrorism?
    Answer. No, the government of Iran continues to sponsor terrorism.
    The Iranian government conducted at least 13 assassinations in 
1997, mostly in Northern Iraq against members of the regime's main 
opposition groups.
    Iran supplies training, funding and other means of support to 
violent opponents of the Middle East peace process, including Hamas. 
Iran provides similar assistance, as well as weapons, to the 
Palestinian Islamic Jihad, the Popular Front for the Liberation of 
Palestine-General Command and the Lebanese Hizballah.
    We are working to convince the international community to focus 
pressure on Iran to end its support for international terrorism.
         iranian support for hamas, hizballah and islamic jihad
    Question. Does Iran still provide support to Hamas, Hizballah and 
Islamic Jihad? If so, what kind of support?
    Answer. Iran supplies training, funding and other means of support 
to violent opponents of the Middle East peace process, including Hamas. 
Iran provides similar assistance, as well as weapons, to the 
Palestinian Islamic Jihad, the Popular Front for the Liberation of 
Palestine-General Command and the Lebanese Hizballah.
                          general foreign aid
    Question. The purpose of American foreign policy and the purpose of 
our investments in USAID programs is to keep America strong and 
respected. Our goal is to protect the interests of our citizens in an 
age when national borders are porous, markets are global, and many of 
the threats to our security cannot be dealt with by any one nation 
acting alone.
    How have these programs improved the security of our allies, our 
partners in the Middle East Peace Process, and our friends in the 
states of Eastern Europe and throughout the world?
    Answer. Deadly conflict and crisis within countries represent the 
main threats to security in the post Cold War era. Foreign assistance 
programs have improved security by successfully addressing some of the 
factors that increase the likelihood of deadly conflict and crisis. Aid 
programs have promoted economic, social, and political progress. They 
have attempted to strengthen institutions and enhance human resources, 
so that countries can better deal with internal conflicts without 
falling into crisis and deadly conflict.
    In the Middle East, where conflicts are indeed deep-seated and 
bitter, our aid has contributed to significant economic, social, and 
political progress. For instance:
    According to the Fraser Institute, economic freedom increased 
between 1975 and 1995 in Israel (from 2.2 to 4.2); in Egypt (2.7 to 
4.4); and in Jordan (4.3 to 4.8). The improvements for Israel and Egypt 
were relatively large compared with other countries. These higher 
scores represent significant strengthening of policies and 
institutions, in many cases supported by foreign assistance.
    Both Israel and Egypt achieved clearly positive average annual 
growth in real per capita income over the 1985-95 period (2.5 percent 
and 1.1 percent, respectively). While per capita income growth for 
Jordan was negative over the same period, real gross domestic product 
has increased at a rapid rate (8 percent annually) since the Gulf War. 
This sort of economic progress does not guarantee security and 
stability, but it surely helps.
    On the social side, there have been major improvements in life 
expectancy, and sharp declines in infant mortality and fertility in 
Egypt, Israel, and Jordan. More generally, people's well-being in terms 
of health, education, status of women, and other social dimensions has 
clearly improved on average in each of these countries.
    On the political side, Israel has long been classified as ``Free'' 
by Freedom House, and its ratings within that category have improved. 
Jordan has made significant progress, from ``Not Free'' to ``Partially 
Free.'' Egypt has remained classified as ``Not Free.'' For Jordan and 
Egypt, Internal threats posed by fundamentalists have undoubtedly 
contributed to limits on political freedom.
    Similarly, in Eastern Europe foreign assistance is supporting 
economic, political, and social progress, including more effective 
institutions. While most Eastern European aid recipients are relatively 
advanced by development standards (looking at per capita income and 
social indicators), they are undergoing a profound institutional 
transition, which challenges their capacity to manage conflict. In most 
cases we are seeing significant improvements in economic growth 
performance, democracy, and in the performance of underlying 
institutions.
    Helping Russia, Ukraine, Armenia, Georgia, the Central Asian states 
and other states of the former Soviet Union become fully stable market 
democracies continues as much in the U.S. national interest as it was 
when the Soviet Union disintegrated. We are helping these nations 
create democratic societies and market economies which are increasingly 
based on Western values, and linked to us through trade and investment 
and through people-to-people, grassroots relationships.
    In some cases, particularly parts of the former Yugoslavia, 
avoiding deadly conflict and crisis will take considerably more than 
the broad economic, social, and political progress that foreign 
assistance aims to support. Nonetheless, there and elsewhere this sort 
of progress will enhance security by improving the odds that conflict 
and crisis can be avoided.
    U.S. foreign assistance programs have improved the United States' 
ability to function in the world by promoting economic and political 
freedom; by supporting economic and social progress, and by helping to 
foster a more cooperative global order.
    Question. The purpose of American foreign policy and the purpose of 
our investments in USAID programs is to keep America strong and 
respected. Our goal is to protect the interests of our citizens in an 
age when national borders are porous, markets are global, and many of 
the threats to our security cannot be dealt with by any one nation 
acting alone.
    In general, how do these programs support freedom, security and 
strengthen the security of the United States of America?
    Answer. Deadly conflict and crisis within countries represent the 
main threats to security in the post Cold War era. Foreign assistance 
programs have improved security by successfully addressing some of the 
factors that increase the likelihood of deadly conflict and crisis. Aid 
programs have promoted economic, social, and political progress. They 
have attempted to strengthen institutions and enhance human resources, 
so that countries can better deal with internal conflicts without 
falling into crisis and deadly conflict.
    While successful development does not guarantee security, it 
significantly improves the odds of avoiding deadly conflict and crisis. 
Within the traditional developing world over the past decade,, almost 
all of the countries that have fallen into crisis are least-developed 
countries where development progress has been at best sporadic and 
uneven (e.g., Somalia, Sudan, Zarie, Burma, Liberia, Rwanda, Haiti, and 
Ethiopia). Conversely, almost all of the countries that have reached 
middle-income or advanced status, as well as most poor countries that 
are making steady development progress (e.g., India, Bangladesh, Ghana 
and Uganda since the late 1980's) have largely avoided crisis and 
deadly conflict.
    A well-publicized study of failed states sponsored by the CIA 
reported that high infant mortality and low levels of openness to 
foreign trade were the most reliable predictors of state failure. We 
believe that these indicators are best seen as proxies for low levels 
of development. The implication is that with broad economic and social 
progress, the odds of state failure diminish.
    U.S. foreign assistance programs have improved the United States' 
ability to function in the world by promoting economic and political 
freedom; by supporting economic and social progress, and by helping to 
foster a more cooperative global order.
    First, USAID and other foreign assistance programs have 
successfully promoted economic and political freedom. Of 66 aid 
recipient countries covered by the Fraser Institute survey of economic 
freedom for 1975 and 1995, economic freedom clearly improved in 50 
countries; was substantially unchanged in 6; and clearly declined in 
only 10. Of 86 aid recipient countries covered by the Freedom House 
surveys of political freedom for 1975 and 1996, freedom clearly 
improved in 40; was substantially unchanged in 23; and clearly declined 
in only 13. For both economic and political freedom, the average change 
over all of the countries surveyed has been significantly positive.
    These sorts of improvements mean that the global community in which 
the United States operates is increasingly one of shared values where 
private markets and democracy are concerned.
    Second, USAID and other foreign assistance programs have 
successfully promoted economic and social progress. USAID recently 
reviewed the development performance of 90 aid recipients, a group that 
absorbed the bulk of U.S. (and other) foreign assistance over the 1965-
90 period and which today includes over 3 billion people. Forty-one 
countries, accounting for over two-thirds of the group population, 
achieved significantly positive economic growth over the 1965-90 period 
(Looking at the more recent 1985-95 period, another sixteen countries 
join that group). Progress in terms of social indicators (infant 
mortality, life expectancy, literacy, and fertility) has been nearly 
universal.
    Question. The purpose of American foreign policy and the purpose of 
our investments in USAID programs is to keep America strong and 
respected. Our goal is to protect the interests of our citizens in an 
age when national borders are porous, markets are global, and many of 
the threats to our security cannot be dealt with by any one nation 
acting alone.
    How has our foreign assistance improved our ability to function in 
the world?
    Answer. Deadly conflict and crisis within countries represent the 
main threats to security in the post Cold War era. Foreign assistance 
programs have improved security by successfully addressing some of the 
factors that increase the likelihood of deadly conflict and crisis. Aid 
programs have promoted economic, social, and political progress. They 
have attempted to strengthen institutions and enhance human resources, 
so that countries can better deal with internal conflicts without 
falling into crisis and deadly conflict.
    While successful development does not guarantee security, it 
significantly improves the odds of avoiding deadly conflict and crisis. 
Within the traditional developing world over the past decade, almost 
all of the countries that have fallen into crisis are least-developed 
countries where development progress has been at best sporadic and 
uneven (e.g., Somalia, Sudan, Zaire, Burma, Liberia, Rwanda, Haiti, and 
Ethiopia). Conversely, almost all of the countries that have reached 
middle-income or advanced status, as well as most poor countries that 
are making steady development progress (e.g., India, Bangladesh, Ghana 
and Uganda since the late 1980's) have largely avoided crisis and 
deadly conflict.
    U.S. foreign assistance programs have improved the United States' 
ability to function in the world by promoting economic progress, and by 
helping to foster a more cooperative global order.
    First, USAID and other foreign assistance programs have 
successfully promoted economic and political freedom. Of 66 aid 
recipient countries covered by the Fraser Institute survey of economic 
freedom for 1975 and 1995, economic freedom clearly improved in 50 
countries; was substantially unchanged in 6; and clearly declined in 
only 10. Of 86 aid recipient countries covered by the Freedom House 
surveys of political freedom for 1975 and 1996, freedom clearly 
improved in 40; was substantially unchanged in 23; and clearly declined 
in only 14. For both economic and political freedom, the average change 
over all of the countries surveyed has been significantly positive.
    These sorts of improvements mean that the global community in which 
the United States operates is increasingly one of shared values where 
private markets and democracy are concerned.
    Second, USAID and other foreign assistance programs have 
successfully promoted economic and social progress. USAID recently 
reviewed the development performance of 90 aid recipients, a group that 
absorbed the bulk of U.S. (and other) foreign assistance over the 1965-
90 period and which today includes over 3 billion people. Forty-one 
countries, accounting for over two-thirds of the group population, 
achieved significantly positive economic growth over the 1965-90 period 
(Looking at the more recent 1985-95 period, another sixteen countries 
join that group). Progress in terms of social indicators (infant 
mortality, life expectancy, literacy, and fertility) has been nearly 
universal.
    These sorts of improvements mean that the global community in which 
the United States functions is not only freer, but also significantly 
healthier and better educated, with higher incomes and less widespread 
poverty. As articulated in the International Affairs Strategic Plan, 
this clearly serves U.S. national interests.
    Finally, U.S. foreign assistance programs are part of a larger 
donor effort that developed under U.AS. leadership, and has represented 
a major, unprecedented example of voluntary global cooperation. The 
idea that rich countries as a group would provide aid to poor countries 
represented a major step forward for the global community in the early 
1960's. While the Cold War helped stimulate and justify development 
cooperation then, President Kennedy made it clear that the U.S. was 
providing aid (and was encouraging other countries to do the same) 
because it was the right thing to do.
    Since then, the number of donors has increased rapidly (including 
some 13 countries that have been aid recipients), as has the share of 
overall aid provided by donors other than the U.S. This unprecedented 
example of voluntary cooperation under enlightened U.S. leadership 
(including aid to formerly communist countries) has surely made an 
important contribution to a global order that functions increasingly as 
a cooperative community of nations. It has enhanced the ability of the 
U.S. to function in the world as a global leader. Returning to the 
premise of the question, foreign assistance has helped build a more 
cooperative international order under U.S. leadership.
    Question. How has our foreign aid improved our ability to function 
in the world? More specifically, how has it helped us in our recent 
troubles with Saddam Hussein?
    Answer. During the Iraq crisis, we forged a coalition of like-
minded nations determined to see the UNSC's resolutions enforced and to 
counter the threat posed by Iraqi weapons of mass destruction. Not one 
country reversed its commitment to us. Our allies understood that our 
combined resolve and steadfastness brought us to the point of 
agreement. U.S. foreign assistance plays a role in maintaining strong, 
comprehensive, and mutually beneficial relationships with key regional 
partners. Foreign assistance helps enable our partners to participate 
in international peacekeeping efforts, as well as combating terrorism.
    Question. Did our former coalition allies and recipients of 
security assistance reduce the drain on our own resources, physical and 
financial, during the recent build up in the Arabian Gulf?
    Answer. Eighteen countries offered military assets for the 
coalition and another twelve offered basing and overflight rights. More 
than 70 governments spoke out about the need for Iraq compliance with 
the obligations they accepted at the end of the Gulf War as part of the 
UN cease-fire resolution. With our coalition partners standing by, the 
robust force currently deployed in the region will stay in place until 
we are confident that Iraq will comply fully with its obligations.
    Question. Could we depend on Egypt, Jordan and other Middle East 
nations or was our access limited?
    Answer. Our Middle East partners played an important role in the 
Iraq coalition. We worked closely with Bahrain both in the region and 
on the UN Security Council to address the threat to the security of the 
Gulf and the authority of the United Nations posed by Saddam's pursuit 
of weapons of mass destruction. King Hussein of Jordan called 
repeatedly for full Iraqi compliance with all relevant UN resolutions. 
Egypt provided timely critical assistance in providing Suez Canal 
transit, overflight clearances, and refueling services. We consulted 
closely with the Saudis during the Iraq crisis and were confident of 
their support. We have a cooperative defense relationship with Qatar 
and several other regional partners.
                     holocaust victims' trust fund
    Question. Could you explain what the $10 million in the Holocaust 
Victims' Trust Fund will be used for?
    Answer. The ten million dollars represents the second tranche of a 
three-year commitment by the U.S. to the Nazi Persecutee Relief Fund. 
The Fund is tasked to provide relief to the aging survivors of Nazi 
Persecution. The Fund can also be used to support education and other 
awareness programs related to the Holocaust.
    Question. How did you arrive at the sum of $10 million?
    Answer. Congress authorized a total U.S. contribution of up to $25 
million in the ``Holocaust Victims Redress Act,'' which was signed by 
the President in mid-February. Given the complexity of this new 
program, a multi-year funding stream is a prudent and realistic 
estimate of the rate of implementation and expenditure.
                   origin of trust fund contribution
    Question. Where did you get this money from? Did it come out of 
another account?
    Answer. Money for the U.S. contribution has been identified within 
the Economic Support Fund (ESF). $4 million has been identified in FY 
98, $10 million has been added to the President's budget for FY 99, and 
we expect to request an additional $10 million from FY 2000.
                   debt relief for poorest countries
    Question. Will the Administration take action to relieve the debt 
burden of the poorest of the poor countries? Would it be appropriate 
for the Department of State to use its influence with the other nations 
that make up the G-7?
    Answer. The Administration recognizes the importance of reducing to 
sustainable levels the debt burdens of poor countries that are 
implementing economic reforms. Acting with the other creditor 
governments that make up the Paris Club, we have reduced the burden of 
government-to government debts of some of the poorest countries by up 
to 67%. We have also been a strong advocate of the Heavily Indebted 
Poor Countries (HIPC) debt relief initiative, through which reforming 
countries receive reductions of up to 80% of their debts to Paris Club 
governments and, for the first time, relief on their debts to the 
International Monetary Fund (IMF), the World Bank, and other 
international financial institutions. Both of these efforts are aimed 
at reducing countries' debt burdens to manageable levels.
    Our FY99 budget contains funding for continued debt relief for the 
poorest countries through the Paris Club. It also contains funding for 
us to forgive the concessional (low-interest-rate) bilateral debts owed 
to the U.S. by those African governments undertaking strong economic 
reforms. The two funding items will allow us to reduce debt with a face 
value of up to $1.6 billion. Our debt relief efforts benefit countries 
that are reforming their economic policies, because debt relief alone 
will not lead to sustainable growth and development unless governments 
implement responsible economic policies.
    The Administration is continuing to work with our G-7 counterparts, 
who participate in the Paris Club, on debt relief. We are encouraging 
those who have not done so to join us in forgiving bilateral 
concessional debts owed by reforming African countries. We plan to 
discuss continued efforts on debt relief with our counterparts at the 
upcoming Birmingham Summit.
                       demining program increase
    Question. Demining is an area of utmost importance to many of us on 
this subcommittee. The removal of landmines is a major challenge 
requiring a very long term commitment. It is, indeed, one of the most 
important initiatives in the world today. The United States recently 
failed to sign the international agreement banning landmines, which was 
very disappointing to me and many of my colleagues. However, the 
Administration's request for demining programs has been increased from 
$20 million last year to $50 million for FY'99. Would you please 
comment briefly on why the United States failed to sign this agreement, 
and explain the increase for the program.
    Answer. The United States is committed to the elimination of anti-
personnel landmines (APL). In September 1994, President Clinton became 
the first world leader to publicly call for a global ban on landmines. 
The U.S. UNGA resolution on APL, passed overwhelmingly in 1996, has 
consistently been cited by Ottawa Process supporters and others as the 
basis for their work in establishing an APL ban. In 1996, the United 
States led negotiation of the Amended Mines Protocol (Protocol II) to 
the Convention on Conventional Weapons (CCW), including creating the 
requirement that unmarked APL self-destruct and self-deactivate. On 
January 17, 1997, the President announced that the United States would 
observe a permanent ban on the export and transfer of APL. Also in 
1997, the United States worked vigorously to establish negotiations for 
an APL ban in the Conference on Disarmament (CD), the preeminent 
multilateral forum for arms control negotiations. Unable to achieve 
hoped for progress in the CD at that time, we attended the Oslo 
Conference in September 1997 determined to make every effort to 
negotiate an effective, comprehensive global APL ban that would also 
address the security concerns of participants. At Oslo, we attempted--
and failed--to negotiate two changes that would have allowed us to sign 
the Ottawa Convention:
    A nine-year transition period to phase out the APL (not including 
anti-personnel submunitions in mixed anti-tank systems) we now use to 
protect our troops, giving us time to devise alternatives; and
    A provision permitting continued use of our mixed anti-tank 
munitions systems. (These systems have self-destructing anti-personnel 
submunitions which protect anti-tank munitions from being easily 
breached, but which are deemed APL under the treaty.)
    Our self-destructing, self-deactivating mixed anti-tank munitions 
systems are the safest anti-tank systems from the perspective of 
protecting civilians. They are also the most militarily effective. They 
are set to self-destruct in as little as 4 hours, at most in 15 days. 
The mechanism is extremely reliable: in more than 32,000 tests, all 
except one destroyed itself on schedule or earlier; one was one hour 
late. Self-destruction leaves these mines completely harmless after 
hostilities have ceased. At the same time, these weapons are essential 
to protect American forces where they may be greatly outnumbered and 
facing attack by enemy armored forces. We estimate our casualties to be 
as much as 30% higher if we are denied the use of these devices.
    Despite our best efforts to negotiate an exemption for our self-
destructing mixed anti-tank munitions systems, we were unsuccessful, 
even though the Ottawa Convention permits continued use of non self-
destructing mines (anti-tank mines with anti-handling devices) which 
will explode upon contact with a human being and are a humanitarian 
problem. Rather than expose our troops and the civilians they may be 
sent to protect to additional risk by banning self-destructing mixed 
anti-tank munitions that do not cause a humanitarian problem, we have 
not signed the Ottawa Convention.
    (Part II: Demining) As President Clinton, the Canadian Prime 
Minister and Foreign Minister, and the United Nations Secretary General 
have said, a ban on anti-personnel landmines is only a first step. The 
critical task before us is to remove the mines currently emplaced and 
threatening innocent civilians. Even if an international ban takes 
effect today, landmines will continue to remain in the ground in some 
60 countries worldwide. These hidden killers need to be removed in 
order for the land and infrastructure to be returned to peaceful 
civilian use and economic development and progress. For that reason, 
the Secretaries of State and Defense announced on October 31, 1997, the 
President's Demining 2010 Initiative, designed to accelerate global 
humanitarian demining operations, including landmine survivor 
assistance, to eliminate the threat of anti-personnel landmines to 
civilians by the year 2010. Working with others, the U.S. aims to 
create an effective international coordinating mechanism to ensure that 
sustained public and private resources for demining are directed, in an 
organized and rational manner, to programs in the mine-affected 
countries. We have requested $50 million for FY 99 to expand the 
program into additional countries, and to enhance and sustain ongoing 
indigenous demining efforts in nineteen countries, including the five 
countries added to the program in FY 97 and FY 98.
    Question. What is the next step?
    Answer. In addition to our extensive efforts in demining, the 
United States has taken many steps toward ending the APL problem. The 
CCW Amended Mines Protocol, a treaty which ensures responsible use of 
APL, was submitted in January 1997 to the Senate for advice and 
consent. The major historical APL producers and exporters who have the 
majority of the world's APL stockpiles and have not participated in 
Ottawa have approved adoption of this protocol. The President announced 
on September 17, 1997 that we would redouble our efforts to establish 
serious negotiations for a global APL ban in the CD. We will start by 
seeking an export ban on APL to capture the major mine producing 
countries in order to stop the spread of landmines which are causing 
the humanitarian problem. The President also directed the Department of 
Defense to develop alternatives to APL (not including anti-personnel 
submunitions in mixed anti-tank systems) so that by the year 2003 we 
can end the use of these weapons outside Korea. As for Korea, the 
objective is to have alternatives to APL ready by 2006.
    In addition, in January 1997, the President announced that the 
United States would observe a permanent ban on the export and transfer 
of APL and would cap its APL stockpile at current levels in May 1996, 
the administration announced the destruction of non-self-destructing 
(NSD) APL not designated for the defense of Korea or for training. 
Since May 1996, we have now destroyed 3 million such weapons and are 
expected to destroy the remaining stocks by the end of 1998.
    Question. How can we get a truly effective global ban on landmines? 
How do we negotiate a realistic ban?
    Answer. We share a common goal with Ottawa Process supporters: the 
elimination of landmines worldwide. While the Ottawa Process is to be 
commended for the progress it has made, there is much left to be done.
    A truly effective global ban on APL would have to capture both 
those states who are most affected by the scourge of APL and the 
principal producers and exporters of APL. We hope to make progress 
toward this end in 1998 by negotiating an export ban on APL in the CD. 
It is our belief that the CD offers the best possibility of capturing 
those major APL exporting and producing states who have not signed the 
Ottawa Convention. In order to stem the supply of APL worldwide, not 
just to states but to non-state parties in civil conflicts, it is 
critically important to bring in the major producers and exporters.
    The U.S. was also a leader in negotiating the Convention on 
Conventional Weapons Amended Mines Protocol. Once it enters into force 
(possibly this year), it will address the humanitarian problem caused 
by APL by strengthening restrictions on landmine use and transfer and 
by also capturing key landmine states that are not party to the Ottawa 
Convention. Specifically, CCW mandates that one self-destructing APL--
the true ``hidden killers'' which are responsible for civilian 
casualties worldwide--must be marked and monitored wherever they are 
used. Those who willfully violate and cause death to civilians will be 
subject to penal sanctions and/or extradition. CCW also bans the 
transfer of APL to non-state parties--who make up a large proportion of 
the humanitarian problem in zones of civil conflict--and carries strict 
proscriptions against the use of non-detectable mines. The CCW Amended 
Mines Protocol goes directly to the heart of the humanitarian problem 
associated with APL. It is certain that if it had been observed by all 
the key states for the past 40 years, the number of post-combat 
civilian casualties from the indiscriminate use of APL would be very 
dramatically reduced. The CCW Amended Mines Protocol was submitted to 
the Senate for advice and consent to ratification in January 1997.
    Question. Does the United States intend to commit to working for a 
global ban on landmines?
    Answer. Again, the United States is and has long been committed to 
working for a global ban on anti-personnel landmines. Since 1994, when 
President Clinton called for the comprehensive global elimination of 
APL at the United Nations, the United States has been at the forefront 
of active efforts to ban them. The United States led efforts to adopt 
the Convention on Conventional Weapons Amended Mines Protocol (Protocol 
II). The U.S. UNGA resolution urging states to pursue an agreement to 
ban anti-personnel landmines passed overwhelmingly (155-0) on December 
10, 1996, helped set the Ottawa Process in motion. On September 17, 
1997, President Clinton committed the United States to redoubling 
efforts to establish serious negotiations for a global APL ban in the 
CD, beginning with an export ban.
    It is important to note that U.S. APLs are not causing the 
humanitarian problem. Long before the Ottawa Process began, the United 
States developed and began using self-destruction, self-deactivating 
short-duration mines in order to eliminate residual casualties from 
emplaced APL. These U.S. mines self-destruct within 4 hours to 15 days 
after activation with a reliability rate better than 99.99%. On May 16, 
1996, the President banned U.S. use, production, and export of non-
self-destructing APL (the type which can last for decades and which is 
almost exclusively responsible for the humanitarian problem) worldwide 
except for training purposes and for the Korean Peninsula, where NSD 
APL are imperative to the security of U.S. and Korean forces. Since 
then, we have unilaterally destroyed 3 million such weapons and are 
expected to destroy the remaining stocks by the end of 1998.
    On January 17, 1997, the President announced that the United States 
would observe a permanent ban on the export and transfer of all APL 
(including even self-destructing/self-deactivating APL) and would cap 
its APL stockpile at current levels.
    On September 17, 1997, the President directed the Department of 
Defense to develop alternatives to APL (not including anti-personnel 
submunitions in mixed anti-tank systems) so that by the year 2003 we 
can end even the use of our self-destructing APL outside of Korea. As 
for Korea, the objective is to have alternatives ready by 2006.
    In 1997, the U.S. actively pursued a comprehensive and global APL 
ban in the CD. Also in 1997, the U.S. was a leading sponsor of a UNGA 
resolution calling on the CG to ``intensify its efforts'' on APL. We 
are continuing these efforts during the current CD session, working to 
establish a mandate for negotiation of an export ban.
    Question. How far off in the future do you expect such a ban could 
take place?
    Answer. It is difficult to predict how long it would take to 
establish an effective comprehensive global ban. The CD has agreed to 
establish a Special Coordinator for APL for the '98 session, and we 
hope to begin negotiations for an export ban this year. The CCW Amended 
Mines Protocol requires 20 nations to ratify in order to enter into 
force and may reach 20 within a few months (it has been submitted to 
the Senate for advice and consent to ratification).
    A principal reason the U.S. is not signatory to the Ottawa 
Convention is that it prohibits U.S. mixed anti-tank systems, which are 
necessary to protect our forces and which pose virtually no risk to 
non-combatants. We have made clear that the U.S. reserves the right to 
use mixed systems indefinitely. However, this could change if we find a 
viable and affordable concept for replacing these systems with an 
alternative that is comparable in terms of military effectiveness, 
safety of use, and minimal risks for non-combatants. As of now, we have 
not identified any operationally viable concept. We will keep Congress 
informed as administration policy develops in this area.
    Question. To follow up on my initial question, wouldn't it have 
been easier for the United States to sign the Treaty and work from the 
inside, that is if we are trying to reach the same goals
    Answer. Our nation has unique responsibilities for preserving 
security and defending peace and freedom around the globe. As 
Commander-in-Chief, the President will not send our soldiers to defend 
the freedom or our people and the freedom of others without doing 
everything he can to make them as secure as possible.
    For that reason, the United States insisted in the treaty 
negotiations in Oslo that two provisions be included in the treaty. 
First, we needed an adequate transition period to phase out the APL we 
now use to protect our troops, giving us time to devise alternative 
technologies. Second, we needed to preserve the self-destructing mixed 
anti-tank munitions systems we rely on to slow down an enemy's armor in 
a battle situation. In neither case was there a willingness on the part 
of the Ottawa process nations to accept these provisions.
    If we have become a party to the Ottawa Convention, from that 
moment on we would have been unable to use self-destructing mixed anti-
tank munitions and our troops would have been exposed to additional 
risk despite the fact that self-destructing mixed anti-tank munitions 
do not cause a humanitarian problem. Despite our best negotiating 
efforts, the United States could not sign the Ottawa Convention. In the 
Oslo negotiations of the Ottawa Convention, we went the extra mile and 
beyond in an attempt to negotiate an effective agreement that would 
protect our forces. As the President has said, there is a line that 
simply cannot be crossed, and that line is the safety and security of 
our men and women in uniform. The offer we made at Oslo remains on the 
table.
    Question. It is my impression that some of the embassies are not 
taking the ``Leahy Language'' seriously. For example, in Bolivia. The 
State Department's Bolivian section of the ``Country Reports on Human 
Rights Practices for 1997'' raises questions about the U.S. Embassy's 
human rights reporting and its implementation of the amendment. The 
report states that ``* * * 14 civilians were killed in the course of 
law enforcement operations that encountered armed resistance. The 
precise causes and circumstances of these deaths have not been 
officially determined, but it appeared that some resulted from the use 
of excessive force by authorities.''
    I would like to know what was the Embassy's conclusion about these 
deaths?
    How were these 14 people killed?
    What information did the U.S. Embassy use to evaluate and reach its 
conclusions?
    Were any of those security forces receiving U.S. counternarcotics 
aid?
    It is my understanding that there is credible evidence regarding 
human rights violations and abuses provided to the Bolivian Embassy by 
the Andean Information Network, an NGO on the ground in Bolivia.
    This is very important to note, because our ambassador to Bolivia 
has moved on to Colombia, a country where this committee has expressed 
its grave concerns in the past with regard to human rights violations, 
and if this policy is not fully embraced on the ground then the will of 
Congress, as expressed in the ``Leahy Amendment,'' is being 
disregarded.
    Madame Secretary, could you please investigate this and report back 
to this committee at the earliest possible chance.
    Answer. Nine of the 14 civilians, and one police officer, were 
killed in December 1996 after police and military forces were ordered 
to the Amayapampa area in Potosi department to dislodge miners who have 
seized a privately owned mine in a dispute with the mine's management. 
The Bolivian Government requested an investigation by the Inter-
American Commission on Human Rights (IACHR). The IACHR reported that 
five civilians died of gunshot wounds, one from a crushed skull, one 
bled to death from an untreated bullet wound and the other two deaths 
were not explained.
    The IACHR concluded that some of the civilians killed in the 
Amayapamapa area were not active in the conflict. It called upon the 
Government of Bolivia to complete a full investigation, punish those 
officials responsible and make fair compensation to the victims or 
their survivors.
    The U.S. Embassy reviewed the IACHR and police reports, had 
conversations with government officials and reported this information 
to the Department. In a February 1997 meeting with the Bolivian 
Minister of Government, Assistant Secretary Gelbard raised the 
potential implications of unresolved investigations of human rights 
abuses and echoed Ambassador Kamman's concerns over the Bolivian 
government's handling of the Amayapampa incidents. None of the police 
or military units involved in the Amayapama violence receive U.S. 
counternarcotics aid or funds appropriated under the FY-98 Foreign 
Operations Appropriations Act, nor are we considering providing such 
assistance to these units. As such, no further actions were necessary 
under either the Leahy Amendment or section 570.
    The remaining five of 14 civilian deaths occurred at the time of 
clashes, which began on April 17, 1997 in the Chapare region, between 
coca farmers and Bolivian government coca eradication units. A 300-man 
force from the Ecological Police and UMOPAR (the specialized police 
unit that enforces counternarcotics laws) was ambushed by a mob of 
about 1,500 peasants, wielding firearms, stones and dynamite. Three 
civilians and one policeman died of gunshot wounds. Justice Ministry 
human rights investigators found that the fourth civilian death, which 
had initially been attributed to gunfire, was caused by the victim 
falling from a roof. The fifth civilian death, that of an infant 
allegedly overcome by tear gas fumes, was attributed to a severe 
infection, undernourishment, and dehydration.
    The Embassy used police reports and conversations with government 
officials and the Andean Information Network to investigate this case. 
From this information it appears that the Chapare deaths were a result 
of the police protecting themselves in the course of a legitimate law 
enforcement operation from a coca growers' ambush and that the police 
did not use excessive force. There are no neutral or objective 
eyewitness accounts of this incident and we have encouraged the 
Bolivian government to carry out a thorough and professional 
investigation. The Ecological Police and UMOPAR receive U.S. 
counternarcotics aid.
    These incidents were reported to the Department, and we have 
pressed the Government of Bolivia to more thoroughly investigate this 
and any other such incidents. Pending receipt of any further 
information developed in this case as a result of the GOB's or our own 
investigations, the Department concurs with the Embassy's conclusion. 
We note that the information initially received in this case was not 
processed strictly in accordance with established procedures. The 
Department has since established a committee for the purpose of 
regularizing the mechanism for review of such incidents.
                             latin america
    Question. What part of these funds goes to training and what for 
equipment?
    Answer. The funds identified for the military will go primarily for 
training, fuel and POL with some monies for minor repairs, aviation and 
boat spare parts and operational support. The support provided to the 
police will mostly fund commodities, air support costs, Training, 
telecommunication equipment and operational costs.
    Question. During the past two fiscal years, which countries 
benefited from INL Interregional aviation programs? How much equipment 
was used in each country?
    Answer. INL interregional aviation programs benefited the countries 
of Colombia, Peru, Bolivia, and Guatemala during the past two fiscal 
years. The number of INL owned aircraft used in each country was as 
follows:
    Colombia: Early in the period in question, seven T-65 aircraft and 
one Cessna 208 were employed in Colombia. This has expanded to where 
today there are 8 T-65s, 2 Casa 212's, 5 OV-10's, one Cessna 208, 6 
Bell 212's and UH-1's in Colombia being supported by the INL contract.
    Peru: 16 UH-1 helicopters.
    Bolivia: In FY 97, there were 22 UH-1 helicopters employed in 
country, As of FY 98, this number has been reduced to 16.
    Guatemala: Previously 5 Bell 212 helicopters were employed in 
Guatemala, but these have since been relocated to Colombia.
    Question. Could you please provide the funding levels for the INL 
interregional aviation programs by country?
    Answer. The following approximate amounts are provided for FY 1998. 
Please note that these amounts include a prorata share of Main 
Operating Base (Patrick AFB) costs which are all incurred for the 
ultimate benefit of overseas country programs.

                          [Dollars in millions]                         
------------------------------------------------------------------------
                                                                FY 1999 
                                                     FY 1998    planned 
------------------------------------------------------------------------
Colombia..........................................       23.7       29.5
Bolivia...........................................        6.4        5.5
Peru..............................................        7.9        6.0
                                                   ---------------------
      Total.......................................       38.0       41.0
------------------------------------------------------------------------

    Question. Much of our military assistance to Mexico is for 
counternarcotics training. How do we know that those troops that we 
help train for counternarcotics are not used instead for counter-
insurgency?
    Answer. In response to Mexico's interest in improving the skills 
and capabilities of military personnel being assigned to newly-created 
counter-drug units, the US arranged for training by the US Army Special 
Forces. This training has emphasized skills and discipline useful for 
personnel engaged in counter-drug activities. The Mexican Secretariat 
of National Defense selects personnel for US training who are most 
likely to be assigned to counter-drug units, or to units which 
regularly perform counter-drug missions.
    Some of the Mexican states that have recently experienced insurgent 
activities are also major drug-trafficking and producing states. 
Therefore, it is likely that some of the personnel who receive US 
training will, at some point, be assigned to units or missions in those 
states. However, we do not intend to attempt to direct the Government 
of Mexico where in its territory individual officials should be 
assigned.
    Recipients of US Special Forces training are given thorough 
grounding in internationally-accepted concepts of protection of human 
and civil rights, the rule of law, and appropriate interaction between 
military forces and civilian populations in conflictive situations. A 
key aspect of such training is knowing when to refrain from use of 
force.
    Question. Is there any ``End Use Monitoring'' of the 
counternarcotics training programs?
    Answer. The U.S. Government attempts to conduct post-training 
assessments or evaluations to determine the impact of the training and 
to be able to make changes in curriculum or training methods to make it 
more effective in the future. We are also very interested in 
ascertaining if personnel receiving specialized U.S. training are 
assigned to positions where they can make use of it. This will affect 
where we invest limited training resources in the future. We are not 
able, however, to follow up on each and every individual around the 
world who receives U.S. training.
                              fmf pipeline
    Question. Why is there still so much old money in the pipeline for 
foreign military financing?
    Answer.We define ``pipeline'' as being uncommitted funds, that is, 
the amount of monies not programmed for a specific defense article or 
defense service. Since the early 1960's, a total of $96.279 billion in 
FMF has been apportioned among 141 countries and international 
organizations. Of that amount, $751 million (or) .78% remains 
uncommitted to date, and only $427 million (or) .44% represents funds 
apportioned in FY96 and prior. Moreover, $288 million of the $427 
million in prior year uncommitted funds relates to loans apportioned 
for Greece. We do not believe a program that has been over 99% 
committed is under-utilized. A total of 23 countries/organizations have 
not received any new FMF apportionments since FY85 and five countries 
are restricted from using FMF (e.g., Brooke Sanctions).
    Question. Is that money ever transferred from other sources and 
what are those uses?
    Answer. Legally, the money could be transferred to another account/
agency as long as the funds were uncommitted, undisbursed (meaning 
bills have not been paid from the FMF account) and were apportioned 
within five years of the transfer date (ref: Sec. 632 FAA and 31 USC 
1551). In practice, however, funds have not been transferred to other 
accounts. Moreover, the transfer of FMF funds among countries has 
occurred only once: in FY94, $2.190 million of FY90 funds were 
deobligated from Guatemala and reobligated to Bolivia. We are currently 
prohibited from exercising ``deob-reob'' authority (ref: sec. 510, P.L. 
105-118).
    Question. Can you please supply this Committee with a new estimate 
on FMF monies still in the pipeline?
    Answer. A report identifying current uncommitted FMF monies is 
attached.


[Pages 502 - 505--The official Committee record contains additional material here.]



          nato enlargement and the partnership for peace (pfp)

    Question. Please explain the extent of our military assistance to 
Poland, the Czech Republic, and Hungary?
    Answer. Since the beginning of PfP funding in FY1995, the USG has 
provided $98.6 million in Foreign Military Financing (FMF) to Poland, 
the Czech Republic, and Hungary. Since FY1991, we have also provided 
approximately $19 million in International Military Education and 
Training (IMET) funds to these three countries. The total for direct 
military assistance to these three countries is just under $120 
million.

                        [In millions of dollars]                        
------------------------------------------------------------------------
                                                       FMF        IMET  
------------------------------------------------------------------------
Poland............................................      $45.7       $6.9
Czech Rep.........................................       24.1        4.4
Hungary...........................................       28.8        6.7
------------------------------------------------------------------------

    These countries have used FMF primarily for the purchase of defense 
equipment and training to improve their militaries' interoperability 
with NATO forces. For example, funds have supported the Regional 
Airspace Initiative, English language labs, Search and Rescue 
Equipment, NATO-standard mapping equipment, tactical field radios, 
navigation and safety aids and similar uses. IMET funds have provided 
training for officers, NCOs, and civilians from these countries at U.S. 
military education institutions in the areas of defense resource 
planning, doctrine, civil-military relations, language, leadership, and 
other core military science disciplines.
    In addition, we have offered these countries low-cost loans under 
the Central European Defense Loan (CEDL) program. Although none of the 
three took advantage of the loan program in FY1997, they have expressed 
interest in the program and we will offer them loans again in FY1998. 
We obligated $18.24 million in FY1997 subsidy for loans to Poland and 
the Czech Republic and have set aside $20 million for the program in 
FY1998.
    The above levels do not include DOD programs and funding in support 
of Partnership for Peace (PfP) program. Because most of these programs 
are open to all Partners, DOD is unable to provide country-specific 
costs for the participation of the three states invited to join NATO. 
Examples of the DOD programs include the Joint Contact Team Program, 
which puts military liaison teams in Partner country MODs; the 
Partnership Information Management System (PIMS); the Defense Resource 
Management System (DRMS); Marshall Center programs; Exercise Support 
Funds; and other programs designed to maximize interaction between 
Partner militaries, U.S., and NATO forces, as well as to promote 
familiarity and interoperability with NATO forces.
    Other USG programs, such as cooperation between the militaries of 
these three countries and National Guard units in the U.S., have 
exposed thousands of Central European soldiers to U.S. military 
personnel, procedures, and perspectives. Poland, Hungary and the Czech 
Republic have taken only limited advantage of the Excess Defense 
Articles program, largely due to the cost of transporting, upgrading, 
and maintaining EDA equipment.
    Question. What is the out-year plan for our military assistance?
    Answer. The President's budget requests $80 million for FY1999 to 
support the Partnership for Peace (PfP) program. Of this, we plan to 
allocate $25.0 million to assist Hungary, Poland, and the Czech 
Republic in achieving NATO standards and improving their 
interoperability with NATO forces as they prepare for membership. We 
are also requesting $4.45 million in IMET funds for these three 
countries to continue U.S. military training opportunities for an 
expanded number of military and civilian personnel. Finally, we are 
requesting a $20 million in loan subsidies to support the Central 
European Defense Loan (CEDL) program, which will allow those countries 
to address deeper infrastructure needs.
    Beyond FY1999, we intend to continue providing FMF grants to 
Poland, the Czech Republic, and Hungary at reduced levels to facilitate 
their integration with NATO.
    We regard to IMET, we intend to maintain current levels for the 
next several years to ensure that critical training needs are met.
    Question. What is the status of military loans to these 
countries and what are they being used for?
    Answer. The Central European Defense Loan (CEDL) program 
was designed to assist creditworthy Central European nations in 
improving their NATO interoperability by providing low-cost 
loans to remedy military infrastructure deficiencies.
    Fiscal Year 1997 was the first year of the CEDL program. We 
offered loans to Poland, Hungary, and the Czech Republic. Both 
Poland and the Czech Republic stated their desire to take out 
loans of $100 million and $80 million, respectively, to finance 
procurement of advanced radar, air defense systems, and safety 
and navigation upgrades for military airfields. However, last-
minute problems in gaining parliamentary approval in the Czech 
Republic and a sensitive political climate in the lead-up to 
the Polish parliamentary elections prevented both governments 
from signing a loan agreement before the end of FY97. Hungary 
withdrew its request for loan assistance in August 1997.
    We intend to use the remaining FY97 funds, in conjunction 
with the FY98 funds, to offer comprehensive loan packages to 
the Czech Republic, Hungary, Poland and Slovenia. A joint State 
Department/Defense Security Assistance Agency (DSAA) team will 
visit Poland, Hungary, and the Czech Republic in April 1998. 
The team will brief the governments on the CEDL program, alert 
them to changes in the program (specifically a decrease in the 
loans' interest rate), and answer technical questions on 
procurement procedures and financing under the program. We are 
optimistic that these countries will find the CEDL program a 
sound mechanism to help themselves prepare for NATO membership.
    Question. Explain the reasons for the military grants to 
the PFP countries. What purposes are these funds used for?
    Answer. The State Department provides grant Foreign 
Military Financing (FMF) funds to support the Partnership for 
Peace (PFP) program under the President's Warsaw Initiative, 
which has enjoyed strong, bipartisan support in Congress. PFP's 
primary objective is to establish strong, enduring security 
ties between NATO and all its PFP Partners, and to assist those 
Partners interested in joining NATO to meet the obligations of 
membership. PFP strengthens the forces of Partner countries, 
and thus their contributions toward our common goals of 
securing peace and stability throughout Europe, deterring 
aggression, preventing, defusing and managing crises, and 
supporting the new democracies in Central Europe and the NIS.
    State's FMF program funds the purchase of defense articles, 
services, and training to assist Partners in improving their 
compatibility with and understanding of NATO practices and 
terminology, strengthening democratic control of the military, 
and improving defense planning, structure, and budgeting 
processes. It facilitates military preparedness, and provides 
critical English language training--the baseline requirement 
for functioning in a NATO environment--for thousands of 
soldiers. Additionally, PFP has:
    Helped Poland, Hungary and the Czech Republic prepare for 
NATO membership through the purchase of equipment, services, 
and training to improve interoperability with NATO;
    Provided continued support for the Baltic Peacekeeping 
Battalion;
    Helped the newly created Central Asian Peacekeeping 
Battalion (Centrasbat) gain crucial experience and equipment;
    Prepared and equipped national forces to participate in PFP 
exercises and NATO peace support, humanitarian, search and 
rescue, and peacekeeping operations;
    Taught partners how to participate more actively in 
European security matters, including new operations or crisis 
management efforts;
    Trained PFP states to become active and engaged partners 
with the United States and other NATO Allies on critical issues 
of Euro-Atlantic security;
    Funded the Regional Airspace Initiative in the NATO 
selectee countries, Romania, Slovakia, Bulgaria, the Former 
Yugoslav Republic of Macedonia, and the Baltics;
    Increased the size, depth and complexity of PFP and ``in 
the spirit of'' exercises, leading to interoperability and even 
deployability with NATO forces;
    Trained partners for real life operations including IFOR/
SFOR/SFOR II and the Iraq Deployments; and
    Provided the technical wherewithal for cooperation (such as 
tactical radios, search and rescue equipment) that permit NATO 
interoperability for exercises and real world operations.
           georgia: responsibility for assassination attempt
    Question. What can you tell the Committee about the recent 
assassination attempt on President Shevardnadze of Georgia in terms of 
who might be responsible?
    Answer. The evidence indicates that the assassination attempt was 
perpetrated by supporters of former Georgian President Gamsakhurdia and 
Chechen mercenaries.
    On March 19, Russia extradited to Tbilisi Guram Absnadze, a former 
Georgian finance minister under Gamsakhurdia. Georgian authorities are 
currently holding Absnadze, who is accused of organizing and financing 
the February 9 terrorist act against President Shevardnadze, as well as 
assisting the infiltration of terrorist groups into Georgia. Others 
involved with the attack are also under detention.
    Question. With regard to the recent assassination attempt on 
President Shevardnadze on March 2, 1998, President Schevardnadze 
assured his countrymen that recent assaults on him and UN officers had 
failed to disrupt or, diminish Georgia's reliability as a transit route 
for Caspian oil. My staff tells me that in discussions with groups from 
the Caucasus region that their impression is that Mother Russia was 
involved in order to assure that oil pipelines head north to Russia 
instead of west toward Europe.
    As you know, the committee vastly increased resources to Georgia 
last year partly to help them bolster border security. What is the 
status of these programs.?
    Is the United States exploring other ways to help the Georgians 
with their security?
    Answer. In FY 1998, under the FREEDOM Support Act, the U.S. 
Government will allocate up to $20.1 million for programs to enhance 
Georgia's border security, law enforcement and export control 
capabilities by providing equipment, training, and services to 
Georgia's Border Guards, Customs Service and other law enforcement 
officials. The priority objectives of this assistance program are to:
    Assist Georgia in gaining control of its seacoast, particularly the 
Poti Port; establish a transparent land border regime, focusing on the 
Azeri and Armenian borders; and then on the Russian and the Turkish 
borders;
    Enhance the Georgian Border Guard and Customs export control 
capabilities to prevent, deter, and detect potential weapons of mass 
destruction smuggling;
    Improve capabilities of the Georgian national law enforcement and 
legal authorities to investigate and prosecute internal and 
translational criminal activity; and
    Develop the law enforcement, legal and regulatory infrastructure in 
Georgia to help establish a society based on the rule of law and 
respect for individual human rights.
    The Special Georgia Border Security and Related Law Enforcement 
program will be implemented through two program elements. First, the 
United States Customs Service will implement the majority of the 
program including almost all equipment procurement, delivery, support 
and related training, with policy oversight by the Department of 
State's Bureau of Political Military Affairs Arms Transfer and Export 
Controls office (PM/ATEC) and the International Law Enforcement and 
Narcotics Bureau (State/INL) respectively, subject to overall 
coordination by the U.S. NIS Assistance Coordinator (S/NISC) to ensure 
no duplication of programmatic efforts. The Coordinator will rely on 
the Department of State, Defense, Commerce, Energy, the U.S. Embassy in 
Tbilisi, and other USG agency experts for guidance as appropriate. 
Other U.S. Government programs that focus on assisting Georgians with 
their security include:
    The DOD Cooperative Threat Reduction (CTR) program, the U.S. is 
purchasing two patrol boats for Georgia (delivery expected in mid-1998) 
to help the Georgian border guards patrol the Black Sea coast and 
independently assume more control of Georgia's maritime borders. 
Georgian officials also participated in a Nuclear Defense Fund funded 
legal, regulatory and enforcement forum organized by the Department of 
Commerce.
    The DOD/FBI Counterproliferation program will focus on training law 
enforcement officials including the police, judiciary, procuracy, 
customs officials, appropriate parliamentary entities, defense and 
foreign affairs officials. Georgian officials are expected to be 
invited for a two-week basic course on weapons of mass destruction 
(WMD) smuggling issues, probably at the Budapest International Law 
Enforcement Academy (ILEA).
    The DOD/Customs Counterproliferation program plans to provide 
training to assist Georgia's customs service and border guards over the 
next two years. The program includes training, both in-country and in 
the U.S., as well as provision of appropriate equipment to enhance 
Georgia's border security.
    The Department of Energy/Export Control is working with 
multilateral partners to develop a regional workshop which will focus 
on nuclear export control issues in the region, including Georgia.
    The Department of State/Export Control assistance plans to provide 
an automated export licensing system which will improve the abilities 
of export licensing officials to control the transit and export of 
strategic materials from the territory of Georgia.

       Questions for the Record Submitted by Congresswoman Lowey

                              gaza airport
    Question. I have received reports that Yasser Arafat is blocking a 
final agreement on the establishment of an airport in Gaza, yet has had 
continued to point to the lack of a resolution on this issue as one on 
which the Israelis have not fulfilled their commitments under the Oslo 
Accords. Perhaps he believes that leaving this issue unresolved will 
increase external pressure on Israel. Can you comment on this matter? 
Have we indicated to him that such a strategy will not work?
    Answer. Although there has been a significant narrowing of 
differences between the Palestinians and Israelis on matters related to 
an airport agreement, outstanding issues remain over some details of 
airport operations. The items of concern apply to both sides. The U.S. 
has made clear to the negotiating parties that it will work to ensure 
that their flexibility yields workable outcomes with regard to all 
issues in the peace process. Our practice is to avoid a scorecard 
approach affixing blame on specific aspects of the negotiations.
             jerusalem as place of birth in u.s. passports
    Question. I am disappointed that passports issued to U.S. citizens 
born in Jerusalem still list their place of birth as Jerusalem only 
without listing a country of birth. Is it the position of the USG that 
an American born in a hospital in West Jerusalem is born in disputed 
territory and not in Israel?
    Answer. The practice of entering ``Jerusalem'' only in the passport 
is a long-standing one. This is a very difficult issue. However, given 
the agreement by Israel and the Palestinians themselves to leave 
discussion of Jerusalem to the permanent status talks and our 
determination not to take steps that could undermine permanent status 
negotiations between the parties, we do not believe that this is an 
appropriate time to change that practice.
                    israel's membership in the weog
    Question. Israel is the only country in the UN that is denied 
access to a regional grouping--the mechanism by which UN member states 
are chosen to sit on powerful committees, including the Security 
Council. What is holding up Israel's efforts to gain admittance to the 
Western Europe and Others Group? What are we doing to correct this 
situation?
    Answer. The United States strongly supports Israel's bid for 
temporary membership in the WEOG and will continue to do so. Israel, 
like all others members of the United Nations, should have the right to 
belong a regional grouping, which enables members to participate fully 
in all activities of the UN.
    One point of contention among current WEOG members is concern over 
what impact Israel's membership will have on WEOG members' electoral 
prospects within UN bodies. Israel has offered various guarantees to 
allay these concerns. We believe those guarantees should be sufficient. 
We will continue to seek every opportunity to make our views clear to 
WEOG members, and we will press the case of Israeli membership in WEOG 
in all appropriate UN and other fora.
                   administration's position on iran
    Question. I am pleased that Iranian President Khatami has made more 
conciliatory comments about Iranian-U.S. relations than his 
predecessors. But other clerical leaders in Iran, including Supreme 
Leader Ayatollah Khamenei, continue their hostility to the United 
States and to policies that would allow Iran to be accepted in the 
international community. I am deeply concerned by statements from some 
members of the foreign policy community calling for a more moderate 
U.S. stance toward Iran. Iran continues to be the world's leading 
sponsor of terrorism and is actively pursuing dangerous nuclear and 
ballistic missile technology. Now is not the time to be moderating our 
position on this international pariah. Could you update us on the 
Administration's position regarding Iran? What effect, if any, has the 
ongoing crisis with Iraq had on your thinking about Iran?
    Answer. The United States objects to Iranian policies in several 
keys areas, particularly its pursuit of weapons of mass destruction and 
the means to deliver them, its support for terrorism including the 
violent opposition to the Middle East Peace Process, and its abuses of 
the human rights of its citizens.
    Our strategy aims to induce the government to change these policies 
by exerting steady pressure--through economic sanctions, diplomatic 
efforts with our allies and our military presence in the Gulf. This 
pressure is designed to make Iran realize that its interest is not 
served by continuing these policies. It is also designed to make it as 
difficult as possible, in the interim, for Iran to carry out those 
policies.
    The Iranian government has publicly called on Iraq to comply with 
UN Security Council Resolutions. There are signs that Iran stepped up 
enforcement of UN sanctions against Iraq. In December, Iran refused to 
allow a Russian aid flight to overfly Iranian territory without 
obtaining prior permission from the UN Sanctions Committee. In March, 
Iran stepped up enforcement of sanctions against smugglers of Iraq 
gasoil. We welcome these developments.
         iranian support for hamas, hizballah and islamic jihad
    Question. Does Iran still provide support to Hamas, Hizballah and 
Islamic Jihad? If Iran is successful in gaining nuclear, chemical and 
biological weapons, it could change the face of modern terrorism. Is it 
possible that Iran will use these weapons in terrorist attacks?
    Answer. Iran supplies training, funding and other means of support 
to violent opponents of the Middle East peace process, including Hamas. 
Iran provides similar assistance, as well as weapons, to the 
Palestinian Islamic Jihad, the Popular Front for the Liberation of 
Palestine-General Command and the Lebanese Hizballah.
    We have no evidence suggesting that Iran intends to use nuclear, 
chemical or biological weapons in terrorist attacks.
    Question. Despite the awarding of the 1996 Nobel Peace Prize to two 
East Timorese activists, the Indonesian government continued its 
widespread violation of human rights in East Timor last year. The State 
Department's 1997 Human Rights Report for Indonesia lists an atrocious 
array of abuses in East Timor, including murder, torture, and 
disappearances. This is absolutely disgraceful. And, frankly, our 
continued support of President Suharto as he thumbs his nose at our 
demands for improvements in his human rights and economic policies, is 
unacceptable. What are you doing about this?
    Answer. The Administration remains committed to finding a just, 
equitable, and peaceful solution to the situation in East Timor, and 
the current economic crisis in Indonesia has in no way diminished our 
efforts on behalf of that goal. We strongly support the efforts of the 
United Nations and those of the UN Secretary General's Personal 
Representative Amb. Marker in facilitating direct talks between 
Indonesia and Portugal. On February 6, Deputy Assistant Secretary 
Aurelia Brazeal traveled to New York to meet with Amb. Marker, and on 
March 12, Amb. Marker met with Assistant Secretary Stanley Roth in 
Washington.
    From President Clinton's discussion of East Timor with President 
Soeharto at the APEC summit in November on down, all levels of the 
administration have been engaged on this issue. In just the past two 
months, State Department officials have had a number of meetings which 
dealt with our concerns on East Timor. Those meetings include:
    My March 7 meeting with Portuguese Foreign Minister Gama,
    Under Secretary Pickering's March 19 meeting with Foreign Minister 
Gama,
    Assistant Secretary Roth's February 27 meeting with Nobel Laureate 
Jose Ramos Horta,
    Assistant Secretary Roth's February 3 meeting with Indonesia 
Foreign Minister Alatas, and Assistant Secretary Roth's meeting with 
the Portuguese Special Envoy for East Timor, Ambassador Fernando Neves 
on March 11.
    Our Embassy in Jakarta of course continues to closely monitor the 
overall and human rights situations in East Timor with frequent visits 
and is in regular contact with the Government of Indonesia on East 
Timor. When there are reports of abuses in East Timor, our Embassy is 
quick to raise them with Indonesian authorities. Additionally, the U.S. 
delegation at the current session of the UN Human Rights Commission in 
Geneva is actively engaged with the governments of Indonesia and 
Portugal and with European Union representatives on this issue.
    The Administration is also very concerned with the humanitarian 
situation on the ground in East Timor. Over the years, we have been the 
largest international aid donor to East Timor. Our aid programs are 
designed to improve the lives of average Timorese, while helping them 
achieve more control over their own lives.
    Question. I would like to pose a question about the fundamental 
benefits of the International Military Education and Training Program: 
The Administration has testified time and again that the IMET program, 
and especially the Expanded IMET component, is intended to teach human 
rights, civilian control of the military, and democracy building. We 
have been providing IMET and Expanded IMET to Indonesia for many years, 
but that country's military is still categorized by atrocious human 
rights violations. When will we see this supposed pay-off for our 
military assistance? When can be expect the millions of dollars we have 
put into IMET to result in a greater respect for human rights in 
Indonesia? And I might add that Indonesia is just one of several 
countries that this question can apply to.
    Answer. In general we would note that greater respect for human 
rights, professionalism, and proper conduct are among the many benefits 
that we have seen flowing from the IMET program. While it is impossible 
to quantify the human rights ``pay-off'' from IMET, we believe that 
engagement with the Indonesian military through IMET has produced some 
progress in this regard.
    IMET has provided the opportunity for Indonesian military personnel 
to be educated in the United States, to observe our commitment to rule 
of law and American values, and to acquire additional skills. IMET 
graduates are more professional, more committed to improving their own 
armed forces, and more likely to be at the forefront in reforming their 
own services. Indonesian IMET graduates return home with an 
understanding of what we Americans stand for and what we stand against. 
IMET graduates have been prominent in investigating and punishing the 
failures of discipline that cause human rights abuses.
    We would also note that an example of IMET's pay-off in providing 
access to the Indonesian military was their prompt response to our 
recent request for security to protect the evacuation of Americans from 
Jakarta.
    Question. I was extremely disappointed at the Administration's 
decision last year to lift the twenty-year-old ban on high technology 
arms sales to Latin America. This ban has served U.S. interests well in 
Latin America by helping promote stability and democracy in the region. 
Now is not the time to flood that region with expensive weapons systems 
that will divert scarce resources from poverty eradication and provoke 
a regional arms race. I have introduced legislation to codify this ban, 
but it is not too late for the Administration to reverse its ill-
advised decision to lift the ban. What is the current status of this 
policy? What potential arms sales are currently being discussed and 
what is the timetable for these sales?
    Answer. On August 1, 1997, the Administration decided after a two-
year review of security policy in Latin America to establish a process 
for case-by-case consideration of requests for advanced arms transfers. 
That process is in place today.
    This decision puts U.S. arms transfer policy toward Latin America 
on par with the rest of the world and reflects the significant 
political, economic, and military transformation that has occurred in 
the region. It also reflects the new level of maturity, cooperation and 
dialogue we have reached in our partnership with the countries of the 
region. Our former policy of presumption of denial on advanced arms 
transfers to Latin America, while appropriate and successful for its 
time, is, in the Administration's view, no longer the right policy for 
today's situation in the hemisphere.
    Nonetheless, restraint remains the fundamental principle of U.S. 
arms export policy. In considering arms transfer to Latin America we 
take into consideration our guiding goals of strengthening democracy 
(including civilian control of the military), encouraging concentration 
of resources on economic and social development, avoiding an arms race, 
supporting transparency and confidence-building, and ensuring that 
responsible defense modernization occurs in a manner appropriate to 
each country's legitimate security requirements.
    Our change in policy has not resulted in a significant increase in 
advanced arms sales to the region to date. The only significant sales 
of advanced weaponry currently under consideration are the possible 
sale of fighter aircraft and associated weapons systems to Chile and of 
two used F-16B models to Venezuela to replace lost aircraft. The 
Government of Chile has yet to decide if it will choose a U.S. fighter 
(F-16 or F/A-18) over competing Swedish and French aircraft.
    The current modernization plans underway in some Latin American 
countries are a result of aged and obsolete inventories of weapon 
systems. We do not believe the decision by some civilian elected 
leaders in South America to modernize their defense forces represents 
the beginning of an arms race nor do we believe that a unilateral U.S. 
ban on advanced arms transfers would alter modernization plans as non-
U.S. suppliers are ready and eager to sell.
                          microcredit funding
    Question. One of the reasons why there is such wide-spread support 
for microcredit in Congress is its effectiveness and cost-efficiency at 
giving the poorest people the means to help themselves out of poverty. 
I would like to see the Administration invest further in microcredit, 
and I am concerned that despite the fact that this Subcommittee and 
this Congress has prioritized this program, funding for microcredit 
within USAID declined between 1994 and 1996 from $137 million to $111 
million (the last year for which we have numbers available).
    Last summer, USAID projected that it would spend $120 million for 
microcredit in 1998. This is $15 million less than the $135 million 
Congress recommended for 1998.
    Is the Administration planning to invest the full $135 million, 
with half to the poorest, which Congress recommended for microcredit in 
1998?
    Answer. USAID is currently completing its analysis for its 
microenterprise programs for FY 1997. As expected, the funding level is 
significantly higher than reported in FY 1996--$161 million in FY 1997 
compared to our reported $111 million for FY 1996. Due to delayed 
passage of the FY 1996 appropriations bill, some funding budgeted for 
FY 1996 was obligated in FY 1997. On average, these two funding years 
keep USAID's microenterprise funding at approximately $134 million, 
which is just below what we are planning for FY 1998 and FY 1999.
    In its July 1997 Statement of Renewal of the Microenterprise 
Initiative which was signed by USAID Administrator Atwood, First Lady 
Hillary Clinton and many Members of Congress, USAID committed itself to 
a target of $120 million for FY 1997 and FY 1998. It also set a target 
of providing half of the funds directed at microcredit for poverty 
lending, as agreed to with the Microenterprise Coalition, an 
association of microenterprise practitioners.
    Subsequently, in an effort to be responsive to congressional 
directives for FY 1998, USAID has committed itself to reaching $135 
million goal. We expect that half of the funds for microcredit will be 
targeted towards poverty lending.
    For FY 1999, USAID is again planning an $135 million level, but 
these levels will necessarily depend on the availability of funds. In 
general, microenterprise programs work best where there are 
complementary USAID programs involving economic reforms and 
development. Cuts in these complementary programs can temper the 
potential of microenterprise programs, therefore, USAID must maintain a 
balance among all.
    Question. One of the reasons why there is such wide-spread support 
for microcredit in Congress is its effectiveness and cost-efficiency at 
giving the poorest people the means to help themselves out of poverty. 
I would like to see the Administration invest further in microcredit, 
and I am concerned that despite the fact that this Subcommittee and 
this Congress has prioritized this program, funding for microcredit 
within USAID declined between 1994 and 1996 from $137 million to $111 
million (the last year for which we have numbers available).
    Last summer, USAID projected that it would spend $120 million for 
microcredit in 1998. This is $15 million less than the $135 million 
Congress recommended for 1998.
    Is the Administration planning to invest the full $135 million, 
with half to the poorest, which Congress recommended for microcredit in 
1998?
    Can you tell me if USAID is planning to significantly expand 
investment for microcredit for 1999?
    Answer. USAID is currently completing its analysis for its 
microenterprise programs for FY 1997. As expected, the funding level is 
significantly higher than reported in FY 1996--$161 million in FY 1997 
compared to our reported $111 million for FY 1996. Due to delayed 
passage of the FY 1996 appropriations bill, some funding budgeted for 
FY 1996 was obligated in FY 1997. On average, these two funding years 
keep USAID's microenterprise funding at approximately $134 million, 
which is just below what we are planning for FY 1998 and FY 1999.
    In its July 1997 Statement of Renewal of the Microenterprise 
Initiative which was signed by USAID Administrator Atwood, First Lady 
Hillary Clinton and many Members of Congress, USAID committed itself to 
a target of $120 million for FY 1997 and FY 1998. It also set a target 
of providing half of the funds directed at microcredit for poverty 
lending, as agreed to with the Microenterprise Coalition, an 
association of microenterprise practitioners.
    Subsequently, in an effort to be responsive to congressional 
directives for FY 1998, USAID has committed itself to reaching $135 
million goal. We expect that half of the funds for microcredit will be 
targeted towards poverty lending.
    For FY 1999, USAID is again planning an $135 million level, but 
these levels will necessarily depend on the availability of funds. In 
general, microenterprise programs work best where there are 
complementary USAID programs involving economic reforms and 
development. Cuts in these complementary programs can temper the 
potential of microenterprise programs, therefore, USAID must maintain a 
balance among all.

        Questions for the Record Submitted by Congressman Torres

                      the united states and unesco
    Question. Madame Secretary, would you please provide this 
Subcommittee with a status report on the prospects of the US. rejoining 
UNESCO during this year. Would you also state for the record whether 
you will be exerting, and exercising your personal leadership to re-
affiliate the U.S. with UNESCO?
    Answer: We are please with many of the changes that have taken 
place at UNESCO since we withdrew in 1984, including depoliticization 
of its work, management reforms and thirty percent reduction in 
personnel. We also recognize that UNESCO is doing good work in a number 
of areas that reflect policy priorities of this administration.
    Re-entry into UNESCO will be costly. The cost to the CIO account 
would be about $67 million annually. Given the severe funding 
restrictions we face, funds for re-entry into UNESCO would not be 
available within the CIO account without withdrawal from another major 
agency.
    Nonetheless, as President Clinton stated in his November 1995 
letter to Director General Mayor, ``U.S. membership remains on our list 
of priorities, and we will continue to explore ways to identify the 
necessary resources to make this wish a reality.''
                       the united states and cuba
    Question. Just this week, the Department of State denied entry 
visas to Cuban academics, professionals and government officials who 
were invited by the University of California at Berkeley to a historic 
academic conference called: ``A Dialogue With Cuba''.
    In spite of the fact the Cuba Democracy Act of 1992 encourages 
legitimate academic and cultural exchanges, the U.S. Department of 
State rejected the visa requests of Cubans who are members of the Cuban 
National Assembly and key heads of government departments. These visas 
were rejected by the Department of State citing Presidential 
Proclamation 5377, which was issued by former President Reagan.
    We understand that the Department has the legal authority, under 
this Proclamation, to deny these visas, but would like to inquire as to 
the justification for invoking this law, at this time. Even if these 
Cuban government officials were to make presentations which were purely 
propagandistic in content, what is their threat to the U.S.? Doesn't 
the U.S. have a long, inalienable tradition of free speech which is 
being compromised by denying the University of California the right to 
have their invited guests permitted into this country? Are we not 
acting in the very same manner for which we criticize the Castro 
government? Would we not be in a stronger position if we permitted the 
free speech which we claim their government denies? Isn't the 
Department of State setting itself up for charges of denial of free 
speech at the very University where the Free Speech Movement began in 
1964? Is this wise?
    Answer. Presidential Proclamation 5377 of October 4, 1985 suspends 
entry to the United States of the following classes of Cuban nationals 
as nonimmigrants: ``[a] officers or employees of the Government of Cuba 
or the Communist Party of Cuba holding diplomatic or official 
passports; and [b] individuals who, notwithstanding the type of 
passport that they hold, are considered by the Secretary of State or 
his designee to be officers or employees of the Government of Cuba or 
the Communist Party of Cuba.''
    This Proclamation is part of the overall U.S. effort to maintain 
pressure on the Cuban government for change. It is most useful when 
enforced against high-ranking members of that government, such as 
members of the Cuban National Assembly and key heads of Cuban 
government departments.
    All nonimmigrant visa applications received from Cubans subject to 
the Proclamation are forwarded to the Department. The Proclamation 
allows the Department to approve exceptions on a case-by-case basis and 
each case is given careful consideration, but applications from higher-
level Cuban officials are given greater scrutiny. In general, Cubans 
who are rewarded with high positions in the government have 
demonstrated their political loyalty. They support official Cuban 
government policy and therefore are unlikely to serve as anything more 
than mouthpieces of the Castro regime in any setting.
    We worked with the organizers of the Berkeley conference and 
approved the applications of eight of the invited Cuban participants. 
We suggested that other well-qualified Cubans of slightly lower 
political prominence could be invited to substitute for those very 
high-ranking invitees that would not be given visas. We also suggested 
that the viewpoints of Cuban officials could be effectively shared in a 
number of ways, such as distributing writings or videotapes from Cuba 
at the conference, utilizing voice or video teleconferencing with 
participants in Cuba, or inviting other participants from Cuba. Indeed, 
the Principal Officer of the Cuban Interests Section in Washington, 
D.C., spoke at the conference and several other officials from the 
Cuban Interests Section also attended.
    We do not want to inhibit the free flow of information. The 
Presidential Proclamation is a prohibition on travel to the U.S. by 
certain Cubans who are officers or employees of the Cuban government or 
Cuban Communist Party, not a prohibition on the exchange of 
information.
        Questions for the Record Submitted by Congressman Kaptur
                              human rights
    Question. What is being done to curb the slave trade in 
prostitution emanating from NIS countries?
    Answer. The U.S. is committed to combating trafficking in women and 
girls worldwide.
    The President's Interagency Council on Women established a senior 
governmental working group on trafficking to coordinate the USG 
response on trafficking in women and girls. The group focuses on the 
areas of prevention, victim assistance and protection, and enforcement. 
The working group consults closely with NGOs and members of Congress. 
Theresa Loar, Director of the President's Interagency Council on Women 
and Senior Coordinator for International Women's Issues, leads the 
working group.
    We are working jointly with the European Union, the Group of Eight, 
and the UN, as well as the Governments of Israel, Italy, and Ukraine.
    As directed by President Clinton in an Executive Memorandum on 
March 11, 1998, we are responding to the Government of Ukraine's 
request to jointly develop and implement a comprehensive strategy to 
combat trafficking from and to Ukraine. This U.S.-Ukraine cooperation 
will become a model for combating trafficking in women and girls. The 
Government of Ukraine requested that we work jointly on this initiative 
and has actively pursued its development. Secretary Albright discussed 
the U.S.-Ukraine initiative with the Government of Ukraine during her 
March 6 Visit to Ukraine. First Lady Hillary Rodham Clinton also 
addressed this issue with Ukrainian officials on her last visit to 
Ukraine. On April 13, 1998, President Leonid Kuchma signed legislation 
prescribing criminal charges for trafficking in human beings.
    The U.S. and European Union are currently sponsoring a joint 
information campaign to combat trafficking in women and girls and to 
warn potential victims of methods used by traffickers. The U.S. public 
awareness campaign is in Ukraine and the European Union supports a 
similar campaign in Poland. In July 1998, the U.S. will sponsor a 
workshop in Ukraine to evaluate the effectiveness of the dissemination 
campaign. If our campaign is deemed successful, it could be adapted and 
expanded to other critical source and transit countries worldwide.
    The State Department developed a brochure which focuses on warning 
young women about the methods of traffickers and the consequences of 
accepting their offers. The U.S. embassies in Poland and Ukraine 
distribute these brochures, which have been translated into Polish, 
Russian, and Ukrainian, in the consular waiting areas and beyond.
    The State Department's Bureau for International Narcotics and Law 
Enforcement (INL) allocated FY 1998 funding to the Immigration and 
Naturalization Service (INS) to conduct immigration training to deter 
migrant trafficking, including trafficking in women and children, in 
the former Soviet Union, Central America, and South Africa. INL also 
allocated funding to the INS attaches in Vienna and Moscow to conduct 
two conferences for immigration officials in the region on migrant 
trafficking and trafficking in women and children.
    As directed by President Clinton in an Executive Memorandum on 
March 11, 1998, the President's Interagency Council on Women will 
organize a conference for governmental and non-governmental 
representatives from source, transit, and destination countries and 
representatives from international organizations to call attention to 
the issue of trafficking in women and girls and to develop strategies 
from combating this egregious human rights violation. Participants from 
the NIS will be invited to this conference.
    State Department consular presence worldwide works with source, 
transit, and destination countries to develop strategies for protecting 
victims and expanding and enhancing anti-fraud training to stop the 
international movement of trafficked women and girls.
             china resolution at un human rights commission
    Question. The UN Commission on Human Rights convenes its 54th 
session next month. Will the Administration use this forum to secure 
support from other nations to press China on its horrendous human 
rights record?
    Answer. The United States decided not to sponsor a resolution at 
the UN Human Rights Commission in Geneva this year. We made this 
decision because of steps China has taken and in anticipation of 
further progress.
    Among the steps taken are: (1) its decision to sign the 
International Covenant on Civil and Political Rights, which codifies 
the principles of the Universal Declaration on Human Rights; (2) its 
signature of the International Covenant on Economic, Social and 
Cultural Rights this past fall; (3) the release of a number of 
prominent political prisoners whose cases we have highlighted to the 
Chinese government; (4) its invitation to the UN Arbitrary Detention 
Working Group which visited Chinese prisons, and its agreement in 
principle to an exchange of U.S. and Chinese prison officials; (5) its 
agreement to create a U.S.-China NGO forum for discussion of human 
rights issues.
    The decision to sign the covenant on civil and political rights is 
particularly welcome, since this will create a multilateral process for 
scrutiny of China's human rights record.
    Our decision does not mean that we accept that China's human rights 
record is satisfactory; it is not. We continue to speak out publicly 
about that record including at the UN Human Rights Commission in 
Geneva, where Ambassador Richardson delivered a strong speech detailing 
our concerns; we will advocate forcefully through diplomatic channels 
as well.
    Question. What steps are you taking to ensure that the funds 
designated to fight drug trafficking, which we support, are not being 
used to commit human rights violations in such places as Colombia and 
Mexico?
    Answer. In response to provisions in the 1997 Foreign Operations 
Appropriations Act (FOAA), our embassies in countries where we provided 
or are providing 1997 International Narcotics Control (INC) funds have 
implemented and follow specific and detailed procedures to review 
reported incidents of human rights violations by security forces, 
correlate that information with INC-funded programs, and report such 
information to the Department of State to ensure that INC funds do not 
reach units responsible for abuse. In compliance with section 570 of 
the 1998 FOAA which applies to all funds made available by the FOAA 
(not just INC funds), we have instructed all overseas posts to develop 
and implement similar procedures. We have also set up a mechanism in 
the Department of State to provide a thorough review of reports of 
human rights abuse and monitor the distribution of assistance.
    U.S. counternarcotics aid to the Colombian military is provided in 
accordance with the provisions of Section 570 of the FOAA, as 
applicable, and of the ``End-Use Monitoring'' Memorandum of 
Understanding (MOU) we signed with the Colombian Government August 1, 
1997. Under the terms of this MOU, we will not provide assistance to 
any unit of a Colombian security force if we have credible evidence of 
gross human rights violations by that unit's members, unless we can 
determine that the Colombian government is taking steps to bring the 
responsible members of the unit to justice. In addition, the slightly 
different requirements of Section 570 are applied with respect to 
assistance subject to that section.
    Our embassy in Mexico City has also developed procedures in 
compliance with Section 570 of the FOAA. In addition, where required by 
our legislation, the Government of Mexico has provided us with binding 
assurances that equipment transferred to Mexico will be used only for 
the purposes for which it is intended--in this case counternarcotics.
    Question. Beyond current policy, what can the U.S. do to stem the 
continuous uprisings in Chiapas?
    Answer. In the final analysis, there is little that the U.S. can do 
to directly affect the situation in Chiapas. The complex conflict in 
that state is an internal Mexican affair, which Mexicans will have to 
resolve for themselves.
    The level of violence and polarization in Chiapas has escalated to 
the point that any resolution of the situation will be a long-term 
process. A peace and conciliation settlement to which all parties can 
agree is the first necessary step. We have consistently supported 
efforts to find such a settlement and opposed continuing violence. 
Beyond peace and conciliation, Chiapas--as one of the poorest states in 
Mexico--will require extensive economic development and social 
restructuring to give all of the inhabitants a greater stake in 
society, thereby reducing the potential for violence.
    Question. In the Administration's opinion, what fuels this unrest?
    Answer. The conflicts in Chiapas are very complex and have a number 
of overlapping causes. The primary roots of unrest in the state, 
however, are centuries of extreme poverty and oppression of the 
indigenous inhabitants by a mestizo minority. Political conflict is 
also prominent among the causes of unrest, pitting supporters of the 
historically governing Institutional Revolutionary Party (PRI) against 
the Zapatista rebels and their supporters and/or adherents of the Party 
of the Democratic Revolution. Other factors, such as land conflicts, 
religious and ethnic differences, and family feuds, tend to reinforce 
the major elements and contribute to an atmosphere of polarization and 
violence.
    Question. How significant a role does agriculture play in 
contributing to instability?
    Answer. If by ``agriculture'' one means land conflicts, certainly 
competition for land and other scarce economic resources contributes to 
instability and conflict in a poor area such as Chiapas. As we have 
indicated, however, land distribution is but one of the many factors 
contributing to polarization and violence in Chiapas. An intensive and 
long-term program of economic development and social reform--including 
changes in land distribution and local government--will be required to 
reduce the instability we see today in Chiapas.
                        international narcotics
    Question. We have been fighting the ``war on drugs'' since the 
early 1980's. Has there been any study or information you can provide 
on the effectiveness of U.S. counternarcotics aid?
    Answer. The congressionally-mandated International Narcotics 
Control Strategy Report (INCSR), produced every year since 1987 by the 
Department of State, is the most comprehensive assessment of our global 
antinarcotics program. This document assesses global trends and 
provides a detailed assessment of the narcotics trade and the 
effectiveness of antidrug programs in more than 150 countries, 
including every country to which the United States provides 
counternarcotics assistance. We publish this report by March 1 every 
year and send a copy at that time to every member of Congress. The 
INCSR provides a balanced assessment of our global antidrug efforts. It 
is clear, however, that our programs have achieved significant gains 
whenever host nation governments have had the political commitment to 
support antinarcotics efforts and we have had the funds to sustain 
these initiatives.
    Question. How exactly can these funds be used?
    Answer. Our counternarcotics assistance--$210 million in FY 98--is 
used to develop and strengthen host nation capabilities to target a 
wide variety of drug threats. With these funds, we provide equipment, 
training, technical, and other assistance to create or strengthen 
police and judicial systems to investigate and prosecute major 
traffickers; to develop and implement alternative development and 
eradication programs to eliminate illicit drug crop cultivation; and to 
promote drug awareness and demand reduction programs to garner 
increased public and political commitment to narcotics control. We also 
contribute to multilateral organizations to foster enhanced 
multilateral cooperation against narcotics trafficking and to support 
programs by multilateral organization in important drug producing and 
trafficking areas where U.S. Government access is limited.
    Question. What is the penalty for the misuse of these funds?
    Answer. There is a standard provision clause in each Letter of 
Agreement (LOA) that is signed with a foreign government offering them 
counternarcotics assistance which states ``Any property not used for 
the intended purpose will be returned to the USG.'' If warranted, the 
foreign assistance funds could be frozen and withdrawn, depending on 
the circumstances of misuse. The embassy also has the right to inspect 
or audit any portion of the program at any time to ensure that goods 
and funds are used in accordance with intended purposes.
    Question. How do we keep track of the funds given to countries to 
stop drug trafficking?
    Answer. The funds are tracked through two separate financial 
management systems. The first is operated by the embassy budget and 
fiscal office and officially establishes the initial obligation of 
counternarcotics funds and tracks the subsequent spending of these 
monies. A second Financial Management System, maintained by the 
Embassy's Narcotics Affairs Section, prepares quarterly Financial 
Management Activity Reports which are more descriptive and also keep 
track of expenditures on an accrual basis.
    Question. Given that drug trafficking and cultivation in Colombia 
has increased, yearly cultivation grew by 10% last year even as it 
declined in other Andean countries, how effective has our 
counternarcotics aid to Colombia really been?
    Answer. The growth in Colombian coca cultivation this year (18%), 
occurred almost entirely in areas outside the zone where U.S.-financed 
eradication efforts have been taking place. In the Guaviare region, 
where the vast majority of our spray activity has been concentrated 
cultivation actually decreased by 25%. This demonstrates that the 
eradication program is effective. Our challenge now is to work with the 
Colombian government to expand our joint eradication efforts into the 
new cultivation areas in southern Colombia.
                       greece, cyprus and turkey
    Question. The Administration has taken a vigorous, clear and proper 
stand on the implementation of the UN Security Council Resolutions on 
Iraq. However, the Security Council has adopted many unanimous 
resolutions on Cyprus that have specific provisions for their 
implementation. Is the lack of a vigorous, clear, and proper stand on 
these many resolutions detrimental to the credibility of our foreign 
policy?
    Answer. The position of this Administration on the Cyprus issue is 
clear: we support the UN settlement process and the goal of a bizonal, 
bicommunal federation. There should be no doubt that this 
Administration places a high priority on resolving the Cyprus dispute. 
The President and Secretary are actively engaged. They have assembled a 
strong negotiating team, led by Ambassadors Richard Holbrooke (Special 
Presidential Emissary) and Tom Miller (Special Cyprus Coordinator).
    Holbrooke and Miller are in intensive contact with the leaders of 
the two communities, the Greek and Turkish governments, the UN, and 
other key players, including the European Union. The leaders of both 
communities have stated repeatedly that the U.S. has a key role to play 
in resolving the Cyprus dispute.
    Question. While you were U.S. Ambassador to the UN, you affirmed 
the territorial integrity of Cyprus and spoke about the ``illegality of 
the Turkish army's occupation.'' Do you feel this statement is true 
today?
    Answer. The U.S. remains committed to the territorial integrity of 
Cyprus and to UN efforts to reunify the island on the basis of a 
bizonal, bicommunal federal solution.
    In the context of an overall settlement, it is our goal to see that 
the security needs of all the people of the island are addressed.
    Question. Why had the Administration remained silent regarding 
Turkey's action in Cyprus and the Aegean?
    Answer. The U.S. has not been hesitant to criticize actions by any 
party in the region, including but by no means limited to Turkey, that 
we view to be detrimental to regional stability and that might impede 
efforts to lower tensions.
                           nato and the u.n.
    Question. With future expansion of NATO, can you tell me if our 
European allies have increased their contributions to aid in this 
effort?
    Answer. At the Madrid summit in July 1997, the NATO allies agreed 
that the costs of enlargement would be manageable and would be met. At 
the North Atlantic Council Defense Ministers' meeting last December, 
all 16 allies reaffirmed this view, stating that ``costs associated 
with the accession of the three invitees will be manageable, and that 
the resources necessary to meet these costs will be provided in 
accordance with our agreed procedures under which each ally bears its 
fair share.
    While the U.S. has the largest direct funding of assistance to NATO 
partners, many NATO allies have their own active programs of 
cooperation with partners. The Nordic countries have been active with 
the Baltic states, the Netherlands has a cooperative program with the 
Czech Republic, Italy runs training and exchange program with Albania 
and Slovenia, and there are many other examples. NATO has an internal 
clearinghouse for cooperative programs with partners, but the process 
does not compare contributions in monetary terms.
    Question. What is NATO's purpose, in the next century, since the 
threat of the old Soviet Union has diminished?
    Answer. NATO's purpose is stated precisely in its 1949 founding 
treaty: to safeguard the freedom of the peoples of the allied 
countries; to promote stability and well-being in the trans-atlantic 
area; and to unite our efforts for collective defense and the 
preservation of security.
    Clearly, we are no longer preparing for a Soviet invasion, but 
threats remain:
    NATO must be able to provide political reassurance that we are 
prepared to defend current and future allies as required by Article V.
    It must have the ability to build back up over a period of years in 
case Europe's security environment changes for the worse.
    As agreed in the 1991 strategic concept, NATO should be able to 
deal with threats, to Allies' security from local or regional 
instability, as has been the case in Bosnia.
    It must be able to promote others' contributions to coalitions of 
the willing, together with NATO partners, to respond to crises anywhere 
that threaten transatlantic interests.
    These missions will require a strong and dynamic Alliance with a 
dedicated membership in the years to come.
    Question. Do you foresee a time when the Europeans will be able to 
defend themselves without our financial contributions to NATO?
    Answer. The United States has long maintained that American and 
European security interests are integrally related. We have repeatedly 
emphasized that it is in our national interest to remain fully engaged 
in the European security structure. In fact, maintaining the trans-
atlantic link in NATO continues to be one of our major policy 
objectives. Thus, we do not look for a time when the Europeans will be 
able to defend themselves without United States support, rather we 
focus our attention on ensuring that our European allies continue to 
improve their defense capabilities and that they continue to bear their 
fair share of the financial costs of trans-atlantic security.
    In this context, I can report that our European allies do in fact 
play a larger role in their own defense than they did in the past. 
Since the end of the Cold War, American troop levels in Europe have 
been reduced by two-thirds, and the U.S. pays only approximately 25 
percent of the NATO common-funded budgets total costs. Our European 
allies make up the remaining 75 percent of the common-funded costs, 
which amounted to approximately $1.3 billion last year.
    Our allies have made considerable progress over the past six years 
toward building the needed capabilities to accomplish NATO's mission:
    The U.K., for example, makes substantial contributions; its troops 
form the core of the ACE Rapid Reaction Corps, and it has the 
capability to deploy and sustain a division-sized force of 20-25,000 
personnel in a Gulf War-style scenario. They recently had an aircraft 
carrier, the HMS Invincible, deployed to the Persian Gulf in support of 
U.S. forces.
    France is establishing a Rapid Reaction Force designed for rapid 
response in both European and overseas contingencies. With nearly 
10,000 troops in Bosnia, France is the third largest force contributor 
to SFOR after the U.S. and Britain.
    Italy is also upgrading its ability to project forces to areas of 
need as evidenced by their recent leadership role in the Albania 
crisis.
    Germany is also increasing its capability to deploy forces. A 
53,000 strong Crisis Reaction Force is being formed and will be fully 
operational by the end of 1998. It is significant to note that Germany 
has 2,500 troops in Bosnia, making this the first time since joining 
NATO, that Germany has deployed troops outside its borders.
    Our smaller European allies are also making significant 
improvements. For example, the Netherlands navy and air force improved 
their transport and air defense capabilities by procuring air-to-air 
tankers; acquiring an amphibious-lift ship for their marines; and by 
upgrading their F-16s and Patriot missile systems.
    European commitment to their own security is clearly reflected with 
regard to operations in Bosnia, where Europeans comprised more than 90 
percent of the United Nations Protection Force (UNPROFOR) several years 
before the U.S. participation in the current NATO operation. Even 
today, our NATO allies and other non-NATO troop contributing nations 
comprise more than 70 percent of the forces operating in and around 
Bosnia.
    It is clear that more work needs to be done to improve the 
capability of the European forces for mobility, deployability and 
sustainability, and senior U.S. officials in Washington and at NATO 
continuously press allies to make these improvements. We will continue 
to emphasize the need for these improvements in the future.
                               iraq/u.n.
    Question. Would you say that our arrears to the U.N. played any 
role in our inability to persuade other nations to participate in the 
continual Iraqi disregard for U.N. Security [Council] resolutions?
    Answer. The Security Council has in fact responded firmly to Iraq's 
violation of its obligations under Security Council resolutions, most 
recently in its resolution 1154 of March 2, 1998, which made clear that 
further Iraqi violations of the relevant resolutions would have the 
``severest consequences'' for Iraq. This resolution passed unanimously.
    Having said that, it is also clear that our ability successfully to 
conduct multilateral diplomacy of the type necessary to bring about 
consensus on such a serious issue is complicated by a number of 
factors, including the arrears situation.
    Question. With the latest United Nations-brokered deal with Iraq, 
many of our citizens have questioned whether the U.S. has become a 
subordinate to U.N. policies. Would you comment?
    Answer. The United States conducted an active diplomatic campaign, 
centered on the United Nations, designed to compel Iraqi compliance 
with its own commitments under Security Council resolutions and bolster 
the central goal of our policy toward Iraq: to make certain that Iraq 
is not in a position, now or in the future, to threaten its neighbors 
or U.S. interests in the region. The agreement reached in Baghdad by 
the Secretary-General is a win-win situation for the United States and 
the United Nations. UNSCOM has said cooperation from Iraq under the 
Annan-Aziz MOU so far has been good. If that continues, it will mark an 
important victory for the international community.
    But if Iraq violates the MOU, it will be clear to all that Iraq has 
reneged once more on its commitments under Security Council resolutions 
and reneged on the terms of the 1991 ceasefire. And the Council has 
made it clear that that will have the severest consequences. The United 
States is prepared to take whatever actions necessary, including 
military action, to respond to the breach of the ceasefire established 
by the Security Council.
                                 bosnia
    Question. How much money has the United States expended from all 
accounts for Bosnia-related activities? How much have other nations 
expended?
    Answer. The set of financial benchmarks used in accounting for 
expenditures in support of nonmilitary Bosnia-related activities is 
complex. The World Bank has the most comprehensive database for the 
international effort. That database is broken out into committed, under 
implementation, disbursed and expended categories. Under expenditures, 
by yearend 1997 the United States had expended $347.45 million, 
approximately 20.3 percent of the international total of $1.7 billion.
    For military expenditures, the calculation uses fiscal rather than 
calendar year, but the numbers are more clear.
    The Department of Defense Comptroller reports the FY96 cost for 
U.S. support operations in and around Bosnia to have been $2.5 billion. 
The FY97 cost for IFOR/SFOR operations was approximately $2.3 billion. 
FY98 costs for SFOR are projected to be $2.0 billion.
    (Note: The President's $1.5 billion FY98 budget request for Bosnia 
assumed a reduction from 8,500 to 5,000 in U.S. troops by the end of 
FY97. Higher force levels were required due to the delay in municipal 
elections to September 1997. The extension of the 8,500 troop level 
through June 1998 added $487 million to the projected budget.)
    The FY99 estimate to maintain 6,900 troops in Bosnia as a follow-on 
force is $1.9 billion. This FY99 requirement was identified to Congress 
as a non-offset emergency budget amendment for FY99.
    Calculating the expenditures of other nations' support of IFOR/SFOR 
peacekeeping activities in Bosnia is problematic. There is little 
relevant public information on such spending and few of the 
participating nations use comparable accounting methods.
    Nevertheless, we can state that U.S. troops today comprise less 
than 25 percent of the international forces in Bosnia and Herzegovina 
overall and that that percentage will decline as our troop strength 
drops.
    Question. What percentage of all troops in Bosnia are U.S. forces? 
What percentage of troops in Bosnia are deployed by other nations?
    Answer. U.S. troops comprise approximately 24 percent of the 
military force deployed in support of peacekeeping operations in Bosnia 
and Herzegovina. The balance is provided by the other nations 
participating in this international effort.
    Question. How many US Volunteers are being recruited from a number 
of experienced or retired Americans of different skills versus younger, 
less experienced Americans?
    Answer. Currently, the average Volunteer is 29 years of age. About 
24% are over 29 years old, and 7% are over 50 years old. As health 
indicators and life expectancy improve in the U.S., the Peace Corps 
will continue to recruit older Americans who often possess, in relative 
terms, a more broad range of life skills, education, and expertise.
    It should be noted, however, that despite their relative youth, the 
average Peace Corps Volunteer brings with him/her education and 
experience that prove essential to successful service. Ninety-seven 
percent of Volunteers hold bachelor's degrees, and 18% have graduate 
experience or degrees. Twenty six percent possess one or more years of 
work experience.
    Question. How will proposals for increased funding either augment 
or change the profile of current Peace Corps Volunteers?
    Answer. Current Profile:
    Gender--59% female, 41% male.
    Minorities--14% of Peace Corps Volunteers.
    Age--Average is 29 years old, median is 25 years old.
    Peace Corps will continue recruiting a diversity of skills, ages, 
genders, and ethnic backgrounds. It will offer increased opportunities 
to ethnic minorities and older Volunteers, and enhance recruitment of 
Volunteers who can respond to countries' emerging needs for ``scarce 
skills'' which include support of nonprofit organizations, 
environmental protection, and business development. The largest number 
of new Volunteers will remain recent college graduates.
                            nonproliferation
    Question. How confident are you with the safety and security of NIS 
nuclear plants and the material associated with them?
    Answer. We are concerned about the security of nuclear materials in 
the nations of the former Soviet Union, but are making great strides. 
This continues to be a high priority area for U.S. assistance. We have 
been working cooperatively with these countries to prevent the loss, 
theft, and proliferation of nuclear materials since 1992. Together we 
have already made substantial improvements, and must continue to 
provide support through completion of these projects several years from 
now. Several Administration programs are involved.
    The Department of Energy's Material Protection, Control and 
Accounting Program (MPC&A) is working with eight NIS countries at over 
50 facilities to implement upgrades to improve security and physical 
protection of weapons-usable nuclear materials not contained in 
weapons, as the first line of defense against nuclear smuggling. In FY 
1998-98, approximately $250 million was appropriated to support these 
activities. Upgrades have been completed in Uzbekistan, Belarus, 
Latvia, Lithuania, and Georgia, and completion of the scope of work 
originally identified in 1994 will be complete by the end of CY 2002.
    The DOE also works with NIS countries to improve the safety at 
Soviet-designed reactors by strengthening the condition of the plants, 
enhancing host country safety practices, and supporting developing of 
host country nuclear safety infrastructure. DOE has close working 
relationships with 15 nuclear power plant facilities and 30 scientific 
institutes and governmental agencies.
    The U.S. Nuclear Regulatory Commission assists in strengthening 
nuclear regulatory institutions and practices for countries with 
Soviet-designed nuclear reactors, including Russia, Ukraine, Armenia, 
and Kazakhstan. It has trained over 600 regulators since 1992. The NRC 
also provides MPC&A assistance for safeguarding and elimination of 
nuclear weapons and weapons-usable materials in Russia, Ukraine, and 
Kazakhstan.
    The Department of State-administered Nonproliferation and 
Disarmament Fund provides grants that support a variety of efforts, 
including strengthening export control regimes to prevent illicit 
trafficking of nuclear materials.
    The Department of Defense Cooperative Threat Reduction (CTR) 
Program works to enhance the security, safety, control, accounting and 
centralization of nuclear weapons and fissile materials to prevent 
their proliferation and encourage dismantlement. The CTR program was 
critical in helping Belarus, Kazakhstan, and Ukraine become non-nuclear 
weapons states. CTR funds have also contributed to DOE's MPC&A effort.
    In selective cases where weapons-usable nuclear material has been 
at particular risk, we have worked with our allies and the NIS 
government involved to remove the material. In recent weeks, we 
completed the removal of several kilograms of highly-enriched uranium 
(HEU) from a nuclear research reactor site in Tbilisi, Georgia, to the 
UK for safe storage. Several years ago, we worked with Kazakhstan on 
Project Sapphire which removed nuclear fuel to the US for storage and 
reprocessing.
    Question. How confident are you with the containment and 
remediation of the Chornobyl reactor and site?
    Answer. U.S. concerns at Chornobyl rest largely with the 20-story 
steel and concrete ``Shelter'' built to cover the radioactive remains 
of the destroyed Chornobyl-4 reactor. Built in just seven months, under 
difficult and hazardous conditions, the shelter was never intended to 
serve as a long-term solution for the problems posed by the destroyed 
reactor. The unstable condition of the shelter is now a source of 
serious concern and requires prompt international attention.
    In the 1995 Memorandum of Understanding (MOU) between the G-7 and 
Ukraine on Chornobyl Closure, Ukraine agreed to permanently close the 
remaining operational units at Chornobyl by the year 2000. To help 
Ukraine develop a plan to stabilize the shelter over the destroyed 
reactor, Ukraine and the G-7 nations approved the internationally 
prepared Shelter Implementation Plan (SIP). At the G-7 Denver Summit in 
June 1997, the G-7 nations pledged to contribute $300 million toward 
the $760 million SIP project cost. The U.S. share of this pledge is $78 
million. Ukraine has pledged $50 million in kind. As of March 23, 1998, 
countries have agreed to provide over $400 million over the next 5-6 
years to implement the SIP. This total is sufficient to initiate work 
while additional pledges are sought. Public sector fundraising will 
continue, and the private sector fundraising effort is expected to kick 
off within a year.
    Bilateral funding by the European Union and by the United States 
was also provided in 1996 to enable early work on the shelter to take 
place. U.S. bilateral assistance are focused on improving safety at the 
site, and include provision of a nuclear safety monitoring system, 
provision of occupational safety equipment, and provision of equipment 
for shelter operations. The U.S. is working to strengthen the 
capabilities of Ukraine's Nuclear Regulatory Authority, which plays an 
important role in reviewing and approving implementation of the SIP.
    In addition to our bilateral activities at the Chornobyl shelter, 
the U.S. has contributed funds through the Nuclear Safety Account (NSA) 
at the EBRD to construct two facilities (for liquid radioactive waste 
management and safe spent fuel storage) which will support 
decommissioning of the Chornobyl plant. The NSA is also funding four 
small projects to improve the near-term safety of Chornobyl Unit 3 
prior to its closure in 2000. As a contributor to the NSA, the U.S. 
sits on the NSA Assembly of Contributors and has a vote in determining 
how projects are implemented. The U.S. is also funding completion of a 
partially-built heat plant at Chornobyl which will support the site 
during decommissioning activities, after the last Chornobyl reactor is 
closed.
    Question. How confident are you with the safety and security of 
Newly Independent States (NIS) nuclear power plants built to the 
Chornobyl design?
    Answer. The Chornobyl-style RBMK reactor is a Soviet-designed 
boiling water, graphite-moderated, pressure-tube reactor which contains 
fundamental uncorrectable safety deficiencies which would prevent these 
reactors from ever being licensed to operate in the U.S. These 
deficiencies include a susceptibility to power instabilities; lack of a 
modern containment system to prevent release of radioactivity to the 
environment; and inadequacies in the emergency core-cooling systems, 
fire protection systems, and electronic control-and-protection systems.
    There are a total of 14 RBMKs operating in Russia, Lithuania and 
Ukraine. The U.S. has strongly urged these countries to close them down 
as soon as possible. In Ukraine, we have seen excellent progress with 
the closure of Chornobyl Unit 1 in 1996 and Ukraine's commitment to 
close the remaining operational reactor at Unit 3 by 2000. In Ukraine, 
Russia, and Lithuania, the U.S. Agency for International Development 
(AID) is working with the host country to identify safe, 
environmentally acceptable and least cost options which will permit 
other RBMK reactors to close. The programs of DOE and the Nuclear 
Regulatory Commission to reduce the risks of a serious accident at 
these RBMK reactors and to strengthen the nuclear regulatory authority 
in the countries continue.
    Question. With the many questions of biological weapons 
proliferation, who has the final say if a country should get the 
possible ingredients that could be used for military purpose? I asked 
this question, because I watched one of the news shows and was stunned 
to hear a former DOD official say that ingredients that were eventually 
shipped to Iraq, which he had blocked, were overridden by the State 
Department and the Commerce Department.
    Answer. All export licenses for Commerce-controlled dual-use 
biological weapons-related items are reviewed by the interagency, 
including the Departments of State, Defense, and the Arms Control and 
Disarmament Agency. Each agency provides the Commerce Department with a 
recommendation to approve or deny a license application.
    Taking into account interagency views, the Department of Commerce 
determines whether a license should be approved or denied. On those 
occasions when agencies disagree with the disposition of a license, 
they may appeal the decision to Commerce-chaired interagency review 
board.
    A mechanism exists--but it is rarely used--whereby an agency may 
continue to appeal a license decision to the Export Administration 
Review Board--which is composed of Cabinet-level officials--and 
ultimately to the President.
    Question. What is the current procedure?
    Answer. Licenses for Commerce-controlled dual-use items are 
referred to the interagency for review. Agencies, including the 
Departments of State, Defense, and the Arms Control and Disarmament 
Agency provide the Commerce Department with a recommendation to approve 
or deny a license application.
    Should an agency disagree with the Commerce Department's 
disposition of a license, it may appeal the decision to the Commerce-
chaired interagency review board.
                                demining
    Question. Your budget shows a 700% increase over the last two years 
for humanitarian demining. I recognize the importance of this work, but 
can such a rapid ramp-up actually be used effectively?
    Answer. Within the last year, we have expanded the program from 
fourteen to nineteen countries and are seriously examining several 
additional countries. We are also continuing our support to existing 
country programs which continue to remove landmines from the ground. 
Commitments to sustaining existing country programs, and expanding into 
new country programs, have already utilized the $20 million received 
for FY 98. The worldwide U.S. Government Humanitarian Demining Program 
is managed and monitored by the Interagency Working Group (IWG) on 
Humanitarian Demining which ensures effective use of the funds. Actions 
within the State Department are increasing our oversight and program 
management which we believe will effectively monitor and manage these 
resources. In addition, with the announcement of the President's 
Demining 2010 Initiative on October 31, 1997, we will be working to 
accelerate all global humanitarian demining operations, including the 
U.S. program, to eliminate the threat to civilians of anti-personnel 
landmines by the year 2010.
    Question. What commitments do we have for similar contributions 
from our allies?
    Answer. We estimate that approximately half of all international 
demining assistance comes from the U.S. with the European Union as the 
next largest donor. Other major donors include Norway, which has 
committed $100 million over five years, Japan ($80 million over five 
years), Canada ($100 million Canadian over five years), Sweden ($23 
million in 1998), the United Kingdom (10 million British Pounds per 
year for the next three years and Finland ($6 million in 1998). The 
1998 edition of the State Department report Hidden Killers will include 
information on international contributions to the worldwide 
humanitarian demining effort.
    With the announcement of the President's Demining 2010 Initiative 
on October 31, 1997, the U.S. will be hosting a conference in May, 
bringing together key donor governments and others to create an 
effective international coordination mechanism to ensure that sustained 
public and private resources for demining are directed, in an organized 
and rational manner, to programs in the mine-affected countries, with 
the goal of eliminating the threat to civilians of anti-personnel 
landmines by the year 2010. The Demining 2010 Initiative has challenged 
the international community--public and private sectors--to raise $1 
billion annually for global humanitarian demining.
    Question. Who administers international demining programs?
    Answer. The U.S. Government Humanitarian Demining Program is 
administered by the Interagency Working Group (IWG) on Humanitarian 
Demining, chaired by State. The Department of Defense designates the 
Vice Chair. A recent Congressional Report (copy attached) explains the 
IWG process.


[Pages 523 - 532--The official Committee record contains additional material here.]



    Question. Do we directly fund demining operations or is the funding 
funneled through NGOs?
    Answer. In most cases, our goal is the establishment of a 
sustainable, indigenous demining capability to manage and conduct 
demining operations in a landmine-affected nation, rather than funding 
ongoing demining operations. The first step is to establish a Mine 
Action Center, which is an office of the host nation government 
responsible for solving the landmine problem in that country. U.S. 
Government assistance is provided in-kind through the host government 
Mine Action Center. Where a direct, government-to-government military 
relationship is not appropriate, we have functioned through the United 
Nations (in Afghanistan and Angola) and through USAID (in Angola and 
Rwanda). In the future, new funding through the Nonproliferation, 
Antiterrorism, Demining and Related Programs (NADR) account will 
provide additional resources and administrative flexibility to consider 
accomplishing overall objectives through NGOs as well.
    Question. Can you please explain to what extent Laos and Cambodia 
will benefit this year and succeeding years from this program?
    Answer. We plan to provide Cambodia with $2.0 million in NADR funds 
in FY 98 and $3.0 million in FY 99 (out of the $50 million requested). 
We plan to provide Laos with $2.0 million in NADR funds in FY 98 and 
the same amount in FY 99. In both cases, the program has successfully 
established a sustainable, indigenous demining and unexploded ordnance 
(UXO) clearance capability in each country. Ongoing funding provides 
additional equipment to sustain and expand the program.
    Question. How does this compare to the past support?
    Answer. In FY 97, we provided both Cambodia and Laos with $1.0 
million each in NADR funds. We have increased our support together with 
increased managerial capability in each country.
         Questions for the Record Submitted by Congressman Obey
                         unhcr children's fund
    Question. In the fiscal year 1998 Foreign Operation conference 
report the conferees included report language supporting the 
establishment of a fund to assist unaccompanied refugee children. The 
report language states: ``The conferees believe the United States 
should play a leadership role in helping to establish a fund through 
the United Nations High Commissioner for Refugees for vulnerable 
refugee children, particularly those separated from their parents. The 
conferees recommended that approximately $5,000,000 in fiscal year 1998 
funds be made available for this purpose.''
    I understand that the Refugee Bureau of State has been moving 
forward on this fund. Can you tell me when you anticipate the UNHCR 
will receive this funding?
    Answer. We are committed to improving the protection of and 
assistance to refugee children who make up 50% of the world's refugees. 
This is a major priority for the USG and we are working closely with 
the United Nations High Commissioner for Refugees to ensure that 
programs are designed to recognize and meet the special needs of 
refugee children.
    We appreciate the strong Congressional support of our efforts to 
promote greater appreciation of the need to focus programs on the 
special needs of refugee children. The recommendation in the report 
language in our 1998 appropriation that some $5 million 1998 fiscal 
year funds should be made available for the special needs of refugee 
children in a reinforcement of this commitment.
    We are working actively with UNHCR on the programming of this 
funding to augment UNHCR's programs for refugee children, including 
implementing the principal recommendations of the Graca Machel study 
which focused on unaccompanied minors, adolescents, education, sexual 
exploitation, and children caught up in armed conflict; building up 
UNHCR's partnership with NGOs to provide further assistance to refugee 
children; and training both UNHCR staff and implementing partners in 
the special needs of refugee children.
    Last year, PRM provided $1,367,000 to UNHCR to support new regional 
coordinator positions for refugee children for Central Asia, Turkey, 
West Africa, and the Horn of Africa, to fund training workshops on the 
protection and special assistance needs of refugee children, and for a 
pilot project in peace education.
















                           W I T N E S S E S

                              ----------                              
                                                                   Page
Albright, Hon. M. K..............................................   297
Holum, John......................................................   127
Lipton, David....................................................     1
Rubin, Hon. R. E.................................................     1
Slocombe, W. B...................................................   127













                               I N D E X

                              ----------                              

                       Secretary of the Treasury
                         (Hon. Robert E. Rubin)

                                                                   Page
Abortion Linkage to IMF..........................................    34
Africa Initiative................................................    63
African Development Fund.........................................     9
Arrears..........................................................9, 116
Asia.......................................................10, 118, 122
Austerity Programs...............................................    94
Authorization Request............................................    66
Budget Outlays...................................................    74
Cancellation of Some Pending Loans...............................   110
Chairman Callahan's Opening Statement............................     1
Commitments to Reform in Thailand, Indonesia and Korea...........    78
Corruption.......................................................    88
Debt Reduction...................................................65, 66
Debt Relief......................................................   123
Default..........................................................    24
East Timor.......................................................26, 28
Educating the American Public....................................     7
Foreign Credit Reporting System..................................    70
Fund for the Special Operations of the IDB.......................    43
GDP..............................................................    47
GEF...........................................................9, 59, 73
Geographic Focus.................................................    72
Global Deforestation.............................................    73
Global Economy...................................................36, 40
Global Environment Facility......................................    71
Global Financial Architecture....................................    91
Group of Seven...................................................   119
Health and Education Programs....................................    34
Holocaust Survivors..............................................    57
Human Rights.....................................................    33
IDA..............................................................    10
IMF.....................18, 22, 36, 44, 52, 75, 89, 91, 92, 94, 96, 117
Impact of Forest Fires on Environment and Human Health...........    71
Indonesia.......................................................26, 119
Interagency Cooperation..........................................   119
Inter-American Development Bank................................112, 125
International Affairs Technical Assistance Program...............    66
International Finance Corporation................................   111
Japan............................................................    50
Korea............................................................   119
Labor Support....................................................    78
Leverage.........................................................    90
Linkage Factor...................................................    60
Market-Demanded Reform...........................................    77
MDBs--Bilateral vs Multilateral Aid............................115, 116
Mexico City Language.........................................17, 22, 48
Micro Lending....................................................35, 42
Middle East Peace Process........................................    78
Mr. Obey's Opening Statement.....................................     6
Ms. Pelosi's Opening Statement...................................     3
Needs Assessment.................................................    39
New Arrangements to Borrow..............................61, 74, 96, 116
North American Development Bank..................................    41
Opening Up Markets...............................................    20
Reestablishing Financial Stability...............................    25
Reform...........................................................     8
Restrictions on Future Indebtedness..............................    65
Source of Funding................................................    93
Special Drawn Account............................................    38
Statement of Mr. Rubin...........................................    13
Success Stories..................................................    72
Sudan............................................................    29
Suharto Family Projects..........................................   103
Swiss Bank Fund Payments.........................................   114
Technical Assistance Funding Summary.............................    68
Thailand.........................................................   119
Transparency of Information......................................   111
Treasury International Affairs Technical Assistance..............    67
U.S. Commitment to IFIS..........................................   114
U.S. Exports.....................................................    71
U.S. National Interests..........................................   117
U.S. Workers.....................................................    59
World Bank Information...........................................   112

                          Security Assistance
   John Holum, Acting Under Secretary of State for Arms Control and 
                     International Security Affairs
       Walter B. Slocombe, Under Secretary of Defense for Policy

African Crises...................................................   271
Blackhawk Helicopters for Colombia...............................   287
Bosnia....................................................177, 245, 292
Cambodia.........................................................   259
Chairman Callahan's Opening Statement............................   127
Chemical Weapons.................................................   243
Chiapas..........................................................   193
Colombia.............................................184, 209, 258, 287
Comprehensive Test Ban Treaty..................................207, 283
Counternarcotics.................................................   272
Cyprus.........................................................203, 263
Demining..................................................267, 276, 294
East Timor.......................................................   175
Economic Support Fund............................................   266
Egypt..........................................................262, 265
End Use Monitoring Report........................................   290
Foreign Military Financing................................216, 274, 285
Georgia..........................................................   284
Greece.........................................................203, 272
Guatemala.................................................244, 258, 280
Haiti................................................206, 207, 262, 267
Human Rights.....................................................   280
IMET.......................................178, 184, 209, 220, 244, 286
IMF............................................................175, 184
Indonesia......................................................175, 261
International Law Enforcement Academy............................   291
Israel...........................................................   265
KEDO......................................................181, 261, 263
Latin America....................................................   279
Leahy Amendment................................................280, 288
Mexico...........................................................   271
Middle East...............................................179, 181, 198
Middle East Development Bank.....................................   171
Mr. Holum's Opening Statement....................................   136
Mr. Slocombe's Opening Statement.................................   160
Mr. Yates Opening Statement......................................   132
NATO.......................................173, 196, 203, 210, 247, 281
NIS..............................................................   201
Nonproliferation.................................................   293
Nuclear Weapons..................................................   199
Pakistan.......................................................244, 268
Persian Gulf Crises..............................................   194
Proliferation of Military Technology.............................   179
Russia...........................................................   260
School of the Americas....................................211, 247, 266
Security Assistance..............................................   243
Turkey....................................................203, 210, 272
U.S. Military Training.........................................257, 291
Vietnam..........................................................   262
Weapons of Mass Destruction......................................   243
Weapons Proliferation............................................   264

                   Secretary of the State Department
                      (Hon. Madeleine K. Albright)

Africa...........................................................   369
Andean Eradication...............................................   461
Asian Financial Crises...........................................   466
Blackhawk Helicopters............................................   354
Bosnia...............................................372, 463, 480, 519
Caucasus.........................................................   468
Chiapas..........................................................   341
Colombia.........................................................   464
Cuba.............................................................   513
Cyprus....................................................351, 468, 517
Debt Relief for Poorest Countries................................   495
Demining..................................................352, 496, 522
Drug Report to Congress..........................................   478
Ecuador........................................................368, 371
Egypt............................................................   473
Family Planning..................................................   371
FMF Pipeline.....................................................   501
General Foreign Aid..............................................   492
Georgia..........................................................   508
Global AIDS......................................................   478
Greece...........................................................   517
Haiti..........................................................335, 338
Herzegovina......................................................   468
Holocaust Survivors............................................462, 485
Human Rights..............................................368, 369, 514
IMF............................................................336, 372
Indonesia......................................................484, 510
International Family Planning....................................   365
International Narcotics..........................................   476
Iran.............................................................   490
Iraq..............336, 339, 342, 346, 361, 367, 369, 371, 471, 474, 519
Ireland..........................................................   471
Judicial Reform..................................................   478
KEDO.............................................................   335
Korean Peninsula.................................................   473
Latin America..................................................359, 500
Mexico...........................................................   479
Mircocredit Funding..............................................   512
Middle East..........................................356, 363, 372, 509
Middle East Development Bank.....................................   480
Monetary Support.................................................   337
Mr. Callahan's Opening Statement.................................   297
Mr. Livingston's Opening Statement...............................   299
Mr. Obey's Opening Statement.....................................   300
Ms. Pelosi's Opening Statement...................................   301
Multiregional Activities.........................................   461
Nagorno-Karabakh..........................................344, 355, 369
NATO......................................................357, 363, 517
New Independent States...........................................   483
Nonproliferation.................................................   490
Nuclear Deterrent................................................   487
Post-Air Strike Plans............................................   486
Results Act......................................................   475
Russia.........................................................366, 488
Saddam Hussein...................................................   470
Secretary Albright's Opening Statement...........................   303
Sub-Saharan Africa...............................................   465
Supplemental Budget Request......................................   362
Thailand.........................................................   484
Turkey.........................................................343, 517
Ukraine..............................................349, 352, 469, 484
UN Human Rights Commission.......................................   340
UNESCO...........................................................   513
UNHCR Children's Fund............................................   533
UNSCOM...........................................................   471
Weapon Proliferation.............................................   472
Weapons of Mass Destruction......................................   339