[House Hearing, 106 Congress]
[From the U.S. Government Printing Office]
DEVELOPMENTS IN THE BALKANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
APRIL 11 AND JULY 19, 2000
Serial No. 106-169
Printed for the use of the Committee on International Relations
Available via the World Wide Web: http://www.house.gov/
U.S. GOVERNMENT PRINTING OFFICE
68-286 WASHINGTON : 2000
COMMITTEE ON INTERNATIONAL RELATIONS
BENJAMIN A. GILMAN, New York, Chairman
WILLIAM F. GOODLING, Pennsylvania SAM GEJDENSON, Connecticut
JAMES A. LEACH, Iowa TOM LANTOS, California
HENRY J. HYDE, Illinois HOWARD L. BERMAN, California
DOUG BEREUTER, Nebraska GARY L. ACKERMAN, New York
CHRISTOPHER H. SMITH, New Jersey ENI F.H. FALEOMAVAEGA, American
DAN BURTON, Indiana Samoa
ELTON GALLEGLY, California MATTHEW G. MARTINEZ, California
ILEANA ROS-LEHTINEN, Florida DONALD M. PAYNE, New Jersey
CASS BALLENGER, North Carolina ROBERT MENENDEZ, New Jersey
DANA ROHRABACHER, California SHERROD BROWN, Ohio
DONALD A. MANZULLO, Illinois CYNTHIA A. McKINNEY, Georgia
EDWARD R. ROYCE, California ALCEE L. HASTINGS, Florida
PETER T. KING, New York PAT DANNER, Missouri
STEVE CHABOT, Ohio EARL F. HILLIARD, Alabama
MARSHALL ``MARK'' SANFORD, South BRAD SHERMAN, California
Carolina ROBERT WEXLER, Florida
MATT SALMON, Arizona STEVEN R. ROTHMAN, New Jersey
AMO HOUGHTON, New York JIM DAVIS, Florida
TOM CAMPBELL, California EARL POMEROY, North Dakota
JOHN M. McHUGH, New York WILLIAM D. DELAHUNT, Massachusetts
KEVIN BRADY, Texas GREGORY W. MEEKS, New York
RICHARD BURR, North Carolina BARBARA LEE, California
PAUL E. GILLMOR, Ohio JOSEPH CROWLEY, New York
GEORGE RADANOVICH, California JOSEPH M. HOEFFEL, Pennsylvania
JOHN COOKSEY, Louisiana
THOMAS G. TANCREDO, Colorado
Richard J. Garon, Chief of Staff
Kathleen Bertelsen Moazed, Democratic Chief of Staff
John Herzberg, Professional Staff Member and Counsel
Jill N. Quinn, Staff Associate
Nicolle A. Sestric, Staff Associate
C O N T E N T S
TUESDAY, APRIL 11, 2000
The Honorable James W. Pardew, Principal Deputy Special Advisor
to the President and Secretary of State for Kosovo and Dayton
Implementation, U.S. Department of State....................... 3
James W. Swigert, Deputy Assistant Secretary for European Affairs
and Deputy Special Advisor to the President and Secretary of
State for Dayton and Kosovo Implementation, U.S. Department of
The Honorable Joseph J. DioGuardi, Volunteer President, The
Albanian American Civic League................................. 25
Linda Dana, Institutional Contractor in Kosovo, International
Organization for Migration..................................... 29
Bajram Rexhepi, M.D. Chairman of the Commune Mitrovice........... 31
Muhamet Mustafa, President, Reinvest Institute for Development
Ilir Zherka, Executive Director, National Albanian American
WEDNESDAY, JULY 19, 2000
Crime and Corruption in Bosnia:
Harold J. Johnson, Associate Director, International Relations
and Trade Issues, National Security and International Affairs
Division, U.S. General Accounting Office accompanied by James
Shafer, Assistant Director, International Relations and Trade
Issues, National Security and International Affairs Division,
U.S. General Accounting Office................................. 45
David Bruno, Evaluator in Charge, U.S. General Accounting Office. 51
The Honorable James W. Pardew, Principal Deputy Special Advisor
to the President and Secretary of State for Democracy in the
Balkans, U.S. Department of State.............................. 58
TUESDAY, APRIL 11, 2000
The Honorable Benjamin A. Gilman, a Representative in Congress
from New York and Chairman, Committee on International
Ambassador James W. Pardew....................................... 71
James W. Swigert................................................. 74
The Honorable Joseph J. DioGuardi................................ 77
Linda Dana....................................................... 92
Dr. Barjam Rexhepi............................................... 95
Muhamet Mustafa.................................................. 100
Ilir Zherka...................................................... 105
WEDNESDAY, JULY 19, 2000
The Honorable Benjamin A. Gilman, a Representative in Congress
from New York and Chairman, Committee on International
Harold J. Johnson................................................ 110
Ambassador James W. Pardew....................................... 130
Additional material for the record:
Statement of Esad Stavileci, Ph.D., Professor of Law, University
of Prishtina, Kosovo, and University of Tetova, Macedonia...... 139
Chart from Dr. Rexhepi on the structural nature of the population
before the war................................................. 143
Letter from Paul R. Williams, Washington College of Law, American
University, commenting on the U.S. General Accounting Office
report entitled ``Bosnia Peace Operation: Crime and Corruption
Impedes the Success of the Dayton Peace Agreement''............ 146
Report on USAID Anti-Corruption Efforts in Bosnia-Herzegovina.... 151
DEVELOPMENTS IN THE BALKANS: KOSOVO
TUESDAY, APRIL 11, 2000
House of Representatives,
Committee on International Relations,
The Committee met, pursuant to notice, at 3:05 p.m. in room
2172, Rayburn House Office Building, Hon. Benjamin A. Gilman
(Chairman of the Committee) presiding.
Chairman Gilman. The Committee will come to order. We will
be joined by our Members shortly, as many of them can get away
from their other committees.
Today's hearing is the first opportunity this year for
Members of our International Relations Committee to review the
differences and the effectiveness of our policy in Kosovo with
Administration officials. In view of last year's NATO strikes
against Serbia, the current commitment of some 7,000 United
States troops and the expenditure of approximately $2 billion
of U.S. taxpayers' funds since last June to aid Kosovo, I can
think of few areas of greater importance to our Nation's
Nevertheless, reports indicate that things are not
progressing smoothly in Kosovo. The perception is we have won
the war but we are losing the peace. Recent visits by Members
of the House and our staff have revealed that achieving
enduring peace and stability will be much more difficult and
costly than we did in winning the air war over Serbia. Although
we can and should be rightfully proud of that achievement and
other significant contributions of our own men and women of our
Armed Forces, we need also to be realistic with regard to the
nature of the commitment that our own Nation has now entered
into in yet another part of the Balkans.
Continuing ethnic violence plagues Kosovo. Reprisal attacks
against the Serbs and other minorities have received much
attention in the press, as has the situation in the divided
town of Mitrovice where thousands of Albanian residents have
not been able to return to their homes in the Serb-controlled
part of that town. Difficulties in reestablishing public
services such as water, sanitation, electricity and medical
care have undermined the morale of the long-suffering Kosovar
people. These difficulties are attributable to the failure of
international donors in Europe to fulfill their pledges in a
The economy of Kosovo is also stagnant, prolonging
unemployment among the large numbers of young people who, with
no real hope for a better future, could turn to crime and
The recent outbreak of violence and instability in Serbia,
the heavily Albanian populated region just over the Kosovo
boundary and near our own forces, has also given rise to
concern for the safety of our own troops. Will the conflict
between Albanians and Serbs resume? Could our troops be brought
into an armed confrontation with Serb forces in the next few
weeks? These are serious questions that I hope we can try to
answer this afternoon.
We will hear from several witnesses, including some from
Kosovo who I hope will enlighten us about the challenges to
bringing about a lasting peace in Kosovo.
Before turning to our first panel of witnesses, I would
like to emphasize that although our hearing today is focused on
Kosovo, we are also looking closely at Montenegro, where the
administration or democratically elected President Djukanovic
is being undermined by forces loyal to Serbian dictator
Slobodan Milosevic. The crisis in Montenegro has the potential
of threatening everything we are trying to accomplish in
The possibility of overthrow of President Djukanovic and
the threat of serious violence instigated by Milosevic in
Montenegro are matters of particular concern. I invite our
witnesses to address that problem as well as the events in
Our first panel will be Ambassador James Pardew and Mr.
James Swigert for the Department of State.
Ambassador Pardew has appeared before this Committee both
in open public sessions and for private briefings on a number
of occasions, for which we are grateful. He served in both of
our Departments of Defense and State and brings a long-term
expertise in Balkan affairs to our hearing this afternoon.
Mr. Swigert has also been involved in Yugoslav affairs for
a number of years. He served in several capacities in the
Bureau of European Affairs, actually wearing two hats, one as
Deputy Adviser to the President and Secretary of State and one
as Deputy Assistant of State for European Affairs.
Let me note that it is regrettable that our request for an
Administration witness on this important issue took so long to
fulfill, given this Committee's responsibility for oversight of
our Nation's foreign policy.
And I now ask if our Ranking Committee Member, Mr.
Gejdenson from Connecticut, has an opening statement.
Mr. Gejdenson. Thank you, Mr. Chairman. I will be very
I just want to say that I think you know we are in a very
critical stage here obviously in the sense that, unlike during
the Cold War when we undertook an engagement, the competitive
nature and our fear of Soviet expansion kept the United States
focused and engaged, and so for over half a century we could
keep and continue to keep troops in Germany. For decades we
could keep them in South Korea, and there was generally a
bipartisan consensus in that manner.
Today, it is going to be much more difficult. The United
States and its citizens feel no great threat from any single
power. As individuals who are presenting America's policies, it
is particularly important that you lay out for the Congress and
the American people the facts that indicate constantly why we
are there, the benefits of being there, the dangers of being
there, the cost of being there and also the cost of not being
So what you do here is terribly important because it is
much harder today than in the time of the Soviet empire to keep
Americans focused and to keep Congress from giving you more
headaches than you are getting in the field.
Thank you very much.
Chairman Gilman. Thank you, Mr. Gejdenson.
Mr. Bereuter. Thank you, Mr. Chairman, for holding these
In the middle of February, I took a delegation of about 12
Members into Kosovo. These were Members who participate in the
NATO Parliamentary Assembly, and who have been following with
considerable interest what happens in the former Yugoslavia. We
came away uniformly depressed by what we saw in Kosovo. Things
are not going well. They are going very badly there in many
The commitments of international police are not being met
by the Europeans and others. Soldiers are doing things they are
not supposed to do in order to fill that gap. The violence
against Serbian ethnics in Kosovo continues unabated. If we
aren't protecting the Serbian ethnics 24 hours a day, they are
killed. We were trying to give the one Serbian Kosovar woman,
left in the community of some 3,000 or 4,000, 24-hour
protection, but somebody got through and slit her throat.
Across the border in Serbia, the reverse is happening--
ethnic violence. It would appear, in fact, the KLA is condoning
it in Kosovo. Whether or not the KLA changes its name and its
uniforms, it is still not, of course, satisfied with autonomy.
It never has been. There is no rule of law.
Things are very bad and getting worse in Kosovo. We are in
a situation where it appears that, despite the best efforts of
the men and women we have serving in the armed services and
many very excellent military units from other NATO and non-NATO
countries side by side with us, we are simply in an
unattainable, unachievable kind of task in Kosovo. I think the
situation is a very, very serious problem that the American
people need to be made aware of. They need to know that things
are going from bad to worse.
Thank you, Mr. Chairman.
Chairman Gilman. Thank you, Mr. Bereuter.
Any other Members seeking recognition? If not, we will now
proceed with our witnesses.
Ambassador Pardew, please proceed.
STATEMENT OF THE HONORABLE JAMES W. PARDEW, PRINCIPAL DEPUTY
SPECIAL ADVISOR TO THE PRESIDENT AND SECRETARY OF STATE FOR
KOSOVO AND DAYTON IMPLEMENTATION, U.S. DEPARTMENT OF STATE
Mr. Pardew. Thank you, Mr. Chairman. Thanks again for this
opportunity to update the Committee on the situation in Kosovo.
I wish to submit a formal statement for the record which
reviews our interests and objectives in Kosovo, areas of
progress in civil administration and reconstruction, current
challenges and what we are doing to overcome those challenges
and the burden sharing of the international effort.
With your permission, I will submit a longer briefing for
Chairman Gilman. Without objection, your full statement
will be made part of the record.
Mr. Pardew. I would like to briefly summarize the formal
statement, after which I will be followed by Deputy Assistant
Secretary Swigert, who will update the Committee on Montenegro.
Our continuing engagement in Kosovo relates directly to our
national security interests. We know from history that a stable
Europe is vital to American security and that Europe is not
stable if its southeastern corner is in turmoil. In the past 4
years, the United States and our allies have successfully
contained, then subdued, conflicts in Croatia, Bosnia and
Kosovo as the former Yugoslavia broke apart. But the area's
stability remains at risk from the Milosevic regime and the
fragility of States recovering from conflict. International
military forces create a secure environment in Kosovo. However,
long-term peace and stability in the region requires robust
civilian, political, economic and reconstruction programs
backed by sufficient resources to make a difference.
Our immediate civil implementation objectives are two. The
first is to complete the establishment of an interim
administration under which the people of Kosovo can enjoy
substantial autonomy. The second is to develop local
provisional democratic, self-governing institutions to ensure
conditions for a peaceful and normal life for all inhabitants
One year ago, the North Atlantic Treaty Organization was
engaged in an intensive air campaign against the security
forces of Slobodan Milosevic. Their purpose was to halt the
brutal repression of the Serbian regime against the people of
Kosovo and restore order in the region. In 78 days, the air
campaign, supplemented by aggressive diplomacy, succeeded in
driving Milosevic's forces from Kosovo. The military victory
set the stage for the deployment to Kosovo of allied security
forces and an international civilian administration. The NATO-
led Kosovo force, or KFOR, and the U.N. Mission in Kosovo,
UNMIK, remain the heart of the international effort in Kosovo
All of us would welcome faster progress for civil
implementation in Kosovo--but remember the situation less than
1 year ago. The conditions encountered by UNMIK as it deployed
and began to organize in Kosovo were desperate. Over 1 million
people were dislocated and traumatized by war. There was no
economy; there was no government; there was major destruction,
including 120,000 homes damaged or destroyed. The civil
infrastructure was either destroyed or neglected, and all of
this was overlaid by a Communist legacy.
Today, the situation on the ground in Kosovo is
dramatically better and continues to improve gradually day by
day. More than a million refugees and internally displaced
persons have returned to their homes. The KLA has
demilitarized, a growing international police presence has been
established, and training for local police is well under way.
Humanitarian agencies have met basic shelter, food and medical
requirements and pulled the population through the winter.
Recently, we have made progress in restoring order in
Mitrovice, increasing civilian police deployments, increasing
Kosovo Police Service training, preparing the groundwork for
municipal elections later this year, and securing Serb
participation in UNMIK governing structures. Further, public
and independent media are regaining their voices.
UNMIK and KFOR continue to face tough challenges, but they
are not insurmountable. I would like to quickly run through
programs that address these issues.
First, the strategic area of northern Kosovo around the
city of Mitrovice. KFOR and UNMIK have developed a
comprehensive strategy and have begun to implement that
strategy. The United Nations has appointed a strong civil
administrator for the region in American William Nash. The
number of international civilian police is still short, but the
United Nations has made progress in CIVPOL deployments recently
with 2,757 regular police in-country--513 of those are
Americans--out of an authorized 3,593. The United Nations has
also begun to fill the 1,100 positions for special police units
to help with crowd control.
In the area of local police, there are currently 451 Kosovo
police in classroom training and 341 in the field. The police
school will expand its capacity to 700 Kosovar students, up
from 500 today, to reach the goal of graduating 3,600 police
officers by February of next year.
The Kosovo Protection Corps [KPC], now has a total of 4,500
KPC candidates who have been selected for membership. And the
International Organization for Migration has begun training for
KPC field members in each of the six regional task
KFOR and UNMIK have established conditions with the KPC for
disciplining those who violate the law or deviate from
established norms for that organization.
Last, in the area of local government, last week moderate
Kosovo Serb leaders announced they would participate in UNMIK-
sponsored governing structures, particularly the Interim
Administrative Council and Kosovo Transition Council.
We plan for local municipal elections later this year.
Civil registration is to begin in April and to be completed by
July in time for these elections to be held this fall.
The judicial system is also moving forward. UNMIK has sworn
in 289 Kosovar judges and 42 prosecutors. Criminal trials have
been recently completed in district courts in Prishtina,
Prizren, Pec and Gnjilane; and to supplement these local judges
UNMIK is assembling international judges for particularly
sensitive areas such as Mitrovice.
With some of our key allies, we are developing a strategy
to support the UNMIK international police effort to counter
organized crime and to take effective action in that area.
And, finally, in the media sector, a variety of newspapers
and magazines have appeared in kiosks all over the major towns,
and public television and a number of radio stations are on the
air, beginning to return the Albanian voice to the area.
On burden sharing, Mr. Chairman, the Europeans must lead
the international effort in Kosovo and bear the lion's share of
the assistance burden. Europe accepts this responsibility. Out
of 45,000 KFOR troops in Kosovo, European Nations and Canada
provide 72 percent of the forces. The U.S. contribution of
troops comprises about 13 percent of the total.
In terms of civil implementation, the current total for all
donors in 2000 is just over $1.2 billion. The U.S. share of
$168 million is about 13.9 percent of the fiscal year 2000
spending on Kosovo revitalization. Our share of humanitarian
assistance has been about 20 percent. Our cost for U.N.
peacekeeping through UNMIK has been at the 25 percent level
mandated by U.S. law; and costs for the U.S. share of peace
activities through the Organization of Security and Cooperation
in Europe [OSCE] have ranged from 10 to 16 percent.
Mr. Chairman, the Administration does not support
initiatives in the Congress to place an arbitrary limit on U.S.
spending for international efforts in Kosovo and the rest of
southeast Europe. We believe that such legislation would be
counterproductive. As Secretary Albright wrote in a recent New
York Times op-ed piece, the day may come when a Kosovo-scale
operation may be managed without the help of the United States,
but it has not come yet. Proposals in the Congress to place a
legal cap on U.S. expenditures would decrease our flexibility
and harm, not help, our partnership with Europe in responding
to future events.
Such limits do not take into account the European
contributions in our hemisphere. For example, the Europeans
provided more than 60 percent of the bilateral aid pledged in
the wake of Hurricane Mitch, assumed 33 percent of the cost of
establishing peace in El Salvador, and 34 percent in Guatemala.
I have just returned from Kosovo, and I can tell you that
the people there have emerged from a difficult winter and are
preparing to build a new future. Prishtina and the countryside
are alive with activity. These are tough and enduring people
and they are grateful for our help, but they are not sitting
back and waiting for us to rebuild their homes and lives. They
need some tools and they need guidance from us to get started,
but they are eager to get on with the job.
I hope this gives you a clear idea of where we stand in
Kosovo right now, and I will be happy to go into more detail in
the question and answer session.
[The prepared statement of Ambassador Pardew appears in the
Chairman Gilman. Thank you.
We now turn to Deputy Assistant Secretary Jim Swigert.
STATEMENT OF JAMES W. SWIGERT, DEPUTY ASSISTANT SECRETARY FOR
EUROPEAN AFFAIRS AND DEPUTY SPECIAL ADVISOR TO THE PRESIDENT
AND SECRETARY OF STATE FOR DAYTON AND KOSOVO IMPLEMENTATION,
U.S. DEPARTMENT OF STATE
Mr. Swigert. Thank you, Mr. Chairman, for the opportunity
to update the Committee on Montenegro. I would like to briefly
describe the current situation, outline our strategy for
advancing U.S. interests and update you on our assistance
efforts. I have prepared a written statement for the record
which, with your permission, I would submit and then just give
a brief oral summary.
Chairman Gilman. Thank you. Without objection, your full
statement is made a part of record. Please proceed.
Mr. Swigert. The prudent and forward-looking policies of
the democratically elected government of President Djukanovic
have made Montenegro a positive factor in the southeast
European region. Montenegro opposed ethnic cleansing and
supported a peaceful settlement in Kosovo. Montenegro pledged
support for the International Criminal Tribunal for the former
Yugoslavia and has provided shelter and assistance to refugees
and internally displaced persons, no matter what their ethnic
origin. The Djukanovic government has also increased efforts to
counter smuggling and organized crime in the region and
recently improved its police cooperation with Italy.
The Administration shares the concern of many Members of
Congress about Milosevic regime's efforts to pressure the
democratic reform government of President Djukanovic. The
potential for aggression or serious violence provoked by
Belgrade is real. An outbreak of violence in Montenegro could
set back reform efforts throughout the region, produce more
suffering and more refugees, and seriously jeopardize U.S.
interests in the region. At the same time, Milosevic knows that
such action would pose serious risks for his own regime.
Consequently, U.S. policy is focused on preventing a new
Balkan conflict from erupting and on providing the necessary
assistance to ensure Montenegro can continue to develop
democracy in a market economy, and continue its positive force
in the region.
We have made strengthening the Djukanovic government a
priority--as something good in itself--but also as a step that
decreases the chances of conflict by raising the cost to
Milosevic of any aggression against a strong and popular
leader. Milosevic is fully aware of the priority that we place
on the security of the region and of Western capabilities to
respond to any destabilizing actions.
Administration officials, including Secretary Albright,
have reiterated over the last year our strong interest in the
security of the region, including Montenegro; and NATO leaders
have made clear the alliance is following developments there
The fundamental problem for Montenegro, as for its
neighbors, remains the lack of democracy in Serbia and the
Milosevic regime. As part of the Federal Republic of Yugoslavia
or the FRY, Montenegro is highly vulnerable to pressure from
Milosevic, who is fundamentally hostile to the Djukanovic
government and its democratic reform program. Promoting
democracy in Belgrade is therefore a priority for the
Administration, also, as part of its Montenegro policy. We
believe that a democratic Serbia would enable the two republics
to found a new constructive partnership.
During this winter, Montenegro endured additional pressures
from Milosevic, including temporary closure of Montenegro's
airports by Belgrade and blockade of Montenegro's trade with
Serbia, which is ongoing.
We have worked closely with the Djukanovic government to
try to mitigate these pressures. While tensions remain, the
situation is calmer now than a few weeks ago. Rather than
falling into Milosevic's trap of confrontation, the Montenegrin
government is working with its Yugoslav army contacts to
prevent security incidents and tensions from escalating. This
prudent approach denies Milosevic and his supporters a pretext
for violence or intervention.
Still, tensions could quickly rise again. The situation is
fragile. Therefore, it is essential we maintain our support for
the Djukanovic government.
We will continue to demonstrate our political backing by
maintaining regular and high-level contacts with President
Djukanovic and his government. President Djukanovic met twice
with President Clinton this past year, Secretary Albright met
with President Djukanovic last month, and we are in daily
contact with his government.
An essential element to our strategy is to back up this
political support with concrete economic assistance. After
Montenegro took steps last fall to protect itself from hyper-
inflation exported by Belgrade and made the Deutsche Mark a
legal currency, we sent economic advisers to Montenegro to help
implement critical economic reforms. In this fiscal year 2000
we are providing $26 million in SEED and $11 million in ESF
economic support funds, as well as humanitarian and food aid to
ease the pain of Belgrade's embargo against Montenegro; and
last month we signed an OPIC agreement with Montenegro to help
stimulate private sector investment there.
However, we expect our monetary assistance for fiscal year
2000 will not suffice, given that Montenegro's needs have risen
due to Belgrade's trade embargo. Thus, we have requested an
additional $34 million in SEED funding from the Congress in
this fiscal year; and we appreciate the House's inclusion of
this request in the supplemental bill passed on March 30 and
hope the Senate will support it.
Western assistance serves four valuable purposes. First, it
helps to mitigate the destabilizing effects of Belgrade's
economic sanctions against Montenegro. Second, it allows
President Djukanovic to show that his policies deliver concrete
results to the people of Montenegro. Third, it reduces pressure
from pro-independence groups within Montenegro on Djukanovic to
take risky steps. And, fourth, it concretely demonstrates to
Milosevic our strong interest in Montenegro and to the Serbian
people that our differences are with Milosevic and his
policies, not with Serbs or Montenegrins.
U.S. leadership and resources are essential, but we cannot
meet all of Montenegro's needs alone nor should we do. Europe
also has a strong interest in the success of Montenegro's
reforms and an essential role to play, and the Administration
has been working intensively at senior levels to encourage the
European Union and others to deliver greater resources to
Montenegro and to speed the delivery of those resources. The
response has been encouraging recently.
This year, the European Commission doubled EU assistance to
Montenegro for 2000 from 10 to 20 million euros. The European
Council has directed the European Investment Bank to find ways
to finance projects in Montenegro, and this could be very
significant. Last month, Stability Pact donors pledged funds
toward a list of ``Quick Start'' infrastructure projects, which
included $15 million of infrastructure projects in Montenegro;
and EU members are moving to boost their bilateral assistance
as well. Germany recently granted 40 million Deutsche Marks in
investment credits, and the Netherlands has established a
program of its own.
We will keep working with our European partners to get
Montenegro the assistance it urgently needs.
In closing, let me thank you for the chance to discuss the
situation in Montenegro and our policy. We consider the
Djukanovic government's reform program both a model and a
stimulus for democratization across the FRY. Montenegro is now
moving down a road toward creating prosperity in cooperation
with the international community that the people of Serbia
could also travel were there democratic government in Serbia.
We appreciate the strong support of this Committee and
other Members of Congress both for Montenegro and for the
Administration's efforts to help the government of Montenegro
remain a model for democratization.
[The prepared statement of Mr. Swigert appears in the
Chairman Gilman. Thank you very much, Assistant Secretary
Swigert and Ambassador Pardew, for your testimony which helps
us have a better insight on what is going on in that part of
the world. Just a few questions, and then I will turn to my
There have been a number of claims and counterclaims
concerning amounts paid to Kosovo provided on the one hand by
the United States and on the other by the European Union,
including both contributions by individual EU members and by
the EC. Can either one of you tell us how much respectively the
United States and EU have been providing to Kosovo for
humanitarian assistance, economic reconstruction and the cost
of the KFOR mission?
Mr. Pardew. Mr. Chairman, we always get into these
financial discussions, and it is very easy to get off into
apples and oranges. I would like to stay with the data which I
provided in my statement which discussed burden sharing. For
civil implementation in 2000, the U.S. share is 13.9 percent.
Europe is paying the bulk of the remaining part of the $1.2
billion. Our share of humanitarian cost----
Chairman Gilman. Is that the total being provided, $1.2
billion by everyone?
Mr. Pardew. For civil implementation, sir?
Chairman Gilman. By all parties?
Mr. Pardew. Yes. This was committed at the donors
conference last fall.
Chairman Gilman. And we are providing 13 percent?
Mr. Pardew. 13.9 percent. Our share of humanitarian
assistance has been about 20 percent, and I don't have a total
number, but I can get that for the Committee if you would like.
Costs in the peacekeeping account have been about 25 percent of
the UNMIK costs; and our OSCE share has ranged from 10 to 16.9
percent. The Europeans have picked up the bulk of the remainder
of those costs, although there are non-European contributors as
well, like Japan and some others who have contributed, but the
bulk of the burden was paid by the Europeans.
Chairman Gilman. All of those costs you have just recited
is $1.6 billion; is that right?
Mr. Pardew. No, it would go well above that because of the
Chairman Gilman. What are the total costs that have been
Mr. Pardew. Just a minute, sir while I look at the figures.
The total cost for Kosovo--and I have civil costs here--$1.2
Chairman Gilman. You mentioned before $1.6 billion. Does
this figure you are giving us now include all of the funds that
we have allocated for Kosovo?
Mr. Pardew. The figure of funds that we have allocated for
Kosovo for civil implementation to include reconstruction in
fiscal year 2000 is $1.26 billion. Excuse me, that is in
Bosnia. In Kosovo, the total is $1.227 billion for fiscal years
1999 and 2000. That includes money for stabilization,
humanitarian, the U.N. costs, OSCE costs, and that is for
fiscal years 1999 and 2000.
Chairman Gilman. $1.27 billion?
Mr. Pardew. For civilian assistance for fiscal year 1999
Chairman Gilman. That leaves out the military costs?
Mr. Pardew. That leaves out the military costs.
Chairman Gilman. And how much are the military costs?
Mr. Pardew. The figure I have is for Kosovo, both again
1999 and 2000, is $5.157 billion from the 050 Defense
Chairman Gilman. $5.157 billion. So we are talking roughly
$6 to $7 billion altogether, is that right, altogether our
costs in Kosovo?
Mr. Pardew. That is correct. For fiscal year 1999 and 2000
our total costs for Kosovo, military and civilian, are $6.384
billion from the 150 Foreign Operations accounts and the 050
Chairman Gilman. So we are paying in what percentage of all
those costs? What does our average contribution amount to?
Mr. Pardew. It varies from program to program, whether it
is humanitarian, civil implementation or others.
Chairman Gilman. You talked about 13 percent.
Mr. Pardew. Thirteen percent of civil costs.
Chairman Gilman. What about military?
Mr. Pardew. I don't have the total military cost of the
Chairman Gilman. Can you provide that for our Committee?
Mr. Pardew. I can try.
Chairman Gilman. Thank you very much. We would welcome
Chairman Gilman. Why have the United States and EU accepted
the de facto partition of Kosovska Mitrovice?
Mr. Pardew. We have not accepted partition of Kosovo. In
fact, we strongly oppose any action which would promote
partition or be viewed as a partition of Kosovo.
Chairman Gilman. What are we doing to allow displaced
Albanians to return to their homes in safety in that area?
Mr. Pardew. So far, in Mitrovice, there have been about 140
Albanians returned to their homes on the north side of the
river. This is not an acceptable level.
Chairman Gilman. One hundred forty out of how many?
Mr. Pardew. Out of probably 2,000 or 3,000 north of the
Chairman Gilman. Only 140 have been able to return? What is
holding things up?
Mr. Pardew. The situation in Mitrovice is extremely tense.
The Serbs have dominated the northern side of the river, the
Albanians the south. UNMIK had not established its authority
Attempts to return Albanians across the river generated
significant hostilities which KFOR had to deal with.
The United Nations and NATO have developed a comprehensive
strategy for Mitrovice, but this is not something that can be
solved immediately, Mr. Chairman. This is a very complex
situation that has to do with continued influence by Belgrade
in the north of the area. Extremists on both sides have
exploited the situation there. We have just put a strong civil
administrator in Mitrovice to improve the civil administration
there. So this is an ongoing process, but it is not going to be
Chairman Gilman. So, Ambassador Pardew, essentially until
that is clarified there is a de facto partition in Mitrovice.
Mr. Pardew. There is an unacceptable separation in
Chairman Gilman. Did our Nation agree to the deletion of a
provision requiring Serbia to return Kosovar Albanian detainees
from Kosovo by Serb forces for the military technical agreement
negotiated with the Federal Republic of Yugoslavia at the end
of NATO's air campaign? Did our Nation agree to the deletion of
a provision that required them to return these detainees?
Mr. Pardew. I am not aware of the details of the
negotiation, Mr. Chairman, but I don't recall ever seeing
anything agreeing that detainees would not be returned. In
fact, we have worked very hard to pressure the regime in
Belgrade to return Kosovars who are held prisoner in Serbia,
and there are quite a number of them, probably up to 2,000.
Some have been returned but not nearly enough.
Chairman Gilman. So Serbia is mandated to return these
detainees that were taken from Kosovo by the Serb forces?
Mr. Pardew. We certainly demand that the Serb return
Kosovars who were taken from Kosovo at the end of the conflict.
Chairman Gilman. One last question. What is the status of
the Trepca mine? Have Albanian workers been permitted to resume
their work there and does Serbia receive any of the proceeds
from the operations of that mine at the present time?
Mr. Pardew. The Trepca mine is a strategic issue associated
with Mitrovice in northern Kosovo. An international mining
consortium is currently in negotiations with UNMIK to look at
the potential to reopen that mine. The U.S. Agency for
International Development has a team in Trepca as we speak
looking at the environmental impact of the Trepca mine. The
Trepca mine is part of the strategic plan for northern Kosovo
that UNMIK is working on. We believe it should be reopened to
the degree that it can become economically viable, and it
should be staffed and operated by the people of Kosovo.
Chairman Gilman. Mr. Ambassador, I understand that the
workers would like to go back there. They are ready to go back
to work there. All they need to do is pump out some of the
water that has accumulated there and to assure safety of the
workers; is that correct?
Mr. Pardew. There is much more to it than that, Mr.
Chairman. The mine has been neglected. It was poorly run by the
administration that ran it up to now. Parts of it are still
under the control of Belgrade.
Yes, certain parts of the mine are flooded, but other parts
of the mine are a serious ecological problem. We will know more
about how much of that mine can be reopened as soon as the
USAID environmental team returns and when we have had a serious
professional assessment of it.
Chairman Gilman. I would hope that we could expedite that,
since several thousand workers could be returned and several
millions of dollars could be earned by the Albanians.
Mr. Gejdenson. Thank you, Mr. Chairman. I think what you
are sensing here is a number of crosswinds that are running
through the Congress, and part of it I kind of referenced at
the beginning is the post-Soviet-era impatience, and I think
what you are going to find is there are going to be attempts to
restrict your discretion to a greater and greater degree.
There is now legislation by the Chairman and Mr. Bereuter
that would limit expenditures by the United States in
southeastern Europe to 15 percent of the share of the EU.
It was interesting, you stated that in our hemisphere the
hurricane response saw the EU putting in about 30 some percent,
but I think there is no argument that the United States has
historically paid the largest portion of many of these
international operations. And I think what you are going to
have to do is you are going to have to find a way to convince
Members of Congress and the American public that this is, one,
a solid investment that represents America's best interests;
and part of that you can, I think, show from a historic
perspective. I mean, obviously, if there had been the time
pressures for results at the end of the Reichstag and the Nazis
we would have probably been out of Germany sometime in early
1951, not having succeeded at accomplishing all of our goals
and reconciliation in the area.
But I can tell you that between now and the election there
is going to be continued pressure, and I would suggest that you
go back and talk to the folks at the White House and State
Department and say that you are going to need to help those of
us who supported the Administration with a demonstration that I
think is doable, that the Europeans are carrying their burden,
and where they are not, we ought to work together to get them
to carry that burden.
There is no question the United States rightly exercised
the major portion of the military operation during the war in
Kosovo because of our incredible ability, unmatched by any
other country; and for that reason, frankly, I am a supporter
of the Europeans having a European military strategy and a
coordinated purchasing of equipment so they can play a more
equal role in endeavors that the United States and Europe feels
are important. I think that we ought to enter a dialogue to
make sure the Europeans pay their part. I think it will be
easier to get continued American support.
And, you know, the pressure is going to continue from the
majority in this Congress, and I think that you have got to
come forward and help those of us who believe in what we are
doing in Kosovo with the information that lets us work
something out that will allow us to continue what I think is
the best representation of America's involvement in foreign
We are doing what is right. We are doing it for the right
reasons. We are not simply doing something simple, that looks
good or doing something like protecting an oil-producing
country that represents our need of foreign crude.
So I admire what you have done and how you have done it
there, and I think we need to make sure that we pull the
information together that lets us come to a policy that will
allow us to continue to take this leadership role in the world.
And I thank you gentlemen for your testimony.
Chairman Gilman. Thank you, Mr. Gejdenson.
Mr. Bereuter. Ambassador Pardew, Secretary Swigert, thank
you for your testimony. I am having a hard time understanding
how I am going to direct comments to you.
Ambassador Pardew, you have a very distinguished public
service record as a civilian in DOD and as a military officer,
and I know you are in a difficult position. But I do think that
what you have presented here, in the way of written testimony
and in your comments, do not give an accurate impression to the
American people of the difficulties we are facing there and the
fact that we have serious problems that are not being
corrected. The situation is deteriorating.
Effectively, we have a partition in Bosnia. We are moving
to a partition in Serbia, and in that part of it that is
Kosovo. You say we have made progress in restoring order and
then you go on to list several areas. But progress from point
zero is about what we are talking about, so it is extremely
slow. There is no confidence or credibility in the people that
will be managing the judicial positions nor is there likely to
You saw how many votes, I imagine, that the Warner burden-
sharing proposal, as advanced by a bipartisan group in the
House, received. I voted against that because I didn't think it
was a good idea in the way they had framed it. But the United
States did bear a large majority of the costs for pursuit of
the war over Kosovo--in the backyard of the Europeans.
Europeans should be expected to do more. I think it is only
fair, as a representative of the American people, that we need
to expect them to come forth and share the costs.
The figures we have, for example, in international police
is far less than requested in the first place, and the
Europeans still haven't met what is now the downgraded number.
I think it is reasonable to place not a dollar limit cap, but
instead a percentage gap.
Mr. Gejdenson referred to an element in the legislation
that Chairman Gilman has offered with the support of many of
us, including myself, and in that legislation, at least we do
make it a percentage. It is at 15 percent, but I am quite
willing to raise it to 18 percent because there is reason that
it ought to be 18 percent. This is consistent with what the
Administration has said at various times, although they would
like to back away from that number now. Let us advance it from
15 percent to 18 percent. If the Europeans and the Canadians,
since Canada is a NATO member, come up with much more, then the
amount we have to spend--which I hope we would spend well--in
the Balkans area will go up as well. It is not a dollar cap. It
is a percentage cap that we ought to expect, and it can be
adjusted to see if, in fact, the forces meet their goals from
year to year by what, in fact, we are willing to spend the next
Just a minor correction, it is not just what the EU is
spending. It is under our bill what the EU and NATO members are
spending as contrasted with the United States. You have, for
example, six European countries that are not members of the EU
whose contributions would also be considered along with the 15
members of the EU plus, of course, Canada. If they can't come
up with 82 percent of the costs in Kosovo today, then they are
not pulling their fair share. I think we need to assure the
American people that there is a limit on how much of the total
amount we are going to provide in the reconstruction of and in
the attempt somehow to restore civil order to Kosovo and also,
for that matter, to Bosnia.
I welcome any comments you have, Ambassador or Mr. Swigert.
Mr. Pardew. Well, thank you very much, sir.
I don't want to leave anyone with the impression that we
have had raging success in Kosovo yet or that we don't have
significant problems ahead of us.
You mentioned the police. The police are a problem. The
international community is doing something with police that
they have never done before. We have international police there
with arrest authority and carrying weapons. At the same time we
are trying to establish a judicial system. We are trying to
establish a police and judicial system, first of all, with
internationals, and then with locals.
I would go back to the point in my statement which reminds
us that we came into an area which was devastated. There was no
government. There were no police. Jails--there are no detention
facilities. So I don't want to leave with you a presentation
that implies Kosovo is a rosy picture. But I will say it is far
better than anything that existed at the end of the bombing
campaign. We have a long, uphill way to go, but we think that
we can overcome all the items that are difficult today, and
that we are making gradual progress. I do not believe, sir,
that we are sliding backward.
Mr. Swigert. I might comment, if I could, on the question
of European and Canadian and Japanese support. We certainly do
see this as a necessity and a priority, and we are working very
hard to ensure that Europeans follow through on their
commitments and deliver the assistance that they promised in a
timely fashion. This is an area in which we have had
considerable discussion with the Europeans, and they have
recognized that there is an issue here. At the latest meeting
of the European Council in Lisbon, they undertook a number of
steps to try and speed up the delivery of assistance. So I
think this is an area where all of us can do more, both in
specific situations and with respect to Kosovo and also across
the board in southeast Europe.
Mr. Bereuter. Thank you. We will try to stiffen your
backbone by giving you some requirement that they will have a
percentage of it but no more than a percentage. We will see if
they are going to meet their commitment.
Thank you, Mr. Chairman.
Chairman Gilman. Thank you, Mr. Bereuter.
Mr. Hastings. Thank you very much, Mr. Chairman, and thank
you for holding the hearing; and, gentlemen, thank you for your
If I could begin, Secretary Swigert, with you and refer to
your testimony where you say we firmly believe the
establishment of a democratic government in Belgrade would make
it possible for Serbia and Montenegro to establish a new
constructive relationship in which Montenegro could be a
genuine partner with Serbia in a democratic Yugoslavia. I
firmly believe that, too, but how realistic is the prospect of
Mr. Swigert. Well, you raise a very serious issue which is
the presence in Belgrade of an antidemocratic regime, and I
think that not just this Administration and the Congress but a
number of countries around the world, our European partners,
are all united in terms of working for democratization in
Serbia. This is a priority for us, and it is a priority for
Europe. We would like to see this happen sooner rather than
later because of the drag that Serbia represents within the
region and because of the additional suffering that the
perpetuation of the Milosevic regime is bringing on the Serbian
We have been carrying out a very active policy along three
tracks of putting increasing pressure on the Milosevic regime
through selective sanctions in conjunction with the European
Union and others, through isolation of the Milosevic regime
diplomatically and through strong support for democratic forces
in Serbia, as well as support for the democratic government in
The Montenegrin government of President Djukanovic has made
clear that its priority is bringing about a different
relationship with Serbia, not a break with Serbia but rather a
new partnership; and in a number of the discussions we have had
with representatives of the Serbian opposition, they have
expressed support for that. So I believe that with democratic
change in Serbia there can be a new arrangement reached between
democratic forces in both republics.
I think the question of when democratic change comes about
in Serbia is something that really depends upon the Serbian
people themselves. If you look at the opinion polls, Mr.
Congressman, we see that Milosevic is going down and the level
of frustration is tremendous. The democratic opposition in
Serbia will have a demonstration this week calling for free and
fair elections at all levels. It remains to be seen whether
that will be a turning point. It will be, I think, a struggle
to put more pressure on Milosevic, and the strategy that we are
following I think is one that we need to stick with. We have
been encouraged that the European Union has moved recently to
strengthen its financial sanctions and expand the visa list
that is directed against Milosevic's regime and his principal
Mr. Hastings. Thank you very much.
If I could turn to you, please, Ambassador Pardew, you
cited Secretary Albright's recent New York Times op-ed in which
she says, from your testimony, the day may come when a Kosovo-
scale operation can be managed without the help of the United
States, but it has not come yet. If I can share the frustration
that I hear among my colleagues with you and first preface that
by suggesting that, when I voted personally in favor of our
intervention, I made a floor statement in which I clearly made
understood that I did not expect this to be a limited operation
by any stretch of the imagination. One can't quantify very
easily the amount of time when theorists are talking about an
end game in something as complex as the Balkans. To ask for
that certainty is almost impossible.
At the very same time, when you hear my colleagues
advancing with a great deal of seriousness the notion of
capping the activity there, that comes about because we are
feeling our pressure from our constituents saying, you know, we
are spending a lot of money over there, you are telling us we
don't have any money here to do certain things, and then we go
home and face that. That said, is there any way that, with all
of the things that are on the ground, that we can suggest to
the American people that that day is going to happen, and even
if we said 30 years, it might be better than leaving it to
ambiguity all the time? Do I make myself clear?
Mr. Pardew. Yes, Congressman, you do. And I would like to
be able to give a date, but we learned from Bosnia that we
really cannot set firm deadlines because our strategy needs to
be based on the job that we have to do, and the missions that
need to be accomplished. The answer to the length of our
commitment in the Balkans is based on our interests; and, as I
said in my statement, we have very powerful security interests
in stability in the Balkans. And we have been engaged in this
endeavor with our European allies much less overall than they
have, but we have been involved because it is in our security
interests to be involved.
Our strategy for leaving is based on implementation of U.N.
Security Council Resolution 1244 which stipulates the
conditions required for a sustainable peace. When we leave
Kosovo, we need to leave it in a condition which is stable,
which is oriented toward Europe, which is a partner among
Europe democracies, with an economy that is integrated into the
So I wish I could give a precise answer to a withdrawal
date, but I can't. But I can say it is in our interests for us
to be there, and it is in our interests to stay the course
until such time as we have established the conditions for a
Mr. Hastings. Mr. Chairman, I recognize that my time has
run, but I am particularly interested, as a former jurist, in
the development of the judicial system; and if you would please
have someone followup with me personally so that I can be
briefed regarding where we are in that regard. I would also be
interested in further elaboration of the demilitarization of
the KLA, but at the very same time I recognize that there are
time constraints, and I want to compliment you, Ambassador and
Mr. Secretary, for your testimony here today.
Thank you, Mr. Chairman.
Chairman Gilman. Thank you, Judge Hastings.
Mr. Sherman. Thank you, Mr. Chairman.
I would like to echo and amplify what so many of our
colleagues have said, and that is, that when it comes to the
burden sharing in not only Kosovo but also Bosnia that our
foreign policy establishment has really let down the American
A week ago, we heard from the State Department with regard
to Haiti, and I asked at that point, how are expenditures in
the former Yugoslavia compared to European expenditures in
trying to bring democracy, freedom and economic progress in
Haiti? So far we don't have a response. I have always found
that when people want to give me a response they are very
quick. The message is very clear. When something goes wrong in
Europe, the American taxpayer pays. When something goes wrong
in the Americas, the European taxpayers pay virtually nothing.
We have heard testimony here that says the Europeans are
doing more than the United States. Along with several of my
colleagues, we saw what was going on during the war. Virtually
all the effective fighting was done by the United States.
I don't always agree with the Governor of Texas, but he has
put forward the theory that if the United States always has to
be the peacemaker, that others should assume the duty of being
peacekeeper. And yet here we are with no end in sight, doing
the European work for them, not only doing what they couldn't
do for themselves--in spite of their incredible wealth, in a
population that is larger than ours, they couldn't deal with
the military aspects of peacemaking. But now they clearly are
capable of doing everything that needs to be done in Bosnia and
Kosovo, and we are doing it instead.
I think that the question really is, do the Europeans think
that Kosovo and Bosnia is important? And, if so, if we announce
that within 1 year we were leaving, would they come through
with the billions and billions of Euros necessary to assume
this duty? Or would they decide that the former Yugoslavia just
isn't worth very much of their money?
Mr. Pardew. Well, our participation, as I have said before,
is based on our interest, and we have interests there.
Mr. Sherman. Excuse me, I have a limited amount of time. I
will ask you to focus on the question: If we stopped, giving
the Europeans 12 months notice, would they step up to the
plate? Or would they say, sorry, Kosovo and Bosnia are not very
much in our interest, at least not enough to assume the full
financial burden, and if they are not in your interest, so be
it? I am not asking you whether Kosovo and Bosnia is in
America's interest. I am asking you what would the Europeans do
if we insisted they shouldered the entire load?
Mr. Pardew. The Europeans would probably make the best of
Mr. Sherman. We could pull out and the Europeans would
handle the problem?
Mr. Pardew. I said that they would probably do the best
they could with it. The question is, should we be there? The
answer to that is----
Mr. Sherman. With all due respect, I am given 5 minutes of
time where I am supposed to ask questions, and your response is
to tell me the question is. I am very sorry. I am supposed to
ask the questions. I know that you would prefer to be asked
different questions, and perhaps one of my colleagues will come
in and ask you the questions that you would like to answer.
Mr. Pardew. Congressman, you have asked a very important
and complex question. I would like to give you an adequate
Mr. Sherman. If you could stick to the question I have
asked, I would appreciate it.
Mr. Pardew. The United States is participating with our
European partners in an issue that is of vital interest to the
Europeans and the United States. The question is not whether we
should be there but to what degree.
Mr. Sherman. Excuse me, Ambassador, I will reclaim my time
because, once again, you are saying what the question is. And
it could very well be that that will be the question asked you
by one of my colleagues, but I don't think that the question is
whether--the degree to which we should be involved in the
Balkans for 5 years, 10 years, 20 years. It looks very much as
if we will be in the former Yugoslavia for at least as long as
we have been in Korea. And, you know, Asia is a different
circumstance, but here you have all of the wealth and power of
Europe, which apparently is insufficient to deal with the
problem in Europe, let alone grossly inadequate European
contributions to that problem in Korea or East Timor or
Columbia or Haiti.
So I realize that you would prefer that I ask you a
different question, but, in fact, the question is whether we
will show, as civilian leaders, the same kind of courage that
our men and women in uniform showed. They stood up to
Milosevic. We now have to stand up to Paris and to Berlin and
say that European problems need to be financed, the solutions
to those problems need to be financed by European taxpayers.
And you can say that we have an interest in former
Yugoslavia. You could make an equal case that France or Britain
or Germany should be concerned with the freedom and development
of Haiti, and yet we are still waiting for those figures to
come in. You can certainly say that Italy and Spain should care
about the democracy and freedom of the people of South Korea,
yet I am not aware of any European contribution on a
So it seems that where there is a European concern about
something in the Americas or Asia, we have no money at all from
the Europeans. We may see a little bit of French help to Haiti,
a former colony, whose problems today are a direct result of
colonial exploitation by the French themselves, but we will see
very little German help for Haiti, very little Italian or
Spanish financing of the military in South Korea, an inadequate
European response to East Timor, and the fact that we would
then do the European job of convincing the American taxpayer
that that is an acceptable circumstance that we contribute
mightily to Europe and they do nothing outside of Europe is
Mr. Chairman, I yield back the balance of my time.
Chairman Gilman. Thank you, Mr. Sherman.
Mr. Pomeroy. I am sorry, Mr. Rohrabacher just arrived.
Mr. Rohrabacher. Yes, I just did. I apologize. As you know,
we have various hearings that we have responsibility to attend,
and I was the chairman of the last one, and again I apologize
if we are covering some ground--how much specifically have we
spent in the Balkans for the last 5 years?
Mr. Pardew. Mr. Rohrabacher, I knew you were going to ask
me, and I have brought you an answer I hope will satisfy your
Mr. Rohrabacher. All right.
Mr. Pardew. The total cost to the United States since 1995
in developmental, humanitarian and military costs is roughly
Mr. Rohrabacher. That includes?
Mr. Pardew. That is Bosnia and Kosovo. U.S. Military and
foreign assistance in fiscal year 1996 to fiscal year 2000 is
$11.366 billion from accounts---- and
----. That is Bosnia.
Mr. Rohrabacher. OK. Now hold on. First one was--$17
billion is the total?
Mr. Pardew. $17.8 billion is the total.
Mr. Rohrabacher. OK.
Mr. Pardew. For Bosnia, that total is $11.366. That is
fiscal year 1996 to 2000.
Mr. Rohrabacher. OK.
Mr. Pardew. And in Kosovo--that is fiscal years 1999 and
2000--the figure is $6.384 billion.
Now, let me break down the $17.8 billion one other way.
Military costs are $15.257 billion, civilian costs $2.5
billion. So what I am saying is that the bulk of the U.S.
funding has been military.
Mr. Rohrabacher. Now you are saying that our military
operation that brought the Serbs to their knees so they would
agree to this peace plan in Kosovo cost us less than $15
billion, all this bombing?
Mr. Pardew. The military outlays for Kosovo, $5.157
Mr. Rohrabacher. That includes that whole----
Mr. Pardew. That is the air campaign.
Mr. Rohrabacher. How long was the air campaign?
Mr. Pardew. Seventy-eight days.
Mr. Rohrabacher. You are saying it is under $6 billion for
that air campaign?
Mr. Pardew. Right.
Mr. Rohrabacher. That is phenomenal. I will just say that
if I, being someone who is asked to look at the figures, that
figure would jump out at me and say, look a little closer, that
doesn't sound realistic.
Mr. Pardew. Mr. Rohrabacher, unfortunately, I am not into
the details of military cost sufficiently to answer a lot of
detailed questions about them. These are figures that we
received today from OMB and the Defense Department.
Mr. Rohrabacher. OK. Well, you know, cost is something that
we are supposed to look at very closely here, and, of course--
so $17 billion, you are suggesting that $17 billion is what the
cost was--now, I don't know what the cost to us would have been
to the strategy which was our alternative, and one alternative
was just to recognize that the Albanians and Kosovo had a right
to their self-determination, recognizing them and maybe
providing them with some support so they could defend
themselves. That was another alternative that I was suggesting
and that some others felt would have been a moral alternative
to direct military intervention. Would you guesstimate the cost
on something like that? Wouldn't that have been something like
$2 or $3 billion at the most?
Mr. Pardew. I couldn't put a cost figure on that. I was
involved in looking at some of those options, and I can tell
you what I believed at the time. I believe that there was no
way that we could adequately create an organization that could
defend itself in the short-run against the Serb army and
police. That would have been a long-term solution, but a lot
more people would have died had we gone down that trail.
Mr. Rohrabacher. Let us note that the Kosovars were here
and were asking not for American troops in the beginning but
were asking instead for just our recognition of their human
rights, to control their own destiny and some support, some
help so that they could fight their own battle rather than
having American military personnel there and having American
military people put themselves and their lives in danger and
having over $17 billion expended in Treasury, which is a
considerable cost, even though I think that is low balling it,
frankly, once I take a closer look.
And how much is our European allies then?
Mr. Pardew. I don't have the total cost of the military
campaign. I have the U.S. cost, but I do not have the 1995 to
2000 total international costs for the Balkans.
Mr. Rohrabacher. It would be of interest to us when
analyzing whether or not this is a cost-effective approach to
foreign policy in the future to see whether or not an
expenditure in the tens of billions of dollars by the United
States actually stimulated our European allies to get more
involved or whether what happened was what most of us on the
other side suggested would happen, that if we end up spending
the money the European allies will be less likely to commit
their resources and less likely to buildup their own military
So these are very pertinent issues, and I wish you success,
and I yield back the balance of my time.
Chairman Gilman. Thank you, Mr. Rohrabacher.
Mr. Pomeroy. Thank you very much, Mr. Chairman.
I want to speak specifically to the cap proposal, and are
we talking about the 15 percent cap, Mr. Chairman, or 18
percent cap? Will it be amended?
Chairman Gilman. It is going to be amended. Mr. Bereuter is
suggesting the possibility of increasing it to 18 percent.
Mr. Pomeroy. I am familiar with the notion that over a
longer term project, longer meaning more than 1 year, there is
going to be an ebb and flow in terms of shifting costs. For
example, as we respond to what relief in Grand Forks, North
Dakota, to build a permanent flood protection device there, the
local share is greater at the first phase of the project, the
Federal share greater in the middle, local share greater at the
end, to ultimately, over several years, you have a 50/50 cost
share, but that doesn't mean at any given point of time you
have got a 50/50 cost share.
Now, my question, Mr. Ambassador, is whether the same might
be true here and, in fact, you have an ebb and flow in
participation. I am informed, for example, that one of the
things the United States does best is respond to emergencies,
disaster assistance. We might bear perhaps more of that cost
than the countries in that phase less when we are in the longer
term restructuring phase.
I would like to show a couple of pictures that I personally
took when I toured Kosovo in December. This is a picture of a
family living in a warm, dry room. Tens of thousands of
Kosovars spent their winter in circumstances similar to this.
Into a destroyed structure they take this warm, dry room kit,
tiny little stove there for heating and then plastic sheeting
on the ceiling and over the windows. Wholly inadequate housing,
dangerous for the health of those living in here. They are not
dying of exposure, but, obviously, we have got an enormous task
in terms of still emergency housing reconstruction.
Another thing that I saw was extraordinary damage, I mean
unbelievable damage to the countryside. I put this picture up
because it illustrates, I think, two things: devastation which
was commonly seen throughout the country in terms of structures
as well as damage to the agricultural infrastructure. It
destroyed every damn tractor they could find and made the
prospects of getting on with the normal activities in a farming
region very, very difficult to obtain.
Now, I use these photographs to point out perhaps it is not
timely in any way to be talking caps yet because we are still
very much in more of an emergency portion, disaster portion of
the response, and what we see today isn't necessarily
reflective of the longer term relationship that we will have
with our European allies. By golly, they ought to carry more
than 50 percent. They ought to carry way more of the costs of
the long-term reconstruction than what we have invested to
date, but it just seems to me that hard caps might interfere
with the normal ebb and flow of things as you work toward
getting this structure, even if we are all agreeing that 18
percent is an appropriate figure to be at.
If the Ambassador would respond.
Mr. Pardew. I agree completely, Congressman. We think that
any kind of cap limits our flexibility. It does not allow us to
exploit some advantages that we have in the temporary
circumstances you just described. In some cases, we can move a
little quicker in meeting immediate humanitarian needs. In
other places, such as reconstruction, the Europeans clearly
should pay and, quite frankly, are willing to pay the vast
majority of the costs. So we think that a hard cap absolutely
limits our flexibility and sets up a precedent with our
European allies which would not be helpful to us in areas where
we might need their help.
Mr. Pomeroy. The diplomatic dimension in terms of eliciting
full European response, do you think they would respond well to
this kind of activity out of Congress or might we actually set
our own cause back, the objective being getting full European
participation, reducing the U.S. participation, the 18 percent
range? What is the best way to pursue that objective?
Mr. Pardew. First, the President, the Secretary of State,
and every senior Administration official I know who are
involved in Kosovo and the Balkans have been working with our
European allies to ensure that the message from Congress--that
Europe must pay the lion's share--is understood by them. Europe
is moving forward in this regard, some not fast enough. We
believe however, that they accept their responsibility for the
lion's share of the costs, and we believe that they accept
responsibility for leadership. Therefore, we are confident that
our European allies will, in fact, step up to the plate, as we
Now, as to their attitudes, I think it will damage our
relationship if this kind of hard ceiling is put on our
spending flexibility. We can expect to see some sort of
reciprocal position from them. They accept their
responsibilities, they accept their position of leadership, and
for us to make demands on some things that they can't fix is
For example, their fiscal year is different than ours. We
start in October. They start in January. So we have funding
available in January that they can't match because they haven't
gotten into their process. Those kinds of timing issues and
technical issues make this even more difficult. So there are
technical reasons not to set the cap. It will damage our
relationship for sure, and I think it will hurt us in some
other areas where we need their help.
Mr. Pomeroy. In all of that, in developed Western Nations,
we have got many--our relations with our allies are going to
get through that, but who gets hit in the crossfire are these
Kosovars again it seems to me.
And just for an example, this picture haunted me, haunted
me for weeks after, and I asked AID personnel to go back and
see how these little kids were doing, and they weren't doing
very well at all, and they ended up being able to draw up on
additional resources, come in, get clothing, get a better
housing put in place. They did a lot of work in this particular
situation here because I asked; and they saved, in my opinion,
It would seem to me we could be getting ourselves in a
situation--I think that might be kind of an analogy for what we
might find--a situation that urgently required a response, but
we are up against our cap, sorry, wait till the next fiscal
year, wait till some headroom frees up and we will see what we
These caps imposed here in town have got nothing to do with
real-life circumstances on the ground. The people that get hurt
are the most helpless folks that have already been totally
devastated through war they didn't bring on but got brought
upon them. We have to think about these things.
Thank you, Mr. Ambassador.
Mr. Rohrabacher [presiding]. Thank you very much.
Let me just note for the record that what H.R. 4053
suggests, not only suggests but mandates, that in southeast
Europe that the United States not provide more than 15 percent
of the costs of the operations down there, humanitarian and
military, starting next year. That is starting next year, so
that the current fiscal year 2000 is not included.
And I understand that there are people in need all over the
world, and those people are wonderful people that you just
showed us the picture of, and I certainly feel for them, but I
will have to say that it is about time that our European allies
do their part. And the more that they hear from Members of
Congress who are not willing to be tough and set the
guidelines, they will not step forward because they know that
Uncle Sam is going to pick it up. And that is the history, and
that is the way it is, because that is reality.
And I am sorry that our European allies, in fact as far as
some of us are concerned, our European allies, southern Europe
is their responsibility and not the responsibility of the
United States, and the money that we have poured in is a
tremendous cost. Anyway, the bill also says that the Secretary
of State will certify to Congress that our goal of this cap of
15 percent is achieved and that the Europeans are certainly
cooperating, and that is what this bill is all about.
Mr. Pomeroy. Mr. Chairman, may I respond briefly?
Mr. Rohrabacher. Wait one moment, and let me say I will be
going to Kosovo over the Easter break, and we have people--you
know, we have people down there that again for years came to us
asking that they be permitted to defend themselves, and instead
now we are deeply involved. And what I need to ask the
Ambassador before I pay the courtesy of having my colleague
answer some of the things I just mentioned, do we now recognize
that Kosovo has a right to its own statehood or are we still--
and if we don't, what is our exit policy? How are we ever going
to get out of this unless we at least recognize the people of
Kosovo's right to determine their own destiny?
Mr. Pardew. As I have said, our exit strategy is based on
implementation of those elements of U.N. Security Council
Resolution 1244 which creates the conditions for a sustainable
peace. The U.N. Mission in Kosovo is the first step in building
peace in Kosovo, and the second is to establish elements of
democratic self-government. Our exit strategy is therefore
predicated on implementation on U.N. Security Council 1244 as a
means of obtaining substantial and sustainable autonomy. We do
not support independence for Kosovo.
Mr. Rohrabacher. I would suggest this, that if we do not
support that, then this is all a facade. I mean, the fact is
there will never be a time when we can leave because we have
not laid the foundation and been honest with everybody that we
are involved and that our major goal is to protect these--these
people have a right to control their own destiny. They are not
going to give up on that. They are willing to live in horrible
conditions like we have just seen in order to achieve their
right to control their own destiny, and that is what we see
here, brave, courageous people willing to do that, and that is
not going to change. They are going to always demand that. And
unless we have come down and been unambiguous about this, we
are wasting everybody's time and money.
And, in fact, my belief is--and I am sorry to be so up
front about this, but the fact is, that unless we are willing
to be that demonstrable in our support, at least for the
principle of self-determination, we shouldn't have gotten
involved in this again, and we should--they came to us. That
was their goal. They are willing to sacrifice. They are willing
to go through this suffering in order to achieve, as other
nations have done, in order to achieve their independence, and
if we would just walk away without recognizing that it won't
last, then everything we have spent will be for nothing.
So it is just a thought, and I know you aren't making the
policy right now. You are trying to do it the best you can, and
I appreciate that. And I hope that when I go down there in a
couple weeks--I know that you are doing your very best job in
trying--in a very bad circumstance.
I do think that my colleague from North Dakota certainly
should have a right to respond.
Mr. Pomeroy. Thank you, Mr. Chairman.
I was going to respond briefly by saying that I don't think
that, vis-a-vis our European friends, our diplomatic ends are
best pursued by a punch in the nose. I think that having voices
like yours in the debate are absolutely constructive and
helpful. They ought to know there is a growing discord in terms
of impatience about what is happening from the European
participation side. I just hope that the U.S. Congress is a
little more measured, a little more inclined to let the
Secretary of State and the President advance the foreign policy
of this Nation, rather than always trying to lead the President
and the Administration, and that the debate is not about the 18
percent figure, the debate is about the means to get there, and
that is why I have serious reservations about this legislation.
Chairman Gilman [presiding]. We have two votes on the
floor. We will briefly recess the Committee for about 10
minutes. The Committee is recessed.
I think we are finished with our panelists, and we thank
you for your patience and your willingness to supply us with
information. If you would provide the additional information we
The Committee is in recess.
Chairman Gilman. The Committee will come to order.
It is now my privilege to introduce a former colleague Joe
DioGuardi. Former Congressman DioGuardi has been involved in
educating the American public and the Congress about issues
concerning the Albanian population in the Balkans for over a
decade. As founder and President of the Albanian American Civic
League, Joe DioGuardi has promoted involvement in public
affairs of our ethnic Albanian citizens from the northeast and
throughout the United States.
Joe and his good lady Shirley Cloyes have provided me and
our staff with invaluable insights into the conflict in Kosovo
since it flared up in 1998. In fairness to Joe, I should point
out that he has warned us that Kosovo would be a serious
flashpoint in the former Yugoslavia until justice was provided
to its majority Albanian community. He first made that warning
in 1989 soon after Milosevic had taken a step to strip Kosovo
of its autonomy under the Yugoslav constitution.
I hope that Joe's prescience that he has demonstrated over
the years will help guide us today in this hearing. Clearly our
present policy has some significant problems, and we invite Joe
now to help enlighten us as to how we may best correct them.
You may submit, Mr. DioGuardi, your entire statement for
the record and summarize as you see fit without objection.
STATEMENT OF THE HONORABLE JOSEPH DIO GUARDI, VOLUNTEER
PRESIDENT, THE ALBANIAN AMERICAN CIVIC LEAGUE
Mr. DioGuardi. Thank you, Mr. Chairman.
Thank you so much for all you have done in all these years.
We started I guess in 1986 when we put the first resolution on
the egregious human rights violations in Kosovo. I was a new
Congressman back then and ethnic Albanians in my District came
to see me, and I was shocked by what I heard from them about
what was happening in the middle of Europe. And you and Tom
Lantos and so many other good Congressmen and later Dana
Rohrabacher joined with us.
You know, if it weren't for the vigilance of this Committee
and the actions that it has taken since 1989, especially under
your chairmanship, Congressman Gilman, today Kosovo would be
like Chechnya, a wasteland with hundreds of thousands of bodies
strewn about and nobody would care. I really feel sorry for the
poor people of Chechnya who did not have a voice in this
Congress, but that is what Kosovo would have been had it not
been for people like you. And we really appreciate all that you
and this Committee have done, but the job is not over.
I know you have to leave. You can pass the baton to Dana,
and I will let you know the bottom line.
Chairman Gilman. I sorely regret. I am being called to
chair another meeting with the World Bank President. As you
know, he is being challenged this weekend here in Washington,
all kinds of demonstrations against the World Bank.
I am now going to ask Dana Rohrabacher, our distinguished
senior Member of our Committee, to conduct this; and I will try
to return as soon as we finish our other meeting. Thank you for
being here, Congressman, and thank Shirley Cloyes for her
interventions. Mr. Rohrabacher.
Mr. DioGuardi. What I would like to do Congressman, Mr.
Chairman, is to basically summarize what I think are the key
issues and the matrix we can use is, one, legal; two, economic,
practical; and three, political.
What I will do is submit for the record a statement
prepared by our Balkan Affairs Adviser Shirley Cloyes, my wife.
She is a volunteer, by the way, as I am, and she prepared
something that is probably the most complete analysis of what
this body and the Administration has to do to win the peace. We
know we won the war, but it looks like, as you have suggested,
we are losing the peace.
Mr. Rohrabacher [presiding]. Your statement will be
included in the record.
Let me note that there will probably be another vote around
35 minutes from now, and if we could have your testimony and
the testimony of the next panel, that is the way it is going to
get done. Otherwise, somebody will get shortchanged. So if you
could summarize your testimony and we get to the next panel, we
will get everything on the record.
Mr. DioGuardi. We look forward to the meeting with you
tomorrow so that we can help you on your trip to Kosovo and
meet the fine people we have brought here, because it is
important that you get all the information possible to bring
back to this body.
So what I would like to do is start with the legal issue,
and we have with us today one of the most prominent professors
of international law in the Albanian world. He is a Professor
of Law at the Universities of Prishtina and Tetova, Prishtina
in Kosovo and the University of Tetova in Macedonia. He is Dr.
Esad Stavileci. He is not able to speak today, but he did
prepare a statement that is in English, and I would like to
submit this for the record.
Mr. Rohrabacher. The statement will be made a part of the
record. So ordered.
[The prepared statement of Mr. Stavileci appears in the
Mr. DioGuardi. He has come to the same conclusion as Noel
Malcolm has, the English scholar, the gentleman from Oxford who
said that under international law Kosovo deserves its
independence, as you have suggested. He has prepared a book on
this. Dr. Stavileci has summarized that book in his statement,
and basically the bottom line is that Yugoslavia is a
confederation that is in the process of disintegration.
It is not only Albanians that are saying that, Mr.
Chairman. You can turn to some well-known Slavs. One that I
want to quote here is the Croatian scholar, Branka Magas. She
stated in a speech to the Bosnian Institute in London on May
10, 1999: ``Unless the process of dissolution of Yugoslavia is
allowed to be completed and the Former Republic of Yugoslavia
dissolved into its component parts, thus setting Kosovo on a
path to independence, it will be impossible to build a peaceful
and democratic state system in southeastern Europe.''
Mr. DioGuardi. It can't be said any better than that, and
this is not an Albanian speaking. It confirms what you said.
What are our choices here? Our choices are to stay there for a
long period of time or allow the Albanians to control their own
Let me go to the next phase, which is the economic and the
practical. That is why we brought Dr. Muhamet Mustafa. He is an
expert on the economy of Kosovo. He put together a group called
the Riinvest Institute for Development Research. He is the
chairman. He has many contacts in the United States. His papers
have been quoted here in the newspapers in Washington and the
bottom line is that Kosovo does have the resources to be
economically independent. It has mines, the Trepca mines. It
has many factories, many that are being occupied by the bloated
bureaucracy called UNMIK right now, so that Albanians can't
even reclaim the factories so that they can return to their own
Kosovo does not want to be another Bosnia. It doesn't want
to be a ward of the United States and of the rest of the world.
Bosnia, as you know, is an ethnically divided, carved-out
enclave, totally dependent and going nowhere. It is very
important to hear Dr. Mustafa's message.
Let me go on to the third phase, the political. This is
where the rubber hits the road, Mr. Chairman. If we don't
understand that it took a bold stroke by the United States to
jump in and do what we did--and it was costly, as you said. You
should have asked your old buddy, Joe DioGuardi, the only
certified public accountant ever elected to this body in 200-
and-something years, and he could tell you why the Kosovo
military campaign was more expensive than the figures indicate.
But Ambassador Pardew couldn't explain this to you because
government operatives don't understand their own accounting
system. In effect, all the bombs that were dropped were part of
some other budget in years past. We are not on an accrual
system here. So every bomb, every plane they used, everything
that was destroyed was already written off. The government
doesn't consider that a cost. If you are in business and you
used that system, you would be indicted if you had a publicly
traded company. But that is the system we have here.
What you have to say to them is, wait, I want to know what
we used during this war, not what you just put into this year's
budget because you had to replace something and drop it. What
did you use? And you will find out that the real cost is tens
of billions of dollars for sure.
The political solution for Kosovo is going to be a tough
one. You have the United Nations with a resolution that is bad
law. We have had bad laws in this country. Remember the Dred
Scott decision that black Americans were just property. We had
to get rid of that law. It was bad. We had a Civil War over it.
U.N. Resolution 1244 is bad law. Let me tell you why. On
the one hand it asserts the sovereignty of Serbia over Kosovo,
and on the other hand it dismantles Serbia's sovereignty. You
have created an ambiguity here that doesn't allow the Kosovars
any ability to stand on their own feet. And you have got now a
bureaucracy called UNMIK and OSCE and several others that are
trying to work within this resolution.
The worst result is the situation in Mitrovice. That is why
we brought the mayor of Mitrovice, Bajram Rexhepi. Bajram
Rexhepi is a medical doctor. We also have here the former
Albanian director of the Trepca mines. He can tell you how to
put those mines back into service. They even have a pro forma
where this year they can make money if you allowed them to do
that, but they can't control their own mine. The problem is the
United Nations It is trying to impose or trying to implement
bad legislation, and we have got to do something about it.
Now, I am going to give you my last comment and this is
where the conundrum is. How do you deal with it? If the United
States hadn't taken the lead with NATO in stopping the
genocide, there would have been a tremendous conflagration. We
know that Greece and Turkey would have been at each other
because of Macedonia being right there. We did the right thing.
It is still in our vital interest to do the right thing. By the
way, the paper that was prepared by Shirley Cloyes was
delivered to the White House 2 weeks ago because we wanted the
President to know. He has a chance to be bold again, and he is
being too cautious.
[The prepared statement of Mr. DioGuardi appears in the
Mr. Rohrabacher. What is the right thing?
Mr. DioGuardi. The right thing right now is to look at the
real villains. Villain one, Slobodan Milosevic, is still there
doing damage. I heard Congressman Bereuter complaining about
how the Albanians are treating the Serbs so badly. He forgot
what Slobodan Milosevic did, to kill Albanians, including
pregnant women, to rape and torture them. Everything that we
have seen in Nazi Germany was repeated. He didn't want to
mention the resentment for some reason.
The point is you have Slobodan Milosevic. He has got to be
picked up, just like we picked up Krajisnic last week or the
week before. We have to get the French out of the way and bring
this guy to justice. Without that, there will never be peace in
To get justice, you have two other problems. You have China
and Russia. This is where the United Nations is not the place
for the solution. As long as you look to the United Nations for
the solution of Kosovo, you will never have the solution. Why?
Russia has lost its influence all over the world. It is
embarrassed now to retreat because it wants to find some place
where it has some influence. Russians have their Serbian
surrogates, their Serbian Communist regime. They are going to
stay in the Balkans until we tell them, if you don't move, we
are not going to give you the World Bank credits, the aid you
need. So Mr. Putin, back off. We will work with you in some
And China, my God, what did the Chinese just do? Another
Communist regime. They gave $300 million to Slobodan Milosevic.
Is that kicking us in the head? They want us to give them Most
Favored Nation status on a permanent basis, without conditions;
but yet they give a war criminal that is trying to reassert his
dominance in this area, that will kill the peace in the Balkans
and Europe, they give him $300 million.
What is Slobodan Milosevic going to do with this money?
Create jobs? No. He is going to pay his army and his police. So
we have to back China off, and we have the leverage to do this.
I hear people asking what are we going to do? It is going to
take too long.
Mr. Rohrabacher. Your solution is, No. 1, to make sure that
Slobodan Milosevic is arrested as a war criminal.
Mr. DioGuardi. Absolutely. You have to do something more
than just wish it.
Mr. Rohrabacher. No. 2 is to get Russia and China out of
Mr. DioGuardi. They need our trade and our economy. They
need our aid, and we have to assert that.
Mr. Rohrabacher. Do you have another point to make?
Otherwise, I think we need to get onto the panel.
Mr. DioGuardi. There is a reason to do it. This will
prevent another Balkan war. If we don't do this, you are
heading for another Balkan war. I know the Albanian people.
They are certainly not going to go back under Serbian
sovereignty. So we need to find a solution. I have pointed the
way. You guys have to find a resolution.
Mr. Rohrabacher. May we put the next panel up, because we
are going to have a vote in 20 minutes.
Mr. DioGuardi. Thank you for the hearing.
Mr. Rohrabacher. Thank you. You are making sure that your
entre is used for righteous causes.
We are proceeding now with the second panel. We have Ms.
Linda Dana. She is from a town in the center of most of the
heavy fighting, and she is a former medical student and will
testify about her family's and her own personal experiences
during the war. I am grateful to Mr. Pomeroy who has actually
arranged for Ms. Dana's appearance here today. Would you like
to say a few words in introduction?
Mr. Pomeroy. I met Linda Dana when I had my trip in
December. She is in the United States at this point in time
acting as a medical interpreter for two children who are
undergoing medical procedures in Cleveland. So it was very
fortunate, I believe, for us that she happens to be in the
country at the time of this important hearing, and the Chairman
was very kind to acquiesce to my request that she testify.
Mr. Rohrabacher. If you have a written statement for the
record, if you can put that in the record. If you can summarize
in just a couple of minutes for your testimony, then we will
have everyone summarize and come back for questions for
everyone on the panel. We want to make sure that everyone gets
STATEMENT OF LINDA DANA, INSTITUTIONAL CONTRACTOR IN KOSOVO,
INTERNATIONAL ORGANIZATION FOR MIGRATION
Ms. Dana. Thank you, Mr. Chairman, Members of the
Committee, and Congressman Pomeroy. My name is Linda Dana. I am
from Gjakova in the western region of Kosovo. I am happy and
grateful to have the opportunity to speak with you today about
missing and imprisoned people, an issue that touches many
Albanian families in Kosovo, including mine. It is estimated
that 4,500 Kosovar Albanians are imprisoned in Serbia and are
still unaccounted for. To date, Serb authorities have not been
forthcoming with any information. Until we know the fate of our
family members and fellow citizens, the war will not be over
for us. I am here today to ask the U.S. Government to help us
find out what happened to these people.
Today, I speak for the people of my city, prisoners and
missing persons. Before the war, I was a medical student. I was
born and grew up in Gjakova, the third largest municipality in
Kosovo. Gjakova was both a cultural and industrial center. The
prewar population of the city and surrounding villages was
approximately 141,000 residents; 2 percent were Serbs.
Kosovar Albanians were not free. At best we are second
class citizens. We could not hold jobs in state-supported
enterprises, attend state secondary schools and universities,
or travel freely. We were forced to live in a parallel system,
but we survived.
The war came to Dukagjini region in western Kosovo in the
summer of 1998, long before NATO bombing. The city of Gjakova
was almost totally blockaded. Travel in and out of the city was
dangerous if not impossible. There was continual heavy fighting
in villages around Gjakova between Serb military forces, the
KLA and civilians. On March 24, 1999, Serb military and
paramilitary forces burned the historical sections of Gjakova
to the ground in an act of revenge. For 450 years Old Town was
built, and after one night it is gone. The burning of Old Town
marked the beginning of terror for us because it was a symbol
of pride of this community.
During the next 2\1/2\ months, many people were forced to
leave the city. Of the almost 60 percent that stayed, 1,500
people were either killed or captured by Serb forces. Some are
known prisoners, but the fate of many other remains unknown.
In the city, paramilitary forces went from home to home,
sometimes torturing, looting, or rounding up men and boys.
There are stories of people being killed who refused to open
their doors to police. Civilians were forced to hide in their
homes. As many as 30 people gathered in one house, posted
lookouts and waited for Serb police.
On the night of April 1, my neighborhood was in flames. I
was alone with my mother and father because my brothers had
been on the run for 5 days. I don't know how we survived. On
the morning of April 2, we were forced to leave our home with
thousands of people.
I left with my childhood memories, with my youth songs, but
without my brothers. In the hope that we would find my brothers
among the lines of people, we walked for 9 hours to get to the
Albanian border and stood there for 2 rainy nights until we
But my brothers never came. They never passed the border of
hope; rather, they are forced to stay in the city of hell and
be threatened every minute with death.
After 72 long days the war was finished, but not my
suffering and the suffering of many Albanian families. I had
lost my home, and my second brother was missing in town,
together with thousands of people all over from Kosovo.
Between May 7 and May 15, 300 people were taken from their
homes. At 8:30 a.m., on May 10, paramilitary forces entered the
street Asim Vokshi, at my uncles's house where my brother was
staying. They separated men and boys from women. Then they beat
an old lady who refused to let go of her sons. They forced the
other women to leave the streets. According to eyewitness
accounts, 30 men, including my brother and 9 members of my
large family were taken into the street where the police
checked documents, beat some of them and shot the others. The
bodies were later removed. Witnesses also claim that they saw
some men forced into a police van which was driven away. We
don't know who the men in the van were.
My story is not unique. It is just one of the stories that
people have to tell. It just happens that I am here and telling
the story. It is hard to go back and to face your destroyed
town and face your friends and relatives. The story of my
hometown remains painful and unfinished. The drama continues.
Every Friday people stop working for an hour and they protest
with photos of their loved ones.
A citizens' organization from Gjakova, the Office for
Information on Detainees and Missing People, has been working
with national and international organizations to gather
information about missing, detained and imprisoned persons. It
is known that when Serb forces retreated, they transferred
prisoners from Kosovo to Serbia. According to the records, 370
people from the municipality of Gjakova are in Serbian prisons;
703 people fate is still unknown. Local organizations and the
newly appointed Gjakova municipal commission are working
closely with the Kosovar Transition Council's Commission on
Prisoners and Detainees and the International Committee of the
Red Cross to bring this issue to the attention of international
community. They have called upon the former Republic of
Yugoslavia and Serb authorities to provide a full accounting of
known dead and persons currently detained and imprisoned in
Serbia as well as immediate release and return of prisoners and
detainees. They have also requested that the Secretary General
of the United Nations appoint a special envoy to address the
issue of missing persons. On their behalf, I am asking the U.S.
Government to support these efforts.
I know that in the recent weeks representatives from the
U.S. Government and the governments of western Europe have
expressed concern about incidents of ethnic violence directed
at Serbs and other minorities in Kosovo. We too want the
violence to end because until it does, the conflict in Kosovo
will not be over. It is also true that until we know what
happened to the members of our families, we will not be free to
build a better future for all Kosovars.
In closing, I want to say on behalf of all Albanian
Kosovars, I want to express our sincerest gratitude to the
American people, President Clinton, the Congress of the United
States and all of the NATO allies. It is because of you we are
free, because of you we are alive and we have human dignity
back, and our eyes look forward to the future.
The task of rebuilding our lives and communities is well
underway. I have seen firsthand the impact of the United States
assistance to Kosovo as an employee of the USAID Office of
Transition Initiatives. I have worked in partnership with
communities throughout Kosovo to provide emergency relief,
rebuild homes, schools, and repair water and electrical
networks. With continuing support of the United States and the
European allies, we will build a better future. Please do not
lose faith in us. I hope that my voice has conveyed the clear
message of gratitude and appreciation of all Kosovar people and
I thank you today.
Mr. Rohrabacher. Thank you very much for your testimony.
Ms. Dana. Thank you for listening to me.
[The prepared statement of Ms. Dana appears in the
Mr. Rohrabacher. We appreciate your colleague from North
Dakota to make sure your message got out. We will make sure
that whatever issues take place, that the issue of missing
people will be high on the list of priorities.
The next witness that I have down is Dr. Bajram Rexhepi.
Dr. Rexhepi is a medical doctor and he has been very actively
involved in Albania, and frankly he has focused attention of
ethnic lines between northern and southern sectors.
You may proceed. I would suggest that when that bell goes
off for a vote, we have very little time left. We have 10-15
minutes to get all of the testimony in, if you can summarize.
STATEMENT OF BAJRAM REXHEPI, M.D., CHAIRMAN OF THE COMMUNE
Dr. Rexhepi. I am pleased, Mr. Chairman, that Mr. Gilman
has invited me to present testimony to your Committee regarding
the city of Mitrovice which has been illegally divided. I will
focus on the problems that are obstacles to resolving the
Mitrovice issue and that thereby prevent the establishment of
peace and stability in postwar Kosovo.
I want to begin with the roots of the problem. The
following factors contribute greatly to the crisis in
First, Milosevic has created a system of parallel Serbian
institutions with Serbian agents from Belgrade acting in
Mitrovice in an unrestrained way.
Second, the Serbian regime has created executive councils
in the Serbian areas of Mitrovice to implement Serbian control
in violation of U.N. Resolution 1244.
Third, undercover Serbian police masquerade as civilians,
while they in fact operate with sophisticated communications
equipment and weapons.
Fourth, parallel courts operate in a continuation of
Serbian prewar trials.
Fifth, even local services, such as elementary schools,
high schools, the universities, and the hospitals, are provided
by a parallel system of local institutions and communes.
The current reality in postwar Kosovo is that, Albanians
have always been cooperative, with the aim of creating, as soon
as possible, joint organs of local administration. The Serbian
side has been marked by a lack of cooperation, intentional
obstruction of efforts to create a joint administration, and
outright acts of violence. This behavior belies the reality of
what is happening inside the Serbian population at the local
level. Many Serbs are actually ready and willing to cooperate,
but they have been prevented from doing so by extremists who
have threatened them and their relatives with death.
I will try to be short. Serbia wants to divide Mitrovice
and have control of the Trepca mines. In order to keep the
mineral wealth of Trepca in his hands, Milosevic must dominate
the political dynamics in the region. He is trying to create a
geographical and ethnic connection between Serbia and the
northwestern part of Kosovo. The populations of Peposaviq and
Zubinpotok, for example, are now 90 percent Serbian and 10
percent Albanian. With the ethnic cleansing of the northern
part of Mitrovice, the city is now divided by the Iber River
between Serbians in the north and an Albanian majority in the
The northern sector is, as I stated earlier, a haven for
Serbian war criminals, gangs, and members of organized criminal
syndicates. Their unrestrained movement between Serbia and
Kosovo and their stockpiling of weapons has been very visible.
It is becoming increasingly apparent that Milosevic wants to
control the northwestern part of Kosovo as the first step in a
strategy to destabilize or attack Montenegro, the Sandzak, and
Kosovo. The principal source of provocation and new conflict is
the continuing existence of Milosevic's regime.
In order to prevent the permanent partitioning of
Mitrovice, the multinational KFOR forces must control the flow
of arms and use of covert communication devices on both sides
of the city. The border between Serbia and Kosovo must be
controlled. Under U.N. Resolution 1244, Serbian troops and
nonresidents of Kosovo must remain 5 kilometers behind the
The U.N. police must play an active professional role in
the life of the city. The arrest of criminals and the removal
of troublemakers will lower tensions and make it possible to
begin the path to peaceful coexistence between Albanians and
Serbs. All residents of Mitrovice should be assisted in
returning to their homes and buildings on both sides of the
city. Schools that have been occupied by Serbs must be
released, so that students may return to their classrooms.
Steps must be taken to reactivate the economy with an emphasis
on the stimulation of small- and medium-sized businesses. This
cannot happen unless joint institutions and a local
administration are established immediately.
Regarding the latter, the existing measures set forth by
the Transitional Council of Kosovo to ensure freedom of
movement throughout Mitrovice, while not ideal, should
nevertheless be implemented as soon as possible. There is a
pressing need to increase the efficiency of UNMIK's civilian
administration. This could be accomplished, in part, through
closer and more complete collaboration between UNMIK, the
police, and KFOR and greater engagement with the local
I want to close with a word of thanks. In spite of all of
the problems that Mitrovice continues to face, the NATO
intervention in Kosovo stopped Milosevic from implementing
full-scale genocide, created the possibilities for the return
of the Albanian population, and provided a path that ultimately
will enable us to create conditions for a normal life. Without
this action by the West, especially by the United States, with
the constructive commitment of the Congress, the world would
have abandoned us and itself to barbarism.
I would like to present some documentation about the
structural nature of the population because before the war, it
was 62 percent Albanian, and there has been much ethnic
Mr. Rohrabacher. We are happy to put that into the record.
[The prepared statement and additional documentation of Dr.
Rexhepi appears in the appendix.]
Mr. Rohrabacher. We are now joined by Congressman Engel
from New York who has been a real hero in this effort over the
years and we recognize not only his good heart, but his
tremendous energy that he has put out in this part of the world
to try to save people's lives and bring about peace in that
We will have a couple more testimonies, and then questions
and answers. The next witness is Dr. Muhamet Mustafa, and he is
from an economic think tank that is focused on some of the
requirements that are necessary for the Kosovar economy to
become independent and for Kosovo to become a real and
legitimate country, and we are very interested in your
analysis. You may proceed.
STATEMENT OF MUHAMET MUSTAFA, PRESIDENT, RIINVEST INSTITUTE FOR
Mr. Mustafa. Thank you, Mr. Chairman, Members of the
Committee, ladies and gentlemen, it is a great honor and unique
privilege for me to have the opportunity to address you during
these challenging times for Kosovo.
I will stress only some points in my speech because we are
behind schedule, it seems.
My organization has conducted several surveys to identify
the impact of the war on Kosovo, which I would like to share
with you today in order to illustrate our challenges. During
the war, about 88 percent of the Albanian population was
deported out of Kosovo or displaced from their residences in
Kosovo. Families' incomes were reduced by 70 percent; 70 to 80
percent of household goods were destroyed or looted. The
private housing stock was reduced by 40 percent.
In commercial life, 90 percent of private companies
suffered some form of damage. Livestock and farming equipment
levels were reduced by 50 percent. The situation in our
socially owned companies and public companies was compounded by
technical degeneration from the last 10 years of rule by the
Serbian regime. Our unemployment rate immediately prewar was 74
percent. When we consider the systematic destruction of the
Milosevic regime in interethnic relations during the last 10
years and the terrible social and psychological consequences of
the war for thousands of families and individuals in Kosovo, we
have a more complete picture of the devastation in postwar
However, there is good news to share. We estimate that
about 95 percent of the deported and displaced population have
returned in or near to their previous residences, and are
showing their interest in rebuilding their lives. Family
businesses such as shops, restaurants, handicrafts, and
services have been reactivated. Around 70 percent of small and
medium enterprises have restarted and increased their turnover
by 40 percent. Employment increased by 27 percent and salaries
64 percent compared to 1998. Farming and land cultivation lags
behind due to the large-scale devastation of the villages.
Public services and utilities have been reactivated but
with significant problems due to the consequences of the decade
of neglect and current inefficiencies in developing central and
municipal administrative structures.
The U.N. administration has made significant efforts to
establish the basic legal framework for a market economy.
However, the participation of Kosovars in this administration
and the reconstruction process needs to be advanced. There is a
need for more direct Kosovar input in a process that will bring
a sense of ownership in it and in policymaking. This is
essential for public support and the strengthening of the rule
of law and a sustainable public finance system.
There is a feeling that the U.N. administration is being
built more under the influence of the political spectrum rather
than working to include and strengthen civil society capacities
and technical resources. Shifting from emergency to a
sustainable phase of reconstruction strategy should include
building up economic independence with an open economy and
regional and European integration. Kosovo's advantages are
human capital, entrepreneurial spirit and energy, a positive
attitude to transitional reforms, natural resources, optimism,
and the people's strong determination to rebuild their country.
Kosovo is a post-colonial country with heavy war
consequences. When Kosovo had broad autonomy during the
seventies, its economic viability substantially improved, and
during 10 years of peaceful resistance Kosovars survived within
their own institutions. In today's postwar environment, they
are exhibiting an impressive readiness to rebuild their
society. Technical and financial assistance needs to capture
this energy and should be focused on increasing development
capacities according to modern development concepts based on
entrepreneurship rather than the creation of yet another aid
The quality of economic viability not only of Kosovo but
also the other countries in the region will depend on the
outcome of the current efforts within the Stability Pact and
Mr. Chairman, the stance respectively of this House and the
U.S. Administration toward the Kosovar issue was essential for
our hope in the hard times that we have just passed through,
and it is of key importance not only from the perspective of
building up a democratic society in Kosovo, but for the
transformation of the Balkans into a region of cooperation free
from the burdens of the past and history. From their
perspective, Kosovars believe in European values and they
understand the importance of the role of the European Union in
the postwar period, but we believe also that the role of the
United States in Kosovo and in this whole, sensitive region is
crucial. For it provides the most effective channel to overcome
the historical burdens that plague the Balkans and to promote
the values of openness in this new era of globalization.
Mr. Chairman, Members of the Committee, let me express my
gratitude toward our [Riinvest] American partners, the Office
for International Private Enterprises, the National Endowment
for Democracy, USAID, and Freedom House. These organizations
have assisted in the growth and development of Riinvest, the
private think tank in Kosovo that I represent, and who work
closely with us in enhancing Kosovar capacities for economic
and social development and democracy. Also I thank very much
the American Albanian Civic League for bringing here the
reality of Kosovo. Thank you very much.
Mr. Rohrabacher. It is very good to hear that the National
Endowment for Democracy has been investing in this type of
long-term approach and analysis. We appreciate your testimony.
[The prepared statement of Mr. Mustafa appears in the
Mr. Rohrabacher. Next, if I pronounce it correctly, is Ilir
Zherka, Executive Director, National Albanian American Council,
which is a nonprofit organization which fosters a better
understanding of Albanian issues and promoting peace, human
rights and development in the Balkans.
STATEMENT OF ILIR ZHERKA, EXECUTIVE DIRECTOR, NATIONAL ALBANIAN
Mr. Zherka. Thank you, very much, Mr. Chairman. I will
submit my full statement for the record. You know, I think that
the international community has had a mixed record in postwar
Kosovo. There have been some successes and some failures. But
the answer to winning the peace is more U.S. leadership, not
less. I think the American people understand this. There was a
poll conducted last month that showed that two-thirds of the
American people think that the U.S. military should stay in
Kosovo until we finish the job, the transition to democracy and
also protecting the people. That poll, Mr. Chairman, you will
be happy to know, also showed that 79 percent, close to 80
percent of the American people, support a proposal to create a
democratic, independent Kosovo.
Getting back to our involvement, I think that the American
people support it and it is critical here, but in order for us
to win the peace, we have to maintain our flexibility and our
focus, and I think that H.R. 4053 unfortunately limits that
flexibility and diverts some of our focus.
On the question of flexibility, we need to be in there, we
need to be doing the right thing. And, sure, the Europeans
ought to be paying the bulk of the expenses on reconstruction,
and they are. This policy is working and I think the
Administration has gotten the message, but I think a hard cap
sends a bad message that we are willing, if the Europeans
reduce their spending by 50 percent, to follow in suit, which a
hard cap would result in. I think it also would be very
difficult to administer. You would have the Administration
looking over its back to figure out where they are in
relationship to the Europeans, and that is not what we want
them to do.
It would also take away one of our strengths in the postwar
Kosovo. Again, if you are having to look over your shoulder and
figure out what you are spending in relationship to other
people who are pledging one thing today and delivering
something else later, I think it makes it difficult. That is
the first issue.
The second is the question of our focus, and I think that
another thing that is unfortunate about the bill is not only
that we set this spending cap, but then we protect money to
Montenegro, Macedonia and Serbia against a cap. Although this
bill doesn't limit aid to Kosovo and Albania, I think the
message is that Macedonia shall be a priority for funding. The
message is that these other places are a priority and maybe
Albania and Kosovo are not.
We haven't won the peace in Kosovo, and we need to be more
engaged, not less. We need to be focused on winning the peace
there. As all of us know, the Albanian people are staunch, pro-
Americans. They believe that they have a special relationship
with this country that started with Woodrow Wilson and
continues on to today. We should cultivate that relationship
and finish the job in Kosovo and we should have a regional
approach to aid that emphasizes burden sharing by the Europeans
at a much larger level than ours but that treats the region
fairly and adequately.
And I think if we are going to have a priority in the
region, Kosovo ought to be it. It is the most dangerous place
there, and it continues to be the most dangerous place. I would
say that this bill--although I understand the intention of the
sponsors of the bill, I think it sends a mixed message to the
region--would limit the flexibility of the Administration and
also would focus our energy, we believe, at the National
American Albanian Council where we ought not be going.
That is a summary of my testimony.
[The prepared statement of Mr. Zherka appears in the
Mr. Zherka. I wanted to offer the results of the poll that
I mentioned to add to the record.
Mr. Rohrabacher. Without objection, so ordered.
We appreciate your summarizing your testimony. It was
forceful and direct, and we thank you for that. I will now--let
me just say a couple of words and then I will turn it over to
About 8 years ago now, my attention was first drawn to the
Balkans, and most Americans didn't pay much attention to the
Balkans until all of this happened. Let me just note that I
don't believe that what has happened there is something that
was mandated by history and by the underlying animosities
between races and ethnic groups and religions which went on. I
think the U.S. Government, not just starting with this
Administration but starting with the Bush Administration, blew
a chance for peace in the Balkans. I think our problem in the
Balkans stems back to a speech given by Secretary of State Jim
Baker in Belgrade when he gave the impression to Milosevic and
his crew that stability was America's No. 1 goal in the Balkans
and that they would be the instrument for stability. Shortly
after that, Milosevic sent his tanks into the neighboring
That was very sad because I think before that time if the
stress would have been on freedom and free trade and enterprise
and opportunity and justice, which is what--frankly, which is
what Ronald Reagan stressed compared to George Bush, his
successor--a free system could have been established in which
people wouldn't have felt so threatened. If there would have
been democracy in Serbia and a more democratic system there,
people could have, I think, cooperated.
It is one of the true tragedies of our time that what
evolved wasn't a more peaceful evolution into a better world
after the Cold War ended in the Balkans but instead devolved
into this mess. As I say, I think the policy of the United
States Government--when you do not stand for freedom and you
talk about stability, in the end you don't have stability or
freedom. Needless to say, another to way to put it, pragmatism
just doesn't work. And I know that sounds rather ironic, but if
one is trying to be pragmatic instead of principle-based, it
doesn't work in the long run.
Nowhere was that brought home more to me than the fact that
Croatia has had--people say, who are the bad guys; they are all
bad guys. Well, I am afraid that is just not the case. Croatia
has had a democratic election, and in that democratic election,
the party that was in power has been removed and a new party
has been put in its place; and Croatia has a relatively free
system now, and Serbia still has the same old dictatorship and
same old click, and there is no more reason to think that the
people of Kosovo should be less free than the Croatians or
Albanians or any of the others. And yet our government still
insists on calling Serbia Yugoslavia.
The basic problem I see is that we have not been willing to
insist that the fundamentals are spelled out and that we
instead made a principled stand. And the most important
principled stand is that ballots and not bullets should
determine people's future, and the people of Kosovo have a
right, just like everyone else, to have ballots determine their
future rather than bullets, especially if those are bullets are
from guns from Serbians and people intent on forcing their
control over a much larger population, as it is in Kosovo.
So I appreciate your testimony today. Let me just say we do
have a real hero. I tried to be helpful and Joe has been here
working over the years to draw our attention. One of the true
heroes of your effort has been Eliot who has just earned our
respect. I would like to ask if Eliot has some questions, and
then we will go to Mr. Pomeroy.
Mr. Pomeroy. I think it appropriate we yield to a hero and
just get back to a Member later.
Mr. Rohrabacher. Thank you.
Mr. Engel. Thank you. Now that my colleagues have swelled
my head, I want to thank them both for their kind remarks. They
are both very kind because both of them have been stalwarts in
the fight for freedom, particularly in the Balkans. I know Mr.
Rohrabacher is going to be there within the next couple of
weeks, and I know that he will come back and report on what he
saw. He has been one of the most engaged Members on the issue
of Kosovo and the Balkans and really believes in what he says
in terms of freedom. We disagree very little regarding the way
that things ought to be in the Balkans.
Earl Pomeroy represents a district in the heartland of
America, and you would think that he wouldn't be concerned with
things that happen overseas, and he is as concerned as anybody
Mr. Rexhepi, I saw you Sunday night in New York. It is good
to see you again.
Dr. Mustafa, we have had an opportunity to meet. Ms. Dana,
we met yesterday, and that was a pleasure. Mr. Zherka and I
have gone to Kosovo together numerous times and is a good
personal friend of mine.
Rather than ask questions, I want to emphasize a few
things. Dana, Mr. Rohrabacher, said it very well. The only
solution, in my estimation, long term for Kosovo is
independence; self-determination. There is no other solution.
It is ridiculous to think that the Serbs could ever again run
or control Kosovo or that Kosovo could be autonomous within
Serbia. It is ridiculous. Ten years ago, 12 years ago, sure,
that would have been possible. It would have been welcomed.
Twelve years ago I would have thought a third republic would
have been a solution within Yugoslavia. It is not a solution
now. It is ludicrous.
What makes it difficult is that we entered this war, we won
the war, and now we have to win the peace. We seem to have
adopted conflicting goals. While we have driven the Serb army
out of Kosovo, oppressive force is not what the Serb population
wants. I believe everyone has a right to live in Kosovo. We
have driven Milosevic and his miserable people who practice
apartheid and genocide and ethnic cleansing out of Kosovo. They
can never come back in. And as Mr. Rohrabacher pointed out,
people here who oppose Kosovo independence say it is not a good
idea to have countries break up. If we allow each ethnic group
to form their own country, you would have hundreds and hundreds
of ethnic groups from all over the world breaking countries
apart and forming their own country.
Well, that might be true if Yugoslavia still existed, but
Yugoslavia doesn't exist anymore, as Mr. Rohrabacher pointed
out. It is just Serbia and Montenegro, and the Montenegrans
want out, and so it is ludicrous to call it Yugoslavia. The
Bosnians and the Croats and the Macedonians all had the right
to self-determination and independence, and all had the right
to form their own nation, the people of Kosovo have the same
right, and the people of Montenegro have the same right as far
as I can see.
Unless NATO or the United Nations or the West wants to make
Kosovo a protectorate forever, and I don't think that is the
solution, then we ought to be looking at independence and
looking at ways to achieve that independence. I think the
quickest way to achieve that, and it is the best way, is to
make sure that democracy establishes itself quickly in Kosovo,
we should have elections even on the municipal and local level
as quickly as possible, and then on the national level so that
the people of Kosovo can run their own nation and be a
Therefore, I think the logical conclusion for the world
would be that they deserve to have their independence. I think
that is an issue that I am going to keep fighting for. It is
good for Kosovo and it is good for the United States, freedom
and democracy. It makes the most sense.
As Mr. Zherka pointed out, nearly 80 percent of Americans
support independence for Kosovo. We should not stay there any
longer than we have to, but we shouldn't leave 1 day earlier
than we have to, and we shouldn't leave until independence is
I wanted to also highlight the issue of the prisoners, at
least 5,000 of them, Albanians who have been taken back to
Belgrade and Serbia when Milosevic and his people retreated. We
must continue to urge the release of the Kosovars who are
illegally imprisoned by Milosevic. We need to constantly raise
that issue and constantly force that issue.
Those are really the statements that I wanted to make. I
just wanted to throw out to the panel what you see, if anyone
would care to comment, as the most important thing that can be
done right now. I tell all my friends back in Kosovo that it is
really important to work together. Everyone in Kosovo agrees on
the same thing, and that is independence. There may be
differences on how best to achieve it, but everyone agrees that
independence is the only solution.
I would like to ask what we ought to be doing that we are
not doing in the United States. What do you think are the
issues that we ought to emphasize in meetings with Dr.
Kouchner? He is very frustrated that the European nations have
not come forward with the aid, the police or the things that
are needed. What do you see are the most important things, and
what can we do right now in the Congress to solidify that?
Mr. Engel. And, Mr. Mayor, let me just quickly--I talked
too long, but I want to just mention one other issue that is
dear to your heart, and that is the division of your city. We
cannot, I believe, continue to stand idly by and allow
Mitrovice to be partitioned because the partitioning, the
division of Mitrovice, is the effective partition of Kosovo. We
cannot allow the partition of Kosovo from the bridge north
through the mines and then up through Serbia. So, I want to you
to know that your struggle is our struggle because we must not
allow that continued division of your city.
Dr. Rexhepi. Any kind of division of Mitrovice and
partition of Kosovo is unacceptable. I tried to say, very
shortly, that I think the best solution for stability in the
Balkans is the independence of Kosovo. I think Professor
Stavileci gave in written form one project about that, and it
represents my way.
Mr. Mustafa. May I add something? I think that the most
important thing is to channel the determination and energy of
Kosovars to fully participate in reconstruction and in building
up institutions, municipal elections, the parliamentary and
other elections, and to assist Kosovars to inject this energy
in building up a democratic society. And that in economics, we
just need an open system of market economy. We need technical
assistance to engage our population, which is young and which
is ready to accept new technological challenge. So we need to
stimulate private sector small- and medium-size enterprises. We
need to stimulate family businesses and to urge them toward a
We need to avoid the confusion that was created about the
ownership of socially-owned companies. The ownership of
socially-owned companies of Kosovo is the same as ownership of
socially-owned companies in Slovenia and in other parts of
Europe. So there is no necessity, there is no reason to make a
confusion that we do not need and that which doesn't exist.
Mr. Rohrabacher. Thank you very much.
Mr. Mustafa. Thank you. Mr. Chairman, I am submitting
several documents for the record.
Mr. Rohrabacher. We will be very happy to put that in the
Mr. Pomeroy. Thank you, Mr. Chairman, and I thank you for
your conduct of the hearing, letting all the witnesses go, and
driving us right to the vote which has now been called. I think
you have facilitated a full discussion this afternoon. I
appreciate it very much and appreciate Eliot's comments as
A couple of points. First, relative to the missing
persons--clearly Ms. Dana, you have made a compelling statement
today--let us know the personal impact as well as the
importance really in terms of the recovery of the region, and I
think that you have certainly refocused this Committee on the
imperative of a full accounting of missing persons and release
of prisoners of war by Serbia, before any sanctions can be
lifted, as one of the utmost priorities with which we hold the
continuation of sanctions. We will need to continue to press as
hard as we can on this question.
More broadly, I want to ask the panel about what might be
the Kosovar perception of the legislation under consideration
to cap the United States' participation in the recovery. You
have indicated, I think each of you, the tremendous
appreciation of the role, the leadership role the United States
has played in bringing things to where they are to date. This
isn't aimed at you, it is aimed at our European allies, and we
want their full participation. But would there be a perception
of the people of Kosovo that we are walking away, we are
diminishing our role, and what would be the psychological
dimensions that this bill would have for the people there?
Mr. Zherka. If I can start off, and then we can turn to the
other witnesses, I think there has already been a little bit of
that signal. And certainly people up here on the Hill are
frustrated with the responsiveness or the nonresponsiveness of
our allies, but in the recent action here in the Congress, you
had Administration requests for supplemental spending for
Kosovo drastically reduced. The request was for about $150-
some-odd million. The allocation was for 12.5. Last week there
was a vote in the House on the Kasich amendment, and of course
now there is this bill, not to compare this bill to those
actions certainly, but I think there is a message that is
coming from the Congress that there is frustration here and I
think that that is understood.
This bill represents yet another signal, I think, of people
of getting the message. But we have on this bill supporters of
the Albanian people who have been there, like the Chairman and
others in the past, and so I guess the message to our
supporters who are on this bill is that the cap puts a limit on
flexibility where it probably ought not--it doesn't need to be
Mr. Pomeroy. It seems to me, we have got to roll here, you
know; we have got these folks, they are facing unbelievably
difficult circumstances in the rebuilding. I have seen it. The
devastation is unbelievable. They are dealing with personal
grief circumstances, virtually everyone, in some measure, and
it would seem to me that if our frustration is the Europeans,
this deals with the Europeans. But for Congress to move this
legislation is going to kick the very people who are down and
we don't intend to kick at a time when the United States has
been there. We are the people that have brought them freedom
today. We are the people that are almost--that are very
important to them in terms of a feeling of hope and promise in
the future. And without feeling that things are going to get
better tomorrow, I don't know how in the world they can
confront the terribly difficult rebuilding challenges that face
them right now.
And so I just think that this would have unintended
consequences. No one on this Committee means to send that
signal, but I think it is inescapably drawn from this action.
Ms. Dana, do you have a comment on that?
Ms. Dana. Yeah. I would like to add here we have a big
responsibility ourselves, too, on establishing a civil society,
and we know that. We still have to say that we have a great
people, and which half of them are youth. That is good to have,
smart young people. But what I was hearing these days is like
we are a kid that just started walking, and pushing a kid that
has started walking not to walk as fast as he needs to walk and
he is willing to walk is the same that is doing Kosovars today.
Freedom has brought to us a big energy. We know that, but we
have a long way to walk. It is going to be bumpy, it is going
to be hard. We still need your support on that, and my words
are words of ordinary people. I am facing these people every
day in the field, and just saying to them that I am an employee
of USAID, which is a governmental organization, I see a big
smile. I am defending that smile today here in front of you. I
wish I can do it and you can see it. Thank you.
Mr. Pomeroy. Beautifully said.
Mr. Rohrabacher. Thank you very much. I think we should
close on that. I appreciate all the hard work that Joe has put
into this and all of you. I appreciate you coming halfway
around the world here to talk to us. We are the United States
of America. If we don't stand for freedom we don't stand for
anything, and we are very proud that the people of Albania want
to have democratic government and have the courage and strength
to stand up to tyranny, and we are on your side. So God bless
you, and this hearing is now adjourned.
[Whereupon, at 6:10 p.m., the Committee was adjourned.]
DEVELOPMENTS IN THE BALKANS: CRIME AND CORRUPTION IN BOSNIA
WEDNESDAY, JULY 19, 2000
House of Representatives,
Committee on International Relations,
The Committee met, pursuant to notice, at 10:13 a.m. in
room 2172, Rayburn House Office Building, Hon. Benjamin A.
Gilman (Chairman of the Committee) presiding.
Chairman Gilman. The hearing will come to order. This
morning's hearing focuses on a distressing problem that
threatens to undermine our accomplishments in Bosnia and
perhaps elsewhere in the Balkans. Pervasive crime and
corruption has tainted all levels of Bosnia's society,
particularly its political institutions and its economy, and is
now jeopardizing the basic peace framework that was mandated by
the Dayton Peace Accord.
This is a principal finding by our General Accounting
Office pursuant to a study they conducted that was requested by
our Ranking Democratic Member, Mr. Gejdenson; our Committee
Vice Chairman, Mr. Bereuter; and myself last September. Because
this finding has such profound implications for our goals in
Bosnia and perhaps lessons for our mission in Kosovo, I have
convened this hearing in order to allow our Members of our
International Relations Committee to have the opportunity to
review and question the GAO authors of this report and also to
hear our State Department's response to the report.
I am informed that during a review of the GAO's draft by
all interested agencies in our government no one challenged the
essential finding concerning the impact of endemic crime and
corruption in Bosnia. Given that fact, I am anxious to hear, as
I am sure my colleagues are, of just what we are doing to
confront this important issue. I am also informed that our good
Ambassador, Tom Miller, who has been in charge in Sarajevo
since last August, has made it his top priority to root out and
resolve difficulties that have impeded the Bosnian economy.
Ambassador Miller is focused on the problem of
privatization and has withheld U.S. funds that would go to
supporting the budgets of our two main entities in Bosnia, the
Federation and the Republika Srpska, until the appropriate
measures are put in place by the local political leaders that
will ensure a fair and effective privatization of the publicly
held assets in Bosnia.
To be fair to the Bosnian people and the situation itself,
we should note that Bosnia is not only a post- conflict
situation where a devastating war raged for nearly 4 years,
forced nearly have of Bosnia's citizens to become refugees or
internally displaced persons, killing thousands more in the
massive distribution of problem, but is also a post-communist
society which has not had the benefit of functioning Democratic
institutions nor the experience of a free-market-based economy.
Our purpose today is not to be engaged in the blame game,
but to determine what needs to be done in order to salvage our
policy in Bosnia. We have spent a billion dollars in providing
assistance in Bosnia since 1995 and billions more for troops
serving there as part of the NATO peacekeeping mission.
Clearly, our investment is huge, and we can neither ignore
this problem or simply walk away from our effort. We hope that
our witnesses today, therefore, can provide us with some
incites and some suggestions as to what we need to do to make
our Bosnian policy a success.
We are joined today by Harold Johnson, who is the Associate
Director of GAO's International Relations and Trade Issues; Mr.
James Shafer, the Assistant Director of that office; and David
Bruno, who is the Evaluator in Charge of this study.
Subsequently, we will here from Ambassador James Pardew from
the State Department, who is the principal Deputy Special
Advisor to the President and the Secretary of State for Dayton
implementation and Kosovo.
I now would ask if our Ranking Minority Member of the
Committee, the gentleman from Connecticut, Mr. Gejdenson, has
any opening statement. Mr. Gejdenson.
Mr. Gejdenson. Thank you, Mr. Chairman, and, I think, all
of us who believe in a dynamic American foreign policy have to
be vigilant when it comes to looking at what happens to
American resources. And while the vast majority of American
resources got to where they were supposed to go and did
apparently much better than any of our allies, any time money
is not achieving the targeted effect, it obviously is something
we need to focus on. So I think there is obviously good news
here as well as some small areas of major concern, I think, for
many of our European allies.
One of the things that I have worked on this year is
legislation dealing with fighting corruption, and if we look at
the crises around the globe in many of the most impoverished
nations, we can often look to decades of corruption and
thievery by the elected leaders. Clearly, in a case like
Nigeria, the newly elected democratic government faces a very
daunting task as a result of the theft of billions of dollars
in what should be a very rich country.
So this is an important hearing, and I think that figuring
out ways to help establish practices that fight corruption and
bribery is something the United States ought to take a
leadership role in. I think we can commend the people involved
in America's AID program for generally doing a very good job,
and we want to work with them to make that even more
successful. Thank you, Mr. Chairman.
Chairman Gilman. Thank you, Mr. Gejdenson. If there are no
other Members seeking recognition, I now invite Harold Johnson.
Mr. Johnson has served as director of the International
Relations and Trade Issues at the General Accounting Office
since 1996, and prior to that he served in a number of senior
positions at GAO, including director of international affairs
issues, foreign economic-assistance issues, and military
manpower issues. He has been a recipient of many awards during
his career, such as the Distinguished Service Award.
Mr. Johnson is joined today by his deputy, James Shafer,
who has also served as assistant director of GAO's European
office, and he has been the assistant director of acquisitions
in the GAO's Army group and previously led numerous reviews of
military and international issues.
We are also pleased to have with us David Bruno, who is the
evaluator in charge of the report that is the subject of
today's hearing, and Mr. Bruno has participated in or directed
evaluations of United States and the United Nations' foreign
affairs and assistance programs for over 10 years, including
U.S. agricultural-credit programs for the Soviet Union, USAID
business-development programs in Russia, child-survival
programs in Africa, and counterdrug assistance in Latin
Gentlemen, we welcome our entire panel. We appreciate your
good work on this report. Mr. Johnson, you may now proceed, and
you may summarize your statement, which will be entered in full
in the record, whichever you may deem appropriate. Please
STATEMENT OF HAROLD JOHNSON, ASSOCIATE DIRECTOR, INTERNATIONAL
RELATIONS AND TRADE ISSUES, NATIONAL SECURITY AND INTERNATIONAL
AFFAIRS DIVISION, U.S. GENERAL ACCOUNTING OFFICE
Mr. Johnson. Thank you very much, Mr. Chairman. We are
pleased to be here today to discuss the report we completed at
your request and the request of Congressmen Gejdenson and
Bereuter on the impact of crime and corruption on the
implementation of the Dayton Agreements. The agreement, which
was signed in December 1995, created the Bosnian National
Government and recognized two entities that were created during
the war, the Bosnian-Croat Federation and the Republika Srpska.
During the past 4 years, from 1996 through 1999, the
international community has provided about $4 billion to
finance the civil aspects of the agreement. About $1 billion of
that is from the United States--slightly over $1 billion is
from the United States. More importantly, as of March this
year, U.S. military costs to support the agreement have totaled
over $10 billion.
The United States, NATO, and the Peace Implementation
Council have developed conditions often called ``benchmarks''
to help determine when military forces can be withdrawn from
Bosnia. Several of these conditions relate to reducing
Our report focused on three areas: First, how crime and
public-sector corruption have affected implementation of the
Dayton Peace Agreement; second, what the international
community has done to improve Bosnia's law enforcement and
judicial systems; and, third, how assistance resources are
being safeguarded and whether such assistance is being used in
Bosnia in place of domestic revenues lost to crime and
I would like to note at the outset that in doing our work
we did not conduct independent investigations of specific,
corruption-related cases. Instead, we examined studies,
reports, and other documents published by NATO, the Department
of State, the Agency for International Development [USAID], the
United Nations, and many other international organizations. The
evidence and conclusions presented in these documents are based
on analysis and investigations of corruption in Bosnia.
We also interviewed an extensive list of more than 40 top
officials, both governmental and nongovernmental, responsible
for and knowledgeable about programs and activities in Bosnia.
We based our conclusions and recommendations on this extensive
documentation coupled with the first-hand experience and
judgment of high-level, international officials in Bosnia.
Very briefly, we found a near consensus opinion among
officials that we interviewed that crime and corruption in
Bosnia is endemic and that it is threatening the successful
implementation of the Dayton Peace Agreement and that until
this situation is satisfactorily addressed, the conditions that
would allow for the withdrawal of NATO-led forces cannot be
Although clearly some progress has been made and some of
the benchmark conditions have been met, progress in
implementing the conditions is not yet self-sustaining.
Bosnia's law-enforcement and judicial systems are inadequate
and institutionally incapable of prosecuting cases of
corruption or administering justice. Bosnian, international,
and U.S. efforts to correct weaknesses in these systems have
achieved only limited success and have not measurably reduced
political influence over the judiciary or the economy.
We found that international assistance, including U.S.
assistance, is generally not being lost to fraud and corruption
and that except for some budget support, such assistance has
been protected by numerous internal controls. However, we did
find incidents of corruption in the international-assistance
More importantly, however, this assistance provided by the
international community could supplant the hundreds of millions
of dollars the Bosnian Government loses each year to customs
fraud and tax evasion. Moreover, the Bosnians spend a large
percentage of their revenues maintaining three competing
militaries that are primarily designed to fight each other.
According to the High Representative, the size and structure of
these forces are incompatible with the defense needs of Bosnia
and are financially unsustainable.
The international community has provided about $407 million
in budget support to cover Bosnia's budget deficits, and most
of this support has not been controlled or audited. The
exception is the support provided by the United States.
I would like to expand just briefly on each of the three
points that we looked at. Pervasive illegal activity is
negatively affecting the progress of reforming Bosnia's legal,
judicial, and economic systems; achieving U.S. policy
objectives in Bosnia; and attaining the Dayton Peace
Agreement's ultimate goal of self-sustaining peace. Unless
Bosnian officials make concerted efforts to address this
problem, the benchmarks that would allow for the withdrawal of
NATO-led forces cannot be met. According to U.S. and
international organization officials, to date, Bosnian leaders
have not demonstrated sufficient political will to reform.
Bosnia's nationalistic political parties continue to
control all aspects of the government, the judiciary, and the
economy. Thus, they maintain the personal and financial power
over their members and authoritarian control over the country.
We were told that Bosnian leaders from all ethnic groups may
have little incentive to combat corruption, since curbing
corruption may reduce their ability to maintain control.
War-time, underground networks have turned into political/
criminal networks involving massive smuggling, tax evasion, and
trafficking in such things as women and stolen cars, and other
things. Investigations have shown that certain smuggling
operations have been successful only with the participation of
According to the State Department, criminal elements
involved in narcotics trafficking have been credibly linked to
public officials. The proceeds of this narcotics trade are
widely believed to support illegal, parallel institutions
maintained by ethnic extremists.
Numerous reports show, and international organization
officials confirm, that Bosnian law enforcement officers'
allegiance is often to the ethnic, political parties rather
than to the public. For example, police in some areas work for
local party officials and protect the business interests of the
officials, intimidate citizens, and prevent return of refugees.
Similarly, political officials are involved at many stages
in the judicial process. The selection of judges in Bosnia is a
product of political patronage. Judges' salaries are controlled
by political-party structures.
We were told that there are good and honest individuals
throughout the judicial system. However, criminal leaders, many
of whom are closely linked to ruling political parties, are
ready to threaten judges, prosecutors, police officers,
lawyers, witnesses, with violence, even death, to act in a
particular way. Such influence over the courts often prevents
cases involving organized crime and corruption from being
Bosnian, international, and U.S. anticorruption and
judicial-reform efforts have been initiated over the past 4
years, but they have achieved only limited success in reducing
crime, corruption, and political influence.
While international efforts could correct weaknesses in
Bosnia's legal and judicial system and provide needed
supporting structures for the rule of law, Bosnian government
efforts have primarily resulted in the creation of committees
and commissions that have failed to become operational or
measurably reduce crime and corruption. The Office of the High
Representative has developed a strategy for coordinating
international anticorruption efforts. However, the strategy
essentially is a recitation of existing international efforts,
and although the work of the international community is
collegial, it is not truly coordinated.
Despite the lack of a truly coordinated effort, the
international organizations, including the European Commission,
NATO, and the United Nations, have implemented a number of
anticorruption and judicial-reform efforts. I will cite a few
The European Commission's Customs Assistance Office has
established an anticorruption program that is considered the
most successful effort. The office has assisted in establishing
customs legislation and customs services at the entity level.
Investigations conducted and systems put in place by the office
have identified incidents of corruption and illegal activities
that have resulted in the loss of millions of dollars in
customs duties and tax revenues. In addition, customs officials
perpetrating illegal activities have been exposed.
The NATO-led, Stabilization Force helped the entity armed
forces establish an office of inspector general to help
eliminate fraud and corruption in the entity armed forces. The
office's investigations have led to the removal, reassignment,
or suspension of noncompliant personnel.
Finally, the U.N.'s International Police Task Force, the
IPTF, has focused on restructuring, retraining, and
democratizing local police. The task force has established a
certification process through which each police officer is
evaluated against specific criteria, including whether they
were involved in human-rights abuses during the war.
In addition, the task force has created specialized units
to train Bosnian police in public-security issues such as
organized crime, drug-related activities, corruption, and
terrorism. Some progress has been made, but the linkages
between the police and the political parties has not been
The international community has implemented a number of
efforts to make Bosnia's weak and politically influenced
judiciary more independent and professional. The Office of the
High Representative, for example, has imposed laws to expand
the jurisdiction of the Federation Supreme Court and the
Federation Prosecutor's Office and provided special witness
identity protection. In addition, the United Nations
established the Judicial System Assessment Program in 1998 to
monitor and assess the judicial system in Bosnia. However,
these and other efforts have had only minimal impact on the
problem, partly because high-level Bosnian officials have not
demonstrated a sufficient commitment to fighting crime and
U.S. anticorruption efforts, led by the Agency for
International Development, seek to curtail corruption through
the elimination of the communist-era financial-control systems,
primarily the payment bureaus, and by privatization of state-
owned enterprises. Experience has shown that the best and
possibly the only way to accelerate the establishment of a
sound and competitive, commercial banking system is to attract
reputable foreign banks. Although efforts to establish a
private banking system in Bosnia are progressing, the U.S.
Government and the international community have had little
success in attracting prime-rated, international banks to come
Privatization has encountered problems, and corruption is a
concern. According to the United Nations and other experts, the
privatization process is another opportunity for government and
party officials to profit through corrupt activities. For
example, officials may solicit bribes from those interested in
obtaining assets or sell assets to themselves below value.
Further privatization could legitimize political factions'
ownership of companies.
The documentation required to privatize Bosnian companies,
including opening balance sheets and privatization plans, is
being provided by the enterprise managers who may themselves
bid on the companies, clearly a conflict of interest. Several
officials told the Agency for International Development that
they were depressing the value of their firms so that they
could purchase them for less than their true value. Also, the
Office of the High Representative publicly stated in April of
this year that a majority of the already privatized companies
now belong to the nationalist political parties.
Finally, you asked about controls over international aid
and whether assistance supplants Bosnian funds. As I mentioned,
the United States and other international donors have
established procedures for safeguarding assistance to Bosnia,
and we found no evidence that assistance has been lost on a
large scale because of fraud or corruption.
Most of the $4 billion supported Bosnia's physical
reconstruction, which has been largely successfully completed.
However, we did find instances of corruption within the
international assistance effort. I will cite three examples.
The United States still has not recovered the approximately
$935,000 of U.S. Embassy operating funds and AID Business
Development Program loan payments deposited in a bank that was
involved in corrupt activities and is now bankrupt, but the
recovery process is underway. In July 1998, AID's Business
Development Program manager, a Foreign Service national, was
terminated for receiving payments for helping a loan applicant.
And the final example is about $340,000 in World Bank-
provided funds lost as a result of a procurement scheme
perpetrated with fraudulent documents. As of May, no arrests
had occurred. There may be other examples, but those are
Despite the international community's success at
controlling the use of assistance funds, such assistance has
supplanted millions of dollars the Bosnian governments lose
every year to corrupt activities such as customs fraud and tax
evasion. Determining the total amount of revenue lost because
of corrupt practices would be difficult, and the international
community has not systematically attempted to make such a
However, evidence gathered during successful customs
investigations and a partial analysis by the Office of the High
Representative showed that losses total hundreds of millions of
dollars annually. For example, the Office of the High
Representative concluded that a moderate estimate of revenue
lost to tax evasion in the Republika Srpska is about $136
million, or 46 percent of the entity's annual budget.
Due to shortfalls in revenue, partly because of corrupt
practices noted above, the entity governments incur budget
deficits which are then funded through direct budget support;
that is, moneys that are provided and not earmarked for a
specific purpose. Most of the $470 million committed by the
international donor community for general budget support is not
controlled or audited, although the $27 million committed by
the United States has been controlled and audited.
Meanwhile, the Federation and Republika Srpska budgeted
about 41 and 20 percent, respectively, of their average annual,
domestic, financial revenues on military expenditures from 1997
through 2000, despite the High Representative's opinion that
sustaining three large, separate armies primarily designed to
fight each other, is not financially feasible.
If the Bosnian governments strengthened the rule of law and
identified ways to collect some or all of the hundreds of
millions of dollars lost annually as a result of widespread tax
and customs-duty evasion, the amount of budget support being
provided might not be needed.
Our report recommended that the Secretary of State take the
lead in a reassessment of U.S. strategy for assisting Bosnia.
We believe that such a reassessment is necessary because
without it the United States and other donors may continue to
fund initiatives that have little hope of resulting in a self-
sustaining, democratic government and market economy based on
the rule of law, and thus allow for the withdrawal of NATO-led
In particular, we believe State should consider whether
supporting the provision of direct budget support is an
appropriate form of assistance in the current environment in
Bosnia, and second, how it can support those political leaders
in Bosnia whose goals for addressing the corruption problem are
consistent with the goals of the United States and the rest of
the international community.
We also suggested in our report that Congress may wish to
require the State Department to certify that the Bosnian
governments have taken concrete and measurable steps to
implement anticorruption programs and improve their ability to
control smuggling and tax evasion. State disagreed with our
recommendation. According to the Department of State, by 1998,
it had undertaken a broad reassessment of the strategy for
Bosnia, and it continually reassesses assistance priorities in
Bosnia. However, we found no evidence that State's reassessment
or its current strategy addressed the underlying causes of
corruption and the lack of reform, namely, the continued
obstructionist behavior of hard-line, nationalist, political
leaders. Mr. Chairman, that concludes my prepared statement.
[The prepared statement of Mr. Johnson appears in the
Chairman Gilman. Thank you very much, Mr. Johnson. Do your
colleagues wish to make any opening remarks? All right. We
welcome having you here, and I am sure there may be some
Mr. Johnson, you stated that the USAID-led anticorruption
activity of reforming the political-party-based payment bureaus
is one of the more important, major actions taken by a U.S.
Mr. Johnson. Yes.
Chairman Gilman. Could you elaborate further on the
specific transfers of responsibility from the bureaus to other
government ministries and banks other than tax collection, and
is the process to eliminate the payment bureaus on track to be
completed by December of the Year 2000?
Mr. Johnson. We were told that the process is on track. It
is a little difficult for us to accept that because they still
do not have a banking system in place that will accommodate the
banking function that the payment bureaus currently perform.
That is an essential element of the whole process and a key
I would like to ask Dave Bruno to elaborate on that a
little bit because he has looked into this in some detail.
Chairman Gilman. Mr. Bruno.
STATEMENT OF DAVID BRUNO, EVALUATOR IN CHARGE, U.S. GENERAL
Mr. Bruno. Thank you, Mr. Chairman.
Chairman Gilman. Could you put the mike a little closer to
Mr. Bruno. Well, currently, as you alluded to, some of the
functions of the payment bureaus are being moved to other
ministries--tax collection, statistics, that type of thing. The
key function of the payments bureau is to facilitate payments
between enterprises and individuals. The bureau basically
served as a bank under the former socialist system in place in
Yugoslavia. Until there is a transparent banking system in
Bosnia, the key functions of the payment bureaus cannot be
There have been some laws passed or imposed which have
allowed certain payment transactions to be made through banks,
banks currently in Bosnia, but until there is an open and
transparent banking system to replace the payment bureaus,
large-scale, foreign investment is unlikely.
As we mentioned in our report, corruption is one of the
main reasons why investments, foreign investment, and even
domestic investment by private entrepreneurs, has not
accelerated and, in fact, taken the place of assistance. Until
a banking system is in place, the economy won't be revived
because there will be no investment.
Chairman Gilman. Thank you. According to the GAO and USAID,
the only way to establish a sound, competitive, commercial-
banking system that fulfills key market functions is the entry
of reputable foreign banks. But as you maintained earlier,
investment in Bosnia, post-1995, has been greatly deterred by
the systemic corruption that takes place in the Bosnian
That said, how can our nation persuade a strong financial
institution to get involved with such risks being present? If
ending corruption is contingent upon attracting foreign banks
while investment is contingent upon ending corruption, don't we
have a case of the chicken and the egg here?
Mr. Johnson. There is a bit of a catch-22 there, but that
is not from lack of trying to get international banks, a
reputable international bank, to come in. It is our
understanding that there have been discussions with a Turkish
bank, which is maybe not a Bank of America or Citibank, but one
that would probably be interested.
Chairman Gilman. Does that look promising?
Mr. Johnson. From what we were told, there are discussions
under way. What the status of those discussions are, I am not
sure. Ambassador Pardew could probably respond to that better
than I can.
Chairman Gilman. Aside from that interest, have any other
banks shown any?
Mr. Johnson. No.
Chairman Gilman. Critics of the Dayton Peace Agreement
point out that because the DPA provides for only a very weak
national government, it is the DPA itself that limits the
ability of the Bosnian government to forge the anticorruption
institutions at the national level where they are most
necessary, and it leaves it to the leaders of the two entities,
where nationalist pressures are most easy to bring to bear.
What is your response to that kind of criticism?
Mr. Johnson. The peace agreement did create a weak,
national government, and there are problems related to that,
and one of the problems that is probably most pronounced is
that there is not strong support for the departments and
institutions already being created at the national level. It
leaves them in a rather weak position, but I do not want to
imply that it is not workable.
I think it is the system that we have, and it needs to be
pursued, the system in place is apparently the best that could
be gotten in 1995 when they negotiated the agreement, and so it
is what we have to live with.
Chairman Gilman. Thank you. Mr. Gejdenson.
Mr. Gejdenson. Thank you, Mr. Chairman. Let me first say
any money that is American taxpayer money that is lost is
something that troubles all of us. How much money do you think
was lost as a result of corruption here? We have seen numbers
across the board in the newspapers. What's your estimate?
Mr. Johnson. U.S. money lost to corruption?
Mr. Gejdenson. U.S. money.
Mr. Johnson. Well, the money that we know about is
basically the money that is involved with the BH Banka
situation that you are aware of.
Mr. Gejdenson. And how much is that?
Mr. Johnson. And that is about $935,000.
Mr. Gejdenson. So $900,000 out of how much?
Mr. Johnson. Well, over a billion dollars, a small
Mr. Gejdenson. Over $1 billion.
Mr. Johnson. Yes.
Mr. Gejdenson. And so that is 1 percent. Is that correct?
Mr. Johnson. About.
Mr. Gejdenson. About 1 percent.
Mr. Johnson. Excuse me.
Mr. Gejdenson. No. Go right ahead.
Mr. Johnson. I think it is important, the amount of U.S.
money that would be lost, but I think the more important issue
is whether or not the problem in Bosnia will unravel the entire
process, and that is what we tried to focus on. I think the
international organizations have basically done a good job of
trying to control the money that we provide. There is not a
debate about that.
Mr. Gejdenson. And there is some pressure here in Congress
to try and press our allies to rapidly disperse their funds so
that they will meet certain targets, or they want us to pull
out. Now, I guess what I would say is, is there a mechanism in
place that would allow this to happen without actually just
losing more money?
Mr. Johnson. Well, there has definitely been a criticism of
our allies throughout the Balkans, but in Bosnia in particular,
about the slow disbursement rate. And when we talk to Bosnian
officials or even AID officials, we hear this criticism that
the European Union is very slow in disbursal. They could be
more rapid in disbursing money and still maintain the controls,
is the general perception.
Mr. Gejdenson. You know, it may be human nature, but you
get the sense that at the beginning of a crisis or the end of a
war there is this inclination in Congress, and the public that
Congress reflects, to have a significant response. And so, in a
sense, are we front loading too much of the money? Is the money
available only at the beginning when oftentimes there are not
the systems in place, and would we be better off trying to get
Congress to commit the money over a longer period of time with
some more flexibility here?
Mr. Johnson. Well, I think as a general proposition, you
are probably correct. I think in the case of Bosnia the money
was put up front and was needed up front for reconstruction.
Mr. Gejdenson. Uh-huh.
Mr. Johnson. I do not think there was unwarranted front
loading in the case of Bosnia. That criticism, I think, is more
applicable to some other situations in Eastern Europe.
Mr. Gejdenson. And, you know, money is fungible.
Mr. Johnson. Sure.
Mr. Gejdenson. And so when you sit here and you are looking
at these factions having larger military-police units than they
ought to have, and, of course, the problem is always what do
you do with them if you disband them. These people need
salaries. You are creating political problems on the ground and
what have you. But how do you look at these situations and say,
well, we are going to take U.S. assistance and use it for good
causes because the government is using its money for military
forces they really do not need.
Mr. Johnson. That certainly is a dilemma. The international
community does have some leverage, however, that it probably
has not used as much as it could. The High Representative has a
lot of authority to influence the Bosnian governments, both the
Federation and the Republika Srpska, as to the size and
function of their military. And clearly, up to this point both
of those entities have received support from outside for their
militaries. So that is a problem that can be addressed probably
more readily than it has been.
Mr. Gejdenson. Let me ask you one last question. What would
be the most important change you would desire that Congress
would execute in how we deal with these situations? What could
we do that is most helpful in changing the way we operate?
Mr. Johnson. I do not know that I would recommend
necessarily a change. I think that we have--over the past 4 or
5 years GAO has looked at the program in Bosnia and evaluated
the progress, and we have generally been supportive of the
program that has been put in place. There are obviously
glitches along the way.
I think the fact that this hearing is taking place, that
light is being focused on this problem, is a helpful thing. I
think we need to signal to the rest of the world that
corruption is not something that we can tolerate in programs
that we are participating in, and it is not just the money that
we provide bilaterally. We spend a lot of money on the IMF as
well as the World Bank and have considerable resources at
stake. So I think efforts like this to focus attention on the
problem is a very helpful thing.
Mr. Gejdenson. If I could indulge the Chairman just one
more question, and you do not have to give me the entire answer
here now, but on the issue of corruption, I have seen some
progress in recent years from our G-7, G-8 partners, but some
of them still allow for bribery to be a deductible tax expense.
Is that correct?
Mr. Johnson. It is my understanding that this occurs,
although the OECD in Paris has reached an agreement----
Mr. Gejdenson [continuing]. To end that.
Mr. Johnson [continuing]. To end that.
Mr. Gejdenson. Well, it seems to me that that is terribly
important because if the most important industrial nations in
the world accept bribery as a price of doing business, to turn
around to these fledgling nations and expect them to be
policing themselves is a little bit unrealistic. And if
European and other partners of ours think it is OK to go in and
bribe governments for contracts, it is a little hard for us to
then come back and say, ``Gee, we want to fight corruption.''
So I certainly hope that you will give me any advice that
we can strengthen our fight against bribery and corruption
because, I think, when you look around the world at the
failures we have had, a lot of it ends up going back to that
Mr. Johnson. That is right.
Mr. Gejdenson. Thank you.
Chairman Gilman. Thank you, Mr. Gejdenson. Mr. Chabot.
Mr. Chabot. Thank you, Mr. Chairman. My understanding of
your statement here this morning is that the government is
losing a lot of their own resources to crime and corruption and
many other things, which obviously should not be going on. You
are saying the resource that we are directly losing, our aid,
is somewhat minimal. But our resources going to them are
relieving perhaps the necessity for them to seriously confront
the reforms that they need to carry out, such as cutting down
the corruption and actually collecting the taxes they are owed,
and things of that nature. Is that correct?
Mr. Johnson. That is correct. Yes.
Mr. Chabot. And I guess the logical followup is that some
portion of our aid there is counterproductive, that we are
essentially subsidizing behavior that over the long term may
actually hurt the government and the people that we are trying
to help. Is that correct?
Mr. Johnson. I do not know if I would characterize it as
counterproductive necessarily, but there is a contradiction
there that we need to address, and the Bosnian government needs
to address, and that is one of the reasons we made the
recommendation to the State Department that it reassess the
strategy because that is something that needs to be looked at
by the people who run a program, whether or not there is a way
to squeeze on that.
Now, the United States does not provide very much budget
support, so the amount of leverage, direct leverage, that the
United States has is minimal, but the United States, through
the World Bank, does provide a substantial amount of budget
support, and working through the executive director's office at
the bank, that problem could be addressed, we believe, in a
more forthright way.
Mr. Chabot. Using taxes as an example, I think your
testimony was that they have a pretty ineffective way of
Mr. Johnson. Yes. And their tax law is so convoluted that
people just cannot pay.
Mr. Chabot. Right. I would argue that our tax system is
pretty convoluted as well, but nonetheless it is relatively
effective. I think our government is pretty good at collecting
what it is owed, or pretty bad, however you want to put it. We
collect a whole lot of money here very effectively, and we are
shifting some of those resources over to countries which have
not gotten their act together and are not collecting their
taxes. I would argue from the American taxpayer's point of
view, that this is not a very good deal, but let me move on.
As far as how long we are in Bosnia, many of us were very
skeptical of the President when he suggested early on that we
would be there a year and that our cost would be ball-park $2
billion. That year obviously has extended far beyond that. It
has been 4 or 5 years and we have spent, in your testimony I
think, over $10 billion, so we are way over what we were told
in length and in cost. But how long we are in Bosnia, to some
degree, depends upon how quickly they get their act together,
how quickly they have an independent judiciary, a workable
government, a system of collecting taxes.
But since we are subsidizing by giving them money, we are
making it so that they do not reach the crisis that sometimes
you have to reach before you actually take action. We are
dragging the day of reckoning out even further. Therefore, we
may be there a heck of a lot longer even than the President
might suggest that we be there. So I just wonder whether our
policy makes much sense at all.
One final point. Mr. Gejdenson mentioned the one case of
the bank where, I think, we know $935,000 was lost----
Mr. Johnson. We are still negotiating to get some of that
back, and I think they will get a large share of it back.
Mr. Chabot. OK. I think, Mr. Gejdenson said important words
when he said that is a million dollars or so out of a billion.
I mean, that is that we know of. And as far as how many dollars
have been directly lost, we really do not know, but the fact is
we are spending an awful lot of money over there. The thing
that concerns me is that we may be subsidizing dependency and
irresponsible behavior and putting off the actual reforms that
need to take place. I thank you for your testimony here this
Mr. Johnson. I think you have expressed a legitimate
concern. One of the things that we tried to keep in mind when
we did this work was exactly what you have talked about. The
peacekeeping operation in Cyprus has been there for many years,
and the situation in Bosnia--I think it would not be in our
interest to have a peacekeeping mission in Bosnia for the
length of time that we have had the U.N. peacekeeping operation
Mr. Chabot. Thank you very much. I certainly share that
point of view. I would hope that the Bosnia peacekeeping
mission would be much, much shorter than Cyprus. Thank you.
Chairman Gilman. Thank you, Mr. Chabot. Mr. Sherman.
Mr. Sherman. Thank you. I would simply observe that I do
not see any facts in play now that would cause our peacekeeping
operation in Bosnia to be shorter than that in Cyprus.
Mr. Johnson. That is right.
Mr. Sherman. Certainly, the level of ethnic opposition and
tension is at least as high as in Cyprus, and one cannot point
to any trends that would make peacekeeping there unnecessary.
Mr. Johnson. You are right.
Mr. Sherman. Our decision to insist that Bosnia be a multi-
ethnic state made up of ethnicities who have shown a tendency
to kill each other over the last several hundred years ensures
that there will be a multi-ethnic state of people with a
tendency to kill each other, and that we will have to be there
for a long time preventing those deaths.
I want to pick up on Mr. Gejdenson's remarks about the
deductibility of bribery, and I realize that is a little step
or two away from the purpose of these hearings, but I am
picking up on the Ranking Member's comments. We have the
largest trade deficit this month, or rather last month--the
report just came out today--the largest monthly trade deficit
in the history of human kind, period, largest ever in a month.
And it is relatively nonremarkable because the month before
that we also set a record, and we have been setting records
I do not think there is any way to quantify how much of
that trade deficit is due to the fact that our competitors pay
bribes and we do not. There was a declaration several years ago
by the other OECD countries that they would embrace a concept
similar to the Foreign Corrupt Practices Act. Perhaps you
gentlemen could indicate whether that has gone beyond the
Mr. Johnson. I would hesitate to comment on that at this
point. I am not quite up to date on where they stand on that,
but I can get that information to you.
Mr. Sherman. I can only assume that in those countries
where bribes are tax deductible they are not illegal, and I
realize you may not have come here prepared to focus on that,
but Mr. Gejdenson at least pointed that out. Do any of the
other panelists have a further comment on that?
Mr. Shafer. No.
Mr. Sherman. The other thing I would like to point out is
there is only one reason we are in Bosnia--Bosnia is in Europe.
I mean, the human rights violations there were terrible, but
not nearly as bad as what had happened in several places in
Africa and what is happening today in Sudan.
So we were told Bosnia is different because it is in
Europe, and Europe is vital because Europe is rich, powerful,
and technological. That is why I have got to wonder why for a
problem in Europe, America does the lion's share of the
fighting, pays the lion's share of the defense cost, provides
the lion's share of the strategic backup. When I say
``Bosnia,'' I am including Kosovo. They are two very related
problems here. And at the same time, when there are problems in
this hemisphere, Europe does almost nothing with regard to
solving many of the problems in this hemisphere--a little
contribution toward Colombia, a little contribution toward
I think, while we can and have lost money due to theft, and
you do point out the $900,000 at issue that is the focus of
these hearings, that we lose an awful lot more because we
decide that where something is important to the Europeans, it
means we have to pay the lion's share of the cost, and that is
not just $900,000. So thank you, Mr. Chairman.
Chairman Gilman. Mr. Tancredo. Thank you, Mr. Sherman.
Mr. Tancredo. Thank you, Mr. Chairman. Just one quick
question, because I was late, and I apologize. I just wonder if
you would agree with the feeling that I have gotten from your
presentation, certainly among many other things, that the
problems in the area are systemic. The problems with corruption
are systemic and are not necessarily personality driven. That
is to say that even if we were able to incarcerate people,
Krajisnic and others, that would not change the situation all
that much because the problem is, in fact, systemic.
Mr. Johnson. The problem is systemic. You are absolutely
right. In fact, when you look at who is involved in the corrupt
activities and the linkages between those involved in corrupt
activities, the judiciary, and government officials, you see
I guess a good way to look at the problem is that corrupt
activities are being pursued in Bosnia as another means to
continue the war aims that the parties had throughout the
period of the war. They want to continue separation. They want
to continue having ethnically pure entities, ethnically pure
cantons, within the Federation part of the country, and a lot
of the corrupt activities support those war aims. So it is a
very systemic problem and not one easily fixed. This is not
garden-variety corruption that is taking place in Bosnia.
Mr. Tancredo. Thanks very much. I have nothing else, Mr.
Chairman Gilman. Thank you, Mr. Tancredo. I have just one
more question for our panel. How do you assess the
anticorruption efforts of the Office of the High
Representative? Do you agree with the critics who maintain that
that office actually is preventing more effective programs
initiated by the United States and the World Bank?
Mr. Johnson. I do not know about preventing. I would like
to turn to Mr. Shafer to respond to that.
Chairman Gilman. Mr. Shafer.
Mr. Shafer. I would not characterize the Office of the High
Representative's efforts as preventing progress in this area.
As Mr. Johnson has pointed out, this is an extremely difficult
problem that is not easily solvable by any one person or series
of actions. In fact, recently, the Office of the High
Representative has gotten much more active, for example, in
eliminating key cantonal officials and ministers for various
corrupt activities, and that is a positive step in and of
itself. They have established a number of efforts to bring
together the international community, and it is going to take a
long time, I think, before we can see any results from the
antifraud unit within the Office of the High Representative.
Chairman Gilman. Any other comments by the panelists before
we conclude? Mr. Bruno.
Mr. Bruno. I would like to elaborate on that a little bit.
Although there are a lot of individual efforts conducted by or
somewhat coordinated by the Office of the High Representative,
there are some other nuts-and-bolts types of things that have
not been done by the High Representative, the World Bank, or
others. As we point out in our report, there has been no
analysis of the revenue loss, no systematic analysis. There are
some estimates but no systematic analysis.
There has been no audit of expenditures of the entity
governments to see where our budget support is going, ``ours''
meaning the international community, and how those funds may
support illegal parallel institutions or the political parties.
There has also not been a review of the actions taken by the
financial police to see exactly what they are doing to fight
corruption and what they need in terms of assistance.
And as my colleague stated, the High Representative has
removed officials, high-level officials, but removing them does
not always remove their power, and it is not enough to remove
them. It would be better if there was an example made of those
individuals. If they have abused their power and it is an
infraction of the law, then an investigation should follow and
not simply just the removal of that official.
Chairman Gilman. Well, I want to thank our GAO
representatives for being here today and for your extensive
report, which is most helpful to us, and we will be passing it
on to some of the other people who will be doing some work in
that part of the world. We appreciate your time and your
effort. Thank you, gentlemen.
All. Thank you.
Chairman Gilman. We will now move on to our second panel.
Ambassador Jim Pardew is no stranger to our Committee. He has
appeared both in open and public sessions and private briefings
with us on a number of occasions. He has served in both our
Departments of Defense and State, brings to us a long period of
expertise in Balkan affairs, and we welcome you to our hearing
this morning. In a sense, Ambassador Pardew has become the
institutional memory for our Balkan policy due to his long-term
involvement in U.S. policy in that region during the past
We are grateful for your willingness, Ambassador, to appear
today, and we welcome your testimony, which you may summarize
without objection. Your full statement will be entered into the
record. Please proceed, Mr. Ambassador.
STATEMENT OF AMBASSADOR JAMES W. PARDEW, PRINCIPAL DEPUTY
SPECIAL ADVISOR TO THE PRESIDENT AND SECRETARY OF STATE FOR
DEMOCRACY IN THE BALKANS, U.S. DEPARTMENT OF STATE
Mr. Pardew. Mr. Chairman, I welcome the opportunity to
again appear before the Committee to discuss our programs and
strategies for addressing crime and corruption in Bosnia, and I
take note of the new technical developments of the Committee
since I was here last. The next time I appear before the
Committee I would like to use the new capability to perhaps
make my presentation a little better.
I will update the Committee this morning on the nature of
corruption in Bosnia and our strategy for dealing with it. I
will also respond to the specific points raised in the GAO
report. With your permission, I will summarize a more detailed
statement, which I submit for the record.
The problem of corruption and crime in Bosnia should be
considered in the context of what has been achieved there since
the war. Great strides have been made in security,
reconstruction, refugee return, and other critical elements of
Dayton implementation. That said, we agree with the basic
thrust of the GAO report, that corruption and crime are endemic
problems in Bosnia. Crime and corruption seriously inhibit
Dayton implementation and economic and political development.
The political environment in Bosnia is a direct legacy of
the war and the communist political past in which transparency
and accountability were of no concern. The inclination of the
current political leadership is to continue to do business as
usual. There are, however, democratic, reform-minded leaders in
Bosnia, and we want to work with them.
And our message to the people of Bosnia in the run up to
the parliamentary elections this November is that they often
deserve better leadership and should use the elections in
November as an opportunity for change.
Let me briefly review our investment in Bosnia and how the
focus of our assistance program has shifted. We pledged and
disbursed $1.007 billion from 1996 to 1999, primarily for
critical, post-war requirements. This represented 18.5 percent
of the $5.4 billion total, international, civil program for
Bosnia. Beginning with a reassessment in 1998, our focus
shifted to helping Bosnia begin to reform itself as a stable,
peaceful, free-market democracy that can function without heavy
engagement of the international community.
This year, we are spending $100 million in SEED, or Support
to European Democracy, funding and about $40 million in
peacekeeping-operations funding in Bosnia.
Fighting corruption and crime requires action in two
general areas. The first is reform of the political and
economic structure. The second is establishing the rule of law
with effective enforcement. Bosnia must achieve major progress
in both of these areas if it is to counter current levels of
corruption and crime.
I would point out that USAID has been a leader in the
anticorruption effort in Bosnia, and I would like to submit for
our record a summary of their anticorruption program.
Chairman Gilman. Without objection, it will be made part of
Mr. Pardew. I have already mentioned upcoming elections as
a potential road to political reform. Successful reform also
requires a new and transparent legal and structural framework.
The international community has identified over a dozen pieces
of specific legislation and administrative actions to
restructure the Bosnian government, many of its functions, and
The most important of these laws and actions will
accomplish the following: Formation of an adequately paid,
well-trained, professional civil service; the establishment of
modern, effective, impartial, and professional law enforcement
and judicial bodies; the establishment of a strong, central
treasury. Within a year we expect to see the state treasury
established and significant progress on overhauling the civil
service and judicial and law- enforcement bodies. Judicial and
law-enforcement reform is already under way.
Other high-priority tasks include the following: The
abolition of the payments bureaus, which were discussed earlier
this morning. These are a major source of funding for the
nationalist parties, and the process is on schedule for closure
of these bureaus by the end of the year. Next is the creation
of strong, central, regulatory authorities for the financial,
telecom, and power sectors. Progress is underway in
establishing an effective banking supervisory agency and
regulatory framework for the financial sector. We expect
movement soon on establishing an effective, central-regulatory
body for the energy sector.
Privatization of key industries is another major area of
reform. This is intended to break control of key businesses by
the nationalist parties. The United States is leading the
effort to move quickly on large-scale privatization of over 100
key business entities.
Another area is the establishment of effective auditing
organizations to search out and deal with fraud and corruption.
We are providing $1.3 million in funding for auditors and
specialists to support this effort.
The second part of our anticorruption strategy is the
enforcement framework, which I subdivide into police
enforcement and judicial reform. Until recently, the police
lacked even the most basic law-enforcement tools for policing
in a democracy. We are helping restructure, downsize, train,
and equip the Bosnian police to give them the basic tools to
function. We are also working with them on more complex
challenges such as fighting organized crime.
Let me quickly cover our new initiatives. The International
Police Task Force recently established a joint task force
operating in both entities that can monitor high-profile
investigations. It has handled approximately 30 cases in 1999.
It is currently overseeing 120 cases, and has assisted INTERPOL
with an additional 50 cases. We have provided two FBI agents to
assist the Bosnians in several high-profile investigations and
help them further their anti-organized-crime capacities. Later
this year, we will give specialized training for the Bosnian
police in major case management, public corruption, and
transnational money laundering. We also are funding an
organized-crime adviser to begin duties later this year.
We are working with police in both entities to establish
professional-standards units that both conduct internal
investigations and promulgate codes of ethics. So far, these
units have investigated over 380 cases of misconduct by the
police, and these have resulted in dismissals of several
We also support the work of the IPTF's noncompliance unit,
which audits the practices of local police organizations and
investigates reports of misconduct or anti-Dayton actions by
local police. We recently donated $1.95 million to aid and
development of multi-ethnic border service, which began initial
operations in the Sarajevo Airport last month. The border
police is the first armed, joint institution in Bosnia and will
greatly increase the ability of the Bosnian government to
secure its own borders and will help prevent the trade in
illegal goods and disrupt trafficking of persons.
This month, we transferred $1 million to expand operations
of the antifraud unit in the Office of the High Representative.
With the antifraud unit's increased activity, our funding will
be used to hire additional investigators and prosecutors.
Bosnia's judicial system needs a major overhaul. Through
the American Bar Association's Central and East European Legal
Initiative and others, we are working with Bosnia to establish
a politically independent, professional, and effective legal
system. Primary activity includes vetting and training judges
in establishing the security of courts, the court police, and
In July last year, the Office of the High Representative
produced a comprehensive, judicial-reform strategy that
includes specific action plans to effect reforms. A judicial-
reform law will be adopted shortly that will replace current
party controls over the appointment of judges.
In May, we approved a $1.75 million Department of Justice
allocation for expanded programs to strengthen prosecutors'
offices and begin ground work for establishing a vetted
investigative strike force.
Turning to the GAO report, it made three specific
recommendations to combat crime and corruption: that we use
more conditionality, that we end direct budget support, and
that we reassess our assistance program.
We agree with serious conditionality, although we need to
make sure that conditionality supports our objectives. Our aid
is increasingly focused on supporting minority returns and
forcing the pace of judicial structural reforms. The threat of
denial of such aid is not an effective lever.
The most effective form of conditionality currently is
through the international financial institutions, which
continue to provide significant amounts of investment project
credits and budget-adjustment lending. We are working closely
with the World Bank, the IMF, and the EBRD to strengthen
We coordinate closely with the international community and
OHR to supply as much leverage as possible to overcome
resistance by the Bosnian leadership to implement the change
necessary to undercut corruption.
We also agree with moving away from direct budgetary
support. We have already terminated such support bilaterally,
and we do not envision resuming bilateral budget support. We
continue to believe, however, that such support should be
provided by the international financial institutions based on
strict conditionality. IFI adjustment lending provides an
important incentive for structural and economic reform and
reinforces our anticorruption program by requiring greater
budget transparency, improved expenditure control, and
On the third recommendation, we do not see the need to
reassess our assistance programs at this time. We made a
fundamental shift in 1998 based on the completion of the most
urgent funding needs. We are fully on track with our reform
priorities, including stemming corruption and crime problems.
As we implement our programs, we are continuously fine tuning
our strategy and tactics based on developments on the ground.
In closing, Mr. Chairman, the program to reduce crime and
corruption in Bosnia is very ambitious. It cuts across all
elements of Dayton implementation, and we need to be in it for
the long term if we expect to help bring democracy and
prosperity to Bosnia.
Unfortunately, attacking crime and corruption is not a
short-term problem. It is a never-ending struggle even in
advanced democracies, but in Bosnia there is good news as well.
The international community is in agreement on the high
priority of stemming corruption and crime. They are now the
very high priority of the Office of the High Representative,
and we are starting to make headway in all of them. Thank you,
[The prepared statement of Mr. Pardew and USAID Anti-
Corruption Efforts appear in the appendix.]
Chairman Gilman. Thank you, Mr. Ambassador. The GAO has
recommended that the Congress condition further aid on Bosnian
political leaders taking specific steps to demonstrate their
commitment to the anticorruption effort.
Mr. Ambassador, what is your view of that recommendation,
and how much of United States-provided assistance to Bosnia
would be appropriate to use as leverage for this issue?
Mr. Pardew. Mr. Chairman, we will always gladly take a look
at the specific recommendations of the Congress, and I would
have to do that before I would make a final determination on
how we might view a particular proposal. But I pointed out
previously that anticorruption and anticrime are major
initiatives of the Administration and of the High
Representative. And so before the Congress acts, I think we
should very carefully review the programs that we have in place
and avoid unnecessary restrictions.
Chairman Gilman. Should we condition our assistance on
their cleaning up the corruption?
Mr. Pardew. We are conditioning our assistance on cleaning
up corruption. Everything that we are providing right now has
some type of conditionality on it, and crime and corruption are
very high on our agenda. I do not think at this point it is
necessary for the Congress to assist, but we will certainly
take a careful look at anything you might propose.
Chairman Gilman. And what is our nation doing to bring
together the EU and other donors to work with us to confront
this problem that we have?
Mr. Pardew. This problem was a discussion topic at the
recent Peace Implementation Council ministerial. It is always
on the agenda of the Peace Implementation Steering Group. We
use all forums that oversee the international effort, and we
also stress this bilaterally. It is a very high-priority
program at this time.
Chairman Gilman. And, Mr. Ambassador, how difficult would
it be to revise and modify the Dayton framework so as to
strengthen the national government to better enable it to
confront crime and corruption throughout Bosnia?
Mr. Pardew. Mr. Chairman, as I have testified before, the
issue of strengthening central institutions, first of all, it
is a high-priority issue and needs to be done. It is largely a
matter of the will of the leadership. I do not think we need to
reopen the Dayton Agreement in order to strengthen the national
Chairman Gilman. Thank you very much. Mr. Gejdenson.
Mr. Gejdenson. Thank you, Mr. Chairman. You paint a pretty
rosy picture here. You think it is going to be that good, huh?
Mr. Pardew. I think we are doing a lot, Congressman. I do
not want to overdramatize success. As I have said, this is a
major problem, and it does hinder our overall efforts in
Bosnia. I think corruption and crime have to be looked at in
the context of what has been done since the Dayton Agreement
was signed. I can point to improvements of the security
situation and the reconstruction that have been dramatic. We
are gaining ground in the return of refugees, the Brcko,
creation of central institutions, and I can go on and on. The
point is that crime and corruption must be put in the context
of a number of good things that have happened.
Mr. Gejdenson. It is good to get an optimistic note. Our
colleagues on the other side of the aisle here are constantly
seeing the end of the world approaching.
Let me ask you a couple of questions here. With the end of
these Soviet-era payment bureaus, are the private banks going
to come in on their own? Is there a sense that somebody is
going to step up to the plate and see an opportunity to make
money here and not get shaken down, or is there something else
that is going to need to happen? Are we going to need, like, an
OPIC guarantee system, or will it happen without us?
Mr. Pardew. Closing the payments bureau is one of the most
critical structural reforms that needs to take place. Closing
them is on track to end this year, and that will be a major
step toward creating a banking system. There is already a
functioning central bank in Bosnia, and it is working very well
under international leadership.
Creating a banking system in Bosnia has been a long, uphill
struggle. The situation is not as bad as was presented earlier,
in my view. At least one Austrian full-service bank is, I
believe, about to open for business. A Turkish bank is there
operating already. We have encouraged U.S. banks to go there as
well, but, quite frankly, Bosnia is a small market for some of
the big, international banks.
In addition, the Office of the High Representative [OHR]
has a banking agency. That banking agency is trying to clean up
the local banks. There are over 12 banks now being closed to
try to clean up and make economically viable the existing
banking system as we try to bring in international banks.
Mr. Gejdenson. And you mentioned the refugee return and the
increased numbers of refugees that are returning. They have
come from western countries in many instances. They have got to
be a pressure point for change as well, and it seems to me an
almost good news/bad news scenario in a number of these places
around the world that as information is spread through society
about the alternatives out there, there is going to be a
heightened demand for improvements in people's, situations. And
are these governments going to be able to deliver a better
standard of living, improvements in the people's living
situations, sense of security economically?
Mr. Pardew. Bosnia must change. As you point out, there are
refugees who are returning, and they are returning from more
advanced western democracies in some cases, and they have high
expectations about the economic structure. They are simply not
going to accept on a long term this old communist economic
I think young people are another factor. If Bosnia wants to
keep their young people in Bosnia, they must have to have
economic opportunities for them, and those opportunities must
be based on a conventional, western, transparent, market
Mr. Gejdenson. Well, thank you very much. I hope you keep
I think an important part of this is a dialogue with the
Congress because often our colleagues are left with bits and
pieces of information, headlines that leave a misimpression.
Many of our colleagues do not fully understand the magnitude of
the European participation, and we always jump to the
conclusion that we are providing the most troops, the most
money. In almost every category that seems to be not case.
Could you just, in my final moment here, run through again what
portion we are paying and what portion the Europeans are
providing in this?
Mr. Pardew. In Bosnia our total funding on the civil side
is about 18 percent. The Europeans have paid most of the rest,
although there are some non-European donors. I think U.S. troop
levels are about 20 percent. The bulk of the troops are being
provided by the Europeans.
Mr. Gejdenson. That is really an astounding situation, when
you take a look at the historic portion that America has given
in almost any other effort, that the idea that the United
States is participating at about a fifth or less is a real
statement that the Europeans are stepping forward, as they
ought to. And we want to thank you for the work you are doing,
and stay in communication with us. Thank you very much.
Mr. Tancredo [presiding]. Thank you, Mr. Gejdenson. I just
have a couple of things, in a way a followup on the question I
posed to the panel before, and that is with regard to what hope
there can be that we can take from the possibility of
incarcerating some of the people there with higher visibility I
suppose, and what hope do we have that something like that, if
we were able to, incorporate Mr. Krajisnic or others that we
would oftentimes like to see incarcerated, and which we
certainly do now want to see incarcerated, what hope do we have
that that would actually change the situation, especially with
regard to corruption in Bosnia?
Mr. Pardew. The war criminal issue has a powerful, symbolic
effect. First of all, we have made significant progress over
time on bringing indictees to justice. We started, obviously,
with zero. We are now 49 of the people who have been indicted
by the ICTY have gone to The Hague. However, the two most
significant indictees, Krajisnic and Milosevic, are not there
yet. They have simply evaded capture, either by the local
police or SFOR.
It would be a tremendous psychological boost to the whole
area, if these prominent war criminals were brought to justice.
The arrest of Mr. Krajisnik, who was head of the Parliament was
significant. He was a corrupt official, and bringing him to
justice also helps create an atmosphere that corruption will
not be tolerated.
Mr. Gejdenson. You heard the testimony of the panel before
you, and one of the individuals indicated that beyond just
removing people from office some other action has to be taken.
Do you agree with that, and what specific action would you
Mr. Pardew. Absolutely. People who are found to be in
violation of the anticorruption or other laws need to be
brought to justice. We have to do many things at once, though.
We have to strengthen the judicial system, and many of the
other things I addressed in my testimony. In some cases, I am
not sure they are ready for some of the more sophisticated
anti-crime activities, but we are working on them.
But those who violate the laws need to be brought to
justice, and officials in Bosnia need to be held accountable
for their actions. This is the structural changing that I was
talking about. In the old system, leaders were not accountable,
and the current situation is a carry over from the old days. We
have to change the structure as well as take the proper
measures against individuals.
Mr. Tancredo. Yes. Well, changing the structure is
certainly an enormous undertaking that one can, I guess,
understand, or we can rationalize in the amount of time that we
have spent and that we probably will be spending there, but it
is nonetheless quite frustrating for Members of Congress and, I
am sure, members of the general public, when you really can
never see an end to the tunnel.
Let me ask you, can the goals of the Dayton Agreement be
achieved in the near future, and with such emphasis on aiding
the economy of Bosnia, are prospects dimmed by the fact that in
a time of great economic prosperity in the world little
progress has been actually realized? Somewhat of the same vein,
Mr. Pardew. I think the goals of Dayton implementation can
be achieved, but it certainly has not been, nor will it be,
easy, and I cannot put a specific timeframe on it. We have a
set of benchmarks which we are working toward. We have made
progress in a number of those benchmarks.
The benchmarks have been sent to the Congress along with
our report on their status, but implementation is difficult,
and it is long term. I think we have some tough sledding ahead
of us to make these fundamental changes that we were seeking.
Mr. Tancredo. Thank you, Mr. Ambassador. I appreciate your
Mr. Pardew. Mr. Chairman.
Mr. Tancredo. Yes.
Mr. Pardew. Could I make one point for the record.
Mr. Tancredo. Of course.
Mr. Pardew . In the earlier testimony today they talked
about the United States loss of money in this BH Banka. I would
like to set the record straight on that, if I could?
First of all, we are very heartened by the GAO's report
that recognizes that the United States and international donors
have established procedures for safeguarding assistance to
Bosnia and that there is no evidence that that assistance is
being lost. The BH Banka case, there is $900 million----
Mr. Tancredo. $900 million?
Mr. Pardew [continuing]. $900,000--I am sorry. Did I say
$900 million? I do not want to set that record today. I just
increased the problem significantly. We have not given up on
that money. That money is not lost. We are working with the
Office of the High Representative and the Federation to get the
$900,000. We will take whatever legal measures are necessary to
ensure that our money is recovered. So we do not consider that
money lost, and we will stay on this.
Mr. Tancredo. Thank you, Mr. Ambassador. We appreciate your
testimony here today, and the Committee is adjourned.
[Whereupon, at 11:37 a.m., the Committee was adjourned to
reconvene subject to the call of the Chair.]
A P P E N D I X
April 11 and July 19, 2000
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Prepared Statement of Ambassador James W. Pardew, Jr., Principal Deputy
Special Advisor to the President and Secretary of State for Kosovo and
Dayton Implementation, U.S. Department of State Before the House
Committee on International Relations
april 11, 2000
Mr. Chairman, thank you for the opportunity to update the Committee
on the situation in Kosovo. This presentation will review our interests
and objectives, areas of progress in civil administration and
reconstruction, current challenges, what we are doing to overcome them,
and sharing the burden of the international effort.
Our continuing engagement in Kosovo relates directly to our
national security interests. We know from history that a stable Europe
is vital to American security, and that Europe is not stable if its
southeastern corner is in turmoil. In the past four years, the U.S. and
our allies have successfully contained, then subdued, conflicts in
Croatia, Bosnia, and Kosovo as the former Yugoslavia broke apart. But
the area's stability remains at risk from the Milosevic regime and the
fragility of states recovering from conflict. International military
forces are critical to creating a secure environment in Kosovo.
However, sustaining the peace and establishing the conditions for long-
term stability in the region require robust political, economic, and
reconstruction programs backed by sufficient resources to make a
There are two immediate civil implementation objectives in Kosovo.
The first is to complete the establishment of an interim international
administration under which the people can enjoy substantial autonomy.
The second is to develop local, provisional, democratic, self-governing
institutions to ensure conditions for a peaceful and normal life for
all inhabitants of Kosovo.
One year ago, the North Atlantic Treaty Organization was engaged in
an intensive air campaign to halt Milosevic's brutal repression of the
people of Kosovo and restore order in the region. In 78 days the air
campaign, supplemented by intensive diplomacy, succeeded in driving
Milosevic's forces from Kosovo. The success of the NATO campaign set
the stage for the deployment to Kosovo of the international security
force and the international civilian administration organization. The
NATO-led Kosovo Force (KFOR) and the UN Mission in Kosovo (UNMIK)
remain the heart of the international effort in Kosovo today.
All of us would welcome faster progress for civilian implementation
in Kosovo, but remember the situation ten months ago when Serb forces
began withdrawing from Kosovo. The conditions encountered by UNMIK as
it deployed and began to organize in Kosovo were desperate:
Over one million people dislocated and traumatized by
No economy; no government.
Major destruction, including 120,000 homes damaged or
Infrastructure either destroyed or neglected.
A communist legacy.
Today, the situation on the ground in Kosovo is dramatically better
and continues to improve gradually day by day. International efforts
have returned more than one million refugees and internally displaced
persons (IDPs) to their homes, demilitarized the KLA, established a
growing international police presence, and begun training local police.
Humanitarian agencies have met basic shelter, food and medical
requirements and pulled the population through the winter. Recently,
UNMIK and KFOR have made progress in restoring order in Mitrovica,
increasing CIVPOL deployment, increasing Kosovo Police Service
training, preparing the groundwork for municipal elections this year,
and securing Serb participation in UNMIK governing structures. Further,
public and independent media are regaining their voices.
As NATO Secretary General Robertson pointed out recently, any
Kosovar child can tell you how life has improved since the arrival of
UNMIK and KFOR. Children have begun to attend school again, even if in
tents. Many ethnic Albanians are studying in their own language for the
first time in 10 years.
UNMIK, we must remember, has been on the ground for only about 10
months. The International Community's post-conflict task of repairing
years of damage wrought by the Milosevic regime is extremely complex;
many challenges remain. Ethnic tensions continue at an unacceptable
level. The chronic problems in the divided city of Mitrovica will
resume without an aggressive, sustained effort on the part of UNMIK and
KFOR. FRY forces and ethnic Albanian insurgents confront each other in
the Presevo Valley region of southern Serbia, where we face a tough
challenge in preventing potential violence there from destabilizing the
situation in Kosovo. The economy needs to be rebuilt and organized
crime suppressed. UNMIK and KFOR must continue to improve security for
Serb and other minority refugees and displaced persons so that they can
return to their homes. In addition, we continue to see the need for
countries to provide police up to the higher authorized level, an
improved judicial system, and more complete staffing of UNMIK.
These are tough challenges, but they are not insurmountable. I
would like to update you on programs to address these issues. Let me
start with one of the most difficult problems--Mitrovica. Despite
significant opposition from extremists opposed to the International
Community's efforts, KFOR and UNMIK have developed a comprehensive
strategy addressing the issues of Mitrovica. The UN has appointed a
strong administrator for the region in American William Nash. KFOR and
UNMIK have already returned more than 140 displaced Albanians to homes
north of the Ibar River and KFOR has established and expanded ``Zones
of Confidence'' in key problem areas around two bridges and one
neighborhood. An international judge and an international prosecutor
are in place in Mitrovica, and several more are planned. Economic
development in the area is another factor of the strategy.
The UN remains short of civilian police, but it has made recent
progress in CIVPOL deployments, with 2,757 regular police in country
(513 Americans), out of an authorized 3,593. The UN has also begun to
fill the 1,125 positions for special police units, which will assist in
riot and crowd control. So far, 129 personnel have deployed, including
a 114-member unit from Pakistan that will be assigned to Mitrovica.
UNMIK is expecting two Jordanian units totaling 230 officers to arrive
around April 18, and is working with other nations, including Spain and
India, on further special police deployments in the near future.
The development of the Kosovo Police Service (KPS) is also
progressing. There are currently 451 KPS in classroom training, with
the fourth class having started March 27, and 341 in field training.
The police academy director just verified that the school in Vucitrn
can now accommodate as many as 700 Kosovar students, up from the
previous limit of 500, in two classes with staggered semesters. This
will prove to be a cost-effective way to reach the goal of graduating
3,600 officers by February 2001, toward a total KPS force of 4,000.
The Kosovo Protection Corps (KPC) is also progressing as an
organization. A total of 4,500 KPC candidates have been selected, out
of a ceiling of 5,000. The International Organization for Migration has
begun training for field members in each of the six Regional Task
Groups. The KPC is the most important element of a broad program to
provide employment for KLA veterans. During this development phase, we
are urging NGOs in Kosovo to utilize KPC for public works projects
during periods when KPC members are not otherwise occupied.
We are keenly aware of the possibility that some demobilized
members of the former KLA, including those who have joined the KPC, may
act inappropriately. KFOR retains high standards for participation in
the organization and are enforcing a zero tolerance policy regarding
illicit activities. On March 1, KFOR and UNMIK put into force the KPC
Disciplinary Code (DC), which constitutes the formal mechanism for
enforcement of the rules for compliance and disciplinary action against
offenders. The DC applies to all KPC members and provides the legal
basis for the commander of the KPC to take disciplinary action against
non-compliant members. On March 17, UNMIK and KFOR signed the
Compliance Enforcement Framework Document, which assigns responsibility
for investigating criminal actions to UNMIK, administrative discipline
to KPC, and compliance violations to KFOR.
UNMIK has made progress in the creation of interim governing
structures. On April 2, moderate Kosovo Serb leaders announced that
they would participate in UNMIK-sponsored governing structures,
particularly the Interim Administrative Council (IAC) and Kosovo
Transitional Council. This was a direct result of Secretary Albright's
dialogue with Bishop Artemije, who led this politically courageous
change of policy. The Serbs will attend meetings as observers at first,
but we hope and expect that this will quickly lead to full
participation. Serb involvement in these joint institutions is vital to
UNMIK's mission and it affirms the right of all Kosovo residents to
play a meaningful role in their own governance.
Elections will be the next major step in the process of
establishing provisional self-government in Kosovo. Civil registration,
the key to developing a voter registry, is set to begin in April and be
completed in July, in time for municipal elections to be held this
fall. UNMIK is reportedly close to issuing the regulation creating the
Central Election Commission, which will be responsible for setting
election rules, overseeing the conduct and supervision of the election,
and certifying the results.
As I noted earlier, Mitrovica and southern Serbia continue to be
potential flashpoints. Ethnic Albanian insurgents in the Presevo region
had pledged to reject the use of violence and seek a political
solution, but we know that their insurgency actions continue. We will
continue to warn extremists on both sides of the border that
provocation and violence will not be tolerated. Additionally, KFOR and
UNMIK are monitoring the situation carefully.
We are concerned that UNMIK does not have enough administrators and
staff with specialized technical skills. We are working with the UN
Headquarters and UNMIK to identify specific personnel needs and will
work with allies to further increase the numbers and skills of the
An effective judicial system is a critical requirement in Kosovo.
UNMIK has sworn in 289 Kosovar judges and 42 prosecutors. Criminal
trials have recently begun in the district courts of Pristina, Prizren,
Pec, and Gnjilane. The OSCE-established Kosovo Judicial Institute has
begun training sessions for the newly appointed judiciary. However,
qualifications, low pay, and intimidation remain significant obstacles
to a working judiciary. A U.S. interagency judicial assessment team
recently reviewed the state of the judicial system procedures and
physical infrastructure. Its findings and recommendations will provide
the basis to press for international support to rebuild the judicial
system. We continue to work to further increase the number of judicial
personnel and provide the basic equipment the court system needs.
Another focus area is the suppression of organized crime, which as
in any post-conflict environment is a problem for re-establishing the
rule of law and as a potential security threat. The exact magnitude of
the problem is not known, but it seems clear that opportunists and
professional criminals from both inside and outside Kosovo are
operating in the province and could be using it as a transshipment
point for illicit goods. Together with some of our key allies, we are
developing a strategy to support the UNMIK International Police efforts
to identify and take action against organized criminal elements. We
were disappointed to see that funding for this effort was not included
in the supplemental passed by the House.
The Kosovo media, which had been essentially silenced by Milosevic,
has made a remarkable recovery following the cessation of hostilities
in mid-June. Albanian-language newspapers and magazines are in Kiosks
all over the major towns and a number of radio and TV stations have
come on the air.
The U.S. has major interests in Kosovo and therefore participates
significantly in the international effort there. However, the Europeans
must lead the international effort and bear the lion's share of the
assistance burden. Europe accepts this responsibility. Out of about
45,000 KFOR troops in Kosovo, European nations and Canada provide about
72 percent of KFOR forces (80 percent if you include Russia.) The U.S.
contribution of troops comprises about 13 percent of the total.
In terms of civil implementation, the current total for all donors
in fiscal year 2000 is just over $1.2 billion. The U.S. share of $168
million is thus estimated at 13.9 percent of FY 2000 spending on Kosovo
revitalization. Our share of humanitarian assistance has been about 20
percent. Our costs for UN peacekeeping through UNMIK have been at the
25 percent level mandated by U.S. law, and costs for the U.S. share of
peacekeeping through the Organization for Security and Cooperation in
Europe have ranged from 10.1 percent (FY 99) to 16.9 percent (FY 00).
There are initiatives in Congress that propose an arbitrary limit
on U.S. spending to support the international effort in Kosovo and the
rest of southeast Europe. We believe that such legislation would be
counterproductive. As Secretary Albright wrote in a recent New York
Times op-ed piece, the day may come when a Kosovo-scale operation can
be managed without the help of the United States, but it has not come
yet. Proposals in the Congress to place a legal cap on U.S.
expenditures would decrease our flexibility and harm, not help, our
partnership with Europe in responding to future events. Such limits
also do not take into account European contributions in our hemisphere.
For example, the Europeans provided more than 60 percent of the
bilateral aid pledged in the wake of Hurricane Mitch, assumed 33 per
cent of the cost of establishing peace in El Salvador, and 34 percent
Having just returned from Kosovo, I can tell you that the people
there have emerged from a difficult winter and are preparing to build a
new future. Pristina and the countryside are alive with activity.
Everywhere you look you see examples of construction and commercial
activity that represent the height of human perseverance and ingenuity.
These are tough, resourceful people. They are grateful for our help,
but they are not sitting back and waiting for us to rebuild their homes
and lives. They need some tools and guidance from us to get started,
but they are eager and able to do the job.
I hope this gives you a clearer idea of where we stand in Kosovo
right now. I would be happy to answer any questions you might have.
Prepared Statement of James W. Swigert, Deputy Assistant Secretary for
European Affairs and Deputy Special Advisor to the President and
Secretary of State for Dayton and Kosovo Implementation, U.S.
Department of State Before the House Committee on International
APRIL 11, 2000
Mr. Chairman, thank you for the opportunity to testify on U.S.
policy toward Montenegro. I will begin by describing our view of the
current situation, outline our strategy for advancing U.S. interests,
and update you on our efforts to assist the reform government of
President Djukanovic's prudent and forward-looking policies have
made Montenegro a positive factor in the region. Montenegro opposed
ethnic cleansing and supported a peaceful settlement in Kosovo; pledged
support for the International Criminal Tribunal for the former
Yugoslavia (ICTY); and has provided shelter and assistance to refugees
and internally displaced persons. The Djukanovic government has also
increased efforts to counter smuggling and organized crime and recently
improved its police cooperation with Italy.
We share the concern of many Members of Congress about the
situation in Montenegro and in particular, the efforts of the Milosevic
regime in Belgrade to pressure the pro-democracy government of
President Djukanovic. The potential for aggression or serious violence
provoked by Belgrade is real. An outbreak of violence in Montenegro
could set back reform efforts in the region, produce more suffering and
more refugees, and seriously jeopardize U.S. interests in the region.
At the same time, Milosevic is aware that such action carries serious
risks for his own regime.
Consequently, U.S. policy is focused on preventing a new conflict
from erupting and on providing the necessary assistance to ensure
Montenegro can continue to develop democracy and a market economy. We
have made strengthening the Djukanovic government, its base of support,
and its ability to govern a priority--something good in itself--but we
also see it as a proactive measure to decrease the chances of conflict
by raising the costs to Milosevic of aggression against Montenegro's
We and our allies have made it abundantly clear to Milosevic that
we are watching the situation in Montenegro and Serbia very closely.
Secretary Albright has reiterated over the last year, most recently in
Sarajevo last month, our strong interest in the security of Southeast
Europe, including Montenegro. SACEUR General Clark has repeatedly
stated, most recently in March, that NATO is watching the situation
very closely. Last October NATO Secretary General Robertson assured
President Djukanovic of the continued support of the Allies for his
government and its efforts to promote political and economic reforms. A
year ago NATO Heads of State and Government reaffirmed their strong
support for the democratically-elected government of Montenegro. In
December NATO Ministers stated they were concerned about continued
tensions between Belgrade and the democratically-elected government of
Montenegro and called on both sides to resolve their differences in a
peaceful and pragmatic way. NATO ministers have also repeatedly called
on both sides to refrain from any destabilizing measures. By now,
Milosevic is fully aware of the priority we place on the security of
the region and of Western capabilities to respond to any destabilizing
The fundamental problem for Montenegro, as for its neighbors,
remains the lack of democracy in Serbia. Because of its status as
sister republic to Serbia in the Federal Republic of Yugoslavia (FRY),
Montenegro is particularly vulnerable to pressure from Milosevic, who
is fundamentally hostile to the Djukanovic government and its reform
program. The Milosevic regime has routinely ignored or trampled on
Montenegro's rights under the Yugoslav constitution.
During this winter, Montenegro was subjected to additional
The temporary closure of the civilian airport in Tivat
and the civilian-military airport near Podgorica.
A build-up of Yugoslav Army presence at and
interference with newly-opened border crossing points.
The initiation of illegal television broadcasts of
Milosevic propaganda from Yugoslav Army installations in
An embargo slapped on by Belgrade to block trade with
its fellow Yugoslav republic.
We have worked closely with the Djukanovic government to help it
overcome these pressures. While tensions remain, and the embargo has
raised costs to Montenegro of basic goods and medicines--also depriving
Serbia of natural markets--the situation is calmer now than it was a
few weeks ago. Rather than falling into Milosevic's trap of
confrontation, the Montenegrin government is working with its Yugoslav
Army contacts to prevent security incidents from escalating. The
prudent approach taken by the Djukanovic government denies Milosevic
and his supporters any pretext for violence or intervention.
At the same time, we recognize that tensions could spike upward
again and do so quickly, given Milosevic's hostility to Podgorica.
Therefore, it is essential we maintain our support for the Djukanovic
government and continue to actively promote a democratic transformation
in Serbia. We firmly believe the establishment of a democratic
government in Belgrade would make it possible for Serbia and Montenegro
to establish a new, constructive relationship in which Montenegro could
be a genuine partner with Serbia in a democratic Yugoslavia.
The reform program of the Djukanovic government is already acting
as a model and a stimulus for democratization throughout Yugoslavia.
Today, Montenegro is moving down a road toward greater prosperity that
the people of Serbia could also travel, were their government
democratic and willing to cooperate with the International Community.
The Montenegrin government has worked actively with us and the EU in
our dialogue with the Serbian opposition on promoting democratization
throughout the FRY.
President Djukanovic has kept Montenegro on the path of peace and
reform. His government, a multi-ethnic coalition of three democratic
parties, has committed itself to building democracy and a market
economy. Montenegro has progressed, thanks in large part to the strong,
pragmatic leadership President Djukanovic has provided. His careful and
steady approach has enabled Montenegro to provide a more tolerant and
prosperous society, despite tremendous pressure from the Milosevic
regime to fall in line.
Recognizing the constructive approach the new Montenegro government
was taking, the U.S., and increasingly, the European Union, have
supported the Government of Montenegro politically and with economic
Western assistance serves four valuable purposes. First, it helps
to mitigate the destabilizing effects of Belgrade's economic sanctions
against Montenegro. Second, it allows Djukanovic to show that his
policies deliver concrete benefits to the people of Montenegro. Third,
it reduces pressure from pro-independence groups on Djukanovic to take
risky steps. Fourth, it concretely demonstrates to Milosevic our strong
interest in Montenegro and to the Serbian people that our differences
are with Milosevic and his policies, not with Serbs or Montenegrins.
The U.S. has become and continues to be the Djukanovic government's
leading supporter and most vocal advocate:
We exempted Montenegro from sanctions against the FRY--
including the flight ban, the oil ban, and the financial
sanctions--and persuaded the EU to follow suit.
We worked with our NATO allies to minimize the impact
on Montenegro of air strikes against FRY and Serbian forces to
avoid inadvertently weakening support for President Djukanovic
and his reform policies.
We demonstrated political support through high-level
contacts: President Clinton met twice with President
Djukanovic; Secretary Albright hosted President Djukanovic in
Washington last fall and met him in Sarajevo last month; and we
have remained in close daily contact with key Montenegrin
officials despite the inability to maintain a permanent
presence in Montenegro.
Following Montenegro's adoption of the Deutsche Mark as
a parallel currency, we sent a team of economic advisors to
assist in developing and implementing urgently needed reforms
of Montenegro's macrofinancial policies, budgeting processes,
tax system, banking sector, and payment systems. The EU is also
providing advisors in coordinated efforts.
Last month, we signed an OPIC investment incentive
agreement with Montenegro to help stimulate private sector
investment, which is essential to building a vibrant economy.
The agreement allows OPIC to offer political risk insurance and
financing to U.S. firms for projects in Montenegro. It also
allows OPIC-sponsored investment funds to invest in U.S. and
non-U.S. projects in Montenegro.
Furthermore, an essential element of our strategy has been to back
up our political support with concrete economic assistance. In fiscal
year 1999, we provided $26 million in SEED funds for programs and
budget support, $15 million in economic support funds (ESF), and a
substantial amount of humanitarian and food aid to help them cope with
the sudden influx of tens of thousands of Kosovar Albanians. In fiscal
year 2000, we are providing another $26 million in SEED for program and
budget support and $11 in ESF while continuing to provide considerable
humanitarian and food aid to alleviate the impact of Belgrade's
economic sanctions against Montenegro.
However, we expect that the amount of monetary assistance for
fiscal year 2000 will not be adequate to meet Montenegro's needs, which
have increased due to Belgrade's intensified economic sanctions against
Montenegro. Consequently, we have submitted to Congress a supplemental
request for an additional $34 million in SEED funding. We appreciate
the House's inclusion of this request in the supplemental bill passed
on March 30 and hope the Senate will also support it.
While U.S. leadership and resources have been and remain essential,
the U.S. alone cannot provide sufficient support for Montenegro, nor
should we do so. Europe too has a strong interest in the success of
Montenegro's reform efforts and an essential role to play. Thus, we
have been working intensively at senior levels to encourage the EU to
commit greater resources to Montenegro, and speed their delivery,
bearing in mind the importance of strengthening the Djukanovic
government at this particular moment. The response has been
encouraging. This year:
(1) The European Commission doubled EU assistance to Montenegro
for 2000 from 10 to 20 million Euros.
(2) The European Council tasked the European Investment Bank
(EIB) with developing a plan for financing projects in
(3) In Brussels on March 30, Stability Pact donors pledged
funds against a list of ``Quick Start'' infrastructure
projects, which included $15 million of projects in Montenegro.
We have submitted for congressional notification the intended
U.S. share of this effort, which will leverage far larger
(4) EU members are looking for ways to increase their bilateral
assistance to Montenegro. Germany has granted DM 40 million in
investment credits and the Netherlands has also offered
significant new assistance.
We will keep working with our European partners to get Montenegro
the assistance it urgently needs.
For the Montenegrin government, keeping the economy stable and
showing that relations with the West pay dividends are critical in the
run-up to the June 11 municipal elections in Podgorica and Herceg Novi.
About one quarter of Montenegro's electorate will be eligible to vote
in these elections, which are expected to gauge popular support for the
Djukanovic government's policies of democracy and economic reform.
Currently, the economy surpasses relations with Serbia as the issue of
greatest concern to voters.
Popular support for independence has grown considerably over the
last few years, but the Montenegrin people remain sharply divided over
the question. A substantial portion of the population, perhaps a third
or more, remains strongly opposed to independence. Given Milosevic's
support for Serb loyalists in Croatia, Bosnia, and Kosovo, we believe a
unilateral move toward independence by the Montenegrins would provoke
Belgrade to respond with force.
Absent Milosevic's threats, we would still be convinced that the
best future for Montenegro is to remain with Serbia in a democratic,
prosperous, and reformed Yugoslavia. Such a relationship would preserve
the traditional ties between the peoples of each republic and
facilitate their economic development. Clearly, a democratic Montenegro
can be a model and stimulus for democratization throughout the FRY.
In closing, let me thank the members of the committee for this
opportunity to discuss the situation in Montenegro and our policy
there. We appreciate the strong support of this committee and other
members of Congress both for Montenegro and for the Administration*s
efforts to help the government of Montenegro remain a model for
democratization in the FRY.
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Prepared Statement of Ilir Zherka, Executive Director, National
Albanian American Council Before the House International Relations
APRIL 11, 2000
Mr. Chairman, thank you for inviting me to join you today to
discuss the situation in Kosova and your bill, H.R. 4053, the ``United
States Southeastern Europe Democratization and Burdensharing Act of
As we all know, last year at this time Serb forces were on a
murderous rampage in Kosova. In their effort to rid the country of its
indigenous, Albanian population, Serbs committed horrific acts of
violence. In the village of Kline, 11 children, including a two-year
old, were shot at close range by Serb forces. In Gjakova, Valbona Vejca
together with her three children, including a 3-month old baby boy,
were murdered at a pool hall where they sought shelter. In Izbicaj,
nearly 50 elderly men were beaten by Serbs, their faces smashed in,
before being shot at close range. And throughout Kosova, young girls
were raped, some in front of their families, as an instrument of war.
At the end of this killing spree, nearly ten thousand were dead, a
million forced out of their homes, a whole nation traumatized. The war
in Kosova was the central part of Milosevic's final solution to the
Albanian question. Whatever history will say about the post-war
situation in Kosova, the fact is that the United States of America led
the military effort that put an end to the Serb campaign of murder,
rape, and brutality against the Albanians. For this, Albanians will be
forever grateful and indebted to this great nation, and all Americans
should be proud of our actions in Kosova.
We should also be proud and thankful that the United States broke
the chains of repression in Kosova. For the first time in history, the
people of Kosova are free--free to express themselves, free to realize
their individual potential, and, fairly soon, free to elect their own
leaders and decide their own fate.
But, while the international community was successful in war, it
has had a mixed record in peace. The international community has been
unable to tackle some of the fundamental problems in Kosova, such as
the inadequate supply of water and electricity, the division of
Mitrovica, and the lack of law enforcement.
Part of the solution to the problems that plague the international
mission in Kosova is for the United States to assert greater
leadership, not less.
The American people understand what we have accomplished in Kosova
and they support the need for continued American leadership. A poll
conducted last month by Penn, Schoen, and Berland, showed that a
majority of Americans supported the air campaign against Serbia. More
importantly, a full two-thirds of the American people say they support
the decision to put Kosova under NATO and U.N. control, and two-thirds
believe that the U.S. military should stay in Kosova to help the
transition to democracy, protect the people, and finish the job we
As a side note, the poll also revealed that nearly 80 percent of
Americans support the creation of a democratic, independent Kosova.
After the United States incurred the bulk of the costs of the
military campaign against Serbia, we support the idea that Europeans
ought to pay for the bulk of the costs of peacekeeping and institution
building in Kosova. But, at the same time, the United States must
maintain flexibility to make the strategic investments needed
throughout the region to ensure that stability and democracy firmly
take hold in the Balkans.
Unfortunately, the assistance cap in H.R. 4053 does not provide
enough flexibility. Instead, the bill would tie our aid to the levels
provided by the international community. Under this bill, if European
contributions dropped by 50 percent, we would be forced to do the same
even if we thought it very unwise. Also, the 15 percent cap would be
difficult to calculate and negatively effect our ability to deliver aid
to Kosova. Today, we are able to get aid much more quickly to Kosova
than the Europeans. Under the cap, however, the Administration would be
forced to constantly reevaluate its efforts, causing delays.
Additionally, the cap in H.R. 4053 would tie us to an arbitrary number,
15 percent, again limiting our flexibility in the region.
Beyond the problems presented by the funding cap, H.R. 4053 shields
Montenegro and Macedonia from potential funding cuts, but not Albania
Although assistance to Albania and Kosova is not necessarily
restricted in H.R. 4053, the language of the bill seems to suggest that
these two countries are less of a priority for the United States.
We firmly believe that helping to create a strong, stable, and
democratic Albania is essential to maintaining peace in the Balkans.
Moreover, we have yet to win the peace in Kosova. Congress should
consider doing more, not less to help establish long lasting
institutions there. After all, we are spending billions of dollars to
keep our military in Kosova. We should also be willingly to leverage
that money with adequate sums to rebuild the economy and establish
The people of both Albania and Kosova are staunchly pro-American.
In fact, Albanians throughout the world believe that they have a
special relationship with the United States. That affinity began when
Woodrow Wilson helped protect Albania's independence and continues
through today with the U.S.-led NATO air campaign against Serbia. We
should try to cultivate that special relationship and work to ensure
that a spirit of democracy and respect for human rights prevails in
Albania and Kosova.
We also believe that, as we provide aid to Montenegro and
Macedonia, we should continue to press those countries to work harder
to provide equal rights and equal opportunities to their Albanian
With the emergence of the Stability Pact, the United States and the
international community is taking a regional approach to the Balkans.
Congress should continue that approach by removing in H.R. 4053 the cap
on our assistance and by adopting funding principles and goals for the
Again, I thank you for inviting me to address this Committee. I
look forward to answering any questions you may have.
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