[Senate Hearing 108-]
[From the U.S. Government Publishing Office]



 
DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED 
              AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2005

                              ----------                              


                        THURSDAY, MARCH 25, 2004

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:01 a.m., in room S-146, the 
Capitol, Hon. Judd Gregg (chairman) presiding.
    Present: Senators Gregg, Stevens, Domenici, Hollings, Kohl, 
and Byrd.

                        DEPARTMENT OF THE STATE

                        Office of the Secretary

STATEMENT OF COLIN L. POWELL, SECRETARY OF STATE
    Senator Gregg. First off, we want to thank the Secretary 
for coming before the subcommittee today. He certainly had a 
hectic schedule, just back from Spain and we very much 
appreciate your time, Mr. Secretary, in light of all the 
responsibilities you have and especially in light of your 
extraordinary travel schedule. You have got to be a little 
tired and we appreciate that, but we do thank you for taking 
time to come in.
    This subcommittee has a lot of involvement obviously in the 
State Department. We have tried and we are going to continue to 
try to be supportive of the State Department. There are a lot 
of issues I know we want to get to so I am going to reserve an 
opening statement so we can get your statement and then move to 
questions. But I will obviously yield to Senator Hollings for 
any statement he wishes to make.
    Senator Hollings. I think that is the best approach and I 
yield also.
    Senator Gregg. Then we will start right out unless, Senator 
Byrd, did you want to say anything?
    Senator Byrd. I will follow the same standard here.
    Secretary Powell. I am almost reluctant to say anything 
after that.
    Senator Gregg. We came to hear you.
    Secretary Powell. Mr. Chairman, I thank you and Senator 
Hollings, and Senator Byrd. I am just back from Madrid. I flew 
overnight the night before last, attended a very moving 
memorial service for the Spaniards who were killed in the 
terrible tragedy of 
3/11, had meetings with outgoing Prime Minister Aznar and with 
the new incoming Prime Minister, Mr. Zapatero. Although we have 
some disagreements with Mr. Zapatero on Iraq and we will work 
through that, one thing there is no disagreement on is that the 
United States and Spain will be united in this fight against 
terrorism. Spain has been fighting terrorism long before 3/11 
or 9/11. They have had to face the ETA terrorists, so I am 
confident that we will find ways to cooperate in this battle 
against terrorism.
    It is always a pleasure to appear before this subcommittee. 
This is not like the old army story like we are always glad to 
see the inspector general. But in this case really it is true 
because, Mr. Chairman, you and the members of the committee 
have been supportive of what we have been trying to do in the 
Department for the last 3 years. I remember during my 
transition pre-confirmation period when we talked about some of 
the problems that you saw in the Department with respect to 
management, with respect to construction of our Embassies and 
things of that nature. I have tried in the 3 years I have been 
Secretary to be responsive to your concerns.
    Before I go further, let me take this opportunity to 
especially acknowledge Senator Hollings, since this may well be 
the last chance we will have to see each other in this 
particular capacity, to thank you for your support, your 
prodding, and your friendship for so many years, Dr. Hollings.
    Senator Hollings. Thank you. He and I got honorary degrees 
at Tuskegee together. That is Dr. Powell.
    Senator Gregg. Very appropriate.
    Senator Hollings. We had Cappy James and the Air Force down 
there. The Tuskegee flyers trained in South Carolina.
    Secretary Powell. Tuskegee Airmen.
    Mr. Chairman and members of the subcommittee, I thank you 
for the opportunity to testify on the State Department's 
portion of the President's budget request for fiscal year 2005. 
I have a longer statement I would submit for the record, Mr. 
Chairman, with your permission.
    Senator Gregg. Absolutely.
    Secretary Powell. While I know that this subcommittee's 
specific oversight deals with that part of the request that 
involves State Department operations, I want to give you as 
well an overview of what those operations will support in the 
way of foreign policy. So let me give you the overall budget 
picture first and then touch on foreign operations. Finally I 
will deal with the top priorities of our specific funding 
request before you.
    The 2005 international affairs budget for the Department of 
State, USAID, and other foreign affairs agencies totals $31.5 
billion broken down as follows, foreign operations $21.3 
billion, State operations of principal interest to this 
subcommittee, $8.4 billion, Public Law 480, food aid, $1.2 
billion, international broadcasting $569 million and the 
Institute of Peace $22 million.
    President Bush's top foreign policy priority reflected in 
this budget is winning the war on terrorism. Winning on the 
battlefield with our superb military forces is just one step in 
this effort. To eradicate terrorism altogether, the United 
States must help create stable governments and nations that 
once supported terrorism like Iraq and Afghanistan. I visited 
both of those places last week and I hope in the course of our 
questioning I can say a word about what I saw.
    We must go after terrorist support mechanisms as well as 
the terrorists themselves, and we must help alleviate 
conditions in the world that enable terrorists to bring in new 
recruits. To these ends, the 2005 budget will support our 
foreign affairs agencies as they focus on the reconstruction of 
Iraq and Afghanistan. We will continue to support our coalition 
partners to further our counterterrorism, law enforcement and 
intelligence cooperation, and we will continue to expand 
democracy and help generate prosperity, especially in the 
Middle East.
    Forty-eight percent of the President's foreign affairs 
budget supports the war on terrorism. For example, $1.2 billion 
supports Afghanistan reconstruction, security and democracy 
building in 2005. More than $5.7 billion provides assistance to 
countries around the world that have joined us in the war on 
terrorism. And $3.5 billion indirectly supports our war on 
terrorism by strengthening our ability to respond to emergency 
and conflict situations. And finally, $190 million is aimed at 
expanding democracy in the greater Middle East; crucial if we 
are to attack successfully the motivation to terrorism.
    Two of the greatest challenges facing us today are the 
reconstruction of Iraq and the reconstruction of Afghanistan. 
With respect to Iraq, the Coalition Provisional Authority and 
the Iraqi Governing Council, in my judgment have made great 
strides in the areas of security, economic stability and 
growth, and democratization. Iraqi security forces are now in 
the forefront of our security efforts, and you can see that 
they are taking casualties as they go about securing their 
country for their people.
    In addition, the CPA has established a new Iraqi army, 
issued a new currency, and refurbished schools, hospitals, the 
sanitary infrastructure, working on the oil infrastructure. So 
much good work is going on with respect to reconstruction that 
it is unfortunate that the continuing security situation we 
face tends to drown out or put a black cloud over the good work 
that is being done.
    But much work remains to be done. Working with our 
coalition partners we will continue to train Iraqi police, 
border guards, the civil defense corps and the army in order to 
ensure the country's security. At the same time, as I noted, we 
are going to work on these critical infrastructure needs.
    But there is progress taking place. The definitive example 
of that progress, on March 8 the Iraqi Governing Council 
adopted a transitional administrative law, which is essentially 
an interim constitution for Iraq. This was a remarkable 
milestone. You will recall that Friday when we thought it was 
going to be signed and suddenly there was a signing table, 25 
pens and nobody showed up because there was a problem over it. 
And over the weekend that problem was solved, through argument, 
through debate, through democratic process; something that they 
had never had experience with before. But it happened.
    This administrative law recognizes freedom of religion and 
puts the judiciary on an independent track. It puts the 
military firmly under civilian control. It gives women the 
access to civil society and the political life of the country. 
It is a huge step for the Iraqi people and we should not sell 
short what an accomplishment this is.
    The U.N. Secretary General's special advisor Mr. Brahimi, 
Ambassador Brahimi, has been invited back to Iraq by the 
Governing Council in order to work with the Council and the CPA 
to put in place a revised interim government that will take 
sovereignty from the CPA on the first of July. In my visit with 
Ambassador Bremer last week we talked about the transition from 
the CPA to a very large State Department chief of mission 
operation, a very large Embassy. Already I have four 
Ambassadors over there working with Ambassador Bremer and 
trying to make this transition as smooth as possible.
    Mr. Chairman, Afghanistan is another high priority and I 
was there last week. We are committed to helping build a stable 
and democratic Afghanistan. They had a very fine constitutional 
process at the end of last year where they adopted a 
constitution for this country that just a few years ago was a 
basket case, a despotic basket case. Now it has a constitution, 
and as you saw in press reporting this morning, President 
Karzai has scheduled elections for early September for both a 
new president as well as for a legislature.
    Still there are problems along the Afghan-Pakistan border, 
still problems out in Herat but as I drove through Kabul last 
week you could see buildings going up, you could see women who 
felt secure enough in their life now to remove the burkha; 
about 50 percent covered and 50 percent not covered. I visited 
a registration place in a school where women were registering 
to vote, filling out the forms, stepping forward, getting their 
registration card and proudly showing it to me that they are 
now part of the life of the new Afghanistan. So we have 
accomplished a lot in Afghanistan, but here too there is much 
more work to do.
    I was watching some footage yesterday that we are going to 
use at the Donors' Conference next week that shows some of our 
reconstruction efforts in Afghanistan, and one shot on this 
video is of the new blacktop road, complete with markers that 
goes from Kabul to Kandahar. We will continue that road around 
to Herat, in working with our Saudi partners, our Japanese 
partners, and provide a beltway for this country. But it is 
more than just a beltway. It is a road that will link the 
country together, give the central government the ability to 
control the regions a little more effectively. It will 
contribute to the economic life of the country. But more 
importantly, it will also link Afghanistan with the other 
nations of central Asia.
    Pakistan is looking at this and is starting to readjust its 
infrastructure, its port activities, to take into account that 
there will be peace in this part of the world as we go into the 
years ahead. The old silk route of 2,000 years ago is going to 
be recreated, except this time it will be with hard roads and 
ports, with an information infrastructure, and hope eventually 
with pipelines that criss-cross this area and move oil and 
natural gas from central Asia to the east and not just to the 
west.
    So the opportunities here are enormous. We have to deal 
with security. We have got to get rid of those remaining 
Taliban and al Qaeda elements. But we should not sell short not 
only our accomplishments of the last couple of years, but the 
potential that lies ahead for a region, the Caucuses, central 
Asia, south Asia all being linked in a new hub of 
transportation and trade as long as we can keep the peace and 
security, and that is what we are committed to.
    The 2005 budget, as I said, includes $1.2 billion in 
assistance for Afghanistan, which is on top of the $2.2 billion 
in 2004; $1.2 billion already out there and I will make a 
public announcement of the other $1 billion at the Afghan 
Donors' Conference in Berlin next week.
    As important as waging the war on terrorism is to America, 
we have other priorities in our foreign affairs budget; HIV/
AIDS, 8,000 people a day are dying of this terrible disease. It 
is extremely difficult to make economic improvements in a 
country if you are not working on these kinds of problems, and 
the President is with his HIV/AIDS program. Over the past year 
we have worked with Congress to pass legislation laying the 
groundwork for this fight.
    In marking our progress, earlier this month, Ambassador 
Tobias who heads the program for us, Secretary Thompson, 
Administrator Natsios of AID, and I rolled out the strategy for 
the HIV/AIDS plan and announced the first dispensation of 
dollars for these programs; $350 million in contracts will roll 
out to some of the NGOs and PDOs. As a crucial next step, the 
2005 budget request expands on the President's plan with $2.8 
billion to combat AIDS in the most affected countries in Africa 
and the Caribbean. Together, the Department of State, USAID, 
and the Department of Health and Human Services, will use the 
significantly increased resources quickly and effectively to 
achieve the President's ambitious goals in the fight against 
global AIDS.
    Just as a digression, we are also seeing polio back in 
certain parts of Africa, and this has to be part of our health 
efforts as well, coming out of the Department of State and 
coming out of USAID.
    Of course, there are other dimensions of economic success 
in Africa, and the program that we are pushing forward and you 
know a great deal about, the Millennium Challenge Corporation. 
The corporation has now been formed. I am the chairman of the 
board. We have sent a nominee to the Senate to be the CEO of 
this board, Mr. Paul Applegarth. The Millennium Challenge 
Corporation will fund infrastructure and other similar 
proposals to those countries that are committed to democracy, 
the free enterprise system, individual rights of men and women, 
the rule of law, and the end of corruption. We have other 
foreign assistance accounts, but the millennium challenge 
account will invest in those countries that are moving in the 
right direction.
    Let me turn now, gentlemen, to the part of the budget 
request that is of particular interest to you, State 
operations. As you recall, we created the diplomatic readiness 
initiative in 2002 to address staffing and training gaps that 
had become very averse to the conduct of America's diplomacy. 
The goal of the diplomatic readiness initiative was to hire 
1,158 new foreign and civil service employees over a 3-year 
period. These new hires, the first over-attrition hires in 
years, would allow us to provide training opportunities for our 
people and greatly improve the Department's ability to respond 
to crises, to ramp up when we needed to, such as we have had to 
do in Iraq and Afghanistan.
    I cannot say strong enough what a dynamic impact this 
program has had on the Department. The Department sees that its 
leadership, but more importantly its leadership in Congress 
cares about the Department. Your are willing to invest in the 
readiness of our people, bring in new people. I got a report 
from the Under Secretary for Management yesterday that close to 
30,000 people have already signed up for the next giving of the 
foreign service exam. We have been averaging 50,000 people a 
year for the last 2 years wanting to become part of this new 
team, which I think has been energized by the support we have 
been receiving from the Congress and for that I am very 
appreciative.
    We also created new mandatory leadership and management 
training. It is great for our people to learn how to speak 
different languages and learn all about foreign policy and to 
be experts and write papers. But they also have to be able to 
lead and manage people in these very, very complicated missions 
that we have around the world. So beginning from the first day 
that you come into the foreign service and go to the junior 
officers' course, the entry level course, you will receive 
leadership and management training and will continue throughout 
your whole career. If this bears a marked similarity to the way 
they do it in the military, it is not coincidental or 
accidental. We are essentially adopting what I learned in the 
military and bringing it over to the foreign service and to the 
civil service. We are giving leadership training to our senior 
civil service employees as well.
    The other thing I am very proud of, of course, is the 
information technology investment that we have made with your 
support. It has paid off. Every desk in the State Department, 
everywhere in the State Department now has an Internet capable 
computer sitting there. We did it in-house for the most part.
    Senator Gregg. And it worked.
    Secretary Powell. It works.
    Senator Gregg. Not like some of our other agencies.
    Secretary Powell. Frankly, we looked outside and then we 
decided, we can do this ourselves. You may recall, gentlemen, 
that you had a real problem with the way we were running our 
Diplomatic Telecommunications Service for years, and Mr. Tenet 
and I sat down and said, let us figure out who can deliver the 
capacity best, and we solved that. Mr. Tenet provides the 
capacity, and the person working for Mr. Tenet to do that also 
works for me. So we have a good deal and it is working. Our 
capacity has increased, the cost has gone down considerably, 
and everybody is happy. Therefore, I can put broadband 
capability in every mission around the world.
    Just a little war story on how this works, as you know, 
part of our effort to reach out to the Congress was to create a 
State Department office up here to respond to Members of 
Congress. I was able to get an office in the House. I do not 
want to point any fingers but I have not yet been able to get a 
room on the Senate side. Be that as it may, 30 percent of the 
work of my House office comes from the Senate side. I was in 
there the other day waiting for a hearing to begin and just 
talking to my folks who work there. There are three people in 
there. I said, what kind of requests are you getting? 
Constituent requests, visa problems, all this, hundreds and 
hundreds--the volume is going up 300 percent in the last year.
    I said, give me an example of how you solve a problem that 
a Member of Congress brings to you. They said visa problems are 
common ones. Somebody will come in and say, why didn't a friend 
of mine get a visa when they applied in New Delhi or Mumbai or 
somewhere like that? I said, how do you handle that? Do you go 
to the Department and ask Consular Affairs? They said, no, we 
go right to the Embassy. How do you go right to the Embassy? 
Information technology. I said, show me. Sandra Shipshock, the 
officer who was working in the office, went to her computer and 
in 10 seconds she had not only gotten to the Embassy, she got 
into the Embassy's consular section data base. And in less than 
20 seconds she had pulled up the specific visa application with 
a picture of the individual who had applied for the visa and 
why the visa was denied.
    This data base is all secure. We have firewalls. Not 
anybody can just go in like you are going to Google. But the 
fact of the matter is that the kind of information technology 
system we have put in place allows us to provide that kind of 
service, not only to Members of Congress but to the public.
    In that same vein, now that we have this information 
technology system coming along, we have to change the way we do 
business. We cannot just be an information system without a 
change in the process and the thinking of the Department. That 
is what our SMART Project is all about that we are asking for 
your support. We want to get rid of cables. Get rid of the way 
we used to do it in World War II. My staff gave me a chart the 
other day and it was recognizing that the last Wang computer 
left the Department 3 months ago. I am pleased to hear that. It 
should have left 10 years ago. But we are now in the 
information age and I ask for your support for our SMART 
program so that we can change the thinking in the Department as 
well as just put new computers and software into place.
    Mr. Chairman, the Department has the responsibility to 
protect more than 60,000 Government employees who work in 
Embassies and consulates abroad. I know how interested you have 
been in this program over the years. You know that we have 
reorganized our efforts. We reorganized the Office of Overseas 
Building Operations to manage the effort with speed, efficiency 
and effectiveness under the leadership of General Chuck 
Williams. At the beginning of this administration we were 
building one new secure Embassy a year. Today we are building 
10 new secure Embassy compounds a year. Many of these compounds 
also have separate facilities for USAID. They are also 
deserving of protection.
    Moreover, we have reduced the Embassy's program cost by 20 
percent using modern management techniques, using common 
components among our Embassy projects. Within the budget we are 
watching a plan to replace the remaining 150 Embassies and 
consulates that do not meet current security standards over the 
next 14 years for a total cost of $17 billion.
    To fund construction of these compounds we will begin the 
capital security cost-sharing program in 2005. Not everybody is 
crazy with this cost-sharing program, but it has to be done and 
I am working with my Cabinet colleagues on it. Each agency with 
staff overseas will contribute annually toward construction of 
new facilities based on the number of positions that that 
Department or agency wants in the type of space that we are 
preparing for them. We arrived at the cost shares in the 2005 
President's budget request in consultation with each agency and 
Department.
    Along with securing our facilities we have focused on 
assuring that overseas staffing is deployed where they are 
mostly needed to serve U.S. interest. As agencies assess the 
real cost of maintaining staff overseas I hope they will adjust 
their overseas staffing levels to the minimum absolutely 
necessary since they will now have to contribute to the cost of 
maintaining them overseas.
    Our budget request also, I might say, touches on physical 
security improvements to those soft targets in our missions, 
schools, recreational facilities. You know that we have an 
extensive plan to go after the soft targeting possibility, 
providing physical security improvements to overseas schools 
attended by dependents of Government employees and other 
citizens. Our 2005 request includes $27 million for this 
effort, including $10 million for the schools, $5 million to 
improve security at employee association facilities, and $12 
million for residential security upgrades. Protection of 
Americans living and working overseas is one of our highest 
priorities.
    We also appreciate the ongoing support from this committee 
for our peacekeeping budget. U.N. peacekeeping operations in 
troubled and fragile regions have been and remain critical to 
ensuring that such places are given stability and the time they 
need to work on long-term solutions to their underlying 
conflicts and problems. UNAMSIL in Sierra Leone and UNMISET in 
East Timor have been effective in helping new governments to 
establish themselves. We are also supporting peacekeeping 
missions in Liberia and Ivory Coast, and I would just ask for 
your continued support.
    I am going to have difficulty meeting all of the 
peacekeeping financial responsibilities that I expect to arise 
over the next year, but the 2005 submission is certainly a good 
start on meeting those responsibilities. We will just have to 
see how the cost flows out in the course of the fiscal year.

                           PREPARED STATEMENT

    Mr. Chairman, Senator Hollings, Senator Byrd, thank you for 
this opportunity to present our case. I thank you for your past 
support and I will thank you in advance for your future 
support.
    [The statement follows:]

                 Prepared Statement of Colin L. Powell

    Mr. Chairman, members of the subcommittee, thank you for the 
opportunity to testify on the State Department's portion of the 
President's Budget Request for fiscal year 2005. While I know that your 
specific oversight is of the State Department operations portion of 
that budget request, I want to give you as well an overview of what 
those operations will support in the way of foreign policy. So let me 
give you the overall budget picture first and, then, touch on foreign 
operations. Finally, I will deal with highlights of our funding request 
for State Department operations.
    The President's fiscal year 2005 International Affairs Budget for 
the Department of State, USAID, and other foreign affairs agencies 
totals $31.5 billion, broken down as follows: Foreign Operations--$21.3 
billion; State Operations--$8.4 billion; Public Law 480 Food Aid--$1.2 
billion; International Broadcasting--$569 million; and U.S. Institute 
of Peace--$22 million.
    Mr. Chairman, the President's top foreign policy priority is 
winning the war on terrorism. Forty-eight percent of the President's 
budget for foreign affairs directly supports that priority by assisting 
our allies and strengthening the United States' diplomatic posture. For 
example: $1.2 billion supports Afghanistan reconstruction, security and 
democracy building, and more than $5.7 billion is provided for 
assistance to countries around the world that have joined us in the war 
on terrorism, and $3.5 billion indirectly supports the war on terrorism 
by strengthening our ability to respond to emergencies and conflict 
situations. Moreover, $190 million is aimed at expanding democracy in 
the Greater Middle East, in part to help alleviate the conditions that 
spawn terrorists.
    In addition, $5.3 billion is targeted for the President's bold 
initiatives to fight HIV/AIDS and create the Millennium Challenge 
Corporation, both of which will support stability and improve the 
quality of life for the world's poor--and, again, help to relieve 
conditions that cause resentment and despair.
    Mr. Chairman, let me elaborate a bit on how some of these dollars 
will be spent.

                      WINNING THE WAR ON TERRORISM

    Winning on the battlefield with our superb military forces is just 
one step in defeating terrorism. To eradicate terrorism, the United 
States must help create stable governments in nations that once 
supported terrorism, go after terrorist support mechanisms as well as 
the terrorists themselves, and help alleviate conditions in the world 
that enable terrorists to bring in new recruits. To this end, in fiscal 
year 2005 the State Department and USAID will continue to focus on the 
reconstruction of Iraq and Afghanistan, support our coalition partners 
to further our counterterrorism, law enforcement and intelligence 
cooperation, and expand democracy and help generate prosperity, 
especially in the Middle East.

Building a Free and Prosperous Iraq
    The United States faces one of its greatest challenges in 
developing a secure, free and prosperous Iraq. The USG is contributing 
almost $21 billion in reconstruction funds and humanitarian assistance 
to this effort. The World Bank and the International Monetary Fund are 
expected to provide another $4 to 8 billion in loans and grants over 
the next three years. These resources, coupled with the growing 
assistance of international donors, will ease the transition from 
dictatorship to democracy and lay the foundation for a market economy 
and a political system that respects human rights and represents the 
voices of all Iraqis.
    The Coalition Provisional Authority (CPA) and the Iraqi Governing 
Council (IGC) have made great strides in the areas of security, 
economic stability and growth, and democratization. Iraqi security 
forces now comprise more than half of the total security forces in the 
country. In addition, the CPA has established a New Iraqi Army, issued 
a new currency and refurbished and equipped schools and hospitals. And, 
as you know, the CPA is taking steps to help the Iraqis form a fully 
sovereign government this summer.
    Much work remains to be done. Working with our coalition partners, 
we will continue to train Iraqi police, border guards, the Civil 
Defense Corps and the Army in order to ensure the country's security as 
we effect a timely transition to democratic self-governance and a 
stable future.
    At the same time, we are helping provide critical infrastructure, 
including clean water, electricity and reliable telecommunications 
systems which are essential for meeting basic human needs as well as 
for economic and democratic development. Thousands of brave Americans, 
in uniform and in mufti, are in Iraq now working tirelessly to help 
Iraqis succeed in this historic effort. Alongside their military 
colleagues, USAID, State Department and the Departments of the Treasury 
and Commerce are working to implement infrastructure, democracy 
building, education, health and economic development programs. These 
efforts are producing real progress in Iraq.
    As a definitive example of this progress, on March 8, the IGC 
formally signed the Transitional Administrative Law (TAL)--essentially 
an interim constitution for Iraq. This was a remarkable milestone. The 
TAL recognizes freedom of religion and expression, the right to 
assemble and to organize political parties, and other fundamentally 
democratic principles, as well as prohibiting discrimination based on 
gender, nationality or religion. This is a huge step for the people of 
Iraq and for the region--a step toward constitutional democracy. It is 
a step that just a year ago, Iraqis would not have imagined possible.
    The U.N. Secretary General's Special Advisor, Lakhdar Brahimi, was 
invited back to Iraq by the IGC last week. He will help the Iraqis to 
determine what sort of transitional Iraqi government will be developed 
and to prepare for elections at the end of this year or early in the 
next. Creating a democratic government in Iraq will be an enormous 
challenge. But Ambassador Bremer, working with the Iraq Governing 
Council and with the United Nations and our coalition partners, is 
committed to success. And when the CPA, funded and directed by the 
Department of Defense, goes out of business on June 30 and the State 
Department assumes the lead role in representing and managing U.S. 
interests in Iraq, we will carry on that commitment. We are already 
thoroughly involved. I was just in Baghdad last week meeting with 
Ambassador Bremer, members of the IGC, and talking to some of our 
troops. I know how thoroughly involved we are. And we will all succeed.

Winning the Peace in Afghanistan
    Mr. Chairman, Afghanistan is another high priority for this 
Administration. The United States is committed to helping build a 
stable and democratic Afghanistan that is free from terror and no 
longer harbors threats to our security. After we and our coalition 
partners defeated the Taliban government, we faced the daunting task of 
helping the Afghan people rebuild their country. We have demonstrated 
our commitment to this effort by providing over $3.7 billion in 
economic and security assistance to Afghanistan since 2001.
    Through our assistance and the assistance of the international 
community, the government of Afghanistan is successfully navigating the 
transition that began in October 2001. Afghanistan adopted a 
constitution earlier this year and is preparing for democratic national 
elections this summer. With technical assistance from the United 
States, Afghanistan successfully introduced a new stable currency in 
October 2002 and is working to improve revenue collection in the 
provinces. The lives of women and girls are improving as women pursue 
economic and political opportunities and girls return to school. Since 
2001, the United States has rehabilitated 205 schools and 140 health 
clinics and trained fifteen battalions of the Afghan National Army 
(ANA). Also, President Bush's commitment to de-mine and repave the 
entire stretch of the Kabul-Kandahar highway was fulfilled. The road 
had not been functional for over 20 years. What was once a 30-hour 
journey can now be accomplished in 5 or 6 hours.
    While the Afghanistan of today is very different from the 
Afghanistan of September 2001, there is still much left to accomplish. 
In the near-term, the United States will assist the government of 
Afghanistan in its preparations for elections this summer to ensure 
that they are free and fair. To demonstrate tangible benefits to the 
Afghan people, we will continue to implement assistance on an 
accelerated basis. The fiscal year 2005 Budget contains $1.2 billion in 
assistance for Afghanistan that will be focused on education, health, 
infrastructure, and assistance to the ANA, including drawdown authority 
and Department of Defense ``train and equip''. For example, U.S. 
assistance efforts will concentrate on rehabilitation and construction 
of an additional 275 schools and 150 health clinics by June 2004, and 
complete equipping of the fifteen army battalions. The United States 
will also extend the Kabul-Kandahar road to Herat so that people and 
commerce will be linked East and West across Afghanistan with a ground 
transportation link between three of the largest cities.
    Last week, when I was in Kabul to meet with President Karzai and 
his team, I had the chance to visit a voter registration site. I saw 
how far Afghanistan has progressed, in only two years, along the path 
to constitutional democracy. I saw also clear evidence of the Afghan 
people's commitment to continue on that path despite the many 
challenges ahead. I met 9 or 10 women at the site and they knew what 
was at stake in their country. They were eager for the free and fair 
elections called for in the Bonn Agreement and I assured them that 
America was solidly behind them. I told them that as long as they are 
committed to building a new, democratic Afghanistan, we will stand 
shoulder to shoulder with them.

Support for Our Coalition Partners
    As part of the war on terrorism, President Bush established a clear 
policy to work with other nations to meet the challenges of defeating 
terror networks with global reach. This commitment extends to the 
front-line states that have joined us in the war on terrorism and to 
those nations that are key to successful transitions to democracy in 
Iraq and Afghanistan.
    Our assistance enables countries cooperating closely with the 
United States to prevent future attacks, improve counter-terrorism 
capabilities and tighten border controls. As I indicated earlier, the 
fiscal year 2005 Budget for International Affairs provides more than 
$5.7 billion for assistance to countries around the world that have 
joined us in the war on terrorism, including Turkey, Jordan, 
Afghanistan, Pakistan, Indonesia and the Philippines.
    U.S. assistance has also resulted in unparalleled law enforcement 
and intelligence cooperation that has destroyed terrorist cells, 
disrupted terrorist operations and prevented attacks. There are many 
counterterrorism successes in cooperating countries and international 
organizations. For example:
  --Pakistan has apprehended more than 500 al Qaeda terrorists and 
        members of the Taliban through the leadership of President 
        Musharraf, stronger border security measures and law 
        enforcement cooperation throughout the country. I talked with 
        President Musharraf when I was in Islamabad last week. As you 
        know, his military forces were over the weekend hotly engaged 
        with Taliban and al Qaida fighters in the border areas. More of 
        the terrorists were being killed or captured. Fighting will 
        likely continue.
  --Jordan continues its strong counterterrorism efforts, including 
        arresting two individuals with links to al Qaeda who admitted 
        responsibility for the October 2002 murder of USAID Foreign 
        Service officer Lawrence Foley in Amman.
  --The North Atlantic Treaty Organization has endorsed an ambitious 
        transformation agenda designed to enhance its capabilities by 
        increasing deployment speed and agility to address new threats 
        of terrorism.
  --Colombia has developed a democratic security strategy as a 
        blueprint for waging a unified, aggressive counterterror-
        counternarcotics campaign against designated foreign terrorist 
        organizations and other illegal, armed groups.
    The United States and its Southeast Asian allies and friends have 
made significant advances against the regional terrorist organization 
Jemaah Islamiyah which was responsible for the Bali attack in 2002 that 
killed more than 200 people. In early August 2003, an Indonesian court 
convicted and sentenced to death a key figure in that bombing.
    Since September 11, 2001, 173 countries have issued orders to 
freeze the assets of terrorists. As a result, terror networks have lost 
access to nearly $200 million in more than 1,400 terrorist-related 
accounts around the world. The World Bank, International Monetary Fund 
and other multilateral development banks have also played an important 
role in this fight by strengthening international defenses against 
terrorist finance.
    While progress has been made attacking terrorist organizations both 
globally and regionally, much work remains to be done. The fiscal year 
2005 President's Budget strengthens our financial commitment to our 
coalition partners to wage the global war on terror. Highlights of the 
President's request include $700 million for Pakistan to help advance 
security and economic opportunity for Pakistan's citizens, including a 
multi-year educational support program; $461 million for Jordan to 
increase economic opportunities for Jordanian communities and 
strengthen Jordan's ability to secure its borders; and $577 million for 
Colombia to support President Uribe's unified campaign against drugs 
and terrorism.
    In September 2003, at the United Nations, President Bush said: 
``All governments that support terror are complicit in a war against 
civilization. No government should ignore the threat of terror, because 
to look the other way gives terrorists the chance to regroup and 
recruit and prepare. And all nations that fight terror, as if the lives 
of their own people depend on it, will earn the favorable judgment of 
history.'' We are helping countries to that judgment.
    Mr. Chairman, one of the aspects of the War on Terrorism that gives 
us a particular sense of urgency is proliferation of weapons of mass 
destruction. These terrible weapons are becoming easier to acquire, 
build, hide, and transport.
    On February 11, President Bush spoke at the National Defense 
University (NDU) and outlined the Administration's approach to this 
growing danger. The President described how we have worked for years to 
uncover one particular nefarious network--that of A.Q. Khan.
    Men and women of our own and other intelligence services have done 
superb and often very dangerous work to disclose these operations to 
the light of day. Now, we and our friends and allies are working around 
the clock to get all the details of this network and to shut it down, 
permanently.
    We know that this network fed nuclear technology to Libya, Iran, 
and North Korea.
    At NDU, President Bush proposed seven measures to strengthen the 
world's efforts to prevent the spread of WMD:
  --Expand the Proliferation Security Initiative (PSI) to address more 
        than shipments and transfers; even to take direct action 
        against proliferation networks.
  --Call on all nations to strengthen the laws and international 
        controls that govern proliferation, including passing the UNSCR 
        requiring all states to criminalize proliferation, enact strict 
        export controls, and secure sensitive materials.
  --Expand our efforts to keep Cold War weapons and other dangerous 
        materials out of the hands of terrorists--efforts such as those 
        accomplished under Nunn-Lugar.
  --Close the loophole in the Nuclear Nonproliferation Treaty that 
        allows states such as Iran to produce nuclear material that can 
        be used to build bombs under the cover of civilian nuclear 
        programs.
  --Univeralize the IAEA Additional Protocol.
  --Create a special committee on the IAEA Board of Governors to focus 
        on safeguards and verification.
  --And, finally, disallow countries under investigation for violating 
        nuclear nonproliferation treaties from serving on the IAEA 
        Board of Governors.
    As the President said at NDU, the nexus of terrorists and WMD is a 
new and unique threat. It comes not with ships and fighters and tanks 
and divisions, but clandestinely, in the dark of the night. But the 
consequences are devastating. No President can afford to ignore such a 
threat. And President Bush will not ignore it.

Expansion of Democracy in the Middle East
    We believe that expanding democracy in the Middle East is critical 
to eradicating international terrorism. But in many nations of the 
Middle East, democracy is at best an unwelcome guest and at worst a 
total stranger. The United States continues to increase its diplomatic 
and assistance activities in the Middle East to promote democratic 
voices--focusing particularly on women--in the political process, 
support increased accountability in government, assist local efforts to 
strengthen respect for the rule of law, assist independent media, and 
invest in the next generation of leaders.
    As the President emphasized in his speech last November at the 
National Endowment for Democracy (NED), reform in the Middle East is of 
vital importance to the future of peace and stability in that region as 
well as to the national security of the United States. As long as 
freedom and democracy do not flourish in the Middle East, resentment 
and despair will continue to grow--and the region will serve as an 
exporter of violence and terror to free nations. For the United States, 
promoting democracy and freedom in the Middle East is a difficult, yet 
essential calling.
    There are promising developments upon which to build. The 
government of Jordan, for example, is committed to accelerating reform. 
Results include free and fair elections, three women holding Cabinet 
Minister positions for the first time in Jordan's history, and major 
investments in education. Positive developments also can be found in 
Morocco, which held parliamentary elections last year that were 
acclaimed as free, fair and transparent.
    In April 2003, the Administration launched the Middle East 
Partnership Initiative (MEPI), an intensive inter-agency effort to 
support political and education reform and economic development in the 
region. The President continues his commitment by providing $150 
million in fiscal year 2005 for these efforts.
    To enhance this USG effort with a key NGO, the President has 
doubled the NED budget to $80 million specifically to create a Greater 
Middle East Leadership and Democracy Initiative. NED is a leader in 
efforts to strengthen democracy and tolerance around the world through 
its work with civil society. We want that work to flourish.
    As President Bush said in his November speech at NED: ``The United 
States has adopted a new policy, a forward strategy of freedom in the 
Middle East. This strategy requires the same persistence and energy and 
idealism we have shown before. And it will yield the same results. As 
in Europe, as in Asia, as in every region of the world, the advance of 
freedom leads to peace.''

Public Diplomacy in the Middle East
    And the advance of freedom is aided decisively by the words of 
freedom.
    Democracy flourishes with freedom of information and exposure to 
diverse ideas. The President's fiscal year 2005 Budget promotes 
expansion of democracy in the Middle East by providing public access to 
information through exchange programs and the Middle East Television 
Network.
    New public diplomacy efforts including the Partnerships for 
Learning (P4L) and Youth Exchange and Study (YES) initiatives have been 
created to reach a younger and more diverse audience through academic 
and professional exchange programs. In fiscal year 2005, the P4L and 
the YES programs, funded at $61 million, will focus more on youth of 
the Muslim world, specifically targeting non-traditional, non-elite, 
often female and non-English speaking youth.
    U.S. broadcasting initiatives in the Middle East encourage the 
development of a free press in the American tradition and provide 
Middle Eastern viewers and listeners access to a variety of ideas. The 
United States revamped its Arabic radio broadcasts in 2002 with the 
introduction of Radio Sawa, which broadcasts to the region twenty-four 
hours a day. As a result, audience size for our Arabic broadcasting 
increased from under 2 percent in 2001 to over 30 percent in 2003. 
Based on this successful model, the United States introduced Radio 
Farda to broadcast to Iran around the clock. Building on this success, 
the fiscal year 2005 President's Budget Request provides over $70 
million for Arabic and Persian radio and television broadcasts to the 
Middle East. Last month, the United States launched the Middle East 
Television Network, an Arabic language satellite network that will have 
the capability of reaching millions of viewers and will provide a means 
for Middle Easterners to better understand democracy and free market 
policies, as well as the United States and its people. This network 
kicked off on February 14 with nine hours per day of broadcasting. 
Today, the broadcasting is 24/7. The network--Al-Hurra, or ``the Free 
One''--reaches 22 countries, including Iraq. President Bush has already 
appeared on the network and I did an interview several weeks ago.

                 OUR NEW APPROACH TO GLOBAL PROSPERITY

    President Bush's approach to global economic growth emphasizes 
proven American values: governing justly, investing in people, and 
encouraging economic freedom. President Bush has pledged to increase 
economic engagement with and support for countries that commit to these 
goals through an ambitious trade agenda and new approaches to 
development assistance focusing on country performance and measurable 
results.

The Millennium Challenge Account (MCA)
    In February of 2003, we sent the Congress a budget request for the 
MCA and legislation to authorize the creation of the Millennium 
Challenge Corporation (MCC), the agency designed to support innovative 
development strategies and to ensure accountability for results.
    The MCC will fund only proposals for grants that have clear, 
measurable objectives, a sound financial plan and indicators for 
assessing progress.
    The Congress appropriated $1 billion for MCA for fiscal year 2004. 
The fiscal year 2005 budget request of $2.5 billion makes a significant 
second year increase to the MCA and paves the way to reaching the 
President's commitment of $5 billion in fiscal year 2006.

Trade Promotion Authority (TPA)
    President Bush recognizes that the fastest, surest way to move from 
poverty to prosperity is through expanded and freer trade. America and 
the world benefit from free trade. For this reason, one of his first 
actions upon taking office in 2001 was to seek TPA, allowing him to 
negotiate market-opening agreements with other countries. The President 
aims to continue vigorously to pursue his free trade agenda in order to 
lift developing countries out of poverty, while creating high-paying 
job opportunities for America's workers, businesses, farmers and 
ranchers and benefiting all Americans through lower prices and wider 
choices. As the President said in April, 2001 at the Organization of 
American States: ``Open trade fuels the engines of economic growth that 
creates new jobs and new income. It applies the power of markets to the 
needs of the poor. It spurs the process of economic and legal reform. 
It helps dismantle protectionist bureaucracies that stifle incentive 
and invite corruption. And open trade reinforces the habits of liberty 
that sustain democracy over the long term.''
    Since receiving TPA in 2002, the President has made good on his 
promise, completing free trade agreements with Chile and Singapore, 
which were quickly approved by Congress and went into effect on January 
1. We have recently completed negotiations with five Central American 
countries on the Central America Free Trade Agreement (CAFTA) and our 
work to bring the Dominican Republic (DR) into that agreement concluded 
successfully on March 14 with the signing of an FTA with that country. 
Now, the DR can join CAFTA. In February, we announced the conclusion of 
an agreement with Australia. More recently, negotiations have been 
completed with Morocco and an agreement announced, and negotiations are 
ongoing with the Southern African Customs Union (SACU), Bahrain, and on 
the Free Trade Agreement of the Americas (FTAA). We are concluding 
comprehensive agreements that include market access for goods and 
services, strong intellectual property and investment provisions, and 
include commitments for strong environmental and labor protections by 
our partners. These arrangements benefit Americans and our trading 
partners.
    Building on this significant progress, the President intends to 
launch free trade negotiations with Thailand, Panama, and the Andean 
countries of Colombia, Ecuador, Bolivia and Peru. The President has 
also stated his vision for a Middle East Free Trade Area by 2013, to 
ignite economic growth and expand opportunity in this critical region. 
Finally, the President is committed to wrapping up successfully the 
World Trade Organization's Doha agenda. The United States has taken the 
lead in re-energizing these negotiations following the Cancun 
Ministerial.

             CARING FOR THE WORLD'S MOST VULNERABLE PEOPLE

Emergency Plan for AIDS Relief
    When President Bush took office in January 2001, the HIV/AIDS 
pandemic was at an all time high, with the estimated number of adults 
and children living with HIV/AIDS globally at 37 million, with 68 
percent of those individuals living in sub-Saharan Africa. From fiscal 
years 1993 to 2001 the total U.S. Government global AIDS budget was 
about $1.9 billion. As part of the Emergency Plan for AIDS Relief, the 
President proposed $2 billion in fiscal year 2004 as the first 
installment of a five-year, $15 billion initiative, surpassing nine 
years of funding in a single year. The President's Emergency Plan for 
AIDS Relief represents the single largest international public health 
initiative ever attempted to defeat a disease. The President's Plan 
targets an unprecedented level of assistance to the 14 most afflicted 
countries in Africa and the Caribbean to wage and win the war against 
HIV/AIDS. In addition, programs will continue in 75 other countries.
    By 2008, we believe the President's Plan will prevent seven million 
new infections, treat two million HIV-infected people, and care for 10 
million HIV-infected individuals and those orphaned by AIDS in 
Botswana, Cote d'Ivoire, Ethiopia, Guyana, Haiti, Kenya, Mozambique, 
Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda and Zambia.
    Announced during President Bush's State of the Union address on 
January 28, 2003, the Emergency Plan provides $15 billion over five 
years for those countries hardest hit by the pandemic, including $1 
billion for the Global Fund to Fight AIDS, Tuberculosis and Malaria. 
The fiscal year 2005 Budget provides $2.8 billion from State, USAID, 
and the Department of Health and Human Services (HHS) to combat global 
AIDS, more than tripling funding for international HIV/AIDS since the 
President took office.
    Over the past year, we have worked with the Congress to pass 
legislation laying the groundwork for this effort and to appoint a 
senior official at the State Department to coordinate all U.S. 
Government international HIV/AIDS activities. Ambassador Randall Tobias 
has been confirmed by Congress and has now taken steps to assure 
immediate relief to the selected countries.
    Earlier this month, Ambassador Tobias, Secretary Thompson, USAID 
Administrator Andrew Natsios, and I rolled out the strategy for this 
plan and announced the first dispensation of dollars--$350 million in 
contracts to some of the NGOs and PVOs who will be carrying out the 
fight at the grass-roots level. It was a thrilling moment, I can assure 
you.
    As a crucial next step, the fiscal year 2005 Budget Request expands 
on the Emergency Plan. By working together as a highly collaborative 
team, and placing primary ownership of these efforts in the hands of 
the countries that we are helping--just as you will recall the Marshall 
Plan did so successfully in post-WWII Europe--the Department of State, 
USAID and HHS can use significantly increased resources quickly and 
effectively to achieve the President's ambitious goals in the fight 
against global AIDS.
    Mr. Chairman, President Bush summed it up this way in April of last 
year, ``There are only two possible responses to suffering on this 
scale. We can turn our eyes away in resignation and despair, or we can 
take decisive, historic action to turn the tide against this disease 
and give the hope of life to millions who need our help now. The United 
States of America chooses the path of action and the path of hope.'' 
These dollars put us squarely on that path.

Emergency Humanitarian Assistance--Helping Others in Need
    The President's Budget Request reflects a continued commitment to 
humanitarian assistance. The request maintains U.S. leadership in 
providing food and non-food assistance to refugees, internally 
displaced persons, and other vulnerable people in all corners of the 
world. In addition, the budget reflects the findings of the Program 
Assessment Rating Tool (PART) evaluations completed for the United 
Nations High Commissioner for Refugees and for USAID's Public Law 480 
Title II international food assistance, which confirmed a clear purpose 
for these programs.
    In 2003, the Administration provided funding to several 
international and non-governmental organizations to assist nearly 
200,000 Angolan refugees and internally displaced persons return home 
after decades of civil war.
    In an Ethiopia enveloped by drought, the Administration led 
international efforts to prevent widespread famine among 13 million 
vulnerable people, providing over one million metric tons of emergency 
food aid (valued at nearly half a billion dollars) to the World Food 
Program and NGOs, funding immunizations for weakened children, and 
supplying emergency seeds to farmers.
    In Sudan, the Administration worked with the United Nations and the 
Government of Sudan so that vital assistance could be delivered to the 
Sudanese people. This year the United States will provide about $210 
million in vital assistance to the people in the south, including 
approximately 125,000 metric tons (valued at nearly $115 million) in 
food aid, as well as non-food assistance, such as sanitation and water. 
We anticipate that a comprehensive peace agreement in Sudan will allow 
us to expand significantly our development assistance to help the 
Sudanese people in effecting a long-awaited recovery following decades 
of civil war. The fiscal year 2005 Budget includes $436 million in 
humanitarian and development, economic, and security assistance 
funding, much of which will be contingent upon a peace settlement 
between the government and the south.
    The fiscal year 2005 Budget ensures that the Administration can 
continue to respond quickly and appropriately to victims of conflict 
and natural disasters and to help those in greatest need of food, 
shelter, health care and other essential assistance, including those in 
areas starting to recover from conflict and war, such as Liberia. In 
particular, the budget requests funding for a flexible account to give 
the President the ability to respond to unforeseen emergency needs, the 
Emergency Fund for Complex Foreign Crises, funded at $100 million.
    Now, Mr. Chairman, let me turn to the State Department operations 
portion of the President's Budget Request which, as you will recall, 
totals $8.4 billion.

               KEEPING AMERICANS SAFE AT HOME AND ABROAD

    The State Department has the responsibility to protect more than 
60,000 U.S. Government employees who work in embassies and consulates 
abroad. Since the 1998 bombings of two U.S. embassies in East Africa, 
the State Department has improved physical security overseas; however, 
as many of you are well aware, many posts are still not secure enough 
to withstand terrorist attacks and other dangers. To correct this 
problem, in 1999, the State Department launched a security upgrade and 
construction program to begin to address requirements in our more than 
260 embassies and consulates.

Capital Security Cost Sharing Program
    Working with the Congress, President Bush has accelerated the pace 
of improving and building new secure facilities. Moreover, we have 
reorganized the Overseas Buildings Office to manage the effort with 
speed, efficiency, and effectiveness. Within the budget, we are 
launching a plan to replace the remaining 150 embassies and consulates 
that do not meet current security standards over the next 14 years, for 
a total cost of $17.5 billion. To fund construction of these new 
embassy compounds, we will begin the Capital Security Cost Sharing 
(CSCS) Program in fiscal year 2005. We will implement this program in 
phases over the next five years.
    Each agency with staff overseas will contribute annually towards 
construction of the new facilities based on the number of positions and 
the type of space they occupy. We arrived at the cost shares in the 
fiscal year 2005 President's Budget Request in consultations with each 
agency and the State Department's Overseas Buildings Office.
    CSCS is also a major component of the President's Management Agenda 
Initiative on Rightsizing. Along with securing facilities, we have 
focused on assuring that overseas staffing is deployed where they are 
most needed to serve U.S. interests. As agencies assess the real cost 
of maintaining staff overseas, they will adjust their overseas staffing 
levels. In this way, new embassies will be built to suit appropriate 
staffing levels. The program is already producing rightsizing results. 
Agencies are taking steps to eliminate unfilled positions from their 
books to reduce any unnecessary CSCS charges, which in turn is leading 
to smaller embassy construction requirements.

Border Security
    Prior to September 11, 2001, the State Department's consular 
officers focused primarily on screening applicants based on whether 
they intended to work or reside legally in the United States. In 
deciding who should receive a visa, consular officers relied on State 
Department information systems as the primary basis for identifying 
potential terrorists. The State Department gave overseas consular 
officers the discretion to determine the level of scrutiny that should 
be applied to visa applications and encouraged the streamlining of 
procedures.
    Today, Consular Affairs at the State Department, working with both 
Customs and Border Protection and the Bureau of Citizenship and 
Immigration Services at the Department of Homeland Security, are 
cooperating to achieve our goals more effectively by sharing 
information and integrating information systems.
    The Department of State has invested substantial time, money, and 
effort in revamping its visa and passport process as well as its 
provision of American Citizen Services. The Department has more than 
doubled its database holdings on individuals who should not be issued 
visas, increased training for all consular officers, established 
special programs to vet applications more comprehensively, increased 
the number of skilled, American staff working in consular sections 
overseas, and improved data-sharing among agencies. The State 
Department, along with the Department of Homeland Security, is 
currently developing biometrics, such as fingerprints, digital 
photographs or iris scans, for both visas and passports in order to 
fulfill requirements of the Patriot and Border Security Acts and the 
International Civil Aviation Organization.
    As a part of the State Department's efforts to screen visa 
applicants more effectively, and in particular to ensure that a 
suspected terrorist does not receive a visa to enter the United States, 
we will be an active partner in the Terrorist Screening Center (TSC). 
The TSC, established in December 2003, will maintain a single, 
consolidated watchlist of terrorist suspects to be shared with Federal, 
state, local and private entities in accordance with applicable law. 
The Department of State will also participate in the Terrorist Threat 
Integration Center (TTIC), a joint-effort aimed at reducing the 
potential of intelligence gaps domestically and abroad.
    To achieve our goal of secure borders and open doors, in fiscal 
year 2005 the State Department plans to expand the use of biometrics to 
improve security in the visa and passport processes; more effectively 
fill gaps worldwide by hiring people with specific skills including 
language expertise; improve and maintain all consular systems; and more 
broadly expand data sharing with all agencies with border control or 
immigration related responsibilities. The budget in fiscal year 2005 
includes $175 million for biometric projects including photographs and 
fingerprints to comply with Border Security and Patriot Acts.
    The Border Security program underwent a PART analysis in the 
development of the fiscal year 2004 and fiscal year 2005 budgets and 
this budget request reflects the results of those analyses. The 
Department is moving ahead on program management improvements that 
clearly link to the Department of Homeland Security goals related to 
visa policy.

The Critical Importance of Diplomatic Readiness
    You will recall, Mr. Chairman, members of the subcommittee, that we 
created the Diplomatic Readiness Initiative (DRI) in 2002 to address 
staffing and training gaps that had become very adverse to the conduct 
of America's diplomacy. The goal of DRI was to hire 1,158 new foreign 
and civil service employees over a three-year period. These new hires, 
the first over-attrition hires in years, would allow us to provide 
training opportunities for our people and greatly improve the 
Department's ability to respond to crises and emerging priorities 
overseas and at critical domestic locations. To bring these new people 
on board--and to select the best men and women possible--we 
significantly improved Department hiring processes, to include 
recruiting personnel from more diverse experience and cultural 
backgrounds and people who could fill critical skill gaps. In the 
process, we broke records in recruiting and thus had the best and the 
brightest from which to select. The Department of State will be reaping 
the benefits from this process for many years to come. We also created 
new mandatory leadership and management training, enhanced public 
diplomacy and consular training, and made significant increases in the 
amount of language training available for new Foreign Service Officers. 
DRI hiring has supported the Department's efforts in responding to 
crises since September 11th and provided the additional resources 
necessary to staff overseas locations that truly represent the front 
line in the war on terrorism.
    Some of these positions, however, are being diverted to support new 
requirements not envisioned by DRI, such as permanently staffing new 
embassies in Afghanistan, Iraq, Sudan, and possibly in Tripoli. Because 
of this, the fiscal year 2005 Budget Request provides additional 
resources to continue our DRI commitment.
    DRI has allowed the Department to focus on recruiting, training and 
retaining a high quality work force, sized to requirements that can 
respond more flexibly to the dynamic and demanding world in which we 
live. We need to continue it.
    USAID has begun a similar effort to address gaps in staffing in 
technical skills, calling it the Development Readiness Initiative. 
USAID plans to hire approximately 40 Foreign Service Officers in fiscal 
year 2004 under this initiative. This Budget Request includes authority 
for USAID to hire up to 50 additional Foreign Service Officers in 
fiscal year 2005, in order to fill critical skill gaps identified 
through a comprehensive workforce analysis.

Information Technology
    Mr. Chairman, with your help and support, last year was a watershed 
year for the Department of State in the field of Information 
Technology. Shortly after assuming my position, I identified 
Information Technology as one of my highest priorities. Our objective 
was faster, smarter, simpler, and more effective diplomacy at every 
level. Three years later, we now have worldwide Internet access on 
desktops, as well as classified communications at every appropriate 
post. This has changed the way the State Department does business and 
could not have been accomplished without your support and that of the 
other members of the subcommittee, as well as the full Appropriations 
Committee. As we move forward with our efforts to replace our decades 
old cable system with the SMART program, the Committee's continued 
support of our IT modernization efforts will be as important as ever.

Soft Target Protection
    Mr. Chairman, I also want to tell you that your subcommittee's 
leadership in ensuring the protection of so-called ``overseas soft 
targets'' including overseas American schools is greatly appreciated. 
The Department has established a three-phased, multi-year program to 
provide physical security improvements to overseas schools attended by 
the dependents of U.S. government employees and other U.S. citizens. 
Our fiscal year 2005 request includes $27 million for this effort 
including $10 million for the schools, $5 million to improve security 
at employee association facilities, and $12 million for residential 
security upgrades. The protection of Americans living and working 
overseas is our highest priority.

Peacekeeping Operations
    We also appreciate the ongoing support from this Committee for our 
peacekeeping budget. U.N. Peacekeeping Operations in troubled and 
fragile regions has been and remains critical to ensuring that such 
places are given the stability and time they need to work on long-term 
solutions to their underlying conflicts. UNAMSIL in Sierra Leone, and 
UNMISET in East Timor have been effective in helping the new 
governments to establish themselves. We also supported peacekeeping 
missions in Liberia and Ivory Coast to assist their fragile 
transitional governments to implement peace agreements in those war-
torn states. Your support in meeting these important needs has been 
indispensable. We look forward to working with you on helping us meet 
additional peacekeeping obligations as they emerge.

                        CONCLUSION AND QUESTIONS

    Mr. Chairman, I have focussed your attention for long enough. There 
is more in the President's Budget Request for fiscal year 2005; but 
what I have outlined above represents the top priorities for the State 
Department. I will be pleased to answer any questions you have about 
these priorities or about any other portion of the budget request in 
which you are interested. If I cannot answer the question myself, I 
have a Department full of great people who can; and I will get you an 
answer for the record.
    Thank you.

    Senator Gregg. Thank you, Mr. Secretary. We will try to be 
helpful. There are so many issues that we would like to take 
up, and I know each of us has a series of areas. Let me just do 
a couple and then turn it over to Senator Hollings and Senator 
Byrd and then we will go around again.

            FAILURE OF CLINTON ADMINISTRATION WITH TERRORISM

    The first one is, I think you ought to be given the 
opportunity to respond to what Mr. Clarke said yesterday, 
although you were in Madrid. This committee dealt a great deal 
with the prior administration on the way it ramped up for 
terrorism and therefore with Mr. Clarke directly and 
indirectly, and we had some issues which are fairly well 
documented, with the failure of the prior administration to 
really get its act together and get coordinated.
    One of the big problems we had was the terrible stovepipe 
approach in the other administration. We tried to set up 
something called the National Domestic Preparedness Office 
(NDPO), and we tried to set up a number of major initiatives, a 
Deputy Attorney General to focus activity on terrorism, and 
quite honestly we ran into a lot of resistance and most of it 
came out of Mr. Clarke's shop, because I think he had much more 
of a centralized rather than cross-fertilization approach. So, 
I personally have reservations about his own track record in 
this area, but his criticism is there and he is a professional 
in this area.
    However you came into the office of Secretary of State and 
he has stated essentially that this administration did not put 
a high priority on terrorism. It focused primarily on China and 
Russia and the relationship on the Korean peninsula. Of course, 
the attack on the American observer ship, was the first major 
foreign crisis of this administration, and that terrorism was a 
backburner issue, to paraphrase from his viewpoint, once this 
administration came into office. I think you are probably the 
fairest broker around here, to be very honest. I think the 
American public views you as a straight shooter who has seen it 
all, both as, obviously, the Chairman of the Joint Chiefs of 
Staff and as Secretary of State, and Chairman of Joint Chiefs 
under both Republican and Democratic Presidents.

                        TERRORISM--HIGH PRIORITY

    So I would be honest in your assessment as a fair broker as 
to what level of interest you folks put into terrorism, what 
the priority was when you took office as Secretary of State, 
and do you agree with Mr. Clarke's characterizations?
    Secretary Powell. No, I do not. Terrorism was an important 
issue for President Bush and for all of us coming in. We were 
not unmindful of the fact that the Cole had just been attacked. 
We were not unmindful of the fact that our Embassies had been 
blown up, and terrorism was a danger. As I testified before the 
commission the other day, the very first briefing I received 
during my transition period, some 4 days after President Bush 
announced me, was from Mr. Clarke. The other colleagues that he 
had and that were becoming my colleagues, and the outgoing 
administration were involved in intelligence and terrorism. 
This is not the sign of somebody who did not have an interest 
in terrorism. It was also something the President made clear we 
had to be interested in.
    But you cannot ignore when a China problem comes along or a 
Russia problem. All of these are important issues, and 
terrorism was an important issue.
    I did not have adequate opportunity in my presentation the 
other day to describe all of the things that the State 
Department was doing in the name of the President throughout 
the spring and summer of 2001 to warn and alert American 
citizens around the world, to warn and alert our Embassies, all 
the things that Mr. Rumsfeld was doing to make sure that our 
military forces were secure, sending fleets to sea, taking our 
ships and our other military forces out of areas of 
vulnerability. The CIA was hard at work. We saw the threat. We 
did not ignore the threat. We responded to the threat.
    The suggestion, however, that there was one magic moment or 
one magic bullet or one moment in time when you could connect 
two dots and say, we know that these individuals are in our 
country and we know that they are planning to fly planes into 
the World Trade Center is not right. We never connected the 
dots like that, and I am not sure that except in hindsight 
could one have seen that the dots might have been connected in 
that way. So I think all of us were working hard.
    The question about, you did not have enough meetings, I had 
all kinds of meetings in the Department. But the whole thing 
did not rest on all the principals getting together every day 
to talk to one another or to stare at one another. You do that 
when something is unfolding in a crisis atmosphere, as Mr. 
Clarke makes reference to, just before the millennium Y2K 
period. That is different. That is when you were in a real-time 
mode and you were expecting something to happen over New Year's 
Eve Y2K.
    But I can tell you that the President was interested in 
this. He gave instructions to the chiefs of mission. The 
President sends a letter to every Ambassador who is taking over 
as a chief of mission, and one of the elements in that letter 
was, you are responsible for the security of your Embassy. I 
was charged by the President to work with those Ambassadors.
    We did not see, to the best of my knowledge and you have 
heard from Mr. Tenet, and the FBI will be presenting before the 
commission next week, we did not see enough information to say 
that we knew that there was a threat already inside the 
country, nor did I see in my first several months until 9/11 
came along, those first 7 months--the previous administration 
had 7, 8 years. But in our first 7 months I never saw a case 
come together that was of sufficient power of persuasion that 
you could say, we know enough about al Qaeda and we know enough 
about the Taliban that we could simply on our own, without 
getting Pakistan on our side, to go and invade Afghanistan and 
look for Osama bin Laden. It would not have been possible 
without the support and cooperation of the countries in the 
region, Uzbekistan, Pakistan, and not just say what we had to 
work out with the Russians and others in the region.
    So I have thought about this. I have listened to the 
testimony. Mr. Clarke says that he tried to get access to 
various people in the administration. Dr. Rice has responded to 
this. She was available to him. He worked directly for her. 
There has been a discussion of memos sent, memos not sent, e-
mails sent, e-mails not sent. I hope all of this will be 
balanced by the commission as they complete their work. I will 
wait for the commission's final report as opposed to daily 
comments that come from members of the commission in the press.

                     UPDATE ON IRAQ AND AFGHANISTAN

    Senator Gregg. Thank you for that evaluation. You mentioned 
that you have been to Afghanistan and Iraq, and of course, that 
is the future of how we fight terrorism. You said you wanted to 
give us an update on what is going on there. Tell us what your 
thoughts are.
    Secretary Powell. Yes, sir. Afghanistan, it has been 2 
years since I was there. I was there shortly after the Taliban 
was booted out, when there was only one telephone available for 
the whole government and money was being moved around by the 
half-ton in order to pay for something. I went back this time 
and we have a functioning government. We have a government that 
is slowly extending its reach out to the provinces. It is still 
difficult but it is slowly moving in that direction. We have a 
government that now rests on a solid constitution, and we 
should be proud of our effort in making that happen.
    We have buildings going up all over. The Pakistanis were 
noting to me that 95 percent of the capacity of their cement 
industry has been reached because of construction that is 
taking place next door in Afghanistan. They are very delighted 
with that, of course. We have a road that has been rebuilt. We 
have restored hope to a people, and we have got to stay the 
course. We have got to stay the course with our NATO allies, 
who are now taking an active role under the leadership of NATO 
for security in Kabul and for putting it place more provincial 
reconstruction teams. I think it is up to 12 now.
    So Afghanistan has shown a lot of progress over the last 2 
years. Even though there are problems that remain, we should 
not sell ourselves short on what we have been able to 
accomplish. This is a country that 3 years ago had every woman 
walking around covered, that had nothing but the most despotic 
regime imaginable on the face of the Earth. That was the home 
office for al Qaeda and the home office for international 
terrorism. Now it has a government resting on a constitution, 
rights for the people, people are registering to vote. If there 
are remaining al Qaeda elements in the country or along the 
border with Pakistan, they are running and hiding. The remnants 
of the Taliban are causing trouble but they are also running 
and hiding.
    We have gotten Pakistan to completely reverse its strategy 
from being a supporter of the Taliban to being an enemy of the 
Taliban; losing men in the fight along the border now to go 
after these remnants. So we have got to stay the course, and 
because we have created a better life for the Afghan people, we 
have got to finish the job.
    With respect to Iraq, Ambassador Bremer and I spent a long 
time going over the progress that has been made. I see in the 
future an interim government coming in place, a full 
constitution being written. I see a new national assembly 
coming into being, a new national government coming into being. 
I see the United Nations getting involved. The major problem is 
security. Remnants of the old regime, terrorists and criminals 
who are operating inside of Iraq, and it is a problem for us, a 
serious problem. We have got to get on top of it.
    But we cannot say that just because we are having this 
security problem that this therefore makes this a mission that 
should not have been undertaken. It was the right mission to be 
undertaken. We have freed 25 million people. We have given them 
the beginning of a democratic system, and what we have to do 
now is not shrink back from the fight that is ahead of us but 
to fight this fight, fight it well with our friends and allies, 
and work with the Iraqi people who by any poll that anyone has 
taken, wants us to be involved. Wants us to leave, of course, 
but wants us to help them get the kind of country and the kind 
of system we are talking about, and then leave. And create a 
place, a country that we will not be arguing about with respect 
to weapons of mass destruction, who will be living in peace 
with its neighbors. This is a sound objective for us to pursue 
and we should pursue it.

                          STATE BUDGET IN IRAQ

    Senator Gregg. One more question and then I will turn to 
Senator Hollings. On that point, the Coalition Provisional 
Authority is using approximately $1 billion this year, 
projected to basically try to reconstruct Iraq. This gets 
handed off from the DOD to you on July 1, as you mentioned. Yet 
as we look at the budget that was sent up, there does not 
appear to be any funding to support the State Department on 
this. The question is obvious.
    Secretary Powell. Yes, there is not a specific line item in 
2005. We believe that, and Ambassador Bremer and I had very 
candid talks about this because, you are quite right, it 
becomes the responsibility of the State Department on the first 
of July. But right now we believe that there will be sufficient 
funds available to the Department on the first of July that 
will carry us through the end of the year.

                  FUNDS FROM THE DEPARTMENT OF DEFENSE

    Senator Gregg. Will they be coming from DOD?
    Secretary Powell. Yes, the funds that are available to the 
CPA do not suddenly disappear on the first of July. A lot of 
the things that are being done now for the CPA will continue be 
done for the State Department. Just a brief example. The 
Program Management Office that the Department of the Army runs 
now, that is getting policy direction from the CPA as well as 
from the Department of Defense, that the same Program 
Management Office will continue to provide that contracting, 
administrative fund flow service, but now it will be getting 
its policy direction and its supervision from the chief of 
mission.

                DEPARTMENT OF DEFENSE SHARING WITH STATE

    Senator Gregg. Have you ever found the DOD to be very 
generous about sharing funds with the State Department?
    Secretary Powell. No, nor has the State Department been 
very generous about sharing funds with DOD. But when both 
Departments know what they have to do and the President wants 
done, I have found that both Departments over time will what 
the President wants. In this case, the funds that are going to 
be used are funds that are for this purpose.

              WHO PAYS THE COALITION PROVISIONAL AUTHORITY

    Senator Gregg. Will the CPA employees become State 
employees? Will you be paying them directly or will their 
payment continue to flow through DOD?
    Secretary Powell. It will be a combination. Some of them 
are State employees now working within the CPA, and of course, 
they remain on my rolls when we change over to the chief of 
mission. But a lot of people who are there we hope will 
continue to do their work on non-reimbursable details from 
their Department. I am not going to pay the Army Program 
Management Office.
    Senator Gregg. Can we get a projection as to how this is 
going to be handled?
    Secretary Powell. Yes.
    [The information follows:]

    Secretary Powell asked me to respond to your question at his March 
25, 2004, hearing about how the State Department plans to fund 
personnel costs as operations transition from the Coalition Provisional 
Authority (CPA) to U.S. Embassy Baghdad.
    We are currently working with our colleagues in the Department of 
Defense (DOD), the CPA, and many other U.S. Government agencies to 
address this question.
    We plan to establish, by July 1, 2004, a U.S. Ambassador and U.S. 
Embassy staff and U.S. Mission facilities that will house the USG 
agencies in Iraq serving under Chief of Mission authority. The State 
Department has announced positions for 142 American employees. On 
average, the cost to establish a new State Department position overseas 
is about $350,000. Of course, in Iraq, a number of additional cost 
factors are thrown into the mix that are not considered within this 
average.
    We do not yet have refined cost estimates for how much the U.S. 
Mission will cost the State Department in fiscal year 2004. Estimates 
of personnel costs must include not only base salaries, but also 
certain additive costs for being posted in Iraq (e.g., allowances and 
differentials), locally engaged staff costs, travel, and rough order of 
magnitude logistics/life support costs for the currently planned State 
Department staffing. Estimates must also include certain staffing 
assumptions for provincial teams.
    However, as you are aware, the big ticket costs for our Iraq 
presence will be incurred to provide security, facilities, logistics/
life support, and information technology/communications for the U.S. 
Mission complex. The cost of these requirements in fiscal year 2004 
will depend on the total size of the U.S. Mission, including USG 
agencies other than State, and the support arrangements now being 
discussed with CPA, DOD, and other agencies.
    As of April 15, ten other agencies have requested a presence in 
Embassy Baghdad, for a total of 254 American positions. In the long 
term, we estimate a total of 350-400 permanently assigned Americans 
from some 12-15 other agencies will serve under the Chief of Mission in 
Iraq.
    Together with other agencies, we continue to refine plans and 
budget estimates for our operations in Baghdad after June 30. We should 
soon have more accurate estimates to share with you.

    Senator Gregg. Because it does seem to us that you are 
going to end up getting the ball handed to you but it will not 
have any air in it.
    Secretary Powell. We will have air in it, sir. I have 
Ambassador Ricciardone, our Ambassador from Manila has been 
working this for me. He stayed on in Baghdad after I left last 
week with retired General Mick Kicklighter, representing 
Secretary Rumsfeld, so that we can have a smooth baton pass.

                                TRANSFER

    Senator Gregg. Maybe your staff could brief our staff on 
how the baton pass is coming along.
    Secretary Powell. Yes, it is coming along.
    Senator Gregg. Senator Hollings.

                   ARMED SERVICES WILL NOT GIVE MONEY

    Senator Hollings. The Armed Services Committee has already 
provided in law that DOD shall not pay you. Did you know that?
    Secretary Powell. They shall not----
    Senator Hollings. The Armed Services authorization bill, 
the defense authorization bill, there is a proviso in there 
that they shall not pay you.
    Secretary Powell. Shall not pay me?
    Senator Hollings. Any money into the cost sharing program.
    Secretary Powell. Cost sharing. I thought we were still on 
Iraq.
    Senator Hollings. That is what I am talking about too. So 
you better get it straightened out. I think we are getting a 
policy where all departments are going to take care of cost 
sharing and I am worried about State Department ending up 
holding the bag for all of these departments. Even though the 
President, the White House has set out that policy and it is 
understood, we are signing legislation into law that says, none 
of these monies can be used for cost sharing.
    Secretary Powell. But I do not think that relates directly 
to Iraq. That relates to our worldwide effort to get cost 
sharing in our facilities.
    Senator Hollings. That is right.
    Secretary Powell. We will push back on that provision of 
law, and maybe some people who are not willing to participate 
in cost sharing will not find that we provide facilities for 
them.

                      CLARKE AND STATE CONNECTION

    Senator Hollings. I think you are the gentleman to push 
back on it. Now I was not even going to get into Clarke, but 
how many times did he meet with you? Was he in your loop at the 
Department of State?
    Secretary Powell. I saw Mr. Clarke at various meetings that 
were held, interagency fora, whenever the subject of terrorism 
was being discussed or counterterrorism, and we were in the 
White House meetings and Mr. Clarke was there. I know Mr. 
Clarke very well. I have known him for many years. The day he 
briefed me he came over to the Department on the 20th of 
December with his colleagues at my invitation.

                             CLARKE LACKING

    Senator Hollings. And he did brief you on counterterrorism. 
Did you find him wanting in his task as a terrorism czar as 
they call him?
    Secretary Powell. Wanting in his task?
    Senator Hollings. Yes.
    Secretary Powell. He knew the subject well. He had been 
working on the subject for many years. He was engaged in it and 
he was pushing it. But I have no reason to believe that he was 
not able to press his case to his immediate supervisors in the 
White House.
    Senator Hollings. But you could not know.
    Secretary Powell. I cannot tell you what he did day to day 
in the White House.
    Senator Hollings. You cannot tell me what went on with him 
and Condoleezza Rice and the National Security--you are over at 
the Department of State.
    Secretary Powell. Yes.

                        SECRETARY WITNESS CLARKE

    Senator Hollings. I love the effort here, because you do 
have the credibility. I agree with the distinguished chairman 
that you have got credibility with us all. It is nice to try to 
superimpose your understanding and everything else about this 
situation with the Clarke matter, but in truth you are not a 
witness about all of that, are you?
    Secretary Powell. I am a witness to the extent that I 
participated in discussions on terrorism and counterterrorism 
matters, and my Department and people working for me 
participated in this on a very, very regular basis, and 
interacted on a regular basis with Mr. Clarke. It is not just 
principals meetings that were being held, but counterterrorism 
security group meetings were held on a regular basis. My 
intelligence officials, I have my own intelligence bureau, I 
have my own counterterrorism coordinator in the Department, and 
they all worked on a regular basis with Mr. Clarke and with the 
CIA and with the FBI. That is why whenever the threat level was 
modified, it went up or went down, it was a matter of immediate 
interest to us. We put out warnings and advisories. We 
sometimes told Embassies to close down for a couple days. We 
responded on a constant, continuous basis to the threat 
information that we had.
    Senator Hollings. I am totally familiar with your 
intelligence operation because some people have questioned it. 
But I investigated it in 1954 when it was run by Scott MacLeod 
and Park Armstrong. They were the individuals in the Department 
of State.
    Be that as it may, I want to commend you--we were together 
Friday night in Islamabad and you really did the country credit 
in your little presentation at that dinner. We were very proud 
of you, and later on on CNN going into it that night.
    Secretary Powell. Thank you, Senator.
    Senator Hollings. With relation, and that is why I am 
asking on Afghanistan. You take Iraq and you take Afghanistan, 
Afghanistan has got 4 million more people than Iraq. And 
different than Iraq, we have got the people with us. They are 
solid with us in Afghanistan. You got the Taliban there, but 
the people are with us. We have got a history of having helped 
defeat the Soviets and so they are glad to have us. 
Specifically when they tell us about weapons and cache of 
weapons and any kind of munitions and everything else, we go 
there and find it. In Iraq, we have got 11,000 leads and come 
up dry on 11,000 leads with nothing.

                          MONEY TO AFGHANISTAN

    We have got NATO there in Afghanistan and we do not have 
NATO or really an alliance in Iraq. I cannot, for the life of 
me watching and listening and working with both of them, here 
we have got over $100 billion, they say $125 billion on Iraq. I 
know they requested only $1.2 billion for Afghanistan and we 
got it up to $2 billion. And that was the big meeting that we 
had with your folks, with the Ambassador and all of his folks, 
even with Karzai and everyone else. They just needed more help. 
The opportunities were galore. The AID fellow was slipping me 
one card with $600 million and all. It just seemed to me that 
we were not following through.
    Specifically, I want you to comment on it and see if you 
cannot help it. Let us get right to helicopters. And I will 
name the gentleman, General Stone. General Stone, he came on 
board last June and they had no attack operations whatsoever. 
It took him until about September and October to train them, 
and the first one they pulled off was in the end of November, 
December. Now as you and I both know, they are doing darn good 
up there on the border. They are putting their lives on the 
line and everything else like that.
    We were told with respect to helicopters they had yet to 
arrive. He says, you know my word is my success out here. If I 
cannot give my word and follow through with it, he says, I am 
nothing. I told him back in September, and in fact the 
contractor has already been manufacturing the helicopters and 
everything else of that kind, but the State Department has not 
authorized the Defense Department or the Defense Department--I 
never could get it exactly straight, but there is some snarl in 
the bureaucracy. When you and I were there they did not have 
any, and the next say, on Saturday they brought over a couple 
of them from Nepal so they could make some raids.
    So here, 2\1/2\ years later we have yet to equip them with 
night goggles. They said they were on the way. But I am 2\1/2\ 
years behind looking for Osama and I am finally getting some 
operations, and I still do not have the helicopters, and you 
can help us there.
    And as you indicate with that election coming off, we ought 
to be putting way more in the National Endowment for Democracy. 
We got it up to $30 billion and then we added another $60 
billion and everything else, but relatively nothing in 
Afghanistan.
    I learned with the foreign minister in Tunis, because we 
took that in World War II, and I was amazed coming out of 
Morocco where they had 65 percent illiteracy, they had 65 
percent literacy in Tunis, 80 percent homeownership and 
everything else of that kind. The foreign minister said, the 
secret, Senator, is let the women vote. In Muslim countries, 
you let the women vote, they want good schools, they want good 
homes. Karzai is doing just as you have attested, getting the 
women to participate in that September election. But he does 
not have the money to follow through and everything else of 
that kind.
    We are pennypinching. We are just throwing, like you say, 
the largest State Department facility in history, almost $900 
billion to go into Baghdad where the jury is out. I am not as 
sanguine as you are. I am worried about it.

                    PUTTING MORE AID IN AFGHANISTAN

    But we know, and you and I both agree on Afghanistan, but 
let us put the money to it. Karzai needs about $5 billion to 
really follow through. General Jones, as you know, the 
commander of NATO says, one, two, three, he will have three 
areas secured by September and the fourth area where the 
Taliban is, there are about 1,300 there and he can get rid of 
those by the end of the year. So we are on course. I am very 
hopeful about Afghanistan. Like I saw, the jury is out on the 
other. That is one of the main things. I have got two or three 
other questions, but if you would like to comment----
    Secretary Powell. Let me just touch on a few, if I may, 
Senator. With respect to Pakistan, we are working the 
helicopter issue. They need more helicopter capacity in that 
part of the tribal areas. On night vision goggles, when we were 
there last week they had not----
    Senator Hollings. They had not arrived.
    Secretary Powell. They had not signed the letter of 
agreement (LOA). They are working on it.
    Senator Hollings. Whatever the snarl is, good God, you and 
I are trying to get Osama for 2\1/2\ years and we just had not 
signed the papers to get----
    Secretary Powell. No, they had not signed the LOA.
    Senator Hollings. They had not signed or whatever it is.
    Secretary Powell. It is being worked now.
    One other indicator of how things are going in Afghanistan, 
and we should not dismiss the fact that this is an example of 
what we can do if we stick with it, and it is an example that 
might apply to Iraq, 3 million refugees have come home from the 
largest refugee population in the world. Three million people 
who are being accommodated, slowly but surely, but they will be 
accommodated.
    With respect to NATO in Afghanistan, I think ultimately 
there will be a NATO role in Iraq as well as an alliance. But 
most of the nations of NATO are already involved in Iraq as 
part of our coalition efforts. We should not dismiss that. So 
they have expressed their support for what we are trying to do.
    There is a difference in the funding that has been made 
available to Afghanistan and the funding that is made available 
to Iraq, but I think we have determined that our needs in Iraq 
are far greater than the needs in Afghanistan, even if we had 
double or triple the amount available.

                         AFGHANISTAN OVER IRAQ

    Senator Hollings. The opportunity is greater in 
Afghanistan. The needs are greater in Iraq. You and I agree. 
But let us take the opportunity that is there where you put 
just--the President has asked for $1.2 billion, for God's sake, 
and hundreds of millions over there for the needs in Iraq. But 
here are the opportunities. You could take $20 million and put 
in what we call a VOIP, a voice over Internet provider, and we 
could get the Internet going and communications going and we 
could have that by the end of the year if you got a good 
contractor in there, and then we would have communications in a 
friendly country where they like us, they support us, they 
support NATO and everything else, and they are working with us 
to try to get rid of the Taliban. That is an opportunity.
    Secretary Powell. The only other thing I would mention is, 
as you know, we have asked for doubling of the NED funds this 
year.
    Senator Hollings. In Iraq.
    Secretary Powell. No, overall. The overall account, we have 
asked for a doubling of the National Endowment for Democracy 
(NED).
    And I congratulate the Tunisians for what they have done 
with respect to literacy. That is what we would like to see in 
all these other places as well.
    Senator Hollings. Let me yield.
    Senator Gregg. Senator Byrd.
    Senator Byrd. Thank you, Mr. Chairman.
    Mr. Secretary, I am an ex-officio member of this committee. 
I take this opportunity to thank the chairman and the ranking 
member of this subcommittee. They are very learned and 
experienced, dedicated members of the Appropriations Committee. 
I also want to thank you for your long service to your country. 
I have observed your service from my vantage point of several 
positions going back over a number of years, and I share the 
encomiums that have been expressed already by the chairman and 
the ranking member.
    There has been some discussion here about foreign aid and 
the Pentagon. Press reports indicate that the Pentagon will 
continue to handle foreign aid in Iraq even after a new U.S. 
Embassy is established on July 1, 2004. I never understood why 
the CPA should be under the control of the Defense Department 
in the first place. DOD is responsible for fighting wars and 
protecting national security. Getting the Pentagon into the 
foreign aid business is a mistake, and I have been fighting 
that, and I have been fairly effective as the ranking member 
and as the chairman from time to time of the Appropriations 
Committee of the Senate, but not in the case of Iraq. I have 
been opposed to shifting monies over to the Defense Department, 
money for foreign aid. It distracts the Department from its 
core mission. I am talking about the Defense Department now.
    Moreover, in every major postwar situation during the last 
50 years, the State Department and USAID have been in charge of 
reconstruction efforts. Even in the case of Vietnam where the 
war was still being fought, the State Department and USAID were 
primarily in charge of economic and development assistance 
efforts. After June 30, the case for the State Department to 
manage the aid will be even more compelling. There will be an 
Iraqi government, there will be a U.S. mission in Iraq. I 
cannot understand why the Defense Department will still be in 
the business of managing foreign aid.

   WHY DOES THE DEPARTMENT OF DEFENSE FUND THE COALITION PROVISIONAL 
                               AUTHORITY

    You are a former chairman of the Joint Chiefs of Staff. 
Should we not be getting the Defense Department out of the 
foreign aid business and letting the State Department do the 
job that it is supposed to do?
    Secretary Powell. Mr. Chairman, a couple of observations. 
The Defense Department is superb at fighting wars, but they 
also have a record of dealing with the situation that one finds 
in a country in the immediate aftermath of a conflict. We all 
can remember very well General MacArthur in Japan after World 
War II and military officers in Germany after World War II 
until such time as we were able to transition over to other 
agencies of government.
    In the case of Iraq, it was logical and made sense that the 
Defense Department should be prepared for the immediate 
aftermath of the war and to be responsible for the country as 
it is being stabilized and as the reconstruction effort got 
underway. But it was always anticipated that once a point had 
been reached when we are ready to return sovereignty and we 
were ready to continue with the reconstruction effort, it would 
all transfer over to the chief of mission, the Ambassador and 
the State Department. That is on track.
    Even so, during this period where Defense has had the 
direct responsibility for CPA, USAID has been intimately 
involved. We have a very large USAID mission there, contracting 
for and undertaking reconstruction efforts. In fact they have 
been the bulk of the reconstruction efforts.
    On the first of July when this transfers over, if we are 
able to keep that schedule, and I hope and think we will be 
able to keep that schedule, everything comes under the chief of 
mission. So you might still, after that point, have an Army 
Program Management Office for the simple reason that the State 
Department is not equipped to program manage the sums of money 
that are going to be available from the supplemental. So I want 
that Army Program Management Office to contribute to provide 
contracting support, all the other things required to handle 
that sum of money.
    What will change is that they will get all policy direction 
and all instructions will come from the chief of mission, the 
Ambassador, who will work for me in the name of the President. 
He ultimately works for the President.
    When I talk to Secretary Rumsfeld and Mr. Bremer about 
this, they all understand this. As I said to Secretary Rumsfeld 
in a conversation we had last week to make sure there is no 
confusion, there is not any confusion between us, on first of 
July, anybody who is doing things that belong to the Pentagon 
now becomes a supporting organization to the chief of mission 
and to the State Department. There are some things that they do 
very, very well and it would be not wise of the State 
Department to say, we do not want you to do this anymore 
because you belong to the Pentagon. We want you to continue to 
do it, but you will be doing it under the authority of the 
chief of mission, and when you need policy guidance as to 
whether a dollar should go here or go there, or whether this 
project is approved or that project is approved, that decision 
will come from the chief of mission reporting to the State 
Department. And the State Department back in Washington will, 
of course, discuss this on an interagency basis with all 
relevant agencies in the Government and we will get our overall 
direction from the President.
    Senator Byrd. Here, Mr. Secretary, in my hands I hold two 
different declassified versions of the national intelligence 
estimate on Iraq. Now I read from a version that was released 
in July 2003 after the war. This passage is part of the 
dissenting view of the State Department's Bureau of 
Intelligence and Research. Here is what it says.

    ``The Assistant Secretary of State for Intelligence and 
Research believes that Saddam continues to want nuclear weapons 
and that available evidence indicates that Baghdad is pursuing 
at least a limited effort to maintain and acquire nuclear 
weapons related capability. The activities we have detected do 
not, however, add up to a compelling case that Iraq is 
currently pursuing what INR would consider to be an integrated 
and comprehensive approach to acquire nuclear weapons. Iraq may 
be doing so, but INR considers the available evidence 
inadequate to support such a judgment.
    ``Lacking persuasive evidence that Baghdad has launched a 
coherent effort to reconstitute its nuclear weapons program, 
INR is unwilling to speculate that such an effort began soon 
after the departure of U.N. inspectors or to project a timeline 
for the completion of activities it does not now see happening. 
As a result, INR is unable to predict when Iraq could acquire a 
nuclear device or weapon.''

    Secretary Powell. Sir, what was the date you said that was, 
July?
    Senator Byrd. This is the declassified version of the 
national intelligence estimate on Iraq. This version was 
released in July 2003 after the war. It is the declassified 
version.
    Also, here is the declassified version of the national 
intelligence estimate on Iraq that was released in October 
2002. That was when the Senate of the United States did the 
most shameful thing that it has done. It washed its hands of 
its responsibility to declare war, and it shifted that 
constitutional power to the President of the United States, to 
one man, to declare war, to decide when to declare war, and how 
and when to use the military.
    This is the declassified version of the national 
intelligence estimate on Iraq that was released in October 
2002. That was when our Senators were misled into casting a 
vote to declare war, to shift that power to one man to declare 
war. This version was released in October 2002, before the war.
    I looked through every page of this version, and the State 
Department's dissenting views from which I just read have been 
omitted from this version. In other words, the intelligence 
views that did not agree, the intelligence views from your 
Department, Mr. Secretary, that did not agree with the White 
House's political agenda were cut out in the version released 
before the war. They were cut out.
    Let me read just one sentence in the State Department's 
alternative views of Iraq's nuclear weapons. One sentence. 
``The activities we have detected do not, however, add up to a 
compelling case that Iraq is currently pursuing what INR would 
consider to be an integrated and comprehensive approach to 
acquire nuclear weapons.'' That language was left out at the 
time when it should have been left in for the American people 
and all to see.
    I know that you have confidence in the Department's 
intelligence bureau. You just stated it today. You just made 
reference to the intelligence bureau. You expressed confidence 
in your own intelligence bureau. And I have confidence in it. 
Yet, it was left out of this document about Iraq's weapons of 
mass destruction program.
    So can you explain why the State Department's views were 
not included in this document right here, that were so 
important to the President's case to go to war in Iraq? Did it 
concern you that the State Department's views were left out in 
the document that was released publicly before the war?
    Secretary Powell. Senator, I do not have the benefit of 
having read or studied those two documents recently. Are you 
saying these are declassified versions of the same document 
separated in time?
    Senator Byrd. Yes.
    Secretary Powell. I would have to read what the overall NIE 
said. I know that the presentation I made on the fifth of 
February tried to carefully balance and put forward to the 
international community what we believed about at the time.
    Senator Byrd. There it is.
    Secretary Powell. I cannot respond to this, Senator, 
because I am not the author of either document, and I do not 
have an opportunity to read what the basic document says, not 
just the footnote. The fact is that, as the INR footnote says 
and I am sure the basic document says, there was never any 
doubt that he wanted to have nuclear weapons. As I testified 
before the world on the fifth of February, he was keeping in 
place the knowledge infrastructure, he was keeping in place the 
capacity to have such weapons, or plans to have such weapons, 
and that there was some indication that he was undertaking 
procurement activities. There was a difference of opinion with 
respect to some of the procurement activities concerning 
centrifuges, and I made that point when I made my presentation.
    So I think it was clear this is something he wanted to 
have, but there were legitimate differences of opinion as to 
how far he was on the road to having such a capability. One 
thing that I have never doubted is that if he had been released 
from the pressure of the international community or if he had 
been released from the sanctions policy that was in effect, all 
of which he was trying to do, there is no doubt in my mind that 
he would have gotten right back on track with the intellectual 
infrastructure and with the money available to him and with the 
plans that he had.
    Senator Gregg. Senator, if you have completed that line of 
questions, could we go on and get to other Senators and then 
come back for another round?
    Senator Byrd. I had not completed it. I will try to be 
brief.
    Based on the declassified national intelligence estimate, 
the State Department's assessments on Iraq appear to be more 
accurate than the assessments of other agencies. But these 
conclusions regarding Iraq's nuclear weapons program were all 
but ignored by senior administration officials. Vice President 
Cheney said virtually the opposite on national television when 
he stated, ``we know [Saddam Hussein] has been absolutely 
devoted to trying to acquire nuclear weapons and we believe he 
has in fact reconstituted nuclear weapons.'' Mr. Secretary, the 
world heard from the National Security Advisor who warned of 
nuclear weapons and mushroom clouds. These statements were 
absolute and unequivocal, but there is no mention whatsoever 
that the nuclear issue was hotly debated within the 
intelligence community. There is no mention of the questions 
raised by the State Department's intelligence service. Those 
concerns did not match the administration's case for war, so 
those concerns were brushed aside, brushed over, and brushed 
away.
    In your view, Mr. Secretary, why were the State 
Department's conclusions, which ended up being the most 
accurate of all, ignored by other senior officials in the 
administration, especially the Vice President?
    Secretary Powell. Sir, I cannot track each statement. All I 
can say is that the position put forward by me and with Mr. 
Tenet behind me, having approved every word of my presentation 
of the fifth of December, reflected the best judgment of the 
intelligence community. Now where there are differences of 
opinion and nuance, you have to make a judgment as to what the 
preponderance of evidence supports, and Mr. Tenet is the one 
who makes that judgment. I think he put a balanced judgment 
into the overall NIE that was available to the Congress, that 
was available to me as I prepared my presentation and which 
reflected the best judgment of the community when I made my 
presentation. And I had qualifiers in my presentation to 
suggest that there were differences of opinion.
    Senator Byrd. I thank you, Mr. Secretary, and I thank you, 
Mr. Chairman.
    Senator Gregg. It is the tradition of this subcommittee at 
least to recognize the chairman of the full committee whenever 
he arrives.
    Senator Stevens.
    Senator Stevens. I would take just a few minutes, if I may. 
There are five hearings this morning. I have tried to visit 
each one of them, Mr. Chairman.
    Mr. Secretary, my first report to you is that my Flat 
Stanley got home all right.
    Secretary Powell. I am pleased to hear that.
    Senator Stevens. We met the Secretary in Jordan and he was 
kind enough to----
    Secretary Powell. We are still looking for the digital 
pictures so we can put it up in the State Department.
    Senator Stevens. I have got one. I hope you know what a 
Flat Stanley is. If you do not have a grandchild----
    Secretary Powell. You do not know what a Flat Stanley is?

       FUNDING FOR THE COALITION PROVISIONAL AUTHORITY POST-JULY

    Senator Stevens. Mr. Secretary, first, I come primarily 
because I am worried about the funding for the CPA in the 
transition after July 1. I do hope that we can get your 
guidance on what will take place there. As I understand it, it 
is fairly certain that the current funding of CPA will run out, 
and I do not know whether we are going to get to the 2005 bill 
in time to start October 1. There may be a gap there. Are you 
prepared to deal with that?
    Secretary Powell. We believe and we are still grinding down 
on this, Senator, in conversations with Ambassador Bremer and 
Secretary Rumsfeld and our two staffs working with each other, 
we will not walk in on the first of July and find no money 
there. There will be sufficient funds that should be able to 
carry the new operations under the chief of mission through 
certainly the end of the year and the end of 2005. But we 
really need to drill down on those numbers to make sure we have 
got it right.
    Senator Stevens. I hope we can visit later on in the year 
here about that funding, because very clearly----
    Secretary Powell. We have got to make sure we have got it 
right.
    Senator Stevens. Senator Hollings and I have met with 
members of the provisional council that did urge that we go 
forward and did urge that they want that authority at the end 
of June, so I think we ought to be sure that the funding is 
there until we do get the 2005 bill approved.
    Having said that, I know of no one I admire more than the 
two gentlemen on my right here, Senator Byrd and Senator 
Hollings. We disagreed of the vote on the war resolution, and I 
still maintain that based upon the briefings that I had as 
chairman of the Defense Subcommittee and as President pro tem I 
had reached the same conclusions that you announced, and I 
still believe that there are weapons of mass destruction. We 
found their airplanes that they were not supposed to have after 
the first gulf war buried in the sand. It took us more than 1 
year to find them, and we only found them by virtue of an 
informant that told us where they were. Now if they can bury 
airplanes, they can bury weapons of mass destruction.

                 READINESS OF IRAQI SELF-DEFENSE FORCES

    But in any event, the problem now is winning the peace. I 
have one other question to ask you about the status of the 
training of their self-defense force. I hope that we will call 
it a self-defense force rather than an army because I do not 
believe they should have an army yet.
    But in any event, the self-defense force and the police 
that will take over the major responsibility will be in Baghdad 
immediately. Do you have information on the status of that? 
Will they be ready and are they trained sufficiently to 
maintain that security to allow us to pull our forces out of 
Baghdad and have them--and the perimeter outside of Baghdad?
    Secretary Powell. I would like to provide a more fulsome 
answer from Ambassador Bremer and the Pentagon, but based on 
what I heard last week the training that the State Department 
is responsible for with respect to police is going well. We are 
producing in two places trained policemen coming through with 8 
weeks of solid training. We have got to make sure they are 
getting equipped with cars, with uniforms, with weapons, with 
the forensic infrastructure that a police department needs. The 
military is now also training police. So I think the volume of 
trained police will increase very significantly in the months 
ahead. Getting them fully equipped is the challenge.
    With respect to the army, there is an army that is being 
trained now, and battalions are starting to come out of that 
flow, and I think General Abazaid is anxious to speed that up. 
There is a huge amount of effort going into training of the 
civil defense units as they are called, but not civil defense 
in the old context that we remember, Senator Stevens, but 
militia--not even militia. A national guard is the closest 
parallel I think that would be located in the different regions 
to provide security.
    Mr. Rumsfeld says that up to 200,000 Iraqi personnel are 
now in uniform helping us with security and putting themselves 
at risk. Eleven of them were killed the other day. So it is not 
as if they are not wanting to go out there and fight for their 
country and protect their country. But we still have challenges 
ahead to fully equip and train this force in a competent way.
    [The information follows:]

    Public security and law enforcement are critical priorities in Iraq 
and key to the new Iraqi government's ability to establish the 
institutions necessary to effectively govern after June 30th. The 
Department of State has been providing extensive support to the 
Coalition Provisional Authority since May of 2003 to achieve these 
goals. These efforts will continue beyond the transition, and will 
enable the Iraqis to ultimately assume full responsibility for security 
and public safety. As more and more Iraqi police are trained and can 
take up regular duties, coalition forces will be able to reduce their 
efforts in this area. Due to the neglect and abuses of the past 35 
years, the security forces must be rebuilt, and it will take time 
before they reach full operational capacity and can operate 
independently.
    It is encouraging to note that there are nearly 200,000 Iraqis 
working with coalition military forces and providing security for their 
country, serving as part of institutions such as the New Iraqi Army, 
Iraq Police Service, Border and Customs, and the Iraq Civil Defense 
Corp (ICDC).
    The Iraqi Civil Defense Corps--which is similar to an internal 
self-defense force--is supporting Coalition operations throughout Iraq. 
Approximately 35,000 troops in 36 ICDC battalions are trained, 
deployed, and operating side-by-side with Coalition companies and 
battalions. CJTF-7 plans to stand up 9 more battalions by June, 
bringing the total number of ICDC to about 41,000 personnel either on 
duty or in training. ICDC training should be completed by August. In 
the Baghdad area, there are currently 6,300 trained and equipped ICDC 
troops. They are fully integrated into the operations of 1 Armored 
Division, which is assigned to the Baghdad area of responsibility.
    Four battalions of the Iraqi Armed Forces have completed recruit 
training. The fifth battalion will enter training in mid-May, and by 
October we expect to have 27 battalions of IAF trained and equipped. 
Their mission will be defense against external threats.
    With respect to the police, the CPA has determined that an Iraq 
Police Service (IPS) of approximately 75,000 personnel will be needed, 
and in order to reach this number, over 35,000 new recruits must be 
selected and trained. The Bureau for International Narcotics and Law 
Enforcement Affairs (INL) is funding necessary construction and 
renovations at a site offered in Jordan for the training, which began 
in November 2003. The training program consists of 8 weeks of intensive 
basic policing skills training that stresses modern, democratically 
based policing methods under the instruction of up to 400 United States 
and other international police instructors trained to deliver the 
course.
    With INL funding, the curriculum for this training was developed by 
the Department of Justice International Criminal Investigative Training 
Assistance Program (ICITAP), and is based largely on the successful 
model used in Kosovo and other post-conflict areas. In a few months, 
the Jordan site will be at full capacity, and will be able to support 
up to 3,000 recruits and 1,000 instructors and staff at any given time.
    As follow-on to the basic training, recruits will then complete a 
structured field-training program over a twenty-four week period 
administered by International Police Advisors who will focus on the 
practical application of the course work and will further develop their 
skills in core policing areas. So far, nearly 1,500 Iraqi police 
recruits have graduated from basic skills training and are deployed 
back at home. In addition, there are approximately 2,300 recruits in 
training in Jordan and Iraq.
    ICITAP has also developed a three week Transition and Integration 
Program (TIP) for delivery to the approximately 46,000 existing IPS 
personnel. The program focuses on international standards of human 
rights, modern police patrol procedures, the applicable Iraqi criminal 
laws and firearms proficiency. This course is designed to facilitate a 
change in outlook, behavior, action and activities of all Iraqi police 
regardless of assignment or rank.
    This course is being conducted country wide and has been 
prioritized to be delivered to those officers who will function as 
field training officers to the new recruits who will soon be graduating 
from basic training. The delivery of this course will continue until 
all existing IPS officers have successfully completed this training. So 
far, over 10,000 Iraqi police have received this training.
    The CPA training plan also calls for further development of three 
police academies in Iraq--in Baghdad, Arbil and Basra, to also deliver 
the 8-week basic course. These three facilities, when fully renovated, 
will, together be able to train approximately 2,000 students at any one 
time. One hundred Iraqi police trainers have already been given a 
``train-the-trainer'' course at the Jordan facility and have returned 
to Iraq. In addition, 230 U.S. military police trainers have been given 
the ``train-the-trainer'' course and will work with the Iraqi trainers 
in the three Iraq academies.
    Our efforts are directed at enabling the Iraqi police to achieve 
the capacity to provide public security and law enforcement, and 
thereby allowing coalition forces to withdraw as soon as practical and 
safe.

    Senator Stevens. One last question Mr. Chairman. When we 
look at the plans now for the period past June 30, it is my 
understanding that the largest Embassy we have will be the 
Embassy that is in Baghdad.
    Secretary Powell. Yes, sir.
    Senator Stevens. Are we going to appoint an Ambassador 
there?
    Secretary Powell. Yes, sir.
    Senator Stevens. I am hard-pressed to understand why it is 
going to be that large. Could you just describe the need for 
that big an Embassy and its staff?
    Secretary Powell. A lot of things have to be done in Iraq. 
First and foremost, we have to make sure that we have the 
people in place to manage a very large sum of money made 
available by the Congress through the supplemental.
    Second, we have got to help the Iraqis develop a 
sophisticated government with ministries that are answerable to 
political authorities, and that is going to take some effort. 
We will have a very large USAID presence in the country. We 
will have representatives of the chief of mission in different 
parts of the country to represent our interests. There will be 
a very large security component, because we expect that it will 
still be not a safe environment.
    So when you add all of these things up, we think it will 
take a fairly large mission staff to do all these things. There 
will be an Office of Security and Cooperation, and we continue 
to work to improve the capabilities of Iraqi police and 
military personnel and the civil defense units that I spoke of. 
And there will be a lot of contracting people who may work for 
other departments but will be answerable to the chief of 
mission, and therefore become part of the overall mission size.
    Senator Stevens. Will any of the funding for that come from 
the supplemental or what's available to the new government?
    Secretary Powell. Yes, there are opportunities to tap into 
the funding stream of the supplement to support this overhead 
for managing of the supplemental money.
    Senator Stevens. Last item, my friend. Any bricks and 
mortar involved in that? Are we going to build a new building?
    Secretary Powell. We are looking now--yes, we are examining 
sites now for a new Embassy facility, and there is wedge money 
in the program now to begin that work.
    Senator Stevens. That is to permanently house that many 
people or will it come down?
    Secretary Powell. I certainly hope it will come down over 
time, but in the first year or two there is a massive amount of 
work that has to be done. The Embassy is not being scaled for 
that large a presence over time. It will take some years to 
build the Embassy and we are still figuring out what to scale 
it for. But it will be a major facility.
    Senator Stevens. Will the provisional authority be there at 
the same time in that building?
    Secretary Powell. The provisional authority will go away.
    Senator Stevens. Is the new government going to be in the 
green zone?
    Secretary Powell. I assume initially it will be, but I do 
not know the answer to that question. I will get it for the 
record.
    Senator Stevens. Thank you.
    Thank you, Mr. Chairman. I do appreciate your courtesy. 
Gentlemen, appreciate your courtesy.
    Senator Gregg. Thank you, Mr. Chairman.

                         HMONG REFUGEES IN LAOS

    Senator Kohl, I appreciate your patience.
    Senator Kohl. Thank you, Senator Gregg. I would like to 
change briefly to another area of the world which my staff has 
told you I was going to inquire about and that is Laos. Mr. 
Secretary, I am deeply concerned about reports coming from Laos 
on the status of the Hmong. My State of Wisconsin is the home 
to 33,000 former Hmong refugees, many of whom are concerned 
about the status of their family and friends in Laos who have 
been living in the jungle since the end of the Vietnam War. 
Estimates are that there are as many as 17,000 still in the 
jungles.
    As you know, Mr. Secretary, the United States is indebted 
to these former Hmong insurgents who fought valiantly with us 
during the Vietnam war. In recent weeks there have been reports 
that hundreds of Hmong have been emerging from the jungle to 
take advantage of an unofficial Lao government amnesty program. 
The Lao government denies that there is such a program. We have 
been receiving reports that many of these Hmong have not 
surrendered willingly, but they have been captured and are 
being severely mistreated.
    Last week Senator Feingold and myself, along with other 
Senators, sent a letter to Ambassador Negroponte asking for his 
assistance in urging the United Nations to send a high level 
U.N. representative or a fact-finding mission to Laos to 
monitor the treatment of the Hmong. To ensure the safety of 
this Hmong population we need to do all we can to shed light on 
the situation there. Unfortunately, as you know, there is 
virtually no international access to the areas where the Hmong 
live. So can I ask for your support in this request for a high 
level U.N. representative or fact-finding mission to Laos?
    Secretary Powell. Sir, we will be answering your letter in 
the next day or so, but we believe the United Nations can play 
an important role. There are U.N. agencies working in the area 
now. I really do need to talk to Kofi Annan as to whether he 
wants to designate another new special representative for this, 
but we will consider this request.
    Our initial look into the issues raised in your letter 
suggest that they are coming out, but we have not yet got any 
evidence to suggest they are being abused in the way that some 
people have said they are being abused. I do not say it has not 
happened or is not happening, but we still have to do more work 
to establish the facts. We are trying to get greater access to 
them, and we are in touch with the Lao government about the 
need for greater access, and we are about pushing the United 
Nations to achieve greater access.
    As a separate matter, as you know, there is a Hmong 
population that is in Thailand and we are working hard to see 
if we can settle them as refugees as part of our refugee 
resettlement program here in the United States.
    [The information follows:]

    I would like to respond on behalf of the Secretary regarding the 
Department's position on normal trade relations (NTR) for Laos which 
you raised during the March 25 Commerce, Justice, State Appropriations 
hearing.
    The Administration supports granting NTR status for Laos and 
bringing into force the bilateral trade agreement negotiated in 1997 
and signed in 2003. Laos is one of only three countries worldwide (the 
other two being Cuba and North Korea), and the only lesser-developed 
country, subject to tariff rates generally far higher than those 
available under NTR. Extending NTR to Laos could help open Laos to the 
outside world, which could in turn lead to more internal openness and 
transparency. Progress toward a more open and democratic society will 
help us achieve our foreign policy objectives across the board. While 
some opponents of NTR argue that it should be used as a reward for a 
completed democratic reform process, we believe that granting NTR to 
Laos will benefit the Lao people, and will create a more cooperative 
environment in which the United States can effectively pursue key human 
rights and democratization objectives.
    The United States Government remains deeply concerned about human 
rights in Laos, including treatment of the Hmong minority. We have 
repeatedly made clear to the Lao government the strong concern of the 
American people and government about the poor human rights situation 
and will continue to do so. In regard to recent reports of Hmong living 
in remote areas seeking to resettle in Laos, reports so far indicate 
that the Lao Government has treated those seeking resettlement 
humanely. We have offered assistance for this population, but the Lao 
Government has not responded. Also, Secretary Powell has written to the 
Lao Foreign Minister supporting Ambassador Hartwick's urging that the 
Lao Government allow our Embassy or international organizations access 
to these people so that we can assess their conditions first hand. We 
do have reports that fighting continues between some Hmong groups and 
the Lao Government, and we have urged that the Lao take a humanitarian 
approach.
    I hope this answers your questions. Please feel free to contact me 
if we may be of further assistance.

                                      United States Senate,
                                    Washington, DC, March 15, 2004.

Ambassador John D. Negroponte,
U.S. Ambassador to the United Nations, United States Mission to the 
        United Nations, 799 UN Plaza, New York, NY.
    Dear Ambassador Negroponte: We are writing to ask for your 
assistance in urging the United Nations to send a U.N. representative 
or fact-finding mission to Laos to monitor the treatment of hundreds of 
Hmong-Lao, many of whom are former insurgents and their families, who 
have recently emerged from the jungles of Laos. A high-level U.N. 
presence is essential in securing the safety of these individuals, as 
well as in providing greater transparency regarding Lao governmental 
actions to the international community.
    Over the past several weeks, hundreds of Hmong-Lao and their 
families have left the jungles of Laos. Many of these former insurgents 
fought with the Central Intelligence Agency during the Vietnam War to 
rescue downed American pilots, to thwart supply lines along the Ho Chi 
Minh trail and to hold off North Vietnamese troops. When the Vietnam 
War ended and the communist Pathet Lao took over the government, 
thousands of Hmong were killed and sent to reeducation camps. Most 
Hmong fled Laos or hid in the jungles of Laos, fearing for their lives. 
Some estimate that as many as 17,000 Hmong have been living in the 
jungles since 1975. The United States remains indebted to these 
courageous individuals and their families.
    The U.S. government claims that these individuals have surrendered 
to the Lao government and are participating in an unofficial and 
``unstated'' amnesty program organized by the government of Laos. Yet, 
our offices have heard contradictory information. Reports indicate that 
the Laotian government denies the existence of any amnesty program for 
these individuals. In addition, many of our constituents claim that 
these former insurgents have been captured by the Lao military and did 
not surrender. Our constituents fear that these people are in serious 
danger and allege that many have already been killed, including women 
and children. Amnesty International in a report on March 4, 2004 
states, ``Amnesty International has received conflicting reports as to 
their [the Hmong's] reception and treatment by Lao authorities.''
    The restrictions imposed by the Lao government on international 
access have prevented policymakers, journalists and humanitarian groups 
from knowing the reality on the ground and understanding the needs. The 
United Nations can play a crucial role in shedding light on the 
situation. We ask you, therefore, to urge the United Nations to send a 
U.N. representative or fact-finding mission to ensure that these former 
insurgents are treated humanely and that the Lao government respects 
its obligations under international law.
    We thank you for your consideration.
                                   Senator Russ Feingold,
                                   Senator Herb Kohl,
                                   Senator Barbara Boxer,
                                   Senator Mark Dayton,
                                   Senator Dianne Feinstein,
                                   Representative Ron Kind,
                                   Representative Mark Green,
                                   Representative Devin Nunes,
                                   Representative George Radanovich,
                                   Representative Dana Rohrabacher,
                                               Members of Congress.

    Senator Kohl. Thank you. Mr. Secretary, an AP story earlier 
this week based on information from the Hmong leader in the 
jungle reported that 6,000 Laotian troops using machine guns, 
grenades, mortars, and helicopter gunships had launched a new 
attack against a group of 2,000 Hmong insurgents and their 
families. At least seven women and children were killed. 
Amnesty International reported in October that the Lao 
government has used starvation as a weapon of war against 
thousands of Hmong in the jungle. We have seen reports, such as 
photos in a Time Asia piece last summer that Hmong in the 
jungle are living in deplorable conditions.
    What can we do to press the Laotians on the human rights 
situation? Senator Feingold and myself contacted the Lao 
government about the Amnesty report. They have denied the 
report. Our ambassador industry has been pressing for normal 
trade relations with Laos, and that bill was recently 
introduced in the Finance Committee.
    My question is, is this the time for us to be rewarding 
that government with normal trade relations when we are 
supposedly, and I believe should be, so concerned about their 
human rights treatment?
    Secretary Powell. We are concerned about the human rights 
treatment. We have received reports of this military operation 
and we are trying to confirm or get a denial of it; to find out 
what the fact are. The Embassy is working hard to establish the 
facts. While I have seen the same reports that you have, I just 
do not know the real facts yet.
    The Lao government does have an amnesty policy with respect 
to the trade relief legislation. Let me take another look at it 
because I really am not familiar with it.
    Senator Kohl. I would appreciate that very much.
    Secretary Powell. I would be delighted, Senator.
    Senator Kohl. Finally, you refer to the Buddhist temple in 
Thailand and resettlement efforts. I would like to know what 
the State Department plans are to ensure the humane treatment 
of those Hmong Lao who do not qualify for resettlement in the 
United States. In the interest of time I will submit the 
question and I look forward to some response from you.
    Secretary Powell. Yes, sir. Thank you, Senator.
    Senator Kohl. I thank you, Mr. Secretary.
    Senator Gregg. Thank you, Senator Kohl. I know the 
Secretary has to leave but there are number of issues we would 
still like to take up with you, and maybe we could all take 
maybe 5 minutes, 10 minutes at the most to go over those.

                     CHARLES TAYLOR BEFORE TRIBUNAL

    There are a series of issues that deal with peacekeeping 
and activities in Africa. One of my concerns, as you know, is 
how we get Charles Taylor over to be tried before the tribunal, 
so I would ask you a series of questions. One is, do you expect 
the UNMIL process to be successful if Charles Taylor is not 
tried? If your answer is no, then how do we get him tried?
    Number two, it appears that there is going to be an 
expanded peacekeeping effort throughout Africa, especially in 
Sudan eventually, what are you projecting that we are going to 
have to come up with for peacekeeping in Africa?
    Secretary Powell. The best I can do with respect to 
projections is what we have now in the 2005 budget, but I want 
to put down a cautionary word that we do have these other 
demands coming along. I hope they are coming along. I hope we 
will be able to work on peacekeeping forces for the Sudan. As 
you know, we are in a very intense, delicate period of 
negotiations with the Sudanese and the SPLN to try to get a 
comprehensive peace agreement. So we may well have to come back 
to the Congress at some point in the future during 2005 for 
additional support for peacekeeping efforts.
    With respect to Mr. Taylor, he is still subject to the 
court. I believe he should come before that court. As you know, 
he is in Nigeria and the circumstances of him being moved to 
Nigeria was that the Nigerian government would not come under 
pressure in this immediate period to turn him over to the 
court. The Nigerian government has said, however, that when 
Liberia has a functioning government that is recognized and 
makes a request for Mr. Taylor, then it can be looked at at 
that time.
    This was not a perfect solution, but last year when we were 
facing this problem we needed to get the violence ended, and we 
needed to get some control of this country and over the 
population. We needed to get Charles Taylor out. We found a way 
to do that and it required us to make a compromise with respect 
to letting him remain in Nigeria without the Nigerians being 
under pressure to turn him over right now, or else we would not 
have been able to----
    Senator Gregg. But the understanding was that he would not 
stay in Nigeria----
    Secretary Powell. He is.
    Senator Gregg [continuing]. And not be a force.
    Secretary Powell. He is not much of a force.
    Senator Gregg. He is. He is agitating. There are reports 
that he has got an army up and running in the Ivory Coast.
    Secretary Powell. He does not have an army up and running. 
He is an annoyance. I have followed this very carefully because 
the last thing I wanted to see was to have Charles Taylor 
trying to create armies or stop what we are trying to do in 
Liberia. I have seen the reports about creating an army but I 
have never been able to verify that one exists.
    Senator Gregg. How can we justify this tribunal if the 
first person they indicted will not be brought before them? We 
brought Milosevic in. Why should we not bring in Taylor?
    Secretary Powell. We will. It took a long while to get 
Milosevic in, and we finally had to apply different kinds of 
pressure and wait for a different set of circumstances in 
Belgrade before we could get Milosevic in. We still believe 
Charles Taylor belongs before this tribunal and we hope that 
that is where he will end up.
    But last year the challenge we were facing was to get food 
into the people of Liberia who were starving and to get the 
killing ended. And we succeeded. We succeeded by getting 
Charles Taylor out, and the way we got Charles Taylor out was 
to send him to Nigeria with an understanding with the Nigerians 
that they would not be pressured. The Nigerians know that 
ultimately Charles Taylor has to be dealt with, and they have 
set out the circumstances under which he could be dealt with. 
That is when there is a functioning government in Liberia and a 
request for his return. I think eventually he will stand before 
the bench of justice.
    Senator Gregg. Before I turn it over to Senator Hollings I 
do what to thank your Department. You are doing a lot of things 
right. You are doing the IT right, and I think General Williams 
has done an excellent job of getting Embassy construction under 
control. I hope he is going to take a serious look at the new 
U.N. building on the security side. This is a big dollar item 
and I think his expertise and his shop's expertise in that 
would be very important on the security side.
    Senator Hollings.

                         MIDEAST-WEST DIALOGUE

    Senator Hollings. Mr. Secretary, we can use your help on 
that International Center for Mideast-West Dialogue. I had the 
pleasure of talking with the president of Austria some 7, 8 
years ago and he allowed how we ought to have better relations 
between the Christian and the Muslim world, or the Western and 
the Mideast world, and that he talked to the Ayatollah Khomeini 
by phone every week, and other leaders there. At that 
particular time we were looking there at the facility--I am 
rushing along because I do not want to use your time--at 
Istanbul that was given to us by the former Ambassador and 
everything else in a card game, and he lost a bet. He bought it 
and gave us a magnificent facility, presently on loan to the 
British.
    I said, wait a minute now, we have gone along and we have 
got a wonderful consulate there, really a well-appointed 
facility, but why not start an East-West Center where you have 
got a secular state, Turkey, and everything else of that kind. 
We put in $7 million, Senator Byrd, in the bill and everything 
else, and we are ongoing. Now all of a sudden, Assistant 
Secretary Frank Taylor in your Department says it is not safe. 
This is not an Inman facility; we do care whether it is safe 
obviously. But we would not be loaning it to the Brits if we 
were not sure of its safety, you know what I mean? If you get 
those entire in there, and this particular facility, they want 
to move it into the United Nations, move it into New York, we 
would have questions about some of the people in the dialogue 
even getting visas to come into New York under the present 
circumstance and turmoil and what have you.
    Now you can get right in behind us and help us. We will put 
some more money and we will get it going. I think it is the 
Council for American Overseas Research Center, and they are a 
private group that is an NGO that takes and gets all these 
things working together and what have you. They have got 
credibility, and they will all join in. I have seen the success 
of the North-South Center, the East-West Center. We have got to 
get something going in the Mideast. Looking at the morning 
headlines, we are getting worse and worse.
    Otherwise, I have got to comment on Iraq, because I am 
worried about you and that big facility that you have taken. 
After all, the largest facility we have ever built for the 
Department of State, and you have got General Williams and he 
is tip-top and we have worked closely together--$450 million 
here. We have got $900-some million set aside and you say they 
have not--the State Department says we expect to have 1,000 
American personnel in there and 2,000 Iraqis working. So they 
are going to have 3,000 in the thing, and here we do not have 
security.
    My friend Senator Stevens said we differ voting for the 
resolution. Let me level, because I did with my own people back 
home and the press and everything else like that, I knew what 
it was doing when I voted for that authority for the President 
to go into Iraq. He had stated amongst all the build-up on 
October 7 in Cincinnati, facing present danger of evil, we 
cannot wait until the smoking gun is a mushroom cloud. When 
your Commander-in-Chief says that, and you know he has got 
availability with the Mossad. We all yap about the 
intelligence. We act like we are the only ones--whether it was 
good or bad, and distorted, twisted, blah, blah, blah. Israel 
depends on knowing what is going on in downtown Baghdad. Their 
survival depends on it. They have got the best of intelligence.
    So when the Commander-in-Chief said that, I voted for the 
resolution. I was misled, and we all were misled and we can see 
it in the morning news. Now we have got to do the best we can 
in there.
    What happens is that we still do not have enough troops. It 
was the same thing--I thought I was back in Saigon with 
Westmoreland talking to General Abazaid. He in the one breath 
said to me we needed 90 more days to train the police. We do 
not have the police trained sufficiently for June 30. We have 
not secured the borders. We have got green troops in the 
turmoil of trying to not have enough troops, bringing in Guard 
and Reserve with the greens, so a fellow lights a hibachi in 
the backyard and that there gives us a radar, a heat signal and 
we shoot and kill the family and the kids. We see another 
photographer and he aims a camera and we think it is a rocket 
and we kill the Reuters newsman.
    I had a good friend that has been in Baghdad for years off 
and on and he said, I shopped in downtown Baghdad in September. 
I went back in November and it was taking my life in my hands.
    So that train--we are doing the work for the Iraqis, and we 
have got the constitution. You feel good about it, but they 
say, wait a minute, that is an open-ended document. It subject 
to amendment. It gives the Kurds autonomy so the rest of them 
want autonomy. And Ambassador Bremer says we are not going to 
have an Islamic democracy, yet you have got a majority vote, 
and the majority vote is going to vote an Islamic democracy.
    With all of that, Bremer is gone come June 30. Abazaid is 
gone. They are all leaving, and they are leaving it for you. 
And you are building up a temple even bigger than Saddam ever 
built, $1 billion, $900 some million for 3,000 personnel, and 
then you say that the AID people are going to--they are. They 
are going to have to go up with their security. They are 
insecure all over the place. And it is going to be open sesame 
come June 30, and we ought to know at this committee level, 
ought not to be planning a $900 million facility. Maybe $90 
million, or take over one of the--they have got them all over 
the place, all those palaces and everything, and we are in 
them, in many of them.
    We can take where they have got--and that is off the beaten 
track and a good facility, and move that crowd that is in 
there, all computerized, looking for WMD. Just move them out 
and move you in, and we have got a facility and everything else 
and we will see how things go. That is a secure place and 
everything else of that kind.
    But I find the Defense Department--look, I asked about all 
those troops everywhere. I got to General McKernan and I said, 
General, I know you and you know me, you need some more troops. 
I said, I could have used more troops in June last year. I 
said, what for? He said, I could have gotten better security in 
the Sunni Triangle. I said, why not more troops now to get the 
Sunni Triangle, get the borders and everything else secure and 
what have you? The de-Baathification under Chalabi--and he will 
need the Secret Service by this time next year--Chalabi in 
charge of that has knocked off the leadership of the army, he 
has knocked off the leadership of the Sunnis and made some of 
them hostile and joined with Saddam loyalists, and they have 
joined with a lot of the insurgency coming in and terrorists 
and what have you, and the movement is--there is a definite 
movement going against us there, and you are going to end up 
holding the bag. That is what I am worried about.
    Senator Gregg. Senator, we are going to run out of time 
here with the Secretary.
    Senator Hollings. That is all right. He can comment or not.
    Senator Gregg. You can comment on that, then we will go to 
Senator Domenici, then to Senator Byrd.
    Senator Hollings. Help us on that Mideast-West Center.
    Secretary Powell. You are right, security is a problem 
there. Remember, the British just had a horrible situation with 
one of their consulates being blown up. I think we have to be 
careful about using that facility.
    Senator Hollings. That is right, we are in trouble.
    Senator Gregg. Senator Domenici, and then we will go to 
Senator Byrd.

                      IRAQ RECONSTRUCTION, COST OF

    Senator Domenici. Thank you very much, Mr. Chairman. Mr. 
Secretary, fellow members on the subcommittee, first I 
apologize for being late, particularly to you, Mr. Chairman. I 
had three committee hearings at the same time.
    I want to talk just for a minute about Iraq reconstruction 
and then I want to change the subject to non-proliferation. It 
still remains an issue. First on reconstruction, I hope that 
the experts that are going to use the $18 billion for 
reconstruction in Iraq will consider the fact that this 
reconstruction money ought to go as far as it can. By that I 
mean if there is any way that you can use it for guarantees and 
the like, so that less dollars get more accomplished, I think 
that would be a very good way to handle it.
    Now I am not familiar with how you plan to reconstruct 
Iraq, and how you plan to bring this economy into being, but I 
would suggest that you have some finance experts advising the 
Department on how to stretch the $18.5 billion. We know here 
that when we do guarantees, their cost on our budget is 
tremendously less than the amount of the loans. I leave that 
with you, and I hope that you will take every opportunity. If 
the $18.5 billion does not permit that and you see some places 
where more is needed, I would hope you would ask us.

              MOX PROGRAM; STATUS OF LIABILITY WITH RUSSIA

    I want to change the subject. It seems almost trivial with 
what we are doing, but I think non-proliferation of nuclear, 
and chemical, and biological weapons remains a terrific problem 
for the world. I want to ask you again about the MOX program. 
You know what that is. That is the program with the Russians 
that caused America to change its policy and start building a 
plant for MOX, which is a new way to convert some of the 
radioactive consequences of nuclear build-up.
    I am very concerned about the Russian-United States program 
that will remove 34 million tons of plutonium from the 
respective stockpiles. As you know, I have been involved with 
this effort beginning way back when we put it into effect. 
Frankly, I do not blame you, but I am very disappointed that 
the negotiations regarding this issue of liability has not yet 
been resolved. I tell you, Mr. Secretary, that it is a matter 
that deserves your attention. The Russians have negotiated a 
deal like this with another group, the G-8 partners and they 
have done it at a level of protection that is different from 
what we are talking about in this United States. I do not think 
we ought to let them get away with treating us differently.
    In other words, they are making the liability question 
harder for our country than they did for the G-8. I would hope 
that again, Mr. Secretary, that you would find the very, very 
best people and get on with this. We must not lose the momentum 
of this huge deal that we made at the same time we got that 
highly enriched uranium. I think you are aware of that. They 
made a deal. We got enough highly enriched uranium that we 
bought that could make thousands of bombs, and it was bought 
and it is here in America. It is being fixed up to where it can 
be used in nuclear powerplants.
    But the MOX program deals with a more dangerous compound. 
It deals with what nuclear weapons are made of. Or put it this 
way, you cannot make them without this. For the Russians to 
give us under an agreement 34 million tons--I believe that my 
staff is wrong. I think it is 34 tons.
    Secretary Powell. It is a lot.
    Senator Domenici. It is a lot and it could make a lot of 
bombs, and they will not be able to be made. Could I have your 
comments on this?
    Secretary Powell. I am familiar with the program and I am 
familiar with the liability issue. Our responsibility in this 
is outside of Russia, so I have got to take the question back 
to other colleagues in the administration and get back to you 
on it, and talk to my friends at DOE and my own staff to see 
what we can do about the liability problem.
    Senator Domenici. It would be done if you solve that 
problem. Thank you, and thank you, Mr. Chairman.
    [The information follows:]

    On March 25 at the hearing on CJS appropriations, you and Secretary 
Powell discussed the status of the liability issues with Russia and how 
it affects progress in United States and other G-8 partners' 
participation in Russia's plutonium disposition program. The Secretary 
promised to follow-up with you on this matter. This is an interim 
reply.
    State and other interested agencies remain engaged at senior levels 
on the issues you raised. We will provide a substantive response as 
soon as those deliberations are completed. We appreciate your strong 
interest in this issue and this critical initiative.

    Senator Gregg. Senator Byrd.
    Senator Byrd. Let me thank you again, Mr. Chairman, and 
Senator Hollings for your patience, and for your many 
courtesies to me. I am not a member of the subcommittee.
    Let me thank you again, Mr. Secretary, for the good work 
you do. When I came to Congress, we had Secretary Dulles as our 
Secretary of State. My first trip out of this country was a 
trip around the world. I remember that in high school I was 
assigned a book to read, Jules Verne's ``Around the World in 
Eighty Days.'' We went around the world in 68 days, I believe 
it was, in an old Constellation. Of course, that would have 
been called a junket in these days.
    We visited Afghanistan, where they went into the town 
square there, the men wore leggings and looked as though they 
wore secondhand clothing. The time of day was announced in the 
town square. There was no warm water in the hotel where we 
stayed. Mrs.--I am trying to remember the name of the lady from 
Illinois who was a member of the delegation. There were seven 
on the delegation, among whom was a member from Minnesota, a 
former missionary to China. We visited Afghanistan. We also 
visited Iraq and visited the king of Iraq, as it was at that 
time. I sometimes think that I would like to go back to 
Afghanistan and see what changes have been made.

      ISRAEL FENCE STATUS AND COST AND ISRAEL-PALESTINIAN CONFLICT

    While I was in Iraq, I decided to go down to Babylon, the 
old Biblical city of Babylon, sitting on the banks of the 
Euphrates River, and my memory carried me back to that chapter 
in the Bible where Daniel was called in before the king to 
interpret the handwriting on the wall, mini, mini, tiki, 
euphrasi. The meaning as Daniel interpreted it, God hath 
numbered thy Kingdom and finished it. Thou art weighed in the 
balance and art found wanting. Thy kingdom is divided and given 
to the Meads and Persians. That night the king was killed, and 
his dominions were indeed given to the Meads and the Persians.
    I marvel at the prophesies that we have heard and read from 
the Bible, and have seen them come true, and are seeing them 
come true.
    I agree with Richard Clarke's statement, and I paraphrase 
it, in that the war in Iraq has distracted us from the war 
against those who attacked us on 9/11 and the war in 
Afghanistan. I believe that, and believed it before he stated 
it. I am against that war in Iraq, I was against it, am against 
it, and will continue to be against it. I made no bones about 
that. I think that it has been a terrible distraction from our 
homeland security, our own security of this country. I think 
that we are lacking, and I think that something terrible will 
happen again in this country. I think that it is only a matter 
of time. I believe that these people are patient and that they 
will come back. I do not think that this country is being made 
more secure by our being in Iraq. I do not fall for that 
baloney. I was sold lots of that in my time, having been an old 
meat cutter, bologna.
    I think that the war in Iraq has also been a great 
distraction from the handling of the Israeli-Palestinian 
conflict. I think that is where the basic problems have arisen. 
There has been a lot written in the press about the wall that 
the Israeli government is building inside the 1967 boundaries. 
Every country has that right of self-defense. I do not question 
that right. I am sure that you do not agree with those who 
criticize the administration for abandoning the Middle East 
peace process, but for all practical purposes, the Bush road 
map, which was never really anything more than words on paper, 
is dead.
    The fact is that neither Israelis nor Palestinians have any 
reason to believe that this administration is going to expend 
any political capital to move the process forward anytime soon. 
Real progress was being made before this administration took 
office, but since that day, the situation has slid steadily 
backwards and bloodshed has spun out of control. Hundreds, if 
not thousands, of deaths could have been avoided. This 
administration's disengagement from the Israeli-Palestinian 
conflict is a major impediment to what we are trying to do to 
promote democracy and combat terrorism in the Middle East.
    The issue with respect to the wall is where this wall is 
located. It has already cut off hundreds of thousands of 
Palestinians from their land, from their neighbors, and even 
from their family members. Does not this action violate the 
policy that the location of boundaries should be decided 
through negotiation, not by unilateral action by the parties? 
My question would be, what is the administration's position on 
this? What are we going to do about it?
    Secretary Powell. We have problems with the wall and we 
have expressed those problems to the Israelis. They are free to 
protect themselves against the kind of terrorist activities 
that have so frustrated our peace efforts and frustrated the 
peace efforts of the previous administration. We have expressed 
our concern where the wall moves away from what could be seen 
as something that is clearly Israeli into Palestinian 
territory, taking into the wall large numbers of Palestinians 
on their land. There have been adjustments made to the fence, 
or the wall, as you prefer to call it. We just call it a fence. 
Adjustments have been made to the fence that take this into 
account, and we are continuing to work with the Israelis on 
this matter.
    But it is mostly a fence and not a wall, and for that 
reason the Israelis do not believe, and they think this with 
good merit, that it is not necessarily a defining feature that 
cannot be changed in the future as a result of negotiations 
between the two sides. A fence can be put up. A fence can be 
taken down. We have seen that over the past few months where 
some parts of the fence have already been taken down.
    The road map is not dead, and the President did invest 
considerable political capital in it. He went to Sharmel Sheikh 
and he went to Akuba last year. That was an investment of his 
personal prestige, and political energy of this administration. 
President Clinton invested enormous political capital, only to 
see it all come crashing down in the last week of his 
administration because of the intransigence of Yasser Arafat, 
and the same problem we have faced with Yasser Arafat and his 
unwillingness to do what should be done, what we believe can be 
done to bring terror under control.
    For this reason, the President put forward of the two 
states living side by side in peace. He made it clear; called 
one of them Palestine and the other one Israel and worked 
toward that end. We tried to get new people into positions of 
authority in the Palestinian Authority. Prime Minister Abumaz 
in the last year, we invested in him. We put political capital 
on him. But he was frustrated by Mr. Arafat's unwillingness to 
yield any authority over security forces. He stepped down, and 
now Prime Minister Karai, we are ready to help him. We are 
working with the Egyptians, we are working with our British 
colleagues, we are working with the Israelis.
    The President said yesterday we were prepared to send 
another team over. We have had teams going back and forth 
trying to get some traction, trying to see if we can use the 
Israelis' recent idea for moving out of Gaza as a way to get 
this thing going forward, depending on what the Israelis are 
also planning at the same time with respect to the West Bank at 
the route of the fence.
    So we are not disengaged, Senator Byrd. But perhaps the 
most difficult portfolio that we have to manage begins and ends 
with terror. As long as terror continues, as long as the 
Palestinian leaders and the Palestinian people do not crack 
down on terror then we are going to continue to have problems 
getting this peace process moving forward. Israel has a right 
of self-defense. Israel cannot participate with a partner that 
has really no leader to that partnership.
    Senator Hollings. Would you yield just one second? The MLR, 
you and I understand that, the main line of resistance to 
terrorism is Palestine-Israel. General Musharraf just said, 
look, if you folks can go and settle that, terrorism the world 
around will disappear. What you need--if I were king for a day, 
is I would reconstitute you as the general in charge of an 
international peacekeeping force and move right in between the 
two.
    When you have got Sharon, the Bull Connor of Israel--if you 
look on page 152 of the Seven Day War and then Prime Minister 
Levi Eschov turned to Major Ari Sharon when Sharon said, we are 
going to eliminate Egypt, just like he is trying to eliminate 
Palestine. He says, Ari, victory in war settles nothing. The 
Arabs will still be there. You have got a hardhead. He cannot 
learn, and we cannot just put our future in his hands. We have 
got to move in with some kind of international peacekeeping 
force and get something going. Not maps and talking and every 
other darn thing. We know what is necessary, separate the two 
of them. The only object to that is the United States and 
Israel. The free world is for that. I will bet you on it.
    Thank you.
    Senator Byrd. Mr. Chairman, may I just close with this 
thought, with this question? The United States provided $480 
million to Israel in this current fiscal year. How much is 
Israel spending to build this wall? Since money is fungible and 
our aid goes to Israel in the form of a big check, can it be 
said that America is paying for this wall?
    Secretary Powell. Money is fungible, but I cannot give you 
an answer off the top of my head as to what the wall 
expenditures are. As you know with respect to loan guarantees, 
we do dock those loan guarantees in response to Israeli 
activities with response to settlement activities.
    [The information follows:]

    This is in response to your March 25 inquiry of Secretary Powell 
regarding Israeli expenditures on the seam-line fence, and whether U.S. 
assistance to Israel is being used in that effort.
    U.S. assistance to Israel serves multiple purposes--relieving the 
impact of economic burdens Israel has incurred due to its regional 
isolation; maintaining Israel's qualitative military edge; preventing 
regional conflict; and building the confidence necessary for Israel to 
take calculated risks for peace.
    Economic Support Funds (ESF)--$477 million in fiscal year 2004, 
with $360 million requested for fiscal year 2005--may only be used for 
balance-of-payments support. At the discretion of the Israeli 
Government, ESF can be used to (a) purchase goods and services from the 
United States; (b) service debt owed to, or guaranteed by, the U.S. 
Government; (c) pay to the U.S. Government any subsidies or other costs 
associated with loans guaranteed by the USG; (d) service Foreign 
Military Sales debt, both current and refinanced; and (e) finance other 
uses as agreed upon by both sides. Use of ESF money for military 
purposes--including the procurement of commodities or services for 
military purposes--is explicitly ruled out.
    Foreign Military Financing (FMF)--$2.15 billion in fiscal year 
2004, with $2.22 billion requested for fiscal year 2005--represents 
about 25 percent of the Israeli defense budget and is crucial to 
Israel's multi-year defense modernization plan. 26.3 percent of this 
FMF (approximately $580 million in fiscal year 2004) may be used for 
Off-Shore Procurement. Most of this amount is spent in Israel, which 
supports their maintenance of a strong domestic defense industry.
    In addition to ESF and FMF, the Emergency Wartime Supplemental 
Appropriations Act, 2003, authorized $9 billion in loan guarantees for 
Israel, to be made available in fiscal years 2003-2005. The Act states 
that the loan guarantees may be issued only to support activities in 
the geographic areas that were subject to the administration of the 
Government of Israel before June 5, 1967. The Act further states that 
the guarantees shall be reduced by an amount equal to Israeli 
expenditures (between March 1, 2003, and the date of issue of the 
guarantee) for activities which the President determines are 
inconsistent with the objectives and understandings reached between the 
United States and the Government of Israel regarding the implementation 
of the loan guarantee program.
    Thus, on November 25th, the United States Government announced a 
deduction of $289.5 million from the total of $3 billion in loan 
guarantees available to Israel in fiscal year 2003. This deduction 
reflects issues of concern to the United States, including settlement 
activities and the route of the security fence. As the President has 
stated clearly and consistently, ``Israel should freeze settlement 
construction, dismantle unauthorized outposts, end the daily 
humiliation of the Palestinian people, and not prejudice final 
negotiations with the placements of walls and fences.''
    As for costs incurred by the GOI in construction of the separation 
barrier, publicly available estimates are on the order of $2 million 
per kilometer. With the Government of Israel having built nearly 200 
kilometers of fence so far, total costs are approximately $400 million. 
The planned route of the fence calls for another 400 kilometers to be 
built, bringing the total, on completion, to approximately $1.2 
billion. These, of course, are only estimates.
    I hope that this addresses your concerns. If we can be of 
assistance in the future on this or any other matter, please do not 
hesitate to contact us.

    Senator Hollings. We need Secretary Powell to go there and 
say, Mr. Sharon, pull down this wall, just like Reagan. Go 
ahead and do it. We can stop some terrorism. Iraq has no 
terrorism. We started it there. We know where the terrorism is 
and we know the MLR, you and me. You can do it. Thank you.
    Senator Byrd. Thank you, Mr. Chairman.
    Senator Gregg. Do you want to respond?
    Secretary Powell. Terrorism will emanate from those places, 
even with an international force there, until such time as the 
Palestinian leaders decide that it is not serving their 
interest any more and they stop it.
    Senator Hollings. But you do not have any leaders. They are 
a basket case after 35 years of occupation. Anybody with get up 
and go has got up and gone.
    Secretary Powell. There are people who claim they are 
leaders, and there are people who are invested with leadership 
by the people themselves. They are the ones that are not 
acting.
    Senator Hollings. But if you want a democracy in the 
Mideast you would have gone to Syria where Lebanon is a sort of 
50-50 democracy, get the Syrian army out of Lebanon and then 
you would solve the Hezbollah and Hamas problem. Not Iraq.
    Senator Gregg. I wish we could solve the Israeli-
Palestinian issue at this conference table this morning.
    Senator Hollings. I think you can. We have got the man to 
do it.
    Senator Gregg. I suspect that even with our unique talents 
it may be beyond our capacity.
    Mr. Secretary, we appreciate your generous commitment of 
time, especially after all your flying the past few days.
    Secretary Powell. Thank you, Mr. Chairman.

                         CONCLUSION OF HEARINGS

    Senator Gregg. If there is nothing further, the 
subcommittee will stand in recess.
    [Whereupon, at 12 noon, Thursday, March 25, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]
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