[Senate Hearing 108-297]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-297

                 CHALLENGES FOR U.S. POLICY TOWARD CUBA

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                             OCTOBER 2, 2003

                               __________

       Printed for the use of the Committee on Foreign Relations


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                     COMMITTEE ON FOREIGN RELATIONS

                  RICHARD G. LUGAR, Indiana, Chairman
CHUCK HAGEL, Nebraska                JOSEPH R. BIDEN, Jr., Delaware
LINCOLN CHAFEE, Rhode Island         PAUL S. SARBANES, Maryland
GEORGE ALLEN, Virginia               CHRISTOPHER J. DODD, Connecticut
SAM BROWNBACK, Kansas                JOHN F. KERRY, Massachusetts
MICHAEL B. ENZI, Wyoming             RUSSELL D. FEINGOLD, Wisconsin
GEORGE V. VOINOVICH, Ohio            BARBARA BOXER, California
LAMAR ALEXANDER, Tennessee           BILL NELSON, Florida
NORM COLEMAN, Minnesota              JOHN D. ROCKEFELLER IV, West 
JOHN E. SUNUNU, New Hampshire            Virginia
                                     JON S. CORZINE, New Jersey

                 Kenneth A. Myers, Jr., Staff Director
              Antony J. Blinken, Democratic Staff Director

                                  (ii)

  
?

                            C O N T E N T S

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                                                                   Page

Allen, Hon. George, U.S. Senator from Virginia, prepared 
  statement......................................................     9
Aronson, Bernard W., managing partner, ACON Investments, LLC and 
  former Assistant Secretary of State for Western Hemisphere 
  Affairs, Washington, DC........................................    60
Baucus, Hon. Max, U.S. Senator from Montana, Ranking Member, 
  Senate Committee on Finance....................................    10
    Prepared statement...........................................    13
Coleman, Hon. Norm, U.S. Senator from Minnesota, prepared 
  statement......................................................     7
Dodd, Hon. Christopher J., U.S. Senator from Connecticut, 
  submission for the record:
    ``Question and Answer with Colin Powell,'' excerpts from a 
      meeting with the Detroit Free Press editorial board........    35
Feingold, Hon. Russell D., U.S. Senator from Wisconsin, prepared 
  statement......................................................    72
Gonzalez, Emilio T., senior managing director for Global and 
  Government Affairs, law firm of Tew Cardenas, LLP, Washington, 
  DC.............................................................    55
    Prepared statement...........................................    57
Lugar, Hon. Richard G., U.S. Senator from Indiana, opening 
  statement......................................................     3
Newcomb, R. Richard., Director, Office of Foreign Assets Control, 
  U.S. Department of the Treasury, Washington, DC................    21
    Prepared statement...........................................    25
    Responses to additional questions for the record from Senator 
      Dodd.......................................................    76
Noriega, Hon. Roger F., Assistant Secretary of State for Western 
  Hemisphere Affairs, Department of State, Washington, DC........    14
    Prepared statement...........................................    17
    Responses to additional questions for the record from Senator 
      Dodd.......................................................    73
Vivanco, Jose Miguel, executive director, Americas Division, 
  Human Rights Watch, Washington, DC.............................    50
    Prepared statement...........................................    53

                                 (iii)

  

 
                 CHALLENGES FOR U.S. POLICY TOWARD CUBA

                              ----------                              


                       THURSDAY, OCTOBER 2, 2003

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:32 p.m. in room 
SD-419, Dirksen Senate Office Building, Hon. Richard G. Lugar 
(chairman of the committee), presiding.
    Present: Senators Lugar, Chafee, Allen, Enzi, Coleman, 
Dodd, and Bill Nelson.
    The Chairman. This hearing of the Senate Foreign Relations 
Committee is called to order. Today the committee meets to 
examine United States policy toward Cuba. This is a 
particularly opportune time to address the subject because 
something new is happening in Cuba. Little noticed by 
outsiders, a courageous and diverse pro-democracy movement has 
quietly risen above the ramparts of Castro's repression. 
Independent journalists are doing their best to provide 
alternative views. Individuals are opening their homes and 
personal libraries to their communities. Independent labor 
unions are documenting violations of worker rights. Cuba's more 
than 300 political prisoners and their families are now getting 
help from human rights groups, part of the citizen's 
groundswell that is relying on its own initiative to seek 
peaceful emancipation from a totalitarian state. The most 
public expression of this movement is the Varela Project, 
launched by Oswaldo Paya using a provision of the constitution 
that allows citizens to request a popular referendum. Paya, a 
leader of the home-grown Christian Liberation Movement, 
collected more than 11,000 signatures on a petition asking the 
government to hold a vote on establishing more democratic 
freedoms.
    But instead of granting the petition, Castro's submissive 
National Assembly refused to recognize it. The government 
rounded up some 75 activists, many directly connected to the 
Varela Project, named for the 19th century reformer, Father 
Felix Varela. After sham trials, the activists were given 
sentences ranging from 6 to 28 years. The Castro regime 
punctuated its crackdown by executing three Cubans accused of 
attempting to hijack a boat and flee the country.
    If Castro thought the war in Iraq would distract the world 
from these actions, he was wrong. The United States denounced 
him, as did most of Latin America, the European Union, the 
Vatican, the International Council of Free Trade Unions, and a 
number of foreign governments and intellectuals, including many 
who normally overlook Castro's outrages or make hay criticizing 
United States policy toward Cuba.
    This combination of a re-energized international community 
and a vigorous dissident movement on the island itself presents 
the United States with an opportunity to promote the forces of 
freedom and reunite the civilized world against Fidel Castro's 
policies. I believe that our current Cuba strategy has not 
worked. More than 40 years of diplomatic isolation and economic 
embargo have not toppled Castro, brought democracy to the 
island, or improved the daily lives of average Cubans. The 
Helms-Burton law, passed in 1996, has failed to deter third 
countries from investing in Cuba. Too often our Cuba policies 
have isolated us from our European and Latin American allies 
and reinforced Castro's efforts to convince many of his people 
that the United States holds a grudge against them.
    Opening up to Cuba now, however, would send the wrong 
signal, appearing to reward Castro for his crackdown and it 
would be too divisive here at home. But the current policy is 
not our only option. Adjustments can be made that leverage our 
relationships with both Europe and Latin America and support 
the aspirations of the freedom-seeking democrats in Cuba.
    This approach is based on three principles. First, the 
United States should expand its support for the pro-freedom 
forces in Cuba by boosting our program that gives them short-
wave radios and books, by raising the power of Radio Marti's 
signal, and by bringing more dissidents to the United States 
for cultural exchanges.
    Second, we should work with Europe, Latin American 
countries, and the Organization of American States to reach out 
to political activists. In the past, many of our allies have 
neglected Cuba's democrats because they disagree with larger 
U.S. policy, but the Varela crackdown has awoken others to the 
dissidents' plight. At the same time, we should narrowly focus 
our combined pressure on Castro and his inner circle to end 
their human rights abuses.
    Third, at an appropriate time we should consider 
implementing a rational end to travel restrictions to let more 
ideas flow into the country. We must think beyond the fruitless 
war of attrition that has only served to make Castro a folk 
hero in some parts of the world and to distract American 
policymakers from issues of greater or equal importance in 
Latin America. By focusing on human rights instead of Cuba, we 
will convince skeptical allies in this hemisphere and in Europe 
that our policy is pro-democracy and not simply anti-Castro.
    The 77-year old cold war dinosaur's days are surely 
numbered. A transition is inevitable and we should begin to 
prepare now. This 3-point policy will help that transition by 
encouraging a new generation of Cuban leaders to talk to one 
another and to listen to their people, a dialog through which 
they are bound to find common ground among the glaring failures 
of the dilapidated regime.
    This afternoon, three impressive panelists have joined us 
to discuss Cuba policy. First, our colleague, Senator Max 
Baucus, who recently traveled to Cuba, will present his 
legislation that lifts restrictions on trade to Cuba. In the 
second panel, representing the administration, we have 
Assistant Secretary of State for Western Hemisphere Affairs, 
Roger F. Noriega, and the Director of the Treasury Department's 
Office of Foreign Assets Control, R. Richard Newcomb. On our 
third panel, we will hear from Jose Miguel Vivanco, executive 
director of Human Rights Watch's, Americas Division; Emilio 
Gonzalez, senior managing director for global and governing 
affairs at the law firm of Tew Cardenas, and formerly the 
Director of Central American and Caribbean Affairs on the 
National Security Council; and Bernard Aronson, the managing 
partner of ACON Investments, and formerly the Assistant 
Secretary of State for Western Hemisphere Affairs.
    We welcome these distinguished witnesses. It's a special 
privilege to have you with our committee today, Senator Baucus. 
Let me just note the colleagues who have joined us, including 
Senator Coleman, the chairman of our Latin American affairs 
subcommittee and Senator Enzi who has played quite a role and 
has deep interests in this, and obviously Senator Nelson, an 
outspoken person of interest in this subject. I hope others 
will join us.
    As the distinguished ranking member joins us we will of 
course recognize him for his statement. He is busy, I am 
advised, on the floor. And I would say for the benefit of all 
members, there will be a rollcall vote as I understand it at 
3:15. The committee will recess at that point, we hope without 
too much inconvenience to our witnesses, and reassemble 
immediately after the rollcall vote.
    [The opening statement of Senator Lugar follows:]

             Opening Statement of Senator Richard G. Lugar

    Today the Foreign Relations Committee meets to examine U.S. policy 
toward Cuba. This is a particularly opportune time to address this 
subject because something new is happening in Cuba. Little-noticed by 
outsiders, a courageous and diverse pro-democracy movement has quietly 
risen above the ramparts of Castro's repression. Independent 
journalists are doing their best to provide alternate views, 
individuals are opening their homes and personal libraries to their 
communities, independent labor unions are documenting violations of 
workers rights. Cuba's more than 300 political prisoners and their 
families are now getting help from human rights groups, part of a 
citizens' groundswell that is relying on its own initiative to seek 
peaceful emancipation from a totalitarian state.
    The most public expression of this movement is the Varela Project, 
launched by Oswaldo Paya using a provision of the constitution that 
allows citizens to request a popular referendum. Paya, a leader of the 
homegrown Christian Liberation Movement, collected more than 11,000 
signatures on a petition asking the government to hold a vote on 
establishing more democratic freedoms.
    But instead of granting the petition, Castro;s submissive National 
Assembly refused to recognize it. The government rounded up some 75 
activists, many directly connected to the Varela Project, named for the 
19th Century reformer Father Felix Varela. After sham trials, the 
activists were given sentences ranging from 6 to 28 years. The Castro 
regime punctuated its crackdown by executing three Cubans accused of 
attempting to hijack a boat and flee the country.
    If Castro thought the war in Iraq would distract the world from 
these actions, he was wrong. The United States denounced him, as did 
most in Latin America, the European Union, the Vatican, the 
International Council of Free Trade Unions and a number of foreign 
governments and intellectuals, including many who normally overlook 
Castro's outrages or make hay criticizing U.S. policy toward Cuba.
    This combination of a re-energized international community and a 
vigorous dissident movement on the island itself presents the United 
States with an opportunity to promote the forces of freedom and reunite 
the civilized world against Fidel Castro's policies.
    I believe that our current Cuba strategy has not worked. More than 
40 years of diplomatic isolation and economic embargo have not toppled 
Castro, brought democracy to the island, or improved the daily lives of 
average Cubans. The Helms-Burton law, passed in 1996, has failed to 
deter third countries from investing in Cuba.
    Too often our Cuba policies have isolated us from our European and 
Latin American allies and reinforced Castro's efforts to convince many 
of his people that the U.S. holds a grudge against them. Opening up to 
Cuba now, however, would send the wrong signal, appearing to reward 
Castro for his crackdown, and it would be too divisive here at home. 
But the current policy is not our only option. Adjustments can be made 
that leverage our relationships with both Europe and Latin America and 
support the aspirations of the freedom-seeking democrats in Cuba.
    This approach is based on three principles. First, the United 
States should expand its support for the pro-freedom forces in Cuba, by 
boosting our program that gives them short-wave radios and books, 
raising the power of Radio Marti's signal, and bringing more dissidents 
to the United States for cultural exchanges. Second, we should work 
with Europe, Latin American countries, and the Organization of American 
States to reach out to political activists. In the past, many of our 
allies have neglected Cuba's democrats because they disagree with 
larger U.S. policy, but the Varela crackdown has awoken others to the 
dissidents' plight. At the same time, we should narrowly focus our 
combined pressure on Castro and his inner circle to end their human 
rights abuses. Third, at an appropriate time, we should consider 
implementing a rational end to travel restrictions to let more ideas 
flow into the country.
    We must think beyond the fruitless war of attrition that has only 
served to make Castro a folk hero in some parts of the world and to 
distract American policy makers from issues of equal or greater 
importance in Latin America. By focusing on human rights inside Cuba, 
we will convince skeptical allies in this hemisphere and in Europe that 
our policy is pro-democracy, and not simply anti-Castro. The 77-year-
old Cold War dinosaur's days are numbered. A transition is inevitable, 
and we should begin to prepare now. This three-point policy will help 
that transition by encouraging a new generation of Cuban leaders to 
talk to one another and to listen to their people, a dialog through 
which they are bound to find common ground among the glaring failures 
of the dilapidated regime.
    This afternoon, two impressive panels have joined us to discuss 
Cuba policy. Representing the administration, we have Assistant 
Secretary of State for Western Hemisphere Affairs, Roger F. Noriega, 
and the Director of the Treasury Department's Office of Foreign Assets 
Control, R. Richard Newcomb.
    On our second panel we will hear from Jose Miguel Vivanco, 
executive director of Human Rights Watch's Americas Division; Emilio 
Gonzalez, senior managing director for Global and Government Affairs at 
the law firm of Tew Cardenas and formerly the Director of Central 
American and Caribbean Affairs on the National Security Council; and 
Bernard Aronson, the managing partner at ACON Investments and formerly 
the Assistant Secretary of State for Western Hemisphere Affairs. We 
welcome you all and look forward to your insights.

    The Chairman. Yes, Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman. I just wanted to 
underscore what you have said that here we are in a time when 
we see the beginnings of the breaking out of the shackles that 
have enveloped that island for decades. We see this courageous 
band of people headed by Oswaldo Paya. They go out and get over 
11,000 signatures under the auspices of the Cuban constitution 
to petition to the national assembly so freedom of speech, free 
and fair elections, free enterprise, can be brought as items to 
the national assembly. And not only does the Government of 
Cuba, Castro's Cuba, ignore the legal procedures that were 
followed by the Varela Project in the petition, but then they 
do what has shocked the free world, they start throwing these 
people in prison with prison sentences up to 15 and 20 years in 
prison.
    And so whereas Castro had courted favor in the capitals of 
Europe and was having some sympathy, suddenly others realized 
that his true colors were coming out. Then just to make matters 
worse, when some people are trying to escape for freedom, they 
catch them, they bring them back, they execute them, and then 
lo and behold another group trying to escape, they are sent 
back from the clutches of our government to go back and they 
are sentenced up to 10 years. And so a combination of all these 
things, it seems to me, Mr. Chairman, that I would raise the 
same issue as you. Whatever we try to do in changing our 
policy, we don't want to be perceived that we are rewarding 
these kinds of unacceptable behavior by Castro and his 
government. Thank you, Mr. Chairman.
    The Chairman. I thank the Senator.
    Senator Enzi, do you have a statement?
    Senator Enzi. Mr. Chairman, I have a statement as well but 
I'd be willing to defer to the Senator from Montana.
    Senator Baucus. Mr. Chairman, I'm willing to defer to my 
colleague, a member of the committee.
    Senator Enzi. Yes, Mr. Chairman, I'd like to make a 
statement.
    The Chairman. Proceed.
    Senator Enzi. I thank you for holding this hearing and I 
thank you for your comments and also the comments of the 
Senator from Florida. To your list of things that need to be 
done, we probably need to have some kind of provision so that 
if we do catch people that have escaped from Cuba we don't send 
them back to Cuba, but perhaps find some country that would be 
willing to harbor them that we could send them to as an 
alternative.
    But for my statement, there's an old saying that I think 
we're all familiar with that fits the theme of this hearing 
pretty well. It says that even though it isn't always possible 
to change the whole world you can always use what influence you 
have on whatever's before you. Today we have before us our 
continued review and discussion of our policy about Cuba.
    The title of our hearing is ``Challenges to U.S. Policy 
Toward Cuba.'' We will be taking a look at the challenges to 
our current policy that come from within our own country and 
those that come from without, most notably from Castro and his 
own policies. There is no question that the behavior of Castro 
and the Cuban Government has presented a strong challenge to 
our policy for Cuba for many years.
    In a word, his conduct has been deplorable. He's refused to 
provide the most basic of human rights to his people. He's 
refused to allow his people the right to exercise the most 
basic of human rights and freedom. He tries to do everything he 
can to control what the people of his country see and hear. He 
also tries to make the United States his scapegoat for 
everything that goes wrong in his country and his people always 
seem to believe him, but who can blame them? Who can they ask 
or turn to for another opinion? Most of them have never known 
anything else but Castro, and when he does something wrong we 
punish him in ways that serve more to punish the people of Cuba 
than Castro himself.
    There is another level of challenges to our policy with 
Cuba. They come from within our own government, from the 
administration, and from the Members of Congress who believe as 
I do that the time has come for a change in our policy toward 
Cuba beginning with just the travel policies. When we 
introduced the Freedom to Travel to Cuba Act on April 30, 2003, 
we were prepared for the questions that were soon to follow. We 
presented our case fairly and pointed out the need for change 
based on a philosophy my father used to call ``if you keep on 
doing what you've always been doing, then you're going to wind 
up with what you've already got,'' 40 years of already got.
    He was right. It's foolish to do the same thing over and 
over again and expect different results every time. In fact, if 
we were to let someone impartial to help us out with this one, 
he'd ask us what our policy toward Cuba was, and when we 
explained it, he'd just ask one simple question: Is it working 
for you? Is it getting you what you want? That's when we'd have 
to realize why we must change our policy with Cuba, because our 
current policy isn't working. In fact, it hasn't been working 
for a very long time, for us or for the people of Cuba, and 
it's driving other countries to help Cuba. It's not widening 
the gap, it's narrowing it, for him.
    Brazil just extended $400 million in credit. The curious 
thing is why it's taken us so long to figure that out. Clearly 
we need a different policy, one that goes further than 
embargos, one that replaces a needlessly restrictive travel 
policy with one that not only works but encourages increased 
communications between our people and the people of Cuba, one 
that offers the Cuban people a chance that their human rights 
might increase in the process.
    We now have 29 Senators supporting the Freedom to Travel to 
Cuba Act. While this hearing is not going to formally address 
this issue, I don't think there's any denying that it's an 
important part of the mix. The greatest resource we have for 
change and for promoting change in other countries is for our 
people to travel there. I like to think of our people as 
ambassadors for freedom. When people in other countries have a 
chance to interact with their own people and come to know them, 
they'll realize the great gift that freedom is and how it could 
change their lives, if only their government would permit its 
expression. With policy change and people to people, we project 
a fear that freedom of communication will pull the wool over 
American eyes, that we won't be able to see the live communism. 
That goes against history.
    If we're truly serious about bringing change to the Cuban 
Government, we would promote every policy option we can to 
ensure that change comes from within Cuba. Our ambassadors of 
freedom can help do that by increasing Cuban people's idea of 
what is possible for them to achieve and to be as a nation. 
That's how we brought down the Berlin Wall, not by closing 
everything off.
    There was a time when we thought we could close our eyes to 
the problems of the rest of the world and just live our lives 
in the safety and security of our borders. We then learned the 
harsh lessons of what happens when we refuse to get involved in 
the problems of the rest of the world. As we've all heard, 
those to whom much is given, much is expected. There is no 
question that we have all been given much. We are truly blessed 
to call ourselves American citizens. There is also much 
expected of us from around the world. Much is also expected of 
us by the people who live on an island less than 100 miles from 
our shore. We must not and will not ignore their expectations. 
We will also not ignore our responsibilities to our neighbors. 
Thank you again for holding this hearing.
    The Chairman. Thank you, Senator Enzi.
    Senator Coleman, the chairman of our subcommittee that 
deals with Latin America, has just returned from a visit to 
Cuba. Do you have a comment?
    Senator Coleman. I will be brief but I would like to add my 
voice, Mr. Chairman. First, I associate myself with your 
comments in your opening statement and actually with the 
comments of my friend and colleague, Senator Enzi. We traveled 
to Cuba, we're going to change Cuba, I have no question about 
that. I have been a believer that the best way to promote 
democratic change is increase travel, no question about that, 
but, and here's the but, I just got back from Cuba and I met 
with the wife of Roberto de Miranda, sentenced to 20 years for 
organizing a teachers' union, signing the Varela Project. I 
learned about Pedro Alvarez Ramos, a labor organizer sentenced 
to 25 years. I met with the wife of Oscar Espinosa Chepe, 
independent economist, failing health, served 20 years.
    And I have to tell you that I can't remember their faces 
and look in their eyes and say now is the time we're going to 
travel, we're going to open up travel, that Castro has to let 
those people go. There has to be a firm commitment to human 
rights. This is no longer about what other countries do and no 
longer about philosophical arguments, no longer about the 
economic benefits. These are human beings who are suffering, 
who are suffering right now, and we can either choose to say 
that we're going to stand with them and the tradition we have 
for human rights or not.
    And if Castro were to do that I would stand in line and 
say, let's start traveling, let's start trading, let's start 
doing some things. But until he does and those people are still 
sitting there for 20, 25, 28 years, it would not be 
conscionable to support getting rid of the travel ban right 
now.
    [The prepared statement of Senator Coleman follows:]

               Prepared Statement of Senator Norm Coleman

          NOW IS NOT THE TIME FOR MORE TRADE, TRAVEL WITH CUBA

    The future of U.S. policy toward Cuba is bound in two tides of 
change.
    First is the momentum building in the United States to engage with 
Cuba. U.S. policy toward Cuba over the last 40 years has not brought 
change. Castro has outlasted eight U.S. Presidents, and in the post-
cold war world, Cuba no longer poses a strategic threat to us. 
Americans have recognized Cuba as a potential market for our 
agricultural goods--which under a 2000 law can be exported to the 
island. My colleague and friend Senator Mike Enzi has introduced a bill 
in the Senate that would lift the restrictions against Americans 
traveling to Cuba. Senator Baucus, whom I also hold in high regard for 
his strong stance in favor of trade, has introduced legislation that 
would end the U.S. trade embargo against Cuba.
    The other growing tide is the demand for human rights for the 
people of Cuba. Cuba is no paradise. Cubans lack the right to free 
speech, to free association, or to free enterprise. The sheer numbers 
of Cubans leaving for our shores speak to the disastrous state of human 
rights on the island. Last year at great personal risk, over 30,000 
Cubans signed a petition, the Varela Project, calling for a referendum 
on democracy and human rights in Cuba. The Cuban Government responded 
with a wave of repression, arresting over 75 leading dissidents. This 
crackdown drew harsh criticism from even those who had been most 
tolerant of Castro's government.
    Like many other Americans, I have believed that the best way to 
promote change in Cuba is through increased trade and travel--a 
position that put me at odds with the administration. With this view in 
mind--but also with great concern over the crackdown which began this 
spring--I recently traveled to Cuba.
    I met with Cuban officials and had satisfactory discussions about 
the opportunities for agricultural sales from my State of Minnesota. 
During each of these meetings, I also raised my concerns about human 
rights.
    I spent time with the other face of Cuba, too. I visited with some 
of the few leading dissidents who are not in prison--Oswaldo Paya of 
the Varela Project, and Elizardo Sanchez and Vladimiro Roca of Todos 
Unidos, an umbrella group for various human rights organizations. And I 
met with the wives of some of Cuba's political prisoners.
    One woman told me about the arrest of her husband, Roberto de 
Miranda, and his sentencing to 20 years for organizing a teachers' 
union and for signing the Varela Project petition. I learned about 
Pedro Alvarez Ramos, a labor organizer, who was sentenced to 25 years 
in a prison some 265 miles from his family's home in Havana. Oscar 
Espinosa Chepe, an independent economist and journalist, was sentenced 
to 20 years and is suffering from chronic liver disease.
    I was told that these prisoners are typically held in cells 6 feet 
by 3 feet. Lacking cots, they sleep on the floor, beside a hole in the 
ground which serves as their toilet. These cells have no ventilation, 
which is especially difficult given Cuba's climate.
    Trying to remain in contact with their husbands was another source 
of heartache for the women. After traveling hundreds of miles for 
scheduled meetings with their husbands--in a country where few people 
own automobiles--their husbands' captors often cancel the appointments 
for no apparent reason. Scheduled telephone calls are similarly called 
off.
    I continue to believe that both tides of change are inevitable. 
Thanks to the brave efforts of people like Mr. Paya and others, Cuba 
will change someday. And I am equally certain that America will one day 
lift its embargo and travel restrictions.
    I want to go back to Cuba. I want to enjoy its beautiful beaches 
and to engage its warm and welcoming people. I want 2 million Americans 
tourists to spend money in Cuba and lift up its economy--but not while 
Chepe, de Miranda, and many others serve Jurassic prison sentences for 
seeking freedom.
    America should end its embargo on Cuba when the Government of Cuba 
ends its embargo on its own people. Mr. Castro, let your imprisoned 
dissidents go--and when you do I will gladly join the chorus of people 
seeking to end the travel ban and trade embargo.

    The Chairman. I thank the Senator.
    Senator Allen, I understand you have a statement.
    Senator Allen. Yes. Mr. Chairman, thank you for holding 
this hearing as we examine this contentious, spirited issue and 
examine our relationship with Cuba and actions that might 
warrant any changes. I have a statement that I'd like to have 
put in the record.
    The Chairman. It will be put in the record in full.
    Senator Allen. And I'll paraphrase. Listening to my 
colleagues' statements here, the recent crack-down by Castro's 
regime on democratic activists in the midst of the military 
actions over in the Middle East with our country, he probably 
thought nobody was going to be paying attention. But even those 
countries that have been somewhat of apologists for Fidel 
Castro found that even appalling.
    The principal approach that I think the administration and 
Mr. Noriega will be explaining to us I think makes a great deal 
of sense. When you talk about travel, the reality is travel to 
Cuba, and what influence would Americans have and if they had 
American money and American trade, as if we are the only 
country in the world with any wealth, of any goods, or of any 
products. There are people from every country in the world that 
visit Cuba, not every, but many from Europe, from Canada.
    What has all this done to change Fidel Castro and his 
repressive regime? These are people from democratic countries. 
They may not always agree exactly with us, but nevertheless 
these are free countries. This has had absolutely no impact 
whatsoever on his repression, on his persecution of 
individuals. Then when you look at the details of tourism and 
supposedly being ambassadors the vast majority of Cuban 
citizens are barred from entering into these tourist resorts or 
hotels.
    There's a practice called tourist apartheid. It is a crime 
if a Cuban citizen, if you actually wanted to have some 
influence over the selective members who can go to one of these 
places for tourists, criticize the Castro's regime to a 
foreigner. That's punishable by 3 years in prison. Workers at 
the tourist resorts get their jobs because of their loyalty to 
the Communist party and have a lot of their wages taken by the 
regime. They are paid in dollars, but they get paid in the 
Cuban money and it's an unfair exchange rate.
    There's also been assertions that black Cubans appear to be 
discriminated against in the tourist industry and are grossly 
under represented in the senior ranks of the Communist party of 
Fidel Castro.
    So the point is, before we start changing our policies, 
rather than blaming the United States, I think that the reason 
there is not more trade, more tourism, more interaction and 
willingness of the U.S. Government to change the policies is 
due to the actions of Fidel Castro, who continues his 
tyrannical, repressive regime. They are also a state sponsor of 
terrorism, and on the list from the State Department.
    And so I would hope that we'd stand firm for freedom and 
make the changes conditional on the changes and the advancement 
of individual and human rights for the people of Cuba, and when 
that's done, yes, we'll all be happy because Cuba's a beautiful 
island with great resources, a great history before these last 
several decades, and it would be great if they had some 
opportunity and prosperity, but most importantly, a better way 
of life than under this regime, which unfortunately has gone on 
for too many years.
    And for us to apologize, to ignore the dissidents, who 
normally we would consider to be people who are just expressing 
their rights or wanting to leave or wanting to make a change 
peaceably, petitioning their government, we as Americans, of 
all countries in the world, need to stand strong for freedom 
and stand for individual rights of the people of Cuba, and 
that's what I hope that we'll continue to do and pressure that 
regime to somehow get a scintilla of enlightenment. Thank you, 
Mr. Chairman.
    [The prepared statement of Senator Allen follows:]

               Prepared Statement of Senator George Allen

    Thank you Mr. Chairman for holding this hearing. The Cuba policy of 
our country always draws spirited and vigorous debate, so it is 
important to revisit the topic periodically to examine whether the 
actions or policies of the Castro regime warrant a change in U.S. 
policy.
    I would first like to commend Secretary Noriega for his clear and 
in my view accurate assessment of the situation in Cuba. Clearly, the 
recent crackdown on democratic activists has shocked our international 
colleagues from the apathy with which they have treated Castro's brutal 
and tyrannical regime.
    The recent events in Cuba offer a unique opportunity for the United 
States to garner greater support from the international community to 
exact meaningful democratic reforms in Cuba. Castro has long been able 
to isolate the United States for its Cuba policies, now it appears Cuba 
has vastly overestimated the depth of support it enjoys around the 
globe and now faces opposition from once friendly countries.
    In seizing this new found support for change in Cuba I believe the 
United States must do all it can to help those brave Cubans openly 
defying the Castro regime. There is a groundswell for reform in Cuba; 
we saw a hint of it when the Varela Project garnered the signature of 
over ten thousand Cubans calling for a popular vote on democratic 
reforms.
    Castro's fear of this movement was on full display when he arrested 
approximately seventy-five independent journalists and reform 
activists. To no one's surprise, these dissidents were not provided due 
process, faced mock trials and were sentenced to jail terms ranging 
from six to twenty-eight years.
    I believe the plan put forward by Secretary Noriega represents an 
effective and principled policy for the U.S. to pursue towards Cuba.
    We all agree that the desired goal of any Cuba policy is to 
advocate for a representative government and basic human rights. 
However, in achieving that goal the U.S. should not compromise the 
principles on which it was founded. We cannot turn a blind eye to 
repression or the continued degradation of the rights of the 
individual. In achieving our goal, we must remain consistent in our 
message and resolute in our actions.
    As Secretary Noriega has stated, our strategy for change should 
center on helping those inside Cuba working for change, continuing to 
highlight the gross human rights violations that take place under the 
Castro regime and continuing to urge our allies in both the Americas 
and around the world to hold Castro responsible for these acts of 
violence and repression.
    We should not however, make any concessions to the Castro regime 
until real changes are permitted to take place in Cuba.
    It is often argued that the United States should remove the 
existing travel ban to Cuba. Proponents for such a policy contend that 
when U.S. citizens begin traveling to Cuba they will influence and 
augment reform from within. It is supposed that our democratic 
principles and love of freedom will rub off on the Cuban people who 
will demand a representative government and basic human rights.
    To this argument, I would point out that Canadians and Europeans 
have been traveling to and trading with Cuba for decades, and their 
presence as citizens of democracies has done little to bring change or 
reform to Cuba. When foreigners visit Cuba to vacation, rarely do they 
interact with Cuban citizens. Instead they are whisked off the resorts 
on the coasts of the island and are isolated from the circumstances 
under which most Cubans live.
    I am highly skeptical of this strategy for exacting change in Cuba. 
Since it took power in Cuba in 1960, the Castro regime has tyrannically 
repressed the will of the Cuban people. I frankly do not see any 
credible evidence that by encouraging Americans to visit Cuba, and 
handing U.S. dollars to the Cuban Government, the lives of the Cuban 
people will improve or expedite a change in government.
    Our Cuba policy should reflect a desire to stand with the Cuban 
people and advocate for their individual rights and well-being. In 
doing so, I would advise great care to not legitimize or perpetuate a 
system that fails to provide its people neither sustenance nor freedom.
    The United States has taken the correct and principled position on 
Cuba. I do not believe we should change this policy until the Castro 
regime takes a definitive step towards respecting the rights and 
freedoms of the Cuban people.

    The Chairman. Thank you, Senator Allen.
    Senator Chafee, do you have an opening statement?
    Senator Chafee. No, Mr. Chairman.
    The Chairman. Very well.
    Senator Baucus, thank you very much for coming and we look 
forward to your testimony.

   STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM MONTANA, 
       RANKING MEMBER, COMMITTEE ON FINANCE, U.S. SENATE

    Senator Baucus. Thank you, Mr. Chairman. I must say this 
has been a very interesting discussion here. I've had a great 
time just sitting and listening to various points of view, and 
I think they're points that are well-expressed and well-
articulated and I thank all Senators for being so directly 
involved.
    Thank you, Mr. Chairman, for the opportunity to appear 
today, and I want to also thank you personally for your 
continued leadership, not only on this major issue, that is 
trying to find a solution, but on the issue of sanctions, 
generally it's something that you've been involved with for 
many years, and many deeply appreciate that. I also want to 
thank Senator Enzi, Senators Dodd and Hagel and others on this 
committee for their ongoing leadership on the issue of Cuban 
sanctions. They spent a good bit of time on this.
    This hearing comes at an important time. Last spring, the 
Cuban Government, as has been noted, arrested and imprisoned 75 
dissidents whose only crime frankly was speaking freely, and I, 
along with members of this committee, led efforts to condemn 
those actions. It's outrageous the actions that President 
Castro took and the crackdown was certainly unacceptable, and 
here in Congress those on both sides of the embargo battle 
immediately denounced the arrests. That's a no-brainer.
    But beyond these immediate denunciations, there was a 
second, more puzzling reaction in Washington. Somehow, people 
saw the arrests as a vindication of the embargo policy rather 
than as an indictment of its failings. They fell back into the 
mistake of thinking U.S. policy ought to be built around a 
system of rewards and penalties for Castro.
    Some people, including many of my good friends in the 
Congress who believe in engagement, concluded that to ease the 
embargo now would only be a reward for Castro for bad behavior. 
I respectfully would strongly disagree. This is not about 
rewarding Castro. It's about changing Cuba, about how best to 
change Cuba. Let's remember the embargo has been in place for 
more than four decades and it has not worked. The arrests in 
March were not unique, they were merely the latest in a 40-
year-old record of oppression in Cuba.
    Moreover, many dissidents were reported and arrested 
because the Cuban Government was concerned about their meetings 
with Americans. In other words, the arrests indicate that the 
Cuban Government fears increasing contact between dissidents 
and Americans. If that's the case, we should not reward Castro 
by maintaining a failed embargo, that only shelters his regime 
from American influence. If the Cuban Government fears contact 
between the American and Cuban people, the answer is to send 
more Americans, not fewer.
    Alternatively, the so-called carrot-and-stick approach 
forces an odd logic. Under its rationale, one would have to 
believe that a continuation of the embargo would have some new 
and positive effect on conditions in Cuba. That makes no sense, 
it has not worked. Current U.S. policy is broken, it needs to 
be fixed.
    I support engagement in Cuba because I think it's the best 
way to effect democratic change in Cuba. Is engagement good for 
Americans also? Of course it is, in many ways. The benefits for 
American farmers are obvious. Lifting travel restrictions and 
the increased farm sales that would occur would create more 
jobs and improve the economy, not only in my State but every 
other in the union.
    Let's also remember that Castro is doing just fine under 
our embargo. If we want to maintain, for example, the travel 
ban in the name of supporting dissidents, well that's fine with 
him. In fact, perhaps that's exactly what he wants us to do. 
And if I'm correct, then the arrests of 75 dissidents ought to 
create a greater sense of urgency in Congress to reform our 
failed and counterproductive embargo.
    Three weeks ago I traveled to Cuba. I met with officials 
from the Cuban Government, I met with Cuban dissidents, 
including Oswaldo Paya, as has been referred to here, and the 
wives of several jailed dissidents. I have the highest regard 
for them. They are some of the most courageous persons I've had 
the privilege to meet. We've talked about the Varela Project 
and under the constitution all that he is attempting to 
accomplish. It's very courageous the actions that he is taking.
    But more than anything else I was also struck by the 
devastation wrought on the Cuban people by the past four 
decades of Communist dictatorship, which has decimated the 
Cuban economy. Responsibility for the terrible poverty and 
oppression imposed on the Cuban people rests entirely with the 
current regime. Nevertheless, the U.S. embargo, however well-
intentioned, has done nothing to improve these conditions, and 
if anything the embargo appears to have exacerbated the 
isolation and powerlessness of the Cuban people.
    Democratic change in Cuba must begin with the Cuban people 
and U.S. policy can have a profound effect on whether or not 
the Cuban people are adequately empowered to undertake such 
momentous change, but a carrot-and-stick approach is tantamount 
to giving Castro a veto over U.S. policy. If he wants a warming 
in our relationship then he'll do something nice. If he's 
getting nervous and thinks we're too close he'll go and arrest 
more people. He's controlling us. He's dictating our policy. 
We're not firm in U.S. policy with respect to Cuba.
    To hold off engagement simply as a carrot for him to 
release one or two dissidents or to embrace the status quo 
because we think it will induce change is a mistake, is a 
delusion. I know we all share the same goal, helping the Cuban 
people achieve independence. I know there are different 
opinions on this committee and I respect that deeply, but 43 
years of sanctions have accomplished nothing. We must move 
beyond the politics of the issue and press for change.
    Mr. Chairman, as you were speaking, I listened closely to 
what you were saying. I essentially agree with your points. You 
mentioned a 3-point policy, if I heard you correctly, that is, 
Radio Marti and with the people, working with our allies to 
work perhaps with dissidents, with other countries, and third, 
you said, assuming the first two seem to have some effect then 
we could think about our travel ban and our embargo.
    This issue reminds me so much of the same general issue we 
had with China 10 years ago. At that point, the U.S. Congress 
was engaged in big debates. Should we condition MFN on an 
annual basis, that is, should we condition continuing most 
favored nation status to China on China's adherence to human 
rights? That was the issue, huge issue, huge debate. And, Mr. 
Chairman, it was my thought, and it was the minority view at 
the time, but I respectfully think it turned out to be the 
better view, is that, no, we should not condition MFN on human 
rights abuses in China, because that just makes it more 
difficult. China cannot agree to cut back significantly on 
human rights. They'd have to save face in order to get the MFN 
treatment.
    Rather, the better approach is to engage China. China is a 
different country, we're a different country. China's not a 
friend, it's not an enemy, it's a separate country. We have 
interests, they have interests. We have to work with China, we 
have to engage China. We work on the issues where we agree as 
well as the issues where we disagree. And in this case we 
finally dispensed with the annual conditional treatment of MFN 
with China. We passed a PNTR, permanent trade relationship with 
China, and at the same time focused on human rights issues in 
China. We didn't forget human rights, we kept focusing on them. 
And I will say today I think as a consequence this United 
States has a much better relationship with China today than it 
would have had it not done so, that is, if we'd kept up this 
annual MFN treatment, which frankly was, I think, bankrupt at 
the time.
    And it's analogous to this situation. Castro is Castro. 
Cuba is Cuba. The United States is the United States. Other 
countries trade with Cuba. Other countries don't have travel 
bans with Cuba, we do. Are we effecting change in Cuba? No way 
with these travel bans. Will we effect more change in Cuba by 
lifting the travel bans and embargo, yet at the same time 
progressively working on human rights abuses in China? I say 
yes. I say that's a better approach because it allows countries 
to work with you, they want to work with you more under those 
terms, you're not pushing them in the corner, which makes it 
publicly for them to change their views. Rather, you're letting 
them do something that they in some cases want to do, maybe not 
entirely in this case, but we have more influence, I think, 
with the approach that I'm suggesting.
    [The prepared statement of Senator Baucus follows:]

Prepared Statement of Senator Max Baucus, U.S. Senator from Montana and 
             Ranking Member of the Senate Finance Committee

    Thank you very much for the opportunity to appear before you this 
afternoon. Mr. Chairman, thank you for your continued leadership not 
only on this issue, but on the issue of sanctions generally. I also 
want to thank Senators Enzi, Dodd, Hagel, and others on this committee 
for your ongoing leadership on the issue of Cuba sanctions.
    This hearing comes at an important time. Last spring, the Cuban 
Government arrested and imprisoned 75 dissidents, whose only crime was 
speaking freely. I, along with members of this committee, led efforts 
to condemn those actions. The crackdown in Cuba was unacceptable. And 
here in Congress, those on both sides of the embargo debate immediately 
denounced the arrests.
    Yet, beyond these immediate denunciations, there was a second, more 
puzzling reaction in Washington. Somehow, people saw the arrests as a 
vindication of the embargo policy, rather than as an indictment of its 
failings. They fell back into the mistake of thinking U.S. policy ought 
to be built around a system of rewards and penalties for Castro. Some 
people, including many of my good friends in Congress who believe in 
engagement, concluded that to ease the embargo now would only reward 
Castro for bad behavior.
    I respectfully, but strongly, disagree. This is not about rewarding 
Castro. It is about changing Cuba. The embargo has been in place for 
more than four decades, and it has not worked. The arrests in March 
were not unique. They were merely the latest in a forty-four year 
record of oppression.
    Moreover, many dissidents were reportedly arrested because the 
Cuban Government was concerned about their meetings with Americans. In 
other words, the arrests indicate that the Cuban Government fears 
increasing contacts between dissidents and Americans. If that is the 
case, we should not reward Castro by maintaining a failed embargo. That 
only shelters his regime from American influence. If the Cuban 
Government fears contact between the American and Cuban people, the 
answer is to send more Americans, not fewer.
    Alternatively, the so-called ``carrot-and-stick'' approach forces 
an odd logic. Under its rationale, one would have to believe that a 
continuation of the embargo would have some new and positive effect on 
the conditions in Cuba. This makes no sense. I support engagement, 
because I think it's the best way to effect democratic change in Cuba. 
Castro is doing just fine under our embargo. If we want to maintain--
for example--the travel ban in the name of supporting dissidents, then 
that's fine with him. In fact, perhaps that's exactly what he wants us 
to do. And if I am correct, then the arrests of 75 dissidents ought to 
create a greater sense of urgency in Congress to reform our failed and 
counter-productive embargo.
    Three weeks ago, I traveled to Cuba. I met with officials from the 
Cuban Government, and I met with Cuban dissidents--including Oswaldo 
Paya and the wives of three jailed dissidents. More than anything, I 
was struck by the devastation wrought on the Cuban people by the past 
four decades. Communist dictatorship has decimated the Cuban economy. 
Responsibility for the terrible poverty and oppression imposed on the 
Cuban people rests entirely with the current regime.
    Nevertheless, the U.S. embargo, however well-intentioned, has done 
nothing to improve these conditions. If anything, the embargo appears 
to have exacerbated the isolation and powerlessness of the Cuban 
people. Democratic change in Cuba must begin with the Cuban people. And 
U.S. policy can have a profound effect on whether or not the Cuban 
people are adequately empowered to undertake such momentous change. But 
a ``carrot-and-stick'' approach is tantamount to giving Castro a veto 
over U.S. policy. If he wants a warming in our relationship, then he'll 
do something nice. If he's getting nervous, and thinks we're too close, 
he'll go and arrest more people. To hold off engagement simply as a 
``carrot'' for him to release one or two dissidents, or to embrace the 
status quo because we think it will induce change, would be a mistake.
    I know we all share the same goal--helping the Cuban people achieve 
independence. I know there are different opinions on this committee and 
I respect that. But 43 years of sanctions have accomplished nothing. We 
must move beyond the politics of this issue and press for change. I 
appreciate the chance to testify today. And I again thank the chairman, 
both for holding this important hearing, and for agreeing to mark up 
Senator Enzi's and my travel legislation later this year.

    The Chairman. Senator Baucus, we thank you very much for 
that testimony. Let me say on behalf of the committee we thank 
you for your friendship with this committee. As the leader on 
the Finance Committee, you and Senator Grassley over the years 
have been good friends. We likewise want to have a very good 
relationship with your committee, because so many of our 
interests----
    Senator Baucus. They do overlap.
    The Chairman [continuing]. Cross over.
    Senator Baucus. They do.
    The Chairman. Particularly in the trade areas as well as in 
international and domestic taxation, so I thank you for taking 
this time and preparing the statement today.
    Senator Baucus. And I thank you, Mr. Chairman, very much 
for allowing me to take the time.
    The Chairman. The chair would like to recognize now two 
distinguished members of the administration, the Honorable 
Roger F. Noriega, Assistant Secretary of State for Western 
Hemisphere Affairs, and Mr. R. Richard Newcomb, Director of the 
Office of Foreign Assets Control, Department of the Treasury.
    Let me mention before the testimony of these witnesses that 
committee chairs received notice that the rollcall vote has now 
been pushed back to 3:45 p.m., I mention that just as a mental 
footnote. If there are future announcements, the chair will 
make them promptly so that members will have some idea of our 
status. But this does give us a longer period of time to hear 
the testimony of our witnesses and to commence the questioning 
of them.
    Mr. Noriega, very good to have you and I'll ask you to 
testify first and then Mr. Newcomb.

  STATEMENT OF HON. ROGER F. NORIEGA, ASSISTANT SECRETARY OF 
STATE FOR WESTERN HEMISPHERE AFFAIRS, U.S. DEPARTMENT OF STATE, 
                         WASHINGTON, DC

    Mr. Noriega. Thank you very much, Mr. Chairman. I 
appreciate the opportunity to be here to talk about this very 
important topic that's important to all of us. In preparing my 
testimony, Mr. Chairman, I asked that we emphasize our 
constructive, proactive measures to help the Cuban people move 
toward a much brighter future rather than dwell on our 
differences, which does little to improve the lives of the 
Cuban people. Now more than ever we have an opportunity to 
cooperate on our common objective of freedom for Cuba.
    Mr. Chairman, I hasten to note at the outset that the Cuban 
people do not today accept the excuses of the regime for 
denying them basic freedom and well-being. They know very well 
that their family and friends in this country do more to help 
them than any group of people on the face of the Earth. Two 
million foreigners visit the island of Cuba every year and the 
proceeds of that travel go to the regime, not to the people, 
and the impact on Cuban policies is absolutely negligible, 
which was evidenced by the recent crackdown.
    We all agree that the Cuban people will be best served by 
an end to the Cuban dictatorship, followed by a full transition 
of democracy characterized by open markets and respect for 
human rights that will sweep away the vestiges of this regime.
    A second point I'd like to make from the start, which 
relates directly to the challenges to achieving a transition, 
is that the recent events in Cuba have opened the eyes of many 
people around the world to the true nature of the Castro 
regime. That Castro runs a dictatorship that denies the Cuban 
people basic rights was not a surprise to any of us, but for 
many it was a revelation, which moved them to jump off the 
bandwagon and to activism against the regime.
    Finally, we must consider Cuba in the context of a region 
that has changed dramatically in recent decades, as you know 
full well, Mr. Chairman, a transition to which you contributed 
greatly in the Americas. While the rest of the hemisphere 
continues to work on its future by building representative 
democracy, expanding economic development, and increasing 
regional cooperation, the Castro regime remains a dictatorial 
anachronism, stuck in a bankrupt Marxist past suffocating in 
its own rhetoric. Quite out of place with the Americas, Castro 
is an implacable foe of democracy, reform, and economic 
progress.
    Our hemisphere is the first in the world to agree 
unanimously that in the words of the Inter-American Democratic 
Charter, which was signed on September 11, 2001, the peoples of 
the Americas have a right to democracy and that ``democracy is 
essential for the social, political, and economic development 
of the peoples of the Americas.'' The charter indicates ``the 
obligation of governments to protect and defend democracy.''
    The growing international consensus on the nature of the 
Castro regime and the need for change manifests itself in many 
ways. Many of those who stood by Castro in those early days 
have now disassociated themselves in the wake of the crackdown. 
Nobel Prize-winning Portugese novelist Jose Saramago, a 
dedicated Communist and previously an admirer of the Cuban 
revolution, put it succinctly, reacting to Castro's crackdown: 
``This is as far as I go. To dissent is a right.'' Noted 
Chilean author and long-time Castro supporter Carlos Franz, 
announced last July that he was turning down the Jose Marti 
Journalism Prize to protest the crackdown.
    As these old sympathizers make a definitive break with the 
regime, the regime knows that it is in a fight for its life, 
and that is a fight that the regime is going to lose. In a 
superb analysis and call for action published in the Washington 
Post on September 21, four Eastern European former Presidents, 
Vaclav Havel, Arpad Goncz, and Lech Walesa, each a product of 
his own country's progress from repression to democracy, said 
that in the wake of the repression, ``the voices of free-
thinking Cubans are growing louder and that is precisely what 
Castro and his government must be worried about.''
    For the first time in 20 years, Mr. Chairman, the world is 
no longer obsessed with debating the U.S. embargo, but has no 
choice but to focus on the dictatorship that is the object of 
our policy. There is virtual unanimity in the United States 
that the Cuban people will be better off the day Castro slips 
into history. While we do not all agree on the tactics to 
hasten that day, I think it is logical to reserve any further 
concessions to be used to motivate a transitional government to 
remove the vestiges of a corrupt old dictatorship and commit to 
the most profound economic and political reforms.
    We advance none of our goals by making further unilateral 
concessions to a decrepit dictatorship. At a time when other 
nations are moving to pressure Castro, Mr. Chairman, this is 
not the appropriate time to be giving him a $1 billion windfall 
that would come from U.S. tourism today. That is a windfall 
that we should reserve to help the Cuban people, not their 
jailer.
    Despite some differences of opinion, I am confident that we 
can use our common energies to promote shared objectives, such 
as finding more creative, more effective ways to help the Cuban 
people prepare for a happier future without Castro.
    Last year, President Bush offered to match steps toward 
freedom and more open markets by the Cuban Government with 
steps to ease the embargo and travel restriction. Predictably, 
the Government of Cuba rejected this proposal and followed up 
by jailing Cubans who dared to think about their future. Mr. 
Chairman, we must help those brave people through actions 
designed to accelerate and shape the democratic changes that 
the people of Cuba seek. Toward that end, the United States is 
maintaining and augmenting our support for Cuba's growing civil 
society. Our aim, Mr. Chairman, is not to engage Fidel Castro, 
but the other 11 million Cubans who are part of Cuba's future.
    Much has already been done in this area, as you know well. 
We need to redouble our efforts in this climate of increased 
repression, bringing in new Cuban and international actors into 
this process. We are also increasing efforts to break the 
information blockade that Castro has on his own people. Steps 
have already been taken to improve the effectiveness of the 
freedom broadcasting to Cuba through the Martis, through 
innovative and new technical measures.
    We are maintaining international and multilateral momentum 
against the regime to bring about fundamental change that will 
pressure the regime itself. We will work with foreign 
governments, with regional parliaments, with political party 
internationals, with the Organization of American States, with 
other international organizations, to build a consensus for 
change in Cuba. Maintaining our pressure on human rights issues 
generally, including by working with like-minded governments to 
achieve a stronger, clearer U.N. Human Rights Commission 
resolution on Cuba this year will be a very important objective 
of this government.
    We are also raising our profile in the public diplomacy and 
public affairs arenas, particularly to transmit our message of 
support for the Cuban people for rapid and effective change in 
Cuba and reaching out to groups like labor organizations around 
the world that want to defend their brother workers on the 
island of Cuba. I believe it is critical to augment our 
outreach to Congress on developments in Cuba with respect to 
our policy and I'm committed to a regular dialog with you and 
your colleagues to accomplish this objective.
    We will continue to work to make sure that travel by 
Americans to Cuba is consistently supportive of our policy 
goals in Cuba. We have begun this process by eliminating and 
refining some license categories, working with Treasury's OFAC 
and other involved agencies. We will seek enforcement actions 
against those who travel in violation of U.S. law. Mr. 
Chairman, I note that about 200,000 American citizens visit the 
island legally every year. Some of them do so for genuine 
useful purposes that are contemplated in the law, educational, 
scientific, technical exchanges of that kind. We recently 
discovered a group leaving Havana that was talking about their 
wonderful golf tournament that they took part in under a 
religious license, and I know that some golfers are religious 
about their golf game, but that is beyond the pale when it 
comes to exploiting the Cuban island and in violation of U.S. 
law.
    In these days of acute national security concerns, we have 
taken a number of actions to confront the challenges of Cuban 
espionage against the United States by insisting that Cuba's 
representatives are authentic diplomats and not spies who are 
here to do us harm.
    In conclusion, Mr. Chairman, let me again quote from Havel, 
Walesa, and Goncz. ``The internal opposition is getting 
stronger, it has not been brought to its knees by the police 
round-up last March. times are changing, the revolution is 
getting old and the regime is getting nervous.'' I couldn't 
agree more.
    Mr. Chairman, now is not the time to offer unilateral 
concessions that might buy the regime one more terrible day in 
power. It is a debatable proposition. Perhaps it will bring 
about change to make unilateral concessions to a regime on its 
last legs, but it's a very risky proposition, the price for 
which the Cuban people themselves will pay. Instead, we need to 
continue building on the multilateral coalition for change that 
is emerging and to reach out our hand to the courageous men and 
women in Cuba who will one day see their efforts come to 
fruition and build Cuba's future. Thank you very much, Mr. 
Chairman.
    [The prepared statement of Mr. Noriega follows:]

  Prepared Statement of Hon. Roger F. Noriega, Assistant Secretary of 
     State for Western Hemisphere Affairs, U.S. Department of State

    Thank you for inviting me to discuss United States policy toward 
Cuba. I'm delighted to have this opportunity to address this important 
topic. One point I'd like to make from the start, which relates 
directly to the challenges to achieving a transition: recent events in 
Cuba have opened the eyes of many around the world to the true nature 
of the Castro regime.
    That Castro runs a dictatorship which denies Cubans their basic 
rights was not a surprise to us. But for many, it was a revelation, and 
one that has helped us all--Americans, and our allies around the 
world--to recognize that we all agree that the Cuban regime has 
betrayed its people politically and failed them economically. We 
recognize that the Cuban people will be best served by an end to the 
dictatorship, followed by a full transition to democracy characterized 
by open markets and the respect for human rights. Our commitment to 
helping Cubans achieve genuine democracy is an important unifying 
concept, drawing us together on an issue more often marked by 
disagreements.
                      the western hemisphere today
    While the rest of the hemisphere continues to work on its future by 
building representative democracy, expanding economic development and 
increasing regional cooperation, the Castro regime remains a 
dictatorial anachronism, stuck in a bankrupt Marxist past, suffocating 
in its own rhetoric.
    I recall when working on Latin America in the late 1980s, the State 
Department produced a map which showed the continent in 1979 versus 
1989, with countries ruled by dictatorships marked in red, democracies 
in blue. Literally dozens of countries had gone from authoritarian rule 
to democratic governance. Some achieved this feat despite assaults by 
violent leftist insurgencies. Despite all the challenges that face our 
region today, the incredible achievements of the 1980s cannot be 
denied.
    The same map today continues to reveal the obstinate and 
destructive resistance to change by the Cuban regime. The Castro regime 
has passed up opportunities to reform, because the Castro brothers hope 
to retain power until they die. In the past 18 months, Fidel Castro has 
engineered a constitutional amendment declaring ``socialism,'' 
immutable; indicated his intention to remain in power until forced from 
office, including by death, explicitly denied that Cuba will move to 
open markets, and staged the most sweeping crackdown on peaceful 
advocates of change in the history of Cuba.
    Castro is an implacable foe of democracy, reform, and economic 
progress, and his continued presence as head of a government in our 
region is offensive in our democratic region. Our hemisphere is the 
first in the world to agree unanimously that, in the words of the 
Inter-American Democratic Charter, ``the peoples of the Americas have a 
right to democracy'' and that ``democracy is essential for the social, 
political, and economic development of the peoples of the Americas.'' 
The Charter indicates the ``obligation to protect and defend'' 
democracy.
    Our hemisphere will be a safer, happier place when Castro leaves 
the scene, whether by natural processes or, as is the goal of U.S. 
policy, as the result of the will of the Cuban people and the concerted 
action of advocates of peaceful change in Cuba.

                  CHALLENGES TO MULTILATERAL CONSENSUS

    The growing international consensus on the nature of the regime and 
the need for change plays out in many contexts: many of those who had 
stood by Castro in those early days have now begun to speak out 
publicly against the abuses of his regime. Even before the regime's 
ruthless repression of civil society in March of this year, President 
Lula of Brazil said in late 2002, ``Let's not confuse the passion that 
my generation has for the Cuban revolution and what it represented then 
with any approval of the Cuban regime today. I defend religious 
freedom, freedom for trade unions and political freedom.''
    Nobel Prize-winning Portuguese novelist Jose Saramago, a dedicated 
Communist and previously an admirer of the Cuban revolution, put it 
succinctly reacting to Castro's crackdown: ``This is as far as I go . . 
. to dissent is a right.''
    Noted Chilean author and long-time Castro supporter Carlos Franz 
announced last July that he was turning down the Jose Marti Journalism 
Prize, which the regime sought to award him, as a way of protesting the 
March crackdown of civil society. He said he could not accept a 
journalism award purported to support freedom of expression because 
among the dissidents imprisoned in Cuba, there were a number of authors 
and some 20 newsmen.
    The critical factor in the coalescence of this unprecedented 
multilateral consensus on Cuba was that egregious act of repression. 
Rather than detail the injustices of the Cuban regime's repression 
here, I would direct the Committee to the superb Amnesty International 
report, ``Essential Measures? Human Rights Crackdown in the Name of 
Security,'' which is an extremely complete and credible depiction of 
the mechanism of Castro's brutality. It is important to note that the 
Cuban regime's actions were not a sign of strength, but of fear--fear 
of its own people and fear that it will not survive Castro's demise. As 
the noted exiled Cuban academic Juan Antonio Blanco recently pointed 
out, the regime convicted people to lengthy jail sentences for owning a 
decrepit typewriter to send a simple message: it will treat Cubans who 
seek their fundamental freedoms peacefully ``with same implacable rigor 
with which it smashed earlier armed opposition to the revolution.'' The 
regime knows that it is in a fight for its life.
    This is a fight that the regime will lose. In their superb analysis 
and call for action published in the Washington Post on September 21, 
former eastern European Presidents Vaclav Havel, Arpad Goncz and Lech 
Walesa, each a product of his own country's progress from repression to 
democracy, said that, even in the wake of the repression, ``the voices 
of free-thinking Cubans are growing louder, and that is precisely what 
Castro and his government must be worried about.''
    That repression provoked our European and some Latin American 
allies to denounce the regime in some of the most dramatic and 
compelling terms ever. Latin American nations led the effort at 2003 
Human Rights Commission to win approval for a resolution on Cuba.
    There has been an unrelenting drumbeat of criticism and demands for 
justice since Castro's brutal acts took place. In March, the European 
Union (EU) condemned the arrests of the 75. On April 30, the European 
Commission decided to postpone indefinitely Cuba's bid to join the 
Cotonou agreement, a preferential trade pact. On June 5 the EU 
announced its decision to implement the following actions: limit 
bilateral high-level governmental visits, reduce the profile of member 
states' participation in cultural events, and invite Cuban dissidents 
to national-day celebrations.
    In April, the Inter-American Commission on Human Rights stated its 
profound concern about violations of Cubans' rights by the regime, and 
in May, 17 OAS member states, including 14 of Cuba's Latin American 
neighbors, issued a declaration citing the arrest and severe sentencing 
of 75 Cuban citizens who were exercising their fundamental rights. In 
April, the UNCHR resolution on Cuba passed, calling for a visit to Cuba 
by a personal representative of the U.N. High Commissioner for Human 
Rights. The Cuban Government refused to allow a visit. Both the Chilean 
House and Senate passed resolutions opposing the crackdown, as did the 
Central American Parliament.
    There are challenges to the multilateral insistence on change. 
Predictably, in the wake of the crackdown, the regime tried, but 
failed, to excuse its repression as a justifiable reaction to the pro-
democracy activities of the chief of the U.S. Interests Section, Jim 
Cason. Mr. Cason has done a superb job to support democratic 
development and civil society in Cuba. That is our policy in Cuba, and, 
in fact around the hemisphere. Jim was implementing bipartisan U.S. 
policy, and we au have every reason to be very proud of his work there.
    Cuba failed miserably in its efforts to blame us, or by extension 
to ``blame the victims'' by implying that the opposition got what it 
deserved for having met with the Interests Section staff. (Indeed, part 
of the laughable ``evidence'' against the poet Raul Rivero, condemned 
to 20 years in Castro's gulag, is that he owned two plastic chairs in 
which U.S. diplomats had once taken a seat.) Another charge against one 
of the convicted dissidents was that he met with a U.S. Congressman.
    There are other challenges. European countries are the biggest 
foreign investors in Cuba, and even though Castro has of late denounced 
European leaders, especially Spanish President Jose Maria Aznar and 
Italian President Silvio Berlusconi, in the most insulting of terms, we 
know that some mistakenly argue that the policy of insisting on justice 
for the 75 prisoners of conscience somehow puts Europe ``too much on 
the side of the United States.'' Such individuals assert that Europe is 
most effective in pressing for change by following a distinct policy 
from the United States, a paradoxical position, since the essence of 
our policy is to promote democratic change. In any event, we believe 
that while the coalition within the EU for justice for the 75 will 
remain intact, commercial interests and this desire to be distinct from 
us will continue to serve as motivation for some to seek a return to 
the previous engagement policy.
    Challenges to a multilateral approach in Latin America are complex. 
Again speaking with total frankness, it would have been extremely 
gratifying to see more Latin American governments speak up forthrightly 
for change in Cuba and against the repression. As the Secretary said so 
eloquently in Santiago in June, after the OAS General Assembly: ``how 
could we, as a Community of Democracies which has seen what we have 
been able to achieve in this hemisphere over the last fifteen or twenty 
years, fail to speak out with respect to what Castro is doing to his 
people?''
    It is my profound desire, and I take as a personal mission, to 
encourage greater involvement by Latin American governments in the 
quest for democracy and development in Cuba, consistent with our shared 
commitment as articulated in the Inter-American Democratic Charter.
    For the first time in 20 years, the world is not obsessed with the 
U.S. embargo, but rather the dictatorship that is the object of our 
policy. There is virtual unanimity in the United States that the Cuban 
people will be better off the day the Castro regime slips into history. 
While we do not all agree on the tactics to hasten that day, I think it 
is logical to reserve any further concessions to be used to motivate a 
transitional government to remove the vestiges of the corrupt old 
dictatorship and commit to the most profound economic and political 
reforms. We advance none of our goals by making unilateral concessions 
to a decrepit dictatorship. Moreover, despite some differences of 
opinion, I hope that we can use our common energies to promote shared 
objectives, such as finding more creative, more effective ways to help 
the Cuban people prepare for a happier future without Castro.

          U.S. PROGRAMS TO PROMOTE DEMOCRACY AND HUMAN RIGHTS

    It is clear that with Castro there can be no reform in Cuba. 
President Bush's Initiative for a New Cuba challenged the Castro 
government to undertake political and economic reforms. The President 
made clear that his response to such concrete reforms would be to work 
with the U.S. Congress to ease the restrictions on trade and travel 
between the United States and Cuba. For the first time since the Castro 
regime came to power, the United States offered to match steps toward 
freedom and more open markets by the Government of Cuba with steps to 
ease the embargo and travel restrictions. Not surprisingly, the Castro 
regime rejected this opportunity to help move his country toward a soft 
landing.
    The Administration will not wait for Fidel Castro to show that he 
is interested in change, because sadly for him and for Cuba, we don't 
believe that day will come. What we will continue to do is focus on 
actions designed to accelerate and shape the democratic changes the 
Cuban people seek. Toward that end, we are:

   Maintaining and augmenting our support for Cuba's growing 
        civil society. Much has been done; we need to redouble our 
        efforts in this climate of increased repression, bringing in 
        new Cuban and international actors.

   Increasing efforts to break the information blockade Castro 
        has on the Cuban people. Steps have already been taken to 
        improve the effectiveness of the Martis through innovative new 
        technical measures.

   Maintaining multilateral and international momentum against 
        the regime's abuses and for fundamental change which will 
        increase pressure on the regime itself. The international 
        consensus which Castro created by revealing the true, 
        oppressive nature of his government is the single most 
        important new factor in the quest to encourage democratic 
        development in Cuba. We will work with foreign governments, 
        with regional parliaments, with political party internationals, 
        and in all available international organizations to make clear 
        the international community's insistence on real reform.

   Maintaining our pressure on human rights issues generally, 
        including by working with like-minded governments to achieve a 
        UN Human Rights Commission resolution on Cuba which reflects 
        the international consensus on Cuba today.

   Raising our profile in the public diplomacy and public 
        affairs arenas, particularly to transmit our message of support 
        for the Cuban people for rapid and effective change in Cuba.

   I believe it is critical to augment our outreach to Congress 
        on developments in Cuba and with respect to our policy, and I'm 
        committed to regular discussions with the relevant committees 
        to accomplish this.

   We will continue to work to make sure that travel by 
        Americans to Cuba is consistently supportive of our policy 
        goals. We have begun this process by eliminating and refining 
        license categories. Working with Treasury's OFAC and other 
        involved agencies, we will also seek enforcement actions 
        against those who travel in violation of the law.

   We have taken a number of actions to confront the challenges 
        of Cuban espionage against the United States by insisting that 
        Cuba's representatives here are authentic diplomats and not 
        spies.

   We continue to demand reciprocal treatment for Cuban 
        Interests Section staff, compared to treatment by Cuba of our 
        diplomats in Havana.

   The Administration remains committed to taking concrete 
        steps, using the legal tools available to us, to confront 
        trafficking by foreign corporations in properties confiscated 
        by the regime from Americans.

                               CONCLUSION

    We are in the end game of the Cuban people's long travail with 
dictatorship. When Pope John Paul II made his triumphant 1996 journey 
back to a free Nicaragua, he called that country's decade of oppression 
by a small and unrepresentative clique a ``long dark night.'' Cuba's 
night has been longer and darker--but we believe we have an opportunity 
to help the Cuban people bring it to an end and the right policy in 
place to help them do so.
    There is a glimmer of real hope on the horizon. Our allies, 
especially in Europe are insisting with us on a systematic and 
unprecedented way for real change. Even more encouraging is that Cubans 
of conscience and with a commitment to democracy and reform are working 
day by day for change. The crackdown did not crush the opposition, but 
rather has imbued remaining activists with a new sense of urgency and 
mission. Oswaldo Paya has said that he is reconstructing his network of 
civil society activists, and stories of regime abuses of ill political 
prisoners like Raul Rivero and Marta Beatriz Roque provide additional 
motivation for these Cubans of conscience. To quote again from Havel, 
Walesa, and Goncz, ``the internal opposition is getting stronger, it 
has not been brought to its knees by the police round-up last March, 
times are changing, the revolution is getting old and the regime is 
getting nervous.'' I couldn't agree more.
    Since we are in the end game, there is nothing more important than 
for us to stay the course. Now is not the time to experiment with 
perhaps well-meaning, but fundamentally misguided new tactics in Cuba 
which we believe would strengthen the regime, not move forward the day 
of fundamental reform. Instead, we need to continue building on the 
multilateral coalition for change, and to reach out our hand to the 
courageous men and women in Cuba who will one day see their efforts 
come to fruition. Thank you.

    The Chairman. Well, thank you very much, Secretary Noriega, 
for your testimony.
    Director Newcomb, would you give us your testimony.

 STATEMENT OF R. RICHARD NEWCOMB, DIRECTOR, OFFICE OF FOREIGN 
ASSETS CONTROL, U.S. DEPARTMENT OF THE TREASURY, WASHINGTON, DC

    Mr. Newcomb. Thank you, Mr. Chairman, for the opportunity 
today to address issues concerning travel and trade with Cuba. 
The Treasury Department's Office of Foreign Assets Control 
[OFAC] is currently responsible for implementing, 
administering, and enforcing 27 economic sanctions and embargo 
programs pursuant to Presidential and congressional mandates in 
furtherance of foreign policy and national security objectives. 
These programs are primarily directed at countries and groups 
of individuals, such as terrorists and narcotics traffickers 
who engage in activities that are inimical to U.S. interests.
    Sanctions programs may be either comprehensive or 
selective, using the blocking of assets and/or trade or 
investment restrictions to accomplish their objectives. The 
embargo in Cuba is one of the oldest, most comprehensive, 
complicated, and challenging programs we administer, one that 
generates considerable interest on the part of the public. The 
embargo constitutes to serve as an important part of the 
administration's policy to support and encourage a peaceful 
transition to democracy and a free market in Cuba.
    OFAC plays a crucial role in the implementation of 
administration and enforcement of this policy. Our jurisdiction 
extends to transactions by persons subject to U.S. 
jurisdiction, wherever in the world located, involving property 
in which Cuba or a national thereof has any interest whatever, 
direct or indirect. Such transactions are normally prohibited 
absent OFAC authorization. Because our role is focused 
primarily on the regulation of transactions involving persons 
subject to U.S. jurisdiction and not on our multilateral and 
bilateral relations, I defer to my colleague, Roger Noriega, to 
address issues arising in that context.
    In February of last year, I testified before the Senate 
Appropriations Committee's Subcommittee on Treasury and General 
Government on the administration and enforcement of 
restrictions on travel to Cuba. Since then, the administration 
and OFAC in particular, have instituted a number of additional 
measures to facilitate authorized travel to Cuba and ensure 
that prohibitions against unauthorized travel are properly 
enforced.
    In the first instance, these measures involve our efforts 
across the board to promote transparency, consistency, and 
efficiency of our administrative process. In that regard we 
have published two comprehensive set of guidelines. The first 
sets forth criteria for submitting license applications to 
travel to Cuba pursuant to 11 categories of activities for 
which licenses may be issued. The second sets forth enforcement 
procedures governing OFAC's response to violation of our 
sanctions program, including those involving travel.
    We've also taken measures to implement current foreign 
policy initiatives, both with respect to the President's stated 
commitment to facilitate humanitarian aid to Cuba and in order 
to curb the abuses of licenses issued for travel related to 
non-accredited educational exchanges, where travelers were 
engaging primarily in tourist activities. A decision was made 
to eliminate this provision. Finally, we have made progress in 
carrying out certain statutory mandates to facilitate travel 
relating to the export of agricultural commodities to Cuba and 
to initiate hearings before an administrative law judge on the 
imposition of civil penalties for engaging in unauthorized 
travel transactions.
    Regulations prohibit most imports into the United States of 
Cuban origin goods as well as transactions by persons subject 
to U.S. jurisdiction, wherever in the world located, involving 
trade between third countries in Cuba. My remarks, however, 
will center primarily on the issue of travel since in this 
program the Department of Commerce retains licensing 
jurisdiction over most exports and re-export transactions from 
the United States directly to Cuba. Our primary role in this 
regard is to regulate the manner of financing of such exports 
and licensed travel transactions relating to the export of the 
kind exported by the Commerce Department.
    Over the years Congress has been actively involved in the 
formulation of policy with regard to Cuba. In 1992, the Cuba 
Democracy Act added civil penalty authority and required the 
creation of an administrative hearing process for civil penalty 
cases and the establishment of an office in Miami to assist in 
administering and enforcing the Cuba program. The Cuba Liberty 
and Democratic Solidarity Act, also known as Libertad, required 
that underlying prohibitions set forth in the regulations are 
to remain in place until there is a transition to a 
democratically elected government in Cuba.
    Most recently, in 2000, Congress passed the Trade Sanctions 
Reform Act, which we refer to as TSRA, providing for the 
license of agricultural commodities, medicine, and medical 
supplies to countries against which the United States maintains 
trade prohibitions. TSRA also restricts the President's 
discretionary authority to authorize travel-related 
transactions to, from, or within Cuba, to transactions related 
to the 11 specific types of travel activities. Any activity 
falling outside these 11 categories is defined by TSRA as 
tourism and may not be the basis for issuing a license.
    Following through on a commitment I made in the hearings 
last year, we published a comprehensive applications guideline 
on our Web site \1\ in April of this year providing clearly 
articulated criteria for applying for licenses pursuant to each 
of the 11 categories of activities for which specific licenses 
may be granted. Examples are often included to provide 
additional guidance to applicants in furtherance of our goal to 
promote transparency and understanding by the public of our 
administrative process.
---------------------------------------------------------------------------
    \1\ The Web site address for the U.S. Department of the Treasury's 
Office of Foreign Assests Control is: www.treas.gov/offices/eotffc/
ofac/
---------------------------------------------------------------------------
    The criteria set forth in these guidelines seek to ensure 
that existing policy is clear and properly carried out through 
our licensing process. In addition, these guidelines seek to 
eliminate the abusive practice of allowing unaffiliated persons 
to travel under a license issued to another party and ensure 
that there exists the sufficient nexus between the 
qualifications of persons traveling under the authority of the 
license and the full time agenda of authorized activities they 
will engage in while in Cuba.
    The largest volume of license applications processed by our 
office has traditionally involved travel to Cuba and by far the 
largest proportion of these applications, more than 90 percent, 
relate to visits by close relatives. The manual processing of 
these applications is often time-consuming and often 
perfunctory because of the volume of submissions and the policy 
support of licensing family reunification, which is considered 
per se humanitarian. This category of travel is handled by our 
Miami office, which processed nearly 20,000 such applications 
last year.
    The remaining categories of license applications are 
processed in our main office here in Washington, and they 
involve freelance journalism, professional research, attendance 
at professional meetings not covered by a general license, 
educational exchanges involving academic study pursuant to a 
degree program, religious activities, participation in a public 
performance, clinics, workshops, athletic or other competitions 
or exhibitions, support of the Cuban people, humanitarian 
projects, information collecting relating to private 
foundations or research of educational institutes, 
informational materials, agricultural, medical exports, and 
other exports that are licensed, exports of medicine or medical 
supplies, and certain telecommunication equipment. Our office 
in Washington also processes other non-travel-type activities.
    With the advent of these new guidelines, new streamlined 
procedures, and the assignment of additional staff, we are now 
able to process most applications not requiring interagency 
review within 10 days of receipt, doing better than a goal I'd 
set last year of 2 weeks. By far, the majority of our 
enforcement actions with respect to the Cuban embargo concern 
individuals who engage in unauthorized travel transactions 
relating to Cuban tourism.
    We work closely with U.S. Customs service in an effort to 
enforce these travel restrictions. As returning Cuba travelers 
are identified by Customs agents and inspectors at ports of 
entries, those travelers who are not able to claim a general or 
specific license to engage in travel-related transactions are 
routinely referred to OFAC for investigation and civil penalty 
action. Regardless of the motivation underlying the travel 
violation, we endeavor to enforce the law evenly and 
consistently in accordance with our responsibilities under the 
law.
    In January of this year we published our economic sanctions 
enforcement guidelines in the Federal Register, enhancing the 
transparency of OFAC's administrative process by providing in a 
public document a procedural framework for the enforcement of 
economic sanctions programs. Our enforcement guidelines include 
a schedule of proposed civil money penalties for certain 
violations of the regulations, include those involving 
unauthorized tourist-related travel to Cuba.
    Investigative findings are referred to our civil penalty 
branch for consideration with an administrative record 
containing evidence of transactions involving Cuba. In 
September of this year, we revised our administrative penalty 
procedures to afford travelers to Cuba additional opportunities 
to present mitigating factors for consideration before final 
penalty ensues. Administrative law judges will provide at the 
review of the penalty assessment if the right to administrative 
hearing has been invoked.
    As a consequence of the President's May 2002 policy 
direction to ease restrictions on humanitarian aid and to 
facilitate support for civil society, we've refined and updated 
the licensing procedures in our guidelines. We've also 
prioritized this category of license applications over other 
travel categories and a dedicated staff for specific rapid 
process of these activities.
    Tourism, however, in whatever form, is both inconsistent 
with the current policy and prohibited by the Trade Sanctions 
Reform Act. Our enforcement of the ban on tourist travel 
recently extended to the recission of a regulatory provision 
implemented in 1999. This provision had originally been 
designed to allow structured, non-accredited educational 
exchanges to take place that promoted substantive, people-to-
people contact between U.S. and Cuban nationals.
    Our experience over the past years, however, demonstrated 
that persons traveling to Cuba under the authority of these 
licenses were engaging primarily in tourist activities that 
consisted at best of educational tours designed to afford 
Americans an opportunity to see Cuba, involving minimal 
substantive contact with Cuban nationals. This provision was 
part of a larger category of licensable educational activities 
under which we continue to authorize academic study in Cuba 
pursuant to a degree program at an accredited U.S. academic 
institution. Non-accredited academic educational exchanges 
taking outside the structured curriculum of an accredited 
degree, however, too often devolved into tourism.
    In addition, the original policy underlying this provision 
was undercut by restrictions imposed by the Cuban Government on 
substantive open interactions between U.S. and Cuban nationals. 
Last year, we confirmed reports that groups traveling to Cuba 
under these licenses were particularly vulnerable to Cuban 
Government requirements for approval of their schedules and 
assignments to a tour guide or an escort to the group. Contacts 
between members of these groups and Cuban nationals were casual 
at best and often limited to Cubans employed in government 
positions in the tourism industry. This practice subverted 
access to the Cuban people and diluted any meaningful 
educational exchange.
    Despite our considerable efforts, the licenses continue to 
be used for tourism, plain and simple, with groups using their 
licenses to attract other unaffiliated parties to travel, to 
sightsee in Cuba under the pretext of educational exchange, a 
clear violation of section 910 of the Trade Sanctions Reform 
Act.
    Mr. Chairman, this concludes my prepared remarks this 
afternoon and I welcome any opportunity to answer any questions 
you or other committee members may have. Thank you very much 
for the opportunity.
    [The prepared statement of Mr. Newcomb follows:]

 Prepared Statement of R. Richard Newcomb, Director, Office of Foreign 
            Assets Control, U.S. Department of the Treasury

                            I. INTRODUCTION

    Chairman Lugar, Members of the Committee,
    Thank you for the opportunity today to address issues concerning 
travel and trade with Cuba. As you know, the Treasury Department's 
Office of Foreign Assets Control (``OFAC'') is currently responsible 
for implementing, administering and enforcing 27 economic sanctions 
programs pursuant to Presidential and Congressional mandates in 
furtherance of the foreign policy and national security objectives of 
the United States. These programs are primarily directed at countries 
and groups of individuals, such as terrorist and narcotics traffickers, 
who engage in activities that are inimical to U.S. interests. Sanctions 
programs may be either comprehensive or selective, using the blocking 
of assets and/or trade or investment restrictions to accomplish their 
objectives.
    The embargo on Cuba is one of the oldest, most comprehensive, 
complicated and challenging programs we administer, and one that 
generates considerable interest on the part of the public. The embargo 
continues to serve as an important part of the Administration's policy 
to support and encourage a peaceful transition to democracy and a free 
market in Cuba. OFAC plays a crucial role in the implementation, 
administration and enforcement of this policy. OFAC's jurisdiction 
extends to transactions by persons subject to U.S. jurisdiction, 
wherever in the world located, involving property in which Cuba or a 
national thereof has any interest whatsoever, direct or indirect. Such 
transactions are normally prohibited absent OFAC authorization. Because 
OFAC's role is focused primarily on its regulation of transactions 
involving persons subject to U.S. jurisdiction, and not on our 
multilateral and bilateral relations, I defer to my colleague from the 
State Department to address issues arising in that context.
    In February of last year, I testified before the Subcommittee on 
Treasury and General Government Appropriations, Committee on 
Appropriations of the United States Senate, on the administration and 
enforcement of restrictions on travel to Cuba (the ``2002 Hearings''). 
Since then, the Administration, and OFAC in particular, have instituted 
a number of additional measures to facilitate authorized travel to Cuba 
and ensure that the prohibitions against unauthorized travel are 
properly enforced.
    In the first instance, these measures involve our efforts across 
the board to promote the transparency, consistency and efficiency of 
our administrative process. In that regard, we have published two 
comprehensive sets of guidelines. The first sets forth criteria for 
submitting license applications to travel to Cuba pursuant to the 
eleven categories of activities for which licenses may be issued. The 
second sets forth enforcement procedures governing OFAC's response to 
violations of our sanctions programs, including those involving travel 
to Cuba.
    We have also taken measures to implement current foreign policy 
initiatives, both with respect to the President's stated commitment to 
facilitate humanitarian aid to Cuba and in order to curb the abuse of 
licenses issued for travel related to non-accredited educational 
exchanges, where travelers were engaging primarily in tourist 
activities. A decision was made to eliminate this provision. Finally, 
we have made progress in carrying out certain statutory mandates to 
facilitate travel relating to the export of agricultural commodities to 
Cuba and to initiate hearings before an administrative law judge on the 
imposition of civil penalties for engaging in unauthorized travel-
related transactions.
    I am submitting for the record our brochure on Cuba entitled: 
``What You Need to Know About the U.S. Embargo,'' which covers all 
facets of this economic sanctions program, as well as an historical 
overview and chronology demonstrating how the policy has shifted in the 
past with respect to Cuba travel.

             II. TRAVEL AND TRADE--STATUTORY UNDERPINNINGS

    The Regulations prohibit most imports into the United States of 
Cuban-origin goods, as well as transactions by persons subject to U.S. 
jurisdiction wherever in the world located involving trade between 
third-countries and Cuba. My remarks, however, will center primarily on 
the issue of travel, since in this program, the Department of Commerce 
retains licensing jurisdiction over most export and reexport 
transactions from the United States directly to Cuba. OFAC's primary 
role in this regard is to regulate the manner of financing of such 
exports and license travel-related transactions relating to exports of 
the kind authorized by the Department of Commerce.
    When I speak about travel during the course of this testimony, I 
refer specifically to restrictions on ``transactions related to 
travel,'' rather than simply to ``restrictions on travel.'' OFAC's 
jurisdiction under the Trading With the Enemy Act (``TWEA'') is to 
prohibit or regulate commercial or financial transactions, not travel 
per se.
    The licensing criteria set forth in the Cuban Assets Control 
Regulations, 31 CFR Part 515 (the ``Regulations'') implemented under 
the authority of this statute, address transactions incident to travel. 
OFAC's jurisdiction under TWEA to regulate these classes of 
transactions has withstood judicial review and been confirmed by the 
United States Supreme Court in Regan v. Wald, 468 U.S. 222 (1984).
    As you are aware, over the years, Congress has been actively 
involved in the formulation of policy with regard to Cuba. In 1992, the 
Cuban Democracy Act (the ``CDA'') added civil penalty authority and 
required the creation of an administrative hearing process for civil 
penalty cases and the establishment of an OFAC office in Miami to 
assist in administering and enforcing the Cuba program. The Cuban 
Liberty and Democratic Solidarity (Libertad) Act of 1996 (the 
``Libertad Act'') required that the underlying prohibitions set forth 
in the Regulations are to remain in place until there is a transition 
to a democratically-elected government in Cuba.
    Most recently, in 2000, Congress passed the Trade Sanctions Reform 
and Export Enhancement Act (the ``TSRA''), providing for the licensing 
of agricultural commodities, medicine and medical supplies to countries 
against which the United States maintains trade prohibitions. TSRA also 
restricts the President's discretionary authority to authorize travel-
related transactions to, from, or within Cuba. Under section 910 of the 
TSRA, that authority is restricted to travel-related transactions 
related to activities ``. . . expressly authorized in paragraphs (1) 
through (12) of section 515.560 of title 31, Code of Federal 
Regulations, or in any section referred to in any of such paragraphs 
(1) through (12) (as such sections were in effect on June 1, 2000).'' 
Any activity falling outside of these twelve categories is defined in 
this section of the TSRA as ``tourism'' and may not be the basis for 
issuing a license. A synopsis of these twelve categories of activities 
for which travel-related transactions are authorized pursuant to a 
general license or that may be authorized upon the issuance of a 
specific license is found at page nine of OFAC's Comprehensive 
Guidelines for License Applications to Engage in Travel-Related 
Transactions Involving Cuba (the ``Comprehensive Application 
Guidelines''), a copy of which is being submitted for the record. I 
will also describe these categories shortly when I discuss how license 
applications are processed.

                      III. ADMINISTRATIVE PROCESS

A. Licensing
    Following through on a commitment I made at the 2002 Hearings, OFAC 
published the Comprehensive Applications Guidelines on its website on 
April 29 of this year, providing clearly articulated criteria for 
applying for licenses pursuant to each of the eleven categories of 
activities for which specific licenses may be granted. Examples are 
often included to provide additional guidance to applicants in 
furtherance of our goal to promote transparency and understanding by 
the public of OFAC's administrative process. The criteria set forth in 
the Comprehensive Application Guidelines seek to ensure that existing 
policy is clear and properly carried out through OFAC's licensing 
process. In addition, the Comprehensive Application Guidelines seek to 
eliminate the abusive practice of allowing unaffiliated persons to 
travel under a license issued to another party, and ensure that there 
exists a sufficient nexus between the qualifications of persons 
traveling under the authority of a license and the full-time agenda of 
authorized activities they will engage in while in Cuba.
    The Miami Office: The largest volume of license applications 
processed by OFAC has traditionally involved travel to Cuba, and by far 
the largest portion of those applications--more than 90%--relates to 
visits to close relatives. The manual processing of these applications 
is time-consuming and often perfunctory because of the volume of 
submissions and the policy in support of licensing family 
reunification, which is considered humanitarian per se. This category 
of travel is handled by OFAC's Miami office, which processed nearly 
20,000 such applications during 2002. Again, because of the 
humanitarian nature of these travel requests, that office handles such 
requests promptly, usually completing and mailing the licensing 
response within 24 hours of receipt.
    Another of the Miami office's primary responsibilities is to 
regulate certain activities of 202 entities nationwide, which are 
currently licensed to: (1) provide travel and carrier services to 
authorized travelers; and (2) remit funds to Cuban households on behalf 
of individuals who are subject to U.S. jurisdiction in the amounts and 
frequency authorized under the Regulations. Almost two-thirds of these 
licensed entities are headquartered in Miami.
    Integral to this regulatory program is the licensing and compliance 
oversight of the direct charter flights to Cuba currently authorized 
from Miami, Los Angeles and New York to carry authorized travelers. The 
Miami office also investigates alleged violations of the Regulations 
and processes enforcement referrals from the U.S. Customs Service and 
the U.S. Coast Guard. I am submitting for the record a copy of OFAC's 
most recently issued Circular, setting forth guidelines applicable to 
the service providers.
    The Washington Office: The remaining categories of travel-related 
license applications are processed at OFAC's main office in Washington, 
DC, and involve: 1) free-lance journalism; 2) professional research and 
attendance at professional meetings not covered by the general license; 
3) educational exchanges involving academic study pursuant to a degree 
program; 4) religious activities; 5) participation in a public 
performances, clinics, workshops, athletic or other competitions, or 
exhibitions in Cuba; 6) support for the Cuban people as provided in the 
CDA; 7) humanitarian projects; 8) information collection activities of 
private foundations or research or educational institutes; 9) 
informational materials, agricultural and medical exports and other 
exports authorized by the Department of Commerce; and 10) exports of 
medicine or medical supplies and certain telecommunications equipment 
or reexports of U.S.-origin agricultural commodities from a third 
country to Cuba. The Washington office also processes all non-travel 
license applications involving Cuba, from blocked estates to 
international corporate acquisitions.
    During calendar year 2002, OFAC's Washington, DC staff handled more 
than 1,000 license applications for travel in these various categories 
with support from OFAC's Office of Chief Counsel. With the advent of 
our Comprehensive Application Guidelines, new streamlined processing 
procedures and the assignment of additional staff, we are now able to 
process most license applications not requiring interagency review 
within ten days of receipt, doing better than the goal of two weeks I 
set at the 2002 hearings.
B. Enforcement
    By far the majority of OFAC's enforcement actions with respect to 
the Cuba embargo concern individuals who engage in unauthorized travel 
transactions related to Cuba tourism. There are a few organizations and 
individuals who view travel to Cuba as an act of civil disobedience, 
and there are passionate constituencies on both sides of this issue. We 
are often contacted by individuals concerned that OFAC take enforcement 
action against what they view as U.S. tourist travel to Cuba, as well 
as those who believe that any travel-related restriction is an 
infringement of their constitutional rights.
    OFAC has worked closely with the U.S. Customs Service over the 
years in an effort to enforce Cuba travel restrictions. As returning 
Cuba travelers are identified by Customs agents and inspectors at ports 
of entry in the United States or at U.S. Customs Preclearance 
Facilities in Canada or the Bahamas, those travelers who do not claim a 
general or specific license from OFAC to engage in Cuba travel-related 
transactions are routinely referred to OFAC for investigation and civil 
penalty action.
    Enforcement Guidelines: Regardless of the motivation underlying a 
travel violation, OFAC endeavors to enforce the law evenly and 
consistently in accordance with our responsibilities under the law. On 
January 29 of this year, we published in the Federal Register our 
Economic Sanctions Enforcement Guidelines (the ``Enforcement 
Guidelines''), enhancing the transparency of OFAC's administrative 
process by providing in a public document a procedural framework for 
the enforcement of economic sanctions programs administered by OFAC. I 
am submitting for the record a copy of the Federal Register notice 
containing the Enforcement Guidelines.
    The Enforcement Guidelines include a schedule of proposed civil 
monetary penalties for certain violations of the Regulations, including 
those involving unauthorized tourist travel-related transactions with 
Cuba. A schedule of proposed civil monetary penalties for unauthorized 
transactions involving the provision of travel, carrier and remittance 
services to Cuba is also set forth.
    In addition to the Enforcement Guidelines, OFAC also published in 
the Federal Register on February 11, 2003, disclosure guidelines 
involving civil penalties. Since April, 2003, information on civil 
penalty proceedings against individuals is routinely provided on our 
website on an aggregate basis, encompassing individuals who have 
engaged in unauthorized travel-related transactions involving Cuba.
    Enforcement Procedures: Investigative findings are referred for 
civil penalty consideration with an administrative record containing 
evidence of transactions involving Cuba. OFAC has, in September of this 
year, revised its administrative penalty procedures to afford travelers 
to Cuba additional opportunities to present mitigating factors for 
consideration before a final penalty ensues. Administrative law judges 
will preside at the review of the penalty assessments if the right to 
an administrative hearing has been invoked.
    I am submitting for the record a chart that depicts the number of 
Cuba travel cases opened for investigation and referred for civil 
penalty enforcement action from January 1996 through June 2002. As 
shown, 6,398 travel cases were opened for investigation and 2,179 cases 
were referred for civil penalty enforcement action.
    Typical penalty assessments for unauthorized travel range from 
$3,000 to $7,500, but the majority of cases are settled in amounts 
reflecting the mitigation range outlined in the Enforcement Guidelines. 
A number of persons who are the subject of penalty proceedings, 
however, request administrative hearings, often with the assistance of 
public interest legal organizations.

              IV. HUMANITARIAN AID AND EDUCATIONAL TOURISM

    On May 20, 2002, President Bush announced the Initiative for a New 
Cuba, which is intended to encourage the Cuban regime to undertake 
fundamental political and economic reforms, and to provide additional 
support to Cuba's nascent civil society, so that Cuba can take its 
place in the Western Hemisphere's community of democracies. In 
announcing the Initiative, the President said that the ``Administration 
will ease restrictions on humanitarian assistance by legitimate U.S. 
religious and other non-governmental organizations that directly serve 
the needs of the Cuban people and will help build Cuban civil 
society.'' This announcement followed the President's statement in 
January of 2002, affirming the continued enforcement of travel 
restrictions while calling for increased outreach to the Cuban people.

A. Humanitarian Aid
    As a consequence of the President's policy direction to ease 
restrictions on humanitarian aid and to facilitate support for civil 
society in Cuba, OFAC has refined and updated its licensing procedures 
as reflected in the Comprehensive Applications Guidelines. OFAC has 
also prioritized this category of license application over other travel 
categories and has dedicated staff for the purpose of ensuring rapid 
processing of these applications.
    OFAC considers applications for humanitarian assistance both with 
regard to projects conducted in Cuba on an ongoing basis and with 
regard to the accompanied delivery of donated goods. Licenses are 
granted that involve the participation of government-affiliated 
organizations where the applicant can substantiate that the particular 
organization has demonstrated a degree of independence, and when the 
organizations can provide humanitarian assistance in an accountable and 
verifiable way directly to the Cuban people. More intense monitoring by 
the licensee, with a detailed plan for accountability and follow-up, 
will be necessary when considering involvement with government-
affiliated organizations. Direct transfers of funds to the Cuban regime 
or its agencies to conduct activities generally will not be licensed, 
but payments such as hotel expenses, the purchase of essential project 
commodities in state stores, and customs duties are examples of 
expenditures that would normally be permitted.

B. Educational Tourism
    Tourism, in whatever form, is both inconsistent with current policy 
and prohibited by section 910 of the TSRA. OFAC's enforcement of the 
ban on tourist travel recently extended to the rescission of a 
regulatory provision implemented in 1999. This provision had originally 
been designed to allow structured, non-accredited educational exchanges 
to take place that promoted substantive people-to-people contact 
between U.S. and Cuban nationals. Our experience over the past few 
years, however, demonstrated that persons traveling to Cuba under the 
authority of these licenses were engaging primarily in tourist 
activities that consisted at best of ``educational tours'' designed to 
afford Americans an opportunity to see Cuba, involving minimal 
substantive contact with Cuban nationals.
    This provision was part of a larger category of licensable 
educational activities under which OFAC continues to authorize academic 
study in Cuba pursuant to a degree program at an accredited U.S. 
academic institution. To date, OFAC has issued 760 two-year specific 
licenses to accredited U.S. colleges and universities for this purpose, 
as well as numerous licenses to individual undergraduate and graduate 
students seeking to pursue academic study in Cuba where their academic 
institution has not applied for an institutional license. OFAC will 
continue to license educational exchanges pursuant to accredited 
academic activities.
    Non-accredited educational exchanges taking place outside the 
structured curriculum of an accredited degree program, however, too 
often devolved into tourism. This was made evident when parties sought 
renewals of their licenses and reported on activities undertaken, as 
well as from information received from other sources and in the press. 
Licensed organizations typically advertised their trips on their 
websites, emphasizing the climate, music and dance, and seeing the art 
and architecture of Cuba. Very few ads focused on educational exchanges 
with the Cuban people. Press articles portrayed this category of travel 
as tantamount to tourism, and OFAC was increasingly in the position of 
having to justify its authorizations of activities that OFAC never 
intended to take place. I have only to cite to an article issued last 
Sunday in the travel section of the Washington Post in this regard, 
recommending that people act fast if they want to see Cuba by traveling 
under remaining licenses that have not yet expired. I am submitting 
this article and others like it for the record.
    In addition, the original policy underlying this provision was 
undercut by restrictions imposed by the Cuban Government on substantive 
and open interactions between U.S. and Cuban nationals. In 2002, we 
confirmed reports that groups traveling to Cuba under these licenses 
were particularly vulnerable to Cuban Government requirements for 
approval of their schedules and assignment of a tour guide or escort to 
the group. Contacts between members of these groups and Cuban nationals 
were casual at best, and were often limited to Cubans employed in 
government positions in the tourism industry. This practice subverted 
access to the Cuban people and diluted any meaningful educational 
exchange.
    While many of the activities undertaken pursuant to these licenses 
could not necessarily be viewed as violations of the terms of those 
licenses, they were addressed through denials of renewal requests or 
tighter restrictions in new licenses. This resulted in lengthy and 
time-consuming exchanges with applicants, many of whom had developed 
expectations that they had a right to continue promoting tours of Cuba 
on the part of alumni associations and other interest groups.
    In an effort to communicate our licensing policy and correct this 
situation, we issued application guidelines that characterized people-
to-people contact as activity that would normally entail direct 
interaction between U.S. and Cuban individuals not affiliated with the 
Cuban Government, and would normally not involve meetings with Cuban 
Government officials. Pursuant to these guidelines, OFAC would 
evaluate, among other things, whether the U.S. program is structured to 
result in direct and individual dialogue with the Cuban people and 
whether the proposed activities with the Cuban people are educational 
in nature, such as participation in joint activities that may include 
seminars, lectures and workshops. OFAC also evaluated whether each 
traveler would be fully participating in all of the proposed people-to-
people activity.
    Despite our efforts, the licenses continued to be used for tourism, 
plain and simple, with groups using their licenses to attract other 
unaffiliated parties to travel to sightsee in Cuba under the pretext of 
``educational exchange,'' a clear violation of Sec. 910 of the TSRA. 
Moreover, the demand on OFAC staff generated by the administration of 
this one provision was interfering with other licensing 
responsibilities including the facilitation of humanitarian aid to 
Cuba. The provision was rescinded after lengthy consultations with and 
policy guidance from the State Department. I am submitting for the 
record a copy of the Federal Register notice amending the Regulations.

                     V. AGRICULTURAL TRADE AND ALJS

    OFAC is in the process of carrying out two additional statutory 
mandates, one involving the facilitation of certain exports and the 
other the initiation of hearings before an administrative law judge on 
the imposition of civil penalties for engaging in unauthorized travel-
related transactions. Pursuant to the TSRA, OFAC issues licenses for 
the export of agricultural commodities, medicines and medical supplies 
to Iran, Sudan and Libya. The Department of Commerce, as I said 
earlier, authorizes the export of such goods to Cuba from the United 
States, but OFAC issues licenses for travel-related transactions in 
conjunction with exports to Cuba of the kind authorized by the 
Department of Commerce. I am pleased to inform you that we are current 
with respect to the processing of license applications to export these 
goods to Iran, Sudan and Libya as well as with respect to license 
applications to travel to Cuba in conjunction with sale of these goods 
that have been authorized by the Department of Commerce.

A. Agricultural Trade
    Section 910 of the TSRA expressly provides for case-by-case review 
of license applications for travel in support of agricultural exports. 
Consistent with the TSRA, the Regulations provide that travel and other 
transactions that are directly incident to the ``marketing, sales 
negotiation, accompanied delivery, or servicing of exports that appear 
consistent with the export licensing policy of the Department of 
Commerce'' may be authorized by specific license.
    Over the past twelve months, OFAC has issued over 200 licenses to 
travel to Cuba in conjunction with the sale of agricultural 
commodities, medicine and medical supplies on the part of producers, 
consultants, trade councils, state governments, seaport authorities, 
and cargo shipment services. Financing of these exports is restricted 
by the TSRA to payment of cash in advance or to financing by third-
country financial institutions, except that such financing may be 
confirmed or advised by a United States financial institution. General 
transportation services relating to authorized exports are permitted by 
general license.

B. Administrative Hearings
    Prior to 1992, OFAC lacked civil penalty authority to enforce the 
Cuban embargo. With the passage of the CDA in 1992, TWEA was amended to 
provide that civil fines of up to $50,000 (now adjusted for inflation 
to $55,000) could be levied for violations of the Regulations. The CDA 
also required that the Secretary of the Treasury impose such penalties 
``only on the record after opportunity for an agency hearing . . . with 
the right to pre-hearing discovery.'' In 1996, the LIBERTAD Act 
increased the number of categories of violations for which civil 
penalties may be sought to include all travel-related violations. 
Judicial review by Article III courts is available once the 
Administrative Law Judge's civil penalty determination is made final.
    An administrative review process has now been initiated with 
Administrative Law Judges (``ALJs'') in place. The substantial majority 
of hearings concern Cuba travel-related violations by individuals. OFAC 
has contracted with two other federal agencies for the services of ALJs 
to conduct OFAC's civil penalty hearings.
    As of today, I have forwarded more than 50 hearing requests to the 
Treasury Department's Office of General Counsel for hearings before 
these ALJs. I have also notified nearly 50 hearing requestors that I 
will sign Orders Initiating Proceedings in the near future. I will 
shortly sign Orders Initiating Proceedings with the cases en route to 
the ALJs. I have directed my staff to extend settlement offers in other 
cases pending acknowledgment of hearing requests where applicable 
criteria are met, including first and sole offenses and absence of 
aggravating factors.
    Additionally, I have issued, in September 2003, revised regulations 
for the hearing process. These revised regulations increase over 
previous regulations the number of opportunities for U.S. persons to 
settle their penalty cases before final agency action.

                            VII. CONCLUSION

    OFAC currently has sufficient resources devoted to the Cuba program 
to ensure the timeliness of responses to license applications and the 
enforcement of the prohibitions with regard to unauthorized travel-
related transactions. OFAC will continue to administer and enforce the 
restrictions on travel-related transactions involving Cuba in a manner 
that is timely, fair, and consistent with that law.
    Thank you.

    The Chairman. Well, thank you very much, Director Newcomb. 
We appreciate your testimony. The Chair would suggest that we 
have a round of questioning with members limited to 7 minutes. 
I'll commence the questioning by making an observation that the 
issue of travel, which both of you have discussed at some 
length in your testimony, has been one on which Cuban-Americans 
in Florida have had progressively different views. I mention 
this because the Aspen Institute has invited a number of us to 
conferences. I've attended some of these. I mention Cuban-
Americans in Florida frequently because despite all 
protestations to the contrary, both political parties have been 
very interested in them. To some extent our policy may have 
been guided by strong leadership in that State as well as 
elsewhere, but a majority still favor an overall embargo.
    Now we have a very sharp split on an age basis, with 
younger people favoring rather unlimited travel to see their 
relatives in particular. We also have the ability to carry 
money to their relatives. These are both humane considerations 
that are fully understandable, although some older Cuban-
Americans are taking a much more dour view of this. But an 
overall majority of all Cuban-Americans favor travel and 
remittances in a different policy than we have now.
    Furthermore, when queried beyond that, the younger people 
tended to favor what might be called broader engagement. That 
means, I suppose, tourists or the rest of us who would come and 
go from Cuba on the basis that probably this opens up dialog. 
As you've pointed out, Mr. Newcomb, the tour guides may be 
guided to the wrong persons. On the other hand, the thought is 
giving an overwhelming number of people descending upon Cuba--
if they were all allowed to get in--all sorts of activities 
accompanied by a very different level of communication, in 
which we use our communication skills to bombard the island 
with our messages that something different might happen.
    I ask both of you for some comment about this overall 
policy in light of what appears to be not only continuing 
restrictions on all of this, but as a matter of fact, as I 
understand the policy, maybe fewer reasons why people will 
travel, particularly in the tourism situation that you pointed 
out, Mr. Newcomb, and maybe in others in which the 
administration may feel that this is less justifiable.
    I think all of us are trying to wrestle with how we have a 
better outcome in Cuba, now and in the post-Castro era. Members 
have differed already in their opening statements in terms of 
the intensity of this. It's the subject of our hearing today 
and we want your expert testimony. Would you try out that for 
size to begin with, Mr. Secretary?
    Mr. Noriega. Well, thank you very much, Mr. Chairman. I 
don't think that the Cuban-American community is necessarily 
monolithic, speaking very briefly on that. However, what I 
encounter is a shared view that we shouldn't do anything that 
would help the regime cling to power. Now there may be some 
doubts as to whether we ought to try some new ideas and we want 
to be more proactive in new ways of engaging the Cuban people 
and helping the Cuban people. But as far as travel is concerned 
of Cuban-Americans there or Cubans who are here as immigrants, 
there is a particular category for family travel and 
humanitarian remittances to the island, which I think are 
justifiable, and we have taken a decision not to crack down in 
that area, because we don't want to be perceived as limiting 
the ability of people to do legitimate family related travel 
and provide remittances to their family on the island.
    So we believe that that sort of contact, where family 
members are going to see family, going to see blood on the 
island, is very important and it does have a favorable impact. 
And remittances that go to individuals on the island, even 
though the regime very carefully and assiduously vacuums up 
that money by making them buy the basic necessities in dollar 
stores, is nevertheless useful in terms of helping people. So 
the family related transactions, I think, are probably 
particularly healthy.
    The Chairman. Should there be any limits on the families? 
In other words, should they be allowed to travel as often as 
they want to and to take as much money as they want to?
    Mr. Noriega. Well, we think there should be some 
humanitarian considerations when it comes to family. There is 
at this point a $300-per-quarter limit on what anyone can send 
to any person on the island, not whether they're family or not. 
That was intended to try to encourage remittances for people 
who might be trying to start their own little business there or 
to a journalist or human rights activist who needed a stipend 
to keep body and soul together. But that was the intention of 
that originally.
    But on the travel for tourism, Mr. Chairman, I think it 
needs to be borne in mind that the military in Cuba is 
particularly involved in this sector of the Cuban economy. It's 
estimated that 65 percent of the hotel rooms are controlled by 
the military in Cuba as a money-making enterprise and 70 
percent, another fact, 70 percent of the hotel rooms are in 
isolated tourist enclaves where you have to literally cross a 
couple of barricades to get to them and average Cubans can't 
reach them. So tourism travel raises grave doubts, because it 
is funneling resources directly to the repressive apparatus of 
the state and the impact on the Cuban people themselves and the 
interaction of the Cuban people is actually fairly minimal.
    The Chairman. Let me just return to my question on the 
relatives themselves. Should there be limits on the number of 
times they can travel? Why should there be a limit of $300 per 
quarter for relatives trying to help their old folks, for 
example, in Cuba?
    Mr. Noriega. We'd have to do some analysis as to whether or 
not that limit was actually causing hardship. Frankly, I'd have 
to get a written answer to you on that, Mr. Chairman.
    The Chairman. Well, I'd appreciate if you would give that 
analysis and that would be helpful for the record.
    Mr. Noriega. Absolutely, and Mr. Newcomb may have something 
to add on the subject.
    [The following response was subsequently supplied by Mr. 
Noriega.]

    Under the current regulations, persons visiting Cuban nationals who 
are close relatives may travel once per year under an OFAC general 
license. Additional trips within one year require a specific license, 
and OFAC acts expeditiously on these requests. The current policy on 
travel to visit close family provides sufficient flexibility to meet 
the legitimate humanitarian needs of relatives in the United States and 
Cuba. However, in this context as well as others, we are concerned that 
unlimited travel to Cuba would only provide greater benefits to the 
regime.
    For remittances, U.S. persons aged 18 or older may send to the 
household of any individual in Cuba cash remittances of up to $300 per 
household in any consecutive three-month period, provided no member of 
the household is a senior-level Cuban Government or Communist party 
official.
    We believe that the current remittance levels are adequate to 
provide humanitarian support without providing a windfall to the 
regime. Our policy is to help the Cuban people while not assisting the 
regime.

    Mr. Newcomb. Thank you. Mr. Chairman, our role in the 
licensing of these visits relates primarily to a fair, even-
handed approach to issuing licenses in a timely manner. With 
regard to family visits, which we view as humanitarian per se, 
they are generally licensed for one trip. The second and 
subsequent trips we endeavor to license with a 24-hour 
turnaround, so by coming in to our Miami office, we make this a 
top priority to issue these as quickly as possible so that 
family reunification can take place.
    The Chairman. I thank you.
    Senator Dodd.
    Senator Dodd. Well, thank you, Mr. Chairman. My apologies 
to you and to the members of the committee and our witnesses at 
the outset.
    Let me begin by thanking you, Mr. Chairman, for conducting 
this hearing at this level of full committee and the 
participation we have here of people. Our colleague from 
Minnesota is the most recent person to travel to Cuba and we'll 
hear, I'm sure you already have, some observations from Senator 
Coleman.
    I hope we can in a sense, and I applaud my colleagues here 
for their efforts over the years, to try something different in 
this whole arena. The Attorney General of the United States, 
John Ashcroft, was the successful author of the amendment that 
limited, freed up the selling of food and medicine to Cuba in a 
Senate provision a few years ago, and to his credit was a 
worthwhile effort. And of course our colleague from Wyoming has 
been a champion of trying to come up with some new ideas in 
this area. I know Senator Baucus was here as well, and 
certainly these individuals can speak for themselves, but all 
of us share a common determination to achieve change in Cuba, 
and have no tolerance whatsoever for a dictatorial regime.
    But there has been such preoccupation on Fidel Castro and 
far less attention on the 11 million people who are Cuban who 
live on the island and I think all of us are trying to focus on 
ways in which we can focus on them and their families of course 
who have come here. And my admiration for the exile community 
is boundless, I have great admiration for them and what they've 
been through, how they've suffered, the division of families 
over the years. They are a remarkable people and I would 
certainly want any comments I would make to reflect my 
appreciation for their efforts as well.
    And like you, Mr. Chairman, I am somewhat concerned about 
sort of an uneven approach to all of this, and we have 
countries around the globe that we don't exactly applaud and 
agree with their policies, and I can think of a range of them 
as I sit here today that I wouldn't want them to be--I wouldn't 
want to live under them at all, but yet our travel restrictions 
regarding those countries are very different. And I wonder if 
maybe our witnesses might begin by just trying to draw some 
distinctions here.
    And as I understand it, and I'll stand corrected if I'm 
wrong on this, but to the best of my knowledge, if I decided 
this afternoon to travel to North Korea, to Iran, to Libya now 
those countries may not let me in, but I know of no restriction 
within my own government that would prohibit me from trying to 
go. Could you draw a distinction for me on what basis should my 
country distinguish my ability to travel to North Korea, a 
government I presume all of us abhor given its record, 
certainly Libya with a record of terrorism, certainly Iran with 
all of its difficulties. How do we draw in the minds of the 
citizens the distinction between allowing someone from our 
country to at least try to go to those places and not allowing 
them to travel to the island of Cuba? What makes Cuba so much 
worse than these other places?
    Mr. Newcomb. Senator, if I might start by just laying out 
the technical requirements. There are no travel restrictions 
for North Korea or Iran. There currently are travel 
restrictions with regard to Libya.
    Senator Dodd. I stand corrected. All right, we'll stick 
with North Korea and Iran then.
    Mr. Newcomb. OK, but those for the record are the technical 
requirements.
    Senator Dodd. OK, no, no, I appreciate the technical 
approach.
    Mr. Noriega. I was hoping he'd talk longer on them.
    Senator Dodd. Yes, I know. It's sort of a fundamental 
question I have in my mind. What's the distinction here?
    Mr. Newcomb. I would note that as recently as the year 
2000, and you alluded to this, Mr. Chairman, the Congress of 
the United States spoke on the restrictions of travel to Cuba 
when it codified the travel restrictions and the ban on 
tourism.
    Senator Dodd. I'm asking you for a public policy from the 
administration standpoint, you're advocating we maintain a 
restriction. You think there should be no change here. Do you 
think we ought to think set restrictions on North Korea and 
Iran? Would you support that?
    Mr. Newcomb. I don't come anywhere near making policy on 
North Korea and Iran, but I will answer your question. The 
restrictions are on transactions and the issue is spending 
money in Cuba and generating revenue, capital for that regime. 
I think that Cuba is more appealing as a tourist destination 
than North Korea and Iran, particularly because of its 
proximity to the United States. We have to make a policy 
decision whether it would represent a significant windfall to 
that regime if you allowed tourism in addition to everything 
else particularly exploitative of people who don't benefit from 
the travel. Instead it goes to a regime that pays four times as 
much to a policeman than it does to a teacher.
    Senator Dodd. I'm fully aware with all of that. But I 
wouldn't want to make any comparison of what a person gets in 
North Korea either or Iran. Let me ask you this. It was stated 
last year by Under Secretary Bolton, there was an assertion 
that Cuba was developing bio-weapons. In fact, we asked Mr. 
Bolton to come before this committee to answer questions about 
that since it was obviously a serious allegation. He refused, 
or for whatever reason didn't come up. Carl Ford did. He was 
asked for evidence to back up Mr. Bolton's allegations. He 
downplayed those charges, saying the administration hadn't 
meant to imply, and I'm quoting him, ``that it had a smoking 
gun.''
    The Defense Department and the CIA, to the contrary, have 
for many years asserted that Cuba posed no military threat to 
the United States, its interests, or its allies. Now these 
assessments, one or the other is correct and you have most 
recently, I think it was on Tuesday or Wednesday of this week, 
on Tuesday, an article in the Detroit Free Press, which I'll 
ask unanimous consent to be included in the record.
    The Chairman. It will be included in the record.
    [The article referred to follows:]

           [From the Detroit Free Press, September 30, 2003]

 Question and Answer With Colin Powell: Security Brings Pains, Freedoms

Before speaking to the U.S. Arab-Economic Forum, U.S. Secretary of 
State Colin Powell met with the Free Press editorial board. Here are 
excerpts of the conversation.

    Question. Has the search for weapons of mass destruction in Iraq 
become irrelevant at this point?

    Answer. Oh, no, not at all.

    Question. Do you expect that we will find them, and are there 
consequences if we don't?

    Answer. I am quite confident that we will find evidence of the 
programs and I hope we will find the weapons themselves. David Kay (a 
CIA special adviser for the weapons search) is hard at work. We will 
get a first report from Mr. Kay later this week. He's got something 
like 1,400 people at work. They have miles of documentation, they have 
lots of things to look at. And they have hundreds of people to 
interview. It is very painstaking work.
    Now, if we haven't found a huge factory full of stuff or a 
warehouse full of stuff, where will we find them?
    Well, I don't know. We haven't found that yet. But there is no 
doubt in my mind that the program that we found necessary to go in and 
take out is there. It wasn't a figment of anyone's imagination.
    Two weekends ago I was in a place called Halabja in northern Iraq 
and I went to a mass grave and I participated in a memorial service 
there and the dedication of their equivalent of their holocaust museum.
    On a March morning in 1988, Saddam Hussein dropped sarin and VX 
agents on that populated town and killed 5,000 people. It is 
documented. You've seen the pictures. I saw victims who survived. I 
spoke to many mothers and dads two weeks ago who lost children and lost 
members of their families.
    That was 15 years ago. And at the end of the Gulf War, two years 
later, 1991, we found this stuff and destroyed a lot of it. And then 
for a period of six years, seven years almost, inspectors kept looking 
for the rest of it--kept being refused, denied, misled. And one more 
came out. When we thought, no, they couldn't have had any of that 
stuff, suddenly a defector, his son-in-law, if you will recall, shows 
up in 1995 and tells us about all kinds of other stuff that we hadn't 
discovered.
    Finally, in 1998, President (Bill) Clinton was so persuaded that 
the program was there and they had the weapons and they wouldn't 
account for them and they wouldn't come clean with the inspectors that 
he bombed Iraq for four days to go after these facilities. That was 
five years ago.
    That caused Saddam to make it impossible for the inspectors to 
continue their work. Then another four years went by and President 
(George W.) Bush came into office and took this bold decision.
    Anybody who wishes to believe that from 1988 when he used it, and 
it wasn't the first time that he used it, to 1991 when we captured and 
destroyed a lot, through seven years of inspections when he didn't 
`fess up, and the whole world recognized what President Clinton did was 
probably the right thing to do in 1998, anybody who wants to make the 
assumption that in the intervening couple of years it all went away and 
he no longer had any intention and this sweet Saddam Hussein who was 
willing to gas 5,000 people on a spring day in 1988 was suddenly a 
different Saddam Hussein than one we were dealing with in 2001, 2002, 
2003--other nations might have been willing to make that judgment and 
assumption, but not President Bush. He wasn't going to walk away from 
this challenge.

    Question. Do we not have to find them, then, to justify the actions 
that we have taken?

    Answer. I don't want to quite answer your question that directly 
because I can see how it might spin out. But I think we will find solid 
evidence of the program. And I think you will begin to see that with 
Dr. Kay's presentation later this week. So you will have evidence that 
will justify what we did.
    But on top of that evidence, there is a body of evidence that he is 
responsible for human rights abuses, that he filled mass graves, that 
he was responsible for terrorist activity. Therefore, if you look at 
the whole body of evidence--and I spoke to terrorism and human rights 
in my Feb. 5 presentation before the United Nations--I think what we 
did was totally justified on all counts.
    The president led with weapons of mass destruction, so I don't want 
to say they suddenly aren't important. They are. We made that 
assumption as part of our case. And I think we will be able to 
demonstrate that it was a sound presentation to make.

    Question. The conference that brought you to town is all about 
building bridges with the Arab world. We hear a lot from the local Arab 
community, as well as Arabs in the Middle East, that they are 
uncomfortable coming to this country because they are treated like 
terrorists because of our new anti-terrorism policies. How do you, as 
the chief diplomat, chief bridge-builder, build those bridges in light 
of that?

    Answer. We are working very hard at this. The motto we are using, 
the slogan we are using is ``Secure Borders, Open Doors.'' We had to 
secure our borders after 9/11. It was stunning to us that individuals 
could come to this country, get in, and sort of just melt into the 
population, go to flight schools and do all sorts of other things. And 
they all came out of Arab lands, principally Saudi Arabia. And we 
realized how vulnerable we were. And the American people, and the 
Congress representing the American people and the president decided 
that we had to get a handle on who was coming into this country.
    So we have done a lot. We've created the Department of Homeland 
Security. We found that we had disparate databases in lots of different 
agencies. The State Department had the largest database to check people 
against called Tipoff. We've now merged Tipoff with all of the other 
databases to create a new terrorist threat center.

    Question. Is that all done?

    Answer. It was announced last week that the new center has been 
formed with Tipoff, my program, as the central database and the other 
databases are being merged into it. It will take a long time before all 
of the computers are linked up and made compatible with one another, 
but it is under way.
    The other things we are doing have to do with biometrics on our 
passport and visa applications for people coming into the country. It 
is taking us a long time and a lot of money to put these systems in 
place.
    In the process, however, it became much harder to get into the 
country. I hope that it will become easier as time passes and as our 
systems come on line and start to do a better job of talking to one 
another. I hope we reach a point where one of my consular officers 
somewhere overseas gets an application for a visa, interviews the 
individual, puts in the data, the data comes back here electronically, 
we get a clearance back in a very short period of time. So, the 
problems that Arab Americans or Arabs are having will go away with 
time--not just Arabs. I get complaints from just about every country in 
the world, especially the Muslim countries, not just Arab countries. 
Indonesia and Malaysia, places like that as well.
    It's the balance you have to make between security and openness. 
And the lecture that I will give everywhere is that we have to protect 
our borders, but by God, America is an open country, a country of 
countries, a nation of nations and we don't want to change that. We 
want to be a welcoming society. But there has been a drop-off of people 
coming here, for schools, hospital care, and for other purposes, 
tourism, because of the difficulty with visas. But we are hard at work 
on it.

    Question. Metro Detroit has a large Iraqi Shia community, many of 
whom were refugees who fled Saddam Hussein's regime and were very 
supportive of the war. But now many of them are upset with how the U.S. 
Government has handled the post-war situation. A lot of them are saying 
that the U.S. has not listened to Iraqis, they feel they are being 
ignored. What would you say to them?

    Answer. I would tell them to watch our actions in the days ahead. 
Take a look at what we have done in the last month--two months really. 
In the last two months we have created a governing council representing 
all parts of Iraq, all ethnicities. Kurds in the north, Sunnis in the 
middle, Shias in the south, Turkomen--all the other parts of Iraq are 
included in this governing council. We have helped the governing 
council put together a cabinet of ministers so every cabinet department 
now has an Iraqi minister in charge, starting to rebuild that ministry, 
whether it's education, water, foreign ministry. I now have a foreign 
ministry colleague who I have met with at the UN, met with in Geneva. 
And he is representing the Iraqi people to the world. He has been 
accepted at the Arab League. He's in New York now at the UN General 
Assembly.
    So, slowly but surely, we want to start passing more and more 
responsibility off to Iraqi leaders. But we have to be careful. Some of 
my colleagues in the Security Council say, come on, just do it in 30 
days. Thirty days from now, just turn it all over.
    We didn't put this much political capital, and this much treasure 
and these many American lives at risk and lost, to give it back over to 
a few people who essentially have been picked up and said now you're 
the government.
    They are going to have to have a constitution, they are going to 
have to have that constitution ratified and we are going to need 
elections in order to put in place a government that is legitimate in 
the eyes of the people because the people selected that government.
    But it takes time. If we do it too fast, we'll be setting them up 
for failure, and that's what we're not going to do.

    Question. Can we accomplish any meaningful growth in trade and 
economic exchange with the Middle East without settlement of the 
Israeli-Palestinian conflict, and how far away are we there?

    Answer. I think it will all be so greatly facilitated with the 
solution of the Israeli-Palestinian conflict but that's really not 
holding people back. Right next door in Jordan we've concluded a free 
trade agreement . . . and their trade has soared in recent years and is 
really, really growing as a result of that free trade agreement. . . . 
The king spends a great deal of time in the United States and I spend a 
great deal of time in Jordan; I'm very close to him and I know what his 
goal is and that is to make his country more democratic, more 
representative of the interests of the people and not just the 
monarchy, and to educate his young people for a different kind of 
future.
    He needs to not only trade the usual indigenous goods, he needs to 
get into the service sector, he needs to get into the IT sector, he 
needs to upgrade the quality of education in Jordan and that's what 
every Arab nation has to focus on. That's why, in addition to working 
on the Middle East peace process between the Palestinians and the 
Israelis, you'll hear me talk tonight about the Middle East Partnership 
Initiative, the Millennium Challenge Account, all the other things we 
have been doing to get ready for the day when there is peace.
    Now to your question, we are greatly disappointed in the fact that 
(Palestinian) Prime Minister Mahmoud Abbas resigned from office, and we 
are now waiting to see whether Ahmed Qureia can put together a cabinet. 
There's been some discussion over the past 24 hours that a cabinet has 
been put together.
    More importantly, however, is will the new prime minister have 
political authority--real political authority--that is separate and 
distinct from that wielded by Chairman (Yasser) Arafat? And will he 
have full control of the security forces? And if he does have full 
control over the security forces, will he use those security forces to 
go after terrorists?
    The fact of the matter is that as long as Hamas and the Palestinian 
Islamic Jihad can just sit back and make their own judgment as to 
whether they think things are going well or not and decide whenever 
they wish to that they're going to blow up another bus full of children 
and bring the whole thing to a halt again--until the Palestinians take 
on that challenge and say to them ``No, enough of that. This is no 
longer an acceptable way to achieve our political objectives. We will 
never get a Palestinian state as long as we try to do it by blowing up 
innocent people. We're blowing up the dreams of our own people.''
    And until the Palestinian leadership takes on that challenge, we 
can have conferences, we can have plans, we can have proposals, we can 
have timelines, but it will be very difficult to go forward. Israel 
knows it has to meet its obligations under the road map, has to end 
settlement activity, unauthorized outposts have to go. I have a serious 
problem with this fence that's being built. We have to open up access 
between Palestinian cities, towns and villages. We've got to get 
Israeli troops out of there and turn responsibility back over to the 
Palestinians. We had started down that road right after Aqaba, when we 
got everybody on the road map. It was slow, it was halting, it couldn't 
go fast enough because we couldn't guarantee that Hamas wouldn't start 
it all up again--and they did.

    Question. How do you find someone to make this work that is 
acceptable to the United States and Israel and also has credibility 
with the Palestinian people? And as settlements expand and the fence is 
built, it's carving up the West Bank and doesn't it almost preclude the 
possibility of a Palestinian state?

    Answer. We painfully came to the conclusion that Chairman Arafat 
was not a partner for peace. The Israelis had come to that conclusion 
some time ago. President Clinton came to that conclusion at the very 
end of his administration. The last day of his administration he called 
me as I was getting ready to become Secretary of State the next day and 
all of his efforts had just come to naught. And he let me have it for 
about 20 minutes on the phone about Yasser Arafat and how a great deal 
had been put before him and he didn't take it.
    I tried for 14 months to try to get Mr. Arafat to move. I got him 
out of his confinement in the Muqata'a (Arafat's compound) twice. I 
went into the Muqata'a through Israeli lines, then the Palestinian 
lines, with one set of bodyguards passing me off to another set of 
bodyguards and I sat there across from him when he had a machine gun on 
his desk and told him that you've got to change. You simply have to 
become a partner for peace and start taking action against terrorists 
or we're not going to get anywhere and I'm not going to be able to deal 
with you.
    We got him out of that situation and he didn't change. And so last 
year, the 24th of June, the president gave a speech, a vision for the 
Palestinian state that would need new leadership. And guess what, we 
found new leadership in Prime Minister Abbas, so the Palestinians, with 
Arafat, created a prime minister position, and we wanted to work with 
him. And that's why the president went to Aqaba and before that Sharm 
al-Sheik.
    But Abbas was not able to get full control of all the security 
forces, couldn't wrest them away from Arafat, Arafat constantly 
undercut him. And finally Abbas said ``I've got to have it or I'm going 
to quit.'' Arafat didn't give it and he quit.
    Arafat is still seen by the Palestinian people as their leader. You 
can't take away from people what they think about leadership and who 
their leader should be. But the Palestinian people have to start 
looking at what that leadership has gotten them. It's not gotten them 
one day closer to the Palestinian state.
    And they're cheering him on now because the Israelis, I think, made 
a mistake in threatening to exile him and kill him and other things. 
They just put him back on Page One and every television station. It was 
a mistake.
    With respect to the second part of your question, actions such as 
continuing settlement activity and a fence that is on your property is 
fine, but as it transgresses and goes into Palestinian territory, 
you're creating a de facto situation which makes it harder to define 
the contiguous line needed for a Palestinian state. We've made it clear 
to the Israelis that we wouldn't be interested in any final solution 
that looks like Bantustan or a bunch of little fiefdoms all over the 
West Bank. It has to be a contiguous, sensible state. So if we can get 
to the point where we're having those discussions it will be very 
tough. President Clinton had some very tough discussions with the 
Israelis and got them to acknowledge how much would have to be given up 
in order to bring peace between the two parties.
    I think if you can get to that point where serious negotiations on 
what the state looks like take place, you can make progress. Because 
the reality is that Israel needs peace just as badly as the 
Palestinians do. Demographically Israelis need peace. Arabs and 
Palestinians will outnumber them and it will, de facto, by demography, 
become a Palestinian area pressing in on Israel. Isreali leaders know 
this and the Israeli people know it. And they know they will have to 
make the kinds of sacrifices suggested by your question.

    Question. Is there any scenario, other than President Bush not 
winning, where you would choose not to serve a second term?

    Answer. The only answer I give to that question, and it's the only 
answer I can give, I don't serve a term, I don't have a term, I serve 
at the pleasure of the president and, of course, just my own pleasure. 
I'm proud to be serving the president, pleased to be serving the nation 
again, but I serve at the pleasure of the president. It would be most 
inappropriate for me to make a judgment as to how long I'm going to 
serve.

    Question. Is there some part of the world, other than the obvious 
parts, the Middle East, Iraq, North Korea, that should be getting more 
attention?

    Answer. The whole rest of the world . . . if you go through your 
newspaper today and you add up all those places, pick out all of those 
places where you have found news and written about it, it all comes to 
about 100 million people in a world of 6 to 7 billion. And if you look 
at the rest of that world, we don't spend enough time educating the 
American people--about China, 1.3 billion people in that country that 
has done the most remarkable things . . . trying to expand the wealth 
you see in the eastern part of the country out to the rest of the 
country.
    We don't talk enough about what is essentially an arc of stability 
and peace and good relations with the United States throughout most of 
Asia, with the exception of North Korea, and what we have done in 
recent months to bottle North Korea up with its neighbors on our side 
of the issue and we'll keep applying pressure on the North Koreans to 
get us through this diplomatic problem with respect to the nukes.
    India, 1.1 billion people, the Indian prime minister was with the 
president last week, didn't make any news, nobody covered it, there was 
no crisis. There is always tension between India and Pakistan. This is 
the first time in 40 years the United States has excellent relations 
with India, and excellent relations with Pakistan.
    Africa, the president's trip got a lot of coverage, 850 million 
people in desperate need, HIV/AIDS is the worst weapon of mass 
destruction on the face of the Earth, killing more than any other 
weapon of mass destruction and it's spreading. We've got to work on it.
    Our own hemisphere, from the days when I was national security 
advisor and there were generals running countries everywhere, the only 
dictatorship left is Castro's Cuba and it is no longer a threat to the 
rest of the hemisphere. . . . I have a personal history with so many of 
these countries and now they all have democratically elected leaders. 
They all have economies that are going through difficult transitions in 
a globalized, open trading world. They're going to figure it out, 
because they can't stand pat. . . . They're working hard at it, 
committed to democracy.
    There's a big world out there and a lot of good things going on and 
America has a lot to do with a lot of those good things. . . . It 
doesn't get enough attention. Everybody focuses on the issue of the 
day, which is understandable.

    Senator Dodd. Secretary Powell, the Secretary of State, was 
asked the question, ``Is there some part of the world, other 
than the obvious parts, the Middle East, Iraq, North Korea, 
that should be getting more attention?'' And it's a rather 
lengthy answer here but at point he says, ``Our own hemisphere, 
from the days when I was national security adviser and there 
were generals running countries everywhere, the only 
dictatorship left is Castro's Cuba and it is no longer a threat 
to the rest of the hemisphere.''
    Which is the policy of the administration regarding Cuba? 
Is it Mr. Bolton's assessment, or is it the Department of 
Defense, the CIA, and the Secretary of State? There appears to 
be some sort of a contradiction here about whether or not we're 
posing a threat, which would get to the issue of travel 
restrictions and embargos. If a country poses no threat to it 
other than we don't like it, which we don't, why would we 
maintain those kind of restrictions since we don't apply it 
anywhere else in the world?
    Mr. Noriega. Mr. Chairman, if I may answer. We continue, 
Senator Dodd, to believe that Cuba has at least a limited 
developmental and defensive biological weapons research and 
development effort, and has provided dual-use biotechnology to 
other rogue states.
    Senator Dodd. Is the Secretary of State wrong then?
    Mr. Noriega. This reflects the consensus on what the U.S. 
Government's experts believe about Cuba and its biological 
weapons capability. The Secretary was asserting, as I recall 
that statement, about it being a threat militarily. There are 
various aspects to the sort of threat that Cuba might 
represent. I don't think that this--his statements I mean, I'm 
convinced that his statement that you cited and this statement 
are not inconsistent.
    Senator Dodd. Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Dodd.
    Senator Chafee.
    Senator Chafee. Well, thank you very much, Mr. Chairman. I 
had the opportunity and pleasure of going to Cuba in January 
2001 and I was struck by the changes that seemed to be coming 
to the island, obviously with the break-up of the Soviet Union 
and the loss of billions of dollars of Soviet aid. Some of that 
change was necessary just for financial reasons, more and more 
as we've talked about foreign tourists at the hotels, and there 
just seemed to be an air of change, and at the same time a 
thawing of a relationship, I believe, that we were cooperating 
with Castro on negotiations with the Colombian insurgents, the 
ELN, I believe, the meetings were being hosted in Havana. I 
believe that a Coast Guard officer was stationed in Havana to 
help us with drug interdiction, and so these were the signs of 
a thaw and signs of cooperation, but it seems to have turned.
    And, Mr. Secretary, in your written statement, you said 
that the new chief of the U.S. interests section has done a 
superb job supporting democratic development, and can you be 
more specific? I know that the Cuban Government has said we're 
paying some--allegations we're paying the dissidents in being 
more active and inciting the dissidents and thus came the 
crackdown. What exactly was Mr. Cason doing to support 
democratic development?
    Mr. Noriega. Thank you very much, Senator Chafee. The 
policy of the United States is to provide material, political, 
and moral support, to the dissidents. That's been our policy 
for 5 years, 6 years, 10 years before. There are no payments 
that I'm aware of that go from the U.S. Government to any of 
these people. This was an assertion that the regime made 
because they can't understand why anyone on their own time and 
voluntarily would think about their own future and about the 
future of their own country and building a better future for 
their people, because that is of course an area that's reserved 
for Fidel Castro and his cronies to think about and not the 
people of Cuba.
    Senator Chafee. So you can say definitively no U.S. money 
went to dissidents?
    Mr. Noriega. I am not aware of any sort of U.S. Government 
cash payments to any dissidents on the island. We donate books, 
cassette players, radios, to Cubans from all sectors of 
society. I imagine some of this even ends up inadvertently in 
the hands of people in the government who confiscate some of 
this material and then take it and use it. But what Mr. Cason 
is doing is in the finest tradition of the Foreign Service, 
which we did in Eastern Europe, which we did in the Soviet 
Union, which we're doing today in other states that are 
controlled by dictatorships. The United States Embassy is a 
special place for these people in terms of support and a way to 
communicate with the rest of the world to receive information 
and send information out.
    The Castro regime would have us believe that there is 
something wrong with that, and it would be a real shame if we 
deny the Cuban dissidents the solidarity to which they're 
naturally entitled by believing the lies of the regime. Castro 
has been slapping his people around since Jim Cason was in 
junior high school and he needs no pretext for throwing people 
in jail and harassing them and denying them health care when 
they're in jail. He needs no pretext for that. He does it 
because he's a brutal dictator who's particularly desperate now 
because he sees not only his people thinking about the future, 
but he sees people who worry about dissidents on the island and 
are trying to do something to help them.
    Senator Chafee. Well, thank you. And in your position as 
Assistant Secretary for Western Hemisphere Affairs obviously 
you have to work with other countries through the hemisphere, 
and how is our policy toward Cuba affecting our relationship 
with other countries in the hemisphere?
    Mr. Noriega. I appreciate the opportunity to answer that 
because this is an area that I'm very hopeful about. There was 
an initiative after the crackdown in the OAS by the Governments 
of Nicaragua, Canada, Chile, Uruguay, to get a statement of 
support for the dissidents, really more a denunciation of the 
brutal crackdown. In the final analysis that was not approved 
by a majority because 13 of the 14 nations of CARICOM which are 
OAS members said that we can't talk about Cuba while Cuba's not 
in the room, and then Mexico and Brazil and Guatemala had their 
own opinions, but 14 of Castro's Latin American neighbors 
joined in a statement along with the Bahamas, United States, 
and Canada that was an unprecedented statement of his neighbors 
about the crackdown and the need for him to respect human 
rights.
    And that was a breakthrough and we have communicated with 
our friends in the region, like-minded countries in the region, 
and said let's keep this dialog going. The fact of the matter 
is we didn't talk about Cuba at the OAS for many years because 
the United States didn't find it convenient to talk about these 
things. But now we have an Inter-American Democratic Charter 
that lays out the rules of the game, that says that Castro's 
Cuba has no place in the inter-American system, and we're very 
comfortable working with our neighbors to hold that regime 
accountable to this standard for this hemisphere promoting 
democracy, the rule of law, market economies that are important 
to social development.
    Senator Chafee. And can you talk specifically about 
Venezuela and our relationship with them vis-a-vis our Cuban 
policy?
    Mr. Noriega. The Venezuelan Government has demonstrated a 
terrific affinity for the Cuban Government. They have a good 
relationship. They provide them oil on favorable terms. The 
Cuban Government provides doctors to Venezuela. Some 
Venezuelans don't like this and they're concerned that 
Venezuela is going the way of Cuba. We disagree with Venezuela 
on Cuba, but the fact is I think that Venezuela is sort of 
unique in its attitudes toward the regime of Fidel Castro. I 
think most countries in the hemisphere view that government as 
destabilizing in the Americas.
    Senator Chafee. I know my time is up, but am I incorrect 
that recently the President of Brazil visited there and it 
seemed like a good relationship between those----
    Mr. Noriega. That's exactly right, he did visit. It's 
interesting that apparently Fidel Castro visited President 
Lula, when he was detained in Brazil, and I think it was that 
sort of personal tie that was particularly important. But as my 
written statement indicates, President Lula has said that, to 
paraphrase, don't confuse our romanticism about the Cuban 
revolution with support for the policies of the regime today. 
The quote is there quite explicitly noted in my testimony, to 
have an accurate quote.
    Senator Chafee. Thank you.
    The Chairman. Thank you Senator Chafee. We are almost 6 
minutes into the rollcall vote. I'd be happy to recognize the 
Senator for his questions or to recess and start again. All 
right, we will recess and come back after the rollcall vote. We 
thank you for your patience with us. Thank you.
    [A short recess was taken.]
    Senator Nelson [presiding]. If everyone could take their 
seat, I've been requested by the staff director, the chairman 
is delayed on the floor, so out of courtesy to our witnesses we 
want to proceed with the hearing, and I was the next in line 
for the questions. Welcome, Mr. Noriega.
    Mr. Noriega. Thank you very much.
    Senator Nelson. It wasn't long ago that you were here in 
the committee when we voted your nomination to be confirmed, 
and of course, it was done on the Senate floor unanimously. And 
what I would like to do is I'd like to clarify a number of the 
points of the Cuba policy with regard to the administration.
    I read and I reread your prepared statement, and I did not 
see in your prepared statement the articulation of what the 
policy is in regard to travel to Cuba. Would you state that 
again for the record?
    Mr. Noriega. Yes, sir. I apologize for any omission on that 
subject. The policy of the U.S. Government is that tourism 
travel to Cuba is not in the interest of a democratic 
transition in Cuba, and for that reason we do not believe that 
there should be any change in current law. As you know, in the 
year 2000, in the Trade Sanctions Reform Act, the Congress 
approved a codification of the ban on tourism travel. We 
believe that that should not be changed, particularly in the 
wake of the crackdown on human rights in Cuba.
    There are categories of lawful travel: education, science, 
cultural, religious, under which anywhere from 180,000 to 
200,000 people from the United States travel every year to 
Cuba. But we believe that that is a very important sort of 
contact with the Cuban people, family travel is very important, 
humanitarian travel is very important, and we actually 
encourage that and want to find ways to encourage that sort of 
contact. But in terms of tourism, it will tend to benefit the 
regime, pump money into that repressive apparatus, and that 
would be bad for the Cuban people, and it's a policy of 
President Bush not to support any change in that. As a matter 
of fact, as recently as today the administration expressed its 
views on S. 950, saying that if this bill were presented to the 
President in its current form, the President's senior advisers 
would recommend that he veto the bill.
    Senator Nelson. Do you agree with my opening comments in 
this committee hearing that it would be perceived as a reward 
to Castro were the travel policy to be changed at this 
particular time in light of the crackdown by the Castro 
government on dissidents, the executions of the people who 
hijacked the ferry, as well as the others who were thrown into 
prison?
    Mr. Noriega. Absolutely, Senator, I do agree with that. It 
would be perceived as business as usual, with people going to 
the island, this beautiful tropical island, taking advantage of 
tourism, hotels, to which Cuban people from all walks of life 
have no access. Only those people who are fierce supporters of 
the regime have access to those hotels. The very idea that 
there would be significant impact of this kind of tourism is 
very difficult to accept.
    In addition, it would fly in the face of the approaches of 
others in the world now. In Paris, at Charles de Gaulle 
airport, non-governmental organizations are going to the places 
where the flights to Havana are leaving, passing out postcards 
and saying ``don't believe what you see, this is not a tropical 
paradise, it's a tropical gulag.'' And the very idea that at 
the same time the United States would open up, and it would be 
potentially massive numbers of people who want to participate 
in that sort of low-end, very exploitive sorts of tourism, 
would represent a very bad signal in terms of U.S. policy and 
our standing by our principles.
    Senator Nelson. Picking up on the question that Senator 
Chafee asked you about direct assistance to dissidents, and you 
spoke that there was indirect assistance such as books and 
cassette players, is that in the range of some $4 million a 
year?
    Mr. Noriega. Yes, sir, it is. I don't have the number 
explicitly. I think it may be closer to $5 million or $6 
million, but it has gone up in the last several years.
    Senator Nelson. Would it surprise you that when we were 
trying to encourage Serbian dissidents, it was the policy of 
the U.S. Government that we assisted with some $50 million, not 
$4 million or $5 million? So what is the policy of this 
administration? Will there be an attempt to increase that 
indirect assistance?
    Mr. Noriega. My bureau, within the budgeting system of the 
Department, has asked for an increase.
    Senator Nelson. I think you've asked for an increase from 
$4.2 million to $7 million, and my question is, why not much 
more? Cuba is exceptionally important to us that we encourage 
the dissidents. They don't want to feel like they've been 
conflicted, so they don't want it directly, but indirectly, and 
we were giving some $50 million to Serbian resistance. Why 
would we not give more?
    Mr. Noriega. Well, we make our decisions as the art of the 
possible in terms of the budgeting process, Senator, but I take 
your point and I think we should do our very best to maximize 
the sums of money that we can move in an effective, accountable 
way to help the folks on the island of Cuba. It's absolutely 
essential.
    Senator Nelson. I've met with Oswaldo Paya on several 
occasions. I have a great deal of admiration for him. I 
sponsored the resolution congratulating and recognizing the 
Varela Project. We passed it unanimously in the Senate. And I 
think that anything that we can do that will assist them, and I 
would suggest you look at a much more considerable increase of 
assistance to the dissidents.
    Let me ask you this. Why has the administration not 
appointed the vacant positions on the advisory board for Radio 
and TV Marti?
    Mr. Noriega. Senator, that's a very good question. I don't 
have the answer for you. I know that this is something, that 
revitalizing the Marti broadcasting is a very important part of 
our policy. I think that this has to be an area where we need 
to move swiftly and in an affirmative way. I don't have a 
specific answer for you as to when that would be done, but I 
think it has to be part of renovating the Martis, and the 
highest standard we can set is to make them worthy of Jose 
Marti.
    Senator Nelson. Well, I certainly agree, and I was one of 
the co-sponsors when I was in the House of Representatives of 
setting up this organization and it hasn't fulfilled its 
potential, and you need some new blood to rev up this 
organization so that it will be effective and so that they can 
get the message to those people whose lives are shackled. But 
keeping these board positions vacant for almost 3 years now is 
not a good sign, and I would encourage you and the members of 
this committee have a good deal of good feeling toward you in 
your new position, I would encourage you to get the 
administration off the dime and get these positions appointed.
    Let me ask you this. I was, needless to say, shocked after 
the executions, the summary executions that the policy of the 
U.S. Government would be that we would negotiate prison 
sentences for people later interdicted on the high seas being 
returned to Cuba instead of at least arranging, as we have done 
so frequently in the past, for them to go to a third country, 
so that they would not be returning to a prison cell. Can you 
explain the policy of the U.S. Government in the return of 
those people to 10-year prison sentences?
    Mr. Noriega. Senator, I should say at the outset that we 
didn't negotiate at all with the Cuban regime on the sentences 
for those people. The Cuban regime volunteered a statement, a 
diplomatic note to us, about the treatment of these people, 
which we took into account in deciding to repatriate these 
individuals. We actually tried to find a way to charge them 
with a crime so we would at least be able to hold them in our 
custody rather than return them. We resorted to extraordinary 
measures to be in a position where we wouldn't have to return 
them.
    Senator Nelson. Well why didn't we do what we had done in 
the past, arrange for them to go to a third country?
    Mr. Noriega. In some cases we're able to do that if they 
have----
    Senator Nelson. Not on that particular group.
    Mr. Noriega. If they have--if they demonstrate a well-
founded fear of persecution or credible fear of persecution.
    Senator Nelson. In this case there were 12 that were 
returned.
    Mr. Noriega. Right. There were some yes, Senator, in that 
group, if I understand, who were able to voice some concerns 
and were transported, to Guantanamo, where they underwent some 
additional interviews and for those people who did demonstrate 
a credible fear of persecution, we were looking for another 
country to send them to.
    It's our policy not to magnetize the United States any more 
than it already is because these desperate people throw 
themselves into the sea and sacrifice everything they have and 
risk their lives in order to reach here. Our policy is one of 
encouraging safe, legal, and orderly migration. To that end, we 
take the extraordinary measure of actually doing refugee and 
asylum claims in the country itself and interviewing people for 
these asylum claims. But it is our hope that people would 
pursue legal means for migrating to the United States because 
they put themselves at risk. The last thing that we would want 
to do is encourage people to hijack vessels----
    Senator Nelson. I understand that's our policy.
    Mr. Noriega [continuing]. And also to assault Federal 
officers who are trying to----
    Senator Nelson. That's our policy, that's an understandable 
policy, but that's not what happened with those folks and that 
was just a little bit after the executions, which have shocked 
a lot of people in the State of Florida.
    Mr. Chairman, your staff director insisted that I go ahead 
as a courtesy to the witnesses and I have just one other 
question.
    The Chairman [presiding]. Very well.
    Senator Nelson. We really do have the goodwill for you to 
do well because the Western Hemisphere is exceptionally 
important to the foreign policy interests of the United States. 
There was an inexcusable crime that was committed several years 
ago and that was the shooting down in cold blood of a Brothers 
to the Rescue plane. Years later an indictment has been 
returned against the pilots. My question to you, what is the 
policy of the U.S. Government about indicting the person who 
decided to shoot down the Brothers to the Rescue, who is Fidel? 
What is the policy of the government?
    Mr. Noriega. The decision on the indictment, Senator, was 
made by the Department of Justice and the U.S. Attorney. They 
are the ones that decided how to present this to the grand jury 
and whether to include Fidel Castro in that indictment and 
whether to indict him. I suspect that one of the considerations 
was whether or not this would complicate matters in terms of 
his so-called head of state immunity, and that probably had 
something to do with it, but I'm not a lawyer and not an expert 
in their rationale, but my speculation is that had something to 
do with it.
    Senator Nelson. Well, to use your word ``suspect'' I'll 
tell you what I suspect. I suspect that the decision to indict 
was not made by the U.S. Attorney, but it was made by the 
highest circles in the White House, and if you're going to 
indict the pilots, I wonder why don't you get right to the 
source of the decision to shoot down the Brothers to the 
Rescue?
    Mr. Noriega. Senator, knowing what I do about the case, I 
don't suspect that that decision was made at the so-called 
highest levels of our government. I think that decision was 
made by the U.S. Attorney, and on the other point----
    Senator Nelson. Well you and I agree on a lot of things, 
but on that one we don't.
    Mr. Noriega. Well, we're just a couple of suspicious guys 
at least. But at the very least, let me, on the other issue of 
how much money we can provide to the opposition and dissidents 
on the island, let me just note that we will apply effectively 
that sum of money that Congress appropriates for that purpose.
    Senator Nelson. Thank you.
    The Chairman. Thank you very much, Senator Nelson. I thank 
you for continuing the questioning and the meeting and 
apologize for my tardiness. As was the case with several of us 
as we got to the floor we were approached by Senators who had 
other very important issues and so we have tried to take care 
of as many of those as possible. Senator Enzi was another one 
who had a mark-up in fact right on the floor, but I now 
recognize you, Senator, for your questions.
    Senator Enzi. Thank you, Mr. Chairman. I'm one of the 
fortunate Senators who has the ability, because of low 
populations in my State, to talk to almost all of my 
constituents, which of course would include all of my Cuban 
constituents, and they keep raising questions for me and that's 
what led to me working on this travel bill, and I'm really 
disturbed at some of the actions that our government is taking. 
Now I understand that Castro arrested and imprisoned the 75 
dissidents and that that's wicked and wrong. There isn't 
anybody that doesn't think that that I know of, probably 
everybody in Cuba as well except Castro.
    But we made some policy changes and some of them didn't 
necessarily have to do with that imprisonment. One of the 
things that I'm concerned about is why we've changed. I'd like 
the inside story on why we've changed the travel policy 
specifically as it deals with people to people?
    Mr. Noriega. The particular regulations that we promulgated 
making some changes in the travel licensing requirements was 
pretty narrow. It was for non-academic educational exchanges, 
in other words exchanges that weren't in the context of 
academic study. They might be educational but in point of fact 
they took the nature increasingly of tourism. We received mail 
from people complaining about, here, look at this brochure, 
it's go participate in mojito tours of Cuba and it's going to 
be called an educational exercise, and it was summer break in 
Cuba and that was inconsistent with our policy.
    But I want to be very clear, Senator, that we do want to 
continue educational travel of an academic nature, cultural 
ties, humanitarian travel. As a matter of fact----
    Senator Enzi. But do we specifically single out people to 
people and say no more of that?
    Mr. Noriega. No, Senator. That was that one category of 
travel where there was a general license for that sort of 
travel, where we licensed travel that was in a non-structured 
sort of educational activity and folks who had been licensed in 
that way were abusing that opportunity, abusing that license, 
and carrying out what was fairly obvious forms of tourism. 
Having said that----
    Senator Enzi. One of those licensees is from Wyoming that's 
now going to be excluded, and he's been taking groups over 
there for some time. And I asked him specifically about this 
thing that the tourists are kept in enclaves and they're not 
allowed to talk to average people and that they're shepherded 
around and that sort of thing and that hasn't been the case 
with his tours. Now they have to be very careful in instructing 
their people on how people that they talk to could get in 
trouble, but have encouraged them to talk to average citizens 
there, to just be careful on what they're saying, but they are 
by no means shepherded around the whole time.
    Mr. Noriega. Sure.
    Senator Enzi. So how are you going to distinguish between 
the groups that have some true educational value there and are 
making a difference perhaps in the whole Cuban situation----
    Mr. Noriega. Well, there are other categories of travel 
that would remain available. We noted that 70 percent of these 
hotels were in tourist enclaves and this fellow probably made a 
point, conscious point, of avoiding those and going to other 
accommodations that would be more out on the economy and open 
in Cuban society. I don't know the details of what sort of 
operation he runs. It could very well be eligible for some 
other form of specific licensing, but if you would ask him to 
communicate with either me or Mr. Newcomb we can do what we can 
to try to accommodate some sort of license where he could 
continue his work, assuming it was lawful, within the confines 
of U.S. laws approved by Congress 3 years ago.
    Senator Enzi. OK, I appreciate that. Another area that I'm 
kind of, that I need more details on, deals with the 
congressional. I understand the congressional intent that was 
originally established with TSRA concerning the assistance to 
Cuban people through the trade of agriculture and medicine 
products. Can you explain the State Department's 
interpretation, how the intent has changed on that, why we're 
doing something different in the last 10 months than we have 
before?
    Mr. Noriega. In terms of that one decision on the 
regulation change, I'm not familiar with any other way we 
interpret it, other than this one area where I explained that 
we made a decision, made a judgment that it was being abused 
and that it wasn't consistent with travel.
    Senator Enzi. Can you give me a little more detail on how 
that was being abused?
    Mr. Noriega. Are we talking about the travel, the non-
education, sort of non-academic study sort of travel? Is that 
what you're talking about, Senator?
    Senator Enzi. No, actually not. We were doing some health 
care exhibitions in Cuba.
    Mr. Noriega. Oh, I see, oh, that's not now we're----
    Senator Enzi. I changed subjects on you a little bit.
    Mr. Noriega. I got it, I got it. I apologize for that. In 
2003, it is correct that we approved a couple of exhibitions 
and actually before 2003 there were a couple of exhibitions 
that were licensed. The last time we denied a license, frankly 
in direct response to the crackdown, and we felt that we quite 
literally didn't want to do business as usual with the regime 
and be perceived as carrying on normal commercial exchange with 
the government right in the wake of the crackdown. Other 
governments have proceeded differently, but that is the policy 
that we believe makes sense for the United States.
    Senator Enzi. Have any of those other countries expressed 
any concern that maybe we were being too harsh in that area?
    Mr. Noriega. Not to me. The one concern I hear from other 
countries because of TSRA is that the Cuban Government is using 
that cash-only requirement as a basis to pay U.S., some U.S. 
exporters and that's money that the Cuban Government owes to 
other countries and other governments, and they're stiffing the 
other governments because our law requires that they pay cash, 
they're taking cash that they owe to other countries or owe to 
other governments and paying to U.S. farmers and others with 
very explicit political intent of influencing the debate here 
in the United States, and frankly I'm glad that our farmers are 
getting that and not other farmers from other wonderful places 
in the world.
    Senator Enzi. I'll quickly ask one more question if that's 
OK and shift gears one more time, and that's to ask you if you 
can tell me a product that isn't on a U.S. control list, 
meaning it has some military application that Cuba can't get 
under our present policy, not from us but from other people? 
Are we really denying them anything other than what's on our 
military control list?
    Mr. Noriega. They can buy whatever they want and develop 
whatever they want, I suppose, if Fidel Castro decided that 
that's where he wanted to put his resources. I would expect 
that that's the case. It was the same of the Soviet Union when 
we maintained export controls on the Soviet Union, but we 
actually denied them that as a matter of principle and as a 
matter of making it more difficult for them to get certain 
products, but----
    Senator Enzi. Well, we've always had export controls, you 
know, to virtually every nation including Great Britain.
    Mr. Noriega. Absolutely, right.
    Senator Enzi. But not to the extent that we've had here, 
but it hasn't precluded them from getting anything except 
what's on the control list. Just a point that I wanted to make. 
I thank the chairman.
    Mr. Noriega. They pick it up from other countries, yes.
    The Chairman. Thank you very much, Senator Enzi. Senator 
Coleman.
    Senator Coleman. Thank you, Mr. Chairman. And Mr. Chairman, 
thank you for holding this very important hearing. I appreciate 
the opportunity to be here. Mr. Noriega, when I was in Cuba, 
one of the things that's working, a little bit of private 
entrepreneurship, is they have what I think they call 
paladares, my Spanish isn't so good, restaurants in homes and 
at one time I think there were about 100 of them and now the 
government has limited the number, I think to around 24.
    I had a conversation with the head of the central bank, I 
think Mr. Soberon, I think was his name, and it was an 
interesting conversation. But I asked him about why they don't 
just kind of let these things go. Folks there, the help they 
get in American dollars, they're getting tips, they're making 
some money. And one of his responses was something to the 
effect of they're kind of keeping the lid on this because they 
really don't want an entrepreneurial class, because an 
entrepreneurial class would be susceptible to American 
influence and that was of concern.
    How can what can we do to support an entrepreneurial class 
without being accused of meddling, you know, in the internal 
affairs of another country? What kind of actions can we take? 
And not because it's an American influence, but because it's a 
good thing, it's a good thing. So what can we do? What can Mr. 
Cason do? What can our interest section do without crossing a 
line?
    Mr. Noriega. Sure. Well, from the point of view of the 
Cuban Government everything crosses the line that Jim Cason 
does or that anyone that wants to help the Cuban people does. 
But having said that, we do want to find some creative ways to 
encourage contact with these self-employed people, these micro-
enterprises that were budding initially. There were actually at 
one point, there were between 180,000 and 200,000 of these 
paladares, oh, I'm sorry, not paladares, but the whole self-
employed people registered, and that number's down closer to 
120 now because of the government coming in and strangling it 
with red tape and all of that.
    But I think this is an area where we should do some work, 
maybe encouraging cooperative organizations that know how to 
organize, some business management training, maybe video 
cassettes or books that we can make available to people so that 
they can pick up, hone their entrepreneurial skills. The thing 
about entrepreneurial skills are they're natural, they're very 
natural. I remember asking a Cuban economist well, you don't 
have economists in Cuba that don't really know about a modern 
economy, how do you do it? And he said you don't need 
economists to make an economy work, you need rational actors 
who have the ability to operate and do what's in their natural 
interests.
    But it is good that we're doing some of this, Senator, 
already, providing resources, books, to them. One of the areas 
that we hoped might bud when we allowed licensing of 
remittances from any U.S. person over 18 to any Cuban was maybe 
the idea that some people might give them some money to help 
them buildup their inventory, for example, and help them start 
to buildup these small enterprises. But this is an area where 
we need to do some work and I think it would be very useful.
    Senator Coleman. Mr. Noriega, one area where I had some 
concern with the present policy has to do with the issue of 
medical supplies. I understand under the year 2000 legislation, 
TSRA legislation, that medical supplies are OK, but there is, I 
believe, kind of an end-use provision in there, concern about 
to make sure it's not being used for biological weapons or 
other things, and so it's a requirement that, I believe, some 
kind of certification requirement that says you've got to know 
what the end-use requirement is and you've got to track it and 
certify it to some degree.
    And I would suspect, or I would believe there are some 
products, such as we had a concern about AIDS and one of the 
things you need for AIDS is machinery that does CD4 counts that 
they don't make in Cuba. Can you help me understand and just 
kind of maybe educate me a little bit about the purpose, the 
importance of this kind of end-use requirement? To me it would 
slow up getting supplies that we all agree are good things, 
this is for the Cuban people. Can you help me understand that a 
little bit?
    Mr. Noriega. Yes, Senator. Over the years since 1992, Cuba 
has been able to buy medicine and medical supplies from the 
United States. It was very convenient to them to say that they 
couldn't but the fact is they could. A couple of facts are that 
the United States is a high-cost provider for these sorts of 
things and they also, the regime, which is really the only 
entity that purchases anything in Cuba, was unwilling to pay 
those high prices and wasn't credit-worthy and they wanted 
credits. So a lot of the time it would be readily available to 
line up, for example, Caritas, the Catholic church arm, to do 
end-use monitoring for some shipment of material. And I asked 
the head at the time, in 1998 I was in Havana, and I asked him, 
have you ever been asked to do this? And he said, oh yes, all 
the time. I've got a bunch of file folders of these MOUs were I 
agreed to go and do end-use monitoring and that was totally 
acceptable and the license was approved, but the government 
didn't buy anything because the government doesn't have any 
money.
    And so a lot of time that's the complicating factor, but we 
also would have people that would come to our attention in 
terms of a transaction of medical equipment and medical 
supplies and we'd be glad to run to ground and facilitate to 
the extent that it's allowable under the law the approval of a 
license, because we wouldn't want to deny basic articles, 
particularly if this is the only place where you can get them. 
In terms of whether it has a dual-use capability, that's a much 
bigger, compelling argument, and we would have difficulty 
surmounting that argument if that were a case in certain areas.
    But by and large we would want to facilitate those kinds of 
transactions and it isn't impossible by any means to arrange 
some sort of end-use monitoring if the government wants to try 
to do it.
    Senator Coleman. I would just hope that that end-use 
monitoring provision would not prevent the opportunity for 
needed medical supplies to get to those who need them where 
there aren't any of these other concerns, so take a look at 
that and I'll certainly look on this end. I think that would be 
the right thing to do.
    Mr. Noriega. Yes, sir, thank you.
    Senator Coleman. Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Coleman.
    Secretary Noriega, we thank you very much for your 
testimony and for your responses to your questions, and in a 
couple of instances you've indicated you would furnish 
additional information for the record and we would appreciate 
that, of course, also.
    Mr. Noriega. Thank you very much, Mr. Chairman.
    The Chairman. Thank you for coming. I'd like to call now 
upon our third panel, Mr. Jose Miguel Vivanco, executive 
director, Americas Division, Human Rights Watch; Mr. Emilio T. 
Gonzalez, senior managing director, Global Government Affairs 
of the law firm of Tew Cardenas; and Mr. Bernard Aronson, 
Managing Partner, ACON Investments, LLC. Gentlemen, we thank 
you for coming today. We thank you for your patience waiting 
for this moment to testify and we look forward to the 
testimony. I'll ask you to testify in the order that I 
introduced you. If you have prepared statements they will each 
be made a part of the record in full and you may proceed either 
with the statements or with summary comments. Mr. Vivanco.

STATEMENT OF JOSE MIGUEL VIVANCO, EXECUTIVE DIRECTOR, AMERICAS 
          DIVISION, HUMAN RIGHTS WATCH, WASHINGTON, DC

    Mr. Vivanco. Thank you very much, Mr. Chairman, members of 
the committee. I am honored to appear before you today. Thank 
you for your invitation to address the human rights situation 
in Cuba and to discuss U.S. policy toward that country. I would 
like to submit for the record my written testimony.
    The Chairman. It'll be published in full in the record.
    Mr. Vivanco. Thank you very much. Mr. Chairman, members of 
the committee, Human Rights Watch has been monitoring human 
rights condition in Cuba for more than 15 years. Severe 
political repression has been constant throughout this time. 
Cuba has long been a one-party state. It has long restricted 
nearly all avenues of political dissent. It has long denied its 
people basic rights to fair trial, free expression, 
association, assembly, movement, and the press. It has 
frequently sought to silence its critics by using short-term 
detentions, house arrest, travel restrictions, threats, 
surveillance, political-motivated dismissal from employment, 
and other kinds of harassment.
    But this year's crackdown on political dissent in Cuba in 
its scale and intensity is the worst we have seen in a decade 
or more. The crackdown was a reaction to the flowering of civil 
society in Cuba over the last several years and to the growing 
activism and ambitions of its dissident community. It followed 
the success of the Varela Project, led by dissident Oswaldo 
Paya in gathering signatures from Cuban citizens on a petition 
calling for political reform.
    The crackdown began on March 18. In just a few days state 
security agents arrested dozens of people, launching an all-out 
offensive against non-violent dissidents, independent 
journalists, human rights defenders, independent librarians, 
and others brave enough to challenge the government's monopoly 
on truth. In due process terms, their trials were a shame, and 
in the end, 75 defendants received sentences ranging from 6 to 
28 years, with an average sentence of 19 years. Cuban courts 
have not imposed such draconian sentences on such large numbers 
of people in more than two decades.
    What do these troubling developments mean for U.S. policy 
toward Cuba? What approach offers the greatest likelihood of 
effecting change in Cuba? The first thing I hope we can all 
agree on is that no one should have any illusions about the 
character of the Cuban Government, no one should romanticize 
any aspect of this cruel system, or make any excuses for Fidel 
Castro's abuses. The crackdown on dissent in Cuba is not the 
fault of the United States or the fault of the U.S. embargo or 
the fault of the Cuban-American community. The responsibility 
lies exclusively with Fidel Castro.
    We should also agree that this is no time to reward Fidel 
Castro. This is time for maximizing effective pressure on the 
Cuban Government to change its policies, but we also need to be 
tough-minded and strategic in assessing whether the all-out 
embargo currently in place is the best available tool for 
achieving our goals. Is it likely to move the Cuban Government? 
Do Cuba's cynical rulers even see it as punitive? I believe 
that the answer to both questions is no and that a middle 
ground approach will serve the costs of Cuba's brave dissidents 
far better.
    I said that as someone who is often supportive of economic 
sanctions, even unilateral economic sanctions against 
governments that systemically violate human rights. Human 
Rights Watch believes that sanctions, when carefully targeted 
and deployed as part of a larger diplomatic strategy, can be 
effective in promoting human rights and in expressing where the 
United States stands on human rights. This year, for example, 
we applauded the U.S. Congress for supporting additional U.N. 
sanctions against the Government of Burma. We are generally 
skeptical of argument that trade with the United States or 
exposure to American values and practices can somehow convince 
repressive governments to be kinder and gentler to their 
people.
    But it seems to us that any American policy designed to 
promote human rights in another country has to meet two basic 
tests to be worthy of continuation. First, is the policy more 
likely to be effective than the alternatives? Second, does it 
advance the interests and speak to the needs of those 
struggling to defend human rights in the country concerned? 
After 40 years it's clear that the all-out embargo against Cuba 
fails both tests. Many of the dissidents struggling for change 
inside Cuba want to see the embargo eased, including the 
writer, Raul Rivero, and the activist, Hector Palacios Ruiz, 
who were sentenced, respectively, to 20 and 25 years in prison 
in April, as well as Oswaldo Paya, the leader of the Varela 
Project.
    Refusing to heed those who would risk everything for 
freedom in Cuba is senseless. It will be as if the United 
States had taken steps to defend liberty in the whole Soviet 
empire that were categorically opposed by Andrei Sakharov, Lech 
Walesa, and Vaclav Havel. Leading Cuban dissidents understand 
that the embargo helps Fidel Castro's cause, not theirs, 
because it is indiscriminate rather than targeted. It allows 
the Cuban Government to shift blame to the United States for 
the Cuban people's suffering, because it isolates the Cuban 
people from the world, it makes it easier for the Cuban 
Government to control what they hear, see, and know. Because it 
is bitterly opposed by most nations of the world, it enables 
the Cuban Government to divide the international community, 
leading ironically to less international pressure on Fidel 
Castro, not more.
    At the same time, a relaxation or end to the embargo will 
not by itself be an effective strategy for promoting change in 
Cuba. We need to be clear-eyed about this as well. The Cuban 
Government is not going to stop locking up dissident just 
because American tourists have joined the Canadians sunning 
themselves on Cuba's beaches or because American CEOs have 
joined the Europeans signing contracts with Fidel Castro. 
There's a need to be carefully targeted, multilateral pressure 
on the Cuban Government, or Cuban dissidents won't have the 
space to fight for change.
    We need a middle ground between unquestioning engagement 
with the Castro government, an all-or-nothing approach that 
plays into Fidel Castro's hands. All sides in the Cuban policy 
debate need to ask themselves, what does Castro fear most from 
the United States? It is not the continuation of the embargo or 
its dismiss. It is the prospect that the United States might 
someday agree with allies in Latin America and in Europe on an 
effective common strategy for defending the rights of the Cuban 
people.
    For that reason, I would argue that America's Cuba policy 
should not even be directed at Havana right now. Given the 
history of this relationship, there is very little that the 
United States can do bilaterally to influence the Cuban 
Government. Instead, America's Cuba policy should be directed 
toward the other nations of Latin America, toward Europe, 
toward Canada. It should be aimed at forging a principal common 
strategy for promoting political change in Cuba. A united 
international community will have immensely more political and 
moral authority with the Cuban Government than a divided 
international community.
    Because of the crackdown in Cuba there is an opportunity 
now to forge a more united approach. The European Union has 
already toughened its common position on Cuba, for example. 
Latin American countries have supported resolutions on human 
rights in Cuba at the United Nations, which although far too 
mild, are a step forward. But much more can be done. The United 
States should be urging Latin democracies to speak forcefully 
against political repression to Cuba and to stop backing Cuban 
membership in bodies like the U.N. Commission for Human Rights. 
It should press Latin diplomats to meet with Cuban dissidents. 
It should urge European countries to impose on the Cuban 
leadership the same targeted sanctions, including the denial of 
visas and the seizure of assets that they have imposed against 
other repressive governments, such as Burma and Zimbabwe.
    While easing some trade and investment with Cuba and ending 
the senseless ban on travel to Cuba, the United States should 
also work with allies to develop common rules governing 
economic engagement there. Foreign investment in new private 
enterprises has helped limit the power of the state in 
countries like China and Vietnam. But in Cuba, workers in joint 
ventures with foreign companies are still hired and paid by the 
Cuban Government. That's remaining at the mercy of the state. 
European, Canadian, and ultimately American companies should 
receive licenses for investment in Cuba only if that policy 
changes.
    The tragedy of the all-out U.S. embargo on Cuba and a key 
argument for easing it is that it makes the United States 
impotent in pressing its allies for these tougher measures. The 
Bush administration knows it, knows that it has virtually no 
influence with the rest of the world on Cuba. When Cuba was up 
for re-election to the U.N. Human Rights Commission this year, 
the administration hardly even tried to convince Latin 
countries to find an alternative candidate. In most capitals, 
Castro has succeeded in making the embargo a bigger issue than 
his own repression.
    The best alternative to sanctions against Cuba, therefore, 
is not a policy of no sanctions. It should be possible to forge 
a middle path that isolates the Cuban Government, not the Cuban 
people, but so long as the United States is unwilling to climb 
down to a tough, yet sensible policy, it will not persuade its 
allies to rise up to such a policy. Thank you very much, Mr. 
Chairman.
    [The prepared statement of Mr. Vivanco follows:]

Prepared Statement of Jose Miguel Vivanco, Executive Director, Americas 
                      Division, Human Rights Watch

    Thank you for your invitation to address the human rights situation 
in Cuba and to discuss U.S. policy towards that country.
    Human Rights Watch has been monitoring human rights conditions in 
Cuba for more than 15 years. Severe political repression has been 
constant throughout this time. Cuba has long been a one-party state. It 
has long restricted nearly all avenues of political dissent. It has 
long denied its people basic rights to fair trial, free expression, 
association, assembly, movement and the press. It has frequently sought 
to silence its critics by using short term detentions, house arrests, 
travel restrictions, threats, surveillance, politically motivated 
dismissals from employment, and other harassment.
    But this year's crackdown on political dissent in Cuba, in its 
scale and intensity, is the worst we've seen in a decade or more.
    The crackdown was a reaction to the flowering of civil society in 
Cuba over the last several years, and to the growing activism and 
ambitions of its dissident community. It followed the success of the 
Varela Project, led by dissident Oswaldo Paya, in gathering signatures 
from Cuban citizens on a petition calling for political reform.
    The crackdown began on March 18. In just a few days, state security 
agents arrested dozens of people, launching an all-out offensive 
against nonviolent dissidents, independent journalists, human rights 
defenders, independent librarians, and others brave enough to challenge 
the government's monopoly on truth. In due process terms, their trials 
were a sham. And in the end, 75 defendants received sentences ranging 
from 6 to 28 years, with an average sentence of 19 years. Cuban courts 
have not imposed such draconian sentences on such large numbers of 
people in more than two decades.
    What do these troubling developments mean for U.S. policy towards 
Cuba? What approach offers the greatest likelihood of effecting change?
    The first thing I hope we can all agree on is that no one should 
have any illusions about the character of the Cuban Government. No one 
should romanticize any aspect of this cruel system, or make any excuses 
for Fidel Castro's abuses. The crackdown on dissent in Cuba is not the 
fault of the United States, or the fault of the U.S. embargo, or the 
fault of the Cuban-American community. The responsibility lies with 
Fidel Castro, period.
    We should also agree that this is no time to reward Fidel Castro; 
this is a time for maximizing effective pressure on the Cuban 
Government to change its policies. But we also need to be tough-minded 
and strategic in assessing whether the all-out embargo currently in 
place is the best available tool for achieving our goals. Is it likely 
to move the Cuban Government? Do Cuba's cynical rulers even see it as 
punitive? I believe the answer to those questions is no, and that a 
middle ground approach would serve the cause of Cuba's brave dissidents 
far better.
    I say that as someone who is often supportive of economic 
sanctions, even unilateral economic sanctions, against governments that 
systematically violate human rights. My organization believes that 
sanctions, when carefully targeted and deployed as part of a larger 
diplomatic strategy, can be effective in promoting human rights and in 
expressing where the United States stands on human rights. This year, 
for example, we applauded the U.S. Congress for supporting additional 
U.S. sanctions against the government of Burma. We are generally 
skeptical of arguments that trade with the United States or exposure to 
American values and practices can somehow convince repressive 
governments to be kinder and gentler to their people.
    But it seems to us that any American policy designed to promote 
human rights in another country has to meet two basic tests to be 
worthy of continuation. First, is the policy more likely to be 
effective than the alternatives? Second, does it advance the interests 
and speak to the needs of those struggling to defend human rights in 
the country concerned? After 40 years, it's clear that the all-out 
embargo against Cuba fails both tests.
    Many of the dissidents struggling for change inside Cuba want to 
see the embargo eased, including the writer Raul Rivero and the 
activist Hector Palacios Ruiz, who were sentenced, respectively, to 20 
and 25 years in prison in April, as well as Oswaldo Paya, the leader of 
the Varela Project. Refusing to heed those who risk everything for 
freedom in Cuba is senseless. It would be as if the United States had 
taken steps to defend liberty in the old Soviet empire that were 
categorically opposed by Andrei Sakharov, Lech Walesa, and Vaclav 
Havel.
    Leading Cuban dissidents understand that the embargo helps Fidel 
Castro's cause, not theirs. Because it is indiscriminate, rather than 
targeted, it enables the Cuban Government to shift blame to the United 
States for the Cuban people's suffering. Because it isolates the Cuban 
people from the world, it makes it easier for the Cuban Government to 
control what they hear, see and know. Because it is bitterly opposed by 
most nations, it enables the Cuban Government to divide the 
international community, leading, ironically, to less international 
pressure on Fidel Castro, not more.
    At the same time, a relaxation or end to the embargo would not, by 
itself, be an effective strategy for promoting change in Cuba. We need 
to be clear-eyed about this, as well: The Cuban Government isn't going 
to stop locking up dissidents just because American tourists have 
joined the Canadians sunning themselves on Cuba's beaches, or because 
American CEO's have joined the Europeans signing contracts with Fidel 
Castro. There does need to be carefully targeted, multilateral pressure 
on the Cuban Government, or Cuba's dissidents won't have the space to 
fight for change. We need a middle ground between unquestioning 
engagement with the Castro government and an all-or-nothing approach 
that plays into Fidel Castro's hands.
    All sides in the Cuba policy debate need to ask themselves: What 
does Castro fear most from the United States? It is not the 
continuation of the embargo, or its demise. It is the prospect that the 
United States might someday agree with allies in Latin America and 
Europe on an effective common strategy for defending the rights of the 
Cuban people.
    For that reason, I would argue that America's Cuba policy should 
not even be directed at Havana right now. Given the history of this 
relationship, there is very little the United States can do bilaterally 
to influence the Cuban Government. Instead, America's Cuba policy 
should be directed towards the other nations of Latin America, towards 
Europe, towards Canada. It should be aimed at forging a principled, 
common strategy for promoting political change in Cuba.
    A united international community will have immensely more political 
and moral authority with the Cuban Government than a divided 
international community. Because of the crackdown in Cuba, there is an 
opportunity now to forge a more united approach. The European Union has 
already toughened its common position on Cuba, for example. Latin 
American countries have supported resolutions on human rights in Cuba 
at the U.N., which, although far too mild, are a step forward. But much 
more can be done.
    The United States should be urging Latin democracies to speak 
forcefully against political repression in Cuba, and to stop backing 
Cuban membership in bodies like the U.N. Commission for Human Rights. 
It should press Latin diplomats to meet with Cuban dissidents. It 
should urge European countries to impose on the Cuban leadership the 
same targeted sanctions, including the denial of visas and the seizure 
assets, that they have imposed against other repressive governments, 
such as Burma and Zimbabwe.
    While easing some trade and investment with Cuba, and ending the 
senseless ban on travel to Cuba, the United States should also work 
with allies to develop common rules governing economic engagement 
there. Foreign investment in new private enterprises has helped limit 
the power of the state in countries like China and Vietnam. But in 
Cuba, workers in joint ventures with foreign companies are still hired 
and paid by the Cuban Government, thus remaining at the mercy of the 
state. European, Canadian and ultimately American companies should 
receive licenses for investment in Cuba only if that policy changes.
    The tragedy of the all-out U.S. embargo, and a key argument for 
easing it, is that it makes the United States impotent in pressing its 
allies for these tougher measures. The Bush administration knows it has 
virtually no influence with the rest of the world on Cuba. When Cuba 
was up for reelection to the U.N. Human Rights Commission this year, 
the administration hardly even tried to convince Latin countries to 
find an alternative candidate. In most capitals, Castro has succeeded 
in making the embargo a bigger issue than his own repression.
    The best alternative to dumb sanctions against Cuba, therefore, is 
not a policy of no sanctions. It should be possible to forge a middle 
path that isolates the Cuban Government, not the Cuban people. But so 
long as the United States is unwilling to climb down to a tough, yet 
sensible policy, it will not persuade its allies to rise up to such a 
policy.

    The Chairman. Thank you very much, sir, for that testimony.
    Mr. Gonzalez.

 STATEMENT OF EMILIO T. GONZALEZ, SENIOR MANAGING DIRECTOR FOR 
   GLOBAL GOVERNMENT AFFAIRS, LAW FIRM OF TEW CARDENAS, LLP, 
                         WASHINGTON, DC

    Mr. Gonzalez. Thank you, Mr. Chairman, for the opportunity 
to be here. I have a longer version of my statement that I'll 
submit for the record.
    The Chairman. It will be published in full in the record.
    Mr. Gonzalez. Sir, for 26 years I served in the United 
States Army as an artillery, intelligence and foreign area 
officer throughout Latin America. I last served the U.S. 
Government as Director for Western Hemisphere Affairs at the 
National Security Council, a position which I held until July 
of this year. I enthusiastically support the administration's 
current policy and do not believe that now is the time to 
change U.S. policy with regard to trade and travel with Cuba.
    The Cuban Government has gone to great lengths to reinvent 
itself as a responsible neighbor, but its past and current 
actions demonstrate otherwise. For over a decade the Cuban 
Government has embarked on a policy of promoting tourism, not 
to open itself up to the outside world, but to open the outside 
world's pocketbooks to the Cuban Government. Millions of 
tourists from Europe, Latin America, Canada, whose commitment 
to democracy is no less than our own, have traveled to Cuba, 
making it a major tourist destination in this hemisphere.
    Yet over the past 10 years, Cuba is no freer, there is no 
less repression, and Cuba's economy is no more open than in 
years past. In fact, Cuba remains every bit the totalitarian 
state it was at the height of the cold war. Foreign travelers 
to Cuba are surprised to find that Cubans have become second-
class citizens in their own country. Cubans are not allowed to 
swim at tourist beaches, eat at tourist restaurants, or even 
stay at tourist resorts. Inexpensive entertainments for 
foreigners comes on the backs of the Cuban people, but the 
money derived from tourism benefits only the Cuban Government.
    I find it incredulous to think that increased travel by 
U.S. citizens will reduce government control and lift the Cuban 
people out of poverty and into a prosperous and democratic 
future. The Castro regime believes that U.S. tourists will 
provide an instant cash infusion to deplete its government 
coffers. The common perception is that the United States could 
flood Cuba with tourists, and by extension, U.S. ideals. I do 
not believe this would ever be allowed to happen.
    The Castro regime doesn't want unlimited United States 
tourists. It wants only enough tourists to sustain its 
restrictive infrastructure. There will be no flood of tourists, 
just a controlled collection of limited dollars. Whatever 
economic benefits a reform in the tourist industry brings, it 
is measured against real or perceived encroachments on state 
power. For the Castro regime, tourism is not about economics 
and jobs, but about sustaining its political control.
    With regard to trade and particularly the increase in 
agricultural sales to Cuba that has received widespread 
attention, these purchases should not be a prelude to increased 
or broader credit-driven trade with Cuba afforded to other 
developing countries who have demonstrated actual interest in 
reform and democracy. Furthermore, this is not, and I very 
seriously doubt it will ever be, a significant market that will 
be made available exclusively to U.S. agricultural producers. 
Our current policy of accepting only cash sales for 
agricultural products is not only politically appropriate, but 
economically responsible.
    At a time when some are calling for credits to enhance 
trade with Cuba, it is interesting to note that Cuba is 
considered probably one of, if not the most, deadbeat nations 
in the world. The main reason the Castro regime wants the 
lifting of the travel ban is that it cannot afford to pay its 
foreign creditors elsewhere. What few dollars the government 
can muster are being used to make strategic agricultural 
purchases from the United States in hopes of enticing our 
farmers and other agricultural concerns to serve as their 
advocates. But the only reason the Cuban Government can make 
those purchases is that it has stopped payment on essentially 
every other debt it has accrued.
    Cuba's foreign debt has been estimated to be between $20 
and $40 billion. The vast majority of this will likely never be 
repaid, and certainly not by the Castro regime. Cuba owes 
significant debts to Russia, Japan, Argentina, France, Norway, 
Mexico, and other countries who mistakenly believed that they 
were dealing with an honest trading partner. Foreign creditors 
are freezing Cuban Government bank accounts and other assets 
around the world. One Canadian firm has even resorted to 
tracking down and placing liens on Cuban merchant vessels in 
ports around the world in hopes of collecting back payment. In 
fact, a positive by-product of current U.S. policy is that the 
U.S. Government does not have to take a number in the long line 
of creditors hoping to be repaid.
    President Bush has offered and maintained through his 
initiative for a new Cuba a principled approach by engaging the 
Cuban people while repudiating the Cuban Government's 
totalitarian nature. The United States seeks increased trade, 
reduced trade barriers, and more open societies around the 
world. In the meantime in Cuba, human rights activists, 
independent journalists, and trade union leaders have been 
recently arrested on trumped-up charges. Others have been 
summarily executed for leaving the country.
    I believe that at this time it would be grossly 
inappropriate to ease U.S. restrictions on the Castro regime 
given its failure to take a modicum of steps to democratize its 
political system, respect human rights, and open its economy. 
And if I may, sir, as the only Cuban-American testifying today, 
I'd like to say that I hope to be able to come here one day in 
the future in a free and democratic Cuba to advocate for 
greater engagement, to advocate for unrestricted travel, to 
advocate for increased economic intercourse, but I grant you, 
gentlemen, that now is not only not the time, but now is 
precisely the wrong time to engage in any policy changes. Thank 
you.
    [The prepared statement of Mr. Gonzalez follows:]

Prepared Statement of Emilio T. Gonzalez, Senior Managing Director for 
        Global Government Affairs, Law Firm of Tew Cardenas, LLP

    Mr. Chairman: I am Emilio T. Gonzalez, Senior Managing Director for 
Global and Government Affairs at the law firm, Tew Cardenas, LLP. For 
over 26 years I served as a United States Army officer in artillery, 
intelligence and foreign area assignments. I last served the United 
States Government as Director for Western Hemisphere Affairs at the 
National Security Council, a position I held until July of 2003.
    Thank you for inviting me to present my views on the 
Administration's policies with regard to travel and trade with Cuba. 
For over forty years, U.S.-Cuba relations have proven to be as 
passionate and divisive a subject as one can find. Having said that, I 
do not believe that we are all here to find ways with which we can 
continue to nourish a corrupt, hostile and belligerent government 90 
miles off our shores. Honorable people differ on the best ways to bring 
about meaningful political, economic and social change in Cuba. But we 
should always keep in mind the interests of the Cuban people and their 
future, and our national security interests, when deciding on any 
meaningful change to our policy.
    Since coming to power in 1959, the government of Fidel Castro and 
his revolutionary elite has been obsessed with the United States. 
Notwithstanding the Revolution's mantra about national independence and 
dignity, the United States continues to be Cuba's main political focal 
point. The Castro regime dedicates all available assets to influence 
U.S. public opinion, decision-makers and the media. Since coming to 
power, and it bears repeating, the Castro government has constantly and 
continually declared its hostility to the United States, regardless of 
whether it is a Republican or Democratic administration. For example, 
the Cuban Government has:

   Exported revolution throughout the Americas and the world. 
        Cuban troops have been deployed around the globe fomenting 
        revolution, creating instability and renting out its armed 
        forces and internal security personnel. The same government 
        that sent troops to the Golan Heights against Israel and 
        trained major radical terrorist groups in the Middle East and 
        Latin America is now courting us with trade opportunities.

   Sent military officers to Viet Nam to torture U.S. prisoners 
        of war.

   Engaged in narcotrafficking. Ample testimony and information 
        exists that the Castro government has engaged in narcotics-
        trafficking into the United States. In the early 1980s, four 
        senior members of the Castro regime were indicted for narco-
        trafficking. They are still being shielded from U.S. justice by 
        Castro.

   Offered sanctuary to fugitives from U.S. justice, including 
        terrorists and cop killers.

   Continued to be placed on the State Department's list of 
        State sponsors of terrorism. The Cuban Government retains broad 
        relations with international outlaw groups such as the 
        Revolutionary Armed Forces of Colombia (FARC) and the Basque 
        ETA organization.

   Conducted offensive espionage operations against the United 
        States. More Cuban spies are incarcerated today in U.S. prisons 
        that from any other country, possibly from all other countries 
        combined.

    While this is not an exhaustive list, it does illustrate an ongoing 
pattem of conduct by the Castro regime and places today's discussion in 
a proper, national security context.

                                 TRAVEL

    I support current Administration policy and do not believe that now 
is the time to change current U.S. policy. The Cuban Government has 
gone to great lengths to reinvent itself as a responsible neighbor but 
its past and current actions demonstrate otherwise.
    For over a decade, the Cuban Government has embarked on a policy of 
promoting tourism, not to open itself up to the outside world but to 
open the outside world's pocket books to the Cuban Government. Millions 
of tourists from Europe, Latin America and Canada, whose commitment to 
democracy is no less than our own, have traveled to Cuba, making it a 
major tourist destination in the hemisphere. Yet, over the past ten 
years, Cuba is no freer, there is no less repression and Cuba's economy 
is no more open than in years past. Despite the sunny beaches, allure 
of sex and flashy nightlife, Cuba remains every bit the totalitarian 
state it was at the height of the Cold War.
    Tours to Cuba are booked through government entities that then use 
a broad array of other government entities, many of them military-
controlled, to house, transport and control every aspects of a 
tourist's stay in Cuba. Independent travelers may succeed in finding 
private accommodations, but the long arm of the state is always within 
easy reach.
    Foreign travelers to Cuba are routinely surprised to find out that 
Cubans have become second class citizens in their own country. Cubans 
are not allowed to swim at tourist beaches, eat at tourist restaurants 
or stay at tourist hotels. Tourists are not usually aware that Cubans 
cannot read whatever they want, write whatever they want, work wherever 
they want or live wherever they want. Inexpensive entertainment for 
foreigners comes on the backs of the Cuban people, but the money 
derived from tourism benefits only the Castro regime.
    I find it incredulous to think that increased travel by U.S. 
citizens will reduce government control and lift the Cuban people out 
of poverty and into a prosperous and democratic future. U.S. tourists 
would more than likely be herded into existing resorts where their 
movements and activities will not be far from the watchful eyes of 
government minders.
    Furthermore, the Cuban Government would closely regulate tourist 
visas. Unlike tourism in more established and mainstream locations, the 
Cuban Government uses tourism to support continued political control. 
The Castro regime believes U.S. tourists would provide an instant cash 
infusion to depleted government coffers. Unfortunately, the Castro 
regime will not allow appreciable change in the daily lives of Cuba's 
people. The common perception is that the U.S. could ``flood'' Cuba 
with U.S. tourists and by extension, U.S. ideals. This would never be 
allowed to happen. The Castro regime doesn't want unlimited U.S, 
tourists; it wants only enough tourists to sustain the restricted 
tourism infrastructure. There will be no flood of tourists, just a 
controlled collection of limited dollars. Whatever economic benefit a 
reform in the tourism industry brings, it is measured against real or 
perceived encroachments on state power. For the Castro regime, tourism 
is not about economics and jobs but about politics and control.

                                 TRADE

    Trade with Cuba, particularly the increase in agricultural sales, 
has received widespread attention in recent years. Since enactment of 
the Trade Sanctions Reform and Export Enhancement Act (TSRA) of 2000, 
it is estimated that Cuba has purchased over $285 million in 
agricultural commodities from the United States. These purchases, while 
beneficial to our farmers, should not become the prelude to the 
increased, broaden credit-driven trade with Cuba afforded to other 
developing counties who have demonstrated actual interest in reform and 
democracy. Furthermore, this is not, and never will be, a significant 
market that will be made available exclusively to U.S. agricultural 
producers. Our current policy of accepting only cash sales for 
agricultural products is not only politically appropriate but 
economically responsible.
    At a time when some are calling for credits to enhance trade with 
Cuba, it is interesting to note that Cuba is one of the biggest 
deadbeat nations in the world. In fact, the main reason the Castro 
regime wants the lifting of the travel ban is that it cannot afford to 
pay its foreign creditors. What few U.S. dollars the government can 
muster are being used to make strategic agricultural purchases from the 
United States in hopes of enticing our farmers and other agricultural 
concerns to serve as advocates to Cuba's agenda before Congress. But 
the only reason that the Cuban Government can make those purchases is 
that it has stopped payment on essentially every debt it has accrued.
    Cuba's foreign debt has been estimated to be between $20 and $40 
billion. The vast majority of this will likely never be repaid, and 
certainly not by the Castro regime. Cuba owes significant debts to 
Russia, Japan, Argentina, Spain, France, Norway, Mexico and other 
countries who mistakenly believed that they were dealing with an honest 
trading partner. Foreign creditors are freezing Cuban Government bank 
accounts and other assets around the world. One Canadian firm has 
resorted to tracking down and placing liens on Cuban merchant vessels 
in ports around the world in hopes of collecting back payment. A 
positive byproduct of current U.S. policy is that the U.S. govennient 
does not have to take a number in the long line of foreign creditors 
hoping to be paid.
    Moody's has lowered Cuba's credit rating to Caa1--``speculative 
grade, very poor'' and Dunn and Bradstreet rate Cuba as one of the 
riskiest economies in the world. Any credit offered to Cuba to make 
purchases over and above its cash sales would be done at the expense of 
U.S. taxpayers. European, Latin American and Canadian taxpayers have 
paid a steep price for their government's willingness to extend credit 
to an irresponsible borrower.
    Rather than open and reform its economy, Cuba remains intentionally 
inefficient. Expansion of the economy to create job growth is highly 
unlikely as long as the Castro regime's political imperatives override 
economic necessities. An open and reform economy with increased foreign 
investment would result in less control over the Cuban workforce. Under 
the Castro regime foreign firms are required to enter into contracts 
with Cuban state enterprises to hire employees. These enterprises, many 
of them controlled by the Cuban military, are paid in U.S. dollars but 
then pay their workers in near worthless pesos. The Cuban government 
essentially extorts 95% of Cuban workers salaries from foreign firms as 
the price of doing business. The Castro regime carefully controls who 
works in the tourist industry, and retains the right to fire them 
without cause and without reference to the foreign investor paying the 
bills.
    Increased trade generally results in direct foreign investment in 
developing countries, helps lift people out of poverty and promotes 
economic reform. However, most objective observers should agree that 
the Castro regime is only interested in foreign investment, not reform 
and not the welfare of the people of Cuba. Years of investment and 
economic interaction with foreign investors have failed to make Cuba 
more democratic, respect human rights or make the Cuban people 
wealthier.

                              U.S. POLICY

    Notwithstanding the difficulties involved in dealing with Cuba, 
President Bush has attempted to deal seriously with the issue. On May 
20, 2002, the President unveiled his Initiative for a New Cuba. This 
proactive approach to promoting change in Cuba called on the Castro 
regime to:

   Undertake political and economic reforms,

   Conduct free and fair elections next year for the National 
        Assembly,

   Open its economy, to allow independent trade unions, and

   End discriminatory practices against Cuban workers.

    If Cuba were to take these concrete steps toward democracy, 
President Bush will work with the United States Congress to ease the 
ban on trade and travel between the U.S. and Cuba. I hope to one day be 
championing greater trade and commerce with Cuba but today is not that 
day and now is not the time.
    The Initiative for a New Cuba also provides for greater contact 
through improved mail service, greater NGO participation in Cuba and 
educational opportunities for children and family members of imprisoned 
dissidents. The Initiative for a Free Cuba is but the beginning of an 
ongoing, flexible, and responsive campaign designed to generate rapid 
and peaceful change in Cuba. As the President has stated, the U.S. has 
no designs on Cuba's sovereignty. The U.S. wishes to be a helpful and 
productive partner but Cuba needs to respond in equally productive 
ways. The ball is clearly in Castro's court. Trade with the United 
States is not and should not be a one-way street where U.S. resources, 
capital, technology and yes, unwitting tourists, are used to prolong 
systemic human rights violations, one-party rule and absence of the 
rule of law.
    President Bush has offered and maintained a principled approach by 
engaging the Cuban people while repudiating the Cuban Government's 
totalitarian nature. The United States seeks increased trade, reduced 
trade barriers and more open societies around the world, meantime, in 
Cuba, human rights activists, independent journalists and trade union 
leaders have been recently arrested on trumped-up charges and have been 
summarily sentenced to long prison terms. Others attempting to flee 
Cuba have been put before a firing squad and shot.
    Fidel Castro and his revolutionary clique have the blood of tens of 
thousands of Cuban citizens on their hands, citizens whose only crime 
was to speak their mind, worship their God, own their business, educate 
their children and even attempt to leave. Some want to believe that the 
revolutionary dictator who came on to the world's political stage in 
1959 is now an older, wiser, more pragmatic leader. This could not be 
further from the truth. The same man who only recently declared that, 
with Iran he could bring the U.S. to its knees now wants us to bring 
him U.S. trade and tourism dollars. The same man who blasted four U.S. 
civilians out of the sky over international waters now wants us to 
offer him trade credits. The same man, who shields cop-killers and 
trains and harbors terrorists, now wants us to believe that he is a 
kindler, gentler despot worthy of our consideration.
    I believe that at this time it would be grossly inappropriate to 
ease U.S. restrictions on the Castro regime given its failure to take 
even a modicum of steps to democratize its political system, respect 
human rights, and open its economy. Instead, Fidel Castro has ordered 
the most intense wave of repression against Cuba's budding civil 
society and all of us are expected to look the other way. This is not 
the time to change existing policy with regard to travel and trade. In 
fact, this is the wrong time to change existing policy. To do so would 
be an affront to those inside Cuba ceaselessly working, at great 
personal risk, to promote human rights and political change. It would 
send a signal of weakness not only to our allies in Europe, whose 
equally principled positions have been heard loud and clear, but also 
to the Castro regime which thinks the American people can be bought for 
a few grain sales. Before any meaningful change in U.S. policy towards 
Cuba is considered, we should insist that Cuba unconditionally release 
all of the dissidents and opposition leaders arrested earlier this 
year.
    Justice Benjamin Cardozo wrote that ``the great ideals of liberty 
and equality are preserved against assaults of opportunism, the 
expediency of the passing hour, the erosion of small encroachments, the 
scorn and derision of those who have no patience with general 
principles.'' I respectfully ask that we stand with Justice Cardozo on 
the side of principle as we discuss this important foreign policy 
matter.

    The Chairman. Thank you very much, Mr. Gonzalez. The chair 
welcomes Bernard Aronson, an old friend of the committee and 
valued public servant of our country. We're delighted that 
you're here today, sir. Please proceed.

    STATEMENT OF BERNARD W. ARONSON, MANAGING PARTNER, ACON 
 INVESTMENTS, LLC, AND FORMER ASSISTANT SECRETARY OF STATE FOR 
           WESTERN HEMISPHERE AFFAIRS, WASHINGTON, DC

    Mr. Aronson. Thank you, Mr. Chairman. I appreciate that and 
I remember very fondly the enormous support and interest that 
you provided in the region when you were the ranking member of 
the Western Hemisphere Subcommittee and the cooperation that I 
enjoyed personally. So it's great to be back before the 
committee. And I also want to commend you and the committee for 
holding this hearing. We usually get in trouble in Latin 
America when we ignore problems that are emerging and that 
develop into crises, and so I commend you for trying to focus 
some attention on Cuba.
    One might think listening to the debate that nothing has 
changed. We could have had many of these same debates over the 
last 40 years, but in fact a lot has changed and I think we 
need to recognize that if we're going to devise policies that 
are going to achieve the goals that I think everybody in this 
room share, which is to promote a rapid, peaceful transition of 
Cuba to democracy.
    The first change is that the policy the United States has 
pursued in the last number of decades of containment has 
succeeded. There was a time when this committee would hold a 
hearing on Cuba and the issue was Cuban support for 
revolutionary guerrilla groups in dozens of nations in this 
hemisphere. That's a bad dream of the past, and today Cuba is 
isolated politically. Nobody believes that the future belongs 
with Castro-style socialism, and so I think we can approach 
this issue with more confidence than we seem to muster.
    Second, clearly the major change is the collapse of the 
Soviet Union. The Soviet Union provided upwards of $7 billion a 
year in direct and indirect subsidies for this government and 
this regime. No successor nation, no other nation is going to 
take its place, which has vastly weakened Cuba economically, 
politically, and again isolated it.
    The only issue we need to think through is how we can 
achieve the goal we know is going to be achieved in the future, 
which is a democratic Cuba; how we can achieve that peacefully 
and how we can achieve it rapidly, because we have deep 
interests in both of those goals. A traumatic and violent 
change on this island is not in our interest. We know that 
dictatorships are always in crisis at times of transition, 
which Cuba is approaching. I think we also can learn some 
lessons from the transitions in Eastern Europe, which we ought 
to try to apply to Cuba, though each case is different. One is 
the importance of supporting civil society. Another is the fact 
that in a time of transition we don't always know who's who in 
these kinds of regimes. Probably the single most important 
individual in the collapse of communism in the Soviet Union, 
was Boris Yeltsin, at one time a member of the central 
committee of the Communist party of the Soviet Union. My sense 
of the Cuban reality is that most Cubans, even in official 
positions, understand that the jig is up, that this regime is 
not going to endure in its current form for long, that Cuba is 
going to be forced by political and economic necessity to 
change.
    I think we have to find ways to engage with these 
individuals because one of the other lessons of the transitions 
we've seen is that the wreckage these regimes leave behind is 
considerable. Nicaragua still has not fully recovered from just 
10 years of Sandinista rule and the property claims that have 
to be sorted out. We need to be thinking not only how to 
promote change in Cuba, but how to promote it in a way that the 
Cuban people have a chance to recover rapidly and quickly, and 
that's not a small challenge.
    The debate that we're engaged in, as you know, Mr. 
Chairman, is a very old debate in foreign policy, which is how 
do you influence a dictatorial regime. Do you isolate that 
regime, do you sanction that regime, or do you engage with it? 
And we have debated this about South Africa, we've debated it 
about China, we've debated it about Iran, we're debating it 
about Cuba. And interestingly, many of those who advocated 
opening trade and investment with China on the grounds that 
over time it would create space for economic empowerment which 
would lead to political pressures, lead to rule-based law, take 
the opposite view with Cuba--that we need to sanction Cuba. And 
many of those who advocated sanctioning South Africa on the 
grounds that it was a harsh, repressive regime which we needed 
to isolate and not engagement take the opposite view on Cuba.
    The only reason I make the point is I think that we should 
recognize that everybody in the debate has equal good faith. 
Nobody is soft on Castro. These are judgment calls that we have 
to make and try to come up with the best answer. My own view, 
and I think Jose Miguel Vivanco made this point as well, is 
that we could be much more creative in the way we carry out our 
policy toward Cuba and thereby try to enlist greater 
international support, and I'll address specifically the area 
of trade and investment.
    I don't think we have to debate whether to lift the embargo 
or tighten the embargo as the only alternatives. We've had some 
experience in places like South Africa with the Sullivan 
Principles. A creative approach to Cuba could take into account 
the legitimate concerns of those who say that investment flows 
and tourist flows will just be captured by the state and the 
resources will be used by the state to strengthen its security 
apparatus without necessarily going to the other extreme of 
saying therefore let's not pursue these kinds of activities. We 
could condition trade and investment on changes in Cuba whereby 
the Cuban Government had to allow foreign firms to hire and 
fire workers directly and pay them directly, which is currently 
not the practice and the same in tourism.
    Even if we took those steps and Cuba didn't respond, it 
seems to me you'd put a lot of pressure on the Cuban Government 
to make those internal changes and at least it would be very 
clear where the burden of responsibility lay if they didn't 
choose to take us up on it. I think we could also enlist the 
Europeans and others in moving in that direction. The European 
Union conditioned Cuban involvement in the Lome convention, 
which is a preferential trade regime, and its successor, on 
Cuban democratization. Negotiations to include Cuba didn't go 
forward because the Castro regime didn't go forward on the 
democracy agenda, but I think that kind of targeted sanction 
that Jose Miguel Vivanco was talking about could enlist far 
broader multilateral support.
    One of the mistakes we make is that we are so aggressive in 
this that we actually crowd out some of the other countries who 
ought to be doing more in defending human rights in Cuba but 
don't want to look like they are our cat's paw.
    I'll make two brief additional suggestions and leave it 
open for questions. I think the Cuban-American community is an 
enormous resource in this battle for democracy. I think we 
ought to reduce the restrictions on remittances even though 
those dollars also go into this government eventually through 
dollar stores. But I think it's an important way for them to 
support their families and they ought to make the judgment of 
how much of their resources they can provide and not have the 
U.S. Government make that decision.
    I think we ought to explore ways to allow Cuban-Americans 
to claim their relatives on the island as tax-deductible 
dependents, as we do for Mexicans and Canadians, consistent 
with U.S. tax law, again as a way to allow them to provide 
support. I think the more economic support Cuban-Americans 
provide their countrymen on the island the more independent 
they are of the recourse and power of the state.
    Finally, Mr. Chairman, as I alluded to before, I think we 
shouldn't minimize the wreckage that's going to be left behind 
after 50 years of rule by this regime. The embargo was 
originally placed on Cuba because of the expropriation of U.S. 
properties. As you know there are thousands of such claims that 
are filed that have to be adjudicated, and as we saw in 
Nicaragua, the failure to move forward on that aggressively is 
an enormous deterrent to follow-on investment once 
democratization comes because foreign firms don't want to 
invest if property rights are unclear, if there are multiple 
claimants. So I think we ought to think seriously about trying 
to promote some kind of process, and this obviously has to be a 
decision of the executive branch to begin to adjudicate those 
claims and to create mechanisms where they can be done quickly. 
Most of the companies involved, the major companies, have 
written those claims off years ago for tax purposes. We ought 
to think about a mechanism where that can be done speedily, 
thinking ahead of what a fledgling democratic regime in Cuba 
will face as far as a transition to democracy.
    The policy of isolation was the right policy in the cold 
war when every dollar that went to Cuba either provided another 
AK-47 to guerrillas in El Salvador or helped fund Cuban 
military adventures in Africa. In the current environment we 
need to be much more creative than we are, and I think some 
sort of a targeted approach as I suggest where we condition 
trade and investment on the changes that I recommend would be 
more effective. I think we would find broader multilateral 
support and that would create pressures that would be very hard 
for the Cuban Government to resist. Thank you.
    The Chairman. Well thank you very much, Mr. Aronson. The 
chair would suggest again 7 minutes of questioning in a round. 
If there are additional questions then we will have additional 
opportunities. Let me begin the questioning by just picking up 
where you have left off, Mr. Aronson. I envision, as you do, a 
very, very difficult picture in terms of the claims. This 
committee has been listening to people with regard to Nicaragua 
for a long time. This has been very, very disruptive in terms 
of a constructive relationship with the country as well as a 
feeling of injustice by many Americans with regard to the 
country.
    If anything, the Cuban situation is much more complex. The 
emotions behind some of the claims are enormous and heartfelt. 
As you have suggested, many firms wrote off the claims a long 
time ago, but were probably not knowledgeable. The catalog of 
all of this is not clear. The need to sort it out in advance on 
behalf of the country is apparent.
    I mention that because we have Iraq reconstruction on the 
floor now. We are seized with how difficult it is once a regime 
changes, in this case a regime we have changed, to try to find 
some touchstone for an economy to work. I think it's not far-
fetched that when and if the Cuban regime changes there will be 
requests, maybe even demands, that the United States seize the 
issue with equal fervor. To the extent that we have somehow 
worked our way through the rocks and shoals of this to any 
degree we will be immeasurably better off, but that will 
require creative thinking on the part of our government. I 
think it's an important claim.
    Now, the other thing that you've mentioned that seems to me 
is new to this is a tax deduction for remittances by relatives, 
Cubans or Cuban-Americans going to Cuba. You have supported the 
idea, as I've heard you, that there should not be limits on 
these persons in supporting their relatives, either in terms of 
the number of times they go or how much money they take. 
Whatever the argument may be that the Castro government will 
siphon off this money for bad purposes, the sums of money are 
probably not enormous. The things they would be spent for are 
not the same as they were in the cold war.
    But nevertheless this is another interesting idea, and this 
is why I pressed Mr. Noriega. Why set limits on these 
particular people? I even suggested just looking at it through 
political eyes. In Florida, there isn't support for this 
although there are hard-liners who do support it. I thought the 
responses of Mr. Noriega were somewhat ambiguous about this, 
and I've asked him to think about it some more.
    Now, the question I want to ask of all three of you was 
reintroduced by Mr. Vivanco, and that is sort of point two of 
my strategy when we began the hearing. It was the need for 
international cooperation. It is clear for the moment that when 
we take these issues to the United Nations or to the Inter-
American dialog or wherever we take them, that we're not 
getting the support of Europeans who surely share our view of 
the human rights dilemmas there. In part it's because we have 
not really set the stage for this. I think it's important that 
we do so if we are to make more sense, more of an impact. It 
seems to me it would be made stronger by international 
cooperation, and so I want to query this further with each of 
you.
    Is the idea of pursuing international cooperation 
important? You have already testified that it is, Mr. Vivanco. 
Physically, how do we go about doing this? What are the steps? 
Granted, this is not a cure-all but it is one step currently 
that we could do without violating anybody's strictures, it 
seems to me. We could bring more pressure to bear upon the 
current government. Can you outline how we might proceed?
    Mr. Vivanco. Mr. Chairman, I'm fully convinced after 
following human rights conditions for many, many, many years 
that there is a very, very slim chance that change will come as 
a result of some domestic movement in Cuba. The regime of Fidel 
Castro has full and very, unfortunately, very effective control 
over the population in Cuba. So if there is a case where 
international pressure is perhaps the only hope to push that 
government and to push, you know, the conditions there, to 
improve human rights condition, to create an open and 
democratic society, it is the Cuba case.
    Now, I'm also fully convinced that this is perhaps, you 
know, a crystal-clear case where a multilateral approach is of 
the essence. Without the support of Mexico, Brazil, Argentina, 
Canada, and key European allies, it's very, very difficult to 
exercise effective pressure in that government. Unfortunately, 
the message that the Cuban Government is receiving from the 
United States and the rest of the world is in full 
contradiction. We are prescribing isolation, the rest of the 
world prescribe engagement in Cuba.
    The Chairman. Well, how do we get on the same wavelength 
with them?
    Mr. Vivanco. There is obviously as the precondition to 
start talking to and negotiating with potential allies in the 
region you have to make some moves, unilateral moves. For 
instance, the first steps that I would recommend to take is to 
lift the travel ban on Cuba. If you lift that ban, which makes 
no sense, which was not the policy for Eastern Europe, that 
will be a very powerful and unequivocal signal, a message, not 
only for the Cuban Government, the Cuban Government is 
irrelevant here, the strategy is to persuade the rest of the 
allies to come to some specific agreement for targeting 
sanctions, on other kind of sanctions to push the government in 
the right direction.
    The Chairman. Mr. Gonzalez.
    Mr. Gonzalez. Sir, thank you. I would argue, sir, that the 
United States is engaged in an engagement program with our 
European friends and our Latin American friends. Not a day goes 
by when our embassies aren't receiving instructions on one 
aspect or two aspects of human rights in Cuba, of particular 
dissidents, of issues. Foreign visitors coming to the United 
States regardless of what part of the world they're from, 
interestingly enough, change democracy and human rights in 
Cuba, at least during my tenure, was also a topic of 
conversation.
    And one of the things that I think we've been successful in 
doing is this is no longer about the United States against 
Cuba. This is no longer David versus Goliath. You find an 
increasing number of countries that view this as a human rights 
issue and I think we are seeing consensus. I think that what 
happened, as Assistant Secretary Noriega said earlier, the 
lamentable things that happened earlier this year, the 
jailings, the executions, this woke up a lot of people, it woke 
up a lot of people that didn't really want to wake up, and they 
see Fidel Castro at his worst. When he bares his teeth he's a 
very, very bad man, and as a result they've come to terms with 
the fact that this is just as bad a regime as everybody says it 
is and has been saying for some time, and the region as a 
whole, and the Europeans have been very, very proactive and 
forward-leaning with regards to human rights. You don't see 
them talking about the travel ban or the embargo, you see them 
talking about what's important, which is the human rights and 
something that they can all be in agreement with.
    There are always going to be countries for varying 
bilateral differences that are not going to agree with us. 
We're never going to get Chavez, President Chavez of Venezuela, 
to sign on board a human rights agenda with Cuba, that's a 
statement of fact. There are other countries out there who have 
leaders and political parties that don't share our view, not 
because of our embargo policy, not because of our travel 
policy, but because they have an ideological affinity with this 
regime and it goes back 40 years.
    So again, I would take a counter-argument in that I think 
we are seeing, the United States is reaching out to our friends 
around the world. I think we are having success. Yes, it's not 
going as fast as I certainly would like to see it, but we are 
getting quite a bit of help, overtly and discreetly from people 
who quite frankly a year ago I never would have thought would 
be helping us on this issue. Thank you, sir.
    The Chairman. Thank you.
    Mr. Aronson.
    Mr. Aronson. Mr. Chairman, I think we could approach the 
Europeans and maybe some in Latin America and try to strike a 
bargain along the lines I suggested: whereby we take the step 
of conditioning trade and investment on some changes 
internally, the right to foreign firms to hire workers 
directly, to pay them directly, and remove that control that 
currently exists by the Cuban Government where they do the 
hiring and firing and they siphon off 80 percent of the wages. 
If the Europeans saw us making a step toward them we might be 
able to convince them to adopt similar codes like the Sullivan 
Principles in South Africa. If you had that sort of broad 
approach toward Cuba it would put enormous pressure on the 
government to make some internal reforms.
    So I think that would be one direction I would go. I think 
we could encourage some of the eastern Europeans to try to do a 
little bit more. I don't know if they could pull it off, but I 
would love to see some of the armies that have made the 
transition from Communist rule to democratic rule in eastern 
Europe engaging with the Cuban army and trying to find 
dissidents and reformers within the middle ranks that I think 
probably exist.
    I think that we have been so aggressive in confronting 
Castro that we sometimes suck the oxygen out of the space and 
make it a little bit harder for others to stand up. Having 
said, to their credit the Spanish Government has been more 
forward-leaning on democracy in Cuba in recent years, so has 
the Mexican Government.
    And sometimes this is not our problem. I was very 
disappointed to see the President of Brazil, who styles himself 
as a trade unionist, go to Cuba this past week, a country that 
locks up anybody who believes in democratic trade unionism, and 
say nothing about human rights. I thought that was a betrayal 
of his values and he should have known better.
    The Chairman. I thank each of you for those responses.
    Senator Enzi.
    Senator Enzi. Well again, Mr. Chairman, I just thank you 
for holding this hearing. It's been very enlightening. I've 
learned a lot. I think there are some common threads there that 
could be worked on. Yes, there would be some changes in U.S. 
policy, some of them are very subtle changes and I think would 
be welcomed by some of those other countries. I think the 
multilateral, the obligation to work multilaterally is 
extremely critical.
    One of the bills that I've been working on for about 5 
years is our Export Administration Act, and one of the things 
that we realize is that every country in the world makes most 
of the products that we have on some of our lists, and we spend 
a great deal of money trying to control those items that they 
can get from anywhere, and those items could be limited if we 
had some multilateral agreements, but we've given up on 
multilateral agreements.
    We've mentioned this afternoon South Africa several times 
and last month I had an opportunity to be in South African and 
I got to meet with a fellow by the name of Ahmed Kathrada, who 
is one of the people imprisoned at the same time as Nelson 
Mandela, tried with him, imprisoned with him, he's the one who 
edited ``The Long Walk Home,'' and helped get it smuggled out 
of there, and it was very touching for him to mention that a 
copy of all of his letters and memoirs are going to be at the 
University of Michigan because they were the first entity in 
the world to promote sanctions against South Africa, and then 
the United States joined in that. But one of the keys is we 
weren't the only country, and that's the difference with Cuba. 
We're the only country and the rest of the countries are 
saying, what do you think you're proving?
    So we definitely need to have some multilateral action on 
this and I think it can be achieved, and I think the wedge is 
also something that has been suggested by this panel, which is 
the actual bankruptcy of Cuba. As the other countries realize 
they're bankrupt and don't want to lose the investment that 
they have there, they might join us multilaterally. I'm doing 
some things that would bring about some changes that would 
restructure the government and the finances there to bring them 
out of bankruptcy.
    So I really don't have any questions for this panel. I 
really appreciate the comments that you have and I'm glad that 
we have the full text and I've noted some of those things, 
probably taken them out of context to use them the way that I 
want to, but that's what we do around here.
    So I thank you very much and thank you, Mr. Chairman.
    The Chairman. Well, thank you, Senator Enzi.
    Mr. Aronson, do you have a comment?
    Mr. Aronson. You mentioned your interest and concern about 
this claims issue. Maybe the Congress could consider setting up 
an independent commission that could have members of the 
executive branch, people from Treasury, some people from 
investment banks, and some claimants to start to think through 
this thing, because, as you've said, the analogy of Iraq, the 
goal isn't just to topple this dictatorship, the goal is to 
create a decent, hopeful place for the Cuban people who have 
suffered through this nightmare to inherit.
    And I think we're not doing very much to make that likely 
these days. We're sort of all sitting here waiting for 
something to happen, but once that happens Cuba is going to be 
a country we try to rescue, and as we've discovered in many 
places in the world, that's a complicated challenge.
    The Chairman. Mr. Aronson, I suppose that if we did not 
have this extraordinary situation in Iraq in front of us, we 
would not understand the gravity of the problem, but I think 
that we all do now. And the dilemma comes down not just to the 
debate we're having on the floor as we speak about 
reconstruction money, quite apart from money for our troops, 
but the fact that a great deal more of reconstruction money is 
going to be required, and that very little of it seems to be 
forthcoming in the pledging conference or with others abroad 
that might be helpful and that probably share our idealism, but 
that at the same time don't seem to share our sense of 
responsibility about this.
    Now, one way in which America might react is to say 
essentially, we are very sorry that you've had Saddam Hussein 
for all these years, but on the other hand we have some 
problems to solve here in this country and you'll just have to 
do the best that you can. There are some Americans who would 
say that they're very sympathetic. But I'm saying, for the 
moment at least, that a majority of Senators and Members of the 
House are not going to say that. The President of the United 
States clearly is not of that view, because to leave the 
wreckage out there endangers our security. Most of us believe 
that.
    We're going to have some wreckage just 90 miles off the 
coast and the problem then will come back to us. Do you just 
walk away from it? If not, what do you do about it? Now if in 
fact Castro does owe $40 million, which he may, if we've not 
thought through this with people from the international 
community and quite apart from people in our own country who 
feel they have claims, my prediction is that at some point this 
committee will be discussing the reconstruction of Cuba, and 
the question will be, how in the world do we deal with the debt 
of Cuba? We really haven't solved that with regard to Iraq. 
There the figure is often $200 million owed to Russians and 
Germans and Frenchmen and Saudis and Kuwaitis.
    Now, let's say that we don't do anything about it. The 
United States says, well it's out there, but after all we sort 
of know that Saddam never intended to pay it. But here we have 
a fledgling democracy. It's a new, bright hope for these 
people. That's the most optimistic of views about this, but we 
may have something like that. Suddenly the rest of the world 
comes after these people and says, you owe us $200 million. 
Here we are trying to put $20 million into reconstruction. It 
would be totally overwhelmed by this if we have not come to 
some understanding with the rest of the world, which is not 
contributing $20 billion at this point, but which may 
contribute $1 billion or $2 billion, but still they want their 
$200 million.
    This is why some foresight on the part of our government is 
imperative. I appreciate the strong feelings about Cuba, but 
anybody who has strong feelings about the future of the Cuban 
people has to understand that some economic wreckage lies ahead 
without some foresight here. It seems to me we may or not make 
any headway right now. Maybe the countries of the world will 
say, well, let's wait and see. Maybe we'll do better later on 
rather than dealing with this now. Maybe we will, but I doubt 
it and I doubt that understandings even in this country with 
regard to those claims will be any better, having watched, as 
we've suggested, Nicaragua and other cases.
    I appreciate your raising this issue. I think it's a very 
constructive and basically a new thought, at least in the 
public forum. It is important for us to talk about. Likewise, 
there is a need to be talking to other people, as you've 
suggested. Mr. Gonzalez, let me just say that you've had a lot 
of experience with this subject. Essentially I gather your 
testimony is fair enough, but don't get carried away, don't get 
too far ahead of this train. That may be unfair. I just want a 
bit more of your reaction perhaps as to how we think down the 
trail, if we are in fact going to have a responsible government 
at some point, how do we support one that will not be 
overwhelmed by the circumstances of the debt or the lack of 
commerce that's proceeding currently and that probably won't 
proceed much further with the Castro bankruptcy? How do we 
prepare for that in a way that may be more humane for the Cuban 
people?
    Mr. Gonzalez. Thank you, Senator. How you prepare for a 
transition I think is a subject that you have any number, in 
fact, there's an entire university program right now being 
funded on how you prepare for a transition. But I think it's 
important to note that I share the concerns that Bernie Aronson 
made about the debt or the claims, and I also think you're 
going to find more than a few people out there that are going 
to at one point, maybe because the whole debt issue hasn't been 
surfaced, are going to come up and say, you know what, maybe 
let's belly up and maybe let's not file a claim or let's not go 
after a claim. That may not be everybody, but there may be a 
fair number of people out there and that's worth exploring.
    The other thing I think that we're going to find is that 
unlike Iraq, which is on the other side of the world, you have 
a very large reservoir of goodwill amongst the Cuban-American 
communities, not just in the United States, but throughout the 
world, Spain, Mexico, Venezuela. There's an abundance of 
goodwill to go back and help, to go back and invest, to go back 
and build.
    I've never come across, I mean I'm from South Florida, I'm 
about as involved in South Florida and the Cuban-American 
community as you can get, sir. I've never come across somebody 
that says, I'm going to go back and reclaim this or I'm going 
to go back and throw somebody out of a property that I had 50 
years ago, quite the contrary. What you have is just an 
abundance of goodwill to want to go do something once the time 
is right and proper.
    One of the most frustrating aspects of it is you have a 
government that doesn't want to be helped. You have churches 
that would love for nothing better than to establish 
relationships with other churches in Cuba and maybe build or 
fix a leaky roof or build some new pews, but for internal 
reasons they're not allowed. You have NGOs that want to go and 
directly liaise or directly establish relationships with what 
few real NGOs there are in Cuba and they're not allowed.
    We talked about the possibility of Sullivan Principles. At 
one point there was something called the Arcos Principles for 
Cuba, but in the Cuban context foreign investment is a 
completely different animal. Foreign investment in most 
countries is come here, help us grow our economy, create jobs, 
build prosperity. That's just a non-starter in Cuba under these 
circumstances. Foreign investment is fill my hotels, operate 
here under my rules, and if you don't want to operate under my 
rules, then you don't need to operate here. And it's very 
simplistic, but that's the way things are done there.
    A lot of these companies in Europe and in Canada and in 
Latin America that have penetrated the Cuban market did so 
because they wanted to get in, get their money, and get out. It 
isn't the same with tourism, sir. It isn't like you're going to 
go online and log on www.ramada.com and book a room somewhere. 
That's just not going to happen because when you do that, that 
means you've got people all over the country, that means if we 
take Sullivan Principles and you have builders of hotels and 
resorts who are able to hire their own personnel, pay them the 
going wage, give them the same medical and dental benefits that 
maybe we enjoy, those people are now a class apart, they're not 
under the thumb of the government, they're free thinkers now. 
That's something that that government will not allow and will 
not stand for.
    So I think as we start looking at things like travel and 
trade and foreign investment in a Cuba context, we have to be 
prepared to think in an unconventional way. Likewise, the 
claims issues. I share the concern. Having served as the person 
responsible for Central American affairs, we still have 
Nicaragua claims outstanding. The last thing we need is several 
thousand Cuban claims outstanding. But I will grant you, sir, 
that once we get to that point, you'll find more than a few 
people willing to do the right thing.
    The Chairman. Well, I trust that that's probably right. I 
mean, you're experienced in living there in the South Florida 
community, visiting with people who might have claims and so 
forth. You're an expert witness. This is why we appreciate your 
coming.
    I would just add one further dimension for you and other 
leaders in that community to think about. I suppose as time 
goes on that there probably is less desire on the part of 
Cubans or Cuban-Americans in South Florida to assume that they 
will return to be governing agents of Cuba. In the past, as I 
have visited with some groups in South Florida, it was not 
really clear that that was their view. In other words, some, I 
think, had aspirations, in fact, to go and become leaders of 
Cuba.
    Now, maybe that will work out. We're into a little bit of 
that problem in our Iraq situation now. This is why it's sort 
of topical, because it sometimes happens that people who have 
been away for a long time are not accepted by people who have 
been there for a while and suffered through the whole thing and 
feel that they ought to be the ones, even if we can't identify 
who they are. In the case of Cuba now we can identify some. 
You've cited some names today of rather courageous Cubans who 
are in fact in the country now, much more conspicuous than were 
Iraqi opponents to Saddam Hussein, for example.
    I'm hoping, maybe against hope, that in addition to trying 
to work out some of the claim problems in advance, likewise 
there's some sense of the leadership issue in ways that do not 
lead to some divisions between those who might be supportive 
and who are on the mainland of the United States now and those 
who still in fact reside in Cuba. I ask you as an expert 
witness again for some comment on that facet.
    Mr. Gonzalez. Sir, you mentioned earlier how you had seen 
some polling data where a certain generation thought one way 
and a certain generation thought another, and I guess if I 
include myself in the older generation you've outed me now as 
somebody in the same category as my parents or----
    The Chairman. But you may be thinking young.
    Mr. Gonzalez. Sir, I'll give you an example. I'm 46 years 
old. I came to this country when I was 4 years old. I learned 
the language the hard way, in a classroom trying to struggle. I 
went to college here. I went into the United States Army. I've 
served this country. Everybody I know in my generation, not one 
person, not one, has ever said, gee, I want to go back and be 
President of Cuba, gee, I want to go back and take back this 
business that my grandfather, perhaps even great-grandfather, 
at some point lost.
    I think what you find is a large body of people that are 
willing to say, we want to go back and help, not unlike, I will 
tell you, what you find with the Jewish community here sending 
their children to Israel, going back and wanting to contribute. 
You have younger generations--my daughters, both my daughters 
are college-age. They're wrapped up in this because it's almost 
family lore, but at some point you have to say, where can we be 
most useful? Me saying that I'm going to go back and be a 
future President or Minister of Defense or Governor of what 
province, those things are you may have heard those maybe 15, 
20 years, but right now what you have, sir, is I think you have 
a more mature community, you have a more thoughtful community, 
and you have a community that's ready to get down and get to 
work and do for Cuba what we've been able as a community to do 
here in the United States: raise our families, go to our 
churches, be prosperous, go to school, vote, have discussions 
like this.
    I for one am astounded at the fact that I can come here and 
testify. This is something that's unheard of in other 
countries, especially Cuba. This is the kind of thing that gets 
you shot in other countries, especially Cuba. So again, I would 
just I appreciate the question but I would hope that if we take 
anything out of this regarding the Cuban-American community, 
it's that it's a very different community and it's a community 
that's just as passionate, it's a community that's extremely 
responsible, and it's a community that's ready to stand up and 
do the right thing at the right time, and when that time comes, 
sir, I guarantee you we'll have another hearing like this and 
there'll be very, very little differences in what the right 
thing will do to help Cuba join the nations of the in this 
community, the world community, and the Inter-American 
community in this century.
    The Chairman. Well, I appreciate the point you've made. I 
would in fact mention that perhaps you are right. The people 
that I visited with in southern Florida 20 or 25 years ago on 
this issue are people my age, it's a different generation. You 
are not my age, thank goodness for that, you have at least a 
quarter of a century on me there. I was around here in 
Washington as a young naval officer serving Admiral Burke, who 
was then Chief of Naval Operations, and who sent me out to what 
was then National Airport to see Fidel come in for the first 
time as he headed to the United Nations. I took out with me a 
young seaman who was not of Latin American background, he was 
just an impressionable young person who got carried away and 
began yelling, Fidel, Fidel.
    And I told him, easy there, so that we could be just 
observers of this process, not part of the rally. There was 
sort of a charismatic quality about all of this excitement, 
with the people all jamming the airport. The planes were out in 
the middle of the airport. Fidel was making his way right for 
the rope line as fast as he could.
    So having seen all of that and all of the evolution 
subsequently, this hearing--I'm sure for each one of us--and 
that's true for all of you, you have been involved in this much 
of your lives--is sort of a panorama of reactions and changes. 
All I'm saying presently is that now it may be informed more by 
our crisis in Iraq and maybe by a change in the views of the 
American people. We've not been a country that was wanting to 
be engaged in nation-building, not that we would be in Cuba, 
but still our skills are not adequate right now for dealing 
with problems of this variety.
    The President of the United States has acknowledged that 
we're going to need more people--whether they be at State, 
Defense, NSC, some outside agency--that tries to think through, 
what do we do in situations where there is debris all around, 
and counter-claims, and problems of government? It just seems 
to me, once again, that to the extent that tactfully and 
thoughtfully we can sort this out ourselves, but then also 
engage other countries in the sorting out in advance, we maybe 
can make some headway down the trail.
    I thank you all for your comments. Senator Enzi, do you 
have any further questions? Well, we appreciate your coming and 
all the witnesses today and the participation by what was a 
larger crowd at the beginning but still a stalwart band at the 
end. The hearing is adjourned.
    (Whereupon, at 5:48 p.m., the committee adjourned, to 
reconvene subject to the call of the Chair.)
                              ----------                              


              Prepared Statement Submitted for the Record


   Prepared Statement of Hon. Russell D. Feingold, U.S. Senator from 
                               Wisconsin

    I would like to thank the chairman and ranking member of the Senate 
Foreign Relations Committee for convening a hearing on ``Challenges for 
U.S. Policy to Cuba.'' For forty years, the United States has attempted 
to improve human rights and bring democratization to Cuba through 
economic sanctions and travel restrictions. This hearing gives us an 
important opportunity to reflect on the effectiveness of U.S. policy 
and to determine where we should go from here.
    This last year points to the difficulties the United States has had 
in achieving our policy objectives in Cuba. Since March 2003, we have 
seen a dramatic deterioration of the human rights situation in Cuba, as 
President Fidel Castro has cracked down on labor unions leaders, human 
rights activists and independent journalists. In April 2003, the Cuban 
Government's execution of three men who had hijacked a ferry left many 
in the human rights community and in the Congress outraged. Meanwhile, 
Castro's political system remains intact, and the Cuban people continue 
to suffer from severe economic hardships.
    The United States must continue to speak out against the human 
rights violations of the Castro regime toward the Cuban people. At the 
same time, however, we must recognize that travel restrictions and 
current elements of the embargo have not been effective in encouraging 
the political changes and democratic freedoms that Cubans seek. 
Instead, they have provided the government with an excuse for its human 
rights failings, and for the economic, social and cultural hardships 
the country is experiencing.
    While complete normalization is not appropriate at this time, we 
must start with repealing the travel ban. I have had many constituents 
in Wisconsin express concern about this ban. It is not only an 
infringement of the rights of Americans to travel to the place of their 
choosing, but it also destroys an important tool we possess in 
spreading democratic ideals and building relationships with Cubans. 
During this Congress, I cosponsored S. 950, the Freedom to Travel to 
Cuba Act of 2003, with a number of my colleagues. I hope that the 
Senate will take action on this legislation.
    In addition, I continue to support meaningful trade relationships 
with respect to food, medicine and education that would improve the 
health and well-being of the Cuban people. I believe, however, that 
limited sanctions must be maintained to provide ongoing leverage and to 
help us achieve our broader human rights objectives. Any further 
loosening of the embargo should be linked to the Cuban Government's 
compliance with international standards of human rights, efforts to 
free political prisoners, and introduction of democratic reforms.
                              ----------                              


       Responses to Additional Questions Submitted for the Record


 Responses of Hon. Roger F. Noriega, Assistant Secretary of State for 
  Western Hemisphere Affairs, to Additional Questions for the Record 
                Submitted by Senator Christopher J. Dodd

    Question 1. Supporters of the embargo against Cuba maintain that 
one of the goals of the embargo is to support dissidents in Cuba. How 
is the embargo supporting them? Last spring, the taint of support, be 
it real or imagined, prompted a severe crackdown on Cuban dissidents. 
In light of this situation, do you think that current U.S. policy in 
this area has been effective?

    Answer. The embargo is one of the many tools of our policy to 
promote a rapid transition to democracy in Cuba. The embargo indirectly 
supports the development of civil society in Cuba by denying the regime 
the hard currency it needs to perpetuate itself and strengthen its 
repressive apparatus.
    Cubans with a commitment to democracy and reform are working day by 
day for change and the crackdown has only imbued them with a new sense 
or urgency and mission. The Administration is implementing a series of 
actions designed to accelerate these democratic changes that Cubans 
seek. Foremost among these actions is maintaining our support for 
Cuba's growing civil society and looking at ways to augment it.
    Much has been done over the past year. The U.S. Interests Section 
in Havana has provided support to civil society, in conjunction with 
other diplomatic missions. Much more remains to be done.
    We have worked to distribute about two million printed items, 1,000 
magazine subscriptions and more than 10,000 am/fm/short wave radios. 
More than 150,000 pounds of food and medicine have been provided to the 
families of political prisoners and other victims of repressions. USAID 
grantees have helped establish more than one hundred independent 
libraries inside Cuba. USAID grantees have published via the Internet 
more than 18,000 reports from Cuba's independent journalists.
    In a speech at Georgetown University earlier this year, Oswaldo 
Paya, author of the civil society Varela Project, made the point that 
the question should not be whether or not the embargo should be lifted 
but when and how. Paya said U.S. policy should not change in any 
fundamental way until the Cuban people enjoy their fundamental rights 
and can interact with Americans on the basis of equality and free will. 
The United States will continue to enforce economic sanctions and the 
ban on travel to Cuba, until Cuba's Government proves that it is 
committed to real reform.

    Question 2. Last year, Under Secretary John Bolton asserted that 
Cuba was developing bioweapons. We asked Mr. Bolton to come before this 
committee to answer questions about his remarks. Instead, the Assistant 
Secretary for Intelligence and Research, Carl Ford, appeared before the 
committee. When asked for evidence to back up Bolton's allegations, he 
downplayed the charges saying that the administration hadn't meant to 
imply it had a ``smoking gun.'' The Defense Department and CIA, to the 
contrary, have for many years asserted that Cuba poses no threat to the 
U.S., its interests or its allies.

   Obviously, both assessments cannot be correct. On what 
        evidence were the State Department's serious allegations based? 
        Which conclusion--the Department of State's or the DOD's and 
        CIA's do you believe to be correct? On what do you base your 
        judgment?

    Answer. We continue to believe that Cuba has at least a limited, 
developmental offensive biological weapons research and development 
effort and has provided dual-use biotechnology to other rogue states. 
This reflects the consensus on what U.S. Government experts believe 
about Cuba and its biological weapons capability.

    Question 3. On Tuesday, Secretary Powell said in an interview with 
the Detroit Free Press, that ``Castro's Cuba . . . is no longer a 
threat to the hemisphere.'' I agree with the Secretary of State. 
However, this statement is in contrast to earlier allegations by State 
Department officials that Cuba is pursuing bioweapons.

   Is Secretary Powell at odds with other members of the State 
        Department over whether Cuba is a threat?

   Certainly, we all have our problems with Cuba, its human 
        rights record, and with the lack of democracy there. However, 
        if it's not a threat--as Secretary Powell says--then why aren't 
        we addressing these problems through travel and engagement--as 
        we do with other countries that we disagree with?

    Answer. The fact that Cuba is not actively ``exporting revolution'' 
as it was in the 1970's and 80's and therefore less of a threat to the 
hemisphere, is not contradictory to concerns by U.S. Government experts 
that Cuba has at least a limited offensive biological warfare research 
and development effort which needs to be monitored closely.
    We don't believe that lifting the travel ban will benefit the Cuban 
people. Instead, it will provide the regime with much needed hard 
currency, a large portion of which goes to fund Cuba's police state and 
its state-run ventures. The Administration will continue to enforce 
economic sanctions on Cuba and the ban on travel, until Cuba's 
Government proves that it is committed to real reform.

    Question 4. If its goal is to cut off hard currency flows to Cuba, 
then why has the administration chosen to make it easier for Cuban-
Americans to send remittances to the island? These remittances already 
infuse up to $1 billion per year, and are a main source of revenue 
keeping the Cuban economy afloat.

    Answer. There has been no easing of the regulations concerning 
remittances. Under the current regulations, U.S. persons aged 18 or 
older may send to the household of any individual in Cuba cash 
remittances of up to $300 per household in any consecutive three-month 
period, provided no member of the household is a senior-level Cuban 
Government or Communist party official. We believe the current 
remittance levels provide for a reasonable level of humanitarian 
support to the Cuban people in a manner consistent with our foreign 
policy.
    Profits from tourism present a far more important source of hard 
currency for the Cuban Government. The United States will continue to 
enforce economic sanctions on Cuba and the ban on travel to Cuba, until 
Cuba's Government proves that it is committed to real reform. Much of 
the profits from the tourism industry go to fund Cuba's police state 
and its state-run ventures. The Cuban Government controls the tourism 
industry and Cuba's armed forces ministry run an increasing portion of 
Cuba's state-owned and joint-venture tourist resorts.
    Profits from the tourism industry provide the blood for the regime 
and its repressive apparatus. Broader travel to Cuba would only provide 
greater benefits to the regime.

    Question 5. OFAC appears to be preparing to find and fine people 
who travel to Cuba without licenses. In light of Secretary Powell's 
statements, why is the administration greatly increasing its investment 
of time and money on finding Cuban travel ban violators, during a time 
when so many of our national priorities--like health care, education 
and homeland defense--are all being severely underfunded?

    Answer. The United States has imposed and continues to impose 
sanctions and other restrictions on trade and transactions with certain 
countries, including Cuba, to further our foreign policy and national 
security objectives. The United States will continue to enforce 
economic sanctions on Cuba and the ban on travel to Cuba, until Cuba's 
Government proves that it is committed to real reform. Moreover, 
enforcement of U.S. law is not discretionary but is the legal 
responsibility of law enforcement authorities.
    One essential element of our policy towards Cuba is purposeful 
effective interchange of ideas between Americans and Cuban nationals in 
order to help encourage the development of civil society in Cuba. There 
are 12 categories under the Cuban Assets Control Regime that provide 
for such travel to Cuba. Tourism, however, is not one of these 
categories. Much of the profits from the tourism industry go to fund 
Cuba's police state and its state-run ventures. The Cuban Government 
controls the tourism industry and Cuba's armed forces ministry run an 
increasing portion of Cuba's state-owned and joint-venture tourist 
resorts. Profits from the tourism industry provide the life-blood for 
the regime and its repressive apparatus.
    Broader travel to Cuba would only provide greater benefits to the 
regime. We therefore continue to work to ensure full and effective 
implementation of the Cuban Assets Control Regime in order to promote 
the development of a truly independent civil society in Cuba and to 
deny the regime the hard currency it needs to continue its stranglehold 
over Cuban society.

    Question 6. Recently, the Bush Administration has been talking 
about pursing ``multilateral approaches'' to Cuba and about urging our 
allies in Europe and Latin America to pressure Cuba on human rights. 
Certainly, our friends and allies around the world should be raising 
those issues with the Cuban Government. However, nearly every other 
country has trade, travel and diplomatic relations with Cuba and we 
have none. In your opinion, does this situation create favorable 
conditions for a U.S.-led multilateral effort? Does our embargo, which 
almost no other country in the world supports, create an obstacle to 
our developing effective multilateral pressure on Cuba?

    Answer. The embargo is one of the many tools of our policy to 
promote a rapid transition to democracy in Cuba. Another aspect of our 
policy is to encourage greater international involvement, especially by 
Latin American and European governments in the quest for democracy and 
development in Cuba.
    There is growing international consensus on the nature of the 
Castro regime and need for change. Many of those who stood by Castro in 
the early days have now begun to speak out publicly against the regime. 
The critical factor in the coalescence of this multilateral consensus 
was the repression of the past Spring. That repression provoked our 
European and some Latin American allies to denounce the regime in some 
of the most dramatic and telling terms ever. Latin American nations led 
the effort at the 2003 Human Rights Commission to win approval for a 
resolution on Cuba. There has been an unrelenting drumbeat from the EU 
and others of criticism and demands for justice since Castro's brutal 
acts took place.
    For the first time in 20 years, the international community is 
focused on the Castro dictatorship, not the U.S. embargo. While we do 
not all agree on the tactics to hasten the establishment of democracy 
in Cuba, we are working with the EU and Latin American countries to 
promote shared objectives, such as finding more creative and effective 
ways to help the Cuban people prepare for a free and prosperous future 
without Castro.

    Question 7. In your statement, you stated that Fidel Castro cracked 
down on pro-democracy activists because he did not want to, or was 
afraid of, what would happen if the U.S. engaged Cuba. You also said 
that the condemnation of Castro and the unity with regards to this 
issue among the international community came after his crackdown, not 
before then--a crackdown you said was caused, at least in part, by U.S. 
gestures towards engagement. So, if I understand you correctly, the 
international community and condemnation of Castro on this issue was a 
result of moves towards engagement.

   Why then is the administration giving Castro what he wants? 
        You said that the administration does not want to appease 
        Castro, but according to your own statements, that is exactly 
        what the administration is doing by keeping these bans on 
        travel and trade. Please comment.

    Answer. The actions by the Castro regime in March and April of this 
year against the peaceful opposition were taken out of fear. The Cuban 
Government felt threatened by the momentum gained by those seeking 
democratic change in Cuba. In an effort to cut off the opposition 
movement at the knees, political activists, including independent 
journalists, labor leaders, economists, librarians, writers and heads 
of human rights groups arrested and 75 sentenced to long prison terms.
    President Bush's policy toward Cuba is one of support for the Cuban 
people not for the Castro regime. Our Interests Section in Havana 
demonstrated its leadership by supporting the opposition. Through USINT 
and U.S. grantees, we have worked to distribute about two million 
printed items, 1,000 magazines and more than 10,000 AM/FM/SW radios. 
USAID programs have provided more than 150,000 pounds of food and 
medicine to families of political prisoners and other victims of 
repression. USAID grantees have helped establish more than 100 
independent libraries inside Cuba, and have published via the Internet 
more than 18,000 reports from Cuba's independent journalists.
    We will continue to pursue actions designed to accelerate and shape 
the democratic changes the Cuban people seek.
    We would reward an anachronistic regime by unconditionally lifting 
the embargo. The changes in Cuba which one of its leading dissidents, 
Oswaldo Paya, and others on the island advocate have not taken place. 
To lift the embargo when the Castro regime has chosen to ignore all 
calls from governments, international and nongovernmental organizations 
to free all prisoners of conscience would be to reward a ruthless 
dictator who remains the main obstacle to democratic change in Cuba.
    As I stated previously, we will continue to enforce economic 
sanctions on Cuba and the ban on travel, until Cuba's Government proves 
that it is committed to real reform.

                                 ______
                                 

  Responses of R. Richard Newcomb, Director, Office of Foreign Assets 
 Control, U.S. Department of the Treasury, to Additional Questions for 
          the Record Submitted by Senator Christopher J. Dodd

    Question 1. How much staff time is spent on enforcing the embargo 
against Cuba? How does this compare to the figures for how much time is 
spent on tracking down al-Qaeda or terrorist financing sources? Do you 
feel that your office is burdened by embargo enforcement with regards 
to the War on Terror? If so, what changes in approach would you 
recommend?

    Answer. Approximately 15% of total Office of Foreign Assets Control 
(``OFAC'') staff is allotted to enforcing the embargo against Cuba. 
Approximately 20% of total staff is devoted to tracking down terrorist 
financing sources. In addition, resources are also devoted to 
identifying persons who commit, threaten to commit, or support 
terrorism for listing as Specially Designated Nationals and compliance 
measures to ensure that financial institutions and others block any 
transactions involving such entities that might flow through U.S. 
financial systems.
    Enforcement of the Cuban embargo is not a burden that reduces the 
amount of attention OFAC is able to devote to the War on Terror. OFAC's 
mission is to implement and enforce U.S. policy currently with respect 
to 27 economic sanctions and embargo programs. OFAC must balance its 
resources to effectively manage the programs entrusted to us in order 
to accomplish stated objectives consistent with the priorities set by 
the President. At this time, the President has stated priorities for 
both the terrorism program and the Cuba sanctions program that require 
us to judiciously allocate resources for the best outcome.

    Question 2. Are you hiring, or have you hired, new administrative 
law judges (ALJs) to hold hearings for people who have traveled to Cuba 
without a license? If so, how much will this endeavor cost?

    Answer. Yes, OFAC has hired three ALJs to hold hearings for 
individuals who have requested hearings as provided in the Cuban 
Democracy Act, 22 U.S.C. 6001 et seq. We have established procedures 
for the hearings, which were published in the Federal Register on 
September 11, 2003. The ALJ program is expected to cost $600,000 for FY 
2004. These ALJs will also hear non-travel cases where the law provides 
for a hearing and a person requests one in accordance with the 
regulations and administrative procedures that govern this area.

    Question 3. I understand that you will have to pay salaries and 
benefit for the judges and for a ``Secretary's Designee,'' who, under 
the September 11, 2003 regulations, is required to review certain ALJ 
decisions. In addition, support staff for the ALJs and the Secretary's 
designee--secretaries, receptionists, law clerks, and transcribers--
will be needed.
    Will attorneys from OFAC's General Counsel's Office be diverted in 
order to develop evidence for, conduct discovery in, and prosecute 
these cases? For how long will they be diverted? What other resources 
will you need for this effort?

    Answer. OFAC has obtained authorization from the Office of 
Personnel Management to utilize, on a pro-rata cost-reimbursable basis, 
three existing ALJs (and their support staffs) from other agencies. 
None of these judges will hear OFAC civil penalty cases on an exclusive 
or full-time basis. The $600,000 cited above includes reimbursement 
expenses for the judges (and their support staffs), court reporting 
fees, and witness travel. Since hearings have yet to commence, this 
figure is only an estimate.
    The Treasury Department does not currently contemplate hiring an 
individual(s) to serve as the Secretary's designee(s). Instead, the 
Secretary will designate an existing employee (or employees) to carry 
out this function as an additional duty. Existing staff will support 
any Secretary's designee as necessary.
    One attorney in the Office of Chief Counsel (Foreign Assets 
Control) is currently spending about 90% of his time on the hearing 
program. Additionally, the General Counsel of the Treasury Department 
has assigned six attorneys from within the Treasury Department to 
assist in presenting the Director's case against persons alleged to 
have violated the Cuban Assets Control Regulations to the 
administrative law judges. Each of these six attorneys is assisting 
with this effort on an as-needed, part-time basis. As we continue 
working through the current hearing backlog, we project that the number 
of pending cases will drop significantly over the next six months to a 
year. The number of attorneys assigned to assist with this effort will 
remain commensurate with the existing workload. If case levels fall as 
projected, the number of Treasury Department attorneys handling these 
cases will be appropriately reduced.

    Question 4. Last spring, OFAC issued new regulations that 
eliminated the ``People-to-people'' educational travel license 
category.
    What was the administration's rationale for eliminating this 
category of permissible travel to Cuba? How many Americans have 
traveled to Cuba annually under this category of travel? What types of 
groups were traveling to Cuba for people-to-people educational 
exchanges?

    Answer. Travel-related transactions involving Cuba are prohibited 
unless such transactions are authorized in accordance with current 
licensing policy set forth in Sec. 515.560(a) of the Cuban Assets 
Control Regulations, 31 C.F.R. Part 515 (the ``Regulations''), and the 
related sections enumerated in Sec. 515.560(a). See: Section 910 of the 
Trade Sanctions Reform and Export Enhancement Act (``TSRA''), Pub. L. 
No. 106-387, Sec. 910(b), 114 Stat. 1549, 1549A-72 (2000).
    The licensing provision for non-academic educational exchange 
programs was recently removed because the trips often devolved into 
tourism, which OFAC is prohibited from licensing by Sec. 910(b) of 
TSRA. Additionally, the Cuban government required groups traveling 
under this licensing section to receive approval of their agendas and 
assignment of Cuban-government approved tour guides or escorts. These 
requirements limited access to the people and diluted meaningful 
educational exchange.
    The non-academic educational exchange licenses authorized each 
licensed organization to take an unspecified number of persons to Cuba 
under its auspices. Accordingly, OFAC does not have statistics on 
exactly how many travelers utilized these licenses annually.
    The article from the February 19, 2003 edition of The San Francisco 
Chronicle that I submitted with my prepared statement provides an 
indication of the types of groups that were traveling. The groups were 
comprised of a wide variety of individuals who typically responded to 
advertisements frequently placed on Internet Web sites by organizations 
that had been granted OFAC licenses. As reported in the article, some 
groups engaged in such varied activities as ``jazz tours, hiking tours, 
salsa-dancing tours, Spanish-language-instruction tours, and steam-
railroad tours.'' The reporter states that his own group had a tour 
guide from a Cuban government agency.

    Question 5. In May, OFAC created new regulations that made it 
tougher for most Americans to visit Cuba and see the country for 
themselves, but made it easier for Cuban Americans.
    Do you believe that this policy is discriminatory? Why or why not?

    Answer. All transactions involving property in which Cuba has an 
interest including travel-related transactions are prohibited unless 
authorized by a general or specific license consistent with the 
Regulations. The amendments made in March 2003 did not include any 
change with respect to the frequency of travel for family visitation 
with close relatives by Cuban Americans. I do not believe that a 
foreign policy permitting family visitation is improperly 
discriminatory. Family reunification has been a part of U.S. foreign 
policy toward Cuba since the beginning of the embargo.

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