    [Senate Hearing 108-792]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 108-792

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2005

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

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                          ONE HUNDRED EIGHTH CONGRESS

                                 SECOND SESSION

                                       on

                               H.R. 4818/S. 2812

    AN ACT MAKING APPROPRIATIONS FOR FOREIGN OPERATIONS, EXPORT FINANCING,
    AND RELATED PROGRAMS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2005, AND
                               FOR OTHER PURPOSES

                                   __________

                             Part 2 (Pages 1-113)

                              Department of State
                           Nondepartmental Witnesses
              United States Agency for International Development
                             Department of Defense
                    Department of Health and Human Services
                           Department of the Treasury
                       Executive Office of the President
                    Overseas Private Investment Corporation
                               Export-Import Bank
                      U.S. Trade and Development Program

                                   __________

             Printed for the use of the Committee on Appropriations

     Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                     senate

                                   __________

                        U.S. GOVERNMENT PRINTING OFFICE
    92-146                      WASHINGTON : 2005
    _____________________________________________________________________________
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                          COMMITTEE ON APPROPRIATIONS

                         TED STEVENS, Alaska, Chairman
    THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
    ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
    PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
    CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
    MITCH McCONNELL, Kentucky            TOM HARKIN, Iowa
    CONRAD BURNS, Montana                BARBARA A. MIKULSKI, Maryland
    RICHARD C. SHELBY, Alabama           HARRY REID, Nevada
    JUDD GREGG, New Hampshire            HERB KOHL, Wisconsin
    ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
    BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
    LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
    KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
    MIKE DeWINE, Ohio                    TIM JOHNSON, South Dakota
    SAM BROWNBACK, Kansas                MARY L. LANDRIEU, Louisiana
                        James W. Morhard, Staff Director
                     Lisa Sutherland, Deputy Staff Director
                  Terrence E. Sauvain, Minority Staff Director
                                     ------

       Subcommittee on Foreign Operations, Export Financing, and Related
                                    Programs

                      MITCH McCONNELL, Kentucky, Chairman
    ARLEN SPECTER, Pennsylvania          PATRICK J. LEAHY, Vermont,
    JUDD GREGG, New Hampshire            DANIEL K. INOUYE, Hawaii
    RICHARD C. SHELBY, Alabama           TOM HARKIN, Iowa
    ROBERT F. BENNETT, Utah              BARBARA A. MIKULSKI, Maryland
    BEN NIGHTHORSE CAMPBELL, Colorado    RICHARD J. DURBIN, Illinois
    CHRISTOPHER S. BOND, Missouri        TIM JOHNSON, South Dakota
    MIKE DeWINE, Ohio                    MARY L. lANDRIEU, Louisiana
    TED STEVENS, Alaska (Ex officio)     ROBERT C. BYRD, West Virginia (Ex
                                             officio)

                               Professional Staff

                                   Paul Grove
                             Tim Rieser (Minority)
                            Mark Lippert (Minority)

                             Administrative Support

                                LaShawnda Smith

                                C O N T E N T S

                                  ----------

                            Thursday, April 8, 2004

                                                                       Page

    Department of State: Office of the Secretary.....................     1

                           Wednesday, April 21, 2004

    United States Agency for International Development...............   121
    Department of State: Coordinator for Couterterrorism.............   134

                             Tuesday, May 18, 2004

    Department of State: Office of the U.S. Global AIDS Coordinator..   201
    Nondepartmental witnesses........................................   267

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                            THURSDAY, APRIL 8, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:30 p.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Mitch McConnell (chairman)
    presiding.
        Present: Senators McConnell, Specter, Bennett, DeWine,
    Stevens, Leahy, Harkin, Durbin, Landrieu, and Byrd.

                              DEPARTMENT OF STATE

                            Office of the Secretary

    STATEMENT OF HON. COLIN L. POWELL, SECRETARY

                 opening statement of senator mitch mc connell

        Senator McConnell. This hearing will come to order. We want
    to welcome the Secretary of State. After a couple of false
    starts, we are pleased to hold the first of three hearings on
    the fiscal 2005 budget request.
        On April 21, USAID Administrator Natsios and State Counter-
    terrorism Coordinator Cofer Black will testify on foreign
    assistance and international terrorism. On April 28, HIV-AIDS
    Coordinator Tobias will appear before the subcommittee to
    discuss the fiscal year 2005 HIV-AIDS request.
        In the interest of time, Senator Leahy and I will make
    brief opening remarks, and I would request Secretary Powell, as
    usual, to summarize his testimony, which will be included in
    the record in its entirety. We will then move to 5-minute
    rounds of questioning, and the record will be kept open to
    ensure that all senators have an opportunity to have their
    questions addressed.
        Mr. Secretary, I want to begin by thanking you and the
    President's foreign policy team for your collective efforts to
    promote freedom across the globe and, in my judgment, nowhere
    is this more apparent than in Iraq and Afghanistan.
        Having traveled to the Middle East and South Asia myself,
    about 6 months ago, I can attest that the citizens of those
    countries are clearly better off today than they were under the
    repressive misrule of Saddam Hussein and the Taliban,
    respectively.

                                      IRAQ

        The recent BBC/ABC poll results in Iraq are fascinating. I
    wish Americans were as upbeat about America as Iraqis are about
    Iraq. If you watched U.S. television every day, you would think
    nothing but bad things are happening in Iraq, and surely the
    Iraqi people would be depressed about that. However, in the
    BBC/ABC poll--which was taken from February 9 to February 28--
    in answer to the question, ``How are things going today, good
    or bad, in Iraq?'', 70 percent said good, 29 percent said bad.
    That is a question the President would love to see answered
    that way here. Compared to a year ago before the war in Iraq:
    56 percent responded things are better; the same, 23 percent;
    worse, 19 percent.
        In terms of the optimism factor, that is, how they will be
    a year from now, 71 percent of Iraqis thought things would be
    better, only 9 percent thought they would be the same, and only
    7 percent thought they would be worse. I think that pretty well
    sums up the results of a professional poll about how Iraqis
    themselves--those who experienced the murders of 300,000 of
    their own citizens during the Saddam Hussein regime--feel about
    their prospects, Mr. Secretary, as a result of your leadership
    and that of the President and others in liberating that country
    from the regime that had terrorized not only its own citizens
    but its neighbors for well over a quarter of a century.
        To be sure, the Islamic extremists are working hard to
    undermine the new-found freedoms; and, in desperation, are
    attacking soft targets: innocent men, women, and children.
    These terrorists know that each step toward democracy is yet
    another step in the death march for their hateful and
    intolerant ideology.
        In Iraq, we should expect increased terrorist activities in
    the days and months before the June 30 transition. We have been
    seeing that lately.
        Beginning July 1, and under your watchful eye at the State
    Department, I am confident that the Iraqi people will not only
    stay the course but continue to further consolidate the
    significant gains they have achieved in a relatively short
    period of time.
        However, freedom is not free. And we thank the many
    soldiers and civilians serving on the front lines of the global
    war on terrorism; whether American, Iraqi, or Afghani.
        Today's hearing affords this subcommittee an opportunity to
    glean additional information on the President's $21 billion
    budget request for the next fiscal year. And it would be
    helpful, Mr. Secretary, to have your insights as chairman of
    the Millennium Challenge Corporation.
        I know several of my colleagues share a concern with the
    proposed funding levels for SEED and FSA accounts. While we
    support graduation of countries from U.S. foreign assistance,
    we are troubled by developments in such places as Russia and
    Serbia. I want to commend you for giving voice to these shared
    concerns during your trip to Russia earlier this year, and for
    not certifying Serbia's cooperation on war crimes issues last
    week.

                              U.S. EMERGENCY FUND

        It would also be useful to have your views on the proposed
    $100 million U.S. Emergency Fund for Complex Foreign Crises.
    This strikes me as a good idea, given the need to respond with
    maximum flexibility to unanticipated events and opportunities,
    particularly in the Middle East and on the African continent.
    Libya comes readily to mind.
        Just a couple of observations, which will not surprise you,
    relating to Burma. Congress will begin the process of sanctions
    renewal in the next few weeks. I deeply appreciate the
    President's continued interest and leadership on this issue, as
    well as your own. I know we will be able to count on your
    support for continued sanctions, given the total absence of
    irreversible progress toward democracy in that country.
        It is simply not enough for Aung San Suu Kyi to be released
    or that she be given a last-minute seat at the table. We can
    pretend that the State Peace and Development Council is serious
    about a constitutional convention--as Thailand seems to be
    intent on doing--but I hope we will not have short or selective
    memories when it comes to that subject.
        Justice is certainly due for the May 30 attack on Suu Kyi
    and the NLD, and the regime ought to be held accountable for
    its actions.

                               PREPARED STATEMENT

        In that regard I would encourage you to renew and
    reinvigorate efforts to secure sanctions regimes from the
    European Union and other professed supporters of freedom around
    the world. Unfortunately, we are hearing that international
    financial institutions, particularly the World Bank and the
    Asian Development Bank, are keen on re-engaging in Burma. They
    do so at their own risks and should begin finding other funding
    sources for the upcoming fiscal year, because none will be
    forthcoming from this subcommittee.
        [The statement follows:]

                 Prepared Statement of Senator Mitch McConnell

        Mr. Secretary, I want to begin my remarks this afternoon by
    thanking you and the President's foreign policy team for your
    collective efforts to promote freedom across the globe. Nowhere is this
    more apparent than in Iraq and Afghanistan.
        Having traveled to the Middle East and South Asia some six months
    ago, I can attest that the citizens of those countries are better off
    today than they were under the repressive misrule of Saddam Hussein and
    the Taliban, respectively.
        I saw this firsthand through bustling, free commerce in the
    streets, freedom of expression that takes many forms, and through the
    words of grateful Iraqis and Afghanis whose once bleak future now holds
    promise and hope.
        To be sure, Islamic extremists are working hard to undermine these
    new-found freedoms and in desperation are increasingly attacking soft
    targets: innocent men, women and children. These terrorists know that
    each step toward democracy is a yet another step in the death march for
    their hateful and intolerant ideology.
        In Iraq, we should expect increased terrorist activities in the
    days and months before the June 30 transition. Beginning July 1--and
    under your watchful eye at the State Department--I am confident that
    the Iraqi people will not only stay the course but continue to further
    consolidate the significant gains they have achieved in such a short
    time.
        However, freedom is not free. This Senator thanks the many soldiers
    and civilians serving on the front lines of the global war on
    terrorism--whether American, Iraqi or Afghani.
        Today's hearing affords this Subcommittee an opportunity to glean
    additional information on the President's $21 billion, fiscal year 2005
    budget request for foreign operations. It would helpful to have your
    insights into the request, both as Secretary of State and Chairman of
    the Millennium Challenge Corporation.
        I know several of my colleagues share my concern with the proposed
    funding levels for the SEED and FSA accounts, and while we support
    graduation of countries from U.S. foreign assistance we are troubled by
    developments in such places as Russia and Serbia. I want to commend you
    for giving voice to shared concerns during your trip to Russia earlier
    this year, and for not certifying Serbia's cooperation on war crimes
    issues last week.
        It would also be useful to have your views on the proposed $100
    million U.S. Emergency Fund for Complex Foreign Crises. This strikes me
    as a good idea given the need to respond with maximum flexibility to
    unanticipated events and opportunities, particularly in the Middle East
    and on the African continent. Libya comes readily to mind.
        Let me close with a few comments on Burma.
        Congress will begin the process of sanctions renewal in the next
    few weeks, and I deeply appreciate the President's continued interest
    and leadership on this issue. I hope--and expect--that we can count on
    your support, Mr. Secretary, for continued sanctions, given the total
    absence of irreversible progress toward democracy in that country.
        It is simply not enough that Aung San Suu Kyi be released, or that
    she be given a last minute seat at the table. We can pretend that the
    State Peace and Development Council (SPDC) is serious about a
    constitutional convention--as Thailand seems intent on doing--but we
    should not have short or selective memories.
        Justice is due for the May 30 attack on Suu Kyi and the NLD, and
    the SPDC must be held accountable for its actions.
        I encourage you to renew and reinvigorate efforts to secure
    sanction regimes from the European Union and other professed supporters
    of freedom around the world. Unfortunately, I am hearing that
    international financial institutions--particularly the World Bank and
    the Asian Development Bank--are keen on re-engaging Burma. They do so
    at their own risks, and should begin finding other funding sources for
    the upcoming fiscal year because none will be forthcoming from this
    Subcommittee.
        Again, welcome Mr. Secretary. I look forward to your testimony.

        Senator McConnell. With that, I turn to my friend from
    Vermont.

                 OPENING STATEMENT OF SENATOR PATRICK J. LEAHY

        Senator Leahy. Thank you, Mr. Chairman, I am glad you are
    scheduling this hearing. Incidentally, I would urge the members
    of this subcommittee to read the Op-ed piece that Senator
    McConnell had in the Washington Post yesterday about Egypt. I
    think that one does not have to be a great analyst to
    understand that there may be some changes in our approach to
    foreign aid there. And I commend the chairman for his article.
        Senator McConnell. Thank you.
        Senator Leahy. And, Mr. Secretary, of course, thank you for
    being here. You are one of the Cabinet members who regularly
    comes before our committees; not all of your colleagues are
    willing to and I am delighted that you do.
        We have a lot to talk about. Obviously, the situation in
    Iraq is of great concern. We had a discussion earlier this
    morning when we went over the violence and the number of
    casualties; and, of course, you have to feel for the families
    of our brave soldiers, and marines, who are over there. They
    are facing horrendous dangers.
        Your background is in the military. You have a better idea
    than all of us of what they are going through in combat; and
    also what their families go through when they are either killed
    or sometimes severely injured with lifetime injuries.

                              IRAQ RECONSTRUCTION

        We have appropriated more than $20 billion to rebuild Iraq.
    And that is, of course, in addition to the hundreds of billions
    of dollars we are spending there on the military operations.
        Last October, the President said the reconstruction money
    in the Iraq supplemental was an emergency. And we were told by
    the administration that the President needed every dime, he
    needed it immediately. And when some Members on both sides of
    the aisle tried to look at it, maybe split it up, here in the
    Appropriations Committee, we were told we had to pass it
    immediately.
        Five months later, only about a ninth of the money has
    actually been spent. In the meantime, the violence is spreading
    and we hear, as a strategy, only about sending more troops.
        Mr. Secretary, this is an election year and like all
    election years, partisanship up here is at a high--although I
    must say in my 29 years here, it is at an all-time high. But
    the situation in Iraq is not about Democrats or Republicans. It
    is a problem for all Americans. We need to work together to
    solve it.
        You and I have known each other for, I think, a couple of
    decades now. And I have always considered you as somebody who
    can bring people of different political persuasions together. I
    have seen you do that at meetings, where you have had people
    across the political spectrum. Well, we need unity today. We
    need it between the Congress and the White House. We need it
    among the American people. And we need it with our allies.
        I believe that the majority of Iraqis reject violence. They
    want to rebuild their country. But I do not think our strategy
    is working.
        Our forces can quash this latest uprising; they will. But
    what is happening in Iraq today does not bode well for the
    future. Just ``staying the course'' is not a viable strategy at
    this point, at least not to me.
        Using more force, or simply sending more troops, will not
    solve the problem, nor simply replacing the CPA with a giant
    U.S. Embassy.
        We need a broader, multilateral approach that has the
    support of a majority of the American people and the Iraqi
    people, as well as our allies and the international community,
    including as many Arab and Muslim nations as possible.

                                STRATEGY OPTIONS

        Let me suggest just a couple of ideas. I believe the
    President should immediately convene a bipartisan summit of his
    key Cabinet officials and bipartisan Members of the
    congressional leadership at the White House to discuss the
    strategy options for the coming months.
        Second, I believe the President should address the American
    people, explain his strategy in some detail and the difficult
    road ahead, and tell our families how long we can expect our
    soldiers to be in Iraq.
        Third, I believe the President should convene a summit of
    the world's major democracies, including those that opposed his
    decision to go to war. Because rebuilding Iraq poses a
    challenge not only for the United States, but for the rest of
    the world. And if civil war takes hold there, we know how
    disastrous the consequences could be.
        Fourth, the President should send you, Mr. Secretary, back
    to the U.N. Security Council, to seek a new resolution calling
    for increased support from other nations, aimed specifically at
    addressing the deteriorating security situation.
        That resolution, I believe, should also call for the
    appointment, by June 30, of a U.N. Administrator under the
    auspices of the Security Council, to work closely with the
    Iraqi Provisional Government to make clear that this is not
    simply a puppet government that answers to the United States.
        Finally, armed with a U.N. Security Council resolution, I
    believe the President should go back to NATO to ask our allies
    for additional troops and resources.
        Mr. Secretary, you may not agree with any of these
    suggestions but I hope you will at least consider them and give
    me your thoughts; because as the top diplomat in the government
    I believe you should be playing a bigger role.

                               PREPARED STATEMENT

        I do not offer these ideas as a Democrat or Republican. I
    offer these as somebody who has been in the U.S. Senate for 29
    years. And I have worked on a lot of things with a lot of
    different administrations in both parties. I really think this
    is the time to bring people together.
        Mr. Chairman, I have a lot more in my statement.
        Senator McConnell. Thank you.
        Senator Leahy. I will put that in the record.
        [The statement follows:]
                 Prepared Statement of Senator Patrick J. Leahy
        Mr. Chairman, thank you for scheduling this hearing, and thank you
    Mr. Secretary for being here.
        We have a lot to discuss today but the situation in Iraq is of
    great concern. We have all been shocked by the violence and the number
    of casualties in the past few days, and our deepest condolences go out
    to the families of those who have died.
        We have appropriated more than $20 billion to rebuild Iraq. That is
    in addition to the hundreds of billions of dollars we will spend on our
    military operations there.
        Last October, the President said the reconstruction money in the
    Iraq supplemental was an emergency. He said he needed every dime
    immediately. Five months later, only about one-ninth of the money has
    been spent. In the meantime, the violence is spreading and it is not
    clear what our strategy is, except possibly sending more troops.
        Mr. Secretary, this is an election year and partisanship up here is
    at an all time high. But the situation in Iraq isn't about Democrats or
    Republicans. It is a problem for all Americans and we need to work
    together to try to solve it.
        You and I have known each other for a couple of decades. I have
    always considered you someone who can bring people of all political
    persuasions together. We need unity today, between Congress and the
    White House, among the American people, and with our allies.
        I believe the majority of Iraqis reject violence and want to
    rebuild their country. But I don't think the President's strategy is
    working. Our forces can quash this latest uprising, but what is
    happening in Iraq today does not bode well for the future. Just
    ``staying the course'' is not a viable strategy at this point, at least
    not to me. Using more force, or simply sending more troops, will not
    solve the problem, nor will simply replacing the CPA with a U.S.
    Embassy.
        We need a broader, multilateral approach that has the support of a
    majority of the American people and the Iraqi people, as well as our
    allies and the international community, including as many Arab and
    other Muslim nations as possible.
        Let me suggest a couple of possible ideas.
        First, I believe the President should convene a bipartisan summit
    of his key Cabinet officials and Congressional leaders at the White
    House to discuss strategy options for the coming months.
        Second, the President should address the American people, explain
    his strategy and the difficult road ahead, including how long we can
    expect our soldiers to be in Iraq.
        Third, the President should convene a summit of the world's major
    democracies, including those that opposed his decision to go to war.
    Rebuilding Iraq poses a challenge not only for the United States, but
    for the rest of the world. If civil war takes hold there, we know how
    disastrous the consequences could be.
        Fourth, the President should send you, Mr. Secretary, back to the
    U.N. Security Council, to seek a new resolution calling for increased
    support from other nations, aimed specifically at addressing the
    deteriorating security situation. That resolution should also call for
    the appointment, by June 30, of a U.N. Administrator, under the
    auspices of the Security Council, to work closely with the Iraqi
    Provisional Government to make clear that this is not simply a puppet
    government that answers to the United States.
        Finally, armed with a U.N. Security Council resolution, the
    President should go back to NATO to ask our allies for additional
    troops and resources.
        Mr. Secretary, you may not agree with any of these suggestions. But
    I hope you will at least consider them and give me your thoughts,
    because as the top diplomat in this government I believe you need to be
    playing a bigger role.
        Mr. Chairman, I have a longer statement that highlights a number of
    my other concerns, but in the interest of saving time I will ask that
    you include it in the record. Mr. Secretary, I hope you will take the
    time to review it.
        Recently, the Pew Research Center released the results of its
    survey on the way the United States is regarded around the world, more
    than two years after 9/11 when we were the focus of so much sympathy
    and good will. I am suer you know the results. In country after
    country, the majority of people have a negative opinion of the United
    States.
        Another Pew poll showed that support among the American people for
    the President's policy in Iraq has steadily declined. I think these
    polls are a telling measure of the shortcomings of this
    Administration's strategy against terrorism, and also of the
    unilateralism and high handedness that have too often characterized our
    dealings with the rest of the world.
        Turning to the fiscal year 2005 budget, the President's request
    would cut vital programs like Child Survival and Health which have
    strong bipartisan support. But not only that, it is doubtful we will
    receive an allocation from the Appropriations Committee that matches
    even the President's request.
        What this means is that we will, once again, have to rob Peter to
    pay Paul in order to restore the cuts the President made, because it is
    a zero sum game. This will cause problems for you and the people in our
    embassies who carry out the foreign policies of this country. Whatever
    you, the OMB Director, and the President can do to convince the
    Republican leadership here about the importance of this Subcommittee's
    allocation will be time well spent.
        I want to say how concerned I am by this Administration's handling
    of the Israeli-Palestinian conflict. I am sure you disagree with those
    who criticize the Administration for abandoning the Middle East peace
    process, but the fact is that neither we, nor Israelis, nor
    Palestinians have any reason to believe that President Bush will expend
    any political capital to move the process forward any time soon. Not
    only does this mean more bloodshed that might be avoided, but we will
    not succeed in stopping terrorism as long as we ignore this problem.
        You also know of my disappointment about the Administration's new
    landmine policy, which amounts to a pledge to get rid of, in 2010, a
    type of mine we haven't used since Vietnam, including in Korea. At the
    same time, it abandons the commitments I worked out with the Pentagon
    six years ago. It is another example, I believe, of unilateral
    arrogance in the place of leadership and international cooperation, and
    another reason why no one should be surprised by the results of the Pew
    survey.
        I want to commend you for not certifying that Serbia has cooperated
    with the Hague Tribunal. It sent an important message. On the other
    hand, I think you made the wrong decision on Colombia. I support
    President Uribe, but you have consistently certified Colombia's
    performance on human rights despite serious, continuing problems.
        Similarly, Charles Taylor must be brought before the Special Court
    for Sierra Leone. The United States supported the establishment of the
    Court, including proposing and voting for Security Council resolution
    1315. The Bush Administration has made an issue about the enforcement
    of U.N. resolutions, and the State Department, in a letter to me, said
    it is confident that Mr. Taylor will be brought before the Court. We
    need to make this happen, sooner rather than later, as the Court could
    close down as early as next summer.
        Finally, is the issue of corruption. Corruption is like a cancer.
    It is the biggest obstacle to development--from Indonesia to Guatemala,
    from Nigeria to Pakistan. For years we ignored it. But there are some
    leaders who are standing up to it, like President Bolanos of Nicaragua.
    I think we should do everything we can to support him and people like
    him, and make clear that there are severe consequences for government
    officials who engage in this conduct.
        Mr. Secretary, despite my disappointment with some of this
    Administration's policies, I join others here in commending you and
    your staff, who rarely get the credit they deserve.
        Thank you Mr. Chairman.

        Senator McConnell. Thank you, Senator Leahy. I see that our
    full committee chairman is here, Senator Stevens. Do you have
    any comments to make, Mr. Chairman?
        Senator Stevens. I am here to greet my old friend and
    cousin sitting at the table, and I am pleased to listen to him.
        Senator McConnell. Let me just inform everybody the vote on
    the pensions bill is at 2:45. I think what we will do, Mr.
    Secretary, is go ahead and get started.
        I am going to catch the vote right at the beginning, and
    hopefully we can just plow right on through. So, welcome, and
    we will look forward to hearing from you.

                   SUMMARY STATEMENT OF HON. COLIN L. POWELL

        Secretary Powell. Thank you very much, Mr. Chairman,
    Senator Leahy. Thank you for your welcome and for your opening
    remarks.
        Uncle Ted, it is always a pleasure to see you in
    attendance, sir.
        Senator Stevens. Good to see you.
        Secretary Powell. Did you get the Flat Stanley picture I
    sent you, Uncle? Good.
        Senator Stevens. I will tell the committee, he did. He was
    gracious enough to have his photo taken with my granddaughter's
    Flat Stanley. If you do not know what a Flat Stanley is, go to
    his website.
        Secretary Powell. To show you how modern we are trying to
    be at the State Department, my website has a picture of Senator
    Stevens and me and Senator Hollings and a Flat Stanley. For
    those of you who do not know what a Flat Stanley is, if you
    want to yield any part of your 5 minutes of time, I will be
    happy to describe what a Flat Stanley is to you.
        But it is a wonderful children's story about a little boy
    who gets run over by a steamroller and becomes Flat Stanley,
    and who travels all over the world in an envelope. And Senator
    Stevens, in the spirit of the Flat Stanley doll, took the Flat
    Stanley to Asia on a recent trip.
        I met up with the good Senator in Pakistan and we took a
    picture of his traveling Stanley, and now children all over the
    world are going to the State Department website, www.state.gov
    for anybody watching, to take a look at Senator Stevens's Flat
    Stanley.
        With that serendipitous opening to my presentation, let me
    seriously thank all the members of the committee for the
    support you have provided to me and to the State Department
    over the last 3 years. I feel it is a privilege to be able to
    come before you to express my thanks; and also to lay before
    you what the President has asked for fiscal year 2005, and what
    the needs of the Department and the wonderful men and women of
    the Department need to do their jobs for the American people in
    fiscal year 2005.
        I might, before encapsulating my remarks, just say a word
    about Iraq. Senator McConnell, I did see that poll that you
    mentioned and they were very interesting numbers. The people of
    Iraq, what we want for them--they want for themselves. They
    want democracy. They want peace. They are so glad to be rid of
    this regime that filled mass graves, that murdered people, that
    had rape rooms and torture rooms. And they are through with it
    and it isn't coming back.
        Now, there are these remnants that will be dealt with and I
    can assure you of that. And I will continue, when Senator Leahy
    comes back, on the specific comments that the Senator was
    asking me about or questions he was posing to me. But for other
    members of the committee, let me just get started with my
    presentation.
        The President's fiscal year 2005 International Affairs
    Budget request for the Department of State, USAID, and other
    Foreign Affairs agencies totals $31.5 billion, broken down as
    follows: Foreign Operations, $21.3 billion; State Operations,
    $8.4 billion; Public Law 480 Food Aid, $1.2 billion;
    International Broadcasting, $569 million; and the United States
    Institute for Peace, $22 million.

                          WINNING THE WAR ON TERRORISM

        President Bush's top foreign policy priority is winning the
    war on terrorism. Winning on the battlefield with our superb
    military forces is just one part of this strategy. To eradicate
    terrorism altogether, the United States must help stable
    governments and nations that once supported terrorism, like
    Iraq, like Afghanistan; and we must go after terrorist support
    mechanisms as well as the terrorists themselves. And we must
    help alleviate conditions in the world that enable terrorists
    to find and bring in new recruits.
        To these ends, the 2005 budget will continue to focus on
    the reconstruction of Iraq and Afghanistan. We will continue to
    support our coalition partners to further our counter-
    terrorism, law enforcement, and intelligence cooperation. And
    we will continue to expand democracy and help generate
    prosperity, especially in the Middle East.
        Mr. Chairman, 48 percent of the President's Budget for
    Foreign Affairs supports the war on terrorism. For example,
    $1.2 billion supports Afghanistan reconstruction, security, and
    democracy-building activities. More than $5.7 billion provides
    assistance to countries around the world that have joined us in
    the war on terrorism. Some $3.5 billion indirectly supports the
    war on terrorism by strengthening our ability to respond to
    emergencies and conflict situations. And finally, $190 million
    is aimed at expanding democracy in the Greater Middle East,
    which is crucial if we are to attack successfully the
    motivation behind people engaging in terrorism.
        Mr. Chairman, two of the greatest challenges confronting us
    today are the reconstruction of Iraq and Afghanistan. Let me
    begin with Iraq.
        Despite the headlines of the last several days, the
    Coalition Provisional Authorities (CPA) and the Iraqi Governing
    Council have made great strides in the area of security, in the
    area of economic stability and growth and democratization.
    Iraqi security forces now comprise more than half of the total
    security forces in the country.
        In addition, the CPA has established a new Iraqi army;
    still an army in its infancy but an army that will grow and
    become strengthened in the years ahead. They have issued a new
    currency, which is very stable, and refurbished and equipped
    schools and hospitals throughout the country. And as you know,
    the CPA is taking steps to help the Iraqis form a fully
    sovereign government this summer. We will keep to this time
    table, as the President indicated earlier this week.
        But much more work needs to be done. Working with our
    coalition partners, we will continue to train Iraqi police,
    border guards, the civil defense corps, and the army in order
    to ensure the country's security as we effect a timely
    transition to democratic self-governance and to a stable
    future.
        At the same time, we are helping provide critical
    infrastructure, including clean water, electricity, reliable
    telecommunications systems. These are all essential for meeting
    basic human needs, as well as for economic and democratic
    development within the country.
        As a definitive example of this progress, on March 8, the
    Iraqi Governing Council formally signed the Transitional
    Administrative Law, essentially an interim constitution for
    Iraq, and this was a remarkable milestone. The administrative
    law recognizes freedom of religion and expression, the right to
    assemble and to organize political parties, and other
    fundamentally democratic principles; as well, as at the same
    time, prohibiting discrimination of any kind based on gender,
    nationality, or religion.
        This is a huge step for the people of Iraq and for the
    region, a step towards constitutional democracy. It is a step
    that just a year ago, Iraqis would not have imagined possible;
    and with the poll results, the results that Senator McConnell
    mentioned earlier, you can see that they now believe that this
    is a real possibility for them in the future.
        The United Nations Secretary General's Special Advisor,
    Lakhdar Brahimi, is in Iraq now, having been invited to return
    by the Interim Governing Council. Working with the CPA, he will
    help the Iraqis determine what sort of transitional Iraqi
    Government will be developed and to prepare for elections that
    will be held at the end of this year or early in the next year.
        Creating a democratic government in Iraq will be an
    enormous challenge; but Ambassador Bremer, working with the
    Iraqi Governing Council, and with the United Nations and our
    coalition partners, is committed to success, and when the State
    Department assumes the lead role this summer in representing
    and managing U.S. interests in Iraq, we will carry on that
    commitment.
        We are already thoroughly involved. I was in Baghdad 3
    weeks ago. I met with Ambassador Bremer, with members of the
    Iraqi Governing Council, and spoke to some of our troops as
    well. I know how committed we all are, how committed they all
    are, and we will succeed.
        The recent rise in United States and coalition casualties
    is disquieting. We are saddened at every death but we will not
    be dissuaded or driven out. Whether we are confronted by an
    outlaw and his mobs claiming to themselves the mantle of
    religion, or by disgruntled members of the former tyrants'
    regime, or by foreign terrorists, we will deal with them.
        In that way, we are resolute. And Mr. Chairman, the
    coalition is resolute. I believe the vast majority of Iraqis
    feel the same way; the polls indicate such. They want
    livelihoods. They want security. They want freedom. They want
    to strive for their nation's democratic future within the best
    traditions of tolerance and harmony. And that is why we will
    win.
        Mr. Chairman, I know that many of the members are concerned
    about the transition from CPA under the Defense Department to a
    U.S. mission under the State Department. I can tell you that we
    have made significant progress in planning for this transition
    and in working on the challenges we will confront.
        To make sure we act in accord with your intent, we will be
    sending a number of members of my staff to the Congress over
    the coming weeks to brief you and to answer your questions.
    Before we make our final recommendations to the President, you
    will be kept fully informed and your advice and counsel will be
    sought.

                                  AFGHANISTAN

        Afghanistan is another high priority for this
    administration. The United States is committed to helping build
    a stable and democratic Afghanistan that is free from terror
    and no longer harbors threats to our security. After we and our
    coalition partners defeated the Taliban government, we faced
    the daunting task of helping the Afghan people rebuild their
    country.
        We have demonstrated our commitment to this effort by
    providing over $3.7 billion in economic and security assistance
    for Afghanistan since 2001. Through our assistance and the
    assistance of the international community, the Government of
    Afghanistan is successfully navigating the transition that
    began in October 2001.
        Afghanistan adopted a constitution earlier this year and is
    preparing for democratic national elections this September.
    With technical assistance from the United States, Afghanistan
    successfully introduced a new and still stable currency in
    October 2002, and is working to improve revenue collection in
    the provinces.
        The lives of women and girls are improving as women pursue
    economic and political opportunities and as girls return to
    school. Since 2001, the United States has rehabilitated 205
    schools and 140 health clinics, and trained 15 battalions of
    the Afghan National Army, battalions that are out now in action
    helping to secure the countryside.
        Also, President Bush's commitment to de-mine and re-pave
    the entire stretch of the Kabul/Kandahar highway was fulfilled.
    The road had not been functional for over 20 years. What was
    once a 30-hour journey can be accomplished in just 5 or 6
    hours.
        This fundamentally changes all kinds of dynamics within
    Afghanistan. People can move around. The country can be brought
    back together with the simple act of completing this road. In
    the next building season, we will extend the road out to the
    west, as well as to the north, and try to create a ring road in
    this Central Asian nation that, then, can connect to the other
    Central Asian nations: to Pakistan, and through Pakistan,
    ultimately to India, which will put the Silk Road back into
    operation after so many years of misuse and no use.
        While the Afghanistan of today is very different from the
    Afghanistan of September 2001, there is still much left to
    accomplish. In the near term, the United States will assist the
    Government of Afghanistan in its preparations for elections
    this September to ensure that they are free and fair.
        The 2005 Budget contains $1.2 billion in assistance for
    Afghanistan, as I mentioned; and that money will concentrate on
    education, health, infrastructure, and assistance to the Afghan
    National Army.
        For example, the U.S. assistance efforts will focus on
    rehabilitation and construction of an additional 275 schools,
    150 health clinics, all by June 2004, and complete equipping of
    the 15 Afghan Army battalions, extend the road to Herat, as I
    mentioned.
        I might also mention that last week I attended a donors
    conference on Afghanistan that was hosted by our German friends
    in Berlin. There we raised $4.5 billion for President Karzai's
    fiscal year budget, 102 percent of what he sought.
        So I feel confident of our ability, working with the
    international community, to continue making progress in the
    reconstruction of that country.
        Mr. Chairman, the challenges we face in Iraq and
    Afghanistan are hugely complex, daunting and dangerous, and
    security and stability are two of our greatest needs. It is
    hard to rebuild with one hand and fight off attacks with the
    other. But we are making progress and we will continue until we
    have reached our objective: two countries that are on their way
    to good governance, tolerance, and economic recovery.

                                    HIV/AIDS

        Mr. Chairman, as important as waging the war on terrorism
    is to America, there are many other priorities that are
    contained within this budget that are vital to our foreign
    policy agenda. Africa, for example, is high on our foreign
    policy agenda, particularly with respect to the devastating
    HIV/AIDS pandemic. When people are dying in the millions,
    particularly people of working age and younger, it is extremely
    difficult to make economic improvements in your society, in
    your country. It is President Bush's intent to fight even more
    aggressively against the pandemic of HIV/AIDS.
        Over the past year, we have worked with Congress to pass
    legislation laying the groundwork for this fight. Marking our
    progress, last month Ambassador Tobias, Secretary Thompson,
    USAID Administrator Natsios and I rolled out the strategy for
    this plan and announced the first dispensation of dollars. Some
    $350 million is now being applied to the fight by NGOs and
    PVOs, private organizations who are working at the grass-roots
    level.
        As a crucial next step, the 2005 budget request expands on
    the President's plan with $2.8 billion to combat AIDS in the
    most afflicted countries in Africa and the Caribbean.
        Together, the Department of State, USAID and the Department
    of Health and Human Services, will use the significantly
    increased resources quickly and effectively to achieve the
    President's ambitious goals in the fight against global AIDS.

                          MILLENNIUM CHALLENGE ACCOUNT

        Of course, there are other dimensions of economic success
    in Africa and around the globe; and they, too, are a part of
    our foreign policy agenda. For example, an innovative program,
    that you know full well, is the Millennium Challenge Account
    (MCA). In February 2003, we sent the Congress a budget request
    for the MCA and legislation to authorize creation of a
    corporation to administer these monies.
        The corporation designed to support our new and innovative
    development strategies and to ensure accountability, is now up
    and running. And as you know, I am the chairman of the board of
    that corporation, Under Secretary Al Larson is the interim CEO,
    and Mr. Paul Applegarth has been nominated by the President to
    be the approved CEO, and we're waiting for congressional action
    on his nomination now.
        Congress appropriated $1 billion for MCA for 2004. The 2005
    budget request of $2.5 billion makes a significant second year
    increase to the MCA, and paves the way to reaching the
    President's commitment of $5 billion in 2006. With these
    dollars, we will help those countries committed to helping
    themselves, commitment demonstrated by the fact that their
    governments govern justly, invest in their people, and
    encourage economic freedom.
        Mr. Chairman, these are two important accounts: the HIV/
    AIDS account and the Millennium Challenge Account. We know that
    we are asking for significant funding in this second year of
    their existence. But the world is watching to see whether we
    are serious about HIV/AIDS, whether we are serious about this
    new way of providing development assistance. And I strongly
    encourage that you approve the amounts requested for both HIV/
    AIDS and for the Millennium Challenge Account.
        Of course, Mr. Chairman, gentlemen, we can't deal with any
    of our foreign policy priorities successfully if State
    operations are not funded appropriately. I know that such
    operations are not this subcommittee's specific oversight
    responsibility, but the full Appropriations Committee will have
    to consider this funding.

                        DIPLOMATIC READINESS INITIATIVE

        So, just to touch on a few things that are of interest to
    me. First, the Diplomatic Readiness Initiative to hire new
    foreign and civil service employees. We have had great success
    in getting wonderful young men and women to apply for the
    Foreign Service and to come into the Department, and also to
    apply for the Civil Service and come into the Department. It is
    the first time in years that we invested in the manpower needs
    of the Department, and I ask for your continued support for the
    Diplomatic Readiness Initiative.
        We have also had tremendous success with our information
    technology upgrade, and I am very proud of what we have done to
    put the internet in every office everywhere in the world that a
    State Department officer is located in.
        I am also very pleased that we have done a great job in
    using the money given to us for securing our embassies. New
    embassy construction has been accelerated. We are going to
    bring 150 embassies and consulates up to standards over the
    next 14 years for a total cost of $17 billion.
        We owe our employees a safe environment in which to work,
    and we want to do more than just protect the embassy, but
    protect some of the other facilities we occupy in the cities in
    which we are located, to include schools, places of residence
    and other facilities that we use.
        Mr. Chairman and members of the committee, let me stop, at
    this point. You have my prepared testimony and I am ready for
    your questions. But before going to those questions, let me
    just say a word about the strategy that we are pursuing in
    Iraq, to follow up to Senator Leahy's comments a few moments
    ago.

                                      NATO

        The strategy has a number of dimensions to it. First of
    all, we do believe that the international community must play a
    significant and important and vital role in our efforts in
    Iraq. If you look at NATO, 17 of the 26 nations of NATO are in
    Iraq, standing alongside of us. They can't make as large a
    military contribution as we can but they are there within the
    limits of their capability. That, I think, is a statement of
    the international community.
        When I went to NATO last week for meetings, the NAC, North
    Atlantic Council, met at the foreign minister level. We talked
    about what NATO could do in these two places that are of such
    interest to us: Afghanistan and Iraq. In Afghanistan, NATO has
    taken over. NATO has shown its willingness to step forward.
    NATO is going to expand its presence as we get closer to the
    elections.
        NATO is also willing to consider a role for itself in Iraq.
    Afghanistan is its first priority but they are starting to look
    at Iraq. And I think that, in due course, we will be able to
    structure a role for NATO that may add to the number of nations
    that are there; but more significantly, will give a collective
    tone, an alliance tone, to what we are doing.
        Exactly what that is going to look like, I cannot tell you
    yet. But not one member of the Alliance, not one of the 25
    other members of the Alliance, has said, ``No, we will not
    consider it.'' Many of them are very enthusiastic about it.
        Some who were not with us a year ago--France and Germany,
    to be direct--are not opposing a NATO role. They are not sure
    whether they would actually send troops or how they might
    participate, but they are willing to listen to ideas.
    Especially after sovereignty transfers on the 1st of July, I
    think all sorts of new opportunities open up for NATO to
    participate, as well as, perhaps, other countries and
    organizations that are not part of NATO.
        We are interested, as we move forward toward the 1st of
    July and we get deeper into the process of setting up an
    interim government for the Iraqi people, we want the United
    Nations to play a more vital and important role.

                                U.N. RESOLUTION

        I have had conversations with the Secretary General about
    designating a senior representative of the Secretary General to
    perform that role, and we are starting to look at what
    resolution might be appropriate: a new U.N. resolution that
    would extend a hand to the new Iraqi government, that would
    deal with reconstruction activities of the whole international
    community, that would encourage other nations to get involved,
    that would structure a role for the United Nations.
        We are not resisting the United Nations. The President has
    said clearly, he has been saying it for quite a while, we want
    the United Nations to play a ``vital role.'' And we spend a
    great deal of time with the United Nations. I spoke to Lakhdar
    Brahimi this morning to see how he was doing in Baghdad, and
    his conversations with respect to the creation of an interim
    government.
        So, we want the international community to be involved. We
    are working on it. The President speaks to the American people
    on a regular basis about what his intentions are with respect
    to Iraq.
        It is a challenging environment right now because of these
    remnants, these terrorists, these individuals who do not want
    to see the Iraqi people achieve their dreams. They are not in
    this 70 percent and 56 percent and 71 percent you talk about,
    Senator McConnell, but we are doing this for that 70 percent,
    for that 56 percent and for that 71 percent. They deserve it
    and we are going to see that they get it. And we are not alone.

                               PREPARED STATEMENT

        We have coalition partners with us who are staying the
    course, even under the most difficult set of circumstances. And
    I think that over the next days and weeks, you will see that
    our superb armed forces will deal with the threats they are
    facing now. And when these insurgents have been cleared away,
    and then we can get back on track and continue the work that we
    have laid out: the creation of an interim government, a U.N.
    resolution, involvement of NATO and other organizations in
    transition from a CPA to an American mission.
        Mr. Chairman, members of the committee, let me stop at that
    point and make myself available for your questions.
        [The statement follows:]

                   Prepared Statement of Hon. Colin L. Powell

        Mr. Chairman, members of the subcommittee, thank you for the
    opportunity to testify on the State Department's portion of the
    President's Budget Request for fiscal year 2005. Let me give you the
    overall budget picture first and, then, outline our foreign policy
    priorities. Finally, because the Department cannot carry out its
    foreign policy function without adequate funding for its own
    operations, I want to give you a summary of our highest priorities for
    State operations.
        The President's fiscal year 2005 International Affairs Budget for
    the Department of State, USAID, and other foreign affairs agencies
    totals $31.5 billion, broken down as follows:
      --Foreign Operations--$211.3 billion
      --State Operations--$8.4 billion
      --Public Law 480 Food Aid--$1.2 billion
      --International Broadcasting--$569 million
      --U.S. Institute of Peace--$22 million
        Mr. Chairman, the President's top foreign policy priority is
    winning the war on terrorism. Forty-eight percent of the President's
    budget for foreign affairs directly supports that priority by assisting
    our allies and strengthening the United States' diplomatic posture. For
    example: $1.2 billion supports Afghanistan reconstruction, security and
    democracy building, and more than $5.7 billion is provided for
    assistance to countries around the world that have joined us in the war
    on terrorism, and $3.5 billion indirectly supports the war on terrorism
    by strengthening our ability to respond to emergencies and conflict
    situations. Moreover, $190 million is aimed at expanding democracy in
    the Greater Middle East, in part to help alleviate the conditions that
    spawn terrorists.
        In addition, $5.3 billion is targeted for the President's bold
    initiatives to fight HIV/AIDS and create the Millennium Challenge
    Corporation, both of which will support stability and improve the
    quality of life for the world's poor--and, again, help to relieve
    conditions that cause resentment and despair.
        Mr. Chairman, let me elaborate on how some of these dollars will be
    spent.

                          WINNING THE WAR ON TERRORISM

        Winning on the battlefield with our superb military forces is just
    one step in defeating terrorism. To eradicate terrorism, the United
    States must help create stable governments in nations that once
    supported terrorism, go after terrorist support mechanisms as well as
    the terrorists themselves, and help alleviate conditions in the world
    that enable terrorists to bring in new recruits. To this end, in fiscal
    year 2005 the State Department and USAID will continue to focus on the
    reconstruction of Iraq and Afghanistan, support our coalition partners
    to further our counterterrorism, law enforcement and intelligence
    cooperation, and expand democracy and help generate prosperity,
    especially in the Middle East.
    Building a Free and Prosperous Iraq
        The United States faces one of its greatest challenges in
    developing a secure, free and prosperous Iraq. The USG is contributing
    almost $21 billion in reconstruction funds and humanitarian assistance
    to this effort. The World Bank and the International Monetary Fund are
    expected to provide another $4 to $8 billion in loans and grants over
    the next three years. These resources, coupled with the growing
    assistance of international donors, will ease the transition from
    dictatorship to democracy and lay the foundation for a market economy
    and a political system that respects human rights and represents the
    voices of all Iraqis.
        The Coalition Provisional Authority (CPA) and the Iraqi Governing
    Council (IGC) have made great strides in the areas of security,
    economic stability and growth, and democratization. Iraqi security
    forces now comprise more than half of the total security forces in the
    country. In addition, the CPA has established a New Iraqi Army, issued
    a new currency and refurbished and equipped schools and hospitals. And,
    as you know, the CPA is taking steps to help the Iraqi people form a
    fully sovereign government this summer.
        Much work remains to be done. Working with our coalition partners,
    we will continue to train Iraqi police, border guards, the Civil
    Defense Corps and the Army in order to ensure the country's security as
    we effect a timely transition to democratic self-governance and a
    stable future.
        At the same time, we are helping provide critical infrastructure,
    including clean water, electricity and reliable telecommunications
    systems which are essential for meeting basic human needs as well as
    for economic and democratic development. Thousands of brave Americans,
    in uniform and in mufti, are in Iraq now working tirelessly to help
    Iraqis succeed in this historic effort. Alongside their military
    colleagues, USAID, State Department and the Departments of the Treasury
    and Commerce are working to implement infrastructure, democracy
    building, education, health and economic development programs. These
    efforts are producing real progress in Iraq.
        As a definitive example of this progress, on March 8, the IGC
    formally signed the Transitional Administrative Law (TAL)--essentially
    an interim constitution for Iraq. This was a remarkable milestone. The
    TAL recognizes freedom of religion and expression, the right to
    assemble and to organize political parties, and other fundamentally
    democratic principles, as well as prohibiting discrimination based on
    gender, nationality or religion. This is a huge step for the people of
    Iraq and for the region--a step toward constitutional democracy. It is
    a step that just a year ago, Iraqis would not have imagined possible.
        The U.N. Secretary General's Special Advisor, Lakhdar Brahimi, is
    in Iraq now to help the Iraqis determine what sort of transitional
    Iraqi government will be developed and to prepare for elections at the
    end of this year or early in the next. Creating a democratic government
    in Iraq will be an enormous challenge--the recent increase in
    casualties magnifying that challenge. But Ambassador Bremer, working
    with the Iraq Governing Council and with the United Nations and our
    coalition partners, is committed to success. And when the CPA, funded
    and directed by the Department of Defense, goes out of business on June
    30 and the State Department assumes the lead role in representing and
    managing U.S. interests in Iraq, we will carry on that commitment. We
    are already thoroughly involved. I was just in Baghdad last month
    meeting with Ambassador Bremer, members of the IGC, and talking to some
    of our troops. I know how thoroughly involved we are. And we will all
    succeed.
        I also know that many of the members are concerned about the
    transition from CPA under the Defense Department to a U.S. Mission
    under the State Department. I can tell you that we have made
    significant progress in planning for this transition and in working on
    the challenges we will confront. To make sure we act in accord with
    your intent, we will be sending a number of people to the Congress over
    the coming weeks to brief and to answer your questions. Before we make
    recommendations to the President, you will be kept fully informed and
    your advice and counsel will be sought.
        Mr. Chairman, the recent rise in United States and coalition
    casualties in Iraq is disquieting and we are saddened at every death.
    But we will not be dissuaded or driven out. Whether we are confronted
    by an outlaw and his mobs claiming to themselves the mantle of
    religion, or by disgruntled members of the former tyrant's regime, or
    by foreign terrorists, we will deal with them. In that we are resolute.
    And Mr. Chairman, the coalition is resolute. I believe the vast
    majority of Iraqis feel the same way. They want livelihoods, security,
    freedom and the right to strive for their nation's democratic future
    within the best Iraqi traditions of tolerance and harmony. And that is
    why we will win.

    Winning the Peace in Afghanistan
        Mr. Chairman, Afghanistan is another high priority for this
    Administration. The United States is committed to helping build a
    stable and democratic Afghanistan that is free from terror and no
    longer harbors threats to our security. After we and our coalition
    partners defeated the Taliban government, we faced the daunting task of
    helping the Afghan people rebuild their country. We have demonstrated
    our commitment to this effort by providing over $3.7 billion in
    economic and security assistance to Afghanistan since 2001.
        Through our assistance and the assistance of the international
    community, the government of Afghanistan is successfully navigating the
    transition that began in October 2001. Afghanistan adopted a
    constitution earlier this year and is preparing for democratic national
    elections in September. With technical assistance from the United
    States, Afghanistan successfully introduced a new stable currency in
    October 2002 and is working to improve revenue collection in the
    provinces. The lives of women and girls are improving as women pursue
    economic and political opportunities and girls return to school. Since
    2001, the United States has rehabilitated 205 schools and 140 health
    clinics and trained fifteen battalions of the Afghan National Army
    (ANA). Also, President Bush's commitment to de-mine and repave the
    entire stretch of the Kabul-Kandahar highway was fulfilled. The road
    had not been functional for over 20 years. What was once a 30-hour
    journey can now be accomplished in 5 or 6 hours.
        While the Afghanistan of today is very different from the
    Afghanistan of September 2001, there is still much left to accomplish.
    In the near-term, the United States will assist the government of
    Afghanistan in its preparations for elections in September to ensure
    that they are free and fair. To demonstrate tangible benefits to the
    Afghan people, we will continue to implement assistance on an
    accelerated basis. The fiscal year 2005 Budget contains $1.2 billion in
    assistance for Afghanistan that will be focused on education, health,
    infrastructure, and assistance to the ANA, including drawdown authority
    and Department of Defense ``train and equip''. For example, U.S.
    assistance efforts will concentrate on rehabilitation and construction
    of an additional 275 schools and 150 health clinics by June 2004, and
    complete equipping of the fifteen army battalions. The United States
    will also extend the Kabul-Kandahar road to Herat so that people and
    commerce will be linked East and West across Afghanistan with a ground
    transportation link between three of the largest cities.
        Near the end of last month, when I was in Kabul to meet with
    President Karzai and his team, I had the chance to visit a voter
    registration site. I saw how far Afghanistan has progressed, in only
    two years, along the path to constitutional democracy. I saw also clear
    evidence of the Afghan people's commitment to continue on that path
    despite the many challenges ahead. I met 9 or 10 women at the site and
    they knew what was at stake in their country. They were eager for the
    free and fair elections called for in the Bonn Agreement and I assured
    them that America was solidly behind them. I told them that as long as
    they are committed to building a new, democratic Afghanistan, we will
    stand shoulder to shoulder with them.
        In that regard, Mr. Chairman, last week I attended the Berlin
    Afghanistan Conference. There, we raised $4.5 billion for President
    Karzai's fiscal year budget--102 percent of what was sought. So I feel
    confident of our ability to continue making progress in the
    reconstruction of that country.

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

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

    Public Diplomacy in the Middle East
        And the advance of freedom is aided decisively by the words of
    freedom.
        Democracy flourishes with freedom of information and exposure to
    diverse ideas. The President's fiscal year 2005 Budget promotes
    expansion of democracy in the Middle East by providing public access to
    information through exchange programs and the Middle East Television
    Network.
        New public diplomacy efforts including the Partnerships for
    Learning (P4L) and Youth Exchange and Study (YES) initiatives have been
    created to reach a younger and more diverse audience through academic
    and professional exchange programs. In fiscal year 2005, the P4L and
    the YES programs, funded at $61 million, will focus more on youth of
    the Muslim world, specifically targeting non-traditional, non-elite,
    often female and non-English speaking youth.
        U.S. broadcasting initiatives in the Middle East encourage the
    development of a free press in the American tradition and provide
    Middle Eastern viewers and listeners access to a variety of ideas. The
    United States revamped its Arabic radio broadcasts in 2002 with the
    introduction of Radio Sawa, which broadcasts to the region 24 hours a
    day. As a result, audience size for our Arabic broadcasting increased
    from under 2 percent in 2001 to over 30 percent in 2003. Based on this
    successful model, the United States introduced Radio Farda to broadcast
    to Iran around the clock. Building on this success, the fiscal year
    2005 President's budget request provides over $70 million for Arabic
    and Persian radio and television broadcasts to the Middle East. In
    February, the United States launched the Middle East Television
    Network, an Arabic language satellite network that will have the
    capability of reaching millions of viewers and will provide a means for
    Middle Easterners to better understand democracy and free market
    policies, as well as the United States and its people. This network
    kicked off on February 14 with 9 hours per day of broadcasting. Now the
    broadcasting is 24/7. The network--Al-Hurra, or ``the Free One''--
    reaches 22 countries, including Iraq. President Bush has already
    appeared on the network and I did an interview in late February.

                     OUR NEW APPROACH TO GLOBAL PROSPERITY

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

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

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

                 CARING FOR THE WORLD'S MOST VULNERABLE PEOPLE

    Emergency Plan for AIDS Relief
        When President Bush took office in January 2001, the HIV/AIDS
    pandemic was at an all time high, with the estimated number of adults
    and children living with HIV/AIDS globally at 37 million, with 68
    percent of those individuals living in sub-Saharan Africa. From fiscal
    years 1993 to 2001 the total U.S. Government global AIDS budget was
    about $1.9 billion. As part of the Emergency Plan for AIDS Relief, the
    President proposed $2 billion in fiscal year 2004 as the first
    installment of a 5-year, $15 billion initiative, surpassing nine years
    of funding in a single year. The President's Emergency Plan for AIDS
    Relief represents the single largest international public health
    initiative ever attempted to defeat a disease. The President's Plan
    targets an unprecedented level of assistance to the 14 most afflicted
    countries in Africa and the Caribbean to wage and win the war against
    HIV/AIDS. In addition, programs will continue in 75 other countries.
        By 2008, we believe the President's Plan will prevent seven million
    new infections, treat two million HIV-infected people, and care for 10
    million HIV-infected individuals and those orphaned by AIDS in
    Botswana, Cote d'Ivoire, Ethiopia, Guyana, Haiti, Kenya, Mozambique,
    Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, and Zambia.
        Announced during President Bush's State of the Union address on
    January 28, 2003, the Emergency Plan provides $15 billion over five
    years for those countries hardest hit by the pandemic, including $1
    billion for the Global Fund to Fight AIDS, Tuberculosis and Malaria.
    The fiscal year 2005 Budget provides $2.8 billion from State, USAID,
    and the Department of Health and Human Services (HHS) to combat global
    AIDS, more than tripling funding for international HIV/AIDS since the
    President took office.
        Over the past year, we have worked with the Congress to pass
    legislation laying the groundwork for this effort and to appoint a
    senior official at the State Department to coordinate all U.S.
    Government international HIV/AIDS activities. Ambassador Randall Tobias
    has been confirmed by Congress and has now taken steps to assure
    immediate relief to the selected countries.
        On February 23, Ambassador Tobias, Secretary Thompson, USAID
    Administrator Andrew Natsios, and I rolled out the strategy for this
    plan and announced the first dispensation of dollars--$350 million in
    contracts to some of the NGOs and PVOs who will be carrying out the
    fight at the grass-roots level. It was a thrilling moment, I can assure
    you.
        As a crucial next step, the fiscal year 2005 Budget Request expands
    on the Emergency Plan. By working together as a highly collaborative
    team, and placing primary ownership of these efforts in the hands of
    the countries that we are helping--just as you will recall the Marshall
    Plan did so successfully in post-WW II Europe--the Department of State,
    USAID and HHS can use significantly increased resources quickly and
    effectively to achieve the President's ambitious goals in the fight
    against global AIDS.
        Mr. Chairman, President Bush summed it up this way in April of last
    year, ``There are only two possible responses to suffering on this
    scale. We can turn our eyes away in resignation and despair, or we can
    take decisive, historic action to turn the tide against this disease
    and give the hope of life to millions who need our help now. The United
    States of America chooses the path of action and the path of hope.''
    These dollars put us squarely on that path.

    Emergency Humanitarian Assistance--Helping Others in Need
        The President's Budget Request reflects a continued commitment to
    humanitarian assistance. The request maintains U.S. leadership in
    providing food and non-food assistance to refugees, internally
    displaced persons, and other vulnerable people in all corners of the
    world. In addition, the budget reflects the findings of the Program
    Assessment Rating Tool (PART) evaluations completed for the United
    Nations High Commissioner for Refugees and for USAID's Public Law 480
    Title II international food assistance, which confirmed a clear purpose
    for these programs.
        In 2003, the Administration provided funding to several
    international and non-governmental organizations to assist nearly
    200,000 Angolan refugees and internally displaced persons return home
    after decades of civil war.
        In an Ethiopia enveloped by drought, the Administration led
    international efforts to prevent widespread famine among 13 million
    vulnerable people, providing over one million metric tons of emergency
    food aid (valued at nearly half a billion dollars) to the World Food
    Program and NGOs, funding immunizations for weakened children, and
    supplying emergency seeds to farmers.
        In Sudan, the Administration worked with the United Nations and the
    Government of Sudan so that vital assistance could be delivered to the
    Sudanese people. This year the United States will provide about $210
    million in vital assistance to the people in the south, including
    approximately 125,000 metric tons (valued at nearly $115 million) in
    food aid, as well as non-food assistance, such as sanitation and water.
    We anticipate that a comprehensive peace agreement in Sudan will allow
    us to expand significantly our development assistance to help the
    Sudanese people in effecting a long-awaited recovery following decades
    of civil war. The fiscal year 2005 Budget includes $436 million in
    humanitarian and development, economic, and security assistance
    funding, much of which will be contingent upon a peace settlement
    between the government and the south.
        The fiscal year 2005 Budget ensures that the Administration can
    continue to respond quickly and appropriately to victims of conflict
    and natural disasters and to help those in greatest need of food,
    shelter, health care and other essential assistance, including those in
    areas starting to recover from conflict and war, such as Liberia. In
    particular, the budget requests funding for a flexible account to give
    the President the ability to respond to unforeseen emergency needs, the
    Emergency Fund for Complex Foreign Crises, funded at $100 million.
        Mr. Chairman, I know State Operations are not a part of this
    subcommittee's specific oversight responsibilities, but funding these
    operations is essential to our being able to carry out America's
    foreign policy. So let me turn briefly to the State Department
    operations portion of the President's Budget Request which, as you will
    recall, totals $8.4 billion.

                   KEEPING AMERICANS SAFE AT HOME AND ABROAD

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

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

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

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

        Senator McConnell. Mr. Secretary, I have one member here
    who has severe constraints on time. I am going to go out of
    order and let the Senator from Pennsylvania have one question,
    because I understand he will not be able to return. Senator
    Specter.
        Senator Specter. Well, thank you very much, Mr. Chairman
    for yielding to me, and thank you, Mr. Secretary, for the
    outstanding job you have done in providing real balance on our
    foreign policy. I will be submitting questions for the record
    on Iraq, Iran, AIDS, terrorism, the Saudi Accountability Act.
    But in your opening comments, you did not make any reference to
    the situation in Israel. And I note that there is a request for
    $2.6 billion.

                                  ISRAEL FENCE

        My question to you relates to the fence and Israel's
    assertion of its right to make decisions on its own national
    security as it sees fit. And my question is: What is the
    administration view on Israel's sole determination of the
    fence? And are there--is there any thinking about restricting
    any aid or foreign loan guarantees or any other financial
    support to Israel by virtue of what Israel is doing with the
    fence?
        Secretary Powell. Well, as you know, Senator Specter, we do
    have a policy of discussing with Israel their settlement
    activities and some restrictions on loans as a result of
    settlement activities.
        With respect to the fence, Israel has a right to build a
    fence to protect itself if it feels that is what it needs to
    keep the terrorists from getting into Israel. We have expressed
    concern to the Israelis over time about the route of the fence
    and whether it intrudes into Palestinian territory more deeply
    than is necessary for the legitimate right of self-defense.
        The Israelis have made some adjustments to the fence over
    time and they have taken the fence down in some places once
    they have had a chance to take a second look at the impact that
    the fence has had. But at the moment we do not have any plans
    to dock them over the route of the fence.
        Senator Specter. Thank you.
        Thank you, Mr. Chairman.
        Senator McConnell. Mr. Secretary, one of our colleagues
    just recently compared Iraq to Vietnam. You served in Vietnam.
    Are there any similarities?
        Secretary Powell. Not in my judgment, Senator. And I do not
    think these kinds of comparisons are terribly helpful. Vietnam
    was another part of the world, another time in history; and we
    ought to see the situation for what it is today and not try to
    find comparisons that can then be painted in a negative light.
        I think this is quite different. I think that we have an
    Army over there that knows what it is doing. We have a people
    that want to be free and in a democratic society. We do not
    have huge state sponsors outside of Iraq flooding the place
    with weaponry and manpower of any kind. And I think it is not a
    swamp that is going to devour us.
        It is a problem that is solvable and manageable and we need
    to stay the course and not contaminate the good work we are
    doing by comparisons to Vietnam.
        Senator McConnell. What kind of entity will we be handing
    authority to on July 1?
        Secretary Powell. It has not been determined yet. As you
    know, we have a governing council now. One model says leave it
    as it is. Another model says expand it to give it broader
    representation.
        There are other ideas that say, maybe you should try to
    have some sort of mini-Loya/Jirga-like process such as
    Afghanistan but on a smaller scale, although there is not quite
    a tradition of that in Iraq. Or a Shira, some sort of meeting
    where people would elect their representatives.
        So Ambassador Brahimi is looking at all of these, along
    with Ambassador Bremer and his staff and my staff; but no
    decisions have been made yet as to which one of these models
    will be settled upon.
        I think the model that is getting the most attention right
    now and seems the most practical one in terms of the time
    available to us would be some form of expanded governing
    council; but that is just sort of the lead horse at the moment.
    No decisions have been made.
        Senator McConnell. Until recently, the Shi'a were
    relatively comfortable with the transition process and were
    relatively content with their fair shot at winning elections
    during the formation of a new government, while the violence
    was largely a Sunni phenomenon. What do you make of the Sadr
    uprising, his militia, and what it may say if anything about
    the broader Shi'a population, and their views about which way
    we ought to go from here?
        Secretary Powell. I think the administrative law that was
    approved last month recognized the fact that the Shi'a are the
    majority in the country; 60 percent of the people are Shi'a.
    And so in a democratic system where a representative government
    is what we are talking about, they will have the greatest
    representation in the assembly, and that will pass through to
    the executive institutions as well.
        The important point, though, was that the administrative
    law also protected the rights of those who are not in the
    majority, the Sunnis, the Kurds, and the other groups within
    the country. And so we think we have found a good
    representative balance.
        Now, there are still questions about this and not all
    parties are satisfied with it but that is why we are going to
    go forward and write a constitution. And changes could be made
    as you go forward toward the constitution.
        I think this satisfied most Shi'a. All Shi'a members of the
    Governing Council went along with it. The Ayatollah Sistani--
    who is seen in the Shi'a population as the leading ayatollah,
    and has great weight when he speaks--has some reservations
    about it but he did not firmly object to the TAL. The Shi'a in
    the governing council went and saw him and said, ``Look, this
    is pretty good. Let us move in this direction.'' And he
    understood that. He has reservations and those reservations
    will have to be dealt with as we go forward.
        The fellow who is causing the trouble now, al-Sadr, is a
    young radical who is not considered a leading figure in the
    Shi'a community. But he does have the loyalty of the Mahdi
    militia, and he is stirring up a great deal of trouble. He has
    been indicted for the worst kinds of crimes and he has to be
    brought to justice eventually.
        Senator McConnell. Do you think he is getting any support
    from outside the country--from Iran, for example?
        Secretary Powell. There may be some support coming in the
    country. I cannot say it is not the case but I do not sense
    that he is enjoying great support from other Shi'a groups,
    other than his own within the country; or for that matter, from
    outside the country.
        I think he is a finite definable problem. And what we want
    to do is deal with this in the very near future so that he does
    not start to take on more of an aura and more of an influence
    than is deserving of his state and position in the Shi'a
    community.
        Senator McConnell. Final question and then I will turn to
    Senator Leahy. So, your view is that his following is small and
    stable, and not small and growing?
        Secretary Powell. It is small and stable. We do not want to
    see it grow. And that is why our military forces now are
    engaging the Mahdi militia.
        Senator McConnell. Senator Leahy.
        Senator Leahy. Thank you, Mr. Chairman. And Secretary
    Powell, thank you for the comments you made regarding what I
    said in my opening statement. And you and your staff will have
    a copy of my whole statement. I go into a number of things,
    Liberia, the Charles Taylor situation in Sierra Leone,
    Colombia, Indonesia, and others.
        I ask that you take a look at it because, if anything, it
    is a road map of what I intend to focus on in this subcommittee
    this year.
        I appreciate the other troops besides ours involved in the
    reconstruction of Iraq. The British led the way with, I
    believe, 11,000 troops. We have got about 130,000.
        The other 32 nations provide less than 10 percent of the
    troops. They provide less than 1,000 soldiers each, including
    11 of our NATO allies. We have police departments that are a
    lot larger than what they have put in there. And the Spanish,
    of course, are planning to withdraw.
        Mr. Brahimi is only a special adviser. He is not a U.N.
    administrator with all those powers.
        The British have given $1 billion for reconstruction aid.
    Ours is over $20 billion.
        So, we have others in there but we are carrying by far the
    lion's share.
        George Will suggested in a column--and it probably will
    shock him to know I quoted his column--but he said in The
    Washington Post yesterday:

        The transfer of power in Iraq is to an institutional
    apparatus that is still unformed. This is approaching at a
    moment when U.S. forces in Iraq, never adequate for post-war
    responsibilities are fewer than they were.
        U.S. forces are insufficient for that mission; unless the
    civil war is quickly contained, no practicable U.S. deployment
    will suffice. U.S. forces worldwide cannot continue to cope
    with Iraq as it is, plus their other duties--peacekeeping,
    deterrence, training--without stresses that will manifest
    themselves in severe retention problems in the reserves and
    regular forces.

        You have a military background. Do you disagree with him?
    Do we have enough troops there if civil war spreads. Do we have
    enough to contain it?
        Secretary Powell. The commanders believe that there are
    enough forces but, because of the recent spike in activity,
    Secretary Rumsfeld and General Abizaid are--I think the way to
    put it--delaying the transfer out of those who were scheduled
    to leave in the very near future in order to keep an increased
    density of troops.
        Senator Leahy. And continue to transfer in so that you----
        Secretary Powell. Yes.
        Senator Leahy [continuing]. Raise the overall number.
        Secretary Powell. The overall number goes up, rather than
    goes down for some period of time. I do not know how long that
    will be. It is up to Don Rumsfeld and John Abizaid.
        What is interesting is that, although I do not have the
    total access to these numbers as I used to have on a daily
    basis, the re-enlistment rates among those units that have been
    there remain high.
        Senator Leahy. Well----
        Secretary Powell [continuing]. The troops know that they
    are doing something that is important and, even with the
    knowledge that they may have to go back, they are re-enlisting.
        Senator Leahy. I have gone out to visit our--some of our
    wounded out at Walter Reed, and I am talking to a man who has
    lost his leg. He has got a new, very high-tech prosthetic. He
    is showing it to me.
        So I say: ``What are you going to--now what do you--plan to
    do once you get out of here?'' And he looked at me----
        Secretary Powell. Go back to his unit.
        Senator Leahy [continuing]. Said, ``I want to go back. I
    want to go back to the Army.''
        It was very moving. My wife, as you know, is a nurse. She
    has talked with a number of very severely wounded--the same
    thing. And you have to admire their courage.
        Secretary Powell. Well, if I may, Senator Leahy, when I was
    over there a couple of weeks ago, I spoke to a large group of
    troops in one of the rooms. There must have been 500 or 600 in
    the room. And after saying a few words to them, and thanking
    them, and telling them how proud we all were of them, I was
    walking through the crowd, shaking hands, and taking pictures--
    and you are familiar with the scene.
        As soon as I got in the crowd, some young GI stuck his hand
    out and grabbed my hand. He did not want a picture. He did not
    want a signature. He just said, ``Tell the President to stay
    the course.''
        Senator Leahy. Yes.
        Secretary Powell. And these are the young men who are over
    there, not getting showers every day, and living in the mud,
    and living in the dirt, and living in the sand.
        Senator Leahy. You have been there.
        Secretary Powell. I have been there; I know what it is
    like. And they know what they are doing is important. That is
    why they are telling all of us, ``Stay the course.''
        Senator Leahy. None of us have a crystal ball; and if we
    did, maybe this whole thing might have been handled
    differently, maybe Afghanistan might have been handled
    differently, maybe post- or pre-September 11 might have been.
        But let us talk about after June 30. We now have a new
    Iraqi Government. Suppose they take a position that we strongly
    disagree with, suppose they want an Iranian-style theocracy
    instead of a democracy; a theocracy that will not respect
    minority rights, whether it is women or other minority
    religions. Do we have veto power to block it?
        What if they say to the American soldiers, ``Out, right
    now, today,'' or within the few days it might take to leave?
    Can we refuse to leave?
        Secretary Powell. Sovereignty means sovereignty. But before
    they get sovereignty handed over to them or at the time that
    sovereignty is handed over to them, we will have made
    arrangements with respect to what our troops are doing there
    and for what purpose. And the least of my worries is that they
    are going to tell us prematurely to leave.
        Senator Leahy. Why?
        Secretary Powell. Because they are going to need us for
    security for some time to come. This is still a work very much
    in progress. This will be a new government that is still
    getting its sea legs, that is still developing institutions of
    democracy, that has not yet finished a constitution, and has
    not yet held an election to give it full legitimacy. And it
    will be challenged.
        It will be challenged by the kinds of forces that you see
    challenging us today. And for that reason, I am quite confident
    that we will not have a dispute with the Interim Government
    over us keeping our troops in their country. They will need
    that kind of protection.
        Even though sovereignty will be returned to them, the
    troops will remain under our control. And we believe we can
    have an understanding with the Interim Government based on what
    we have discussed with the Governing Counsel, now that Iraqis
    troops will also be under our command. That is our preference
    in order for there to be unity of command.
        If the Interim Government starts to move in a way that is
    totally inconsistent with democracy, or starts to create a
    theocracy, or take away the rights from people, then we have a
    very brand-new and difficult situation. But we do have some
    considerable influence over such a thing by the money that we
    are providing for the reconstruction of the country, by the
    political relationship we will have with them, by the
    international organizations that we hope will be there with us,
    and hopefully perhaps by the U.N. resolution that will help
    establish their interim legitimacy until they go to elections.
        But they will be sovereign. I think as a result of
    agreements and a result of, hopefully, resolutions that are
    passed, there will be some constraints on the power of this
    sovereign government.
        Senator Leahy. I will submit my other questions for the
    record.
        Senator McConnell. Thank you, Senator Leahy. Chairman
    Stevens.
        Senator Stevens. Thank you very much. I just have a couple
    of questions, Mr. Secretary.

                                 WEAPONS DUMPS

        When we were in Iraq, I received estimates of the number of
    weapons dumps. Now, these are a mass of weapons of destruction,
    not the weapons of mass destruction, but the estimate I
    received was from 1,000 to 7,000 of these dumps full of
    artillery shells, hand-held weapons, and shoulder-held weapons.
    We have asked the Congressional Research Service and other
    agencies to try and determine when they were paid for. It is my
    understanding that debt that was incurred after the agreement
    was signed at the end of the gulf war, after the sanctions went
    into effect is invalid. Now, I do not know whether you can
    affirm that but that is my understanding.
        We fear that some of these nations are claiming that the
    bills that are owed are legitimate debts but they were for
    weapons that came to Iraq after Saddam Hussein agreed not to
    purchase any additional weapons.
        Do you think you can ask the Department of State to find
    out if they--know anything about the origin of those weapons,
    these mass deposits of weapons, and their relationship to the
    debt that these people claim?
        I understand Saudi Arabia claims $30 billion; Russia, $6.9
    billion; France, $5.9 billion; Germany, $4.8 billion, and it
    goes on up to $125 billion--$125 billion in total debt. I am
    hoping we can get someone--maybe you could do it--to ask the
    United Nations to step in and help the world destroy these
    enormous deposits of weapons.
        They are out on the ground, no fences around them, and very
    few of them are guarded. I talked to some of the people
    involved in non-government security, the people that were
    involved in Fallujah.
        I asked: ``Have you ever taken weapons from these dumps,''
    they said: ``Well, that would be illegal.''
        I said: ``Well, you mean, illegal for us but not illegal
    for Iraqis?''
        He said: ``Well, we borrow a few now and then.''
        Now, they are just dumps that anyone with a truck can go by
    and pick up artillery shells, all sorts of equipment. I think
    someone has to take responsibility for destroying them.
        Right now, the military does not have enough people to
    guard them. One of them was 5 miles square and piled up about
    10 feet high of weapons.
        These weapons dumps are just totally being ignored. I had
    to apologize to Senator Diane Feinstein when she raised it last
    year. I did not know the scope and extent of it, and she wanted
    us to add some money to the defense appropriations bill. We
    added a little money but we do not have enough money to deal
    with this issue and keep our troops in Iraq, too.
        So, I urge you to help us find some way to determine who
    brought weaponry to Iraq and if they are claiming that they
    have a debt that is owed by the new Iraq, whether weapons were
    brought in illegally after 1991. In any event, please think
    about who can help us get rid of them. That is my message to
    you, my friend.
        I do not think I have ever seen a more difficult problem in
    a battlefield in my life. And I have seen a lot of them, as you
    have. I cannot believe that we can live with the fact that
    anyone can go pick up weapons.
        If they are going to be available on a no-cash and come-
    carry basis, there is no way we can deal with this. I do not
    think we should expose our people to that kind of weaponry,
    totally unguarded and totally available to anyone who wants to
    use it in an unconventional way.
        Secretary Powell. Thank you, Senator. The whole country
    was--is an ammo dump.
        Senator Stevens. Yes.
        Secretary Powell. There are facilities all over the place.
    Some were destroyed during both the gulf war and the current
    war. Others were destroyed after the war, but it was still a
    huge problem, because of the number of facilities.
        I know that Secretary Rumsfeld is working with Ambassador
    Bremer and our military commanders over there to try to get
    some kind of control over these facilities, so we do not have
    the kind of the problem you describe.
        With respect to debt, I am going to ask my lawyers to give
    you an answer for the record, because I do not want to guess at
    it as to if a country sold weapons to Iraq that were sold in
    violation of U.N. resolutions, why should there be a legitimate
    debt against the Iraqi people for such sales? But I need to
    give you a formal answer for the record on that.
        [The information follows:]

                             United States Department of State,
                                        Washington, DC, April 29, 2004.
    Hon. Ted Stevens,
    Chairman, Committee on Appropriations, U.S. Senate.
        Dear Mr. Chairman: This is in response to the question that you
    raised during Secretary Powell's testimony on April 8, 2004 concerning
    the Administration's fiscal year 2005 budget request. Specifically, you
    inquired whether, in light of the mass deposits of weapons found in
    Iraq, any of the debt claims that are being made against Iraq by
    various creditor countries derived from weapons sales that violated the
    Iraqi arms embargo instituted under United Nations Security Council
    Resolution 661 and subsequent related resolutions.
        The vast majority of these bilateral official claims against Iraq
    appear to pre-date the Iraq sanction regime and therefore could not
    derive from sales of weapons in violation of that sanction regime. Of
    the small amount of official claims that post-date the sanctions
    regime, we are not aware of any such claims that derive from illegal
    arms sales. Although Iraqi authorities, working with the CPA and with
    the IMF and Paris Club, have made great progress in identifying the
    amounts of debt outstanding, much of the Iraqi documentation is
    missing. The Iraqi authorities will have to ask Iraq's creditors for
    documentation to substantiate their claims. Until this process is
    completed, we will not be able to completely rule out the possibility
    that some claims derive from illegal military sales. Given the
    knowledge that we have so far, however, we have no reason to believe
    that the debt claims derive from sales of weapons in violation of U.N.
    sanctions.
        Prior to the institution of the Iraqi sanctions regime in late
    1990, Iraq had accumulated a very large external debt as a result,
    inter alia, of the costs of the Iran-Iraq war. While we believe that a
    significant portion of that debt derived from arms sales, such sales
    were not in violation of any U.N.-sanctioned embargo at the time. It is
    possible that a significant portion of the mass deposits of weapons
    recently found in Iraq derived from such pre-sanctions sales.
        We hope that this information is helpful to you and the other
    members of the Senate Appropriations Committee. Please do not hesitate
    to contact us if we can be of further assistance.
                Sincerely,
                                                 Paul V. Kelly,
                              Assistant Secretary, Legislative Affairs.

        Senator Stevens. That is totally logical but, very clearly,
    if they sent it in as canned Spam and they are weapons, that is
    the problem.
        Secretary Powell. Yes, sir.
        Senator Stevens. I hope we can find some way to identify
    it. I asked the Iraqis, and they said all those records were
    destroyed in the war.
        Secretary Powell. It may be hard to get all the answers,
    Senator.
        Senator Stevens. I do think, though, that the United
    Nations ought to be involved. If they want to come in and do
    something that is not violent and not too exposed to danger,
    that is one job they can take on. They are out west, they are
    north, they are south, and they are east. There are 1,000 to
    7,000 dumps. Something has to be done at least to put them
    under some type of security until we can figure out what to do
    with them--until the Iraqis figure out what to do.
        Lastly, I do not think there ought to be an Iraqi Army. I
    think there ought to be a self-defense force, and that we ought
    to limit the number of weapons of this type they have access
    to. But today they have open access to weapons that are just
    horrendous in terms of their capability. Thank you, my friend.
        Secretary Powell. Thank you, Senator.
        Senator McConnell. Thank you, Senator Stevens. The order
    remaining is Senator Harkin, Senator Bennett, Senator DeWine,
    Senator Landrieu, and Senator Byrd.
        Senator Harkin.
        Senator Harkin. Thank you very much, Mr. Chairman. Mr.
    Secretary, you may recall that at last year's hearing, I asked
    you what the Department of State was doing to ensure that the
    needs of people with disabilities were being addressed in our
    foreign assistance programs in Iraq, Afghanistan, and other
    countries. Now, this came about because it had been reported
    back to me that many of our dollars that were used for
    reconstruction in Bosnia, for example, and places like that,
    that the schools were rebuilt and things were inaccessible,
    just totally inaccessible. And I thought, ``Wait a minute. We
    are using U.S. dollars to do that, and we are not providing any
    accessibility.''

                            PEOPLE WITH DISABILITIES

        So then, I began to look at it more and found that we
    really did not have much of a focus in our policies regarding
    people with disabilities. So since we last met, Congress has
    passed the following legislation. One, we required the
    coalition provisional authority to promote the inclusion of
    people with disabilities. Second, we instructed USAID to
    develop access standards. And third, we included disability-
    related criteria for the Millennium Challenge Account. Those
    three things have been passed by Congress.
        I need not tell you, Mr. Secretary, the United States is, I
    think, is in a unique position to lead the world in
    demonstrating the tremendous potential of people with
    disabilities when those barriers are removed. Last week, I met
    with Under Secretary Paula Dobriansky and Assistant Secretary
    Lorne Craner to discuss these international disability
    initiatives.
        I am pleased to learn the Department of State will be
    improving documentation of disability rights in the human
    rights reports. So, that is one good step.
        However, I have proposed the formation of an inter-agency
    panel or task force, within the Department of State, to raise
    awareness and coordinate the government's international
    disability programs. I have stressed the need for a permanent
    staff to focus on disability issues. Because if you do not have
    some inter-agency task force, it just doesn't happen, as I
    found in the last year. You expressed an interest in it a year
    ago. You said you were very sensitive to the issue; I believe
    you are. But you have got a lot on your plate. And you have got
    a lot of things to think about. And this falls by the wayside.
        So, can you just tell me now what are we going to do? Is
    there any hope that we can have some kind of a panel or
    something like that at the State Department?
        Secretary Powell. I think there is. Whether it needs a
    permanent secretariat or not, or an inter-agency secretariat of
    some kind on a permanent basis and how large it should be, I
    would have to sit and discuss this with Under Secretary
    Dobriansky and others.
        But we are sensitive to it, especially with respect to the
    new Millennium Challenge Account and the Millennium Challenge
    Corporation. And I think you have had discussions with Under
    Secretary Dobriansky about how we can approach that problem.
    So, we are sensitive to it.
        I have not discussed the idea of a permanent panel with a
    secretariat, with Under Secretary Dobriansky.
        Senator Harkin. Well, again, I thank you for your
    sensitivity to it; but you were sensitive to it last year, too.
    And I mean it, I am not just saying that, I know you are. But
    there has to be someone in your operation to whom people go
    when these issues come up, whose task it is to ensure that
    disability rights, the things that we have passed in the last
    year, are actually carried out. If there is no one there to do
    that, it just gets muddled and no one ever takes care of it.
        So I do not know the phrases ``secretariat'' and such. I do
    not understand that phrase but these----
        Secretary Powell. No. Your suggestion being we ought to
    have a permanent staff of some kind?
        Senator Harkin. Somebody.
        Secretary Powell. That is what I am talking about.
        Senator Harkin. Some permanent staff some place whose
    focus--I mean, you have it on a number of different other
    areas.
        Secretary Powell. Yes.
        Senator Harkin. Women's issues, other issues like that, you
    have permanent people that someone knows there is an officer,
    someone to go to for guidance, direction, consultation, that
    type of thing when you are dealing with disability rights
    issues. So, I hope that you can take a look at that again.
        Secretary Powell. Thank you, Senator. I will.
        [The information follows:]

                             United States Department of State,
                                         Washington, DC, March 1, 2004.
    Hon. Tom Harkin,
    U.S. Senate.
        Dear Senator Harkin: This is in response to your January 21 letter
    to Secretary Powell urging that our foreign policy promote ``the rights
    and inclusion of people with disabilities.'' Thank you for your
    thoughtful letter. We are aware of your leadership in this area and
    appreciate your strong commitment to the disability community.
        We have attached for your review the annual Country Reports on
    Human Rights Practices, which was released on February 25th. In Section
    5 of each country chapter, we report on the constitutional (legal)
    prohibitions on discrimination based on disability, and whether the
    government of each country effectively enforces those prohibitions. In
    countries where we find societal violence, we report on efforts by non-
    governmental entities to incite violence based on these issues, as well
    as to identify any laws, administrative regulations, or government
    practices that are inconsistent with equal access to housing, jobs,
    education and/or health care. We note any mechanisms available for
    redress of discrimination and whether such mechanisms are effective,
    and report any discrimination against disabled persons in employment,
    education or the provision of other state services. We report whether
    the law mandates building access and whether the government effectively
    enforced the law. We also report abuses in governmental mental health
    facilities, including inhuman and degrading treatment, arbitrary
    commitment, abuse of physical restraints, unhygienic living conditions,
    inadequate medical care, lack of safeguards against dangerous treatment
    and lack of protection against sexual or other violence.
        Our embassies gather information throughout the year from a variety
    of sources across the political spectrum, including government
    officials, jurists, armed forces sources, journalists, human rights
    monitors, academics, and labor activists. This information gathering
    can be hazardous, and our officers regularly go to great lengths, under
    trying and sometimes dangerous conditions, to investigate reports of
    human rights abuses and come to the aid of individuals at risk.
    Disability organizations around the globe are also welcome to provide
    information through this process.
        In addition, the Democracy, Human Rights and Labor Bureau (DRL) has
    been pleased to meet--on more than one occasion--with U.S. disabilities
    NGOs, including those referred by your staff. In September, DRL
    provided disability NGOs with a database that includes the names and
    addresses of 805 disability organizations we have identified in 172
    different countries.
        More recently, the DRL Senior Coordinator for Democracy and Human
    Rights Promotion met with NGO representatives referred by your office
    to discuss grant possibilities under DRL's Human Rights and Democracy
    Fund (HRDF). These individuals were briefed on the types of proposals
    DRL funds, and were invited to submit an unsolicited proposal. HRDF
    funds are used to promote innovative programming that upholds
    democratic principles, supports democratic institutions, promotes human
    rights and builds civil society in countries of strategic importance.
    HRDF finds unique, timely, cutting-edge projects that do not duplicate
    other efforts, as opposed to simply contributing to larger projects.
    Also, HRDF is used to fund pilot projects, or ``seed funds'' that will
    have an immediate impact but that have potential for continued funding
    beyond HRDF resources.
        The Department of State, including the Bureau of Political-Military
    Affairs, works closely with the U.S. Agency for International
    Development (USAID) and other agencies, on humanitarian demining
    programs to clear landmines and promote mine risk education in some 30
    countries. Landmines and other explosive remnants of war have created
    thousands of maimed and disabled people around the world. Through our
    partnership program we support NGOs that treat landmine victims and
    operate prosthetic clinics. Many of them also serve as advocates for
    disabled persons in their communities. In partnership with Warner Bros.
    animation we produced public service announcements (PSAs) for Cambodia
    that warn children about the dangers of landmines. These PSAs also
    carry a message of respect for and acceptance of people with
    disabilities.
        USAID has been working since 1989 to assist people with
    disabilities in their development efforts. We are enclosing a copy of
    their ``Third Report on the Implementation of the USAID's Disability
    Policy.''
        On behalf of USAID, The Department of State Bureau of Population,
    Refugees and Migration (PRM) has awarded grant agreements to NGOs for
    distributing wheelchairs to persons of need throughout the world,
    regardless of race, religion, or political affiliation.
        The Office of the U.S. Global AIDS Coordinator has responsibility
    for all HIV/AIDS programs of the United States government overseas,
    including in 14 focus countries where we will provide extensive new
    resources for prevention, treatment and care. U.S. programs will offer
    a high degree of flexibility in order to provide the most appropriate
    methods of prevention, treatment, and care for groups and individuals,
    including those with disabilities.
        The Department of State is taking effective action in a variety of
    areas. As we mentioned during the February 26th meeting with your
    staff, we do not believe that the establishment of a new special
    coordinator position is warranted at this time.
        Thank you for your letter and please feel free to let us know if
    you have additional suggestions. We look forward to working with you on
    this issue of great importance.
                Sincerely,
                                                 Paul V. Kelly,
                              Assistant Secretary, Legislative Affairs.

    Note.--``Third Report on the Implementation of the USAID's Disability
                Policiy.'' The full text of the Annual Human Rights Report
                can be found at http://www.usaid.gov/about/disability/
                third_report.pdf

        Senator Harkin. I appreciate that.
        Secretary Powell. Thank you.

                                     HAITI

        Senator Harkin. One last thing, Mr. Secretary, I--maybe if
    I get some more time on the second round, you and I have spoken
    a number of times about the situation in Haiti. And I thank you
    for your speaking with me during that very tense period of
    time; and you were very kind and generous with your time with
    me and I appreciate that.
        I know you were there on Monday. I'd like to note that you
    didn't mention the crisis in Haiti in either your opening or
    written statements. I just wanted to point out the crisis in
    Haiti didn't just happen overnight. Since 2001, the OAS has
    worked to resolve the political situation in Haiti. Your office
    has been working with them since 2001.
        A year ago, the United Nations warned the international
    community of a looming political and humanitarian crisis in
    Haiti. Despite this and other forewarnings, the administration
    was left scrambling to respond in February when armed thugs
    took to the streets in Haiti.
        As late as February 13, Mr. Secretary, at a press briefing
    with other foreign ministers, you stated: ``We will accept no
    outcome that in any way illegally attempts to remove the
    elected president of Haiti. At the same time, we believe both
    sides need to come together and find a political solution, a
    peaceful political solution, using the CARICOM proposal.'' That
    is February 13.
        When asked at that briefing how you hoped to convince the
    Haitian opposition to accept the CARICOM plan, which President
    Aristide accepted immediately, you said--and again I quote--
    ``We think that the CARICOM plan has opportunities for both
    sides. President Aristide was elected by the Haitian people and
    his departure from the scene as president can only be by
    democratic constitutional means.'' I am quoting you.
        ``And it would not be appropriate. It would be inconsistent
    with a plan to attempt to force him from his office against his
    will. And that is what you have heard us clearly say today is
    unacceptable outcome.'' Your quote, February 13.
        On February 19, you told Sam Donaldson, ``What we have to
    do now is stand with President Aristide--he is the elected
    President of Haiti--and do what we can to help him.''
        Asked about President Aristide's stepping down, you said,
    ``That is not an element of the plan because, under the
    constitution, he is the President for some time to come.'' Your
    quotes.
        Well, 7 days later, February 27, you begin to indicate that
    one democratic element, President Aristide, should leave. In a
    CNN interview, you said that President Aristide should do what
    he thinks is best for his country. But when asked whether he
    could survive politically, you stated, ``There is such strong
    resistance now to his presidency that I am not quite sure if we
    are going to be able to find a way forward.''
        Mr. Secretary, President Aristide did what we asked him to
    do, maybe not as quickly as we would have liked; but on January
    31, he accepted the U.S.-supported CARICOM plan.
        But it gets worse. Not only did we withdraw support from
    this elected president, but on February 28, the White House
    began blaming President Aristide for ``this long simmering
    crisis.''
        I am quoting a statement from the White House. ``His
    failure to adhere to democratic principles has contributed to
    the deep polarization and violent unrest that we are witnessing
    in Haiti today. His own actions have called into question his
    fitness to govern--continue to govern Haiti.''
        Then finally on February 29, President Bush stated, ``This
    is the beginning of a new chapter in the country's history.''
        What happened, Mr. Secretary? In 7 days, what happened?
        Secretary Powell. We could not keep it going, Senator. We
    could not get the sides to agree to the CARICOM plan. We could
    not keep the process moving forward that would have given us
    the solution as laid out exactly in the CARICOM plan.
        The situation was deteriorating rapidly. And to a
    considerable extent, President Aristide's shortcomings and
    actions over a long period of time contributed significantly to
    our ability to find a political solution.
        We did not ignore it. We worked with the OAS. We sent
    people down to talk. We worked with the OAS, sending a
    distinguished American ambassador down last fall to try to find
    a solution. The solution kept eluding us.
        Then the Haitian legislature was allowed to expire because
    President Aristide wasn't able to bring himself to create
    circumstances which would resolve the political impasse that
    existed.
        We finally found that on the last weekend in February, we
    had a catastrophe on our hands about to happen. When forces
    were lining up, illegal forces supported by President Aristide,
    the Shamirs, who were arming themselves all over Port-au-
    Prince. Both the north and south portions of the country had
    fallen, and President Aristide was worried about his personal
    security, and it was becoming----
        Senator McConnell. Let me just say, Senator Harkin, that
    you are over the 5 minute time limit. Can we bring this to a
    conclusion?
        Secretary Powell. We were not prepared, nor were any of our
    colleagues, France, Canada, or anyone else prepared to send in
    armed forces to be on the side of President Aristide,
    essentially to keep him in power. And they would have been
    there for a very long period of time. We had made that clear
    throughout the period.
        So, his situation became untenable. A solution appeared on
    that Saturday evening, when he decided that his own security
    was at risk, and he asked if we could help him out of the
    country.
        Senator Harkin. I was on the phone with him that day.
        I was on the phone with you that day, too.
        Secretary Powell. I remember very vividly, Senator.
        Senator Harkin. I remember it vividly, too.
        Secretary Powell. Well, what I am saying, Senator, is at 9
    o'clock that night, Saturday night, I was minding my own
    business, not knowing how this thing was going to play out,
    except hundreds of people were about to be caught up in a
    maelstrom.
        After I spoke to you, I think, late afternoon----
        Senator Harkin. Right.
        Secretary Powell [continuing]. It was about 9 o'clock that
    night when I got a call from my ambassador, Ambassador Foley,
    who said his security people have told him that it is no longer
    sustainable and he wants to talk to me. And he wants to talk to
    me and he wants to talk to me about where he is going to go and
    who might come with him. Should I talk to him?
        I said, ``See what it is he is asking for.''
        What he asked for was an opportunity to leave the country
    and he was going to resign. And over the next several hours,
    that was arranged.
        When I spoke to you, Senator, that was the furthest thing
    from my mind. I did not know I was going to get that call at 9
    o'clock that night. And we did not put a gun to his head. We
    did not kidnap him, or put chains around him, or do anything
    else.
        Senator Harkin. I believe that. I believe--you are
    absolutely right on that.
        Secretary Powell. Yes. Let me also say that I went to Haiti
    this past Monday, met the new Prime Minister, interim, and he
    made some statements on Monday. One, a new corruption czar;
    two, a truth and reconciliation commission; three, elections in
    2005; and nobody in the current government will run in those
    elections in 2005. And he made some other promises with respect
    to economic development and the development of the Haitian
    national police.
        This is a country in deep trouble. The one thing I will
    never regret, Senator, is that no killing took place and Port-
    au-Prince is stable now, and we are slowly creating stability
    in other parts of the country, and we are working with the
    United Nations to bring in a peacekeeping force.
        I have no ill will toward President Aristide. I am the one,
    along with Senator Nunn and President Carter, who got him back
    in 1994.
        Senator McConnell. We are going to have to move along or
    other Senators are going to miss their opportunity to ask
    questions.
        Senator Bennett.
        Senator Bennett. Thank you very much, Mr. Chairman. It is
    fascinating to sit here and listen to all this go back and
    forth. And I would like to comment on all of it but I do not
    have time.
        I do remember Senator Nunn reporting your role in helping
    remove Mr. Cedras and replacing him with Aristide. My own
    reaction to that was that we were in the process of replacing a
    brutal dictator much beloved of American conservatives, with a
    brutal dictator much beloved of American liberals. And I think
    that is kind of where we ultimately came out.
        Mr. Secretary, this will be the last time you formally
    appear before this subcommittee. And at the mercy of the
    voters, it may be the last time I am here.
        So, let me take the opportunity to, first, hope that there
    is a, from our point of view, successful outcome in the
    election, and we both may be here another year. But if that is
    not the case, let me take the opportunity to thank you for your
    service, not only as Secretary of State but a lifetime of
    service to your country. It should be duly noted for the
    record, even though we take it for granted.
        I have written you about a number of issues that are
    important to me, tuberculosis, AIDS, malaria, microloans.
        I am very pleased that your opening statement talks about
    all of these issues with the exception of microloans. I do not
    take that exception as an indication of lack of interest. But I
    feel these kinds of things that do not get the headlines with
    the State Department, nonetheless, are very important over
    time.
        I appreciate your willingness to be as supportive of them
    as you have been, and assure you once again of my interest in
    it, particularly the microloan effort, which I know some of the
    bureaucrats at State do not like, because they do not control
    the money. But I have seen the results of that as I have moved
    around the world, and it is very dramatic, and very important.
        Let me get to the issue that has dominated here when we
    talked about Iraq. First following up on the comment of our
    chairman that this is not Vietnam, go back to your experience
    that you told us as you walked through the GIs and the troops
    saying to you, ``Tell the President to stay the course.''
        My military service was after Korea and before Vietnam, so
    I never saw a shot fired in combat. But my memory is that there
    was very little of that feeling in Vietnam, that the GIs were
    not telling their leadership in Vietnam, ``We are glad we are
    here. We feel we have done a good job and this is what we ought
    to stay doing.'' Is that one of the--would that be one of the
    differences between this and Vietnam?
        Secretary Powell. Yes, sir. By the late 1960s--I was there
    in the early 1960s and I was there in the late 1960s--by the
    late 1960s that kind of spirit was drying up. All of our
    youngsters were wonderful young men and women. They served
    their Nation at their Nation's call but they had serious doubts
    about our staying power. And they had serious doubts about the
    mission we were trying to accomplish.
        Senator Bennett. Yes. I think it is important for us to
    underscore those differences.
        Now, the call has gone out for a U.N. administrator to
    replace Ambassador Bremer on the 1st of July. I have contacts
    in Iraq, independent of the government, people who do business
    there or travel there or have relatives there, et cetera. They
    tell me that the Iraqis view the United Nations with as much
    suspicion as they might view the United States.

                                  OIL FOR FOOD

        They are very much aware of the details of the Oil for Food
    scandal, the enormous corruption that surrounded the U.N.
    activity in overseeing Oil for Food, and that the United
    Nations in its role, in Iraq under Saddam Hussein, seriously
    failed the Iraqi people.
        This gives me pause at the idea that the United Nations
    might be seen as the beneficent--disinterested as opposed to
    uninterested--disinterested and therefore an even-handed party
    here who needs to come in and remove the stain of some American
    stigma of being an occupation force, that there are many Iraqis
    who feel that the United Nations would be an occupation force,
    and might take them back to the bad old days of arms deals
    under the table, bribes paid to officials, not only to U.N.
    officials, but to officials of other governments that profited
    enormously during the Oil for Food scandal.
        We do not seem to be paying much attention to the Oil for
    Food scandal but I think it is the biggest example of official
    corruption that we have seen really in my memory. Dollar-wise,
    I cannot think of an area of corruption that begins to approach
    it.
        Do you have any information you can share with us, or
    anything that you think is legitimate for us to know about,
    with respect to that scandal and how it is being examined? The
    only leverage we have on the United Nations, which we have
    exerted in the past, is withholding of our dues to try to clean
    up some of the corruption within the U.N. bureaucracy years
    ago.
        I supported resumption of payment of dues, because there
    was some movement towards cleaning up corruption in the United
    Nations; but the corruption in the United Nations has exploded
    again, maybe not on the front pages of The New York Times, but
    elsewhere the corruption of the United Nations has exploded
    again. And as we are talking about a U.N. role in this vitally
    important, very sensitive, and very delicate situation, which
    could still go south on us.
        We have no guarantee we are going to succeed in Iraq. We
    have a determination and resolve that we are going to succeed
    but we have no guarantee. And inserting into that equation, the
    United Nations, at this particular point when the Oil for Food
    scandal and the level of corruption in it is so enormous, is
    something that concerns me. And I would like to get your
    reassurance that it is under control, or that it is being
    investigated, or that we have some leverage, or whatever you
    might have to say.
        Secretary Powell. Let me begin, first, Senator, by saying
    that the term, U.N. Administrator, which has been used by some,
    or High Commissioner, suggests that we are going down the road
    of turning the whole country over to some U.N. trustee
    arrangement. That is not the case.
        We think there is a role, however, for a senior
    representative of the Secretary General to be there, to assist
    with preparing the country for elections--the United Nations
    brings great expertise to that--in providing advice to the
    governing council, the way in which Ambassador Brahimi did
    earlier this year in getting to an agreement on the
    administrative law. So, I think the United Nations does have a
    role to play.
        A second point, there are concerns among many Iraqissa
    about the role played by the United Nations in the past. It is
    not exactly a love-in. It is not going to be a love-in. But I
    think most Iraqis understand that the United Nations does bring
    assets to the table.
        But there will be questions raised about the Oil for Food
    program. I do not know the dimensions of the problem. I read a
    number of articles about the alleged dimensions of the problem.
    I just do not know how bad it is but it is a bad problem.
        Ambassador to the United Nations, Ambassador Negroponte,
    and Assistant Secretary Kim Holmes testified before Senator
    Lugar and his committee yesterday. We are making an assessment
    now of what documentation we have, that we can make available
    to the investigators and to members of Congress who ask for
    documentation. We do have access to some of the documents, some
    of the contracts that came through our system.
        I have had a number of conversations with Kofi Annan about
    it. I know he is seized with it. He knows that this is a major
    problem that has the potential for being a huge black eye for
    the United Nations. And I know that he is reaching out to find
    people who can assist him in the investigation.
        The United Nations is sort of constrained in that they can
    only investigate themselves, not other countries. But we are
    trying to design a model for them that will allow somebody to
    investigate other countries and bring it all together.
        Ambassador Bremer has taken action to freeze records and to
    have the Governing Council freeze all records in Baghdad so
    they can be made available for inquiries and investigations as
    we move forward.
        So, we are taking the Oil for Food program problem very,
    very seriously. Ambassador Bremer is, the governing council is,
    and now, I believe, Kofi Annan is, as well.
        Senator McConnell. Thank you, Senator Bennett. In order of
    arrival, we will continue with Senator DeWine, followed by
    Senator Landrieu, Senator Byrd, Senator Durbin.
        Senator DeWine.

                                     SUDAN

        Senator DeWine. Mr. Secretary, thank you very much for
    being with us. And I want to follow up on what--the list of
    thank yous that Senator Bennett was listing and add to that
    your commitment and push for a comprehensive peace agreement in
    Sudan. I know you have been very concerned about that and have
    done a lot of work on that, getting close as you have indicated
    there.
        I also appreciate very much the fact that the President
    called on Sudanese Government to stop the militias, in the
    Darfur region, from committing atrocities against the local
    population. That was certainly very much appreciated and
    certainly very, very needed.
        Let me turn, if I could, to Haiti. I know you, as you said,
    you were down there this week. And I just want to say that, you
    know, my sources in Haiti indicate that our troops are doing
    just a bang-up job down there. They are making a big
    difference.
        If I could, I will just quote from a friend of mine who has
    worked in Haiti, doing humanitarian work for a number of years.
    I got an e-mail from this person the other morning, and this
    person said, and I quote, ``The military is doing a good job.
    God bless them. The people have a new spirit. You can feel it.
    There are many organizations considering coming into City
    Soleil for the first time. We are giving out large amounts of
    food. Our schools are open,'' and this continues on, the e-
    mail.
        But it is better there than it has been for years. And it
    is because our troops are there, and the gangs are not
    operating, and there is, you know, the security that is
    necessary for that country to, again, have the opportunity for
    decent peace and some things to start--good things to start
    happening.
        Let me ask a couple of questions, if I could, and I will
    give you a chance to respond. When you were in Haiti, you
    indicated your support for our HERO bill, our trade bill, a
    bill that we--several of us have sponsored here in the Senate,
    and Clay Shaw in the House of Representatives has sponsored. We
    think it would create an awful lot of jobs in Haiti at a time
    when it is clearly very, very necessary for that to happen and
    for some good news to occur down there. I would like for you to
    comment on that, if you could.
        Second, I wonder if you could comment on the
    Administration's plan in regard to Haiti. And I will be very,
    very candid with you. And I have said this publicly before. We
    have been, for the last several years, in the $50 million level
    of support and aid. That does a lot of good.
        We have been--I think of necessity--had to give that money
    to the NGO's. We have not been able to give it to the
    government of Haiti.
        Now, we are in a position where we will be able to channel
    that through the government of Haiti, we hope, and to help
    build up the institutions of that new government of Haiti.
        But when I go through, Mr. Secretary, and look at the needs
    and the things that we are going to have to do, and that we
    hope the international community will assist us in doing. You
    start with the rebuilding of the police, reconstituting of the
    police. You go from there to the courts and the rule of law,
    building up the rule of law.
        The debt, servicing of the debt has to be dealt with one
    way or the other. I would like to see it forgiven but they tell
    me that is going to be a kind of difficult thing to do. But it
    has got to be dealt with one way or the other, either through
    the service or the getting rid of the debt.
        You look at the health structure. You know, agriculture
    development in that country has to take place. You know, 97 to
    98 percent of the country, the topsoil is gone. We all know it
    is an ecological disaster.
        We just go on and on and on. Let alone, the normal
    humanitarian concerns, most of our money today that goes to
    Haiti is just basically for food and medical and other basic
    humanitarian supplies. There is no way, Mr. Secretary, that
    this can happen for a bare minimum $150 million a year. How are
    we going to put that together?
        So those are my two questions.
        Secretary Powell. Okay. First, sir, with respect to the
    troops, thank you very much, and I will pass it on to their
    commanders, but they are not just U.S. troops. We have great
    troops from Chile, from Canada, and from France.
        It was quite a coalition that came together rather quickly
    over a period of a few days. And they went in there and they
    did a good job.
        Senator DeWine. They are doing a great job.
        Secretary Powell. I will never regret the way in which this
    unfolded, because the killing stopped in Port-au-Prince. We
    would have had a bloodbath in Port-au-Prince. And I think
    President Aristide made the right decision that night.
        We now have to spread out to other parts of the Island, but
    the humanitarian aid is now starting to flow throughout, both
    the north and south sides of the Island, as well as in Port-au-
    Prince.
        We do support your HERO bill. I am pleased to, again, say
    it here today. As you know there are some difficult issues
    associated with the legislation but I think it is something
    Haiti needs.
        With respect to the money, we have about $55 million in
    2004. But the need is much, much greater. Frankly, $150 million
    a year would almost be a modest sum.
        Senator DeWine. It would be a modest sum.
        Secretary Powell. But I have got to figure out what other
    resources I have that can be used for this purpose, and what we
    are going to have to do as we get into the next fiscal year,
    and what additional monies may be required.
        This is a country that has been, once again, run into the
    ground. And it needs everything. It needs to be fed. It needs
    the agricultural sector restored, debt dealt with, and perhaps
    number one is the Haitian National Police, once again, rebuilt
    and made honest and non-corrupt in the way we did it in 1994
    and 1995.
        But then it got run into the ground again by cronies of Mr.
    Aristide being put in place.
        Senator DeWine. I would just--my time is up, Mr. Secretary,
    but I would just add, you know, I saw that very closely when
    the police were being reconstituted. And we had some great
    Haitian-Americans from Los Angeles, from New York, from
    Chicago, who went down there and who were mentoring those
    police. We had people from the Justice Department who were
    helping with the courts. Great progress was being made. And
    just to see the pride that these Haitian-Americans took in
    mentoring these young 18-, 19-, 20-year-old Haitians was a
    great thing to see.
        For the reasons that you have cited, all that work started
    to go downhill and went the wrong way. But there is no reason
    to think that that cannot happen again. And with the right
    political leadership in Haiti that--that can be sustained this
    time. And I hope that we can help put that together. Thank you
    very much.
        Secretary Powell. Thank you, Senator.
        Senator McConnell. As you know, Mr. Secretary, there is no
    one in the Senate who has spent more time on the Haiti issue
    than Senator DeWine.
        Secretary Powell. Sure.
        Senator McConnell. He is a real expert and we commend him
    for his attention to this poor beleaguered country.
        Senator Landrieu.
        Senator Landrieu. Thank you, Mr. Chairman, and thank you,
    Mr. Secretary, for the work you do for our country----
        Secretary Powell. Senator.
        Senator Landrieu [continuing]. And for our men and women in
    uniform and for our diplomat corps. I really appreciate it. We
    all do.
        I have three questions. I am going to try to be very brief,
    so we can get these answers.
        One is about the cost of staying the course. As you, I am
    sure, are well aware, $168 billion, which is the amount of
    money that we have already appropriated for military and
    reconstruction operations in Iraq since 2003, actually equal
    the entire amount of money this country spends to fund our
    education initiatives including the Department of Health and
    Human Services, and including all that we spend on Homeland
    Security. So, it is a significant amount of our Treasury, as
    you know, that we are committing to stay the course.
        The World Bank has estimated that another $55 billion is
    going to be required. Our own Congressional Budget Office says
    that that figure may be too low; they think it is $100 billion.
        The other nations have only pledged and not given, but only
    pledged $36 billion.
        Given that we were so wildly off the mark in the last year,
    sort of leading up to this conflict, and I just quickly will
    quote Paul Wolfowitz on February 28, ``If we have to occupy
    Iraq for years, as some people are foolishly suggesting, it is
    one cost. As Secretary Rumsfeld says, if it lasts 6 days, it is
    one cost. If it lasts another 6 months, we are going to be
    greeted as liberators. And if so, the cost will be much
    lower.''
        Donald Rumsfeld said, ``I do not know that there is much
    reconstruction to do,'' on April 10, 2003.
        Additionally on September 22, Paul Bremer told the Senate
    Appropriations Committee that, ``Little or no money would be
    needed for Iraq beyond fiscal year 2004 supplemental.'' Now,
    clearly, we were wildly off the mark in this pattern of
    testimony.
        Since you, Mr. Secretary, are going to--I think under the
    administration's plan--take responsibility on June 30, it moves
    from Defense to State, when the coalition comes into power, how
    are you readjusting these estimates and how are we going to
    stay the course by staying in the budget? Or are we going to
    stay the course out of the budget?
        Secretary Powell. The $18 billion that was appropriated in
    the supplemental is just now starting to flow. Less than one-
    ninth of that money has been used.
        So, I think that amount will certainly sustain us through
    the rest of this year and well into the next calendar year. And
    it was for that reason we made no special requests for 2005. I
    think this is a pretty substantial amount that will deal with
    most of the needs that Ambassador Bremer came in and presented
    to the Congress.
        The estimates are much higher than originally thought,
    because once we got into the country and realized the problems
    that were caused by Saddam Hussein's leadership over time, and
    what would be needed to put this country on a solid footing so
    that democracy could take root, and so that the economy can get
    started again, and the oil sector rebuilt so that soon the
    country can be viable, and live on its own revenue; we realized
    that the situation required this large infusion of funds.
        But at the moment, based on what I know and based on the
    work that my staff has done, I do not anticipate this kind of
    supplemental requirement being needed in the future.
        Senator Landrieu. But do you know a portion--following up
    on the, I think, very good line of questioning of Senator
    Stevens, about the now found and extremely worrisome ammunition
    deposits, dumps, are you saying that in this figure, there is
    enough money to take care of that issue, which seems to be much
    more extensive than we thought? Or are there going to be
    additional requirements for that?
        Secretary Powell. I would have to go back and see whether
    it is provided for in the supplemental or whether it is being
    handled by the Defense Department through other accounts and
    other means.
        Senator Landrieu. Okay. My second question, quickly, it was
    clear that there was a difference of opinion about post-
    military plans between Secretary Donald Rumsfeld and the State
    Department. There was, in fact, a plan that I think the State
    Department began called the Future of Iraq project----
        Secretary Powell. Yes.
        Senator Landrieu [continuing]. Where Defense individuals
    were prohibited from participating because there was a
    difference of opinion.
        My question now that you will come back basically into more
    control, do you plan to re-institute some of the provisions of
    the Future of Iraq project? Or is that scrapped for good?
        Secretary Powell. No. The Future of Iraq project was a
    year-long study effort that was conducted by the State
    Department, with interagency participation. It was well under
    way long before the war started.
        I would have to go back and check. I do not remember any
    prohibition of Defense people from participating. There may
    have been some reluctance on the part of Defense to
    participate. I do not remember.
        But the whole plan was made available to the Defense
    planners, as they got ready for the post-conflict period. And
    there are elements of that plan that are still, I think, quite
    appropriate to the challenges we are facing. And I will use
    elements of that plan or any other plan. Some fine work has
    also come out of other think tanks and agencies that I would
    take advantage of, as well.
        Senator Landrieu. Well, my point being that my information
    is that the DOD employees were prohibited from participating in
    that plan; and had some of the elements of that plan been
    followed, we perhaps would have had more accurate information.
        I know my time is up, so I will just ask this question. You
    can respond in writing.

                          ROLE OF WOMEN IN AFGHANISTAN

        I have now had a chance to read the new constitution of
    Afghanistan, which is right here, in preparation for this
    meeting. One of the big concerns of many Members of Congress
    has been the role of women since they were so brutally
    oppressed. And one of the reasons that, you know, we responded
    the way we did to the attacks was to liberate them and give
    them hope for a better life.
        I cannot read in this document where they are, in fact,
    implied as citizens. I know it is our intent but I could not
    find the language. So, I am going to submit this in writing and
    also some questions about their role in the Iraqi constitution,
    which continues to say that we will be governed by the religion
    of Islam and no law can be developed to the contrary. And we
    know under that religion--and others, not just Islam--but
    women's roles in terms of freedoms have been severely
    restricted.
        I remain very concerned, Mr. Secretary. And I do not doubt
    your personal commitment. Let me say that. You have been a
    stalwart of that and I appreciate it. But I still would feel
    better, I guess, if I saw it in writing; and I will submit the
    question to you.
        Secretary Powell. Let me look at both documents. I think in
    the Iraqi Administrative Law, it said that Islam was the source
    of law.
        The Afghan constitution recently approved by the Loya-
    Jirga--I would have to read it again--but when I was in
    Afghanistan 3 weeks ago, I went to a registration site at a
    school for women, and they were lined up to register to vote.
    And they had to demonstrate that they were a citizen in order
    to get their laminated registration card.
        The statistics I got during that visit was 28 percent of
    the women who have registered, to date throughout the country,
    28 percent of the registrants to date are women. And in the
    western regions, it is up to 45-or-thereabouts percent. So,
    they are coming out as citizens getting ready to vote.
        But I will look at the exact language to make sure they
    have all rights of citizenship besides just registering to
    vote.
        [The information follows:]

                             United States Department of State,
                                        Washington, DC, April 27, 2004.
    Hon. Mary Landrieu,
    U.S. Senate.
        Dear Senator Landrieu: On 8 April, at the Foreign Operations
    Appropriations Hearing for the fiscal year 2005 Budget Request, you
    raised a question to Secretary Powell regarding citizenship provisions
    for women in the Iraqi and Afghan constitutions. The Secretary has
    asked that I reply on his behalf.
        With regard to Afghanistan, Article 22 of the Afghan Constitution
    reads as follows. ``Any kind of discrimination and privilege between
    the citizens of Afghanistan are prohibited. The citizens of
    Afghanistan--whether man or woman--have equal rights and duties before
    the law.'' This specific reference of women's equality in the
    constitution was a significant change from previous drafts. During the
    Constitutional Loya Jirga in December, the women delegates built
    support for the provision and had it included in the final draft, which
    was a major victory for women's rights in Afghanistan.
        In Iraq, as you know, there is yet no constitution, only the
    Transitional Administrative Law. In this document, Article 12
    guarantees the following:

        ``All Iraqis are equal in their rights without regard to gender,
    sect, opinion, belief, nationality, religion, or origin, and they are
    equal before the law. Discrimination against an Iraqi citizen on the
    basis of his gender, nationality, religion or origin is prohibited.''

        The U.S. Government has worked with the Iraqi Governing Council and
    will continue to work with the Iraqi Interim Government and Iraqis to
    ensure that such stipulations are reflected in the permanent
    constitution.
        I hope you find this information useful. The State Department
    remains committed to the development of Afghanistan and Iraq as free
    and equal democratic societies. We welcome your inquiries and
    suggestions.
                Sincerely,
                                                 Paul V. Kelly,
                              Assistant Secretary, Legislative Affairs.

        Senator McConnell. Senator Byrd.
        Senator Byrd. Thank you, Mr. Chairman.
        Mr. Secretary, I want to follow up on a discussion that we
    had during the CJS hearing 2 weeks ago.

                        RECONSTRUCTION PROGRAMS IN IRAQ

        We talked about the State Department taking control of U.S.
    reconstruction programs in Iraq after the June 30 deadline. I
    have in front of me a copy of a table from the most recent
    report submitted to Congress by OMB.
        It shows that as of March 1, 2004, nearly 4 months after
    the Iraq supplemental was enacted, only $2.2 billion of the
    $18.4 billion had been obligated. Moreover, at a time when
    security is the most critical issue in Iraq, the report showed
    that only $381 million of the $3.24 billion for security and
    law enforcement had been obligated, around 10 percent of the
    total appropriated. What has happened to the reconstruction
    money?
        Secretary Powell. The money is available. It just has not
    been obligated as quickly as we might have hoped. And the
    Defense Department and other agencies responsible for
    contracting out these funds are being cautious and judicious in
    how the funds are being spent.
        I expect that in the next several months, the rate of
    obligation will increase significantly.
        Senator Byrd. If it was as urgently needed as the President
    told Congress, back when we were considering the supplemental,
    why is the money not being obligated at a faster pace?
        Secretary Powell. There are contracting issues, there are
    security issues. I expect it to be obligated at a pace that
    would probably take us to the point that by the 1st of July
    when the Chief of Mission assumes responsibility, our estimate
    right now is $14 billion of the $18 billion will have been
    obligated at that point.
        We wanted to keep some of it unobligated so that the new
    ambassador coming in and the new interim government coming in
    have some flexibility as to how the last $4 billion might be
    spent.
        Senator Byrd. When do you anticipate that the 2004
    supplemental funds will be exhausted?
        Secretary Powell. I do not know that I can answer that
    question without talking to my staff, and I am not sure they
    know, because we are trying not to obligate it all so that
    there is flexibility when the Interim Government takes
    sovereign responsibility on 1 July and the new Chief of Mission
    comes in. But I would hope that it would all be obligated by
    the end of the year or early in calendar year 2005 at the
    latest.
        Senator Byrd. In the event that some 2004 funds remain
    unobligated at the end of the fiscal year, do you anticipate
    asking for additional Iraq reconstruction funds in a 2005
    supplemental?
        Secretary Powell. I do not anticipate that at this point.
    At the moment we, of course, have no plans for any more
    requests in 2004. And we will have to see where we are in 2005.
        I believe the $18 billion was a surge of money to go into
    this broken country to get things up and going; and we are
    going to take care of all of our requirements through this year
    and into the beginning of 2005. And then when we get into 2005,
    we can make a judgment on not just Iraq, but on all the other
    things the nation may be facing at that time.
        Senator Byrd. Press reports indicate that the
    administration will seek a new U.N. Security Council resolution
    ahead of the proposed June 30 handover of power in Iraq. This
    seems to make sense, as the United States needs to set a new
    course and tone for the occupation mission.
        In a similar vein, Congress might want to take a fresh look
    at the 2002 Use of Force Authorization, which characterizes
    Iraq as a tyrannical country that may be plotting to attack the
    United States and which fails to take into account the changes
    that have taken place in the last 18 months.
        Secretary Powell, what are the administration's goals for a
    new U.N. resolution?
        Secretary Powell. We just started to examine what might be
    in such a resolution, speculating on the kinds of elements that
    would be in the resolution: some statement with respect to the
    interim government and its authority; some statement of the
    role expected of the United Nations to play; something having
    to do with the presence of military forces from the coalition
    remaining in the country. Remember, 1511 deals with that now.
        What we would have to do is go through the principal
    resolution we are using now, 1511, and see what has changed
    over the several months since 1511 was passed. But we do not
    have a written resolution yet.
        Senator Byrd. Let us look at it this way. Is it just to
    legitimize the U.S. military occupation after the hand-over of
    power or do you seek to elevate the United Nations to have it
    play the central role in Iraq's reconstruction?
        Secretary Powell. We believe that the Interim Government
    should play the central role in the political process going
    forward. We believe that the United Nations has a vital role to
    play but does not become the administrator of the country, and
    does not become responsible for how we would spend our $18
    billion. That remains entirely within U.S. hands, supervised by
    our ambassador, the chief of mission.
        Senator Byrd. Do you expect to obtain more contributions of
    foreign troops for the occupation mission, and, if so, how many
    and from which countries?
        Secretary Powell. I cannot give you a number. My colleagues
    at the Pentagon might be able to give you some estimates but
    they would be nothing but estimates.
        But with sovereignty returned and with a new U.N.
    resolution, there are other countries in the world--not
    necessarily in NATO but other countries in the world--that
    might be willing to provide troops with a new U.N. resolution
    and with sovereignty returned.
        I cannot give you a specific list of which ones but there
    are some--some that have considerable forces. In Asia, the
    Pakistanis have kept the idea open. The Indians have kept the
    idea open. Bangladesh has kept the idea open. Whether or not
    they would in the event actually contribute remains to be seen.
        But they have been interested in contributing under the
    right set of circumstances with respect to U.N. support and
    with respect to sovereignty being returned.
        Senator McConnell. Thank you, Senator Byrd. Now, the
    Secretary, I am told, has about 8 more minutes, so we will see
    how far we can get. I know Senator Harkin is anxious to have
    his say again.
        Let me just ask quickly, Mr. Secretary: Do you support the
    extension of import sanctions against Burma?
        Secretary Powell. Yes, sir.
        Senator McConnell. Why should U.S. taxpayers support a
    flawed Khmer Rouge tribunal that relies in part upon Cambodia's
    broken judicial system, one that is largely incapable of
    delivering justice for human rights abuses committed in that
    country today?
        Secretary Powell. The only reason, Senator, is that it is
    the only game, judicial game, in town. I have the same concerns
    you have about the preponderance of judges as being Cambodians.
    They might not mete out justice the way we would like to see it
    meted out, but we will have international judges on that court
    as well.
        So, at least these aging defendants will be brought before
    a tribunal. Whether or not they are convicted, I cannot say,
    and I would not even suggest that they would be convicted. But
    they will be brought before a court if this court gets up and
    running and functional.
        Senator McConnell. Yes. As you know, the local population,
    much of it, is not very optimistic. This has got to be done in
    a credible fashion.

                               VOICE FOR HUMANITY

        One parochial matter: I want to take a moment to bring your
    attention to the efforts of Voice for Humanity, which is
    referred to as VFH. It is an NGO, based in my State, that uses
    information technology to educate and inform illiterate and
    semi-literate people.
        They are in the process of initiating pilot programs in
    Afghanistan and Iraq. Ambassador Bremer and Iraqi authorities
    readily understand the utility and value of this technology.
        I would like to propose that someone from VFH brief your
    staff on their ongoing pilot programs and requests that our
    U.S. ambassador to Afghanistan find time to meet with them, as
    well.
        Secretary Powell. Okay.
        Senator McConnell. Let me add that VFH is awaiting USAID
    funding for HIV/AIDS education activities in Nigeria, and the
    application of this particular technology is limitless and,
    again I repeat, it is an NGO.
        Senator Leahy, do you want to make any additional
    observations?
        Senator Leahy. I do. Yes, I was thinking, Mr. Secretary,
    you have been here many times. We all know each other. And I
    think the rest of the country hears everybody saying, ``All is
    well. Everything is going fine. We have a few bumps in the
    road, but stay the course.'' We are polite with each other and
    all that.
        Now, I have been to a couple of briefings today, several
    this week, and each time I hear that things are going well. We
    read polls. Some polls say they love us. Some polls say they do
    not love us but the reality is people know some things are not
    going well.
        This morning, the New York Times said this:

        United States forces are confronting a broad-based Shiite
    uprising that goes well beyond supporters of one militant
    Islamic cleric, who has been the focus of American counter-
    insurgency efforts, United States intelligence officials said
    Wednesday.
        That assertion contradicts repeated statements by the Bush
    Administration and American officials in Iraq. On Wednesday,
    Secretary of Defense Donald Rumsfeld, General Richard Myers
    said that they did not believe the United States was facing a
    broad-based Shiite insurgency.
        But intelligence officials now say that there is evidence
    that the insurgency goes beyond Mr. Sadr and his militia. And
    that a much larger number of Shiites have turned against the
    American-led occupation of Iraq.

        If it is the latter, we are in a heap of hurt. And it is
    going to continue beyond just a few firefights and blowing up a
    mosque and arresting one person. Now, which is it? Are these
    intelligence sources correct or is Secretary Rumsfeld correct?
        Secretary Powell. Many times in my career, I have seen
    ``intelligence officials'' who are unidentified, who say things
    to reporters, who then say this is the truth. But I do not know
    that these intelligence officials represent the truth.
        Senator Leahy. Well, without even knowing the names, is
    what they have reputed to have said, is it true to your
    knowledge?
        Secretary Powell. I have no idea what they--I cannot go to
    what they are reputed to have said to a reporter.
        Senator Leahy. Is it----
        Secretary Powell. I will say this----
        Senator Leahy. Is it true that it goes beyond--that this is
    a Shiite uprising----
        Secretary Powell. It is----
        Senator Leahy [continuing]. That is going beyond Sadr and
    his immediate followers?
        Secretary Powell. It is an uprising that was originated by
    Sadr and his following and the Mahdi militia, which responds to
    him. Whether it is extended into the larger part of the Shiite
    community is not established.
        Now, has he picked up some additional individuals who were
    not with them a week ago? He may have. But has he picked up the
    whole Shiite community? He has not. Because there are a number
    of senior officials in the Shiite community who are saying,
    ``Let us have calm,'' including Mr. Sistani.
        So, I think it is not correct to say that what we are
    seeing in the southern part of the country right now, in Al-Kut
    and Najaf and places like that, represents a massive Shiite
    uprising and rebellion. For the most part, it reflects the
    activities of Muqtada al-Sadr and his Mahdi militia.
        Senator Leahy. You understand there is skepticism in the
    country?
        Secretary Powell. Yes. I am sure there will be.
        Senator Leahy. I mean, our country----
        Secretary Powell. Yes, I understand that.
        Senator Leahy [continuing]. To say nothing about Iraq.
        Secretary Powell. Yes. You just expressed it, so I accept
    it. I know there is skepticism.
        The fact of the matter is: It is not an either/or issue. We
    know who started this. And it happened in the last couple of
    weeks. This is an individual we have been worried about for
    some time. Somebody who has been indicted, somebody who has
    murdered or caused the murder of other individuals, and he has
    a following.
        Now, what we do not want to do is see this following grow.
    And the way we will keep it from growing is to smash the Mahdi
    militia and bring this situation under control. And that is
    what the military strategy is and that is what we are about
    doing.
        Senator Leahy. Well, my time is up. I realize you have to
    leave. I do have some follow-up questions.
        These questions are serious ones. If we were going to stay
    here, I would be prepared to stay all evening long to ask them,
    because they are things I am concerned about, everything from
    the millions of dollars we are paying for private security
    guards, on through.
        Senator McConnell. I think we have a couple of minutes
    left. Senator Harkin, do you want to try to get your questions
    in, right here at the end?
        Senator Harkin. Thank you, Mr. Chairman. I appreciate it.

                                     HAITI

        We are a signatory, Mr. Secretary, to the Santiago
    agreement, are we not? And we are a member of the Organization
    of American States, correct? We are a signatory to that,
    international agreement, as is Haiti. The agreement states that
    member nations, which we say that we agree with these other
    countries, that we are going to have collective action in the
    case of a sudden or irregular interruption of the democratic
    political institutional process in member states. We are a
    signatory of that and we did not abide by this international
    agreement in Haiti.
        Second, Amnesty International, according to a press
    release, has spent a couple of weeks in Haiti. They point out,
    that the interim government is targeting Lavalas supporters
    while convicted human rights abusers have not been arrested.
    The government is sending the wrong message.
        Amnesty Intenational points out that Louis-Jodel Chamblain,
    one of the main rebel leaders, was convicted in absentia and
    sentenced to two life terms for killing Antoine Izmery and for
    his involvement in the 1994 Rabateau massacre. The new justice
    minister, Bernard Gousse, said Chamblain--this same man--could
    be retried under Haitian law but that the government could also
    pardon him.
        Jean Tatoun, another rebel leader, sentenced to life--
    Tatoun was in prison. He was released by a street gang last
    year. Tatoun and Chamblain are free, to terrorize the Haitian
    people. And yet Aristide's supporters are being, according to
    Amnesty International, arrested and harassed.
        Last, I want to cite a quote from Mr. Noriega, who works
    for you. On March 1, Mr. Noriega said: ``The last 10 years were
    all about Aristide. It was all about making apologies for his
    mistakes, excuses for his violations, and compensating,
    accommodating his pathological behavior, quite frankly. He is
    not a typical Haitian, thank God.''
        Mr. Secretary, it is below the dignity of any government
    official to use those words; and certainly an assistant
    secretary of state. I hope you realize how obnoxious those
    words are.
        What if someone were to say about Mr. Noriega, ``You are
    not a typical Mexican-American. You, Mr. Secretary, are not a
    typical African-American.'' This is below the dignity of anyone
    that works in your office.
        I will just say this, I agree with you that you--no one
    handcuffed Aristide--he was not kidnaped. You were right on
    that. I have said so publicly. But I do believe, after my
    conversations with him and with you on that day that, he was
    left with no choice.
        He was told that we would not live up to our international
    agreements under the Santiago agreement, that we would not
    protect him from these armed thugs. Aristide disbanded the Army
    in 1994, as you know, because he wanted to be like Costa Rica.
        I just think that what is happening in Haiti now is a
    return--as you said to me, of the rich people on the hill. The
    poor people in Haiti are once again being subjugated.
        From what I just heard you say a little bit ago, I thought
    I heard that the Lavalas party will not be permitted to field
    candidates in the next election. Is that true?
        Secretary Powell. I did not say that, Senator.
        Senator Harkin. I thought you said Aristide's people--
    government----
        Secretary Powell. No, I did not.
        Senator Harkin. [continuing]. Would not be permitted to
    run?
        Secretary Powell. No. I said those in the government now,
    in the transition government, will not be running for office in
    2005. That is what the interim Prime Minister told me.
        Senator Harkin. But they could?
        Secretary Powell. They have made a commitment that the
    ministers who are in this interim government, which is
    essentially a technocratic government, they all met, and all
    the opposites--met with all of the parties the night before I
    got there, Sunday night, and agreed that they would have
    elections for a new legislature and a new president in 2005.
        Whatever municipal elections are appropriate and needed and
    that those members of the interim government now, Prime
    Minister Latortue and other Ministers who are in office now,
    would not be candidates in that election, because they want to
    be seen as a generally non-political, technocratic government
    providing a bridge back to full political participation.
        Now, President Aristide resigned and in a manner that was
    constitutional. The resignation was given--the resignation was
    given to the gentleman who was next in line of succession and
    he became the president. And I met with him on Monday as well,
    President Alexandre.
        Senator Harkin Yes.
        Secretary Powell. And then we have been following the
    original CARICOM plan of putting together a group of
    distinguished individuals who selected a larger group, who then
    selected an interim prime minister, Mr. Latortue, who came down
    from Florida to act as this bridge back to a solid political
    system, we hope.
        It is going to take time. It is going to take a great deal
    of money. Nobody wished President Aristide more good fortune
    than I did.
        When I put, frankly, my life at risk, as did President
    Carter, as did Senator Nunn, we went down there on a September
    weekend in 1994, and spent 2 days with General Cedras and
    General Biamby and the others, with hand grenades rolling all
    over the place and guns in every corner and talked them out
    while the 82nd Airborne was in the air, heading to Haiti.
        At the same time, we were trying to cut the deal. We cut
    the deal. The 82nd landed without a shot being fired and
    President Aristide got a new opportunity.
        I regret to say that we spent a lot of time building the
    Haitian National Police. I was there a year later watching them
    being built. I also watched them being torn apart by corruption
    and by putting in people who were not competent.
        I wish it had turned out differently. And I tried to stay
    with this as long as I could, until finally it became clear
    that President Aristide's actions, over a period of years, had
    so contaminated the--I am sorry, Senator?
        Senator Harkin. I am sorry. He was not even in office
    during that period; Preval was in office.
        Secretary Powell. No. Senator, he was in office from 1994
    until he left.
        Senator Harkin. 1995, 1 year.
        Secretary Powell. He was not in office for the next several
    years; but, Senator, you and I both know that he really was the
    man behind the curtain during that period of time, until he
    came back in--we could go through the history of the elections
    of the early 2000 and that period.
        Senator Harkin. I am familiar with it.
        Secretary Powell. But we need not--I do not think we need
    to belabor that now.
        But I mean, he started to rule through the use of Shamirs.
    The Haitian police was no longer effective and, essentially,
    what we were being--what the international community was being
    asked to do and what it wouldn't do was essentially put our
    troops at his disposal, put French troops at his disposal,
    Canadian troops at his disposal, CARICOM troops at his
    disposal. And it was not going to happen.
        Senator Harkin. Would you ask the----
        Senator McConnell. Okay. Senator Harkin----
        Senator Harkin. Prime Minister Latortue about Chamblain----
        Secretary Powell. We have made clear--I did not ask about
    the specific names but I know the names well.
        Senator Harkin. I know you do.
        Secretary Powell. We have made it clear--two final points,
    we had made it clear to the Prime Minister that these are not
    individuals we can accept in any position in public life.
        Now, how they will be dealt with over time remains to be
    seen. And I have no evidence that is available to me or
    anything I saw in Haiti to suggest that we are seeing summary
    executions on the part of the government against Lavalas
    members.
        Now, there is still violence in the island. Although Port-
    au-Prince is relatively quiet, there are still hot spots
    throughout the island that our military forces are moving into.
    But summary executions by the government of Lavalas members--if
    you will give me the Amnesty International information, I will
    look at it.
        Senator Harkin. Yes, you have your staff--I am just reading
    from the Amnesty----
        Senator McConnell. Yes. Well, thank you, Mr. Secretary----
        Senator Harkin. Thank you, Mr. Secretary.
        Senator McConnell [continuing]. For extending beyond the
    time we thought we would get you.
        I am going to be submitting questions for the record on the
    Aristide government's involvement in the drug trade and other
    questions that we were unable to get to today.
        Thank you, again, as we have all said----
        Secretary Powell. Thank you, Mr. Chairman.
        Senator McConnell [continuing]. For your extraordinary
    service to your country.

                         ADDITIONAL COMMITTEE QUESTIONS

        There will be some additional questions which will be
    submitted for your response in the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                 Questions Submitted by Senator Mitch McConnell
        Question. What pressure has the State Department placed on the
    European Union and Burma's regional neighbors to take a harder line--
    including sanctions--against the SPDC?
        Answer. The Administration continues diplomatic efforts, at all
    levels, to encourage other nations to sustain pressure on the SPDC. We
    have delivered demarches to and had senior-level exchanges with both
    European Union (EU) member states and countries in the region, urging
    them to use their influence to convince the SPDC to accept reform. In
    public and private remarks, we have stated that the SPDC and its
    policies represent an embarrassment for the region and its regional
    organizations.
        In 2003, the EU expanded its existing visa and travel restrictions
    and its asset freeze list to identify a broader set of Burmese who
    benefit from the oppressive policies of the SPDC. The EU also has in
    place a ban on arms sales and limits on assistance to the government.
    The EU has traditionally drafted the annual General Assembly and
    Commission on Human Rights resolutions on Burma (which we have
    supported). EU ``troika'' visits to Burma have drawn attention to the
    continuing lack of progress on democracy and human rights issues. The
    United Kingdom has called on its companies to review their investments
    in Burma; two major British investors, British American Tobacco Company
    and Premier Oil, have sold their investments in the country to outside
    parties in the past year, and at least 18 UK companies cut ties with
    Burma in 2003. No EU member state has followed our lead and imposed
    economic sanctions.
        ASEAN nations issued an unprecedented call for change from fellow
    member state Burma at their June 2003 ministerial meeting. In mid-June,
    then Malaysian Prime Minister Mahathir issued a statement indicating
    the Burmese government's actions were creating a ``dilemma for the
    [ASEAN] organization.'' However, at their October 2003 meeting in Bali,
    ASEAN states took a different path and welcomed ``positive
    developments'' in Burma, including the SPDC's road map to democracy.
    The United States continues its dialogue with countries in the region
    and has made clear the important role that ASEAN has to play in
    encouraging reform. Administration officials have noted to ASEAN
    counterparts that there would not be high-level United States
    participation in ASEAN events hosted by the SPDC in 2006 unless it
    adopts significant reforms.
        Question. How many internally displaced persons are in Burma, and
    what is the United States doing to provide them with security and
    humanitarian assistance?
        Answer. There are an estimated 600,000 internally displaced persons
    in Burma. We remain very concerned about the situation faced by these
    persons.
        The United States does not currently fund organizations or
    individuals for work inside Burma among IDPs, although some projects
    operating along the Thailand-Burma border, including health and
    educational programs, do provide spillover benefits to those still in
    Burma. The Burma earmark in the Fiscal Year 2004 Foreign Operations
    Appropriations Act extended authorization to provide humanitarian
    assistance to internally displaced persons along Burma's borders.
    Although access to this population is limited, we intend to work with
    USAID to try and identify opportunities to provide limited humanitarian
    assistance to internally displaced persons along the border areas,
    where possible.
        We also support the work of international organizations, such as
    the International Committee of the Red Cross, the International Labor
    Organization, and the United Nations High Commissioner for Refugees
    (UNHCR) that have access to these areas. In February 2004, the UNHCR
    gained SPDC permission to begin work for the first time in eastern
    Burma and assess conditions for the eventual repatriation of refugees
    and return home of internally displaced persons. A great amount of
    infrastructure will need to be in place before these persons can return
    in a secure fashion.
        Question. Is North Korea providing Burma with missiles or nuclear
    weapons technology?
        Answer. For well over a decade, there have been reports from
    various sources about North Korean arms sales to Burma. These reports
    have covered numerous items, including small arms, ammunition,
    artillery, and missiles. We have made clear our concerns on this issue
    to the Burmese Government.
        Although North Korea has threatened to export nuclear materials and
    their nuclear ``deterrent,'' we have seen no indication that North
    Korea is providing nuclear weapons technology to Burma.
        Further details on Burma and North Korea's relationship are
    available in a classified report to Congress. We continue to monitor
    the relationship between the two nations.
        Question. Is Burma seeking to acquire a nuclear research reactor?
        Answer. Burma is interested in acquiring a nuclear research
    reactor. The Russians have offered to negotiate an agreement to
    construct a nuclear research facility, including a reactor. Such a
    facility would be placed under IAEA safeguards. To date, an agreement
    has not been concluded.
        Question. How can we convince the EU that its ``wait and see''
    approach is flawed? (i.e., Daw Aung San Suu Kyi's release is not the
    benchmark by which progress in Burma should be measured)
        Answer. We have made formal demarches to and held frequent
    discussions with EU counterparts on Burma and have urged them to
    consider additional measures. While the EU shares our objective of a
    democratic Burma and has taken a strong stand by imposing an asset
    freeze and visa restrictions, its approach to advancing democracy in
    that country differs from ours. No country followed our lead in
    imposing an array of economic sanctions after the May 30 attack on Aung
    San Suu Kyi's motorcade.
        Question. What pressure can the United States exert on India--a
    professed democracy--to support the struggle of freedom in Burma?
        Answer. We continue to raise our concerns regarding the lack of
    progress toward national reconciliation in Burma with Indian officials.
    We have noted that continued instability in the form of the current
    government is not in India's interests and have encouraged the Indian
    Government to speak in favor of the release of Aung San Suu Kyi and
    other political prisoners and to urge the SPDC toward democratic
    reform. Indian officials have indicated that they share our concerns
    about and goals for democracy in Burma, but they must also address
    strategic realities such as China's influence in Burma. India also
    confronts specific issues such as narcotrafficking and cross-border
    insurgences.
        Question. How do you explain the actions of Thailand, and in
    particular Thai Prime Minister Thaksin Shinawatra, to undermine a tough
    approach to Burma?
        Answer. In our discussions with the Royal Thai Government (RTG), we
    have emphasized that the SPDC must release Aung San Suu Kyi and all
    other political prisoners, allow all parties and ethnic groups to
    participate fully in the political process, and establish a realistic
    timeframe for movement towards democracy in Burma.
        Thailand has called for Aung San Suu Kyi's release and has worked
    with other countries to encourage reform and democracy in Burma. The
    ``Bangkok Process'' has been organized by Thailand as a means to
    finding a way forward in Burma. The SPDC, however, has not wished to
    participate following the first session, where participants urged Burma
    to release Aung San Suu Kyi and other political prisoners and engage in
    substantive dialogue with the political opposition and ethnic groups.
        Thailand is unlikely to change its policies or adopt sanctions
    against Rangoon. It is engaged in a fundamental effort to improve
    relations with each of its neighbors. In the case of Burma, under Prime
    Minister Thaksin, the RTG has sought cooperation with Rangoon to
    address numerous problems Thailand faces with its neighbor: narcotics
    trafficking, migrant labor, trafficking in persons, and refugees.
        Some Burmese political groups and a few NGOs have reported an
    increase of official checks for proper immigration documents and of
    political meetings being interrupted; however, most Burmese people and
    related NGOs continue to work within Thailand without such difficulty.
    Thailand continues to host approximately 140,000 Burmese refugees in
    border camps. Thailand has cooperated freely with our resettlement
    program for Burmese refugees that have been provided letters of concern
    by UNHCR, the so-called ``urban Burmese.''
        We have also encouraged Thailand to improve its migrant worker
    policies, and in late April of this year, the RTG cabinet approved a
    new migrant labor policy intended to match labor supply and demand
    while extending basic human rights protections to the 800,000 to 2
    million foreign workers from Burma, Laos, and Cambodia believed to be
    in the country.
        Question. What investments, including projects and activities
    related to iPSTAR, do Shin Satellite and Shin Corporation have in
    Burma, and/or planned for Burma?
        Answer. In May 2002, Bagan Cybertech, a semi-governmental
    telecommunications company in Burma, signed a $13 million agreement
    with Shin Satellite to purchase a ground equipment package for the
    iPSTAR satellite, including 5,000 user terminals. iPSTAR is a
    subsidiary of Shin Satellite which is majority-owned by the Shin
    Corporation, a Thai conglomerate largely owned by the Shinawatra
    family. Once launched and operational in 2004, iPSTAR will provide
    broadband Internet services to 14 countries, including India, China,
    Korea, Australia, New Zealand, Japan, Malaysia, Indonesia, Singapore,
    and Burma. According to a Shin Corporation spokesman, iPSTAR's expected
    revenues from Burma are small compared with those in larger and more
    developed markets in the region.
        In addition to iPSTAR, Shin Satellite has contracts worth
    approximately $2.5 million per year with two Burmese entities. This
    represents a small portion of Shin Satellite's total annual revenue of
    $150 million.
        The Thailand government's policy toward Burma is driven by many
    factors including concern about Burmese refugees, an inflow of illegal
    immigrants, the spread of disease, a history of border disputes, and
    the flow of narcotics into Thailand. We doubt that this satellite deal
    has much effect on Thailand's policy toward Burma.
        Question. Given that Burma previously held a constitutional
    convention in 1995 that was rendered meaningless by the SPDC, what
    makes this one any different?
        Answer. The Administration has noted consistently that for a
    convention to be successful, the political opposition and ethnic groups
    must support it and must be fully involved.
        Question. Why should U.S. taxpayers support a flawed Khmer Rouge
    Tribunal that relies, in part, upon Cambodia's broken judicial system--
    one that is largely incapable of delivering justice for human rights
    abuses committed today?
        Answer. The Government of Cambodia originally requested assistance
    from the United Nations in June 1997 to bring to justice those leaders
    of the Khmer Rouge who bear responsibility for serious atrocities
    committed between 1975 and 1979. Our longstanding policy has been to
    support credible efforts to seek accountability for the atrocities of
    the Khmer Rouge regime, under which an estimated 1.7 million people
    died. Seeking justice for these egregious crimes is a critical part of
    ending impunity in Cambodia.
        We share your concerns about the serious flaws in the Cambodian
    judiciary and continue to speak out strongly against political
    violence, corruption, and the climate of impunity in Cambodia. The
    proposed Khmer Rouge Tribunal, however, is designed to operate as an
    Extraordinary Chambers outside of the regular Cambodian judicial
    system. It will be comprised of both international and Cambodian judges
    and prosecutors.
        We recognize that achieving credible justice will not be easy.
    Strong international support will be needed to help ensure that the
    Tribunal exercises its jurisdiction in accordance with international
    standards of justice, fairness, and due process. If we do not help this
    Khmer Rouge Tribunal succeed, we may not have another opportunity to
    bring the Khmer Rouge perpetrators to justice as many are advanced in
    age or already deceased.
        Question. Do Cambodian judges and legal staff have the training,
    professionalism, competence and independence to effectively participate
    in a tribunal of such import?
        Answer. The Cambodian judicial system suffers from a lack of
    resources, low salaries, and poor training. Through assistance from
    NGOs and foreign governments, there have been some improvements over
    the last several years. Last year, the Royal School for Judges and
    Prosecutors reopened and accepted its first class of students since the
    1960s. Moreover, there has been an increase in the number of lawyers,
    which has resulted in significant improvements for those defendants
    provided with counsel.
        We are concerned about the limited capabilities of the Cambodian
    judicial system. With a mix of international and Cambodian judges,
    however, the Khmer Rouge Tribunal should be able to attain
    international standards of justice. The Tribunal contains provisions
    that are strong enough to protect the integrity of the judicial
    process. Decisions in the two chambers of the Tribunal will be taken by
    a majority of four in the trial court and five judges in the Supreme
    Court respectively and will require the concurrence of at least one
    international judge. Defendants will also have the right to counsel of
    their own choosing, including foreign counsel.
        Question. Is the Cambodian judicial system independent (in
    practice) and free of interference from the Cambodian People's Party?
        Answer. While the Cambodian Constitution provides for an
    independent judiciary, in practice the courts are subject to influence
    and interference by the Executive Branch. The Cambodian People's Party
    is the senior partner in the coalition government that has governed
    Cambodia since the 1998 elections and in a caretaker fashion since the
    2003 elections.
        We recognize that achieving a credible process will not be easy
    given the state of the judiciary in Cambodia today. It is our hope that
    with U.N. participation and strong international support the Khmer
    Rouge Tribunal will be able to carry out its mandate in accordance with
    international standards of justice, fairness, and due process.
        Question. Does the State Department intend to facilitate the return
    of the FBI to Cambodia, (as encouraged by Senators McCain, Daschle,
    Leahy, McConnell, Miller, and Chambliss) and provide support throughout
    the investigation?
        Answer. Should the FBI seek to return to Cambodia with regard to
    this case, the State Department would cooperate fully and provide all
    possible support and assistance.
        Question. Should senior officials of the ruling Cambodian People's
    Party (CPP) be determined to be the perpetrators of that terrorist
    attack, what action will the State Department take to ensure that
    justice and accountability prevail?
        Answer. We are not in a position to speculate on the outcome of any
    investigation or what action we might hypothetically be in a position
    to take at some future time.
        Question. The Vietnam conflict has yet to end for 1,800 stateless
    Vietnamese refugees in the Philippines--what is the administration
    doing to resolve this tragedy?
        Answer. Following talks in Manila in March 2004, the United States
    and the Government of the Philippines reached an agreement to offer
    durable solutions for certain Vietnamese nationals living in the
    Philippines. Most of this group are former asylum seekers who arrived
    in the Philippines in the late-1980s and early-1990s but were
    previously found ineligible (screened-out) for refugee resettlement in
    a third country.
        In 1996, the Philippine Government decided to permit some 1,400 of
    the screened-out Vietnamese to remain in the Philippines. Over the
    years, there have been several Philippine legislative initiatives to
    regularize the status of these individuals. To date none of these
    initiatives has borne fruit.
        Following the Manila talks, the USG announced it would offer
    resettlement interviews to the majority of the group, many of whom have
    relatives living in the United States. Vietnamese married to Filipino
    citizens and their children will not be eligible for this program. In
    addition, Vietnamese previously found to be ineligible for admission to
    the United States because of fraud or who have a record of criminal
    activity will not be considered for United States resettlement.
        The Philippines has agreed, consistent with its law, to offer
    residency to those Vietnamese married to Filipino nationals and to make
    best efforts to offer residency to other Vietnamese ineligible or
    inadmissible for resettlement in the United States.
        Question. How would you characterize Pakistan's efforts to
    militarily engage Taliban Remnants and Foreign Fighters on Pakistani
    soil?
        Answer. Pakistan has shown its willingness to take on Taliban and
    al-Qaeda forces long entrenched in the tribal community of the
    Federally Administered Tribal Areas (FATA) when it conducted its South
    Waziristan operation in mid-March 2004. With a force of about 17,000
    troops, Pakistan conveyed its seriousness to tribal chiefs who in the
    past were prone to disregard demands from Islamabad. The operation cost
    Pakistan over 50 troops, and while it did not succeed in capturing high
    value targets, it did disrupt Taliban/al-Qaeda attacks on Operation
    Enduring Freedom forces. The Government of Pakistan has publicly stated
    that the current pause is tactical and that the operation will continue
    until all foreign militants in the region are accounted for.
        Question. Has the United States been given direct access to the
    ``father'' of Pakistan's nuclear bomb A.Q. Khan?
        Answer. The Government of Pakistan is conducting its own
    investigation of the A.Q. Khan network. It has shared with us--and
    agreed to continue to share with us--information it develops from that
    investigation.
        Question. Do we have a complete understanding of the extent of
    Khan's illicit activities?
        Answer. We have extensive knowledge of the A.Q. Khan network, but
    we do not yet assess that we have a complete understanding. As the
    President has said, the information we know about the A.Q. Khan network
    was pieced together over several years by American and British
    intelligence officers, who identified the network's key experts,
    agents, and money men and mapped the extent of its operations. Other
    governments around the world have also worked closely with us to
    unravel the network and put an end to its activities. In particular,
    the Government of Pakistan has shared with us--and agreed to continue
    to share with us--information it develops from its investigation into
    the A.Q. Khan network. We have learned much about this network and the
    international black market in weapons of mass destruction and related
    technologies. We continue to gather information to develop a complete
    picture of Khan's activities and the damage they have caused.
        Question. President Musharraf has been the target of several
    assassination attempts--do we know who is behind these attacks and who
    is the likely successor to Musharraf should he be incapacitated?
        Answer. Pakistan is actively investigating the two attempted
    assassinations of President Musharraf, but no charges have been filed,
    as of yet. The Pakistani Constitution calls for the Speaker of the
    National Assembly to succeed the President should the latter be
    incapacitated. President Musharraf is also Chief of Army Staff. Since
    army succession in Pakistan closely follows seniority, he would be
    succeeded in that office, should he be incapacitated, by the Chief of
    Army Staff.
        Question. How do you assess the state of democracy in Pakistan
    today?
        Answer. Democracy in Pakistan remains in a nascent stage, a work in
    progress. We believe that President Musharraf and the Government of
    Pakistan have taken some positive steps in bolstering democracy, but
    certainly much more work lies ahead. Pakistan held national elections
    in October 2002, which albeit flawed, brought elected representatives
    back into Pakistan's Government.
        After more than a year of wrangling over the legality of the Legal
    Framework Order that enabled President Musharraf to concurrently serve
    as president and remain as the Army Chief of Staff, the Government and
    political opposition reached a compromise, setting the stage for the
    return of parliamentarians in early 2004. A similar compromise was
    reached on the newly established National Security Council. We note
    that President Musharraf has pledged to give up his Army Chief of Staff
    position by the end of 2004.
        The only significant legislation passed by the new legislature so
    far has been passage of the annual budget bill, but we are hopeful that
    legislators will soon pass other important bills, including anti-money
    laundering and fiscal responsibility laws. New elections are scheduled
    for 2007 and we are working to ensure that they will be conducted in a
    fair and transparent manner in accordance with international standards.
        We have called on the Government of Pakistan to continue efforts to
    bolster democracy, and have encouraged Pakistan to expedite
    implementing its ``devolution'' plan to devolve political power and
    budget resources from the central government to provincial and local
    governments. We remain concerned about reports of Pakistan's
    intimidation of opposition political leaders and journalists. We have
    urged the Government of Pakistan to ensure that opposition political
    leader Javed Hashmi, recently sentenced to seven years in prison
    following a sedition conviction, receive fair and transparent justice
    while his appeals process continues. Helping Pakistan build democracy
    remains a core concern, and along with healthcare, education, and
    continued economic reforms, is the focus of our USAID assistance
    program. One program is helping to train newly elected female
    parliamentarians to effectively draft and pass legislation reflecting
    constituents' concerns. Our Bureau of Democracy, Human Rights and Labor
    also is coordinating with USAID and our Embassy in Islamabad to work on
    additional reforms.
        Question. What portion of economic assistance continued in the
    fiscal year 2005 budget request for Pakistan is intended as budget
    support for the government of Pakistan?
        Answer. To support President Musharraf's vision of a moderate,
    democratic, and prosperous Pakistan at peace with itself and its
    neighbors, we are providing substantial assistance to Pakistan,
    including a request by the President for a multi-year security
    assistance/development package to address short and long-term needs.
    Following the President's June 2003 meeting with Musharraf, he pledged
    to work with Congress to provide Pakistan $3 billion in assistance for
    fiscal year 2005-fiscal year 2009, half for security assistance and
    half for economic support and social programs. Our plan for fiscal year
    2005 would provide up to $200 million/year in ESF for non-project
    assistance (budgetary support and/or possibly debt relief), at least
    $100 million for social sector programs, and $300 million in FMF to
    improve Pakistani military/counter terror capabilities. Thus, two-
    thirds of the $300 million in development-focused funds would be
    provided as budget support and one-third would be provided for similar
    development objectives through USAID's ongoing bilateral programs,
    which focus on improving education, healthcare, democracy, and economic
    development. Discussions with the Government of Pakistan continue on
    how to use the proposed assistance most effectively.
        Question. How will the United States monitor the use of likely
    budget support funds to ensure that they are used as intended?
        Answer. Shortly after the President proposed a multiyear assistance
    package in June 2003, the USG initiated a series of discussions with
    the Government of Pakistan on how to best ensure that budget support is
    most effectively and properly used, drawing on lessons learned in
    providing a $600 million non-project grant in the fall of 2001. While
    these discussions are ongoing, we have developed a series of shared
    objectives that build upon the Pakistan Government's own Poverty
    Reduction Strategy Plan (PRSP). The PRSP focuses on many of the same
    issues of chief concern to the United States, seeks to resolve
    pervasive long-term poverty by improving Pakistan's under-funded basic
    education and health sectors, and recognizes the need to continue
    disciplined budget policies. We also are coordinating with the British,
    Japanese, and World Bank in setting development goals in our shared
    objectives. In addition to tracking funds using traditional USAID
    audits, we envision using an interagency review process in conjunction
    with Pakistan's annual Development Forum meetings to track Pakistan's
    progress on achieving the agreed upon goals.
        Question. How supportive have Arab states been in pledging--and
    fulfilling pledges--for the reconstruction of Afghanistan?
        Answer. According to the most recent figures compiled by the
    Government of Afghanistan (GOA), Saudi Arabia has pledged the most
    among Gulf States--$230 million from 2001-2004, mostly in the form of
    concessional loans--but only a small portion--about $42 million--has so
    far been disbursed. We remain hopeful that Saudi Arabia will follow-
    through on its previous commitment to provide $30 million in
    concessional loans for road construction of a segment along the
    Kandahar-Herat highway.
        Kuwait, Qatar, and UAE have all made offers of assistance to
    Afghanistan, but only a small fraction of these pledges have
    materialized into actual project assistance. However, in some cases
    direct bilateral humanitarian aid and assistance-in-kind has been
    substantial.
        We remain actively engaged on this issue and are involved in
    ongoing efforts to encourage increased assistance from the Gulf States
    to Afghanistan.
        Question. According to Afghan Finance Ministry figures, France
    pledged a paltry $99.4 million for the reconstruction of Afghanistan
    through March 2009 (only $24 million more than the PRC). Should France
    shoulder a greater burden in this effort?
        Answer. The French generally do not make out-year pledges of
    assistance to third countries. The $99.4 million reflects the amounts
    that the French Government has pledged through 2004. We expect the
    French will make additional contributions in the coming years. In
    addition, the French Government intends to give euros 1 million to
    Afghanistan via the UNDP to assist with the ``electoral process.''
        Question. Are al-Qaeda or other terrorist groups profiting from the
    drug trade in Afghanistan, where 2003 estimates for the opium poppy
    crop topped 61,000 hectares?
        Answer. We do not know to what extent al-Qaeda profits from the
    drug trade in Afghanistan. U.S. Government agencies have anecdotal
    reports of drug trafficking by elements of al-Qaeda, but there is no
    evidence that such activities are centrally directed. Al-Qaeda
    continues to rely on private donations and funding sources other than
    narco-trafficking for most of its income, and there is no corroborated
    information in U.S. Government holdings to suggest that drug
    trafficking provides a significant percentage of al-Qaeda's income. We
    remain deeply concerned about the possibility that substantial drug
    profits might flow to al-Qaeda, however, and continue to be vigilant
    for signs that this is occurring.
        The involvement of anti-government Afghan extremists in the drug
    trade is clearer. U.S. troops in 2002 raided a heroin lab in Nangarhar
    Province linked to the Hizb-I Islami Gulbuddin and officials from the
    United Nations and the Afghan Government report that the Taliban earns
    money from the heroin trade. Based on the information available,
    however, we cannot quantify how much these groups earn from the drug
    trade, nor can we determine what percentage of their overall funding
    comes from drugs.
        In addition, extremists and terrorists in Afghanistan may sometimes
    turn to the same network of professional smugglers used by drug
    traffickers for help moving personnel, material, and money.
        Question. What is the proposed fiscal year 2005 U.S. contribution
    to counter-narcotics efforts, and does this amount represent our ``fair
    share'' given that the vast majority of drugs are destined for Europe?
        Answer. The State Department's fiscal year 2005 budget request to
    Congress contains $90 million for International Narcotics and Law
    Enforcement (INCLE), $22 million of which will be devoted and used
    specifically for counter-narcotic programs.
        The United States Government, working closely behind the lead of
    the United Kingdom, has taken an active stance against poppy
    cultivation, narcotics production, and trafficking. Drug cultivation
    and trafficking undermine the rule of law and provide an income source
    for terrorist activities. The drug trade is hindering the ability of
    the Afghan people to rebuild their country and rejoin the international
    community, and it is having deleterious effects on the abilities of
    neighboring countries to control their borders and exercise effective
    law enforcement measures. It is in the interest of all nations to fight
    the drug trade.
        Question. Do you share my view that the people of Afghanistan are
    better off today than they were under the Taliban?
        Answer. Absolutely. Afghanistan is in the midst of a historic
    transition. Less than three years ago the Taliban ruled over all of
    Afghanistan through a rigid Islamic absolutism that denied many
    fundamental human rights, including allowing women to work or go to
    school. Today, under the steady leadership of President Karzai, the
    country has taken enormous strides and now looks ahead to September
    elections that will mark another milestone on Afghanistan's journey as
    a stable, contributing member of the global community.
        In January, an ethnically and gender diverse Loya Jirga adopted a
    new, progressive constitution that guarantees human rights, including
    those of women. Hundreds of schools and health clinics have been
    constructed and rehabilitated, and school attendance for girls and boys
    increased to a record three million last year. Infrastructure
    improvements are also in full force, the most prominent evidence of
    this being the December 2003 completion of the 389 km Kabul-Kandahar
    highway, a U.S.-led project linking Afghanistan's two largest cities;
    construction is soon to begin on the next phase, Kandahar to Herat.
        The results of Afghanistan's improved security environment are also
    becoming more visible. The Afghan National Army is steadily coalescing
    into a true national defense force. Police are being trained to provide
    day-to-day security in the provinces and in Kabul. And last August NATO
    assumed leadership of the ISAF peacekeeping force, an unprecedented
    move for the alliance that subsequently led to the first step of ISAF
    expansion outside Kabul with the decision by Germany to staff the
    Provincial Reconstruction Team (PRT) in Konduz with troops. In total,
    thirteen PRTs have now been established to provide a security and
    reconstruction presence in the provinces, and more are scheduled to
    open within the next six months.
        Question. What is the current strength of the Afghan National Army
    (ANA), and what do you expect the anticipated strength of the ANA to be
    a year from now?
        Answer. The total ANA force now numbers 8,900 troops. At the
    current training rate, the ANA force should grow within one year to
    approximately 18,000 so long as the necessary resources remain
    available to train, equip, arm, and provide infrastructure for new
    troops.
        Question. What is your view of the professionalism and capabilities
    of the ANA, and what are the retention rates?
        Answer. The ANA has been positively received by Afghans across the
    nation. Ethnically diverse and demonstrating a level of professionalism
    most Afghans are not familiar with from their experiences with armed
    militias, ANA troops are often initially mistaken by the population as
    a foreign army.
        The ANA has performed admirably in successfully carrying out recent
    stability operations for the Afghan central government in Herat and
    Faryab provinces. They have also helped with removing heavy weapons
    from Kabul (part of the disarmament, demobilization, and reintegration
    (DDR) process), and have participated alongside OEF forces in missions
    in the East and South.
        As the ANA has gradually gained institutional momentum and general
    acceptance of it as the new national army has grown, attrition rates
    have stabilized at around 2 percent.
        Question. Do you believe that the recent interpretation of the
    Basic Law by the National People's Congress in Beijing that gives the
    NPC total control over direct elections in Hong Kong undermines the
    premise of ``One Country, Two Systems?''
        Answer. Hong Kong continues to have day-to-day authority over its
    affairs under the ``One Country, Two Systems'' formula. The NPC's
    decision does, however, have important implications for the dialogue
    among the Hong Kong Special Autonomous Region (SAR) Government, the
    Chinese government, and the Hong Kong people over the future of Hong
    Kong's electoral process. As the people of Hong Kong have shown in the
    past through the July 1, 2003 and January 1, 2004 demonstrations--a
    well informed electorate will continue to make its voice heard on
    issues that affect the future governance of the territory. We hope the
    authorities in Beijing and the Hong Kong SAR will make meeting the
    aspirations of the people of Hong Kong for democratization a top
    priority.
        Question. How will this interpretation of the Basic Law by the NPC
    impact cross Strait relations--can you think of any reason why
    Taiwanese will believe in the ``one country, two systems'' mantra?
        Answer. It will not have a positive effect. Taiwan's Mainland
    Affairs Council issued a statement on April 7 warning that China's
    efforts to apply its authority vis-a-vis Hong Kong's political reforms
    will undermine freedom in the special administrative zone.
        In the final analysis, the Taiwan issue is for people on both sides
    of the Strait to resolve. This is the only way a peaceful and durable
    solution can be found. We continue to urge Beijing and Taipei to pursue
    dialogue as soon as possible through any available channels, without
    preconditions.
        In the absence of a political dialogue, we encourage the two sides
    to increase bilateral interactions of every sort.
        Question. What additional programs and activities does the United
    States fund to support the advancement of democracy in Hong Kong?
        Answer. The United States supports a variety of programs in Hong
    Kong that reach out to the political, economic, and academic leadership
    to promote the democratization process. For example, Consul General
    James Keith proactively and frequently engages Hong Kong media to
    support the advancement of democracy in Hong Kong, and his interviews
    and editorials consistently reach mass audiences. Further, the United
    States has programmed close to 30 United States speakers since May 2003
    to help promote democracy in Hong Kong; the United States Fulbright
    program in Hong Kong is especially active; and the International
    Visitor exchange program is renowned among Hong Kong's professional
    civil service. In addition to these programs, the United States
    recently opened an American Corner at the University of Macau to expand
    public diplomacy outreach throughout the region.
        Question. Do you believe, as mainland China asserts, that the
    United States is interfering in Hong Kong's ``internal affairs?''
        Answer. Our engagement reflects our well-established commercial,
    social and cultural interests in Hong Kong as well as our history of
    friendship based on shared values. 1100 American companies are based in
    Hong Kong along with 50,000 American citizens. The United States also
    has a legal obligation under the 1990 Hong Kong-Policy Act to monitor
    the progress of democratization in Hong Kong, which we continue to
    discuss in our annual report to Congress.
        Question. What do the razor thin presidential victory of the
    Democratic Progressive Party (0.2 percent margin) and the increase in
    the DPP's share of the popular vote (up to 50 percent in 2004 from 39
    percent in 2000) mean for the forces of independence in Taiwan?
        Answer. The 2004 presidential election was a testament to Taiwan's
    vibrant democracy. More than eighty percent of eligible Taiwan voters
    turned out to participate in a free and fair selection of their next
    President after a vigorous campaign that highlighted a wide range of
    economic, political and social issues. Although the margin of victory
    was only one-fifth of one percent and the attempted assassination of
    President Chen and Vice President Lu marred the election campaign's
    final days, the people of Taiwan behaved well and with restraint.
        In 2000, President Chen said in his inaugural address that so long
    as the PRC does not intend to use force, he would not declare
    independence, not change the national title, not push the inclusion of
    ``state to state'' relations in the constitution, not promote a
    referendum to change the status quo on independence or unification, or
    abolish the National Unification Council (the ``five no's.'') He
    repeated the ``five no's'' during the Presidential campaign. We
    appreciate and take very seriously President Chen's pledge and his
    subsequent reaffirmations of it. We do not interpret his victory as a
    strengthening of the ``forces of indenpendence'' in Taiwan.
        Question. How can the United States partner with Taiwan to advance
    democracy throughout the region?
        Answer. We applaud the success of democracy in Taiwan and the
    dedication of Taiwan's people to the rule of law. The United States
    strongly supports Taiwan's democracy and development of an open society
    under the rule of law. Taiwan is a success story for democracy in Asia
    and around the world. We feel strongly that others can benefit from
    knowing more about Taiwan's achievements. We will explore with our
    friends in Taiwan interested non-governmental organizations how they
    may be able to promote Taiwan's story to a global audience, and how we
    can help to make Taiwan's instructive example available to all
    countries that are attempting to institute democratic reforms and the
    rule of law.
        Question. What specific action has the State Department taken to
    safeguard Burmese Refugees and Burmese organizations in Thailand from
    Thaksin's crackdown on Burma's democratic opposition?
        Answer. The Bureau of Population, Refugees, and Migration funds
    UNHCR which provides protection to 140,000 Burmese refugees resident in
    nine camps in Thailand. UNHCR also issues protection letters to Burmese
    who are living outside the camps in Thailand who they find to be
    ``persons of concern.''
        In fiscal year 2003, the United States provided over $5 million in
    humanitarian assistance to Burmese refugees in camps in Thailand and
    over $3 million for democracy promotion activities, many of which take
    place in Thailand. Some NGO groups have reported difficulties in
    operating along the border due to stricter Royal Thai Government
    policies; the RTG has responded positively when we have raised these
    issues.
        Question. Is Thailand deporting (either formally or informally)
    Burmese nationals to Burma at a rate of 10,000 per month, as reported
    by Human Rights Watch? What is the fate of these deported Burmese?
        Answer. We do not have figures for the total number of deportations
    of Burmese nationals by Thai immigration officials. Burmese nationals
    who are not registered residents of refugee camps are subject to
    deportation back to Burma, both formally or informally. Migrants who
    are informally deported are not returned directly to Burmese
    authorities; they are taken to the border and released. Many are able
    to evade Burmese authorities and re-enter Thailand. Those who are
    formally deported are directly handed over to Burmese authorities and,
    in some cases, may suffer reprisals. UNHCR works with Thai authorities
    to ensure that Burmese who have been designated as persons of concern
    are not formally deported back to Burma. We are looking into recent
    reports that Thai officials may have deported individuals that UNHCR
    has designated as persons of concern.
        Question. How do you assess the recent actions of the UNHCR in
    Burma--is UNHCR serving as a forceful champion for Burmese refugees?
        Answer. We believe UNHCR is fulfilling its mandate in protecting
    Burmese refugees. In February 2004, UNHCR entered into an agreement
    with the Government of Burma to begin initial efforts in the east of
    the country to create conditions that could eventually allow the
    voluntary return of 140,000 refugees from camps in neighboring
    Thailand. UNHCR has repeatedly stated that it will not take part in the
    repatriation of Burmese to Burma until three conditions are met: ``(1)
    a credible cease-fire agreement between the SPDC and the Karen National
    Union; (2) the development of an infrastructure in townships that far
    exceeds current conditions; and (3) an international protection
    presence set up to monitor continuously any repatriation and
    integration.'' UNHCR has underlined that the current situation is not
    conducive to refugee returns and that it currently seeks only to
    improve basic health, education, and community services.
        UNHCR's access to the eastern part of Burma can serve to increase
    transparency and offer the outside world a view into events in that
    region.
        Question. Why is the United States initiating refugee resettlement
    of Burmese refugees, absent a clear understanding with Thaksin's
    government on the treatment of Burmese in Thailand?
        Answer. Since 1990, the USG has been resettling Burmese refugees
    from Thailand. Initially, the United States and other resettlement
    countries, such as Canada, Australia, and others, offered refugee
    resettlement consideration primarily to Burmese students/dissidents who
    fled to Thailand following the violent suppression of pro-democracy
    forces in 1988. In addition, over the years the USG has processed other
    Burmese refugees identified by the United Nations High Commissioner for
    Refugees (UNHCR) office in Thailand as requiring protection provided by
    third-country resettlement.
        In February 2004, the USG began a resettlement initiative for
    certain UNHCR-recognized Burmese refugees living in urban areas. In
    2003, the Royal Thai Government (RTG) had indicated that it wanted all
    Burmese refugees to reside in the border camps. For security and
    protection reasons there are currently some 3,500 Burmese refugees
    living in urban areas within Thailand. UNHCR proposed to the RTG that
    these Burmese refugees be processed for resettlement in third-
    countries. When the RTG agreed, UNHCR referred the first 1,400 to the
    United States for resettlement processing in February. The first of
    these refuges approved for United States resettlement arrived in the
    United States on May 26. UNHCR has indicated that it will refer some
    1,500 additional urban Burmese refugees to the United States later this
    summer. In addition, UNHCR has indicated that it plans to refer several
    hundred other urban Burmese refugees to other countries that have
    indicated an interest in participating in this resettlement initiative.
        Even though Thailand is not a signatory to the 1951 U.N. Convention
    on the Status of Refugees or its 1967 Protocol, for decades the RTG has
    provided temporary asylum to hundreds of thousands of Burmese,
    Indochinese, and asylum seekers from other countries.
        Regarding Burmese refugees in Thailand, in general, Thailand has
    been a generous host to Burmese asylum seekers. Thailand presently
    limits temporary asylum to those Burmese fleeing active fighting and we
    continue to urge the RTG to expand its definition, because of
    conditions in Burma, and grant temporary sanctuary to any Burmese
    genuinely seeking protection from persecution or other forms of serious
    harassment or discriminatory treatment. We also continue to encourage
    the RTG to accede to the Refugee Convention and its 1967 Protocol.
        Question. Does the relocation of these refugees help fulfill the
    objectives of the SPDC to permanently remove Burmese from the border
    areas?
        Answer. The United Nations High Commissioner for Refugees-led
    resettlement effort for the urban Burmese is for some 3,500 Burmese
    refugees who have been living in urban areas in Thailand for years. The
    1,400 individuals that the United States has processed to date
    primarily live in and around Bangkok with a few hundred of these
    refugee applicants residing in other urban areas in Thailand. These
    urban Burmese refugees are living entirely separate from the some
    142,000 Burmese refugees residing in camps on the Thai-Burma border.
        Question. How concerned are you with the reported backsliding of
    Thailand's democratic traditions--specifically, freedom of the press
    and human rights abuses?
        Answer. The Department's 2003 Thailand Country Report on Human
    Rights noted that the Thai constitution provides for freedom of speech
    and of the press, and the Thai Government generally respected these
    rights in practice; however incidents of harassment and intimidation of
    journalists continued to occur. Journalists generally were free to
    comment on governmental activities without fear of official reprisal,
    although there were attempts by the Thai Government to curb journalists
    or publications perceived to be critical of government officials or
    their families. In addition, the media practiced some self-censorship.
        The report also concluded that the Thai Government's human rights
    record worsened with regard to extra-judicial killings and arbitrary
    arrests. We continue to urge the Royal Thai Government frequently and
    at high levels to thoroughly and credibly investigate all killings from
    last year's anti-drug campaign and to bring to justice those
    responsible for wrongdoing.
        We are also following the Thai Government's investigation of the
    disappearance of noted Muslim human rights lawyer Somchai Ninphaijit in
    March 2004. Thai prosecutors have filed charges against several Thai
    police officials accused of participating in the disappearance, and a
    trial is underway.
        Question. What is the relationship between Thai King Bhumipol and
    Prime Minister Thaksin, and are there any indications that the King is
    concerned with Thaksin's potential business conflict of interests in
    Thai domestic and foreign policy?
        Answer. King Bhumipol, who has been on the throne since 1946, is
    the head of state and commands enormous popular respect and moral
    authority. Prime Minister Thaksin Shinawatra took office in February
    2001. As the head of government, the Prime Minister consults regularly
    with the King.
        We have no information on King Bhumipol's views on Prime Minister
    Thaksin's business interests.
        Question. What is the status of talks between Armenia and
    Azerbaijan over the Nagorno Karabakh conflict, and how does the passing
    of Azeri President Heydar Aliyev impact prospects for reconciliation?
        Answer. Heydar Aliyev was a singular figure in the South Caucasus
    and his death could not help but alter the tone course of negotiations.
    In fact, the late president's protracted decline in health became an
    obstacle to negotiations for much of 2003, for the simple reason that
    he was not physically well enough to be deeply engaged on the issue.
    However, President Ilham Aliyev has continued both his father's path
    towards the West and the negotiations between Armenia and Azerbaijan
    dedicated to solving the conflict over Nagorno-Karabakh. Both sides
    have agreed the dispute should be resolved peacefully. We are
    cautiously encouraged that the two sides may each be ready to resume a
    more regular series of discussions on the matter. In addition to direct
    negotiations between President Aliyev and President Kocharian, a
    recurring series of talks at the foreign minister level has been
    initiated to explore different settlement modalities.
        Question. Does current Azeri President Ilham Aliyev have the
    political weight and clout of his father to pursue negotiations over
    the N-K conflict?
        Answer. While it is true that the late President Heydar Aliyev had
    a unique stature in Azerbaijani politics and society, President Ilham
    Aliyev has shown himself willing and able to continue negotiations
    aimed at finding a peaceful settlement to the conflict over Nagorno-
    Karabakh.
        Question. Given the strong Congressional interests of parity
    between Armenia and Azerbaijan, how do you explain the $6 million
    difference in FMF assistance to those countries?
        Answer. The matter of FMF allocation to Armenia and Azerbaijan is
    currently under review at the State Department. Armenia and Azerbaijan
    are each important partners of the United States. The Administration
    believes that building up Azerbaijan's maritime security capabilities
    is important in order to prevent the transit of destabilizing
    contraband or terrorists through the Caspian Sea zone. The
    Administration's increased FMF request for fiscal year 2005 is aimed,
    in large part, at countering that threat. FMF will also enhance
    Azerbaijan's capabilities to participate in international peacekeeping
    efforts. Azerbaijan currently has peacekeeping troops deployed to Iraq,
    Afghanistan and Kosovo.
        We hope to be able to enhance our security relationship with
    Armenia in order to do more in the peacekeeping area there. We
    frequently encourage the Armenian Government to permit closer military
    cooperation with the United States and to permit the United States to
    conduct an assessment of its armed forces. It will be difficult to
    usefully spend more FMF in Armenia until we do a more thorough
    assessment of Armenia's resources and needs to become more
    interoperable with United States and NATO forces.
        Question. How do you assess Armenia's partnership in the war
    against international terrorism? How does this compare to Azerbaijan's
    partnership?
        Answer. Armenia is a serious partner in the global war on
    terrorism. Armenian officials, including the President, regularly speak
    out condemning terrorism. Armenia has recently modernized its laws to
    specifically criminalize terrorism. Stronger counterterrorism financing
    laws are under consideration. Several domestic terror suspects were
    tried and convicted in 2003. Armenia is a party to 9 of the 12
    international conventions and protocols relating to terrorism.
        Azerbaijan is also a contributing partner in the global war on
    terror and has taken significant strides to strengthen its
    counterterrorism posture. Azerbaijan has joined all 12 international
    conventions and protocols relating to terrorism, including four for
    which Azerbaijan's accession was notified after the 2003 Patterns of
    Global Terrorism report went to press. Azerbaijan has recently
    accomplished important steps in combating terrorist finance, has
    rendered terrorism suspects to foreign governments for prosecution, and
    shown some success in disrupting terrorist networks seeking to transit
    Azerbaijani territory.
        We caution against attempting direct comparisons between any two
    countries' counter-terrorism efforts, as each faces different
    challenges in the war on terror and has different capabilities. We
    refer you to the State Department Report ``Patterns of Global
    Terrorism,'' which characterizes Armenia and Azerbaijan's cooperation
    in the global war on terrorism in more depth.
        Question. How best can the United States encourage Russia to ``stay
    the course'' in the advancement of democracy and press freedoms?
        Answer. A historic positive transformation has occurred in Russia
    during the twelve years since the collapse of the Soviet Union. In the
    1990s, Russians acquired basic freedoms, such as expression, religion
    and the ability to choose their leaders through elections. However, the
    pattern of official pressure on the independent broadcast media,
    irregularities in elections, and the arrest and detention of prominent
    individuals such as Mikhail Khodorkovskiy have raised questions about
    Russia's commitment to democracy and the rule of law.
        In January of this year, I addressed all of these issues directly
    with President Putin and in an article published in a leading Russian
    newspaper. I noted in my article that Russia's political system seems
    not to have found essential balance among the executive, legislative
    and judicial branches of government. I pointed out that key aspects of
    civil society, free media and political party development have not yet
    obtained an independent presence in Russia. While in Moscow, I also
    emphasized that the United States wants a robust partnership with
    Russia, but that without a basis of common principles, the United
    States-Russian relationship will fail to reach its potential.
        Through our continued engagement and our assistance programs, the
    United States has played a key role in supporting the development of a
    vibrant and diverse range of civil society organizations, independent
    media outlets and other institutions necessary for democratic values
    and institutions to flourish. Ambassador Vershbow and our embassy in
    Moscow actively advocate on behalf of improving respect for human
    rights, fundamental freedoms, and democratic institutions.
        In the current environment, which is less than supportive of these
    values and institutions, we must continue to engage on the policy front
    and provide assistance to those in Russia who are pushing harder than
    ever to advance democracy. Ultimately, it is up to the Russians to
    determine the kind of political system in which they live, but our
    support--moral and financial--makes a significant difference.
        Question. Is the fiscal year 2005 budget request of $79.5 million
    sufficient to support ongoing political and economic reforms in Russia?
        Answer. This request is adequate to support critical economic and
    political reforms. Given the large capital inflows from oil and gas
    revenues to Russia over the past several years, it is necessary to
    assess the relevance of our assistance and where it makes a strategic
    difference. Russia has the capacity to finance economic reforms if it
    has the political will to do so. We intend to reduce funding for
    economic programs next year with a goal of phasing-out economic
    assistance the following year, in 2006. We are concerned, however, that
    Russia's commitment to democracy and rule of law has come into
    question. We therefore plan to focus more of our funding on programs
    that support civil society, independent media, the rule of law and
    democratic practices.
        Question. Given an increasingly tense political environment, is
    democracy promotion in Russia best handled by the National Endowment
    for Democracy?
        Answer. We share your concern about the political environment in
    Russia and, particularly in this environment, consider it important to
    maintain a diversified approach to democracy promotion in Russia that
    includes a range of partners inside and outside of the country.
        NED's grant support to non-governmental organizations (NGOs) in
    Russia complements the extensive efforts of the U.S. Embassy and USAID
    to support a wide range of democracy assistance, including promoting
    open and competitive political processes, an independent media, human
    rights, tolerance and improved civic participation in local governance.
    These programs are carried out by such experienced United States
    implementers as Internews, IREX, NDI, IRI, ABA/CEELI and, increasingly,
    by Russian partners. The Embassy also provides direct grants for
    democracy-building initiatives directly through the Democracy
    Commission Small Grants program (topping out at $24,000, these are
    typically smaller than NED grants).
        The United States democracy assistance program for Russia is
    strengthened by the on-the-ground presence of the United States Mission
    and by coordination in Washington. We believe that the fact that the
    United States Mission to Russia is directly engaged in democracy
    assistance sends an important signal to activists as well as to the
    government. So far, USAID and the Embassy have encountered little
    explicit resistance from Russian or local federal authorities against
    these programs. Unless this situation becomes significantly more
    aggravated, it would be well worth continuing these programs as many of
    them provide key Russian democracy activists with the only source of
    domestic or international grant funding available to them at present.
        We highly value the contribution made by the National Endowment for
    Democracy (NED). Indeed, the Department of State has supplemented NED's
    core funding with FREEDOM Support Act (FSA) funds for Russia since
    fiscal year 2002. In fiscal year 2004, we will provide $2 million of
    FSA funds to NED for work in Russia.
        Question. Will the recent political changes in Georgia be taken
    into consideration for the purposes of additional assistance under the
    Millennium Challenge Account?
        Answer. We hope that the Millennium Challenge Corporation will take
    into account the changes emerging in Georgia after the Rose Revolution.
    President Saakashvili has made control of corruption a very high
    priority: his actions already back up his words. We would support an
    MCC decision to include Georgia in the eligible countries for fiscal
    year 2004 funding to underpin the new government's commitments. The
    decision, however, will be up to the Millennium Challenge Board.
        Question. What is your response to the recent decision of Serbian
    lawmakers to provide Slobodan Milosevic and other war crime indictees--
    and their families--with financial support and other benefits?
        Answer. Our understanding is that the recent law codifies practices
    that had been in effect in Serbia and Montenegro as a matter of policy.
    These policies have included support for family members of Serbian
    defendants who are in the custody of the International Criminal
    Tribunal for the Former Yugoslavia (ICTY)--allowances for travel,
    telephone calls, the right to collect wages or pension payments due the
    indictee, and assistance with the defense expenses of some defendants.
    Croatia and Bosnia also make such assistance available to ICTY
    indictees, in order to induce them to surrender and submit to the
    Tribunal's jurisdiction.
        The new law, which has proved very controversial with the Serbian
    public, is currently under review by the Constitutional Court, and
    there are strong signals that some of the provisions will be
    overturned.
        In the past, assistance was available only for families of those
    defendants who had voluntarily surrendered to the Tribunal. It appears
    that the new legislation would make this assistance available to all
    defendants who are in The Hague. The Finance Minister, who is opposed
    to certain provisions in the law, is proposing restrictive regulations
    to implement the law.
        We cannot speculate as to what led the Serbian Parliament to pass
    this legislation. Rather than focusing on assistance that the Serbian
    Government might wish to extend to defendants who are already in ICTY
    custody, our primary concern is that fugitive ICTY indictees, including
    especially Ratko Mladic, are finally brought to justice before the
    Tribunal without further delay, a point that the U.S. Government
    continues to stress in all our meetings with Serbian officials.
        Question. ``What impact has the removal of HAMAS leader Yassin had
    on that terrorist organization, and on terrorism against Israel?''
        Answer. HAMAS is a designated terrorist organization. There is no
    question that the group continues to promote violence and instability
    in the Middle East, and its activities remain a major obstacle to the
    pursuit of Middle East peace. Following the death of Sheikh Yassin,
    HAMAS vowed revenge against Israel, as it did following the death of
    leader Abdel Aziz Rantissi on April 17. Since that time, HAMAS has
    continued its efforts to operationalize terrorist attacks inside Israel
    proper. Hamas recently claimed its first successful lethal rocket
    attack on 28 June, when a Qassam rocket launched from northern Gaza
    struck the Israeli town of Sderot, killing a 49 year-old man and a 3
    year-old child.

                                  ISRAEL/EGYPT

        Question. Is the United States considering increased aid to the
    Palestinians for Gaza after an Israeli withdrawal?
        Answer. The United States has devoted significant development and
    humanitarian resources to the West Bank and Gaza, with nearly $75
    million in Economic Support Funds provided in fiscal year 2004 and
    another $75 million requested for fiscal year 2005. Total USAID
    assistance to the West Bank and Gaza since 1993 is over $1.3 billion.
    In addition, in 2004, we are providing $88 million to the U.N. Relief
    and Works Agency (UNRWA) general fund for its programs to assist 4.1
    million registered Palestinian refugees, 1.6 million of whom live in
    West Bank and Gaza. The United States remains the largest donor to
    UNRWA. Also, the United States contributed $20 million in February 2004
    from the President's Emergency Relief and Migration Assistance account
    to UNRWA's emergency appeal for refugees in West Bank and Gaza, and we
    are considering another contribution to the appeal.
        No decisions have been made about future levels of assistance. In
    the event of Israeli withdrawal, the United States will join with
    others in the international community to foster the development of
    democratic political institutions and new leadership committed to those
    institutions, the reconstruction of civic institutions, the growth of a
    free and prosperous economy, and the building of capable security
    institutions dedicated to maintaining law and order an dismantling
    terrorist organizations.
        Question. Will such increased aid (to Palestinians) be conditioned
    on Palestinian efforts to eliminate HAMAS and Islamic Jihad terrorism?
        Answer. This question has been sent to USAID for response.
        The committee notes that no response was received.
        Question. What conditionality has been placed on fiscal year 2003
    supplemental funding for Egypt ($300 million), and will similar
    conditions be placed on the fiscal year 2005 budge request for Egypt?
        Answer. We have placed the following conditions on the Government
    of Egypt for the disbursement of fiscal year 2003 Supplemental funding.
    These conditions were included in our April 2 Congressional
    Notification on this topic and were negotiated between our two
    governments in a cooperative manner. It is worth noting that the
    disbursement of the supplemental funds is still awaiting final
    signature on a joint MOU between our two governments.
        1. Implement a fully floating exchange rate supported by
    appropriate monetary policies:
      --Re-affirm the government's public commitment to allow banks and
            foreign exchange bureaus that are in compliance with prudential
            regulations to freely set exchange rates.
      --Commit to increase the efficiency of and reduce distortions in the
            foreign exchange market under the floating exchange rate
            regime.
        2. Improve the business climate and meet WTO obligations:
      --Maintain tariffs on apparel consistent with Egypt's WTO
            obligations.
        3. Improve transparency and budget deficit:
      --Commit to publishing a budget.
      --Request and establish a timeline with the World Bank for a Public
            Expenditures Review.
      --Agree to IMF public release of executive summary of the annual
            Article IV Consultations report through the Public Information
            Notice (PIN) of the IMF.
      --Agree to publish Reports on Standards and Codes by 12/31/04.
      --Commit to beginning public release of macroeconomic data, including
            but not limited to quarterly GDP estimates (with six month lag)
            and monthly industrial production indices.
        The fiscal year 2005 budget request includes an Economic Support
    Fund (ESF) request of $535 million. We are focusing our resources on
    the Middle East Partnership Initiative pillars of economic reform,
    education, civil society, and women and are determined that our
    assistance activities reach more Egyptians at the grassroots level.
        We have redesigned our cash transfer program, under which ESF
    disbursements are conditioned on economic reform, to focus on the
    financial sector, including bank privatization. In education, we are
    promoting the decentralization of Egypt's education system and
    integrating proven models of teacher training, local school management,
    and community and private sector support/involvement. Girls' education,
    particularly in rural areas, as well as English language training
    programs, will be a key focus of our activities. We are also planning
    to devote significant resources for democracy and governance programs
    that open the public space for debate, support civil society
    institutions, and promote the respect for rule of law.
        Question. How do you explain Egyptian President Hosni Mubarak's
    seeming reluctance to implement much needed political and economic
    reforms in Egypt?
        Answer. Reform has been a focal point in our bilateral relations
    with Egypt for several years. We have been cautiously encouraged by
    several steps the Government has taken including:
      --Floating the Egyptian pound,
      --Replacing WTO-inconsistent apparel tariffs,
      --Creating a National Council on Human Rights,
      --Repealing several military decrees,
      --Sponsoring a regional conference in Alexandria that issued a bold
            declaration favoring reform, and
      --Public statements by Egyptian officials suggesting the possibility
            of lifting the Emergency Law.
        In addition, President Mubarak has expressed his commitment to
    reform, highlighting the need to modernize, develop, and reform society
    in a 14 April speech to the Baker Institute for Public Policy in Texas.
        We remain concerned, however, over restrictions on basic political
    liberties and religious rights, treatment of prisoners including
    routine use of torture, and continued reliance upon the Emergency Law.
    The Emergency Law allows the state to arrest and detain suspects
    without trial for prolonged periods and refer civilians to military
    courts. We continue to stress the need for reform to our Egyptian
    counterparts and emphasize that true stability will only result from a
    free and open society where citizens' rights are respected.
        Question. Has the Egyptian Government actively undermined the
    President's Greater Middle East Partnership Initiative (GME), and what
    role did it have in, if any, in scuttling the Arab Summit in Tunisia
    last month?
        Answer. Like other countries in the region, Egypt has stressed that
    reform cannot be imposed from the outside, but must come from internal
    dialogue and debate--a principal we strongly support. Egypt has worked
    to this end, sponsoring a regional conference in Alexandria that issued
    a bold declaration favoring reform, and engaging in a national dialogue
    with some of the major opposition parties. The Egyptian Government
    acknowledges the need for reform in Egypt and the Middle East and has
    played an important and constructive role in ensuring that the Arab
    League takes up the issue of political and economic reform.
        When the Government of Tunisia cancelled the Arab Summit meeting on
    28 March, Cairo immediately offered to host the Summit if Tunisia was
    unwilling. From 8-10 May, Egypt hosted the Arab League foreign
    ministerial that agreed on a rescheduled date of 22-23 May for the
    Summit. Egypt has and continues to play a constructive role on Arab
    League issues.
        Question. Will the Administration be able to renegotiate foreign
    assistance agreements with Egypt to ensure that they do not have veto
    power over the use of taxpayer funds?
        Answer. The Government of Egypt (GOE) and the USG jointly agree
    every year on the use of aid dollars. Our assistance program is
    codified in our bilateral Treaty agreement with the GOE; something that
    we do not believe should be changed at this time. Such joint decision-
    making has been the principle and practice of this assistance since the
    beginning of our program with Egypt more than twenty years ago. This
    program, rooted in the Camp David Accords, has achieved many benefits
    for the United States and Egypt and is one whose programs are
    continually evolving.
        Our most recent discussions with the GOE, held in November 2003 on
    the topic of a new Democracy and Governance assistance funding, were
    frank and are ongoing. In 1998, we negotiated funding changes to the
    assistance program. These discussions were always held in a productive
    atmosphere with GOE officials. If changes are to be made to the
    program, we are confident that we will have an engaged partner.
    However, a full renegotiation of the agreement would require changes to
    the Accords--a difficult and costly exercise to implement.
        The GOE does not hold a veto over U.S. Government assistance to
    Egypt. This is evidenced by the fact that we have just completed a
    review of the assistance program that intends to advance new program
    initiatives in the areas of economic reform, democracy and governance,
    health, education, and the environment, among other areas. Changes to
    the formulation of our assistance program for Egypt do not inhibit us
    from making these initiatives, and despite some GOE resistance to some
    of our proposals we have been and will continue to discuss these
    proposals in detail with the GOE.
         Question. Do you agree that the failure of the Egyptian Government
    to provide basic freedoms--including that of association--strengthens
    the ability of extremists to recruit from disaffected segments of
    society that have no role or voice in domestic politics?
        Answer. Islamic terrorist movements suppressed by the Egyptian
    Government in the 1980s and 1990's were not seeking an agenda of
    greater political inclusiveness. While the core of extremist movements
    consists of people who are committed to a radical ideology, disaffected
    segments of society are vulnerable to manipulation. The Egyptian
    Government has called for greater political and economic participation
    to counter extremists' influence, and the National Democratic Party has
    led a campaign to encourage youth to become involved in government. We
    are working with both the Government and NGOs to design programs to
    strengthen civil society and the rule of law in Egypt, a result of
    which may be greater public confidence in the political system, and
    accordingly, reduced appeal of extremist groups.
        Question. Are we making any progress at all with the Egyptians in
    reducing the unending vilification of America, Israel and Jews in their
    official and semi-official media?
        Answer. Since the onset of the second Intifada in September 2000,
    there has been an increase in anti-Semitic material published in the
    Egyptian media. We have raised regularly our concerns over anti-Semitic
    material in the official GOE media with Egyptian officials, and
    welcomed Presidential Adviser Osama Al-Baz's repudiation of anti-
    Semitism as a vehicle for protesting policy differences with Israel.
    Our Ambassador in Egypt, David Welch, has taken an active role in
    protesting biased media coverage, calling on the press to present well-
    researched and factually accurate arguments, not those perpetuating
    anti-Semitic slurs, rumors or unsubstantiated conspiracy theories.
         Question. How do you account for Qaddafi's recent willingness to
    cooperate with the West on a range of issues--including weapons of mass
    destruction?
        Answer. No one factor or any isolated event suffices to explain
    Libya's recent judgments. The record of negotiations reflects a new
    seriousness and intensity among Libyan negotiators following September
    11 and in the build-up to Operation Iraqi Freedom. The interdiction of
    the ship ``BBC China'' through President Bush's Proliferation Security
    Initiative may also have been a factor in Libya's decision. But the
    Libyan government has recognized the economic and security advantages
    of improving relations with the United States and others and had been
    edging slowly away from its destructive and futile past polices for
    some time.
        Question. What role did Qadhafi's son Saif Al-Islam have in
    shifting Libya's direction, and what role does he have in the future of
    Libya? What are his reform credentials?
        Answer. It's not clear how much of a role Saif Al-Islam plays in
    the direction of Libyan policy. Officially, Saif Al-Islam holds no
    position within the government. In practice, his familial association
    translates into some degree of influence. Saif Al-Islam heads the Human
    Rights Society of the Qadhafi International Foundation for Charity (The
    Qadhafi Foundation). In this capacity, Saif Al-Islam was involved in
    the discussions between the Foundation and the French victims'
    association that led to a compensation settlement with French parties
    in the UTA bombing. Saif Al-Islam facilitated the visits of several
    United States Congressmen to Tripoli earlier this year. He has not
    participated in the U.S./UK discussions on WMD with Libyan officials,
    nor our bilateral dialogue on political and economic relations.
        There is no established rule of succession in Libya. We cannot
    judge whether Saif Al-Islam has a future political role in Libya.
        Question. Will the United States provide assistance to Libya for
    the destruction of its chemical weapons stockpile?
        Answer. Libya has not made a direct request to the United States
    for assistance in the destruction of its CW stockpile, although at the
    March 23-26, 2004 meeting of the Executive Council to the Organization
    for the Prohibition of Chemical Weapons, the Libyan Representative
    stated that Libya hopes to receive technical and financial assistance
    from the international community. The United States Government has not
    ruled out such assistance. We are encouraging United States companies
    who have expressed an interest and have expertise in destruction of CW
    to initiate contact with the Libyan Government.
        Question. Does Libya provide an example of the value of sanctions
    in addressing a hardline regime?
        Answer. Economic sanctions against Libya--which included a U.N.
    sanctions regime, adopted by the Security Council, as well as sanctions
    imposed under U.S. laws--were sustained for a number of years. Over
    time, in addition to their economic impact, they contributed to
    creating a sense of international isolation for Libya. A desire to end
    that isolation and rejoin the world community was one element in
    bringing about the dramatic changes of policy that we have seen in
    Libya.
        Question. How much have events in Iraq precipitated change in Libya
    and throughout the region?
        Answer. There can be no doubt that United States resolve to see
    international law and more than a dozen U.N. Security Council
    resolutions upheld in Iraq have had a profound impact on the region,
    including on the dramatic decision by Libya's Moammar Qadhafi to give
    up his weapons of mass destruction.
        In Libya's case, other factors also played a role, including the
    sanctions regime, years of tough diplomacy, and United States and UK
    intelligence efforts to uncover the details of Libya's WMD efforts. It
    is also important to note that the courage and tenacity displayed by
    the families of the Pan Am 103 victims helped to persuade Libya to
    fulfill the requirements related to Pan Am 103, including transfer of
    the two suspects and renunciation of terrorism.
        Question. How alarmed should we be with Iran's construction and
    assembly of centrifuges used to enrich uranium at Isfahan, and at
    Iran's attempts to frustrate the work of the International Atomic
    Energy Agency?
        Answer. We are very concerned about Iran's nuclear program,
    including its construction and assembly of centrifuges for its uranium
    enrichment program, because we believe Iran's nuclear program is
    directed towards developing nuclear weapons. In his four reports on
    Iran over the past year, the IAEA Director General has documented
    eighteen years of clandestine nuclear activities, conducted in
    violation of its NPT safeguards obligations, including undeclared
    uranium enrichment and plutonium separation experiments, as well as
    experiments with such weapons-related materials as uranium metal and
    polonium-210. Dr. ElBaradei also documented Iran's efforts during that
    period of time to systematically and willfully hide its clandestine
    efforts from the world.
        Iran claims it needs to develop indigenous uranium enrichment
    capability for its nuclear power program. However, Iran already has a
    guaranteed external fuel supply for the one power reactor currently
    under construction at Bushehr. More importantly, Iran has no need for
    nuclear power to meet its indigenous power requirements. Indeed, Iran
    has some of the largest petroleum and gas reserves in the world.
    Moreover, Iran does not have sufficient known uranium reserves to
    support a civilian nuclear power program. It has more than enough
    uranium, however, for a nuclear weapons program. Iran's troubling,
    confirmed history of serious safeguards violations, and of long-term
    deception and denial regarding those efforts are clear indicators of an
    intent to develop a nuclear weapons capability under the cover of a
    peaceful nuclear energy program. We urge Iran to abandon its pursuit of
    sensitive nuclear fuel cycle capabilities and of nuclear weapons
    capabilities. We are undertaking intensive diplomatic efforts aimed at
    achieving those goals.
        Question. How close to completion is their [Iran's] enrichment
    facility?
        Answer. As a result of the intense international spotlight on, and
    rigorous IAEA investigation of, its nuclear activities, Iran has
    declared the existence of a number--but likely not all--of its
    facilities involved in its uranium conversion and enrichment programs.
    However, Iran's drive to develop the entire nuclear fuel cycle is
    complex and is not centered in a single facility. Furthermore, there
    are lingering suspicions Iran has not declared the full extent of its
    nuclear program. Iran has announced its intention to begin operations
    at its Esfahan uranium conversion facility. We believe testing this
    facility is not consistent with Iran's repeated pledges to suspend
    enrichment-related and reprocessing activities. The production of
    uranium compounds used to produce feedstock for enrichment would be an
    unacceptable step towards actual enriched uranium operations.
        Further along the fuel cycle, Iran has pledged to the IAEA to stop
    assembling centrifuges at the pilot fuel enrichment plant at Natanz,
    though construction of that facility and at the larger Fuel Enrichment
    Plant (which is being buried underground at the same site), appears to
    be proceeding rapidly. The IAEA continues to investigate the source of
    uranium contamination found on centrifuges at Natanz and elsewhere. The
    DG's February 2004 report to the IAEA Board revealed that Iran had not
    declared to the IAEA its possession of more advanced ``P-2'' gas
    centrifuge designs. The DG's February report also noted advances in
    Iran's capability to manufacture domestically a range of centrifuge
    components, including at a number of workshops controlled by the
    Iranian military, a troubling revelation. Until the IAEA concludes its
    investigation of Iran's centrifuge enrichment program, an investigation
    that we anticipate will need to continue for the foreseeable future, it
    is difficult to assess more precisely its current state of development.
        Iran has also experimented with laser enrichment techniques that
    have not been found to be commercially viable in other countries. A
    proliferator is not interested in making enrichment profitable;
    therefore, such techniques could be attractive for use in a covert
    weapons program. The IAEA's investigation of Iran's laser enrichment
    program is ongoing.
        In short, we do not know precisely how close Iran is to having an
    indigenous capability to enrich uranium, largely due to Iran's refusal
    to cooperate fully with the IAEA and because of lingering suspicions
    Iran has not declared the full extent of its nuclear program. However,
    we are working closely with other members of the IAEA Board of
    Governors to ensure that the IAEA and the IAEA's Board continue to
    exert the fullest possible pressure on Iran to cooperate fully.
        Question. The EU said it will not go forward with a new Trade and
    Cooperation Agreement with Iran until its nuclear program has been
    determined to be peaceful--how seriously does the EU take the threat of
    a nuclear-armed Iran?
        Answer. The EU shares our concerns about the threat of Iran
    acquiring nuclear weapons capability. The EU has consistently called on
    Iran to cooperate fully with the IAEA and comply fully with its
    nonproliferation obligations. EU member states serving on the IAEA
    Board of Governors have supported three resolutions adopted unanimously
    calling on Iran to cooperate with the IAEA and declare all its nuclear
    activities in order to allow the IAEA to verify whether Iran's nuclear
    program is exclusively peaceful in nature. But EU states have not
    supported reporting Iran's documented noncompliance with its NPT
    safeguards agreement to the U.N. Security Council.
        The Foreign Ministers of France, Germany and the U.K. (the EU-3)
    reached agreement with Iran during their October 21, 2003 visit to
    Tehran that Iran would suspend ``all enrichment-related and
    reprocessing activities as defined by the IAEA'' and would sign the
    Additional Protocol and commence ratification procedures. In exchange,
    the EU-3 agreed to take a number of future steps, including providing
    Iran easier access to technology. Iran signed the AP December 18, 2003,
    but has taken no significant steps toward ratification. Despite a
    follow-up agreement with the EU-3 on February 23 aimed at reaffirming
    its pledge, Iran has continued to flout its pledge to suspend
    enrichment-related and reprocessing activities, most recently
    announcing the imminent startup of its uranium conversion facility. The
    EU-3 continues to press Iran to meet its promises.
        We continue to work closely with the EU to reach our common goal of
    preventing Iran from acquiring a nuclear weapons capability.
        Question. What impact has the opening of Iraqi society--including
    greater freedom for women--had in Iran, and are there any indications
    that Iranian youth have increased calls for change?
        Answer. The status of Iranian women is complicated; they enjoy some
    freedoms--such as the right to vote and to run for public office--not
    permitted in neighboring states, and they are permitted to work and
    occupy many positions of responsibility in society, including in the
    President's cabinet. However, they are also subject to draconian edicts
    from Iran's theocracy that severely limit other freedoms.
        There has been no clear public reaction by younger Iranians to
    developments in Iraq. However, Iranian Kurds took to the streets in
    demonstrations following promulgation of the Transitional
    Administrative Law in Baghdad. Iranian Kurds seek greater freedom to
    use their language and express their cultural identity. They have
    observed developments in Iraq with great interest.
        With the support of the special Congressional approval provided in
    the 2004 Foreign Operations Bill, we maintain a very active public
    diplomacy program to expose Iran's behavior through public statements
    by USG officials, Radio Farda and VOA broadcasts, and the State Dept's
    Persian website. In addition, we are actively exploring opportunities
    to promote democracy activities within Iran, in accordance with fiscal
    year 2004 congressional authorization.
        We continue to support the Iranian people in their quest for
    freedom, democracy, and a more responsible, transparent, and
    accountable government that will take its rightful place as a respected
    member of the international community.
        Question. What has Iran's response been to the provision of U.S.
    humanitarian relief following last year's earthquake in Bam, Iran?
        Answer. This question has been sent to USAID for response.
        The committee notes that no response was received.
        Question. Has the administration made a determination on sanctions
    against Syria, as required by the Syrian Accountability Act (Public Law
    108-175)?
        Answer. The President of the United States signed the bipartisan
    SAA (the Act) on December 12, 2003. Our goal is to implement the Act to
    demonstrate United States resolve to address the Syrian government's
    support for terrorist groups, its continued military presence in
    Lebanon, its pursuit of weapons of mass destruction, and its actions to
    undermine United States and international efforts with respect to the
    stabilization and reconstruction of Iraq. We are still conferring
    within the State Department as well as with other agencies on the
    possibilities, as laid out in the Act, to best achieve that goal.
        Question. Has Syria made any progress in ceasing support for
    terrorist groups, developments of weapons of mass destruction, and
    facilitating terrorist activities in Iraq?
        Answer. Though Syrian officials have publicly condemned
    international terrorism and Damascus has cooperated with the United
    States and other foreign governments against al-Qaida, the Taliban, and
    other terrorist organizations and individuals, the Syrian Government
    continues to provide support and safe haven to many terrorist groups.
    HAMAS, Palestinian Islamic Jihad (PIJ), the Popular Front for the
    Liberation of Palestine (PFLP), and the PFLP--General Command (PFLP-GC)
    maintain a Syrian Government-sanctioned presence in Syria. Several of
    these groups claimed responsibility for anti-Israeli terrorist acts in
    2003. Hizballah continues to operate freely in Syrian-controlled areas
    of Lebanon and the Syrian Government has taken no steps to end Iranian
    re-supply of Hizballah in Lebanon using Syria as a trans-shipment
    point.
        Syria continues to develop its WMD capabilities. With one of the
    most advanced Arab-state chemical weapons capabilities, it is highly
    probable that Syria is also developing an offensive biological weapons
    capability. Syria maintains an inventory of Scud and SS-21 short-range
    ballistic missiles and devotes significant resources to its ballistic
    missile program; it is believed to have chemical warheads available for
    a portion of its Scud missile force. Syria has not volunteered to have
    its suspected weapons sites inspected by the international community.
    We remain concerned about Syria's nuclear research and development
    program and continue to watch for any signs of nuclear weapons
    activity. Syria has not yet signed the International Atomic Energy
    Agency's Additional Protocol.
        Since the end of major combat operations in Iraq, Syria has made
    some efforts to tighten its borders with Iraq to limit the movement of
    anti-Coalition foreign fighters into Iraq. Nevertheless, Syria remains
    a preferred transit point for foreign fighters entering Iraq. The
    existence of these smuggling networks reflects, at a minimum, some
    Syrian border guard complacency or complicity with foreign fighters
    despite government assurances of counterterrorism assistance in Iraq.
        Question. How many Syrian troops remain in Lebanon following its
    invasion in 1976, and does Syria's support for Hizballah continue to be
    robust?
        Answer. Approximately 15,000-20,000 Syrian troops remain in
    Lebanon. Syria also maintains a robust intelligence network within
    Lebanon. In addition, Syria maintains ties with Hizballah, including
    serving as a transshipment point for resupplying Hizballah in Lebanon.
        Question. How can Syria justify its continued occupation of Lebanon
    after the Israeli withdrawal in 2000?
        Answer. The Syrian and Lebanese Governments argue that Syria's
    continued military and security presence in Lebanon is at the request
    of the Lebanese government. However, the United States continues to
    insist that the Syrians withdraw from Lebanon consistent with the
    spirit of the 1989 Taif Accords, which call for the extension of
    Lebanese government control over the entire territory of Lebanon. The
    Lebanese Army should deploy throughout the country in conjunction with
    the negotiated withdrawal of Syrian military and intelligence
    personnel.
        Question. Do you support the Subcommittee including authority in
    the fiscal year 2005 bill to conduct democracy programs in Syria?
        Answer. We support the inclusion of any authorities and allocations
    that would allow us to work with civil society groups and conduct
    democracy programs in Syria.
        Question. To what extent is Syria aiding and abetting terrorism in
    Iraq?
        Answer. Syria's President Asad publicly indicated his willingness
    to take part in stabilization and rebuilding efforts in Iraq. However,
    Syria has taken no steps to transfer frozen Iraqi assets in Syrian
    banks to the Development Fund for Iraq as required pursuant to United
    Nations Security Council resolution 1483.
        Since the end of major combat operations in Iraq, Syria has made
    some efforts to tighten its borders with Iraq to limit the movement of
    anti-Coalition foreign fighters into Iraq. Nevertheless, Syria remains
    a preferred transit point for foreign fighters entering Iraq. The
    existence of these smuggling networks reflects, at a minimum, some
    Syrian border guard complacency or complicity with foreign fighters
    despite government assurances of counterterrorism assistance in Iraq.
        Question. The Administration has proposed increasing the personnel
    caps for Colombia from 400 U.S. civilian contractors and 400 U.S.
    military personnel to 600 and 800 respectively.
        Does the fiscal year 2005 budget request for Colombia include
    sufficient funding to expand the caps--particularly for civilian
    contractors?
        Answer. We have carefully reviewed the fiscal year 2004
    appropriations and the proposed fiscal year 2005 budget request and, as
    a general response, believe that both include sufficient funding to
    expand the personnel caps for U.S. military personnel and U.S. citizen
    civilian contractors in support of Plan Colombia.
        Enclosed for your information are detailed charts which show our
    intended increases, if the ceilings were raised, and how they will be
    funded. They also provide a breakdown of the numbers of contractors;
    the contractor's parent company; which agency employs the contractors
    and the services the contractor would provide.
        The Administration is seeking an increase in the caps for several
    reasons, as described in more detail by Assistant Secretary Paul V.
    Kelly in his letter of March 16. To review briefly, a cap increase is
    needed because some of the programs authorized by Congress are only now
    coming fully on line and there are also additional programs developed
    since the ceilings were established, such as the anti-kidnapping
    initiative and the Air Bridge Denial program. Most importantly,
    however, we believe that an increase in the military and civilian
    contractor support provided to the Government of Colombia during the
    next two years is essential to sustain the current progress being made
    by our programs in Colombia.
        While we are seeking an increase in the civilian cap of 200, it is
    estimated that the immediate need is for only an additional 93
    contractors.
        In addition, we would emphasize three important points:
      --No U.S. military personnel or U.S. citizen civilian contractors
            would be assigned to Colombia in the absence of necessary
            funding being available for that purpose.
      --The requested increase for civilian personnel ceilings does not
            indicate that we intend to have 600 contractors in Colombia
            full-time. In 2003, the number of U.S. citizen civilian
            contractors varied from 246 to 400. During the period from
            January 1, 2004 through April 8, 2004, the overall number of
            U.S. citizen civilian contractors in support of Plan Colombia
            was between 279 and 396. There are variations due to personnel
            rotations and because individual programs and projects are
            initiated, expanded or reduced, and completed.
      --An increase in the cap will help alleviate difficulties and
            management inefficiencies that arise when several agencies are
            trying to bring additional personnel into Colombia at the same
            time and one group has to wait at the Miami airport until a
            sufficient number of others have departed. In some cases, the
            ceilings have constrained us from the full implementation of
            already funded programs.

                             COLOMBIA CAP INCREASE

    Total Additional U.S. Citizen Civilian Contractor Positions: 93
        Note: These charts illustrate expected increases by office or
    agency in U.S. citizen civilian contractors in support of Plan
    Colombia, contingent upon Congressional approval to increase the
    personnel ceiling. Actual dates will be dependent upon such approval,
    program developments and personnel availability.
    Department of Justice (DOJ): Total Requested Increase--6
        DOJ is currently funding its present contractors and Coast Guard
    investigators through existing programs, but had reduced program
    implementation to meet the cap restrictions. If the increase is
    approved, DOJ plans to raise the number of contractors from six to
    twelve within one month, with presently available funds. These
    additional contractors are identified under in the chart below, but
    their actual presence in Colombia will be TDY on an as-needed basis.

          DOJ JUSTICE SECTOR REFORM PROGRAM (OPDAT, ICITAP, USMS) CHART
    ------------------------------------------------------------------------
                                                                   Month 1
    ------------------------------------------------------------------------
    UNYSIS:
        Programmer.............................................            1
        Prog Mgr...............................................            1
    IBM:
        Programmer.............................................            1
        Prog Mgr...............................................            1
    U.S. Coast Guard: Criminal Investigators...................            2
                                                                ------------
          Total................................................            6
    ------------------------------------------------------------------------

    U.S. Agency for International Development (USAID): Total Requested
            Increase: 12
        The increase of 12 contractors has already been included in USAID
    plans and budget projections, through available fiscal year 2003 and
    programmed fiscal year 2004 funding. Because of the contractor
    personnel ceilings, USAID has not been able to fully implement planned
    programs. The increase, if approved, should allow full implementation
    of all USAID programs. Four contractors would be assigned permanently
    to Colombia while eight would be short-term.

                                   USAID CHART
    ------------------------------------------------------------------------
                                                         Month
                                         -----------------------------------
                                             1        2        3        4
    ------------------------------------------------------------------------
    ARD/CAPP (Agri-business
     Development):
        Chief of Party..................        1        1        1        1
        Contracts/Grants................  .......        1        1        1
        Subject Area Expert.............  .......        1        1        1
    Chemonics CAD (Alternative            .......        1        1        1
     Agricultural Development): Subject
     Area Expert........................
    Chemonics (Commercial Forestry):      .......        1        1        1
     Subject Area Expert................
    Trade and Investment: Economists....  .......        3        3        3
    Program Design Team: Program          .......        4        4  .......
     Development Officers...............
                                         -----------------------------------
          Total.........................        1       12       12        8
    ------------------------------------------------------------------------

    MILITARY GROUP (Milgroup): Total Requested Increase: 40
        The increase for DOD civilian contractors assigned to the Milgroup
    of the U.S. Embassy is to meet additional needs in the area of
    logistics, communications, intelligence aircrews, helicopter
    specialists, construction specialists, radar operators, and military
    operations specialists. The breakdown of increased contractors would be
    23 permanent and long-term additions and 17 recurring TDY personnel.
    Funding is expected from reprogrammed fiscal year 2004 funds and
    requested additional funding for fiscal year 2005. DOD will employ all
    companies listed. The chart below depicts four months of additional
    civilian contractors in the Milgroup. The number of permanent and long-
    term TDY contractors in any given month will be 23 additional personnel
    (depicted in both sample months). In any given month there could be an
    additional seventeen short term TDY contractors (depicted in the
    alternate sample month). At any given time the maximum increase will be
    40 additional contractors, and the minimum increase will be 23
    additional contractors.

                                 MILGROUP CHART
    ------------------------------------------------------------------------
                                                                Month
                                                       ---------------------
                                                            1          2
    ------------------------------------------------------------------------
    Lockheed Martin (Parent Company):
        Property mgmt specialist......................          1          1
        Fuel mgr......................................          1          1
        Airlift coordinator...........................          1          1
        Supply specialist.............................          1          1
        Marine logistics specialist...................          1          1
    MANTECH (Parent Company):
        Automation techs..............................          3          3
        Network techs.................................          3          3
    Northrop Gruman (Parent Company for CSS aircraft):
        Pilots........................................          2          2
        Mechanics.....................................          2          2
        Tech operator crewmembers.....................          2          2
    LSI/Dragoon Technologies (Parent Companies for
     MARS III aircraft):
        Pilots........................................          2          2
        Mechanics.....................................          2          2
        Tech operator crewmembers.....................          2          2
    BDI/Ken Hornsby/Don Carlos (Parent Design
     Companies contracted by Corps of Engineers):
        Architects....................................          2  .........
        Electrician...................................          1  .........
    ITT (Parent Company):
        Radar operators...............................          3  .........
        Radar mechanics...............................          2  .........
    Lockheed Martin (Parent Company):
        Helo mechanics................................          3  .........
        Quality/product control specialists...........          2  .........
    Booze Allen (Parent Company): Military operations           2  .........
     specialists......................................
    Syntex (Parent Company): Comms specialists........          2  .........
                                                       ---------------------
          Total.......................................         40         23
    ------------------------------------------------------------------------

    Narcotics Affairs Section (NAS): Total Requested over the Cap: 35
        Funding for all contractor positions under the Embassy NAS were
    included in the contract cost budget estimates for each program when
    developing annual budget submissions. For the DynCorp contract, funding
    for the increased positions has already been obligated into the
    contract. For the ARINC contract, funds will be added in July during
    the next contract extension and when fiscal year 2004 funds are
    available. Dyncorp positions are rotational, so although the overall
    numbers of required contractors will increase, not all will be in the
    country at the same time.

                                                        NAS CHART
    ----------------------------------------------------------------------------------------------------------------
                                                                                        Month
                                                               -----------------------------------------------------
                                                                   1        2        3        4        5        6
    ----------------------------------------------------------------------------------------------------------------
    DynCorp:
        Intel.................................................        2  .......  .......  .......  .......  .......
        Sec/Med...............................................        1  .......  .......  .......  .......  .......
        Safety................................................        2  .......  .......  .......  .......  .......
        Helo..................................................  .......        1        1  .......  .......        1
        GIS...................................................  .......        1  .......  .......  .......  .......
        QC Inspector..........................................  .......        1  .......  .......  .......  .......
        OV-10 Pilot...........................................  .......  .......        2  .......        2  .......
        Ops Coord.............................................  .......  .......        1  .......  .......  .......
        ISS Ops Co............................................  .......  .......        1  .......  .......  .......
        OV-10 Mech............................................  .......  .......  .......        1  .......  .......
        C-27 Mech.............................................  .......  .......  .......        1  .......  .......
        Metal Adv.............................................  .......  .......  .......        1  .......        2
        ALSE..................................................  .......  .......  .......  .......        2  .......
        ISS Sec...............................................  .......  .......  .......  .......        1  .......
        ISS Planner...........................................  .......  .......  .......  .......  .......        1
    ARINC:
        ASM...................................................        2        1        1  .......  .......        2
        GSM...................................................        2  .......  .......  .......  .......  .......
        Maint.................................................  .......        1        1  .......  .......  .......
                                                               -----------------------------------------------------
          Total...............................................        9        5        7        3        5        6
    ----------------------------------------------------------------------------------------------------------------

        See position descriptions below:
    DynCorp--Eradication, COLAR Aviation, ISS Contractor
                Security/Medical Coordinator (1)
        Position requires extensive security and medical experience as well
    as management experience in the field to complement the coordination
    duties. While we have been able to find some third-country nationals
    (TCN) who qualified for Search and Rescue (SAR)/Medical Technician
    roles, none have had management experience to qualify for coordinator.
                Intelligence/Mission Planners (2)
        Security clearance requirements preclude non-U.S. citizens from
    these positions. The positions coordinate intelligence information from
    various sources in Colombia and use the information to assist in
    mission planning.
                OV-10D Pilots (4)
        Through experience, the vast majority of pilots that can qualify in
    the immediate future for the OV-10 are U.S. citizens. We have been able
    to recruit only a very limited number of TCN and local national (LN)
    personnel because of the experience and skill levels required
    accomplish the mission.
                Rotary Wing Pilots (3)
        As with the OV-10D, for the immediate future, the required
    education and experience levels have historically lead to the vast
    majority of the pilots being U.S. citizens.
                Assistant GIS Coordinator (1)
        This position coordinates Geographic Information System data, which
    requires a security clearance, precluding TCN or LN candidates.
                OV-10D Mechanics (1)
        These mechanics are responsible for all maintenance of the OV-10
    aircraft in Colombia, which requires stringent training, experience,
    and licensing requirements. The aircraft are old and we have some
    difficulty finding personnel with direct experience on the aircraft.
    Few non-U.S. citizens possess the skills and experience that would
    allow the re-training, although we are training Colombian nationals.
                Lead C-27 Mechanic (1)
        This position is assigned to Bogota and coordinates all maintenance
    on the C-27 fleet in Colombia. The training, experience, and licensing
    requirements preclude a non-U.S. citizen from this position.
                Sheet Metal Technical Advisors (3)
        These positions require highly technical skills with a variety of
    specialized equipment. Our experience has shown that a sufficient pool
    of personnel with the skill levels required is not available to fill
    these positions with non-U.S. citizens.
                Safety Specialist (2)
        These positions are responsible for planning, training, and
    monitoring program safety programs, which requires an extensive amount
    of training and experience. Our experience is that the only personnel
    that have the required levels are ex-U.S. military personnel.
                Operations Coordinators (1)
        These individuals coordinate with various agencies and groups at
    Forward Operating Locations (FOLs) to plan and execute missions.
    Experience has shown that the management and experience necessary to
    accomplish this mission comes from a military background. Additionally,
    the vast majority of qualified candidates have been U.S. citizens.
    However, extensive recruiting has led to the hiring of some of the
    positions to be filled with local nationals.
                Aircrew Life Support Equipment (ALSE) Technician (2)
        This position maintains equipment such as vests, night vision
    goggles and other systems associated with aircrew flight operation. The
    position requires highly technical skills with a variety of specialized
    equipment. Our experience has shown that it is difficult to find the
    skill levels required to fill these positions with non-U.S. citizens.
    However, we have been able to recruit some local nationals with the
    appropriate training and experience to fill some of the positions.
                Quality Control Inspector (1)
        This position monitors maintenance carried out on the aircraft.
    Quality Control personnel generally begin as mechanics and through many
    years of experience and training, progress into the Quality Control
    specialty. This type of aviation program is still a relatively new
    endeavor in Colombia, and the experience levels of maintenance
    personnel are still growing. While there has been some success in
    elevating Colombian nationals to Quality Control positions, it is more
    usual that any given position would have to be filled with a U.S.
    citizen.
                ISS Operations Coordinator (1)
        This individual will coordinate with various agencies and groups at
    the Saravena FOL to plan and execute missions for the Infrastructure
    Security Program. Experience has shown that the management and
    experience necessary to accomplish this mission comes from a military
    background. Additionally, the vast majority of qualified candidates
    have been U.S. citizens.
                ISS Security/Medical Coordinator (1)
        Position requires extensive security and medical experience as well
    as management experience in the field to complement the coordination
    duties. While we have been able to find some third-country nationals
    (TCN) who qualified for Search and Rescue (SAR)/Medical Technician
    roles, none have had management experience to qualify for coordinator.
                ISS Tactical Mission Planner (1)
        This position will work in conjunction with the ISS Operations
    Coordinator to ensure that missions are planned with security and
    safety in mind and with clear objective. Experience has shown that the
    tactical, security, and safety requirements for the position limit the
    pool of non-U.S. citizens that can perform this job.
    ARINC--Air Bridge Denial Contractor
                Air Safety Monitors (6)
        Air Safety Monitor (ASM) positions must be U.S. citizens. These are
    the individuals who fly in the aircraft or work at the FAC command
    center as the USG representative and require a U.S. security clearance.
    Once all seven aircraft are in service, there will be 11 ASMs. This is
    based on the current trends of flying one or two day-sorties and one
    night-sortie. If the operational tempo rises above that, we will have
    to increase the number to two ASM (14 total) per aircraft.
                Ground Safety Monitors (2)
        We have a requirement for one Ground Safety Monitor (GSM) and an
    operations officer. Starting July, due to the increased number of
    aircraft we will need two GSMs around the clock, which will require
    five persons in addition to the operations officer.
                U.S. Maintenance Personnel (2)
        We have only two maintenance personnel who are U.S. citizens. They
    are the only contract maintenance personnel that can fly the aircraft
    and have to be available 24 hours a day. We add one C-26 at the end of
    June, a Citation sometime August-September, another C-26 in September,
    and the last Citation sometime December. The number of U.S. citizen
    civilian contractors will increase to four as we get more aircraft.
        Question. To what extent was the Aristide Government involved in
    narcotics trafficking?
        Answer. The Department of Justice/DEA is conducting an
    investigation of drug trafficking in Haiti and all questions relating
    to criminal allegations against the Aristide Government should be
    directed to them.
        Question. Did Aristide personally profit from the drug trade, as
    alleged by a former Aristide confidant in a BBC news story?
        Answer. Any criminal allegations against former President Aristide
    are solely within the purview of the Department of Justice/DEA and
    questions should be directed to them.
        Question. Are any United States or Haitian investigations of former
    President Aristide ongoing that includes complicity in narcotics
    trafficking? Will Haitian authorities investigate the former President
    for any alleged drug trafficking activities?
        Answer. The Department of Justice/DEA is conducting an
    investigation of drug trafficking in Haiti. Questions relating to
    allegations against former President Aristide should be directed to
    them.
        Question. Did Aristide's efforts at placing his loyalists in key
    positions--and his curtailing of the ability of the police to
    function--facilitate the trafficking of narcotics into the region and
    the United States.?
        Answer. The placement of Aristide loyalists in key positions in the
    Haitian National Police--many of whom were unqualified--relegated U.S.-
    trained officers to secondary positions and further undermined the
    effectiveness of an organization already weakened by a chronic lack of
    resources. As to whether or not the Aristide loyalists were themselves
    involved in drug trafficking, the question should be directed to the
    Department of Justice/DEA which is conducting an investigation into
    drug trafficking in Haiti. Certainly, there were no efforts to curb
    drug-related corruption nor prosecutions or convictions of government
    and HNP officials involved in drug trafficking during Aristide's tenure
    in office.
        Question. The March 2004 INCSR states: ``On October 5, 2003, a
    twin-engine Aztec aircraft landed near Cap-Haitien and offloaded 500
    kilograms of cocaine. The Secretary of Public Security refused to take
    action to apprehend three traffickers lodged at the Continental Hotel
    until DEA pressure forced their arrest. Witnesses have often observed
    light aircraft landing with drug cargoes on route 9 in Port-au-Prince.
    Typically, HNP officers will block traffic and help with off-loading
    and ground transport.''
        Were concerns with this incident ever brought to the direct
    attention of President Aristide? What actions if any, did he personally
    take to prevent drug trafficking activities within the HNP? To the best
    of your knowledge, was there ever a reorganization of the HNP by
    President Aristide to address corruption and/or drug trafficking within
    the HNP?
        Answer. The Embassy repeatedly expressed its concern about drug-
    related corruption to President Aristide and other officials of his
    Administration. With the exception of the expulsion of Jacques Ketant
    and three other drug traffickers, President Aristide took no
    significant actions to prevent drug trafficking activities nor did he
    undertake a reorganization of the HNP to address corruption and/or drug
    trafficking within the HNP. On the contrary, the appointment of his
    loyalists to key leadership positions in the HNP exacerbated the
    problem of corruption and hindered the ability of the organization to
    effectively undertake counterdrug efforts.
        Question. What additional assistance requirements do you anticipate
    for Haiti, and how will these needs be addressed?
        Answer. We plan to provide additional assistance through USAID in
    the amount of $65.481 million ($4.0 million in Development Assistance
    and $61.481 million in Economic Support Funds). We will send a
    Congressional notification soon on the planned use of the additional
    funds.
        The additional ESF would provide immediate budget support to the
    interim Haitian government for operational expenses, emergency
    rehabilitation needs, and current debt service payments; protection for
    the interim president; funding to stand up and train an anti-corruption
    unit to effectively monitor all ministries of the Haitian government;
    technical assistance to the Finance Ministry to help with government
    revenue management; short-term and long-term technical assistance,
    equipment and training to strengthen the Haitian customs service and
    port operations; and other assistance to the Ministries of Justice,
    Agriculture, and Public Works. ESF will also support the repair of
    facilities and purchase electricity for vital government services and
    areas receiving less than two hours of electricity a day; support
    election planning and oversight; and training of judges and
    prosecutors.
        The additional Development Assistance (DA) funding will initiate
    short-term job creation programs to build infrastructure that will, in
    turn, spur growth. One immediate action will be to provide jobs and
    training to marginalized urban youth and former gang members to clean
    up the urban environment. Activities will also be developed to
    rehabilitate schools and improve basic infrastructure such as
    irrigation, canals, roads, bridges, and wells. Other short-term
    employment will be in critical areas of public services such as garbage
    collection, water and sanitation, and road repair.
        This $4.0 million of DA and $61.481 million of ESF is additional to
    (1) USAID's original programmed fiscal year 2004 level of $52.4 million
    and (2) the additional funds that had been previously notified to
    Congress, including $3.3 million in Child Survival and Health Funds,
    $3.5 million in Transition Initiatives funding, $3.5 million in
    Disaster Assistance, and $1.0 million ESF for civilian police
    development and election support.
        In addition to the originally programmed $24.7 million of Public
    Law 480 food assistance for fiscal year 2004, an additional $7.0
    million of food assistance will be used for humanitarian assistance.
        The total U.S. Government assistance package for Haiti for fiscal
    year 2004, including funding from all accounts, will be $160.0 million.
        Question. Given Romania's recent entry into NATO and support in
    Afghanistan and Iraq, what action is the Administration considering to
    strengthen United States-Romanian bilateral relations?
        Answer. Long at Europe's periphery, Romania now is at the heart of
    Europe's transition and America's policy goals in Eurasia. Bilateral
    relations are stronger than ever before. Our political dialogue is
    high-level and frequent; United States and Romanian soldiers are
    fighting side by side in Iraq and Afghanistan; we are working together
    to promote stability and security in the Caucasus and Black Sea; and
    Romania's accession to NATO and a rotating seat on the U.N. Security
    Council this year offer new avenues for expanded partnership. The
    United States must continue to place a high priority on building on our
    recent successes, and press Romania to move ahead in key areas of
    reform.
        Romania faces many challenges in the years ahead. Corruption is
    endemic, undercutting attempts to attract more foreign investment and
    pervading the daily lives of ordinary Romanians. The judicial system
    and public administration are in dire need of reform and reports of
    attacks on independent journalists have been on the rise. As Romania
    prepares for EU membership, planned for 2007, it will need to tackle
    these issues with increased vigor, and the United States. must stand
    ready to help in any way it can to support Romania's aspirations to
    fully integrate itself with the West. Greater attention to these areas
    is equally critical to the long-term strength of the United States-
    Romanian partnership. One way we can contribute to meeting these goals
    is through the continued assistance provided to Romania through our
    Support for East European Democracy (SEED) program.
        United States assistance to Romania plays an important role in
    supporting market-based reforms, promoting participatory democracy,
    strengthening civil society, and relieving human suffering. It also
    helps Romania to strengthen its anti-corruption activities across all
    sectors. SEED assistance is helping to expand a market-based private
    sector and improve the quality of life for people in Romania.
    Strengthening the institutional capacity of the government and private
    sector is a priority, as is enhancing private sector competitiveness
    and improving the privatization process for state-owned assets.
    Promoting United States democratic governance objectives at the local
    level in the democratization and broader civil society spheres are
    accomplished through training and technical assistance.
        SEED funds also help to advance child welfare, health care, and
    social assistance reform, all areas where Romania still is seriously
    behind. Finally, the Bucharest-based Southeastern Europe Cooperative
    Initiative's (SECI) Anti-Crime Center, which coordinates regional
    criminal task forces working to counter human trafficking, smuggling,
    and the drug trade, also receives SEED funding. With financial and
    other support from the Romanian Government, the SECI Anti-Crime Center
    has achieved a number of successes in the fight against trans-border
    crime.
        Cooperation across such a wide range of issues has been crucial in
    building the strong partnership the United States shares with Romania
    today. We are confident that the relationships built over the years of
    providing such assistance have laid the groundwork for future
    cooperation based on common goals and values that will last long after
    Romania's graduation from U.S. assistance programs.
        Question. What activities are being considered to bolster reform
    efforts in Macedonia and Albania that are necessary for consideration
    of these countries' respective entry into NATO?
        Answer. The United States is committed to assisting the reform
    efforts of NATO's aspirant countries, and supports both Albania's and
    Macedonia's aspirations to join the Alliance.
        This latest round of enlargement is not NATO's last and the door to
    membership remains open. However, there is no timetable for the next
    round of enlargement.
        The Membership Action Plan (MAP) remains the road to NATO
    membership. Invitations will depend on the ability of each aspirant
    government to achieve the necessary political, economic, military,
    resource, and security reforms as described in their MAP Annual
    National Programs (ANPs). The Alliance will look at the progress that
    individual countries make on their ANPs when considering when to make
    future invitation decisions.
        The United States will continue to assist aspirant countries
    bilaterally as well as through NATO structures. Within the funds
    approved by Congress, the Administration will continue to pursue
    targeted programs, including Foreign Military Financing and
    International Military Education and Training programs to further
    military reforms and NATO compatibility, as well as Support for East
    European Democracy programs to advance political, economic, and civil
    society reforms to bring these countries closer to NATO membership.
    Regular bilateral political, economic, and defense discussions provide
    continuing guidance to the aspirants' efforts.
        The Adriatic Charter, which holds its second biannual Partnership
    Commission meeting in Skopje May 20, is another useful mechanism for
    promoting regional cooperation and concrete reforms by the aspirant
    countries that address common and specific ANP deficiencies.
        Question. What is the State Department doing to safeguard the lives
    and dignity of North Korean refugees in China and elsewhere?
        Answer. Since 1999, the State Department has funded a program that
    provides humanitarian assistance to vulnerable North Koreans in
    northeastern China. In Washington and through our Embassy and
    consulates in China we continue to press the PRC to live up to its
    obligation as a signatory to the 1967 Protocol Relating to the Status
    of Refugees and not deport any North Koreans back to the DPRK. We have
    also made numerous representations urging the PRC to allow the United
    Nations High Commissioner for Refugees access to North Koreans in China
    in order to assess their status.
        Question. Are reports that North Korea tests chemical weapons on
    political prisoners accurate?
        Answer. While we believe that North Korea possesses a chemical
    weapons program, we have no credible information to support claims from
    North Korean refugees that such weapons have been tested on prisoners.
        Question. How have China and Russia pressured the North Koreans to
    give up their weapons programs? Could both countries do more?
        Answer. We are working closely with China and Russia in the six
    party talks, which aim to give the DPRK the basis to make the strategic
    decision that giving up its nuclear weapons programs would be in its
    own best interests. From the first round of talks, in Beijing last
    August, China and Russia have joined the United States, the ROK and
    Japan to urge the DPRK to dismantle its nuclear weapons programs. The
    five parties share the common goal of a denuclearized Korean Peninsula.
    China has played an especially important role, helping to bring the
    DPRK to the table, to move the process forward. The five parties share
    the view that the dismantlement of North Korea's nuclear weapons
    program is a multilateral problem requiring a multilateral response,
    and both China and Russia have indicated they are prepared to actively
    participate in a settlement that would achieve that outcome.
        Question. Given North Korea's penchant for duplicity, how can the
    United States trust any future agreement with North Korea on weapons
    proliferation--or any other issue?
        Answer. The United States seeks the complete, verifiable, and
    irreversible dismantlement (CVID) of North Korea's nuclear program. In
    any agreement with North Korea, we would not rely on trust alone.
    Verification of CVID will be a critical component of any agreement, and
    would involve the United States, the International Atomic Energy Agency
    (IAEA), and other parties as appropriate. Throughout the
    denuclearization process, the onus will be on the DPRK to provide
    complete and accurate information about its activities, fully cooperate
    with all necessary measures to verify that information, and to
    dismantle its nuclear programs in a verifiable manner. We are confident
    that, through appropriate verification measures, we could assess DPRK
    cooperation and compliance. Furthermore, for the long term, we would
    insist on DPRK return to full compliance with the Nuclear
    Nonproliferation Treaty (NPT) and an appropriate IAEA Safeguards
    Agreement. In addition, as the President enunciated in his remarks at
    the National Defense University on February 11, 2004, ``nations that
    are serious about fighting proliferation will approve and implement the
    Additional Protocol.''
        Question. How involved is North Korea in the illicit narcotics
    trade, and what is the nature of its involvement?
        Answer. For decades North Koreans have been apprehended for
    trafficking in narcotics and engaging in other forms of criminal
    behavior, including passing counterfeit United States currency.
    Defectors and informants report that large-scale opium poppy
    cultivation and production of heroin and methamphetamine occurs in the
    DPRK. A defector identified as a former North Korean high-level
    government official testified in May 2003 before the United States
    Senate that poppy cultivation and heroin and methamphetamine production
    were conducted in North Korea by order of the regime. The government
    then engaged in drug trafficking to earn large sums of foreign currency
    unavailable to the regime through legal transactions. The testimony and
    other reports have not been conclusively verified by independent
    sources. Defector statements; however, are consistent over years, and
    occur in the context of regular narcotics seizures linked to North
    Korea.
        During 2003, there was one major heroin trafficking incident linked
    to North Korea. The ``Pong Su,'' a vessel owned by a North Korean
    enterprise, was seized by Australian Federal Police (AFP) and other
    Australian security forces in mid-April 2003 after apparently
    delivering 125 kilograms of heroin to criminals at an isolated beach
    near Lorne, Australia. Another incident with a connection to North
    Korea occurred in June in Pusan, South Korea, where customs authorities
    seized 50 kilograms of methamphetamine from a Chinese vessel that had
    stopped at the port of Najin, North Korea, before arriving in Pusan.
    The ``Pong Su'' seizure and numerous drug smuggling incidents linked to
    North Korea over the past several decades, reflect official involvement
    in the trafficking of illicit narcotics for profit, and make it highly
    likely, but not certain, that P'yongyang is trading narcotic drugs for
    profit as state policy.
        Japan is one of the largest markets for methamphetamine in Asia,
    with an estimated annual import of 10-20 metric tons. Traffickers from
    the DPRK have targeted the Japanese market in the past, and there have
    been regular, large seizures of DPRK methamphetamine in Japan since the
    mid-1990s. Although there were no seizures in Japan during 2003 that
    could be linked to the DPRK, Japanese authorities believe that roughly
    30 percent of methamphetamine seized in Japan is connected to the DPRK.
        There is no evidence that illicit drugs trafficked from the DPRK
    reach the United States, directly or indirectly.
        State trading of narcotics is a conspiracy between officials at the
    highest levels of the ruling party/government and their subordinates to
    cultivate, manufacture, and/or traffic narcotics with impunity through
    the use of, but not limited to, state-owned assets. Law enforcement
    cases over the years have not only clearly established that North
    Korean diplomats, military officers, and other party/government
    officials have been involved in the smuggling of narcotics, but also
    that state-owned assets, particularly ships, have been used to
    facilitate and support international drug trafficking ventures.
        The ``Pong Su'' narcotics seizure occurred within the context of a
    range of criminal activities perpetrated by North Korean officials.
    Those activities include the September 2002 admission by DPRK officials
    of involvement by state security in the kidnapping of a group of
    Japanese nationals held captive in North Korea for several decades.
    North Korean officials have been apprehended for drug trafficking and
    other offenses in countries around the world and have used diplomatic
    pouches to conceal transport of illicit narcotics. Numerous North
    Korean defectors have publicly stated that opium was grown in North
    Korea and refined into heroin, which then was trafficked under the
    direction of an office of the ruling Communist Party of North Korea.
    Information developed by law enforcement in Japan, on Taiwan, and
    elsewhere has repeatedly pointed to the involvement of DPRK officials
    and DPRK state-owned assets in narcotics trafficking. Specific examples
    of involvement of officials and state assets include calls at North
    Korean ports by traffickers' boats to pick up drugs, travel by
    traffickers to North Korea to discuss aspects of the trafficking
    operation, and suspected drug trafficking by North Korean patrol
    vessels, which were thought to engage only in espionage.
        DPRK-linked drug trafficking has evolved over the years from
    individual DPRK officials apprehended for trafficking in narcotics in
    the 1970s and 1980s to the apparent direct involvement of military
    officials and vessels providing drugs within North Korean territory to
    trafficking organizations for wider distribution in East Asia. The
    ``Pong Su'' incident seemingly signals a further shift in North Korean
    involvement in drug trafficking. It is the first indication that North
    Korean enterprises and assets are actively transporting significant
    quantities of illicit narcotics to a designated destination outside the
    protection of DPRK territorial boundaries. Information has also been
    acquired indicating that North Koreans, employed by state-owned
    enterprises located in various Asian countries, have attempted to
    arrange large-scale drug transactions with undercover narcotics
    officers. Informants have also reported traveling to North Korea as
    guests of the government to meet with military officials to arrange
    drug deals. Although some of the information gathered is incomplete or
    unverified, the quantity of information and quality of many reports
    give credence to allegations of state sponsorship of drug production
    and trafficking that can not be ignored. It appears doubtful that large
    quantities of illicit narcotics could be produced in and/or trafficked
    through North Korea without high-level party and/or government
    involvement, if not state support.
        DPRK spokespersons deny any state involvement in criminality,
    ascribe that criminality to individuals, and threaten punishment under
    DPRK laws. However, year-after-year, incidents pointing towards
    increasingly large scale trafficking in narcotics, and other forms of
    criminality linked to the DPRK, accumulate.
        The cumulative impact of these incidents over years, in the context
    of other publicly acknowledged behavior by the North Korean such as the
    Japanese kidnappings mentioned above points to the likelihood, not the
    certainty, of state-directed trafficking by the leadership of North
    Korea. What we know about North Korean drug trafficking has come
    largely from investigation of trafficking operations like that of the
    ``Pong Su'', which have gone wrong, and thus come to the attention of
    authorities. We know much less about the way North Korea is led and
    administered, thus the continuing uncertainty.
        There is also strong reason to believe that methamphetamine and
    heroin are manufactured in North Korea as a result of the same state
    directed conspiracy behind trafficking, but we lack reliable
    information on the scale of such manufacturing. The United States will
    continue to monitor closely developments in North Korea to test the
    validity of the judgment that drugs are probably being trafficked under
    the guidance of the state and to see if evidence emerges confirming
    manufacture of heroin and methamphetamine.
                                     ______

                   Question Submitted by Senator Mike DeWine

        Question. Public reports suggest there are links between former
    senior Haitian officials in the Aristide government, and the deaths of
    and attacks on, a number of opposition members. There are also
    allegations that several of these individuals were involved with
    narcotics trafficking and corruption. Can you provide us with any
    documents that would substantiate these allegations?
        Answer. INL has no information regarding the opposition members. We
    can tell you that what information is available has been briefed to
    members of Congress.
        The Department of Justice/DEA is conducting an investigation of
    drug trafficking in Haiti and all questions relating to criminal
    allegations against the Aristide Government should be directed to them.
                                     ______

                Questions Submitted by Senator Patrick J. Leahy

        Question. Despite months of searching, we have found no weapons of
    mass destruction in Iraq and before the war there was no evidence that
    Iraq was responsible for 9/11 or that Saddam Hussein was involved with
    al Qaeda. Yet these were two key justifications for launching a
    preemptive war in Iraq.
        A recent Pew Research poll showed that the credibility and
    reputation of the United States have been badly damaged, especially in
    Muslim countries but also among our closest allies, as a result of the
    President's policy.
        How has this affected your ability to build support not only for
    our policy in Iraq, but also in Haiti and other parts of the world?
        Answer. Although weapons of mass destruction (WMD) have not yet
    been found in Iraq, the fact remains that Saddam Hussein had possessed
    and used such weapons in the past. He also made no secret of his
    intention to continue his efforts to acquire WMD. His capability to
    manufacture and distribute WMD was a real threat and his removal and
    capture, along with the disintegration of the Baathist party, has
    reduced that threat for Iraqis, the region and the world.
        Although our country's policies may be unpopular in certain
    regions, we continue to work to explain and to build support for our
    policies and actions, both through traditional diplomatic channels and
    through public diplomacy. We are actively engaged with governments and
    publics in all parts of the world, including the Muslim world,
    advocating our policies and informing others about our American society
    and values. Though this mission is challenging, as evidenced in recent
    polls, we will continue to be vigorously engaged. Opposition to our
    policies is a reality, and we cannot afford to answer our critics with
    silence.
        Question. As best I can tell, we are spending, at a minimum, $21
    million for private security contractors in Iraq to protect Ambassador
    Bremer and other CPA officials. USAID and other U.S. government
    agencies also have private security contractors, as do U.S. companies
    doing business there.
        Who is paying for these security personnel? The other day they got
    into the middle of a firefight with Iraqis and they even called in
    their own helicopter for air support. An article in today's Washington
    Post entitled ``Under Fire, Security Firms Form An Alliance,'' says,
    ``The presence of so many armed security contractors in a hot conflict
    zone is unprecedented in U.S. history.'' It also describes how these
    individuals have gotten involved in combat without backup from the U.S.
    military.
        Answer. The armed civilian contract employees to whom you have
    referred in your question have worked under the authority of the
    Department of Defense or the Coalition Provisional Authority, and not
    under the authority of the Department of State. Questions concerning
    these contract employees, and the contracts under which they operate,
    should be referred to the Department of Defense.
        As to your specific reference to the protective detail assigned to
    Ambassador Paul Bremmer, these personnel have been contracted by the
    Coalition Provisional Authority and are supervised and directed by
    them. A similar contract detail is planned for Ambassador Negroponte,
    and will possibly use some or all of the contract employees currently
    assigned to Ambassador Bremmer. At the time of Ambassador Bremmer's
    departure, the supervision of that contract will be assumed by the
    Department of State. It is our understanding that the current cost of
    this detail is approximately $2.1 million per month.
        As to the personal protection of other representatives of the
    Coalition Provisional Authority, the Department of State has not been
    involved in this activity, and has no way of determining these costs.
        Question. Is the Administration moving to install Mr. Chalabi as
    the leader of Iraq after the June 30 deadline?
        Answer. U.N. Special Advisor Lakhdar Brahimi is leading the effort
    to forge a consensus among Iraqis on the formation of the Iraqi Interim
    Government (IIG), which will administer the country as it prepares for
    national elections no later than January 2004. The composition of the
    IIG will reflect the outcome of Brahimi's broad consultations,
    including with members of the Iraqi Governing Council and the Coalition
    Provisional Authority. The Administration fully supports Mr. Brahimi's
    efforts.
        Question. 85 percent of the troops are Americans. On the
    reconstruction side, no other nation comes close to us. The next
    biggest contributor is Great Britain, which has contributed a little
    more than $1 billion.
        Have you sought additional help from our allies, including our Arab
    allies, and what has been the result?
        Answer. In terms of military contributions, there are currently 34
    countries contributing approximately 24,500 troops. We are always
    seeking additional contributions. We recently approached about a dozen
    countries to request support for a dedicated force to provide security
    for U.N. operations in Iraq. Among these were one Arab, two Muslim and
    four South Asian countries.
        The response to our solicitation of financial assistance has been
    even more encouraging. At the Madrid Conference, 38 nations pledged
    over $13 billion, of which $1 billion was committed to 2004 spending at
    the February conference in Abu Dhabi. Japan has pledged $4.9 billion,
    Saudi Arabia pledged $1 billion as well: $500 million in grants and
    loans and an additional $500 million in export credits and guarantees,
    along with Denmark ($156 million) and Austria ($12 million). In
    addition to its monterary pledge of $5 million, Iran pledged $1.5
    billion in credit facilities, restoration of religious sites, tourism
    and pilgrimmage, technical and advisory services, trade, investment,
    market access, and humanitarian assistance.
        Kuwait has pledged $500 million, and the United Arab Emirates,
    Italy, Spain, and South Korea each pledged over $200 million. Arab and
    Muslim nations contributing other significant amounts include Qatar
    ($100 million), Pakistan ($100 million), Turkey ($50 million), and Oman
    ($3 million).
        Arab and Muslim countries that made in-kind pledges included
    Bahrain, Egypt, Jordan, and Tunisia, nearly all of which included
    offers for assistance in police training. Two other Muslim countries
    are among the coalition-supporting nations: Morocco and Uzbekistan.
        Question. What is the President, National Security Advisor, and OMB
    Director doing to defend the Administration's budget request for
    Foreign Operations?
        Answer. This winter, President Bush submitted a robust request of
    $21.3 billion for foreign operations. Since that time, President Bush
    and National Security Advisor Condolleeza Rice have forcefully
    advocated for the President's national security priorities as reflected
    in the Administration's fiscal year 2005 budget request.
        In early February 2005, OMB Director Joshua Bolten testified before
    both the Senate Budget Committee and House Budget Committee defending
    the President's fiscal year 2005 Budget. Since that time,
    representatives of the Administration have appeared before numerous
    committees to defend the President's request for foreign operations.
    They include Secretary Powell's appearances before the Senate Budget
    Committee, Senate Appropriations subcommittees on Foreign Operations
    and Commerce, Justice and State, Senate Foreign Relations Committee,
    House Appropriations subcommittees on Foreign Operations and Commerce,
    Justice and State, and the House International Relations Committee.
    Deputy Secretary of State Richard Armitage, U.S. Agency for
    International Development Administrator Andrew Natsios, and Global AIDS
    Coordinator Randall Tobias, among others, have all appeared before a
    number of congressional committees to defend the Administration's
    fiscal year 2005 budget request for foreign operations.

                            HUMANITARIAN ASSISTANCE

        Question. Mr. Secretary, in your written testimony you state ``the
    President's Budget Request reflects a continued commitment to
    humanitarian assistance.'' But when I look at the budget request I
    don't see this commitment. For example:
      --Child Survival and Health programs are cut by $100 million;
      --``Emergency'' Refugee Assistance is down by about $30 million;
      --``Regular'' Refugee Assistance is down by about $30 million;
      --The budget for Food Aid is flat lined; and
      --Funding for the Global Fund to Fight HIV/AIDS, TB, and Malaria is
            cut by $350 million.
        I don't want to rehash all of the numbers, but last year's budget
    also proposed deep cuts to many of these same accounts. This
    subcommittee had to restore many of those funds. How do these cuts
    reflect a ``continued commitment'' towards humanitarian assistance?
        Answer. Even though we are on a war-time footing, foreign
    assistance is a higher priority than it has been in many years. This is
    most clearly evidenced by the President's additional funding requests
    for the Global HIV/AIDS Initiative (GHAI) and the Millennium Challenge
    Account (MCA). Overall funding for foreign assistance has increased
    greatly.
        While much of the recent foreign assistance funding increase is
    because of massive assistance efforts in Iraq and Afghanistan, the
    Administration is requesting a total of nearly $4 billion for the GHAI
    and the MCA in 2005. Some of the activities that have been funded under
    the traditional Child Survival and Health account will be covered under
    the GHAI and USAID is likely going to manage funding for ``threshold''
    countries under the MCA. In regard to food aid, it is always difficult
    to predict emergency humanitarian needs, but the Public Law 480 account
    has the flexibility to shift some resources from the food for
    development programs to meet emergency relief requirements. And in the
    case of extreme need, there is the authority to draw on the Bill
    Emerson Humanitarian Trust, or even seek supplemental appropriations
    from the Congress.
        By no means is there a cut in foreign assistance.
        Question. Do you agree that our foreign aid agreements with Egypt
    should be renegotiated so the Egyptian Government no longer holds a
    veto over the use of U.S. aid dollars, and that more of our aid should
    be used to strengthen the role of civil society groups?
        Answer. The Government of Egypt (GOE) and the USG jointly agree
    every year on the use of aid dollars. Our assistance program is
    codified in our bilateral Treaty agreement with the GOE; something that
    we do not believe should be changed at this time. Such joint decision-
    making has been the principle and practice of this assistance since the
    beginning of our program with Egypt more than twenty years ago. This
    program, rooted in the Camp David Accords, has achieved many benefits
    for the United States and Egypt and is one whose programs are
    continually evolving.
        Our most recent discussions with the GOE, held in November 2003 on
    the topic of a new Democracy and Governance assistance funding, were
    frank and are ongoing. In 1998, we negotiated funding changes to the
    program. At these discussions, we jointly agreed with both the GOE and
    the Government of Israel to reduce economic assistance funding levels.
    Such levels will take us from $535 million for fiscal year 2005 to $415
    million for fiscal year 2008. These discussions were held in a
    productive atmosphere with the GOE officials charged with renegotiating
    this significant package. If changes are to be made to the program, we
    are confident that we will have an engaged partner. However, a full
    renegotiation of the agreement would require changes to the Accords--a
    difficult and costly exercise to implement.
        The GOE does not hold a veto over U.S. Government assistance to
    Egypt. This is evidenced by the fact that we have just completed a
    review of the assistance program that intends to advance new program
    initiatives in the areas of economic reform, democracy and governance,
    health, education, and the environment, among other areas. Changes to
    the formulation of our assistance program for Egypt do not inhibit us
    from making these initiatives, and despite some GOE resistance to some
    of our proposals we have been and will continue to discuss these
    proposals in detail with the GOE.
        One specific area where we will advance changes is in the realm of
    democracy and governance. We agree with you that more of our aid
    dollars should be used to strengthen the role of civil society groups
    in this area. We believe that these groups are critical to ensuring
    that reform and development are achieved within Egypt, and are
    confident that the changes taking place in Egyptian society today will
    support such assistance.
        Question. What is the United States doing to make sure that Charles
    Taylor is transferred to the Special Court for Sierra Leone before the
    Court's mandate expires, possibly as early as mid-2005?
        Answer. We share the concern of Congress that Charles Taylor not
    escape justice simply by remaining a fugitive until the Special Court's
    mandate expires.
        We are in frequent contact with Nigeria on the issue of Charles
    Taylor. We have made clear to President Obasanjo and others that our
    mutual goal must be for Charles Taylor to be answerable to the charges
    and answerable to the Special Court for Sierra Leone. As part of his
    introductory calls and our ongoing efforts on this subject, recently
    confirmed Ambassador Campbell will raise the Taylor issue with
    President Olusegun Obasanjo and other senior leaders.
        We are looking at appropriate ways to ensure that Taylor will not
    escape justice because of the expiration of the Special Court's
    mandate.
        Charles Taylor and the people of Sierra Leone must know that Taylor
    will answer for his actions.
        Question. Bob Woodward, in his recent book ``Plan of Attack,''
    writes that $700 million in funds appropriated for Afghanistan and the
    war on terrorism was diverted for use in preparing for the U.S.
    invasion of Iraq. This was apparently done without any knowledge of
    Congress. Were you aware of this?
        Answer. No. Questions about how DOD prioritized its funding prior
    to OIF should be directed to the Pentagon.
        Question. The Administration has rejected Richard Clarke's claim
    that the Bush Administration was not sufficiently focused on al Qaeda
    before 9/11. I don't want to get into that, but isn't a key issue
    whether launching a preemptive war against Iraq, which posed no
    imminent threat to the United States or to our allies and there was no
    evidence--none--that Saddam Hussein was involved with al Qaeda or 9/11,
    has made us safer from terrorists?
        Answer. Operation Iraqi Freedom has made the United States safer
    from terrorists by eliminating one of the principal state sponsors of
    terrorism, an enemy of the United States and our Middle East allies.
        The Iraqi regime posed a threat because it was the sworn enemy of
    the United States and those who supported our efforts to contain Iraq
    in accordance with the decisions of the United Nations Security
    Council. The Saddam Hussein regime was a threat because it had used
    chemical weapons against its neighbors, and its own people. It was a
    threat because it sought for years to acquire a broad variety of
    weapons of mass destruction in violation of international law,
    including seventeen U.N. Security Council resolutions and Iraq's own
    treaty commitments. It was a threat because it invaded its neighbor
    Kuwait, a longstanding friend and ally of the United States. It was a
    threat because it attacked Israel with scud missiles in 1991. It was a
    threat because it had connections to terrorist groups. And it was a
    threat because it provided safe haven for known terrorists. Iraq thus
    did pose a threat to the United States and its allies and interests. As
    we continue to prosecute the global war on terrorism, including in
    Iraq, we will continue to reduce the terrorist threat to our country
    and our citizens.
        The Iraqi regime had connections to terrorist organizations such as
    the Abu Nidal Organization and the Mujahedin-e-Khalq. Members of a
    terrorist network headed by a senior al Qaeda terrorist affiliate, Abu
    Musab Zarqawi, established a nascent presence in Iraq in mid-2002,
    probably with the knowledge of at least some Iraqi security officials.
    Zarqawi and his associates are still in Iraq, and it was Zarqawi who
    most recently claimed personally to have carried out the barbaric
    beheadings of United States and Coalition nationals. Zarqawi also
    oversaw the assassination of USAID officer Laurence Foley in Jordan in
    October 2002. Iraq provided material assistance to Palestinian
    terrorist groups, and paid $25,000 financial tributes to the families
    of Palestinian suicide bombers.
        It has never been the contention of this Administration that the
    terrorist attacks of September 11, 2001 were orchestrated jointly by
    Iraq and al Qaeda, as your question suggests.
        Question. Can you provide any evidence--evidence, not speculation--
    that Americans are safer, either at home or when they travel abroad,
    because of the removal of Saddam Hussein, given the damage the war has
    done to our credibility and our reputation, and the anger it has caused
    throughout the Muslim world?
        Answer. We do not agree with your implication that the security of
    the United States has been damaged by Operation Iraqi Freedom. Quite
    the contrary, the President has demonstrated that he means what he says
    and that the United States will not stand idly by when the safety and
    security of the American people are in jeopardy.
        We also are confident that the United States and its citizens are
    safer at home and abroad because of the removal of a ruthless tyrant.
    Iraq was a longstanding state sponsor of terrorism. The Iraqi
    Intelligence Service itself targeted United States citizens, and it
    supported extremist and terrorist groups to further its agenda. Only
    the most well-known example was the attempt by Iraqi agents to
    assassinate former President George H.W. Bush on a trip to Kuwait. The
    Iraqi Intelligence Service reportedly instructed its agents that their
    main mission was to obtain information about United States and Israeli
    targets. Iraq for years was a safehaven, transit point, and operational
    base for groups and individuals who directed violence against the
    United States, Israel and our allies. Iraq provided safe haven and
    support for the Abu Nidal Organization, an extremely violent terrorist
    group that has become largely moribund in recent years. Among its
    earlier terrorist acts, the group machine-gunned scores of Christmas
    travelers in simultaneous and coordinated attacks at airports in Rome
    and Vienna in 1985. Five U.S. citizens were among those killed. With
    the fall of the Saddam Hussein regime, terrorist organizations have
    lost their state sponsor and haven. This undoubtedly has made America,
    and the rest of the world, safer.
        Iraq also supported the anti-Iranian Mujahedin-e-Khalq, the
    Palestine Liberation Front, and the Arab Liberation Front, all
    extremely violent terrorist groups. Moreover, Baghdad provided material
    assistance to other Palestinian terrorist groups in the forefront of
    the intifadah being waged against Israel. The Popular Front for the
    Liberation of Palestine-General Command, HAMAS, and the Palestine
    Islamic Jihad are only the three most important of the terrorist groups
    to which the Saddam Hussein regime extended outreach and support,
    although his support to those groups was less than that provided by
    Damascus and Tehran. As previously noted, Saddam Hussein paid the
    families of Palestinian suicide bombers large sums of money; these
    terrorists undertook attacks that have killed innocent American
    citizens in Israel. All of these groups have lost a principal state
    patron that provided them with a safe haven, financial support or an
    operational base to conduct terrorist acts against the United States
    and its allies. The removal of that regime, and the consequent blow to
    these terrorist groups formerly under Saddam's wing, unquestionably
    have made the United States and its citizens safer, both at home and
    abroad.
        Question. Our credibility as a nation has been badly damaged. In
    countries like Jordan, Pakistan and Morocco--allies of ours that
    receive hundreds of millions in U.S. aid, a majority of the people
    supports Osama bin Laden and believes our motives in Iraq are to
    control Middle East oil and dominate the world. This has given fodder
    to Muslim extremists who call for the annihilation of America. How has
    this made us safer?
        Answer. Any suggestion that the motives of the United States in
    Iraq are to control Middle East oil and dominate the world is belied by
    the fact that the United States now is in the process of handing over
    sovereignty over Iraq to the Interim Iraqi Government. The IIG will
    prepare the way for the election of the first truly democratic
    government in Iraqi's history. This is the best riposte to those in the
    region who might question our motives.
        Moreover, the President last year announced a ``forward strategy
    for freedom'' in the broader Middle East and North Africa. Operating
    principally through the U.S. Middle East Partnership Initiative, the
    President's vision recognizes that political, social and economic
    reforms are urgently needed in the region. It aims to encourage reform
    and democracy as alternatives to fanaticism, resentment, and terror. It
    is the lack of opportunity, the lack of firm democratic institutions,
    sensationalized media reporting, and a collective sense of
    powerlessness that drives young people to revere and support terrorists
    such as Usama bin Laden as an alternative to their present situation.
    The President is committed to working with our friends and allies, both
    within and outside of the region, to give these young people a
    reasonable basis for hope for a better life.
        Question. Democracy is on life support in Russian. Every day,
    President Putin acts more like the autocratic rulers of the past. Is
    this the beginning of a new cold war, as Senator McCain has warned?
    What does it mean for Russia's future?
        Back during the Clinton Administration, Senator McConnell and I
    were very critical of Russia's policies in Chechnya, where the Russian
    army was ruthlessly targeting civilians. During the past two years, the
    situation has not improved, but this Administration, especially since
    September 11, has been only mildly critical. Do you agree, as we told
    the Clinton Administration four years ago, that the Russians, as well
    as the Chechen rebels, have committed war crimes in Chechnya, and what
    are we doing to try to get them to stop?
        Answer. A historic positive transformation has occurred in Russia
    during the twelve years since the collapse of the Soviet Union. In the
    1990s, Russia made great strides in securing basic freedoms, such as
    expression, religion and the ability to choose its leaders through
    elections. However, the pattern of official pressure on the independent
    broadcast media, irregularities in elections, the arrest and detention
    of some prominent business executives, and other developments have
    raised questions about Russia's commitment to democracy and the rule of
    law. The international community, including the United States, can help
    Russia become a more open society through continued engagement and
    assistance, especially in the area of developing democratic
    institutions. Ultimately, however, it is up to the Russians to
    determine the kind of political system in which they live. While in
    Moscow in January, I emphasized that the United States wants a robust
    partnership with Russia, but that without a basis of common principles,
    the U.S.-Russian relationship will fail to reach its potential.
        Regarding Chechnya, we continue to be very concerned about credible
    reports containing allegations that Russian forces have committed
    atrocities, including extra-judicial killings, torture and rape. Such
    allegations raise fundamental questions of compliance with
    international humanitarian law. We are concerned as well by reports
    that allege Chechen forces have committed some similar abuses. The well
    documented and numerous human rights abuses committed by all parties to
    the conflict in Chechnya must be stopped. Russian authorities need to
    redouble efforts to control the behavior of government forces, both
    local and federal.
        In April, the United States voted in favor of the EU-sponsored
    resolution on Chechnya at the U.N. Commission on Human Rights that
    strongly condemned human rights violations in Chechnya. The
    resolution--which failed--urged the Russian government ``to take
    urgently all necessary measures to stop and prevent violations of human
    rights and international humanitarian law . . .'' The United States
    recognizes that Russia has a right to take appropriate measures to
    protect its citizens from terrorist attacks, but any military
    activities in Chechnya must be conducted within the framework of
    international humanitarian law. We condemn any and all abuses of human
    rights by all parties to the conflict. The settlement of the Chechen
    conflict must be a peaceful one, and we see free and fair elections of
    Kadyrov's successor as a possible first-step to defusing the violence
    in the region.
        Question. Just this week, the Global Fund to Fight AIDS, the World
    Health Organization, UNICEF, and the Clinton Foundation, announced that
    they are joining forces to provide generic AIDS drugs to poor countries
    at a fraction of the cost that U.S. drug companies charge.
        The United States, however, has so far refused to join them, which
    means we are paying 4-5 times the cost per person for AIDS drugs. Given
    that the lives of millions of people are at stake, what steps are being
    taken to resolve the Administration's differences with the WHO with
    respect to safety and efficacy standards for HIV combination therapies?
        Answer. Our policy for the procurement of antiretroviral treatments
    under the Emergency Plan is to provide drugs that are safe, effective,
    and of high quality at the lowest cost regardless of origin or who
    produces them to the extent permitted by law. This may include true
    generics, copies or brand name products. A true generic drug is one
    that has undergone review to ensure that it is comparable to an
    innovator drug in dosage form, strength, route of administration,
    quality, performance characteristics, and intended use. Drugs that have
    not gone through such a process are more accurately described as
    copies.
        On March 29-30, 2004, in Gaborone, Botswana, an international
    conference was held on fixed-dose combination (FDC) drug products. The
    conference included representatives of 23 governments, drug regulatory
    agencies, research-based and generic pharmaceutical industry, public
    health leaders, health care providers, advocacy groups (including
    persons living with HIV/AIDS), academia, and multilateral and non-
    governmental organizations. We were very pleased with the broad
    international support and participation that the conference generated,
    including from the conference co-sponsors: the Joint United Nations
    Program on HIV/AIDS (UNAIDS), the World Health Organization (WHO), and
    the Southern African Development Community (SADC).
        The conference successfully completed a vital step forward in
    developing commonly agreed-upon scientific and technical international
    principles to evaluate the quality, safety, and efficacy of FDCs for
    use in treating HIV/AIDS, tuberculosis, and malaria. The conference
    sponsors, representatives, and experts agreed that the final principles
    are not intended to and should not impede access to safe, efficacious,
    and high quality FDCs by people living with HIV/AIDS. The principles
    are not intended to address specific quality issues, or to develop
    clinical, therapeutic, or regulatory guidelines. Rather the document
    will provide scientific and technical principles for considering,
    developing, and evaluating FDCs for use in treatment. It is anticipated
    that the principles will be of use to regulatory agencies around the
    world, as well as to pharmaceutical companies and other organizations
    involved in developing and evaluating FDCs. In this regard, the
    principles will aid us in determining the standards we will expect
    fixed-dose combination drugs to meet to qualify for our purchase and
    expedite the process by which we can purchase lower-cost, non-patented
    FDCs with confidence.
        We have the highest respect for the WHO and its prequalification
    pilot program. However, the WHO is not a regulatory authority. We must
    be assured that the drugs we provide meet acceptable safety and
    efficacy standards and are of high quality.
        Under the Emergency Plan, we intend to support programs that will
    have a sustainable positive impact on health. If the medications in
    question have not been adequately evaluated or have had problems with
    safety or cause resistance issues in the future, we will be
    appropriately held accountable. We will continue to work with WHO and
    the international community on this important area. The finalization
    and adoption of the principles document for FDCs will be a major step
    forward for all. The final statement of principles is expected to be
    released during the second quarter of 2004.
        Question. The Colombian Government is working on a law that would
    give concessions to members of paramilitary and rebel groups in return
    for giving up their arms. The first version of this law was widely
    criticized because it would have allowed drug traffickers and
    terrorists to avoid jail. A second version has been drafted, but it
    still leaves many questions unanswered. The State Department has said
    that it will not support any agreement that allows these people to
    avoid extradition to the United States. But there are many others who
    were responsible for horrific crimes, for whom there are not
    extradition warrants. Do you agree that while we want to support the
    demobilization of these armed groups, we should not support an approach
    that allows people who have committed gross violations of human rights
    to avoid the punishment they deserve?
        Answer. The United States has always supported the Government of
    Colombia's position that it would enter into a peace process with any
    of the illegal armed groups willing to first declare a ceasefire. A
    credible peace process can help end the violence in Colombia and
    achieve an enduring peace. To be credible, we believe that a peace
    process must include the rapid disarmament and demobilization of
    illegal armed groups, justice for victims, and legal accountability for
    the perpetrators of gross human rights violations and narcotics
    trafficking. We have insisted that in any process:
        (1) We will continue to seek extradition of any Colombians who have
    been indicted in the United States now and in the future;
        (2) Gross violators of human rights should be subject to judicial
    process for their crimes in Colombia;
        (3) There should be the rapid disarmament, demobilization and
    reintegration of former militants; and,
        (4) The Government of Colombia should control any zones in which
    members of illegal armed groups are concentrated for the purposes of
    demobilization and disarmament.

                             COLOMBIAN CONTRACTORS

        Question. I am very concerned about the use of American contractors
    in Colombia, where they are flying light weight aircraft in very
    dangerous circumstances. Pilots have written letters in protest for
    which they have been reprimanded. Planes have crashed, a shell company
    consisting of little more than a post office box has been set up to
    avoid legal liability and the families of the men who have been
    kidnapped or killed have not been able to get their questions answered.
        There was a series of articles last November in the Times Picayune,
    which I hope your staff has made available to you. There are serious
    problems with the way this program has been managed and I hope you will
    look into it. I would appreciate any information you can provide
    regarding steps taken to improve oversight of this program, and to
    ensure that there is appropriate accountability, both on the of the
    U.S. Government and civilian contractors, when negligence or misconduct
    occurs.
        Answer. The United States Government employs civilian contractors
    because of the flexibility in planning they allow and because the
    skills they provide are often not otherwise available to the
    government. They provide training, equipment, infrastructure
    development, and expertise to the Government of Colombia and Colombian
    civil society in a variety of areas. Both the Departments of State and
    Defense contract out work requiring the piloting of aircraft and are
    constantly evaluating operations to refine procedures and improve
    security for contract personnel in this area.
        With regard to contractors who work in the aerial eradication
    program, State has taken several measures to improve their safety and
    welfare. In response to increased hostile groundfire this past year, we
    successfully encouraged the Colombian National Police to add an
    additional helicopter to each squadron of aircraft that escorts and
    provides protection to spray missions. We also have coordinated with
    the Colombian Army to prioritize ground troop presence in areas slated
    for eradication where hostile fire is anticipated. Conducting spray
    operations is inherently dangerous work. All of the pilots in the spray
    program receive specialized training for the type of flying and local
    conditions that they will face. We also provide advanced survival
    training for our pilots in the case of a forced landing.
        Each spray mission is planned taking into account the need for
    maximum security, using all available intelligence. If a spray mission
    should face significant risk, it is either cancelled or conducted with
    stepped up coordination with Colombian security forces on the ground.
    Counter Drug Brigade and other Colombian army ground troops conduct
    interdiction operations in the vicinity of aerial eradication to
    provide increased support when required. Armed security escort
    helicopters and at least one search and rescue helicopter accompany
    every spray mission.
        The contractors presently held hostage by the Revolutionary Armed
    Forces of Colombia (FARC) and the subject of the Times-Picayune
    articles you mention, were employed by the Department of Defense, which
    can provide you additional information regarding those air operations.

                ISRAELI-PALESTINIAN CONFLICT/MIDDLE EAST REFORM

        Question. [Part I] In a recent press conference with Prime Minister
    Sharon, President Bush endorsed Mr. Sharon's position regarding the
    right of return of Palestinian refugees and Israeli settlements in the
    West Bank. Were you consulted on the specifics of the President's
    announcement prior to the press conference? This unilateral decision
    diverges in significant respects from the policy reiterated by past
    U.S. presidents. Do you support this decision? How is this decision
    consistent with U.N. Resolutions 242 and 238, which the United States
    is on record supporting? What impact do you expect this decision to
    have for U.S. relations with Muslims in Iraq and elsewhere in the
    Middle East?
        [Part II] The President recently announced his ``Greater Middle
    East initiative.'' So far, the reaction of several key Arab leaders has
    been one of skepticism, at best. What is the President's ``Greater
    Middle East initiative?'' Is it in the budget, or is it just another
    way of describing what we are doing already?
        [Part III] Are we going to stop giving hundreds of millions of
    dollars in aid and selling weapons to autocratic, corrupt governments
    in the Middle East that do not show any interest in becoming more
    democratic and that arrest people who speak in support of democracy?
    Doesn't this make a mockery of the President's message?
        Answer. [Part I] The President stated our views regarding certain
    realities that we believe will shape the outcome of negotiations on
    permanent status issues. The President also made clear that permanent
    status issues must be negotiated between the parties, and stated that
    we have no intention of prejudicing the outcome. It remains U.S. policy
    that issues of refugees and borders must be decided by mutual agreement
    and direct negotiation between the parties in accordance with U.N.
    Security Council resolutions 242 and 338 and the roadmap.
        [Part II] The Greater Middle East initiative is an effort to
    marshal the will and resources of the G-8 and the EU in support of
    indigenous efforts in the Middle East to bring about political,
    economic, and educational reform. Despite initial skepticism, many Arab
    leaders recognize the need to address reform issues and have welcomed
    our willingness to help. Both the political statement and the specific
    action plan to support reform that we and our G-8 partners will endorse
    at the Sea Island Summit remain under discussion. We understand that,
    once final decisions have been made on possible programmatic elements
    of this initiative, the White House will be consulting with OMB and
    Congress on resources.
        [Part III] Our military assistance to certain select countries in
    the Middle East is aimed at enhancing the ability of these governments
    to maintain regional stability and to assist us in the global war on
    terrorism. We also use this aid to enhance the professionalization of
    the officer corps and to strengthen the separation between civilian and
    military functions. At the same time, we are very sensitive to the need
    for greater political openness and economic modernization in a number
    of these countries; these concerns are the impetus for the Greater
    Middle East Initiative and our efforts to promote political, economic,
    and educational reform through programs such as those taking place
    under the auspices of the U.S. Middle East Partnership Initiative.
        Question. The situation in Haiti is obviously dire. The
    Administration says there is a new opportunity now that President
    Aristide is gone, although I gather the other Caribbean nations have so
    far refused to recognize the new government because of concerns about
    the way President Aristide left the country.
        Do you plan to submit a budget amendment or supplemental request
    for Haiti, or are you planning to just continue business as usual? I
    ask because your budget request for Haiti for fiscal year 2005 is $24
    million, down from $27 million in fiscal year 2004.
        Answer. At this point, there is no need for a supplemental request
    for Haiti.
        The fiscal year 2004 allocation for Haiti, including food aid, is
    approximately $55 million. In addition, we have provided more than $3
    million in emergency assistance for the immediate humanitarian needs of
    the Haitian people, and nearly $5 million to the Organization of
    American States (OAS) for its Special Mission for Strengthening
    Democracy in Haiti. The fiscal year 2005 budget request is $54 million.
        We already have identified an additional $40 million from existing
    funds for this year that we are reallocating to meet Haiti's short term
    needs. We are continuing to review other potential sources of funding
    for Haiti, and are working with the Haitian diaspora and international
    donor community to encourage their contributions and support.
        Question. In his November 6 speech to the National Endowment for
    Democracy, President Bush said that Syria has left its people a legacy
    of ``torture, oppression, misery, and ruin.'' The State Department's
    human rights reports say that torture is commonplace in Syria, and they
    describe the gruesome techniques used there, from electrical shocks to
    pulling out fingernails, to ``using a chair that bends backwards to
    asphyxiate the victim or fracture the victim's spine.''
        And yet, in October 2002, the Justice Department deported, or
    ``rendered,'' a Syrian-born Canadian citizen, Maher Arar, who it
    suspected of links to terrorism, to the custody of the Syrian
    government. It did so on the basis of a promise by the Syrian
    dictatorship that Arar would not be tortured. As you know, Arar was
    ultimately released, and claims that he was in fact tortured.
        A. How can we trust mere assurances from governments like Syria or
    Egypt that they won't torture people we turn over to them, when we know
    they abuse prisoners routinely? Should we turn over people to the
    custody of governments that use torture?
        B. Doesn't this policy of turning over prisoners to repressive
    regimes undermine the President's message that America is going to
    stand up for human rights and democracy, especially in the Middle East?
        Answer. Mr. Maher Arar was detained in New York on September 26,
    2002 by United States immigration and law enforcement authorities after
    his name appeared on an immigration watch list. He was subsequently
    refused entry into the United States under Section 235C of the United
    States Immigration and Nationality Act based on information in the
    possession of United States law enforcement officials. United States
    immigration law gives the Attorney General the discretion to deport an
    alien to the country in which he was born. I refer you to the Canadian
    government and the United States Justice Department for the specifics
    of Mr. Arar's case.
        As a matter of principle, and in accordance with international law,
    the United States does not turn people over to governments that we know
    intend to abuse them. We strive to uphold international prohibitions
    against the use of torture and we regularly call on other governments
    to do the same.
        Question. Aren't we asking for trouble when we gloss over these
    facts and cozy up to a government that behaves this way?
        Answer. The fact is we need Pakistan's help on many matters of
    great importance to our national security. In the Global War on
    Terrorism, Pakistan has assisted the capture of more than 550
    terrorists, including many al-Qaeda. It has also recently undertaken
    operations against al-Qaeda and Taliban forces on the Pakistani side of
    the Afghan border. Such operations are continuing, and have helped
    disrupt efforts to attack our forces in Afghanistan. Pakistan's
    cooperation is also necessary for the success of our nonproliferation
    efforts. Information provided by the Government of Pakistan has been
    crucial to our ongoing efforts to put out of business the network
    established by Pakistani nuclear scientist A.Q. Khan.
        In the context of this important alliance, we engage Pakistan in
    frank discussions of all issues to seek solutions that serve our
    interests while preserving a critical relationship.
        Question. Over the past two years we gave Pakistan a total of $1.3
    billion. All that time we knew or had reason to suspect that Pakistan
    was selling nuclear weapons technology to our enemies. And, if we
    didn't suspect it--we should have. You are requesting another $700
    million for Pakistan in fiscal year 2005. What consequences has
    Pakistan suffered from selling nuclear weapons technology to Iraq and
    North Korea? What message does this send to other nations?
        Answer. As Under Secretary of State for Arms Control and
    International Security John Bolton testified on March 30, 2004 to the
    House International Relations Committee, we have no information that
    contradicts President Musharraf's assurances that the top levels of the
    government of Pakistan are not implicated in the activities of A.Q.
    Khan. Pakistan has taken concrete steps to eliminate this network and
    ensure that this kind of proliferation will never happen again.
    Pakistan continues to share with the U.S. Government information being
    developed through ongoing investigations. We are also continuing to
    work with Pakistan to bring its export controls in line with
    international standards.
        Question. For the past four years, I and other Members of Congress,
    and the State Department, have sought the assistance of the Lebanese
    and Syrian governments in a case involving the abduction of two
    American children by their Lebanese father. United States and Lebanese
    courts have awarded the mother, Elizabeth Murad, sole and permanent
    custody of the children. There is compelling evidence that the father
    and children are in Syria, yet despite appeals to President al-Asad,
    the Syrian government has done nothing. Your staff has been extremely
    helpful, but so far we've gotten nowhere. Syrian officials say they are
    attempting to solve this issue. What is your assessment of the Syrian
    Government's efforts? Will you discuss this personally with President
    al-Asad?
        Answer. We have been vigorously pursuing a resolution to the Murad
    child custody case for four years. During that time, we have raised the
    case with both the Lebanese and Syrian governments at every possible
    level, including with President Asad himself. While we appreciate the
    assurances of various Syrian government officials that they are working
    with us to find the Murad children and return them to their mother, we
    find it difficult to believe that neither the Syrian or Lebanese
    governments have been able to locate the father or the children.
    Clearly, both governments need to redouble their efforts to find Liz
    Henry Murad's children and return them to her as soon as possible.
        Question. In the State Department's ``Performance and
    Accountability Report to Congress,'' the Department concludes that it
    is ``on target'' or ``above target'' in meeting almost all of its goals
    with respect to sustainable development and environmental programs.
    Yet, while we can point to accomplishments here or there, if you look
    at the big picture, environmental degradation is getting steadily
    worse, not better. According to the State Department, these are good
    programs. But there is less than $300 million in this budget to protect
    the environment worldwide. In fact, we have consistently given you more
    than you've asked for, yet it is far less than many U.S. States spend.
    Shouldn't we be spending a lot more on these programs, which the State
    Department says are effective, to protect the environment?
        Answer. We appreciate your strong interest in international
    environmental initiatives. Under the new State/USAID Strategic Planning
    Framework, the United States identifies advancing sustainable
    development as one of four key strategic objectives. In reducing
    poverty throughout the developing world, sustainable development
    encompasses economic, social and environmental factors. Major
    initiatives to achieve this goal have been undertaken in sectors
    related to water, energy, forests, fish, climate, health, education,
    and science.
        We are also continuing to address environmental protection through
    substantial contributions to the Montreal Protocol Multilateral Fund
    and the Global Environment Facility. We are awaiting Senate action on a
    landmark agreement--the Stockholm Convention on Persistent Organic
    Pollutants--to phase out ozone depleting substances and we have taken
    significant measures to conserve depleted fish stocks and other ocean
    resources.
        Regarding funding for both social and environmental programs, in
    addition to the nearly $300 million in Department appropriations cited
    in the Report, the Department also administers foreign operation
    program resources totaling nearly $2 billion. These funds have enabled
    us to leverage needed additional resources from foreign governments,
    international organizations and the private sector to strengthen
    international cooperation and build public-private partnerships. The
    aforementioned $300 million funds key components of State operations as
    well as international organizations, including the Pan American Health
    Organization and the World Health Organization, to maintain their
    efficiency and financial viability.
        Question. On January 12, President Bush issued a proclamation,
    effective immediately, suspending entry into the United States of
    foreign officials who have been involved in corruption that has had
    serious adverse effects on the national interests of the United States.
    It also bars entry of their families. The Secretary of State is to
    identify persons covered by this proclamation, and to implement it. Are
    you doing that? Are you developing a list of persons who cannot enter
    the United States on account of this proclamation? For example, are
    former President Aleman of Nicaragua, or former President Portillo,
    both of whom stole millions, on your list? If not, shouldn't they be?
        Answer. The President gave me, as Secretary of State,
    responsibility for administering this 212(f) Presidential Proclamation
    on his behalf. I have approved procedures for implementation of the
    Proclamation and have delegated the decision-making to the Under
    Secretary for Political Affairs. Consistent with the procedures I
    approved, our overseas posts have been given comprehensive instructions
    relating to implementation of the Proclamation. The procedures involve
    initially identifying persons potentially subject to the Proclamation
    and watchlisting them. If the person actually applies for a visa or
    holds a visa that might be revoked, the facts are developed more fully
    to permit a decision by the Under Secretary whether the visa should be
    denied or revoked.
        The Department has not administered the Proclamation on the basis
    of a list. Names are entered in the visa lookout system by posts or the
    Department on a routine basis, and decisions subsequently are made on a
    case-by-case basis. In recent months, the Department has found a number
    of former officials subject to the Proclamation.
        The visa records of the Department, including the visa lookout
    system and records of decisions under the Proclamation, are deemed
    confidential pursuant to Section 222(f) of the Immigration and
    Nationality Act, and may be used for only the purposes specified in
    that section. Thus we are not generally disclosing the names of persons
    entered into the lookout system or specifically found subject to the
    Proclamation.
        Question. What specific steps is the Administration taking to
    ensure that U.S. aid is conditioned on the transparent management of
    oil and mining revenues in recipient countries?
        Answer. The Administration has made reducing corruption and
    enhancing transparency a top foreign policy priority because we believe
    they are central to supporting sustainable development, creating stable
    democracies, and advancing our national security interests. The
    Administration works to promote transparent management of all public
    sector resources, including those derived from oil and mining, even if
    a country does not receive U.S. assistance. We promote international
    efforts to raise transparency standards and improve public financial
    management wherever possible, including through international financial
    institutions (IFIs), through our own bilateral aid programs, in our
    policy dialogue with the U.N. system and in the Organization for
    Economic Cooperation and Development (OECD), and through a vitally
    important G-8 initiative that supports developing country efforts to
    raise transparency standards and reinforces these other efforts.
        Among our bilateral, regional and multilateral programs that
    promote transparency, good governance and anti-corruption are the
    Millennium Challenge Account and the African Growth and Opportunity
    Act. We also pursue these objectives actively in the Summit of the
    Americas, Asia Pacific Economic Cooperation, and the UNDP/OECD-led
    Middle East and North Africa good governance initiative. All of these
    programs emphasize transparency, accountability and good governance.
        The Millennium Challenge Account (MCA), funded initially at $1
    billion for fiscal year 2004, targets U.S. assistance at countries that
    govern justly, invest in their people, and encourage economic freedom.
    It recognizes that development must primarily come from within
    countries rather than from outside. The Millennium Challenge
    Corporation (MCC) uses independent indicators that address rule of law,
    control of corruption, and other governance criteria to select
    countries eligible for MCA assistance. Countries that fail to pass the
    corruption indicator, compiled by the World Bank Institute, are
    presumed not to qualify. Countries ultimately selected for MCA
    participation will enter into a compact with the MCC that requires
    effective, accountable, and transparent use of U.S. assistance.
        The African Growth and Opportunity Act (AGOA) provides significant
    benefits to countries selected for participation, including improved
    access to U.S. credit and technical expertise and liberal access to the
    U.S. market. As with the MCA, rule of law and efforts to combat
    corruption are among AGOA's eligibility criteria.
        The G-8 initiative on Fighting Corruption and Improving
    Transparency provides a particularly good avenue for G-8 governments to
    build partnerships with developing countries to increase transparency
    and thereby use public resources wisely. Efforts will focus on
    transparency in public budgets, including revenues and expenditures,
    government procurement, the letting of public concessions and the
    granting of licenses. Partner governments will conclude voluntary
    compacts with G-8 governments, specifying the concrete steps they will
    take to bring greater transparency and accountability to managing
    public resources. Special emphasis will be given to cooperating with
    countries rich in oil and mineral resources. For these countries the
    compacts will pay particular attention to transparency of revenue flows
    and payments in these sectors. For their part, G-8 countries will
    support partner countries by providing bilateral technical assistance
    and political support.
        At Sea Island, Nigeria, our fifth largest oil supplier, was one of
    four pilot countries to conclude such a compact, demonstrating its full
    ownership of an aggressive program of reform that will lead to greater
    transparency and accountability. The governments of Peru, Nicaragua,
    and Georgia concluded similar agreements with the G-8 governments at
    Sea Island. We hope that more countries will follow the leadership and
    commitment of the four pilots, and that they will provide models and a
    demonstration effect for countries that follow.
        Question. Are you confident that adequate procedures are in place
    to prevent the diversion or misuse of revenues from Iraqi oil
    production?
        Answer. United Nations Security Council resolution 1483 (2003)
    established that Iraq's oil export revenues would be deposited in a
    special fund, the Development Fund for Iraq (DFI.) Until the transfer
    of Sovereignty, the Coalition Provisional Authority in Iraq (CPA) had
    signature authority over DFI. An international body called the
    International Advisory and Monitoring Board (IAMB) was established to
    act as an external audit committee for the regular audits of the DFI.
    Under U.N. Security Counsel resolution 1546 (2004), which provided for
    United Nations recognition of the Iraqi Interim Government (IIG), full
    signature authority over the DFI transferred to the IIG. The resolution
    also continues the role of the IAMB to ensure that proper audits of the
    DFI continue to be carried out, which the USG fully supports. The CPA
    also reconstituted the Board of Supreme Audit and established
    Inspectors General for Iraqi ministries, which remain in operation
    under the interim government.
        Question. I am concerned about the way the Leahy human rights law
    conditioning U.S. assistance to units of foreign security forces (sic).
    I would appreciate your answers to the following questions:
        What instructions has the Department of State sent to embassies for
    establishing a database of alleged human rights violators?
        What instructions do embassies have in place to gather information
    on alleged violators and do their sources include non-governmental
    organizations?
        Are embassies vetting individuals and units before they receive
    security training and what criteria are they using to determine whether
    to provide training?
        What is the status of the Department of State database housed in
    the Bureau of Democracy, Human Rights and Labor? Does the database
    track information on alleged human rights violators, requests for
    training, and instances of denials of training?
        Answer. Department guidance to posts, issued most recently in
    February 2003, updated Leahy Amendment guidance and again instructed
    all posts to keep track of allegations of gross violations of human
    rights involving any unit of the security forces, regardless of whether
    that unit is currently receiving training or assistance or regardless
    of the passage of time.
        Posts have clearly been instructed that any time throughout the
    year that they become aware of any information regarding incidents
    which reasonably could be deemed to be credible information of a gross
    violation of human rights by any unit of the host nation's security
    forces receiving or proposed to receive FOAA-funded assistance or
    involved in DOD-funded training regardless of the passage of time,
    posts should so inform the Department by cable. Posts are instructed to
    report information regardless of the source, including, but not limited
    to reporting by State, DOD, DAOs/SAOs, NGOs, and the media. To the
    extent practicable, posts are asked to identify the unit that has
    allegedly committed the violation of human rights and include post's
    view as to whether the violation of human rights rises to the level of
    being a gross violation and whether it believes the information is
    credible.
        Both embassies and the Department are vetting units proposed for
    training and/or assistance before such training or assistance is
    received. The Department is cognizant of the Senate report accompanying
    the fiscal year 2002 FOAA, which stated that the term ``unit'' should
    be ``construed as the smallest operational group in the field that has
    been implicated in the reported violation.''
        The test database in the Bureau of Democracy, Human Rights and
    Labor (DRL) currently includes the names of approximately 100
    individuals and units about which we have serious human rights
    concerns. The names are drawn from post, NGO and media reports. Many
    are drawn from the 2002 and 2003 Country Reports on Human Rights
    Practices. Since the database was established for testing the Benetech
    Corporation's Martus software in the Department in 2003, DRL has been
    working with the Bureaus of Political-Military Affairs, Information
    Resource Management and Administration to develop and test a
    technology-based solution with security and encryption packages that
    could allow Martus to be available to most posts and Department
    officers. At this time, the test database does not track requests for
    training and instances of denials of training.
        Question. I am very concerned about the deepening crisis in Darfur
    in Western Sudan, a situation that both President Bush and U.N.
    Secretary General Kofi Annan have condemned and expressed alarm about.
    Today's Washington Post quotes the Secretary General saying there is a
    risk of ``genocide'' there and that U.N. troops may be needed.
        Would the Administration support a U.N. monitoring force?
        Would you support increasing the size and deploying part of the
    Civilian Protection and Monitoring Team, currently in Sudan, to the
    Darfur region to try to deter human rights violations?
        Has the Administration called upon the leadership of the African
    Union to declare Darfur an emergency, condemn the human rights abuses,
    and called on the Sudanese government to facilitate and support these
    desperately needed initiatives?
        Answer. The Administration supports a United Nations Peace Keeping
    Operation (UNPKO) in Sudan. We have been studying how a UNPKO might
    operate in Sudan. We expect that there will be a monitoring mission
    mandated under Chapter VI to help monitor the peace. We have been
    talking with our Troika partners (the U.K. and Norway) and the United
    Nations about a mission and look forward to receiving a report from the
    Secretary General. We would not expect a UNPKO to be created until
    after the signing of the comprehensive agreement which would include
    further details on monitoring and security arrangements, although we
    will continue planning for such a mission.
        We have agreed to support the Darfur Ceasefire Commission with
    logistical assets, and CPMT assets will be made available to the
    Commission in the short term to get things going. Due, however, to the
    complexities surrounding the situation in Darfur, we agreed with the
    African Union and the parties that it would be best to have an
    independent international monitoring team operating in Darfur. The
    ceasefire monitoring team will monitor the ceasefire within the
    provisions of the Ceasefire Agreement and when necessary investigate
    alleged violations of the Agreement.
        The African Union (AU) has taken a very active role in responding
    to the crisis in Darfur. In particular, with U.S. encouragement, the AU
    took the lead on establishing the Ceasefire Commission designed to
    plan, verify and ensure the implementation of the rules and provisions
    of the Darfur ceasefire accord signed on April 8 in N'djamena.
        Question. The Bush administration has recognized the role that
    family planning plays in reducing abortions. The President himself has
    said: ``one of the best ways to prevent abortion is by providing
    quality voluntary family planning services.'' Yet funding for U.S.
    family planning has declined since 1995 and remains below the 1995
    level. How do you reconcile the Administration's claim of support for
    family planning with these budget cuts?
        Please provide any information available to the Administration that
    the Mexico City Policy has reduced the number of abortions, either in a
    particular country, or worldwide.
        The State Department recently provided me with a list of activities
    deemed coercive which it says the Chinese Government must eliminate in
    the countries where UNFPA provides support, in order for UNFPA to
    receive U.S. funding. This, however, represents a misreading of U.S.
    law. The Kemp-Kasten amendment does not impose any requirements on
    China or any other government. Rather, it imposes restrictions on any
    (organization) or ``program'' that supports or participates in the
    management of coercive activities. Is it the Administration's position
    that no matter what form of assistance UNFPA provides in these Chinese
    countries, unless China eliminates these coercive activities UNFPA is
    ineligible to receive U.S. funding? In other words, if UNFPA were to
    only provide information (as opposed to any other form of assistance)
    to Chinese family planning workers about voluntary family planning
    services, it would still be ineligible to receive U.S. funding until
    China eliminates each of the activities deemed coercive?
        Answer. Funding for Family Planning.--President Bush has sustained
    funding for family planning assistance at levels between $425 and $446
    million per year, compared to $372-$385 million per year during the
    four years preceding the President's inauguration. The President is
    committed to maintaining these levels because he believes that one of
    the best ways to prevent abortion is by providing quality voluntary
    family planning services.
        Mexico City Policy.--President Bush restored the Mexico City Policy
    in 2001 to clearly separate U.S. Government support for family planning
    assistance from abortion-related activities. The President's directive
    of August 29, 2003 extended the Mexico City Policy to cover all
    Department of State funding to foreign non-governmental organizations
    for family planning assistance.
        There are many foreign NGOs through which USAID and the Department
    of State can provide family planning information and services to people
    in developing countries. The President determined that assistance for
    family planning will be provided only to those foreign NGO recipients
    and sub-recipients whose family planning programs are consistent with
    the values and principles the United States wants to promote as part of
    its foreign policy.
        Funding for UNFPA.--Per your request, the Department recently
    provided you a list for illustrative purposes of elements of a
    coercion-free environment with respect to family planning in China.
    While, as you correctly point out, the Kemp-Kasten Amendment does not
    impose any requirements on China or any other government, it has been
    the consistent policy of the Bush Administration to urge the Chinese
    government to remove coercive practices from its family planning
    programs.
        As you note, the Kemp-Kasten Amendment is relevant to all
    organizations or programs that receive U.S. funds under the Foreign
    Operations Appropriations Act. In light of Kemp-Kasten, and China's
    regime of severe penalties on women who have births outside those
    allowed under China's national and local birth planning laws, Secretary
    Powell determined on July 21, 2002, that China's coercive law and
    practices amounted to ``a program of coercive abortion,'' that UNFPA's
    funding in China amounted to ``support for or participation in the
    management of'' China's program, and that, therefore, it was not
    permissible to continue funding for UNFPA at that time. In notifying
    Congress of his decision, the Secretary pointed out, ``Regardless of
    the modest size of UNFPA's budget in China or any benefits its programs
    provide, UNFPA's support of, and involvement in, China's population-
    planning activities allows the Chinese government to implement more
    effectively its program of coercive abortion.''
        The Department has been in consultations with China since 2002, but
    China has not eliminated its coercive practices. The Department has
    also discussed with UNFPA its Fifth Country Programme in China and has
    suggested various proposals that would permit the United States to fund
    UNFPA consistent with Kemp-Kasten. We continue to consult with the
    Chinese government and with UNFPA. The Department is currently
    reviewing the status of China's family planning program and UNFPA's
    funding in China with the view to determining whether funding for UNFPA
    is permissible in fiscal year 2004 in light of Kemp-Kasten.

                        MILLENNIUM CHALLENGE CORPORATION

        Question. As Chairman of the Board of the Millennium Challenge
    Corporation, how much of the $2.5 billion in the President's budget
    request for the Millennium Challenge Account (MCA) do you anticipate
    obligating in fiscal year 2005? Of the $1 billion Congress appropriated
    in fiscal year 2004, how much do you anticipate obligating this year?
        Answer. This question has been sent to MCC for response.
        The Committee notes that no response was received.
        Question. I also want to thank you for agreeing to provide $2.5
    million for programs to protect intellectual property rights overseas.
    This is an important, bipartisan initiative that is widely supported
    here in Congress. I am not going to micro-manage the process or favor
    one group over another for receiving this money--that is an issue for
    your Department to determine. However, I am wondering if you could get
    back to me, for the record, with more details on INL's plans for this
    $2.5 million.
        Answer. The State Department shares Congress's strong commitment to
    protecting the intellectual property of U.S. artists, inventors and
    industries from foreign counterfeiters and pirates. We view the State
    Department's role in this effort as crucial to our country's economic
    growth and to the well-being of our citizens.
        In response to the fiscal year 2004 budget report language
    regarding the allocation of $2.5 million in crime funds for anti-piracy
    programs, the State Department initiated a process to seek new training
    and technical assistance proposals from various United States
    government agencies and our overseas missions, with input from
    industry. We received over 90 proposals covering 46 countries,
    reflecting the growing demand for training and technical assistance
    from our foreign law enforcement partners.
        These are largely proposals for government-to-government training
    and technical assistance programs focused on building legal regimes and
    intellectual property law enforcement capacity. The proposals range
    from educating foreign judges and prosecutors on international IP
    standards, to hands-on border enforcement and forensics training for
    foreign customs officials.
        The State Department is now completing its review of these
    proposals and will soon begin consulting interested parties, including
    the Appropriations Committees, on its recommendations. Our goal is to
    begin obligating the funds for these programs during the summer of
    2004.
        Question. As you know, I have been urging the Administration to
    rejoin the International Coffee Organization (ICO). While the ICO will
    not solve the international coffee crisis, which has undermined U.S.
    assistance and counter-narcotics efforts around the world, it could be
    a useful instrument to help forge a multilateral consensus on how to
    address this crisis.
        What is the status of the U.S. membership in the ICO? And, where is
    the Administration in terms of formulating a comprehensive strategy to
    address the coffee crisis, as urged by the Congress in resolutions
    passed at the conclusion of the 106th Congress?
        Answer. While we all understand our membership in the ICO will not
    solve the coffee crisis, we view the ICO as a potentially important
    tool in bringing concerned parties together. We hope we will soon meet
    the conditions under which the United States might rejoin.
        A joint State-USTR delegation is attending meetings of the ICO in
    London May 14-21, where we anticipate the ICO will take positive steps
    to resolve our concerns on Resolution 407 and satisfactorily address
    legal and regulatory concerns before we can accede to the 2001
    International Coffee Agreement. We will also seek to address
    institutional issues such as a voting structure that currently favors
    the EU. After these meetings, Under Secretary of State Larson will meet
    for a second time with members of U.S. Industry regarding their
    programs. In anticipation of needing to meet an obligation for dues to
    the ICO, the State Department will continue to work closely with OMB
    and the appropriate congressional committees. We expect to be able to
    make a final decision on membership in the coming months, and before
    the next ICO meetings in September.
        Although coffee prices have seen a significant rebound in the last
    year, we have made our review of membership in the ICO the focal point
    of our activity related to the coffee crisis. However, we see the ICO
    primarily as a tool in implementing our broader efforts. Should we join
    the ICO, we will do so with a positive agenda to improve opportunities
    for producers and enhance the choices available to consumers.
    Recognizing that the coffee crisis has a variety of causes and
    differing effects, the Administration's programs are generally focused
    on the unique needs of individual countries or regions.
        USAID is providing resources and coordinating initiatives to
    address the worldwide humanitarian crisis caused by low coffee prices.
    Currently, USAID supports coffee activities in over 25 countries in
    Latin America, Africa, and Asia. These programs work to promote small-
    and medium-holder coffee systems compete in the international market.
    USAID is using a two-pronged approach. First, where potential exists
    for coffee farmers to effectively compete for premium prices in a
    differentiated market, USAID is working to improve local capacity to
    produce quality coffee that the market demands and to promote effective
    marketing thereby increasing the price farmers earn for their product.
    Second, USAID programs assist farmers that cannot compete within the
    coffee sector to diversify their activities and identify other sources
    of income.
        Question. Can you give me a status report on the implementation of
    FIA, especially with respect to the role of DRL in assigning officers
    to human rights positions?
        Answer. Starting with the Summer 2004 Foreign Service assignment
    cycle, which began in October 2003 and covers assignments for positions
    coming open between May and October 2004, DRL developed a list of
    priority positions on which it wanted to concentrate during this first
    stage of the development of this procedure. The list of priority
    positions to be filled during the Summer 2004 cycle was given to the
    regional bureaus concerned.
        DRL's Executive Office reviews all bidders on these positions and
    provides the Assistant Secretary with their names and pertinent
    information on their assignment history and experience. In addition DRL
    actively recruits and encourages eligible bidders who are well and
    favorably known to the bureau to bid on human rights reporting
    positions overseas, including senior positions. Using this information
    and other details available to DRL, the Assistant Secretary determines
    our preferred candidates. Those names are then given to the regional
    bureaus that bring the preferred candidates to panel for assignment.
    Thus far, no regional bureau has disagreed with a DRL recommendation.
    In any case, no assignment will be finalized without the approval of
    DRL's Executive Office. We anticipate expanding formal recommendations
    in the next cycle to include more senior positions that have
    responsibility for human rights.
        The excellent cooperation between DRL and the regional bureaus
    exhibited during the initial 2004 assignment cycle suggests that the
    objective of the legislation will be clearly and effectively met and
    the assignment of officers to human rights reporting positions in the
    manner envisioned by the FIA will become a routine aspect of the
    assignments process.
        Question. The situation in Indonesia continues to be very
    discouraging. Recently, the Indonesian Supreme Court cut by half the
    jail sentence of a Muslim cleric who had been convicted for his
    involvement in a Southeast Asian terrorist network linked to al Qaeda.
        In the province of Aceh there are reports of atrocities by the
    Indonesian military and police.
        It has been almost two years since the killings of two Americans
    and one Indonesian near the Freeport gold mine in Papua in August 2002,
    and we are still waiting for the results of the investigation.
        There does not seem to be any progress in bringing to justice those
    responsible for the killings and destruction in East Timor after the
    1999 referendum there.
        A. Indonesia is an important country and we have important
    interests in that part of the world. But President Megawati and the
    military hierarchy don't seem to be listening to us when it comes to
    human rights. Or am I missing something?
        Answer. As the world's most populous Muslim country, Indonesia
    takes on global significance. Indonesia is an example that Islam and
    democracy are compatible. Most political and economic trend lines for
    Indonesia are heading in a positive direction, even if they start from
    a low base. Indonesia is becoming ever more democratic--it will hold
    its first-ever direct presidential election this year.
        However, we remain concerned about Government's poor human rights
    record, particularly in Aceh where martial law is currently imposed.
    The need for accountability for human rights abuses committed by the
    Indonesian military and pro-Indonesia militias in East Timor in 1999
    cannot be ignored. We have repeatedly urged the Indonesian government
    to fulfill its commitment and pursue its internal investigation in a
    vigorous, expeditious and credible fashion. Together with the United
    Nations and concerned member states, the United States supports efforts
    such as those of the Serious Crimes Unit--a Timorese Prosecutor's
    office funded by U.N. peacekeeping contributions--to ensure justice for
    past human rights abuses in East Timor. We continue to consult with
    partners on options to ensure a credible level of justice for past
    human rights abuses in East Timor.
        Question. B. If the investigation produces enough evidence to bring
    charges against those responsible for this crime, will you insist that
    they be prosecuted and appropriately punished, not just let off with a
    slap on the wrist the way it always seems to happen in Indonesia?
        Answer. The United States has no higher priority in its dealings
    with the Government of Indonesia than seeking justice in the murder of
    American citizens in Papua. We have told the Government of Indonesia,
    at the highest levels, that we expect a full and impartial
    investigation, and that failure on this front would have negative
    consequences for our overall bilateral relationship. The Indonesian
    government, at the highest levels, has stated its commitment to a
    complete and transparent investigation into the killings. We expect the
    Indonesian Government to fulfill that commitment.
        Question. C. Please provide a detailed accounting of State
    Department counter-terrorism assistance--training, equipment, and any
    other assistance--provided to Indonesian security forces, including the
    police, during fiscal year 2002, fiscal year 2003, and the current
    fiscal year, as well as any such assistance proposed for fiscal year
    2005, and which entities within Indonesia will be the recipients for
    this assistance.
        Answer. The State Department provides capacity building assistance
    to the Indonesian National Police's (POLRI) counterterrorism unit--
    ``Special Detachment 88.'' Our counterterrorism (CT) assistance totaled
    $8 million in fiscal year 2002 and $4 million in fiscal year 2003. We
    have requested $4 million for fiscal year 2004 and $6.5 million for
    fiscal year 2005. This funding will support training of three
    Counterterrorism Investigation (INV) teams (90 officers total) by ATA/
    FBI. As part of this training, we supply certain investigative
    equipment to the teams. The first team of CT investigators (30)
    graduated July 18, 2003, and the graduates were immediately assigned to
    investigate the Parliament bombing and the August 5, 2003, Marriott
    Hotel Bombing.
        We will train three Explosives Incidents Countermeasures (EIC)
    teams (45 officers total). The first EIC team (15 officers) began
    training 25 August 2003. As part of this training, we supply the teams
    with certain tactical equipment. We will also train six Crisis Response
    (CRT) Teams (144 officers total). The first CRT team (24 officers)
    began training September 1, 2003. We provide certain tactical (SWAT)
    equipment and vehicles. Our assistance will support two CRT Train-the-
    Trainer (CRT-TTT) classes (24-36 officers) in fiscal year 2004-2005 to
    develop trainers to sustain and expand the CT Task Force.
        In addition to counterterrorism assistance, we provide anti-
    terrorism assistance (``regular'' ATA). In fiscal year 2001, we
    provided $1,260,779 for courses in Hostage Negotiation Management,
    Vital Installation Security, Explosive Incident Countermeasures, Post
    Blast Investigation, and Terrorist Crime Scene Investigation. In fiscal
    year 2002, we provided $865,955 for courses in Critical Incident
    Management, Hostage Negotiation Management, and Mail Security. We
    provided $778,712 in 2003 for courses in Senior Crisis Management, WMD
    Awareness Seminar, and Explosive Incident Countermeasures.
        The State Department, in conjunction with the Department of
    Justice, is assembling a package of equipment and training to the
    Attorney General's new CT and Transnational Crime Task Force to handle
    all terror trials. This assistance package will be approximately
    $750,000 and is anticipated to begin in Spring, 2004.
        Question. What specific procedures will be taken to ensure that
    this assistance will not be used in a manner that violates human
    rights?
        Answer. Training for the Indonesian military is restricted to non-
    lethal programs, and covers topics designed to promote the
    establishment of a more professional military, such as national
    security decision-making, defense restructuring, civil-military
    relations, military justice, and peacekeeping operations, not to
    mention English language training. Training for the police is either
    specifically focused on appropriate use of force, human rights and
    democratic policing (ICITAP), or in the case of anti-terrorism
    assistance (ATA), includes a specific module on human rights.
        All refresher and advanced training provided by ATA also includes
    specific modules to ensure that graduates remain cognizant of their
    human rights responsibilities.
        Question. Please describe in detail the process by which the
    Administration ensures that members of the Indonesian military and
    police slated to receive U.S. training or other assistance have not
    previously engaged in human rights abuses.
        Answer. The Embassy section or agencies that proposes a candidate
    for training requests biographic information from the candidate. The
    nominating section vets the candidate and/or unit, drawing from its
    files. If the candidate passes the initial screening, the candidate's
    name is submitted to other Embassy sections and agencies for screening.
        If at any point in the process, any doubt or hint of past human
    rights violations arise, the Embassy rejects the candidate. In a few
    cases, the Embassy may recommend that a further investigation is
    needed. If so, a more thorough screening continues and the Embassy
    forwards the case to Washington for decision.
        Question. How are proposed participants vetted? Who conducts the
    vetting? What data banks and other sources of information are used for
    vetting?
        Answer. The Embassy Defense Attache's Office, Office of Defense
    Cooperation, Regional Security Office, Consular Section, Political
    Section, and other agencies all vet proposed candidates. They draw on
    their agencies' national-level databases and records, as well as files
    held at post. Questionable candidates are referred to the Defense
    Intelligence Agency for a more thorough search of the National
    Intelligence Database.
        Question. Does the vetting process include review of information
    available to United States and Indonesian human rights organizations?
        Answer. Yes, when those files are available on line or when the
    Embassy Political Section has reason to believe that derogatory
    information exists about a specific individual. Again, in cases where
    credible derogatory information exists the Embassy rejects the proposed
    candidate. If any questions arise in the case of police candidates, the
    name is submitted for assessment to Indonesian Police Watch, an NGO
    that monitors Indonesian police activities.
        Question. Does the vetting include review of relevant records
    available to other governments with which the U.S. Government has a
    close working relationship (e.g., the Jakarta Embassies of Australia,
    the United Kingdom, Canada)?
        Answer. Yes, certain U.S. Government databases have links to the
    records maintained by key allies. In some cases, Embassy officers
    consult allied embassies with regard to the background and reputation
    of candidates.
        Question. Will the Administration insist on transparent and
    credible prosecutions of those responsible for the killing and wounding
    of United States and Indonesian civilians in Timika, August 31, 2002,
    prior to the provision of IMET assistance to the Indonesian military?
    If Indonesia fails to bring the killers to justice, what steps is the
    Administration prepared to take?
        Answer. We have repeatedly made clear to senior Indonesian
    Government officials, in meetings both in Indonesia and Washington,
    that we expect a full and impartial investigation of this crime, and
    that failure to conduct such an investigation would have a negative
    impact on bilateral relations. Our assistance to the Indonesian
    military is currently limited to E-IMET, and future provision of IMET
    would take into account the results of the investigation of the Papua
    murders. We will reexamine all aspects of our bilateral relationship
    should there be no credible investigation and appropriate follow
    through on the results of the investigation.
        Question. Has Indonesia signed an Article 98 Agreement? If not, has
    Indonesia been the recipient of a presidential waiver on national
    security grounds?
        Answer. Indonesia has not signed an Article 98 agreement to date.
    Indonesia does not require a waiver under the American Servicemembers
    Protection Act (ASPA) as it is not a party to the Rome Statute of the
    International Criminal Court.
        Question. Recent media reports on the use of funds from the U.N.-
    Iraq Oil for Food Agreement to procure support from prominent world
    political leaders included the names of senior Indonesian government
    figures, including President Megawati and DPR (House of
    Representatives) Speaker Amien Rais. What, if anything, has the
    Administration done to investigate these charges? What would be the
    consequences for U.S. policy should the substance of these media
    reports be validated?
        Answer. The Indonesian press has reported the claims of various
    international media outlets that President Megawati Soekarnoputri and
    People's Consultative Assembly Chairman Amien Rais received valuable
    oil contracts from the former Saddam Hussein regime. In response,
    several political figures close to Megawati and Amien issued strong
    public denials that the two figures received benefits from the Iraqi
    Government. Embassy Jakarta reports that other Indonesian sources have
    privately confirmed these public denials.
        President Megawati's opposition to the war in Iraq was consistent
    with domestic political pressures she faced and established trends in
    Indonesian diplomacy.
        The United States strongly supports the U.N.'s independent Volcker
    commission charged with investigating allegations of corruption under
    the Oil for Food (OFF) program, including allegations that many
    prominent international figures took bribes. In addition, the Iraqis
    have insisted upon their own investigation.
        CPA Administrator Bremer has directed the Iraqi Board of Supreme
    Audit, which functions much like our General Accounting Office, to
    undertake the investigation. It is working cooperatively with the
    Volcker commission to investigate OFF abuses and bring the facts to
    light. CPA is cooperating closely with both of these efforts.
        Question. What has the Administration done in the past six months
    to bring an end to the bloodshed in Aceh and to restore the December
    2002 cease fire that the United States played a critical role in
    arranging?
        Answer. U.S. officials continue to press Indonesian authorities to
    seek a negotiated settlement to the conflict in Aceh. The Ambassador
    and other U.S. officials have done so privately at the highest levels
    of the Indonesian Government, and the Embassy did so publicly,
    including through issuance of a statement criticizing the decision to
    extend martial law in November 2003. Through our USAID mission in
    Indonesia, we support NGOs working on human rights in Aceh, along with
    a newsletter and website that report on events in Aceh, critical
    elements given the limited press access to the province.
        Embassy officials have visited Aceh on numerous occasions to meet
    with civilian and military officials as well as civil society figures.
    Embassy officials monitored legislative elections in the province,
    helping to ensure a fair vote. In meetings with Indonesian officials in
    Aceh and Jakarta, Embassy officers have stressed our belief that the
    conflict is not amenable to a military solution, and our belief that
    special autonomy represents the best chance for a long-term solution.
    We have also reiterated our willingness to provide economic assistance
    for reconstruction in Aceh should another cease fire take place, as
    well as our willingness to facilitate such a cease fire, if requested.
    The United States continues to coordinate its actions closely with
    Japan, the EU, and the World Bank.
        Question. In a recent edition of The Wall Street Journal there was
    a mention that the Administration is going to pledge $400 million to
    Cyprus, if a peace agreement between the Greek and Turkish Cypriots is
    reached. Where is this money going to come from, existing funds, a
    budget amendment, or supplemental request?
        Answer. The pledge will not go forward in view of the April 24
    rejection of the unification plan by Greek Cypriot voters.
        Question. I can think of a number of countries, who are not going
    to become members of the European Union, where $400 million is
    desperately needed--including several in Latin America, Africa, and
    Asia. How is this amount of funding for Cyprus justified in light of
    pressing needs in a number of places that are desperately poor and have
    closer ties with the United States, such as Haiti, The Philippines, and
    Liberia?
        Answer. The European Union has decided to make available 259
    million Euros to northern Cyprus, for the purpose of ending the
    isolation of the Turkish Cypriots. In light of the efforts of the
    European Union, we are reviewing our policy towards the Turkish
    Cypriots. Our efforts in Cyprus aim to resolve a long-standing obstacle
    to peace and stability at the intersection of two regions critical to
    U.S. national interests and security. Proposals to fund support for
    Cyprus reunification come at a time of significant increases in the
    fiscal year 2004 budget and fiscal year 2005 request for such
    undertakings as the Millennium Challenge Corporation and the
    President's Emergency Plan for AIDS Relief.
                                     ______

               Questions Submitted by Senator Barbara A. Mikulski

        Question. The United States took great pains to ensure appropriate
    ethnic and geographical representation in Iraq's interim decision-
    making bodies. Why was the same attention not given to gender
    representation, even when women compose a majority of the population?
        Answer. We recognize that the women of Iraq have a critical role to
    play in the revival of their country and we strongly support their
    efforts. Women play a key role both at the national and provincial
    level--in the Iraqi Governing Council (IGC) and the governorate and
    local councils. The IGC has 25 members, including three women. We are
    making every effort to ensure women are represented at every level of
    government and, that they continue to be a central part of the Iraqi
    Interim Government that will take over after the June 30 transition to
    sovereignty. The State Department is currently focusing programs on
    preparing women for future leadership roles within the IGC. For
    example, USAID has focused on women's equality and empowerment through
    assistance to local government . . . USAID-funded conferences and
    trainings have helped Iraqi women learn about democracy, legal rights
    and women's civil society organizations that enable women to advocate
    for their own rights.
        Question. What is being done now, and what more could be done, to
    ensure the full participation of women in the political process after
    the hand over of power on June 30?
        Answer. President Bush has repeatedly stated that supporting and
    promoting respect for women's rights is a U.S. foreign policy
    imperative. The CPA and U.S. Government are working closely with the
    Iraqi Governing Council (IGC) to ensure that women will be well
    represented in the Iraqi Interim Government. The Law of Administration
    for the State of Iraq for the Transitional Period, also known as the
    Transitional Administrative Law (TAL) makes clear that ``the electoral
    law shall aim to achieve the goal of having women constitute no less
    than one-quarter of the members of the National Assembly . . .'' The
    United States is committed to doing all it can to ensure the full and
    fair representation of women and all Iraqis, in the administration of
    Iraq now and in the future.
        Question. What is the State Department doing to help Iraqi women
    overcome these hurdles? For example, do programs to support the
    development of political parties advocate and foster the integration of
    women in political party structures and decision-making? Are there
    programs to train Iraqi women to effectively compete in the electoral
    process?
        Answer. The United States has sponsored, and will continue to
    sponsor, a wide range of initiatives to reach out to Iraqi women, from
    homemakers to professionals and politicians, to ensure their rights and
    opportunities to fully participate in Iraqi civil society.
      --Earlier this year, Under Secretary Dobriansky hosted a roundtable
            with Iraqi women to elicit their ideas for ensuring the full
            integration of women in the reconstruction process. As a result
            of these discussions, the Office of International Women's
            Issues provided a list of qualified women inside and outside
            Iraq who are available to work with the Coalition Provisional
            Authority on reconstruction issues.
      --The State Department helped send a delegation of Iraqi women to the
            June 2003 Global Summit of Women (GSW) conference in Morocco.
            Forty women ministers and over 700 delegates from approximately
            80 countries met to discuss women's economic development and
            business. It was the first GSW meeting held in the Arab world,
            and provided Iraqi women with the opportunity to network with
            their counterparts in the region.
      --The Department of State's Educational and Cultural Affairs Bureau
            is organizing a series of International Visitor (IV) Programs
            on business opportunities for professional Iraqi women. It is
            also organizing interactive Digitized Video Conference programs
            between members of Iraqi women's NGOs and their counterparts in
            the United States.
        Since April 1, 2003, USAID has focused on women's equality and
    empowerment in Iraq, through assistance to local government and civil
    society organizations, directly and immediately touching the lives of
    Iraqi women. USAID-funded conferences and training have helped Iraqi
    women learn about democracy, human rights, women's legal rights, and
    women's civil society organizations that enable women to advocate for
    their needs at both the local and national government levels. The CPA
    and USAID, for example, are working with local women's groups to
    establish nine centers for women in Baghdad and five in Southern Iraq
    to provide educational programs, job skills training, rights awareness
    seminars, and mentoring programs. Additionally, in early 2003, the
    United States committed approximately $2.5 billion in humanitarian and
    reconstruction aid to Iraq. In November 2003, Congress approved
    President Bush's request for an additional $18.7 billion over the
    coming 18 months. Some of these funds will be used to restore Iraq's
    infrastructure, while other portions are allotted to democracy
    building, economic development, employment, medical, and educational
    needs, with full attention to the equal participation of women.
        The leadership experiences gained through involvement in these
    various activities, including in-country councils, conferences,
    external visits, and inter-organizational collaboration are helping
    prepare Iraqi women for professional and political careers. By
    supporting these types of initiatives the United States is working to
    expand the pool of trained Iraqi women, a vital task given the
    centrality of Iraqi women to the future prosperity and stability of
    Iraq.
        Question. The Iraqi Governing Council passed Resolution 137 in a
    closed session in December 2003. The resolution sought to impose
    sharia--Islamic law--in the new Iraq. Imposing sharia would have
    severely rolled back rights that women have enjoyed in Iraq since the
    end of the Ottoman Empire. Iraqi women took to the streets protesting
    the measure and succeeded in having it revoked. The Transitional
    Administrative Law has a bill of rights for all citizens and says that
    sharia is one of many sources of law.
        How confident are you that the rights of women will be preserved in
    Iraq after the transfer of sovereignty?
        What is being done now to lay the groundwork for preserving the
    rights of women in Iraq?
        Answer. The Transitional Administrative Law (TAL) guarantees the
    basic rights of all Iraqis, men and women, including freedoms of
    worship, expression, and association. The TAL also protects union and
    political parties and outlaws discrimination based on gender, class,
    and religion. Looking ahead beyond the June 30 transfer of sovereignty,
    this Law provides that the electoral system should aim to achieve the
    goal of having women constitute not less than 25 percent of the
    Transitional National Assembly. In addition, seven women were recently
    appointed as Deputy Ministers in the current Iraqi administration.
        As for other groundwork, U.S. policy is to ensure that Iraqi women
    are fully involved as planners, implementers, and beneficiaries in the
    reconstruction of their country. The Administration has worked closely
    with Congress to establish programs dedicated to promote equal rights
    and economic opportunities for Iraqi women.
        On March 8, I announced two more initiatives: First, a $10 million
    Iraqi Women's Democracy Initiative to promote women's political
    participation. A comprehensive and open RFP for this initiative has
    been posted, with proposals due by June 1. We expect to select the
    winning entries and inaugurate actual projects on the ground shortly
    thereafter. The second initiative is a United States-Iraq Women's
    Network. This is a public-private partnership between Americans and
    Iraqis to mobilize expertise and resources for Iraqi women. At the same
    time, USAID is implementing civic, economic, and political training
    programs for Iraqi women totaling $17 million.
        There is also significant international support for women's
    initiatives in Iraq. The British government, through DFID, supports
    women's programs. The recent Iraq Reconstruction Conference in Europe
    devoted a special panel to the subject of women. Finally, the
    international NGO community is actively engaged in supporting Iraqi
    women's programs as well.
        Question. What can we count on you to do to ensure that our
    assistance funds support the hard work of indigenous Afghan women's
    NGOs and help build Afghanistan's civil society?
        Answer. In fiscal year 2004, $60 million was specifically earmarked
    by Congress to support women and girls in Afghanistan, and we have
    exceeded that requirement. USG programs that benefit women are a mix of
    components within existing programs ($65,469,000) and new programs
    ($15,000,000) that focuses on advancing the participation and voice of
    Afghan women in local governance, and their access to services. The
    U.S. Agency for International Development, Department of State, and
    many other government and non-government entities are engaged in
    funding and implementing projects.

        AFGHANISTAN--RELEASE OF 2004 SUPPLEMENTAL FUNDS FOR AFGHAN WOMEN

        Question. Congress provided substantial fiscal year 2004
    supplemental appropriations for aid to Afghanistan. $60 million was
    directed to programs to aid Afghan women. How will the $60 million be
    allocated, and when will it be released?
        Answer. In fiscal year 2004, while Congress earmarked $60 million
    for Afghan women and their development, the United States Agency for
    International Development (USAID) has been spending $71.8 million on
    advancing the status of women in Afghanistan. These funds include the
    continuation of projects including education ($29 million), healthcare
    ($10.3 million), private-sector integration ($1.5 million), political
    development by supporting the Bonn Process ($15 million) and government
    support to the Afghanistan Ministry of Women's Affairs ($1 million).
    Through these initiatives, USAID is working to ensure that women are
    active participants in the private and public sectors of Afghan life.
    The supplemental funds also went to the Women's Empowerment Program
    ($15 million), which helps women participate in community activities
    and local governance. This program includes the Women's Private Sector
    Initiative, which strives to provide women with enterprise-skills
    training and other tools to strengthen the environment for women's
    involvement in the private sector.
        The Empowerment Program also includes the Women's Teacher Training
    Institute and Afghan Literacy Initiative, which target young girls who
    do not have formal access to school with literacy-development programs.
        Question. Outwardly, there has been progress on women's rights in
    Afghanistan, with a women's bill of rights and a set-aside for 25
    percent of the lower house of the legislature for women. However, there
    has been little improvement in the lives of most Afghans--men, women,
    and children--especially those in rural areas.
        What is the strategy to reach women and other vulnerable Afghans in
    rural areas?
        Answer. Much of the $60 million specifically earmarked by Congress
    to support women and girls in Afghanistan has gone to those living in
    rural areas.
        In education, the Afghan Primary Education Program (APEP) has set
    aside $20 million of a total $95 million in fiscal year 2004 to provide
    accelerated learning for girls, train female teachers, provide
    textbooks for girls in both the formal and informal school systems, and
    provide vocational training for women. In addition, we are contracting
    the reconstruction of a women's dormitory ($8 million) that will house
    1,000 women from rural areas and allow them to reside in safe
    surroundings while they attend University of Kabul and/or the Education
    University.
        In healthcare, the Rural Expansion of Afghanistan's Community-based
    Healthcare (REACH) program is significantly lowering maternal and child
    mortality and morbidity in Afghanistan. Of the $52 million total
    funding for REACH in fiscal year 2004, over $10 million is being given
    in grants for the delivery of health services by local women-focused
    NGOs and to vocational training for women as community healthcare
    workers and midwives. The first class of 25 rural-based midwives
    graduated from an 18-month long training in April 2004, and by summer
    150 trained midwives will be attending to Afghan women and children.
        In the private sector, we are providing $3.5 million for private
    sector development for women and to secure women's property rights by
    helping to educate women about their property rights in Islam and
    assisting women in accessing sensitively delivered legal assistance to
    use new, more transparent administrative and judicial processes.
        To support democracy, civil society, and the elections, $25,000,000
    of a total $139,900,000 in fiscal year 2004 funding is being used to
    support women's participation in the democratic process. A portion of
    these funds was used to provide technical assistance to the
    Constitutional Commission and the Constitutional Loya Jirga, including
    support for public education campaigns and consultations focused
    specifically on ensuring that women's views were incorporated in the
    constitutional process. Women participated in all phases of the
    drafting process, made up 20 percent of the Loya Jirga Delegates, and
    succeeded in passing a new constitution enshrining equal rights for
    women. These funds are also being used to ensure the registration and
    participation of women in upcoming national elections. We have set
    aside $10 million to develop a community empowerment initiative that
    ensures women's participation in local governance, builds capacity of
    women's community development councils, oversees women's block grants
    issued by the Ministry of Rural Rehabilitation and Development, and
    supports the coordination of multiple activities and services for women
    at the community level. The program will also provide small grants to
    the councils to develop community-owned centers that provide a venue
    for women to participate in governance issues; that provide them with
    services such as literacy training, health education, early childhood
    development assistance, vocational training and micro credit, and where
    they can develop cooperative enterprises. We are also providing $1
    million to help fund the Ministry of Women's Affairs and $2.5 million
    to fund the new Office of Women's Internal Affairs and Human Rights in
    the Afghan Ministry of Foreign Affairs. The United States-Afghan
    Women's Council and State Department have fostered women's
    participation in the political, social, and economic sectors through
    exchanges, mentoring, and specific projects totaling nearly $1 million
    for programs in rural-based women's centers, including adult literacy
    and vocational training.
        Finally, our PRTs are supporting women and girls, with $469,000
    spent to renovate women's dormitories at Kandahar University and Kunduz
    Teacher's Institute and for the rehabilitation of a women's sponsored
    silkworm production factory in Mazar-i-Sharif. We expect other PRT
    projects supporting women to be nominated for funding in the future.
        Question. What is being done to improve security so aid efforts can
    reach more of the population of Afghanistan?
        Answer. The presence of Provincial Reconstruction Teams (PRTs)
    throughout Afghanistan is intended to provide a secure environment for
    NGOs to safely carry out activities. PRTs are a multinational effort.
    In addition to the ten United States-led PRTs, the UK, New Zealand, and
    Germany (under NATO) are also leading PRTs around the country, and
    several other nations have indicated a willingness to lead their own.
    PRTs will form the basis for an expanded NATO/ISAF presence in
    Afghanistan, particularly critical in the run-up to September 2004
    elections.
        Question. On March 8, 2004--International Women's Day--President
    Hamid Karzai was quoted as saying, ``Please, my dear brothers, let your
    wives and sisters go to the voter registration process. Later, you can
    control who she votes for, but please, let her go.''
        What is your strategy to really empower women and have them
    participate in society as equal citizens under the law?
        Answer. First, we want to get women registered to vote and into
    voting booths. Second, we are funding programs to development of civil
    society, particularly human rights for women. Here are some details.
        The Constitutional Loya Jirga approved a new Constitution in
    January 2004. Women were fully engaged in the constitutional process.
    Two of the nine members of the Constitutional Drafting Committee, and
    seven of the 35 members of the Constitutional Review Commission were
    women. Women held almost 20 percent of the 502 seats, or 105 places, in
    the Constitutional Loya Jirga.
        Women achieved a significant gain with the Constitution's specific
    mention of women as citizens, and its provision to set aside 25 percent
    of its seats in the lower house and 17 percent in the upper house of
    Parliament for women. Afghan women will have the right to vote and run
    for office in the elections, which are scheduled to take place in
    September 2004.
        As of May 20, 2.56 million eligible voters have been registered to
    vote. Overall, 807,000 or 31.5 percent of registered voters are female,
    with a 45 percent level in the Central Highlands. Separate secure
    spaces have been created for women at polling stations and at voting
    facilities.
        Special efforts are being made to educate using focus group
    discussion, community interaction and NGO meetings designed to
    encourage village leaders, men and women on the importance of women
    voting. Special emphasis has been given to increasing information
    targeted at women. Over 3,000 civic education classes have been held
    for a total of 70,500. Of that group, approximately 25,000 have been
    women. Two Asia Foundation partners are conducting civic education
    seminars related to the elections. Through a local Afghan NGO called
    Awaz, 200,000 cassette tapes will be distributed in the south,
    southeast and east, specifically targeting messages for women,
    encouraging them to participate in the process and vote. Approximately
    400 traveling theater productions carry similar messages to the
    provinces. Many of these performances will feature the role of women in
    the elections.
        Media use is critically important. Through a Kabul-based media
    center, the United States has also funded video documentaries and made-
    for-TV features on women in elections, women in politics, and three
    ``All Women's Radio Stations'' that host political programs to
    encourage women to register to vote. The percentage of women
    registering to vote in cities such as Mazar-e-Sharif and Herat where
    these shows are aired are double the national average. The United
    States supports content for Radio and Television Afghanistan (a
    national agency) on elections, and specifically provided content to the
    Internews/Tanin network on its recent weekly program on Women and
    Islam.
        In fiscal year 2004, $60 million was specifically earmarked by
    Congress to support women and girls in Afghanistan, and we have
    exceeded that requirement. U.S. programs that benefit women are a mix
    of components within existing programs ($65,469,000) and new programs
    ($15,000,000) that advance the participation and voice of Afghan women
    in governance, and their access to services. We have many projects in
    place to ensure the protection and promotion of women's rights. The
    United States addressed the needs of women in many of its
    reconstruction programs and implemented more than 175 projects to
    increase women's political participation, role in civil society,
    economic opportunities and education. The United States has allocated
    $2.5 million for the construction of Women's Resource Centers in 14
    provinces throughout Afghanistan. In Kabul and nearby towns, the United
    States supports the establishment of an additional 10 neighborhood-
    based Women's Centers. All these Centers will provide educational and
    health programs, job skills training and political participation
    training to women. Through the United States-Afghan Women's Council,
    the United States is providing $1 million for educational training at
    the Centers.
        In sum, our strategy for Afghanistan includes supporting and
    encouraging Afghanistan to evolve into a nation that respects human
    rights, possesses strong democratic institutions and an independent
    judiciary, and conducts free and fair elections. We encourage full
    implementation of the Constitution and establishment of programs that
    promote economic and political empowerment.
        Question. How are we ensuring that women will be involved fully in
    electoral and political processes?
        Answer. The United States is providing $15 million to assist in
    voter registration, and another $8.86 million to support the electoral
    process in Afghanistan through programs that include civic and voter
    education, focus group research, training for political parties and
    civic activists. Extensive voter education will be required to inform
    the population about both the importance of the elections and the
    procedures for participating in the elections, which are scheduled for
    September 2004. Special programs have targeted women, educating them on
    the importance of voting and political participation. Voter
    registration is underway, and as of May 20, 2.56 million eligible
    voters have been registered to vote. Overall, 807,000 or 31.5 percent
    are female, with a 45 percent level in the Central Highlands. Special
    efforts are being made to encourage women to register, approaching
    village leaders and the men and women themselves through focus group
    discussions, community interaction and NGO meetings. The rural nature
    and security concerns make registration difficult, so the United States
    is funding a program of mobile vans to go directly to voters in their
    villages. In Mazar-e-Sharif and Herat, where women have their own radio
    programs, women are registering at twice the national average.
        To support democracy, civil society, and the elections, $25 million
    of a total $139.9 million in fiscal year 2004 funding is being used to
    support women's participation in the democratic process. A portion of
    these funds were used to provide technical assistance to the
    Constitutional Commission and the Constitutional Loya Jirga, including
    support for public education campaigns and consultations focused
    specifically on ensuring that women's views were incorporated in the
    constitutional process. These funds are also being used to ensure the
    registration and participation of women in the national elections,
    which are scheduled for September 2004. The United States funded a $1.2
    million program in political party development and domestic election
    monitoring and also funded a countrywide program on civic education,
    particularly for women, to promote their acceptance of and familiarity
    with democratic norms and civic responsibility in Afghanistan.
        The United States also funded a project to promote women's
    participation in the political process in central Afghanistan, offering
    workshops and discussion groups to rural women and support to potential
    female Constitutional Loya Jirga and parliamentary candidates. We have
    set aside $10 million to develop a community empowerment initiative
    that ensures women's participation in local governance, builds capacity
    of women's community development councils, oversees women's block
    grants issued by the Ministry of Rural Rehabilitation and Development,
    and supports the coordination of multiple activities and services for
    women at the community level. The program will also provide small
    grants to the councils to develop community-owned centers that provide
    a venue for women to participate in governance issues, have access to
    services such as literacy, health education, early childhood
    development, vocational training and micro credit, and where they can
    develop cooperative enterprises. We are also providing $1 million to
    help fund the Ministry of Women's Affairs and $2.5 million to fund
    proposals form the new Office of Women's Internal Affairs and Human
    Rights in the Afghan Ministry of Foreign Affairs.

           MILLENNIUM CHALLENGE ACCOUNT AND CORE DEVELOPMENT ACCOUNTS

        Question. Funding for the MCA in fiscal year 2004 was far below the
    level needed to meet the President's commitment, and the fiscal year
    2005 budget request includes only $2.5 billion for the MCA. Moreover,
    core development accounts are being depleted. This year's request is
    $56 million below last year's enacted levels.
      --How do you justify the reductions in the core development accounts?
      --Do you expect to meet the President's commitment of $5 billion in
            new funds for the Millennium Challenge Account without further
            reductions on other development assistance?
        Answer. These questions have been sent to MCC for response.
        The Committee notes that no response was received.
        Question. Over the past decade, 370 women have been brutally
    murdered in a string of unresolved murders in the cities of Juarez and
    Chihuahua, Mexico. Over 450 women have been abducted--of those, 30 are
    Americans--and over 100 have shown signs of sexual assault, rape,
    beating, torture and mutilation. Media reports have tied the killings
    to drug running and have implicated state and local police. Mexico's
    President, Vicente Fox, has been slow to act on this issue. Recently,
    bending to international pressure, he has appointed a federal
    commission to prevent and punish violence against women in Ciudad
    Juarez and a special prosecutor to coordinate federal and state efforts
    to punish assailants, but both efforts lack funding and teeth.
        What are you doing to raise the profile of these murders and get
    the Mexican Government to take effective action?
        Answer. The murders of women in Ciudad Juarez are a matter of great
    concern to the Department of State. The Department of State, with the
    assistance of the U.S. Embassy in Mexico City and the U.S. Consulate
    General in Ciudad Juarez, has closely followed the situation and the
    inconclusive efforts of Chihuahua state law enforcement authorities to
    resolve these murders. Department of State officials have met with
    Mexican human rights organizations to discuss the latter's view that
    these cases have been mismanaged by Mexican state and local law
    enforcement. Department of State officials have also discussed the
    matter with officials of the Mexican Government. I raised the issue
    with my Mexican counterpart during the November 12, 2003, United
    States-Mexico Binational Commission meeting, reiterating our concern
    over this tragic situation.
        As you know, President Fox has ordered the Federal Attorney
    General's Office (PGR) to assist local authorities in bringing to
    justice those responsible for these crimes. In June of last year, units
    of the Federal Preventive Police were sent to Ciudad Juarez to
    reinforce the local authorities. In August, a joint task force was
    created between the PGR and the State Attorney General's office. In
    October President Fox appointed a commissioner to coordinate the
    Mexican Federal Government's participation in the case, and in January
    of this year the PGR named a special prosecutor on the matter.
        While we cannot independently verify the figures, we note the
    Mexican Government claims that the recent appointments and coordination
    efforts appear to have reduced the incidence of murders of women in the
    city. The Mexican Government has also advised that, while overall the
    investigations are still not advancing as fast as they wish, of 328
    cases involving murders of women, 103 convictions have been obtained,
    and arrest warrants have been issued in another 27 cases.
        We note that Mexico has been open to outside expert evaluation of
    the problem and has invited numerous entities, including the United
    Nations Office on Drugs and Crime and the Inter-American Commission on
    Human Rights Rapporteur on the Rights of Women, to visit Ciudad Juarez
    to examine the situation.
        Offers of technical assistance and training have been made to
    Mexican law enforcement authorities by U.S. law enforcement authorities
    and a working group has been formed with the Mexicans to facilitate the
    provision of assistance. The U.S. Government funds and coordinates a
    broad range of training programs as well as material and technical
    assistance to Mexican federal law enforcement agencies to increase
    their crime-fighting capacities, including their ability to render
    assistance to Mexican state and local law enforcement. We have offered
    to tailor technical or other assistance to the PGR or to state and
    local police, if desired by the appropriate Mexican authorities, to
    help them address the crimes in the Ciudad Juarez area.
        Question. What revenues are being generated by Iraqi oil
    production? How are these funds being accounted for? What percentage of
    Iraq's reconstruction is being paid for from Iraqi oil revenues?
        Answer. Iraq's 2004 first quarter oil revenues just surpassed the
    $4 billion mark. Since the liberation of Iraq, over $9 billion has been
    generated. The current budget projects 2004 revenues of $14.175
    billion, but some current projections estimate that it will rise to at
    least $14.5 billion.
        The Iraqi Oil Ministry accounts for oil revenues with assistance
    from the Coalition Provisional Authority in Baghdad. Oil export
    revenues, in accordance with United Nations Security Council Resolution
    1483, are deposited directly in the Development Fund for Iraq. This
    fund, as well as the export oil sales themselves, are subject to
    external audit by an independent public accountant that reports both to
    CPA and to the International Advisory and Monitoring Board (IAMB)
    endorsed by the resolution. The IAMB includes representatives from the
    International Monetary Fund, the World Bank, the Arab Fund for Social
    and Economic Development and the United Nations.
        The United Nations and World Bank needs assessment for Iraq's
    reconstruction from 2004 to 2007 totaled $56 billion. CPA currently
    projects that oil revenues from 2004 to 2007 will finance $12.1 billion
    of capital projects, or just under 22 percent of the total estimated
    reconstruction cost of $56 billion.
                                     ______

                Questions Submitted by Senator Richard J. Durbin

        Question. Would you support and work for a modification of the
    MCC's eligibility criteria to provide a greater focus on women and to
    include these additional indicators in the criteria in order to endure
    that this half of the world's population is not left to suffer
    discrimination and disparate treatment even as their countries move
    toward greater development?
        Answer. I strongly believe that the participation of women is vital
    to the success of a country's long-term development strategy. The MCC
    criteria already support this proposition. In the selection of eligible
    countries, the Board is required by the legislation establishing the
    MCC to, where appropriate, take into account and assess the treatment
    of women and girls. Eligibility criteria already require ``political
    pluralism, equality and rule of law,'' ``respect for human and civil
    rights,'' and ``investments in the people of the country, particularly
    women and children.'' The indicators used this past year reflect this
    emphasis. Countries that did not provide suffrage or civil rights for
    women were unlikely to score well on the indicators regarding political
    rights, civil liberties, or voice and vote. Countries that did not
    provide adequate education or health care for women did not score well
    on indicators of primary education and inoculation rates. To provide a
    check on these indicators, the Board was able to consider information
    from the State Department Human Rights Report regarding the treatment
    of women and girls and to consider both the level and trend of girl's
    enrollment rates in primary school.
        The eligibility criteria in the MCC's legislation already place a
    clear and rightful emphasis on the role of women. No additional
    legislative language is needed. I believe the MCC should evaluate its
    methodology and indicators each year to make sure it is meeting the
    criteria and be open to including new indicators that provide a better
    measure of whether a country has, as the statute states, demonstrated a
    commitment to ``just and democratic governance, economic freedom, and
    investments in the peoples of such country, particularly women and
    children.''

                   BASIC EDUCATION FUNDING AND THE G-8 SUMMIT

        Question. Mr. Secretary, you and I agree that basic education is
    important to our strategic and developmental interests around the
    world. You have spoken eloquently on the subject many times, and our
    National Security Strategy recognizes the link between poor education
    and reduced security. Unfortunately, the Administration's budget
    request would cut basic education support by $23 million under
    Development Assistance.
        Last December, 18 Senators and 63 Members of the House wrote to the
    President urging him to use the G-8 Summit this June as a venue to
    launch a significant U.S. Initiative on basic education and galvanize
    the world community to achieve the goal of education for all by 2015.
        Reports suggest the Administration is proposing that the Middle
    East be a principal focus of this year's G-8 Summit. I understand that
    priority. I do not think it is incompatible with a major initiative to
    promote basic education.
      --Please explain the proposed funding cut for basic education in the
            Development Assistance account in light of our strategic
            objectives.
      --Please comment on the possibility that the Administration might
            make this year's G-8 Summit the ``Basic Education Summit''.
        Answer. Education is a priority issue for this Administration. It
    is an important long-term investment in sustaining democracies,
    improving health, increasing per capita income and conserving the
    environment. Economic growth in developing countries requires creating
    a skilled workforce. President Bush has helped to give education a
    strong profile in the G-8 in recent years, and work is being carried
    forward actively both multilaterally and bilaterally. We are working
    internationally to support countries' efforts to improve the education
    and to get measurable results on enrollment and educational
    achievement.
        Since the submission of the USAID fiscal year 2005 Congressional
    Budget Justification, projections on basic education levels have
    changed somewhat for both fiscal year 2004 and fiscal year 2005. While
    there is a $22 million reduction in Basic Education funded by
    Development Assistance (DA) from fiscal year 2004 to fiscal year 2005
    (from $234 million to $212 million), the currently projected total for
    basic education from all accounts for both fiscal year 2004 and fiscal
    year 2005 is $334 million. The Administration intends to continue to
    maintain its strong interests in this area. In fact, the United States
    support for basic education from all accounts has more than doubled
    from fiscal year 2001 to fiscal year 2004, in recognition of its
    importance to giving people the tools to take part in free and
    prosperous societies.

                             FEMALE GENITAL CUTTING

        Question. It is my understanding that USAID is developing a
    strategy for eliminating female genital cutting around the world. I
    would like to call to your attention the work of the group Tostan in
    Senegal, which has impressed observers by inspiring the mass
    abandonment of female genital cutting in more than 1,200 villages since
    1997. This kind of extraordinary progress should be encouraged.
        Please provide me with (a) a timetable for the timely completion of
    USAID's strategy, (b) an indication of the likely role of multi-
    dimensional programs such as Tostan in that strategy, and (c) your
    sense of whether it might be possible to begin supporting effective
    programs such as Tostan even before the strategy is completed.
        Answer. (a) USAID will complete its Female Genital Cutting (FGC)
    Abandonment Strategy and implementation plan by early summer.
        (b) Multi-dimensional programs such as Tostan currently are
    integral to USAID's work. Accordingly, USAID incorporated eradication
    of FGC into its development agenda and adopted a policy on FGC in
    September 2000. To integrated this policy into programs and strategies,
    USAID:
      --Supports efforts by indigenous NGOs, women's groups, community
            leaders, and faith-based groups to develop eradication
            activities that are culturally appropriate and that reach men
            and boys as well as women and girls.
      --Works in partnership with indigenous groups at the community level,
            as well as with global and national policymakers, to reduce
            demand by promoting broader education and disseminating
            information on the harmful effects of FGC.
      --Collaborates with other donors and activists to develop a framework
            for research and advocacy and to coordinate efforts, share
            lessons learned, and increase public understanding of FGC as a
            health-damaging practice and a violation of human rights.
        (c) USAID currently funds Tostan projects in Senegal, Guinea,
    Burkina Faso, and Mali.
        In addition to our work with Tostan, USAID is involved with other,
    comparable organizations. For example, in Nigeria, USAID's local
    partners include the Women's Lawyers Association and Women's
    Journalists Association. These groups work with us in programs
    involving community media and traditional media advocacy to change
    social norms regarding FGC.
        We have conducted an evaluation for Tostan approach. Recently, we
    supported the dissemination of the findings and results at a symposium
    in Dakar, Senegal attended by national and international
    nongovernmental organizations as well as government ministries.
        In Mali, we worked with an important women's Islamic group which
    reversed a previous stance when they affirmed that female circumcision
    is optional and that the practice is not mandatory under Islam.
        Question. I would like to have clarification on the
    Administration's position on contributions to the Global Fund for
    fiscal year 2005. The President's budget provides on $200 million for
    the Global Fund in fiscal year 2005. This is less than half of the $547
    million Congress provided in 2004 and far less than the $1.2 billion
    needed from the United States if we are to meet one-third of the Fund's
    projected need for 2005. The Global Fund is a critical partner in the
    14 countries that are part of PEPFAR (President's Emergency Plan for
    AIDS Relief) and is needed, perhaps even more acutely, in all the other
    countries that PEPFAR won't reach. (The Global Fund currently provides
    grants in 122 countries.) The Global Fund is also currently the most
    important new source of funding to fight TB and malaria globally.
      --Why has the Administration proposed such severe cuts to the Global
            Fund?
      --How will the Global Fund be able to renew existing grant awards
            from Rounds 1-3, fund Round 4, and award grants in Rounds 5 and
            6 to the many countries that are equally needy yet left out of
            the 14 country initiative, if the United States commitment to
            the Global Fund is cut by more than half?
      --How can we provide leadership to the Fund while providing only $200
            million, which is only six percent of its budget and less than
            one-third of what is needed to keep existing programs running?
      --Will you support funding the Global Fund at a level of $1.2 billion
            to meet its 2005 need?
        Answer. The President's Emergency Plan for AIDS Relief made a $200
    million per year commitment of pledges for the five-year period of
    2004-2008. Our fiscal year 2005 request therefore remains the same as
    our request in fiscal year 2004. We were the first donor to make such a
    long-term pledge of support to the Global Fund, which together with our
    previous donations to the Fund still represents nearly 40 percent of
    all pledges and contributions through 2008.
        The American people can be extremely proud of our record of support
    for the Global Fund. Our support for the Global Fund is an integral
    part of the President's Emergency Plan. As you note, we cannot make
    every country a focus country, and there are other nations equally
    needy. When the United States contributes to a project of the Global
    Fund, it means that our dollars are leveraged in these grants by a
    factor of two, since the United States thus far has provided one-third
    of all Fund monies. So it is in our interests, as well as the interest
    of all people struggling against HIV/AIDS, malaria and tuberculosis, to
    see to it that the Global Fund is an effective partner in the fight
    against these diseases.
        The Fund nevertheless is a relatively new organization,
    particularly in comparison to the 20 years of bilateral HIV/AIDS
    programs carried out by the United States and other bilateral donors.
    Like all new organizations, it is quite understandably undergoing some
    growing pains. As of April 1, 2004, the Global Fund had disbursed
    approximately $280 million since the Global Fund's Board approved its
    first round of funding in January 2002. This compares to the first $350
    million under the President's Emergency Plan sent to our focus
    countries only three weeks after the program first received its
    funding.
        This is not to criticize the Global Fund for being slow--indeed,
    the United States is one of the donors that has been urging the Global
    Fund to move carefully to ensure accountability and avoid waste. It
    does highlight, however, the potential effectiveness of bilateral
    assistance where donors already have an in-country presence.
        We need both multilateral and bilateral avenues of assistance;
    neither the Global Fund nor bilateral donors can do it all. Other
    bilateral donors also need to step up with greater technical assistance
    to Global Fund projects, without which those projects will founder.
        In addition, the United States believes that in order for funds to
    be effectively and efficiently disbursed, Country Coordinating
    Mechanisms (CCMs) and Local Fund Agents (LFAs) must be actively engaged
    in overseeing the implementation of grant activities. The United States
    would like to see in particular, a stronger representation of the
    private sector, NGOs and people living with the diseases on CCMs, which
    are largely chaired by government ministries. Engaging a broader
    representation of various stakeholders will help reduce potential acts
    of corruption and will allow for a wider distribution of funds so that
    more individuals in need can be served.
        The Global Fund has already announced, in advance of the June Board
    meeting, that technically approved Round Four proposals will not exceed
    the cash already on-hand; so that at least through this Round, no
    funding gap exists. And we along with other donors believe that as a
    new organization, it may be best for the Global Fund not to press its
    current capacity too far, with Round Five not occurring until 2005 and
    Round Six in the following year. Its first projects will not come up
    for review and possible renewal until August 2004, and we will have a
    better sense at that time of its performance record and future needs.

                             TUBERCULOSIS TREATMENT

        Question. Will you push to expand overall U.S. funding to fight
    tuberculos to our fair share of the global effort--about $350 million--
    including our fair share to the Global Fund? (The United States is
    currently investing about $175 million in tuberculosis from all sources
    including our contribution to the Global Fund.)
        Answer. The fight against tuberculosis (TB) is a very high priority
    for the United States Agency for International Development (USAID) and
    the United States is the largest bilateral donor for international TB.
    Over the last several years, our funding commitment to international TB
    programs has increased dramatically--from $10 million in fiscal year
    1998 to about $84 million in fiscal year 2004. TB is a key area in our
    programs to address infectious diseases. We focus on strengthening TB
    control at the country level by supporting programs to expand and
    strengthen the World Health Organization recommended ``Directly
    Observed Treatment Short Course (DOTS)'' strategy in 34 countries,
    including activities in 16 of the 22 high-burden TB countries. We also
    support research related to new and improved treatment regimens, new
    diagnostics and approaches to improve the delivery of TB treatment to
    patients co-infected with TB and HIV/AIDS. In the near future, we will
    expand our research activities by initiating a new partnership with the
    Global Alliance for TB Drug Development. We work in close partnership
    with the National Institutes of Health (NIH) in the area of research,
    and with the Centers for Disease Control and Prevention (CDC) in
    supporting DOTS programs throughout the developing world.
        The U.S. Government also is the largest bilateral donor to the
    Global Fund; it has made almost one-third of the contributions (almost
    $1 billion) and more than one-third (almost $2 billion) of the pledges
    to date. At its eighth board meeting in June in Geneva, the Global Fund
    approved a fourth round of grants. The four rounds of grants will
    provide more than $3 billion over two years and more than $8 billion
    over five years to almost 130 countries. The two-year funding for the
    four rounds includes 13 percent (almost $400 million) for TB grants, 3
    percent (almost $100 million) for HIV/TB grants, and 1 percent (more
    than $20 million) for integrated (HIV, TB, and malaria) grants.
        The resources required to fight TB are considerable. While we have
    to continue with our investments, we need to balance increased funding
    to TB with other extremely important programs, such as malaria and
    child and maternal health. USAID and the Centers for Disease Control
    and Prevention (CDC) are working actively with the Stop TB Partnership
    and other donors to help meet those needs and to identify new resources
    to support TB control worldwide.
        Question. Will you ensure that the President's AIDS Initiative
    makes it a priority to expand access to TB treatment for all HIV
    patients with TB and links TB programs to voluntary counseling and
    testing for HIV?
        Answer. The Office of the U.S. Global AIDS Coordinator is committed
    to the appropriate coordination and integration of tuberculosis and
    HIV/AIDS services and programs. As you are aware, opportunistic
    infections, such as TB and malaria, play a fundamental role in the
    overall health of HIV infected individuals. TB is frequently the first
    manifestation of HIV/AIDS disease and the reason many people first
    present themselves for medical care.
        Since both tuberculosis treatment and HIV/AIDS treatment require
    longitudinal care and follow-up, successful TB programs may provide
    excellent platforms upon which to build capacity for HIV/AIDS
    treatment. The Emergency Plan for AIDS Relief will support TB treatment
    for those who are HIV-infected and develop HIV treatment capacity in TB
    programs. In addition, interventions that increase the number of
    persons diagnosed and treated for HIV/AIDS will increase the need for
    TB treatment and care services. Therefore, action is required to build
    or maintain necessary tuberculosis treatment capacity. For example,
    laboratories, clinical staff, community networks, and management
    structures used for TB control can be upgraded to accommodate HIV/AIDS
    treatment. Finally, because the prevalence of HIV infection is high
    among persons with tuberculosis, TB programs will be important sites
    for HIV testing in the focus countries as well as ensuring that TB
    testing is available in HIV testing, treatment and care sites.
        Question. Mr. Secretary, in September 2002, the National
    Intelligence Council released a report that identified India, China,
    Nigeria, Ethiopia and Russia, countries with large populations and of
    strategic interest to the United States, as the ``next wave'' where HIV
    is spreading rapidly. (India already carries one-third of the global TB
    burden, and because AIDS fuels TB, TB rates will also skyrocket as AIDS
    spreads.)
      --Congress mandated a 15th country be included as a part of the
            President's AIDS Initiative. The PEPFAR strategy report stated
            that this 15th country will be named shortly. Do you know that
            country this will be? If so, can you name the country?
      --If not, what consideration is being given to include India as the
            15th country, given the large number of HIV cases already
            present, the growing HIV problem that is likely to become a
            more generalized epidemic and India's strategic importance?
      --India has a remarkable TB program that has expanded over 40 fold in
            the last 5 years, treated 3 million patients, and trained
            300,000 health workers. I would suggest that India's TB program
            has important lessons for the scale-up of AIDS treatment
            programs in India and globally and we should support it and use
            it as a model in fighting HIV/AIDS. Will you support such an
            effort?
        Answer. Consultations regarding the selection of a 15th country
    have been underway. As a first step, Ambassador Randall L. Tobias, the
    U.S. Global AIDS Coordinator, has consulted with senior officials
    within the Administration, including at the U.S. Agency for
    International Development (USAID), the U.S. Department of Health and
    Human Services (HHS), and the U.S. Department of State, about possible
    candidate countries for the 15th focus country. From this consultative
    process, the following list of 39 countries were identified by one or
    more of the agencies named above as a potential candidate for the 15th
    focus country.

                         EMERGENCY PLAN FOR AIDS RELIEF

                15th focus country--initial candidate countries
        Albania, Armenia, Azerbaijan, Bangladesh, Belarus, Bolivia, Brazil,
    Burma, Cambodia, China, Croatia, Egypt, El Salvador, Estonia, Georgia,
    Guatemala, Honduras, India, Indonesia, Jordan, Kazakhstan, Kyrgystan,
    Latvia, Lithuania, Macedonia, Mexico, Moldova, Nepal, Nicaragua, Peru,
    Philippines, Romania, Russia, Tajikistan, Thailand, Turkmenistan,
    Ukraine, Uzbekistan, and Vietnam.
        Currently, these countries are being considered in the context of
    the ten standards listed below. These considerations provide a basis
    for comparative analysis and discussion regarding the potential
    candidates. It is important to note that these do not represent
    weighted criteria against which countries will be quantitatively
    evaluated. We do not expect that any one country will excel in all
    areas; instead, each country is being evaluated for its collective
    strengths and weaknesses.
      --Severity and Magnitude of the Epidemic.--The prevalence rate, the
            rate of increase in HIV infection, and the total number of
            people living with HIV/AIDS.
      --Commitment of Host-Country Government.--The basis of leadership's
            willingness to address HIV/AIDS and stigma and its desire to
            partner in an amplified response.
      --Host-Country commitment of resource potential.--The degree to which
            the host government has the capacity and the determination to
            make trade-offs among national priorities and resources in
            order to combat HIV/AIDS.
      --Enabling Environment.--The level of corruption, stigma, free press,
            state of government bureaucracies and the strength of bilateral
            partnerships, all of which support effective use of Emergency
            Plan resources.
      --U.S. Government In-country Presence.--Whether the country has a
            strong U.S. Government bilateral in-country presence by USAID
            and/or HHS.
      --Applicability of Emergency Plan Approaches.--Whether modes of
            transmission of HIV/AIDS in the host country are receptive to
            Emergency Plan interventions.
      --Potential Impact of Emergency Plan Interventions.--How many people
            can be reached and the effect of intervention on the trajectory
            of disease.
      --Gaps in Response.--Whether the U.S. Government's technical
            expertise, training, development and strengthening of health
            care systems and infrastructure would fill gaps in the current
            response.
      --Existence of Other Partners.--Whether non-governmental
            organizations and other partners have a substantial in-country
            presence and can facilitate rapid expansion of services and
            efficient use of funds.
      --U.S. Strategic Interests.--The Emergency Plan is ultimately a
            humanitarian endeavor. At the same time, applicability of U.S.
            strategic interests may further the sustainability of
            programming, engender new sources of support, and offer
            increased opportunities for partnerships.
        With regard to India, it is among the potential candidates for the
    15th focus country. As you know, India has the second largest
    population of HIV-infected persons in the world, second only to South
    Africa. Regardless of its selection as a 15th focus country, an
    amplified response is necessary to stem the potential for a generalized
    epidemic that would greatly increase India's HIV/AIDS burden. India has
    a well-developed national strategic plan to address HIV/AIDS and a
    comparatively large pool of health professionals to assist in its
    implementation.
        In addition, the President's Emergency Plan for AIDS Relief
    includes nearly $5 billion to support on-going bilateral HIV/AIDS
    programs in approximately 100 countries worldwide, including in India.
    The U.S. Agency for International Development (USAID) and the U.S.
    Department of Health and Human Services (HHS) are highly engaged and
    active in the HIV/AIDS response in India. India is a participating
    country in HHS' Global AIDS Program through which HHS allocated $2.3
    million for HIV/AIDS programs in India in fiscal year 2002, and $3.6
    million in fiscal year 2003. USAID allocated $12.2 million to HIV/AIDS
    prevention and care activities in India in fiscal year 2002, and $13.5
    million in fiscal year 2003. Additionally, both the U.S. Departments of
    Defense and Labor have HIV/AIDS programs underway in India. Numerous
    other donors, including governments, the private sector, multilateral
    organizations, and foundations, also fund HIV/AIDS programs in India.
        With regard to using India's tuberculosis program as a model for
    HIV/AIDS treatment, the President's Emergency Plan for AIDS Relief is
    focused on identifying and promoting evidence-based best practices in
    combating HIV/AIDS. The Directly Observed Therapy-Short Course (DOTS)
    treatment that has been so effective in India has served as a model for
    HIV/AIDS treatment programs in Haiti and elsewhere. It is important to
    note that unlike TB, HIV therapy is life-long and therefore DOTS will
    likely require modification to be utilized on a large scale. One of the
    most important lessons drawn from the DOTS program is its use of
    community health workers to expand access to treatment. The network
    model of treatment and care promoted by the President's Emergency Plan
    implements this lesson by using community health workers to expand
    access to HIV/AIDS treatment in rural areas where consistent access to
    medical health professionals is limited.
        The President's Emergency Plan for AIDS Relief also recognizes the
    importance of local context in implementing effective HIV/AIDS
    treatment programs. India's human resource capacity is significantly
    greater than that of many focus countries of the President's Emergency
    Plan, as is the reach of its health care infrastructure. These
    advantages play a significant role in India's tuberculosis treatment
    success, but represent limiting factors in access to treatment in the
    focus countries. Thus, the Emergency Plan, while actively implementing
    best practices identified from the success of DOTS therapy, focuses
    significant resources in building human capacity and strengthening
    health infrastructure in the focus countries to support expanded
    treatment programs.
        Question. The Administration has raised safety concerns about
    generic drugs manufactured overseas. In some cases, these concerns are
    legitimate and we would all agree on the importance of safety and
    quality. For this reason the WHO carefully evaluates the safety and
    effectiveness of drugs, whether manufactured overseas or in the United
    States. Yet, you have questioned the WHO approval process because it is
    not a regulatory body that requires clinical trials.
        In the last week, the Global Fund, the World Bank, UNICEF, and the
    Clinton Foundation negotiated an agreement that will significantly
    expand the use of fixed dose combination drugs made in India and South
    Africa. This will dramatically increase the number of AIDS patients
    being treated.
      --Given the urgent need of millions of AIDS victims, will you consent
            to allowing the purchase and use of drugs prequalified by WHO
            while you develop standards and a process to determine whether
            WHO meets the bar?
      --What is the timeline the Administration will use to put in place
            and judge whether the generic drugs manufactured overseas are
            safe and efficacious for purchase with bilateral dollars? How
            are you going to deal with the variations in the procurement of
            drugs? Will there be an collaboration with the coalition?
        Answer. Our policy for the procurement of antiretroviral treatments
    under the Emergency Plan is to provide drugs that are safe, effective,
    and of high quality at the lowest cost regardless of origin or who
    produces them to the extent permitted by law. This may include true
    generics, copies or brand name products. A true generic drug is one
    that has undergone review to ensure that it is comparable to an
    innovator drug in dosage form, strength, route of administration,
    quality, performance characteristics, and intended use. Drugs that have
    not gone through such a process are more accurately described as
    copies.
        On March 29-30, 2004, in Gaborone, Botswana, an international
    conference was held on fixed-dose combination (FDC) drug products. The
    conference included representatives of 23 governments, drug regulatory
    agencies, research-based and generic pharmaceutical industry, public
    health leaders, health care providers, advocacy groups (including
    persons living with HIV/AIDS), academia, and multilateral and non-
    governmental organizations. We were very pleased with the broad
    international support and participation that the conference generated,
    including from the conference co-sponsors: the Joint United Nations
    Program on HIV/AIDS (UNAIDS), the World Health Organization (WHO), and
    the Southern African Development Community (SADC).
        The conference successfully completed a vital step forward in
    developing commonly agreed-upon scientific and technical international
    principles to evaluate the quality, safety, and efficacy of FDCs for
    use in treating HIV/AIDS, tuberculosis, and malaria. The conference
    sponsors, representatives, and experts agreed that the final principles
    are not intended to and should not impede access to safe, efficacious,
    and high quality FDCs by people living with HIV/AIDS. The principles
    are not intended to address specific quality issues, or to develop
    clinical, therapeutic, or regulatory guidelines. Rather the document
    will provide scientific and technical principles for considering,
    developing, and evaluating FDCs for use in treatment. It is anticipated
    that the principles will be of use to regulatory agencies around the
    world, as well as to pharmaceutical companies and other organizations
    involved in developing and evaluating FDCs. In this regard, the
    principles will aid us in determining the standards we will expect
    fixed-dose combination drugs to meet to qualify for our purchase and
    expedite the process by which we can purchase lower-cost, non-patented
    FDCs with confidence.
        We have the highest respect for the WHO and its prequalification
    pilot program. However, the WHO is not a regulatory authority. We must
    be assured that the drugs we provide meet acceptable safety and
    efficacy standards and are of high quality.
        Under the Emergency Plan, we intend to support programs that will
    have a sustainable positive impact on health. If the medications in
    question have not been adequately evaluated or have had problems with
    safety or cause resistance issues in the future, we will be
    appropriately held accountable. We will continue to work with WHO and
    the international community on this important area. The finalization
    and adoption of the principles document for FDCs will be a major step
    forward for all. The final statement of principles is expected to be
    released during the second quarter of 2004.

                                MICROENTERPRISE

        Question. USAID has been a global leader in the area of
    microenterprise, but we need to coordinate our efforts with other major
    players--particularly the World Bank and the United Nations Development
    Programme (UNDP). The Microenterprise for Self-Reliance Act of 2000
    states that the Administrator of USAID and the Secretary of State
    should ``seek to support and strengthen the effectiveness of
    microfinance activities in the United Nations agencies, such as the
    UNDP, which have provided key leadership in developing the
    microenterprise sector.''
        What steps have you taken to strengthen the effectiveness of
    microfinance activities in the UNDP?
        Answer. The United Nations Development Program (UNDP) and USAID are
    both active members of the Consultative Group to Assist the Poor
    (CGAP), the 28-donor coordinating body for microfinance. USAID played a
    leading role in founding CGAP and the agency's financial and technical
    support has strengthened donors, including UNDP, in a number of ways.
    Over the past 18 months, for example, CGAP has coordinated a ``peer
    review'' process to increase aid effectiveness in microfinance.
    Seventeen donors, including USAID and UNDP, have been assessed through
    this process. In each case, the peer review team has identified very
    specific areas for improvement and has proposed steps to strengthen the
    strategic clarity, staffing, instruments, knowledge management, and
    accountability of the microfinance activities of the agency being
    reviewed. The findings have been shared with other donors. UNDP has
    taken a number of concrete steps to respond to the findings, and the
    Administrator of the UNDP provides leadership to the microfinance peer
    review initiative.
        USAID has also worked with other CGAP members to develop stronger
    donor practices, including the recent drafting of core principles for
    microfinance that is in the process of being endorsed by all CGAP
    members. At the last annual meeting, the CGAP member donors also
    endorsed new requirements for membership, including comprehensive
    reporting of microfinance activities and results. USAID has also used
    CGAP to collaborate on developing new tools for microfinance donors,
    such as common performance measures. USAID, UNDP and CGAP took the lead
    in developing specialized microfinance training for donor staff, and
    many staff from UNDP and other donors have benefited from the week-long
    course.
        USAID also takes responsibility for developing knowledge and ``how-
    to'' materials in specific areas, such as post-conflict microfinance
    and rural and agricultural finance. USAID invites participation from
    other donors in this work. Last month, for example, we convened a donor
    forum on recent innovations in rural finance and their implications for
    the donor community. Finally, in the field, USAID is often involved
    with UNDP in in-country donor coordination efforts in the microfinance
    arena.
        Question. I am concerned that the UNDP has not joined USAID's
    efforts (which are required by Public Law 108-31) to develop cost-
    effective poverty-assessment tools to identify the very poor and ensure
    they receive microenterprise loans.
        Will you work with Congress to ensure that UNDP expands its
    microfinance efforts for the very poor and uses the poverty measurement
    methods that USAID is developing so that we can be sure that these
    funds are reaching the people who need them the most?
        Answer. USAID has invited CGAP's technical and financial
    collaboration in developing the poverty assessment tools, as a means to
    ensure that the broader donor community is aware of and involved in
    this important work. An ambitious work plan is underway to have the
    tools designed, field-tested and ready for implementation by USAID in
    October 2005. Over the coming year, USAID will be testing preliminary
    tools in the field with diverse partners. This should begin to provide
    evidence of the value and practicality of the USAID tools for other
    donors, including UNDP. We hope that the tools will prove sufficiently
    valuable and cost-effective to suggest ways for donors and
    practitioners to better serve very poor clients.
        Question. Last year, the Appropriations Committee included language
    in the report that accompanied the Foreign Operations bill (S. Rept.
    108-106) indicating that ``The majority of microenterprise development
    resources should be used to support the direct provision of services to
    poor microentrepreneurs through these networks. Funding for
    administrative, procurement, research and other support activities not
    directly related to the delivery and management of services should be
    kept to a minimum.'' I am concerned to learn that by USAID's own
    reporting, only 45 percent of microenterprise funding in 2002--the most
    recent year for which detailed data are available--went to Private
    Voluntary Organizations, NGOs, credit unions and cooperatives (the
    groups that should be receiving the bulk of the monies) while the
    balance went to consulting firms, other for-profit organizations,
    business associations, research entities, and government agencies.
        What are you doing, or what can you do, to ensure that a majority
    of these funds will, in fact, reach the extremely poor women Congress
    intended for them to reach?
        Answer. USAID's microenterprise development support continues to
    benefit the very poor in a variety of ways. Using the measures
    established by the U.S. Congress, the portion of USAID's fiscal year
    2002 microenterprise development funding that benefited the very poor
    was 50 percent. The services provided to poor and very poor
    entrepreneurs included ``poverty loans,'' other financial services such
    as safe savings accounts, and other support including business
    development services. The Microenterprise for Self-Reliance Act of 2000
    defined poverty loan limits, by region, for purposes of assessing the
    extent of service to very poor clients. Poverty loans comprised a
    majority (63 percent) of all loans held by microfinance institutions
    reporting data in 2002.
        Just as women are disproportionately represented among the very
    poor, so too are they disproportionately represented among clients of
    USAID-supported microfinance institutions. Women clients constituted
    more than two-thirds of the total clients of all microfinance
    institutions in fiscal year 2002,\1\ and the trend is upward. The Near
    East has seen the most dramatic change: the percentage of women clients
    of USAID-supported microfinance institutions in the region has more
    than doubled since 2000, rising from 27 percent to 55 percent.
    ---------------------------------------------------------------------------
        \1\ Excluding Bank Rakyat Indonesia (BRI). BRI's numbers are
    typically excluded from analyses of USAID microenterprise development
    funding because the Bank's client base is so large it would skew the
    findings for the rest of the institutions that receive USAID support.
    ---------------------------------------------------------------------------
        USAID achieves these results in part through collaboration with
    private voluntary organization (PVO) networks, which are the backbone
    of U.S. assistance to the microenterprise development field. USAID has
    long supported the development of PVO networks (including cooperative
    development organizations). The share of USAID funding received
    directly by U.S. PVOs, NGOs, cooperatives and credit unions for
    services to poor entrepreneurs averaged around 46 percent in the 1997-
    2003 period.
        USAID works with other direct service providers as well, to ensure
    that ever more poor clients receive microenterprise support from USAID-
    assisted awardees. Banks, non-bank financial institutions, and business
    associations complement the agency's traditional partners and provide
    diverse financial and business services to poor microentrepreneurs. In
    fiscal year 2003, direct service providers received an estimated 58
    percent of total USAID microenterprise funding directly through grants,
    cooperative agreements, and contracts. This figure understates the
    extent of support to direct service providers. Of the funds awarded to
    consulting firms, a significant portion (often more than 50 percent of
    the contracted amount) is typically designated for direct service
    providers, including PVOs, NGOs, cooperatives and credit unions. Thus
    the actual share of USAID funding awarded to direct service providers
    is consistently over two-thirds of the total.
        USAID is a global leader in supporting innovations that benefit
    very poor women entrepreneurs. The following examples from India
    illustrate creative approaches to overcoming gender and socioeconomic
    disadvantages:
      --In India, the rural dairy initiative seeks to help 4,000 micro-
            scale dairying households in the Himalayan state of Uttaranchal
            move from subsistence to commercial production. With $750,000
            from USAID, AT India (a local non-governmental organization) is
            facilitating delivery of business development services and
            credit, helping very poor women in remote areas integrate into
            the economy and find profitable markets for their dairy
            products. Financial services are delivered through small
            producer networks called mutually aided cooperative societies;
            microcredit allows easy access to services as producers move
            from subsistence level to commercial scale of operations and
            enter into competition with government-sponsored dairies.
            Business services are supplied through private-sector providers
            and include milk and milk products collection, distribution and
            marketing businesses, as well as a range of veterinary,
            nutritional and other livestock services.
      --Also in India, SEWA (Self-Employed Women's Association) Bank has
            used the tools USAID developed under the AIMS (Assessing Impact
            of Microenterprise Services) project to develop a number of new
            products and services for its clients. The SEWA Bank recently
            introduced a one-day loan to meet the credit needs of vegetable
            vendors. In addition, it now offers a special savings account
            designed to pay for marriage expenses, and has started a
            financial literacy program to help its members improve their
            personal financial management. SEWA is also reviewing the
            appropriateness of its products for each of the major
            subsectors in which its members work. Future plans may include
            a loan product to finance girls' education.
        Question. I am concerned about signals that the State Department is
    backing off of its commitment to microenterprise. First,
    microenterprise is no longer mentioned in USAID's Congressional Budget
    Justification (CBJ). The ``Pillars and Programs of Special Interest''
    tables in the fiscal year 2002, fiscal year 2003, and fiscal year 2004
    CBJs all include a separate line for microenterprise under the
    ``Economic Growth, Agriculture, and Trade'' category. In the fiscal
    year 2005 CBJ, there is no reference to microenterprise in this table.
    Second, microenterprise is not mentioned at any point in the USAID
    Strategic Plan for 2004-2009. Finally, you made no mention of
    microenterprise in your prepared testimony.
        Are the State Department and USAID backing off their commitment to
    microenterprise? Given that there is no specific reference to
    microenterprise in this year's USAID CBJ, what level of microenterprise
    funding do you believe is appropriate?
        Answer. The State Department and USAID remain firmly committed to
    support for microenterprise development and recognize its important
    contribution to economic growth and poverty reduction. In fact, I wrote
    in the February 2004 issue of the State Department publication Economic
    Perspectives, ``I am proud of America's key role in promoting
    microenterprise. U.S. objectives are threefold: to improve access to
    financial services for the world's poor; to support access to business
    services that specifically address constraints felt by poorer
    entrepreneurs; and to improve the business climate through regulatory,
    legal and policy reforms. Our efforts are global, from Mali in Africa
    and Jordan in the Near East to Azerbaijan in Europe and Peru in Latin
    America. Our successes will be universal, with the concerted efforts of
    the international community.''
        In fiscal year 2003, USAID substantially exceeded the $175 million
    funding target set by Congress. In fiscal year 2004, the agency will
    once again surpass the agreed upon target of $180 million. Despite the
    very tight budget in fiscal year 2005, USAID considers a
    microenterprise funding target of $180 million to be appropriate for
    that year as well.
        Question. In the May edition of Vanity Fair (page 230), there is an
    article entitle ``The Path to War'' which states that one week prior to
    your speech at the U.N. Security Council in New York on February 5, the
    White House provided you with a lengthy document intended to serve as
    the basis of your UNSC speech that ``was a laundry list of intelligence
    gathered by the government about Iraq's weapons programs.'' According
    to the article, this dossier was ``cobbled together in Vice President
    Richard Cheney's office by a team led by Cheney's chief of staff, I.
    Lewis ``Scooter'' Libby, and John Hannah, the Vice President's deputy
    assistant for national security affairs.'' The article reports that you
    and your State Department staff rejected the White House dossier--which
    ultimately grew to over 90 pages--and started from scratch by drafting
    a new speech based on CIA analysis at CIA Headquarters.
      --Is this account accurate? If so:
        --Why did you and your State Department staff reject the White
                House-provided information as the basis for your Security
                Council speech? What specifically did you find
                objectionable in this material?
        --Why did you rely on the CIA--rather than your own intelligence
                analysts at the State Department's INR bureau--to draft
                this speech? Do you find INR's analysis on Iraq matter in
                any way deficient? Please elaborate. Why didn't you rely on
                intelligence analysis provided by DOD to make your Security
                Council speech.
        --How skeptical were you prior to the recent Iraq war regarding the
                quality of intelligence reporting provided by sources from
                the Iraqi National Congress?
      --If the account is not accurate, which parts are not accurate and
            what are the facts?
        Answer. Shortly after the President gave the State of Union speech
    in January 2003, a small interagency team under State Department
    leadership was sent to the CIA to work with Intelligence Community (IC)
    analysts to prepare my presentation to the U.N. Security Council.
    Working directly with DCI Tenet, the Deputy DCI, John McLaughlin, and
    key CIA, DIA, NSA, and other analysts, the team carefully reviewed,
    vetted and assessed a large volume of material from a variety of
    sources. I urged the IC to conduct a careful sourcing review of all of
    the intelligence information in my presentation. As a result, on a
    number of occasions during the preparation process, we decided to omit
    information from my presentation. It would not be appropriate for me to
    comment further on intelligence matters and this deliberative process.
    But I will say that I gave a draft of my proposed presentation to
    Assistant Secretary for INR, Carl Ford, and he in turn provided me his
    comments. Let me say also that INR's overall assessment of Iraq's BW
    and CW programs paralleled the Intelligence Community's assessment of
    those programs. Where the INR assessment of Iraq's WMD programs
    differed from the IC was in the status of Iraq's nuclear program. I
    reviewed that difference of views and decided to go with the view of
    the majority of the IC.
        The briefing I presented to the United Nations Security Council on
    February 5, 2003, was based on the best intelligence information that
    was available to us, available to the United Nations over a period of
    years, and available to the foreign intelligence services whom we
    worked with closely and for whose efforts we had great respect. We all
    believed that Saddam Hussein had the capabilities and the intent to
    produce WMD. We still believe that. At the time of my briefing, we also
    believed that stockpiles of prohibited weapons were in Iraq, including
    WMD. We were right about missiles and other conventional ordnance. But
    we haven't found stockpiles of chemical or biological weapons, nor have
    we found an active nuclear program.
        Question. The May edition of Vanity Fair contains an article
    entitled, ``The Path to War,'' and cites Sir Christopher Meyer, the
    British Ambassador to the United States, as stating that President Bush
    made clear in a White House meeting on September 20, 2001, with you,
    Dr. Rice, Prime Minister Blair and Ambassador Meyer, that he was
    determined to topple Saddam Hussein from power. According to the
    article, Amb. Mayer stated that ``[r]umors were already flying that
    Bush would use 9/11 as a pretext to attack Iraq . . . On the one hand,
    Blair came with a very strong message--don't get distracted; the
    priorities were al-Qaeda, Afghanistan, the Taliban. Bush said, ``I
    agree with you, Tony. We must deal with this first. But when we have
    dealt with Afghanistan, we must come back to Iraq.''
      --Do you recall this conversation? Is this an accurate
            characterization of that meeting? Please elaborate.
      --Other former Bush Administration officials--Richard Clarke, former
            Secretary O'Neill--have suggested that going to war with Saddam
            was a high Administration priority immediately after Sept. 11,
            or sooner. What is your recollection of specifically when the
            Administration made invading Iraq a high priority? What
            specific event or piece of intelligence was the catalyst for
            the decision to go to war against Iraq?
        Answer. After September 11, I spoke on numerous occasions with
    Principals, the President, and other foreign leaders and officials, to
    include PM Blair and Ambassador Meyer, regarding our response to the
    September 11 attack. These and other conversations were part of a
    process of careful and deliberate considerations that the President
    undertook as he considered how to respond to the September 11 attacks.
    It would not be appropriate for me to discuss specific, privileged,
    pre-decisional conversations with the President. As we know, in
    September 2001, the President directed the U.S. Government to respond
    against those who perpetrated or facilitated the 9/11 attack--Al-Qaeda
    and the Taliban regime in Afghanistan that provided al-Qaeda safehaven.
        The United States' decision, more than a year later, to undertake
    military operations against Iraq was based on Saddam Hussein's refusal
    to comply with U.N. Security Council resolutions and his defiance of
    the international community, his capabilities and intent to possess CW,
    BW, and nuclear weapons--in the past he had used CW against the
    Iranians and against his own people--and, as we believed then, his
    possession of stockpiles of CW and BW weapons as well as an active
    nuclear weapon development program. The Iraqi regime's failure to
    comply with the U.N. resolutions and to continue to defy the
    international community was made clear in the months after the Security
    Council unanimously passed resolution 1441 and after U.N.-mandated
    inspections resulted in reports to the Council that Iraq was not
    providing the immediate, unconditional and active cooperation that had
    been demanded by the Council.
        Question. You were recently quoted in the press (e.g., in the April
    3, 2004 editions of the Washington Post and The New York Times) as
    stating that your characterization of mobile biological laboratories in
    your presentation to the United Nations last year appears to have been
    based on faulty intelligence sources. In your 2003 Security Council
    speech, you cited information regarding mobile biowarfare labs, citing
    eyewitness accounts and saying, ``[w]e have firsthand descriptions of
    biological weapons factories on wheels and rails.''
      --Please elaborate on the nature and extent of your concern with the
            intelligence reporting on this issue--which at the time you
            indicated was based on multiple sources. What have you since
            found out about these apparently faulty intelligence sources,
            and where within the Intelligence Community do you believe that
            responsibility lies for not adequately vetting these sources?
      --Do you believe the U.S. Intelligence Community should initiate a
            reassessment of its vetting procedures for human source
            reporting?
      --Do you consider Intelligence Community reporting related to Iraq
            any more reliable now than it was before the recent war with
            Iraq?
        Answer. My presentation at the U.N. Security Council on February 5,
    2003 reflected the best and most rigorous intelligence, based on the
    information at hand at the time. In the preparation for that
    presentation at the United Nations, I had insisted on multiple sources
    for all intelligence. For example, there were four separate sources for
    the information I presented on the mobile biological labs. Recently,
    the Director for Central Intelligence (DCI) acknowledged that the
    Intelligence Community had previously had access to information that
    called into question the credibility of one of the sources on these
    labs. I understand that, because of this lapse, the DCI has publicly
    stated the Intelligence Community's review process will be scrutinized
    carefully and, where needed, adjusted. As for the other three sources,
    I also understand that their previously solid credentials are now also
    in question--but to go into this any further would cause my answer to
    be classified, so I will stop here. At the end of the day, the
    President, the Vice President, the other cabinet officers and I
    continue to have confidence that the Intelligence Community presents us
    and other senior U.S. officials with timely and credible information
    and its best analysis, based on what is known at any given time.
                                     ______

                Questions Submitted by Senator Mary L. Landrieu

        Question. How was the Administration so wildly off the mark on the
    costs, difficulties and duration of our involvement in Iraq?
        Answer. Many agencies worked to provide the best possible estimates
    of the resources that would be required to free Iraq from the
    repressive regime of Saddam Hussein and to ensure that Iraqis were able
    to form an independent, united, prosperous and peaceful Iraq after the
    conflict. The innumerable variables in making such calculations made
    this very difficult.
        I would refer you to my interagency colleagues for comment on their
    remarks.
        Question. Why were those working on post-war plans dismissed by
    DOD/the Administration? Why weren't the State Department and the Army
    War College listened to? Why hasn't CPA put to use the best practices
    espoused by numerous government agencies, especially since CPA is
    operating in fits and starts and cannot obligate the $18 billion in its
    hands?
        Answer. Our focus now is on supporting the reconstruction and
    political transformation of Iraq and preparing for a transition on June
    30 to Iraqi self-rule, the dissolution of CPA, and the establishment of
    an American embassy, not on revisiting previous differences of opinion.
        Our policy in Iraq has always been a fully cooperative, interagency
    effort, directed by the President. Given the magnitude of the
    undertaking, it should not be surprising that there were interagency
    disagreements at times over personnel and planning. State did its best
    to contribute constructively to the planning effort, and I am proud of
    our contributions.
        On your questions regarding CPA contracting policies, I would refer
    you to my CPA and DOD colleagues.
        Question. What happens to CPA Funds when CPA Disbands on June 30,
    2004? Mr. Secretary, Congress appropriated $18.4 billion for Iraqi
    reconstruction and humanitarian aid last October to the Coalition
    Provisional Authority. In November, the Coalition Provisional Authority
    established it would cease operations on June 30, 2004 and hand-over
    the governance of Iraq to an interim government. A recent CPA Inspector
    General Report states that the CPA has only obligated $900 million of
    the $18.4 billion for reconstruction, or 5 percent. That fact, in and
    of itself, is inconceivable, but I want to ask these questions.
        What happens to the remaining $17+ billion of taxpayer money
    allocated to the CPA when the CPA shuts its doors on June 30? Will it
    transfer to State? DOD? Will Congress have to reallocate these funds?
    What is State doing to fill the void left by CPA?
        Answer. After June 30, the Secretary of State will have
    responsibility for the continuous supervision and general direction of
    all U.S. assistance for Iraq, including the $18.4 billion Iraq Relief
    and Reconstruction Fund (IRRF). Each implementing agency (State,
    Defense, USAID, HHS, and Treasury) will execute assistance programs
    according to its own regulations under the overall guidance of U.S.
    Mission in Baghdad. The Coalition Provisional Authority expects to have
    obligated $5 billion of the $18.4 billion to programs in Iraq by June
    30. OMB has thus far allocated about $11 billion to appropriate
    implementing agencies, and not a single allocation to CPA or its
    successor. In addition, $2.5 billion of 2003 Iraq reconstruction
    assistance continues to fund thousands of projects as money is
    obligated and disbursed to those projects. Funds are allocated
    according to the spending plan described in the quarterly 2207 report
    to Congress. The State Department is working to ensure a smooth
    transition from CPA authorities to the U.S. Mission Baghdad. Program
    Management Office (PMO) policy oversight and general oversight
    functions will transfer to the Mission, while many of its projects,
    particularly in the construction sector will continue to be supervised
    by a temporary organization called the Project and Contracting Office.
        Question. Mr. Secretary, on March 31, you pledged an additional $1
    billion in U.S. funding to the reconstruction of Afghanistan. President
    Karzai says Afghanistan requires at least $27 billion in foreign aid
    over the next five years. The donor conference garnered a total of $4
    billion for this year. I applaud the donors and the Administration's
    pledge, but I have several questions.
        When does the State Department anticipate sending the request for
    an additional $1 billion to Congress: Fiscal year 2005? Fiscal year
    2006? As a supplemental? How will the money be used? Is the State
    Department committed to allocating at least 10 percent of this pledge
    toward the plight of Afghan women? For how many years will the United
    States continue to provide economic assistance to Afghanistan? How much
    funding will be allocated during that time-frame?
        Answer. In fiscal year 2004, the United States is providing $2.2
    billion for Afghanistan's reconstruction, which includes the $1 billion
    pledge announced in Berlin. In fiscal year 2005, we have requested an
    additional $1.2 billion for Afghanistan. This money will be used for a
    wide variety of programs and purposes, including security assistance
    (building the Afghan National Army, training national police, counter-
    narcotics, rule of law, etc.), reconstruction and development projects
    (road construction, health clinics, education, power generation, etc.)
    humanitarian relief (shelter construction, etc.), and economic growth
    initiatives (capacity-building, domestic revenue generation, etc.).
    Though no decisions have yet been made regarding the precise allocation
    of future year funds, support for women and girls in Afghanistan
    remains a high priority, and we will continue to allocate funds for
    these initiatives.
        Since fiscal year 2001, the United States has provided over $4
    billion total for Afghan reconstruction, and as Secretary Powell has
    stated on numerous occasions, we are committed to Afghanistan for the
    long haul. We must ensure that Afghanistan never again reverts to a
    sanctuary for terrorism, a challenge that will require significant
    resources over a prolonged period of time. However, the progress made
    to date has been substantial, and we are confident that with continued,
    steady support, Afghanistan will ultimately re-join the community of
    nations as a stable, democratic, and self-reliant partner.
        Question. The Antiterrorism Assistance program (ATA) has been a
    valuable tool to train international security forces and police forces
    in antiterrorism methodologies and tactics. I am proud Louisiana has
    played such an active role in ATA. I understand the State Department is
    committed to providing such training overseas for programs in
    Afghanistan and Iraq and for the establishment of regional training
    centers closer to the home nations of the participants in ATA. It
    certainly makes sense to conduct training in Afghanistan and Iraq, but
    the other overseas training is certainly a deviation from the
    commitments the State Department made to the State of Louisiana. At the
    behest of the State Department, the State of Louisiana committed
    resources to expand its training infrastructure to accommodate
    increased training. If the State Department continues to move ATA funds
    overseas, programs in Louisiana will be threatened.
        Is the State Department committed to upholding the pledges it made
    to Louisiana and other states to conduct ATA within the United States?
    Will State continue to fund ATA within the United States at fiscal year
    2002 levels?
        Answer. We share your view that the Antiterrorism Assistance
    program has been an extremely valuable tool in the United States
    Government's effort to fight the war on terrorism. Many allied nations
    have the will to combat terrorism, but ATA helps them develop and
    maintain the skill they need in a variety of disciplines.
        Louisiana State University and the Louisiana State Police Academy
    have been valuable partners in antiterrorism training over the years,
    as has New Mexico Tech in Socorro, NM, the Nonproliferation and
    National Security Institute in Albuquerque, NM, the Federal Law
    Enforcement Training Center in Brunswick Georgia, the Pacific Northwest
    National Laboratory in Hanford, Washington, the ATF K-9 Training Center
    in Front Royal, VA, the FBI Academy in Quantico, VA, Fort A.P. Hill in
    Bowling Green, VA, the ATF laboratory in Beltsville, MD, the Armed
    Forces Institute of Pathology in Rockville, MD, and a number of other
    U.S. facilities and institutions.
        Since September 11, 2001, ATA has also provided intensive in-
    country training programs in key countries such as Pakistan, Indonesia,
    Afghanistan, Colombia, and Iraq. The Department of State does not plan
    to discontinue U.S.-based training in favor of overseas training.
    Rather, the Coordinator for Counterterrorism, with my concurrence, has
    tasked ATA with broadening its menu of training options to include in-
    country programs, fly-away courses, emergency antiterrorism assistance
    training teams, and customized consultations as well as standard
    training at U.S. facilities.
        We believe ATA has responded well to the demand for flexibility in
    responding to shifting terrorist threats. The ATA budget for training
    has increased in recent years, and the Louisiana institutions continue
    to meet training requirements effectively. However, there is no way the
    Department can guarantee specific levels, types and locations of
    training into the future, as those decisions will depend upon as yet
    undetermined requirements and funding levels. Please be assured that
    the Department will continue to utilize all platforms that prove
    effective in improving the counterterrorism capabilities of our partner
    nations.

                         SHORTFALL OF ARABIC LINGUISTS

        Question. Secretary Powell, I fully support your efforts to recruit
    the next generation of diplomats through the DRI. Not only is
    recruiting vital to our armed forces but it is also imperative for
    State to recruit Foreign Service employees. Foreign language training
    is critical to the success of our members of the Foreign Service. More
    importantly these men and women must speak the right languages.
        What efforts are being taken to ensure the State Department has
    sufficient numbers of speakers of languages such as Arabic, Farsi, and
    Pashtun?
        Answer. The Department of State has developed and started to
    implement a coherent, integrated strategic plan for meeting its
    language proficiency goals. This plan involves close collaboration
    among the Bureau of Human Resources, the Foreign Service Institute, and
    the functional and regional bureaus and posts with foreign language
    requirements. Our approach involves targeted recruitment, credit in the
    hiring process for language proficiency, and incentives to acquire,
    maintain, improve language skills to highly advanced levels, and to re-
    use over a career the critical and difficult languages that are in high
    demand as we build the language cadres needed. This strategic plan is
    reinforced by the high priority value that the Department's corporate
    culture places on language proficiency among our officer corps.

                               CRITICAL LANGUAGES

        New Policy on Hiring Preference.--To boost our language capability,
    in December 2003 the State Department instituted special preference for
    hiring into the Foreign Service, applicable to both generalists and
    specialists. This preference is given to candidates who speak languages
    for which our current needs are critical. These languages include
    Arabic, Chinese (Cantonese or Standard/Mandarin), Indic languages (e.g.
    Urdu, Hindi, Nepali, Bengali, Punjabi), Iranian languages (e.g. Farsi/
    Persian, Dari, Tajiki, Pashto), Japanese, Korean, Russian, and Turkic
    languages (e.g. Azerbaijani, Kazakh, Kyrgyz, Turkish, Turkmen, Uzbek).
    This list is a reflection of foreign policy objectives, language-
    teaching considerations, and supply of speakers among current
    employees, so it is subject to revision as needs evolve.
        Specifically, candidates with a speaking score of 2 or higher on a
    1 to 5 scale in a critical needs language get a 0.4 point increase on
    the hiring registers, while 0.17 remains the increase for other
    languages. Candidates who benefit from the new policy have already
    passed the relevant Foreign Service entrance exams. As a result of this
    policy, generalist candidates who have their scores adjusted upward are
    moved up on the list of eligible hires, thereby increasing the chances
    that they would be offered an appointment into the Foreign Service.
        Language skills factor prominently in the assignments process,
    affecting job opportunities for the Foreign Service, and the promotion
    process. In addition, Language Incentive Pay provides financial
    incentives for the acquisition, improvement and repeated use of
    languages. This emphasis on languages throughout a career is balanced
    and appropriate.
        A priority has been to develop and expand our Arabic language
    programs to support efforts in Iraq, Afghanistan, Libya, and elsewhere
    in the Middle East. Arabic language training has more than doubled
    between fiscal year 1999 and fiscal year 2003.
        FSI has recently published a ``Language Continuum'' that is
    parallel to FSI's other career and training-related continua. A
    collaborative effort with the personnel system and the operational
    bureaus, this Continuum outlines for the Department and its employees a
    way to meld the principles of strategic workforce planning and the
    ``Open Assignments'' system, by serving as a roadmap to weave language
    proficiency development and use into a successful career progression.
    The Language Continuum is designed to help Foreign Service personnel
    plan a long-term integrated approach to language learning and use,
    leading the motivated and talented more often to attain the advanced
    language skills needed. In partnership with regional bureaus, posts,
    and the Bureau of Human Resources, ``beyond S-3/R-3'' training
    opportunities may be arranged at select educational institutions
    overseas, at a FSI field school or at FSI/Washington. (``S-3/R-3''
    represents a speaking/reading General Professional Proficiency.) This
    targets the need to continuously build and expand the cadre of
    sophisticated users of critical languages, who can better understand
    the positions and assumptions of others and communicate our own
    perspectives more cogently and persuasively in order to effectively
    defend and advance the interests of the United States.
        The Language Continuum provides a ``roadmap'' to systematically
    guide employees at different stages in their careers through the
    multiple training opportunities; outlines a strategic plan for
    achieving the language competency needed for tenuring and for promotion
    to the senior level; describes available resources beyond course
    offerings, including such resources as home stays, guided self-study
    and language learner counseling; addresses the language-training needs
    of eligible family members; and provides learning tips to foster more
    effective language proficiency, and use and improvement to advanced
    levels.

                                GIRLS' EDUCATION

    Background
        Question. There are about 70 million girls not attending school in
    the developing world. They make up three-fifths of the 115 million
    children out of school. The 2003/04 EFA Global Monitoring Report found
    that 70 countries are currently at risk of not achieving the Millennium
    Development goal of gender parity (an equal number of girls and boys in
    school) by 2005.
        Research shows that improving girls' education is one of the most
    effective development investments countries can make. Providing
    education for girls:
      --Boosts economic productivity
      --Lowers maternal and infant mortality rates
      --Reduces fertility rates
      /--Increases life expectancy
      --Protects against HIV/AIDS
      --Improves educational prospects for the next generation
      --Promotes better management of environmental resources
        Encouraging girls' enrollment in school is a focus of basic
    education funding. The Administration's request for basic education
    under DA in fiscal year 2005 is $212 million, representing a $23
    million cut from the fiscal year 2004 appropriation under DA.
        Mr. Secretary, the effectiveness of educating girls is very well
    documented.
        Educating girls:
      --Boosts economic productivity
      --Lowers maternal and infant mortality rates
      --Reduces life expectancy
      --Protects against HIV/AIDS
      --Improves educational prospects for the next generation
        Getting more of the 70 million girls who are currently out of
    school into classrooms is one of the primary goals of the basic
    education program.
        Given these benefits, I am very concerned by the Administration's
    request for a $23 million reduction in basic education support under
    Development Assistance.
        Could you please comment on the rationale behind this?
        Answer. I couldn't agree with you more on the value of girls'
    education. Education can lead to improved lives and livelihoods not
    only for girls but ultimately impacts entire families and communities.
    In addition to the points you have made, I would add, that in these
    troubled times around the world, literacy and learning are the
    necessary foundation for both democracy and development. That is why
    education is a strong priority for this Administration.
        While there is a small decrease in the fiscal year 2005 Development
    Assistance account for basic education, funding from all USAID-managed
    accounts is currently projected to be the equivalent of fiscal year
    2004, $334 million, which excludes funding from recent supplementals. I
    would also like to note that total funding for basic education programs
    has more than doubled since 2001.

                  COORDINATED EDUCATION AND HIV/AIDS STRATEGY

        Question. There is strong evidence that keeping children in
    school--especially girls who are much more susceptible to the HIV/AIDS
    virus--reduces the chance that they will become infected.
        In Swaziland, UNAIDS found that 70 percent of high school age
    adolescents attending school are not sexually active, while 70 percent
    of out-of-school adolescents are sexually active.
        A World Bank study called A Window of Hope reports that in
    Zimbabwe, girls who received primary and some secondary education had
    lower HIV infection rates--a trend that extended into early adulthood.
        Despite this, the focus has been on using schools as a venue for
    teaching about AIDS, rather than recognizing the protective nature of
    education--that simply being educated helps protect people from
    infection.
        Given the value of education as the most effective vaccine against
    AIDS that we currently have:
        Doesn't basic education--and not just AIDS education--have to be
    central to AIDS prevention activities?
        Answer. Basic education is the foundation for success in the
    majority of the Agency's development activities, including agriculture,
    private sector development, and health. To be successful in the fight
    against HIV/AIDS, it is essential that USAID continue working around
    the world to promote completion of basic education for all and
    integrate AIDS prevention messages into all of the other sectors,
    including education.

                  COORDINATED EDUCATION AND HIV/AIDS STRATEGY

        Question. Should the United States have a coordinated strategy on
    basic education and HIV/AIDS prevention?
        Answer. The U.S. Agency for International Development has both
    prevention and mitigation strategies that link basic education to
    lessening the impacts of HIV/AIDS. At the primary level, USAID has
    model curricula to raise learner awareness of the disease and self-
    protection and parallel curricula for teacher training--increased
    awareness and basic learning skills combined do contribute over time to
    lowered rates of infection. USAID is also supporting a technical
    position at UNESCO to advance basic education and HIV/AIDS strategies
    at a global level, and through UNESCO, as a member of UNAIDS, with in-
    country strategies.
        At the mitigation level, USAID developed a model to project the
    work force impacts of the disease. This model guides how the education
    sector needs to respond to assure continued human resources necessary
    for countries and sectors to avoid system and economic collapse, e.g.,
    teachers and managers necessary to meet education sector demands. To
    offset education work force losses in countries worldwide, a multi-
    lingual Internet education portal has been built to train teachers and
    provide resources they need.
        Question. ``The worldwide advancement of women's issues is not only
    keeping with the deeply held values of the American people; it is
    strongly in our national interest. Women's issues affect not only
    women; they have profound implications for all humankind. We, as a
    world community cannot even begin to tackle the array of problems and
    challenges confronting us without the full and equal participation in
    all aspects of life.''----Sec. Powell, March 7, 2002

        Mr. Secretary, your words before the United Nations in March 2002
    imply that you and your administration understand the important role
    advancing the rights of women has in the reconstruction of a nation,
    particularly a nation where women's rights have been violently
    oppressed for decades.
        Yet, since that time, for whatever reason your administration has
    seemingly chosen not to pursue an aggressive, long-term agenda directly
    aimed at protecting and improving the lives of women in Afghanistan and
    Iraq. Instead, we have employed a ``rising tide lifts all boats''
    strategy based on a misperception that overall aid given by the United
    States will inevitably benefit all members of the Afghan and Iraqi
    population. In fact, in your 2003 report on the status of women and
    children you state:

        ``Overall U.S. humanitarian and reconstruction assistance [in
    Afghanistan] will be over $1 billion in fiscal year 2002 and 2003
    combined. Most of these funds are intended to benefit the country and
    Afghan families as a whole--men, women and children alike. Some aid is
    targeted specifically toward Afghan women, children and refugees. This
    combination means that it remains impossible to define a distinct
    dollar amount devoted just to the three population groups feature in
    this report.''

        Making matters worse, while the entire report is about current
    systemic barriers to reconstruction such as security, economic
    development, health care, and education, there is almost no mention of
    the unique barriers to women in these areas.
        Mr. Secretary, in the words of Martin Luther King ``Peace is not
    just the absence of conflict, it is the presence of justice.''
    Particularly justice for those for whom justice has been denied. In
    other words, the advancement of civil rights requires aggressive action
    and targeted programs aimed at eliminating discrimination and promoting
    equality. I know that you know this to be true. Why, then, do your
    recent policies in this area continually fail to acknowledge this
    reality?
        Answer. The United States works proactively with women's issues in
    Afghanistan and Iraq, and has done so from the inception of both
    programs. A list of activities addressing women in Afghanistan and Iraq
    is attached.
        In Afghanistan, the United States Agency for International
    Development (USAID) assists Afghan women through directed grants to
    non-governmental organizations and integration into broad programs. We
    are now combining all of our smaller women's activities into multi-year
    programs. Early in its Afghanistan program, USAID used small grants to
    help establish the Ministry of Women's Affairs, support women's NGOs,
    and provide women with job opportunities. USAID has also ensured
    support for women into humanitarian programs, such as food aid. The
    current program intends to establish and fund seventeen women's
    centers.
        In Iraq, USAID bases its reconstruction programs on the belief that
    women's consent and active participation matters in politics, economic
    opportunity, and social settings. Since April 1, 2003, USAID has
    focused on women's equality and empowerment through local government
    and civil society organizations--two avenues that allowed the most
    immediate and direct impact on their lives. USAID helped build the
    social structures needed to support Iraq's women with increased school
    enrollment for girls and health programs aimed at mothers.
        Reaction to explicit changes in women's roles typically occurs
    about a year after programs begin. This implies that civil society
    organizations and female leaders will be challenged in 2004 even as
    they move beyond their initial footholds. To support women in the
    second year of reconstruction, USAID programs allow for a sustained
    approach to women's equality. In governance, legal changes will include
    codifying women's rights, solidifying the role of women in government,
    and supporting women's civil society organizations. Economic programs
    which target women and give them new opportunities are also being
    developed.
        Question. Mr. Secretary, as you know, the U.S. sponsored resolution
    calls on nations to eliminate laws and regulations that discriminate
    against women and prevent them from participating in society and the
    political process. I understand that you and your administration have
    been working with leaders in both Iraq and Afghanistan to ensure that
    their constitutions recognize and protect the rights of women.
    According to recent reports, your administration remains confident that
    the Afghan and Iraqi Constitutions ``will make acceptable provisions on
    the issue of women's rights.''
        It is my understanding that both constitutions contain a provision
    that states that when there is a conflict between the constitution and
    the law of Islam, the law of Islam is supreme. While other Islamic
    nations have established systems that recognize the sanctity of
    religion and the importance of human rights, what assurances to you
    have that religion will not be used as a means of discrimination
    against women?
        Answer. None of the world's major religions, including Islam,
    discriminate against women. It is traditional practices and
    interpretations of religious teachings that result in discrimination.
    Governments that permit women to be made subservient to men can be
    expected also to make men subservient to men, and are antithetical to
    democracy. There are numerous instances, not only in Islamic countries,
    where conservative elements in strongly patriarchal societies attempt
    to limit a recent extension of civic and economic rights to women.
    Afghanistan's constitution states that ``no law can be contrary to
    sacred religion of Islam and the values of this constitution,'' which
    includes guarantees for the rights of women. A reliance on Islamic
    jurisprudence applies only to laws or provisions not covered by the
    constitution. The United States, as an external influence in Iraq and
    Afghanistan, can help blunt reactionary efforts against recent gains by
    women through explicit inclusion of females in governance, economic and
    social programs.
        Question. Last Wednesday, at a donors' conference in Berlin,
    President Karzai said his country would need $28 billion over the next
    seven years to fully recover from decades of war. Experts say that
    without this funding, most of which will have to come from
    international donors, the reconstruction efforts will likely fail.
    Correct me if I am wrong, but it is my understanding that our total
    contribution to non-military reconstruction efforts in Afghanistan
    since 2002 has been a little over $2 billion. At the same time, in one
    year alone, the United States has allocated $18.4 billion for similar
    reconstruction in Iraq.
        Mr. Secretary, no one on this committee would suggest that
    reconstruction in either of these two countries is any more or less
    important than the other but in terms of strategic planning and long
    term goals, these disparate allocations don't make sense.
        First, if one looks at the indicators of need for non-military
    reconstruction it is clear that there is a greater need for efforts in
    Afghanistan than our budget reflects.

    ------------------------------------------------------------------------
                                                        Iraq     Afghanistan
    ------------------------------------------------------------------------
    Literacy Rate (percent).......................           40           36
    Women (perecent)..............................           29           21
    Infant Mortality Rate.........................     55/1,000    143/1,000
    GDP (dollars in billions).....................          $58          $19
    ------------------------------------------------------------------------

        Second, according to a recent IG report, of the $18.4 billion we
    allocated, only $900 is under contract. In other words, we are not
    spending 95 percent of the money we have allocated for reconstruction
    in Iraq.
        These disparities may lead some to suspect that there are ulterior
    motive at hand here. Can you address this criticism?
        Answer. USAID programmed approximately $1 billion in fiscal years
    2002 and 2003 combined and an additional $1 billion in fiscal year
    2004. The Administration's ``Accelerating Success'' initiative was
    intended to significantly increase both the amount and the impact of
    assistance. While this is a sizeable amount, and we thank Congress for
    its generosity, the needs in Afghanistan will require a sustained
    commitment for the next several years.

                              SUBCOMMITTEE RECESS

        Senator McConnell. Thank you all very much. The
    subcommittee will stand in recess to reconvene at 2:30 p.m. on
    Wednesday, April 21, in room SD-124. At that time we will hear
    testimony from the Honorable J. Cofer Black, Coordinator,
    Office of the Coordinator for Counterterrorism and the
    Honorable Andrew Natsios, Administrator, United States Agency
    for International Development.
        [Whereupon, at 4:30 p.m., Thursday, April 8, the
    subcommittee was recessed, to reconvene at 2:30 p.m. Wednesday,
    April 21.]

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                           WEDNESDAY, APRIL 21, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:35 p.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Mitch McConnell (chairman)
    presiding.
        Present: Senators McConnell, Shelby, DeWine, Leahy, and
    Durbin.

               UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

    STATEMENT OF ANDREW S. NATSIOS, ADMINISTRATOR

                              DEPARTMENT OF STATE

    STATEMENT OF AMBASSADOR COFER BLACK, COORDINATOR FOR
                COUNTERTERRORISM

                 OPENING STATEMENT OF SENATOR MITCH MC CONNELL

        Senator McConnell. The hearing will come to order. I want
    to welcome Mr. Natsios and Ambassador Black. Thank you for
    being here today. Our hearing is on foreign assistance and
    international terrorism, a topic of keen interest, not only to
    our subcommittee but to all the people in the world who are
    free and would like to remain so. Senator Leahy, I believe, is
    on his way. We will both make some opening remarks and then be
    followed by the two of you, first Mr. Natsios and then you,
    Ambassador Black. In the interest of time I'm going to ask our
    witnesses to summarize their remarks and then we will proceed
    to 5-minute rounds of questions and responses.
        A final piece of housekeeping. Due to last minute travel
    requirements, HIV/AIDS Coordinator Tobias will be unable to
    participate in the April 28 hearing on the fiscal year 2005
    HIV/AIDS budget request. Staff will be working with the State
    Department to reschedule the hearing for some time next month
    and we will make an announcement once that date has been
    reached.
        I want to make a few brief historical reflections.
    Understanding the looming threat of the axis powers to America,
    President Roosevelt said in his Arsenal of Democracy speech in
    December 1940, that ``no man can tame a tiger into a kitten by
    stroking it. There can be no reasoning with an incendiary bomb.
    We know now that a nation can have peace with the Nazis only at
    the price of total surrender.'' So it is with the ongoing war
    on terrorism. Our current-day enemies are as ruthless as the
    Nazis and as devious as the kamikaze pilots who struck without
    warning, originally at Pearl Harbor and later when then crashed
    into our ships. From trains in Spain to nightclubs in Bali and
    Tel Aviv the terrorist hydra indiscriminately targets innocent
    men, women, and children in misguided jihad that pits
    fanaticism against freedom. To be sure there can be no
    armistice or peace treaty with terrorists. With the continued
    participation of other world democracies this scourge must be
    managed and controlled like the disease that it is. Our modern
    day arsenal of democracy is vast and potent. From precision-
    guided munitions to basic education programs in the Muslim
    world, America has at hand the tools and the capacity to
    militarily confront terrorism on foreign shores while
    simultaneously undermining social and economic conditions that
    offer terrorists safe haven and breeding grounds. And under
    President Bush we have tested and solid leadership. The weapons
    under this subcommittee's jurisdiction are numerous and include
    the obvious, the State Department's Anti-Terrorism Assistance
    Program and Terrorist Interdiction Program and the more subtle
    USAID's child survival and basic education programs. Although
    many advocate additional resources for foreign assistance
    programs it is clear this administration understands the
    importance of U.S. foreign aid in the war against terrorism.

                               PREPARED STATEMENT

        Testifying on the fiscal year 2005 budget request before
    this subcommittee earlier this month, Secretary Powell
    indicated as follows: ``to eradicate terrorism the United
    States must help create stable governments in nations that once
    supported terrorism, go after terrorist support mechanisms as
    well as the terrorists themselves, and help alleviate
    conditions in the world that enable terrorists to bring in new
    recruits.'' When it comes to the budget request, there may be a
    difference of dollars but not direction. We all know now that
    repression in Cairo and Riyadh translates into terrorism in New
    York, Virginia, and Pennsylvania.
        Let me just close with an observation on Southeast Asia.
    With a highly combustible mix of corrupt and undemocratic
    governments and regional terrorist groups with linkage to Al
    Qaeda, that region may very well become our next front in the
    war on terrorism. The hydra has already appeared in the
    Philippines, Indonesia, Thailand, Malaysia, Singapore, and
    Cambodia. It is imperative that we provide sufficient resources
    to foreign assistance programs in that region--whether basic
    education in Jakarta or democracy promotion in Phnom Penh--to
    deny footholds for Islamic extremism. Should we fail to do so
    the results will be catastrophic for the region and for the
    world. Regional terrorists are undoubtedly aware of the massive
    flow of trade and oil through the Strait of Malacca.
        [The statement follows:]

                 Prepared Statement of Senator Mitch McConnell

        I want to begin my remarks with a brief historical reflection.
        Understanding the looming threat of the Axis powers to America,
    President Franklin Roosevelt said in his ``Arsenal of Democracy''
    speech in December 1940 that ``no man can tame a tiger into a kitten by
    stroking it. There can be no reasoning with an incendiary bomb. We know
    now that a nation can have peace with the Nazis only at the price of
    total surrender.''
        So it is in the ongoing war against terrorism.
        Our current day enemies are as ruthless as the Nazis and as devious
    as the kamikaze pilots who struck without warning at Pearl Harbor. From
    trains in Spain to nightclubs in Bali and Tel Aviv, the terrorist Hydra
    indiscriminately targets innocent men, women and children in misguided
    jihad that pits fanaticism against freedom.
        To be sure, there can be no armistice or peace treaty with
    terrorists. With the continued participation of other world
    democracies, this scourge must be managed and controlled like the
    disease that it is.
        Our modern day arsenal of democracy' is vast and potent. From
    precision guided munitions to basic education programs in the Muslim
    world, America has at hand the tools and capacity to militarily
    confront terrorism on foreign shores while simultaneously undermining
    social, political and economic conditions that offer terrorists safe
    haven and breeding grounds. And under President Bush, we have tested
    and solid leadership.
        The weapons' under this Subcommittee's jurisdiction are numerous
    and include the obvious--State's Antiterrorism Assistance Program and
    Terrorist Interdiction Program--and the more subtle--USAID's child
    survival and basic education programs. Although many advocate
    additional resources for foreign assistance programs, it is clear this
    Administration understands the importance of U.S. foreign aid in the
    war against terrorism.
        Testifying on the fiscal year 2005 budget request before this
    Subcommittee earlier this month, Secretary Powell stated: ``[t]o
    eradicate terrorism, the United States must help create stable
    governments in nations that once supported terrorism, go after
    terrorist support mechanisms as well as the terrorists themselves, and
    help alleviate conditions in the world that enable terrorists to bring
    in new recruits.''
        When it comes to the budget request, there may be a difference of
    dollars--but not of direction. We all know now that repression in Cairo
    and Riyadh translates into terrorism in New York, Virginia and
    Pennsylvania.
        Let me close with an observation on Southeast Asia. With a highly
    combustible mix of corrupt and undemocratic governments and regional
    terrorist groups with linkages to al-Qaeda, that region may very well
    become our next front in the war on terrorism. The Hydra has already
    appeared in the Philippines, Indonesia, Thailand, Malaysia, Singapore
    and Cambodia. It is imperative that we provide sufficient resources to
    foreign assistance programs in the region--whether basic education in
    Jakarta or democracy promotion in Phnom Penh--to deny footholds for
    Islamic extremism.
        Should we fail to do so, the results will be catastrophic for the
    region and the world. Regional terrorists are undoubtedly aware of the
    massive flow of trade and oil through the Strait of Malacca.

        Senator McConnell. With that, let me call on my friend and
    colleague, Senator Leahy, for his opening observations.

                 OPENING STATEMENT OF SENATOR PATRICK J. LEAHY

        Senator Leahy. Thank you very much, Mr. Chairman. I'm
    pleased you're holding this hearing. Ambassador Black and Mr.
    Natsios, I appreciate both of you being here. You both have
    long and distinguished records in your fields and have been
    helpful to our committee.
        I think a key question for us today is one that was posed
    by a top official of the Bush administration. He said: ``Are we
    capturing, killing, or deterring more terrorists every day than
    the madrassas and the radical clerics are recruiting, training,
    and deploying against us?'' I think it is a key question. That
    was Secretary Rumsfeld's question on October 16. It's a lot
    different than the everything is roses rhetoric than we've
    heard from many in the administration. I commend Secretary
    Rumsfeld for the statement. It was blunt, unpolished, and it
    was right on target. I think that question, particularly the
    issue of deterrence, should be at the heart of our
    counterterrorism strategy.
        As you both know, fighting terrorism involves a lot more
    than just force and interdiction. If that's all it took, with
    the most powerful military on earth, we would have already won.
    But I think that many of the administration's foreign policies
    are taking us in the wrong direction, and let me give you some
    examples of where I believe we're losing ground. The conflict
    between Israelis and Palestinians has enormous impact on how
    the United States is perceived in the Muslim world but I don't
    believe the President has invested, really, any political
    capital in solving the conflict. The road map is dead, the
    violence continues unabated and it's fueled the propaganda
    machines of Islamic extremists.
        Iraq, after squandering the goodwill afforded us around the
    world after the September 11 attacks, we are floundering. The
    failure to find weapons of mass destruction has damaged our
    credibility. The commander of U.S. ground forces in Iraq,
    General Sanchez, has said Iraq is becoming a magnet for foreign
    terrorists. Other reports indicate that terrorist organizations
    around the world are using Iraq as a rallying cry for gaining
    new recruits. And while the President has talked about
    democracy and human rights, he speaks about changing the world,
    we are giving billions of dollars in aid to corrupt, autocratic
    regimes that are the antithesis of democracy and American
    values. Yet, we spend a pittance of what is needed to counter
    the powerful forces of Islamic extremism in key countries like
    Indonesia, the Philippines, and Malaysia, just to give some
    examples.
        Ambassador Black and Mr. Natsios, a recent Pew Research
    Poll showed that the credibility and reputation of the United
    States has been badly damaged, especially in Muslim countries,
    as a result of our own policies. Now, your testimony, which I
    have read, I know you're just going to summarize it but it
    describes what you're doing to strengthen government
    institutions and win the battle for hearts and minds in
    countries that are vulnerable to terrorist networks. We want to
    help. But I'm telling you that while I'm sure there have been
    successes, and there have been, if you look at the big picture
    some of the President's policies are working against you and I
    don't think you're devoting enough resources to do the job. And
    I say this as one who has strongly supported efforts of this
    administration, as I have of past administrations, to get
    resources to areas where foreign aid can do some good.
        Thank you. Thank you, Mr. Chairman.
        [The statement follows:]

                 Prepared Statement of Senator Patrick J. Leahy

        Thank you Mr. Chairman for holding this hearing. Ambassador Black
    and Mr. Natsios, I appreciate you being here. I know you both have long
    and distinguished records in your fields.
        I think a key question for us today is one that was posed by
    another top official of this Administration. He said, quote: ``Are we
    capturing, killing or deterring more terrorists every day than the
    madrassas and the radical clerics are recruiting, training and
    deploying against us?'' That was Secretary Rumsfeld's question on
    October 16, and it was notably different from much of the rhetoric we
    have come to expect from this Administration. It was blunt. It was
    unpolished. And it was right on target.
        This question, and particularly the issue of deterrence, should be
    at the heart of our counter-terrorism strategy. As you both know,
    fighting terrorism involves more than force and interdiction.
    Unfortunately, I believe that many of this Administration's foreign
    policies are taking us in the wrong direction. Let me give you some
    examples of how I believe we are losing ground:
      --The conflict between Israelis and Palestinians has an enormous
            impact on how the United States is perceived in the Muslim
            world. Yet, despite its importance, President Bush has invested
            almost no political capital in solving the conflict, the road
            map is dead, and the violence continues unabated--fueling the
            propaganda machines of Islamic extremists.
      --In Iraq, after squandering the good will afforded us after the
            September 11 attacks, we are floundering. The failure to find
            weapons of mass destruction has damaged our credibility. The
            Commander of U.S. ground forces in Iraq, General Sanchez, has
            said the country is becoming a magnet for foreign terrorists,
            while other reports indicate that terrorist organizations are
            using Iraq as a rallying cry for gaining new recruits.
      --At the same time the President talks about democracy and human
            rights--``changing the world'' is how he put it--we are giving
            billions of dollars in aid to corrupt, autocratic regimes that
            are the antithesis of democracy and American values. And yet we
            spend a pittance of what is needed to counter the powerful
            forces of Islamic extremism in key countries like Indonesia,
            the Philippines, and Malaysia.
        Ambassador Black, Mr. Natsios, a recent Pew Research poll showed
    that the credibility and reputation of the United States have been
    badly damaged, especially in Muslim countries, as a result of our own
    policies.
        Your prepared testimony describes what you are doing to strengthen
    government institutions and win the battle for hearts and minds in
    countries that are vulnerable to terrorist networks. We want to help.
    But what I am telling you is that, while I am sure there have been
    successes, if you look at the big picture, some of the President's
    policies are working against you, and you are not devoting enough
    resources to do the job.

        Senator McConnell. Mr. Natsios, why don't you go ahead and
    we'll put your full statement in the record. If it's too
    lengthy, I would ask you to summarize.
        Mr. Natsios. Thank you. Does this go on automatically?
        Senator Leahy. You can press the button right in front of
    you. The light will go on if it's on.

                  SUMMARY STATEMENT OF HON. ANDREW S. NATSIOS

        Mr. Natsios. I do have a longer statement for the record,
    Mr. Chairman, which I would like put in the record, and I will
    read a summarized version.
        It is a privilege for us to be here today to discuss the
    efforts of both the State Department and USAID to combat
    terrorism. President Bush said defeating terrorism is our
    nation's primary and immediate priority; in a word it is this
    generation's calling. The war on terrorism has led to a
    broadening of USAID's mandate and has thrust the Agency into
    situations that go beyond its traditional role of humanitarian
    aid and development assistance.
        In both Iraq and Afghanistan, USAID has stood in the
    frontlines of important battles in the new war. The USAID's
    initiatives are helping the people of Iraq and Afghanistan
    reclaim their societies and together we're laying the
    groundwork for their rebirth. Through the end of the cold war
    and the challenges that now face USAID have prompted the most
    thoroughgoing reassessment of the country's development mission
    since the end of World War II, when the reconstruction of
    Europe began. We are responding with a new understanding of the
    multiple goals of foreign assistance, specifically we now have
    reformulated what we do into five distinct, broad challenges.

                        BROAD CHALLENGES OF FOREIGN AID

        First is supporting transformational development. Second is
    strengthening fragile states and reconstructing failed states.
    Third is supporting U.S. geo-strategic interests. Fourth is
    addressing transnational problems and fifth is providing
    humanitarian relief in crisis countries. Let me go through each
    of these to describe how that relates to the goal of combating
    terrorism.
        First, supporting of transformational development. It is
    the mission of USAID to shore up the democratic forces in a
    society and to help bring economic reforms that have the most
    effective antidote to terrorist threats. The President's
    Millennium Challenge account, in fact, fits very much into this
    category, and we're working with a number of countries that are
    threshold countries. They will probably not make MCC status,
    according to the indicators, but they are on the edge of making
    it and we want to help them get through the 16 indicators so
    they do qualify. And that's a category of countries that are
    about to take off in terms of development. They're pretty
    functional countries but they're very poor, and they need help
    to take off at high rates of economic growth.
        The second is strengthening failed and fragile states. The
    President's national security strategy underscores the changed
    dynamics of the post-cold war world. Today, weak states, it
    says, pose a greater danger to our national interests than
    strong states do. We are dealing with this consequence today.
    There is perhaps no more urgent matter facing AID's portfolio
    than fragile states, and no set of problems more difficult and
    intractable. I might add that the bulk of the states we deal
    with are either failed or fragile states now, the 80 countries
    in which we have USAID missions. It is no accident that the
    three countries which hosted headquarters Al Qaeda were failed
    states; first Somalia, then Sudan and then Afghanistan. That is
    not an accident.
        The third category is supporting U.S. geo-strategic
    interests. Aid is a potential leveraging instrument that can
    keep countries allied with U.S. policy. It also helps them in
    their own battles against terrorism. For example, while it is
    vital that we keep a nuclear-armed Pakistan from failing and
    allied with us in the war on terrorism, we must also help
    Pakistanis move towards a more stable, prosperous, and
    democratic society.
        The fourth category is addressing transnational problems,
    such as HIV/AIDS, infectious disease, international trade
    agreements and various efforts to combat criminal activities to
    support terrorism.
        The final category is a historic one for USAID and the U.S.
    Government, and that is humanitarian aid and disaster relief.
    There is a moral imperative, and that has not changed, to
    provide assistance to people's basic needs. We must, however,
    do a better job of combining this assistance with longer-term
    development goals.
        I want to be clear in my remarks today. I do not believe
    terrorism is simply caused by poverty. The clear analysis shows
    that there is no necessary relationship. There are very poor
    countries that have no terrorism, there are middle income
    countries that do. I do believe, however, that there are
    certain conditions that encourage terrorist networks and spread
    their influence. Among these are geographic isolation of
    people; a lack of economic opportunity and large levels of high
    unemployment; weak institutions and governance; a lack of
    financial transparency in their private banking sectors and
    poor educational systems. Many of these issues are related and
    overlapping, but I'd like to discuss each of them briefly to
    show how they relate to our ability to make contributions in
    the war against terrorism.

                              GEOGRAPHIC ISOLATION

        First is geographic isolation. I would commend a book
    written by my friend, Ahmed Rashidi, a journalist for the Far
    Eastern Economic Review; he's a Pakistani scholar and
    journalist. He wrote a book called ``The Taliban,'' which is
    the best book on the Taliban. It was written before 9/11. And
    what he describes is fascinating, because the connection
    between the terrorist threat, the isolation in the most remote
    areas of Pakistan and Afghanistan, to the Al Qaeda networks and
    the relationship between the madrassas along the border between
    the countries is directly related to the rise of Taliban and Al
    Qaeda in Afghanistan.
        Building roads has been an extremely effective means of
    combating the effects of geographic isolation. We signaled this
    last year when we completed a 379 kilometer highway that
    connects Kabul to Kandahar; we're now building the rest of it
    with the Saudis and the Japanese, between Kandahar and Herat.
    We did this in 13 months. Having run the Big Dig in Boston, I
    can tell you this is almost unimaginable what we built, a 379
    kilometer highway through the middle of this heartland of Al
    Qaeda and Taliban, in the middle of a war and got it done in 13
    months. The restoration of the road was one of President
    Karzai's overriding priorities. Everybody, including school
    children, know about the road. When I was down cutting the
    ribbon with Hamid Karzai, I went down to Kandahar, I asked 6-
    year-old kids: ``Do you know about this highway?'' They said:
    ``Everybody knows about the highway.'' I said: ``Who built the
    highway? They said: ``The Americans built the highway.'' So
    it's very well known that it exists. It is a symbol of what can
    happen when there is development going on in a society.
        We're also sponsoring very innovative radio programming to
    restore communications infrastructure, private sector radio
    stations, in Afghanistan. In a similar vein, USAID has funded a
    so-called Last Mile Initiative, which will bring rural and
    isolated populations around the world into the information age
    via connection to the Internet.

                        ECONOMIC GROWTH AND JOB CREATION

        Third is the lack of economic growth and job creation. We
    have learned that countries become vulnerable and subject to
    terrorist subversion when there are high rates of unemployment,
    particularly among young men between the ages of 15 and 35. You
    can look at actually a demographic analysis of societies. If 70
    percent of the population is over 25 and there are low rates of
    unemployment, the incidence of terrorist groups and the
    incidence of militias, which are outside the control of the
    central government, tend to diminish dramatically. And if you
    have the inverse statistic you have a serious problem. It is
    the case that militias are recruited from the ranks of restive
    and unemployed youth who are easily seduced into criminal
    activity. Our interventions in post-conflict countries have
    focused on various quick impact projects that generate
    employment as they help rebuild communities. We are using a
    variety of programs that address the economic isolation that is
    imposed on them by law and custom, by tenuous rights to
    property, multiple impediments to the creation of productive
    enterprise and disenfranchisement. One of the most important
    aspects of our strategy to address the lack of economic
    opportunity has been trade capacity building, because trade
    equals jobs equals lower unemployment rates.

                               GOVERNANCE ISSUES

        Weak institutions and poor governance. The terrorist threat
    also correlates closely with governance issues. Our development
    programs are firmly committed to building networks of schools
    and health clinics and seeing that they are competently
    staffed. In Afghanistan, Iraq, and elsewhere we are installing
    management systems and teaching skills that will modernize key
    government ministries. For example, in Afghanistan right now,
    1,000 people are on the staffs of the central ministries that
    are paid for by USAID. Eight hundred and seventy of them are
    Afghans with college degrees who have worked with international
    institutions, or NGOs, before their entrance, and we hired them
    jointly, very carefully--120 of them are expatriates. They are
    in the ministries; these are not people working for USAID and
    the Mission. We pay their salaries; they are the force to stand
    up competent ministries to develop public services. So the
    government is competent in administering services. Other
    programs, as in Cambodia, seek to foster competent political
    parties, political institutions at the national and local
    level, judicial reform and the protection of human rights.
        Terrorism also breeds in places where the government is
    present but is gripped by corruption. We're beginning to mount
    a more worldwide assault on endemic, parasitic corruption of
    elites which, among other things, short circuits effective
    development and deepens the resentments that terrorists so
    effectively mine. Weak financial systems also contribute to the
    problem of terrorism by allowing the movement of money between
    institutions and groups without any oversight.
        There is also a problem of choking off criminal activities
    like opium and poppy production. Much of the revenue in
    Afghanistan that fueled Al Qaeda and Taliban was provided by
    the heroin trade; 70 percent of the production of heroin in the
    last 10 years has been from Afghanistan. Our experience in
    fighting cocoa production in Peru, Bolivia, and Colombia has
    shown us that the only effective strategy to literally clear
    the ground for licit and legal crops that will feed the nation
    is aggressive eradication on one side and then alternative
    development programs on the other that provide a means for
    family incomes.

                             EDUCATION AND TRAINING

        The lack of education and training. We believe that in the
    longer term education is one of the most potent weapons against
    terrorism. To that end we have designed programs specifically
    for the Muslim world that respond to the challenges posed by
    the madrassas that preach radical forms of Islam. One approach
    focuses on improving the performance of secular education
    systems. We share the view with more enlightened Muslims that
    see the participation of women as a key to modernization, and
    our education programs are designed to emphasize this
    objective.
        Finally, we would like to emphasize that the presence of
    our missions and embassies in a host country can be a powerful
    educational force as well as a potent counterweight to the
    presence of terrorism and anti-Americanism. I'd like to cite
    that of the 8,000 people who work for USAID--we have 2,000
    direct hires, but 8,000 employees total--4,000 are former
    foreign service nationals. They are not Americans. They are
    Brazilians, they are Peruvians, they are Ugandans, they are
    Jordanians, and they work as a cadre of development experts,
    many of them have PhDs or law degrees or they're experts in
    their disciplines in their countries. Many of them have worked
    for USAID for a couple of decades. They are our links into the
    community at the grassroots level but they also have used USAID
    as a way of learning American values and American systems, and
    I am proud that legions of these graduates, from our FSN
    workforce, have now gone on to ministerial posts. I would add
    that the new vice president of El Salvador, just elected 2
    weeks ago, is a former FSN with USAID in El Salvador. The
    minister of agriculture in Guatemala stopped me 2 years ago at
    a conference and thanked me because for 10 years he was an FSN
    with our agriculture program in Guatemala. He was the minister
    of agriculture, I don't know if he still is. But we find this
    all over the world, that people who used to work for USAID now
    are in ministries as ministers, as prime ministers, as heads of
    NGOs and universities.

                               PREPARED STATEMENT

        I want to close with one point. We at USAID are the chief
    instrument of what some people call the Nation's soft power.
    I'm not fond of the phrase because it unintentionally implies
    weakness, and it is the opposite of that. In any case, the
    President signaled the importance of what we do when he called
    development a critical part of the triad of foreign policy
    instruments. Last week he reminded us that the war on terrorism
    is imminently winnable but it will be long and tough. He has
    also referred to it as an unconventional war that will require
    a large measure of old fashioned resolve and fortitude as well
    as new thinking. He has charged my Agency with new challenges
    and unprecedented responsibilities. I consider it our most
    important calling. Foreign assistance is one of our nation's
    best offenses against terrorism and instability now and in the
    long term.
        Thank you very much.
        [The statement follows:]

                  Prepared Statement of Hon. Andrew S. Natsios

        Chairman McConnell, members of the subcommittee: It is a privilege
    to be here today to discuss the efforts of the U.S. Agency for
    International Development to combat terrorism.
        September 11 and the war on terrorism have brought the most
    fundamental changes to this country's security strategy since the
    beginning of the Cold War. This was the theme that Secretary of State
    Colin Powell brought to Congress in multiple testimonies this month and
    last. Recent events in Madrid--as in Indonesia, Morocco, the
    Philippines, Turkey, Uzbekistan, and Pakistan, among other places--
    underscore the urgency of his remarks and the global nature of this
    challenge. As President Bush said: ``Defeating terrorism is our
    nation's primary and immediate priority.'' In a word, it is this
    generation's ``calling.''
        This country is no longer tasked with managing a global political
    chessboard with two blocs of opposing armies and alliances. We face a
    challenge that is much more complex.
        In September 2002, President Bush unveiled his National Security
    Strategy to address the unprecedented challenges that are facing the
    nation. It outlined the new direction in foreign policy that was
    required to respond effectively to what occurred the previous
    September. Among the tools that would be engaged in the new war was
    ``development.'' Indeed, it was elevated as a ``third pillar'' of our
    foreign policy, along with defense and diplomacy. The global war on
    terror is the arena in which foreign aid must operate. This requires
    USAID to acknowledge its mission is broader than the traditional
    humanitarian and development response. We are challenged increasingly
    to deal effectively with failed states, transnational problems, and
    geostrategic issues.
        In February of last year, the Administration issued the National
    Strategy on Combating Terrorism, which laid out a ``4D strategy'' in
    the War on Terror: (1) defeat the terrorists, (2) deny them resources
    and state sponsorship, (3) diminish the underlying conditions that
    terrorists seek to exploit, and (4) defend U.S. citizens and interests
    at home and abroad. USAID's programs aim directly at both denying
    terrorists resources and diminishing the underlying conditions that
    terrorists exploit.
        In both Iraq and Afghanistan, USAID has stood in the front lines of
    the most important battles in the new war. The outside world has little
    understanding of the devastation--physical and psychological--that
    these societies had suffered from decades of predatory and tyrannical
    governments and political fanaticism. USAID initiatives are helping the
    people of Iraq and Afghanistan reclaim their societies and together we
    are laying the groundwork for their rebirth.
        Our country's post-war reconstruction efforts in Iraq are critical
    to the broader war on terror and remain a central priority of the
    Agency. Our achievements are significant, especially in light of the
    security situation and the desperate and on-going efforts of some to
    disrupt our progress.
        To check the forces of terror and bring peace and stability to this
    dangerous region of the world, USAID is committed to the President's
    goal of seeing democratic governments come to Afghanistan and Iraq. It
    is a historic commitment that is rivaled only by the Marshall Plan, to
    which my Agency traces its origins.
        The new challenges have prompted some of the more important
    internal reforms I have brought to USAID. A bureau of the Agency
    formerly focused on humanitarian crisis has been redesigned to deal
    with the vulnerability of contemporary societies to conflict and
    breakdown as well as the shoring up of democratic governance around the
    world. The Office of Conflict Management and Mitigation has been
    created to provide analytical and operational tools in order to sharpen
    our responses to crises by better understanding the motivations, means,
    and opportunities for violent conflict to thrive.
        Terrorists frequently thrive within an atmosphere of chaos.
    Conflict and state failure serve the purposes of terrorists by
    providing them with an opportunistic environment in which to operate.
    Regimes that are closed--politically and economically--foment a sense
    of hopelessness and multiply the number of aggrieved, who become easy
    recruits to the terrorist cause. It is the mission of my Agency to
    shore up the democratic forces of society and to help bring the
    economic reforms that are the most effective antidote to the terrorist
    threat and its appeal. We understand that this is not going to happen
    overnight and that our contributions are necessary but not sufficient
    alone: a fact clearly pointed out in the President's National Strategy
    for Combating Terrorism. The war on terror will be a long one, as the
    President reminds us, and it will take both resolve and long-term
    commitment.
        USAID's higher profile in our foreign policy initiatives since the
    war on terror began can be measured in budgetary terms. The commitment
    to the Agency has been substantial and growing as we administer funds
    from a number of Foreign Affairs accounts. In fiscal year 2003, for
    example, we administered a nearly $14.2 billion portfolio, including
    supplemental funds for Iraq, which is up from $7.8 billion in fiscal
    year 2001. We are proud of this vote of confidence and anxious to make
    good on our daunting responsibilities.
        The end of the cold war and the challenges that now face USAID have
    prompted the most thoroughgoing reassessment of the country's
    development mission since the end of the Second World War. We are
    responding with a new understanding of the multiple goals of foreign
    assistance. Specifically, USAID now faces five distinct challenges:
      --Supporting transformational development
      --Strengthening fragile states and reconstructing failed states
      --Supporting U.S. geo-strategic interests
      --Addressing transnational problems
      --Providing humanitarian relief in crisis countries
        You may notice that ``conducting the war on terror'' is not one of
    the Agency's core goals. Each of these goals, however, is vitally
    relevant to what the President has called this nation's ``primary and
    immediate priority.'' Let me take a moment to outline these challenges.
        Supporting transformational development.--In the developing world,
    USAID supports far-reaching, fundamental changes in institutions of
    governance, human services such as health and education, and economic
    growth. Through this assistance, capacity is built for a country to
    sustain its own progress. While these efforts have long been justified
    in terms of U.S. generosity, they must now be understood as investments
    in a stable, secure, and interdependent world.
        Strengthening failed and fragile states.--The President's National
    Security Strategy wisely recognizes the growing global risks of failing
    states when it said: ``The events of September 11, 2001 taught us that
    weak states . . . can pose as great a danger to our national interests
    as strong states . . . poverty, weak institutions and corruption can
    make weak states vulnerable to terrorist networks and drug cartels
    within their borders.'' The failure of states such as Zaire,
    Afghanistan, Lebanon, Bosnia, Somalia, Liberia had repercussions far
    beyond their own regions. We are dealing with the consequences today.
        There is perhaps no more urgent matter facing USAID's portfolio
    than fragile states and no set of problems that are more difficult and
    intractable. USAID has extensive experience in conflict and post-
    conflict situations, which uniquely equip us to play a constructive
    role in achieving stability, reform, and recovery in fragile states. I
    offer our experience in the Sudan as illustrative.
        USAID boasts unparalleled expertise in Sudanese affairs. Our staff
    has spearheaded strategic interventions that have brought pockets of
    peace and intervals of tranquility which have allowed our humanitarian
    missions to move forward and peace to gain traction. They have helped
    coordinate policies with other nations that have brought this country
    to the doorstep of peace after more than a generation of civil war. Our
    goal is to bolster the peace, provide humanitarian relief, and spur
    recovery in order to maximize incentives for further development and
    now it is up to the Sudanese government and warring parties to pursue
    this path of opportunity that the U.S. government and other donors have
    helped to open.
        Supporting U.S. geo-strategic interests.--Aid is a potent
    leveraging instrument that can keep countries allied with U.S. policy.
    It also helps them in their own battles against terrorism. Our tasks
    today however, are broader and more demanding than just winning the
    allegiance of key leaders around the world. For example, while it is
    vital that we help keep a nuclear armed Pakistan from failing and
    allied with us in the war on terrorism, we must also help Pakistanis
    move toward a more stable, prosperous, and democratic society. Our
    support for reform of Pakistan's educational system and its political
    institutions is critical in this regard.
        Addressing transnational problems.--Global and transnational issues
    are those where progress depends on collective effort and cooperation
    among countries. Examples include HIV/AIDS and other infectious
    diseases, international trade agreements, and certain criminal
    activities such as trafficking in persons and the narcotics trade.
    USAID will continue to play a leading role on these issues, working
    with countries to help them address these problems so that they do not
    slip into instability and failure.
        Providing humanitarian relief.--The United States has always been a
    leader in humanitarian aid and disaster relief. We are the largest
    contributors of food aid that have fed the hungry and combated famine
    around the world. This is a moral imperative that has not changed. We
    must, however, do a better job of combining such assistance with longer
    term development goals. And we must make sure that the recipients are
    aware of help and U.S. generosity. This is particularly important in
    areas of the world subjected to anti-Americanism and terrorist
    propaganda.
        I want to be clear. I in no way believe that terrorism is simply
    caused by poverty. Osama Bin Laden was by no means from a deprived
    background, nor were the perpetrators of 9/11. I do believe that there
    are certain conditions that are propitious to terrorists and their
    cause. Among these are: isolation, a lack of economic opportunity, weak
    institutions and governance, a lack of financial transparency and poor
    educational systems. Many of these issues are related and overlapping,
    but I'd like to discuss them each briefly, and outline some of our
    endeavors in these areas and the critical contributions they make to
    waging an effective war on terrorism.
        (1) Isolation.--As the experience in Afghanistan indicates, remote
    and isolated areas of poorer countries are the most fertile grounds of
    terrorist fanaticism. These continue to be the strongholds of the
    Taliban.
        Building roads has been an extremely effective means of combating
    the effects of isolation. USAID's signal achievement last year was the
    rehabilitation of 389 kilometers of road that connects Kabul with
    Kandahar, an unprecedented engineering feat given the constricted time
    frame and insurgency threats. Approximately 35 percent of Afghanistan's
    population lives within 50 km of the highway, much of this agrarian and
    rural. Plans are being implemented to extend it to the city of Herat,
    were it will then arc back and reconnect with Kabul in one complete
    circuit.
        Restoration of the road has been one of President Karzai's
    overriding priorities. It is crucial to extending the influence of the
    new government, now endowed with democratic legitimacy and bent on a
    new start for the country. When complete, it will help end the
    isolation that has sheltered the Taliban and fed terrorist insurgency.
    It will stimulate development and reconnect the country to a larger
    network of regional trade.
        I am convinced that development has generally gotten off track in
    abandoning its commitment to road building, particularly in rural
    areas. Short term, it generates employment; long term, it serves
    development. In connecting more remote regions to the capital cities,
    it also spreads the modernizing forces of urban life to the
    hinterlands. And in places like Afghanistan or Pakistan, this can make
    a significant contribution to the war on terror. In other places like
    Nepal where we built roads decades ago, recent evaluations have shown
    that they have had an enormous impact in opening access to remote areas
    and countering the impact of insurgent groups.
        Radios are another example of how we combat isolation. Afghanistan
    has a radio culture. USAID has restored radio transmission towers. It
    has also funded innovative programming and provided the capital to
    build private radio stations. For example, Radio Kabul has broken new
    ground with a program that appeals to the music tastes and concerns of
    the young, featuring a mix of female and male disk jockeys that are
    representative of the diverse ethnic groups in Afghan society. Such
    things were unimaginable under the Taliban and the programming
    popularity is testament to the country's new ethos.
        In a similar vein, USAID is funding the so-called ``Last Mile''
    initiative, which will bring rural and isolated populations into the
    information age via connection to the internet. Increased development
    and trade opportunities for such areas can also be pursued through such
    linkages to the outside world.
        (2) Lack of economic growth and job creation.--We have learned that
    countries become vulnerable and subject to terrorist subversion when
    there are high rates of unemployment, particularly among males aged 15-
    35. This has been confirmed time and again by our experiences with
    fragile and failing states. Militias recruit from the ranks of restive
    and unemployed youths who are easily seduced into the criminal
    activities that support terrorism.
        Our interventions in such countries have focused on various quick
    impact projects that generate employment as they help rebuild
    communities. In channeling the productive energies of such peoples,
    these programs also provide visible signs of hope that can counter the
    call of those who base their appeals on a sense of hopelessness.
    Indeed, programs such as ``food for work'' may be the only means of
    survival for backward or war-devastated communities. As we found out in
    Afghanistan, this is what stood between desperation and reliance on
    Taliban ``charity.''
        The most potent weapon against terrorism, however, will come not
    from external aid but from the internal development of such societies.
    USAID is using a wide variety of programs that address the economic
    isolation that is imposed on them by law and custom, tenuous rights to
    property, multiple impediments to productive enterprise, and
    disenfranchisement. We take inspiration from the work of Hernando De
    Soto who seeks to integrate the untapped talents and tremendous
    energies of the marginalized by bringing them into the mainstream of
    their nation's economy. And we apply the lessons from the work of
    Michael Porter who seeks to unlock the potential latent in national
    economies by creating local conditions that foster business and job
    creation.
        One of the most important aspects of our strategy to address the
    lack of economic opportunity has been trade capacity building
    activities. This includes supporting trade negotiations and helping
    counties take advantage of the opportunities for trade. Complementing
    our efforts in the World Trade Organization and in support of the
    Africa Growth and Opportunity Act, our trade capacity building programs
    help integrate countries into the world trading system. Our programs
    which support our trade negotiations from Central America to Southern
    Africa and beyond will help countries: a) implement the free trade
    agreements, furthering the rule of law and improving transparency, and
    b) benefit from the opportunities offered by those agreements.
        In order for trade agreements to translate into investment
    opportunities, developing countries must have a sound business climate.
    In much of the developing world, however, it remains difficult to start
    and run a business. We are addressing some of the key issues related to
    property rights, contract enforcement, and rule of law--that are part
    of the enabling environment that allows businesspeople, investors, and
    farmers to build private enterprises and create wealth.
        Another example is a report from Mindanao in the Philippines, where
    USAID has been working to provide economic opportunities and permanent
    private sector jobs for members of an insurgent group. Unsolicited,
    this prompted another armed group to offer to turn in their guns for a
    jobs program like the USAID program in a neighboring village. This is
    the kind of demand these programs can generate.
        There is also the problem of choking off criminal activities like
    opium and poppy production that provides the livelihood for many people
    in different regions. Our experience in fighting cocoa production in
    Peru, Bolivia, and Colombia has shown us that the only effective
    strategy is to literally clear the ground for the licit crops that will
    feed the nation while aggressively pursuing eradication of the others.
        In eradicating poppy, we eradicate what is a major source of
    funding for terrorists. We are also addressing what has turned into a
    plague for the region. While poppy was cultivated for export to the
    West as a weapon to undermine the fabric of society there, it has
    caused a raging addiction problem in Pakistan, Afghanistan, and Iraq.
        (3) Weak Institutions and Poor Governance.--The terrorist threat
    also correlates closely with governance issues. This has a geographic
    dimension, when, typically, institutions of government and the services
    they provide have only the most tenuous presence in areas outside the
    capital. Where food is scarce and health service is minimal, the
    religious schools called madrassas will fill the void. USAID has made
    fortifying agriculture and reviving rural economies a priority. Our
    development programs are firmly committed to building networks of
    schools and health clinics and seeing that they are a competently
    staffed. In Afghanistan, Iraq and elsewhere, we are installing
    management systems and teaching the skills that will modernize key
    government ministries. Other programs seek to foster competent
    political parties, parliaments, local government and judicial systems
    which ensure the rule of law.
        Building and strengthening institutions has been at the center of
    our efforts in Afghanistan. We are supporting the electoral process,
    providing assistance for voter registration, political party
    development, and civic education. We are also expanding our rule of law
    program so that a new Constitution can be enforced and are heavily
    involved in supporting educational institutions at different levels and
    through a broad range of activities. In almost every country where
    USAID works, building up institutional capacity--whether it's
    supporting the Bank of Indonesia or the Indonesian Attorney General's
    office ability to combat money laundering or strengthening rule of law
    in Columbia--is central to our approach.
        Terrorism also breeds in places where the government is present but
    is gripped by corruption. USAID considers the issue of corruption as
    central to our development mission. I have commissioned an agency-wide
    anti-corruption strategy which will move USAID's commitment to fighting
    corruption into all appropriate facets of agency operations. We have
    supported Transparency International almost from its inception and we
    work with a host of related NGO's in the field. We are developing
    innovative strategies in Washington and the field to counter the petty
    corruption that demoralizes the citizenry and encumbers their
    activities. The economic drag from such practices is literally
    incalculable.
        We are also beginning to mount a more serious assault on the
    endemic, parasitic corruption of elites which, among other things,
    short-circuits effective development and deepens the resentments that
    terrorists so effectively mine. In making democratic change central to
    our foreign policy initiatives, we are not merely advancing a core
    value of our society but the most effective instrument of social
    regeneration in closed and corrupt regimes.
        (4) Weak Financial Systems.--Related to weak governance is the
    problem of weak financial institutions and lack of financial
    transparency. Of particular significance to the war on terrorism are
    our efforts to reform banking and financial systems and install proper
    auditing practices that will track the monies that serve criminal
    activities and feed terrorist networks. Assistance efforts have helped
    pass legislation, set up financial crimes investigative groups, and
    trained bank examiners to identify and report suspicious transactions.
        (5) Lack of Education and Training.--We believe that in the long-
    term, education is one of our most potent weapons against terrorism. To
    that end, we have designed programs specifically for the Muslim world
    that respond to the challenge posed by radical Islamism. One approach
    focuses on improving the performance of the secular educational system,
    to help it compete more effectively with radical schools. Radical
    schools have been particularly successful in countries where the public
    school system has deteriorated, leaving an educational vacuum. This has
    been dramatically illustrated in Afghanistan and Pakistan. We share the
    view of more enlightened Muslims that see the participation of women as
    key to modernization. And our educational programs are designed with
    due emphasis to this goal.
        Finally, I would like to emphasize that the very presence of our
    Embassies and Missions in a host country can be a powerful educational
    force as well as a potent counterweight to the presence of terrorism
    and anti-Americanism. Secretary Powell last year paid tribute to our
    missions as among the best exemplars of American values and among the
    nation's most effective ``ambassadors.''
        I would also like to cite the over 4,000 Foreign Service Nationals
    that work for USAID. I have been thanked by them on numerous occasions
    in my travels and they frequently express their gratitude for the
    ``educational experience'' that USAID afforded them. In addition, I
    believe that the impact of our training programs has been enormous. I
    am proud that among the legions of ``graduates,'' both of our
    educational programs and of our foreign service national workforce
    (FSN), many have gone on to ministerial posts and other positions of
    influence in their countries. We welcome the vice-president of El
    Salvador as one, a former USAID FSN installed in office several weeks
    ago in what, from a United States point of view, was a most promising
    election for the people of her country and inter-American relations.
        I want to close with the following point. We at USAID are the chief
    instrument of what some call the nation's ``soft power.'' I am not very
    fond of the phrase because it unintentionally implies weakness. In any
    case, the President signaled the importance of what we do when he
    called ``development'' a critical part of a triad of foreign policy
    instruments. Last week, he reminded us that the war on terrorism is
    eminently winnable, but that it will be long and tough. He has also
    referred to it as an ``unconventional'' war, one that will require a
    large measure of old fashioned resolve and fortitude as well as new
    thinking. He has charged my Agency with new challenges and
    unprecedented responsibilities. I consider it my most important task to
    respond to this ``calling.'' U.S. Foreign Assistance is our nation's
    best offense against terrorism and instability now and in the long
    term.
        This concludes my testimony, Mr. Chairman. I will be happy to
    answer any of your or the Committee's questions.

        Senator McConnell. Thank you, Mr. Natsios. Ambassador
    Black.

                     SUMMARY STATEMENT OF HON. COFER BLACK

        Ambassador Black. Thank you very much, Chairman McConnell,
    Senator Leahy, and distinguished members of the subcommittee.
    Thank you very much for this opportunity to testify today at
    your hearing on foreign assistance and international terrorism.
        This hearing is appropriate and timely in addressing the
    State Department's specific counterterrorism programs and USAID
    development programs in the context of the U.S. Government's
    overall strategy to assist other countries. It is essential to
    consider these efforts together rather than narrowly viewing
    individual programs that respond to various regional or global
    threats. Today's hearing should reinforce the fact that
    international programs fundamentally contribute to our goals of
    diminishing the underlying conditions that spawn terrorism
    while thwarting and capturing terrorists before they can strike
    us and our allies overseas.
        Resources are lifeblood as we prosecute the global war on
    terrorism. Many countries function as our allies in this effort
    but a number of these prospective partners are faced with
    relatively weak institutions and capabilities. Before I
    describe the variety of State Department programs, and I'll try
    to be short, to improve the capabilities and institutions of
    our international partners, I first want to thank you and your
    colleagues for your subcommittee's support for these programs.
    We greatly appreciate your subcommittee's support for the
    administration's full fiscal year 2004 appropriations request
    for anti-terrorism programs funded through the
    Nonproliferation, Anti-Terrorism, De-mining and Related
    Programs account. I sincerely hope that your mark-up of the
    fiscal year 2005 request will be equally supportive and that
    your colleagues in the House will follow this example.
        Administrator Natsios has described the scope of USAID
    programs briefly. To strengthen the institutions in our partner
    countries these efforts are a complimentary backdrop to the
    programs we pursue at State. In many of the countries where we
    work the overall institutions of government and society are not
    sufficiently robust for the task of aggressive counterterrorism
    programs. We cannot expect countries to be effective in
    deterring, detecting, and capturing terrorists if their
    security guards and policemen are barely literate and poorly
    paid and susceptible to bribes, their investigators,
    prosecutors and the judges are poorly trained and their basic
    communications infrastructure is weak or virtually nonexistent.
    In order to develop these institutional capabilities fully,
    countries need a functioning educational system to develop
    qualified personnel. Institution building requires laws to
    provide the necessary legal framework for investigating,
    pursuing, apprehending and prosecuting terrorists. Countries
    even need radios, computers and other communications equipment
    that will allow foreign counterterrorism officials to exchange
    information real-time.
        When we strengthen the institutions of our partners we move
    less-developed countries closer toward their full potential in
    combating terrorism. At the same time we must encourage our
    international partners to provide resources and expertise in
    support of this goal.
        Mr. Chairman, let me turn briefly now to some of our
    specific counterterrorism programs. The administration is
    requesting $128 million in the NADR account to meet the Anti-
    Terrorism Training Assistance Program's growing requirements.
    My office provides policy, guidance and funding to the
    Department of State's Bureau of Diplomatic Security Office of
    Anti-Terrorism Assistance, ATA. The highest priority for
    assistance remains in the southern crescent countries, which
    extend from East Asia through Central and South Asia to the
    Middle East and to particularly vulnerable East African
    counties. In this request, $25 million is specifically intended
    for programs in Indonesia, Afghanistan, Pakistan, Kenya, and
    Colombia.
        The ATA program provides a wide range of courses to
    strengthen the counterterrorism capacities of recipient
    countries. The Department works closely with U.S. embassy
    officers, especially regional security officers, to develop a
    tailored training package to meet each recipient country's
    needs. The training includes courses on hostage negotiation,
    bomb detection, and airport security, all of which are
    currently relevant to the threats and events we've witnessed in
    the past year.
        The administration is also requesting $5 million for the
    Terrorist Interdiction Program, or TIP. TIP is designed to
    enhance border security of countries confronted with a high
    risk of terrorist transit. Through this program priority
    countries receive a sophisticated database system and training
    support to identify and track suspected terrorists as they
    enter and exit at ports of entry. TIP is currently operational
    in 18 countries. The requested funds will be used for TIP
    installations in up to six new countries and continued work and
    maintenance on existing installations. The administration is
    requesting $500,000 to strengthen international cooperation and
    to advance United States and international goals and to
    stimulate the analytical and problem solving skills of senior
    officials in countries that currently confront the terrorist
    threat.
        We're also requesting $7.5 million to support programs that
    combat terrorist financing. Understanding----
        Senator McConnell. Excuse me, Ambassador Black.
        Ambassador Black. Yes sir?
        Senator McConnell. Are you near the end of your opening
    statement?
        Ambassador Black. Yes sir, I am.
        Senator McConnell. Okay, great.
        Ambassador Black. I can stop right away if you like, sir.
        Senator McConnell. I want to assure you, if it's any help,
    that I've read your statement.
        Ambassador Black. Okay
        Senator McConnell. I appreciate having it read to me again
    but I can read.

                               PREPARED STATEMENT

        Ambassador Black. Okay. I certainly did not mean to suggest
    that, sir. Anyway, we have a spectrum of programs that we think
    are crucial in the global war on terrorism. They provide an
    underlayment in terms of the anti-terrorism assistance program
    to the interdiction program to our diplomatic initiatives with
    other countries so that we can build the capacity and the will
    to fight terrorism.
        If that's all right with you, Mr. Chairman, I think it's
    probably best I stop right there.
        [The statement follows:]

                     Prepared Statement of Hon. Cofer Black

        Chairman McConnell, distinguished Members of the Subcommittee,
    thank you for the opportunity to testify today at your hearing on
    ``Foreign Assistance and International Terrorism.''
        This hearing is appropriate and timely in addressing the State
    Department's specific counterterrorism programs in the context of the
    U.S. Government's overall efforts to assist other countries, rather
    than programs that respond to various regional or global threats.
    Today's hearing should reinforce the fact that international programs
    fundamentally contribute to our goals of diminishing the underlying
    conditions that spawn terrorism and trying to capture and thwart
    terrorists before they can strike us and our allies overseas.
        Resources are lifeblood as we prosecute the Global War on
    Terrorism. Many countries are willing to cooperate in the Global War on
    Terrorism, but many of these prospective partners are faced with
    relatively weak institutions and capabilities. Before I describe the
    variety of these programs to improve the capabilities and institutions
    of our international partners, I first want to thank you and your
    colleagues for your Subcommittee's budgetary support for the programs.
    We greatly appreciate your Subcommittee's support for the
    Administration's full fiscal year 2004 appropriations request for Anti-
    Terrorism programs funded through the Nonproliferation, Anti-Terrorism,
    Demining and Related Programs (NADR) account and we applaud your
    efforts to restore at least some of the cuts made by the House last
    year. Your action recognizes and underscores the essential role of
    international programs in the ongoing effort to combat terrorism. I
    sincerely hope your markup of the fiscal year 2005 budget request will
    also be equally supportive and that your colleagues in the House will
    follow this example.
        My colleague, USAID Administrator Natsios, has described the broad
    Agency for International Development programs to strengthen the
    institutions in our partner countries. These programs are a
    complementary backdrop to the programs we pursue at State.
        Institution Building for CT Programs.--While the State Department's
    counterterrorism programs focus on developing specific skills, we
    recognize that in many of the countries where we work, the overall
    institutions of the government and society are not sufficiently robust
    for the task of aggressive counterterrorism programs. For this reason,
    institution building is not an abstract or academic concept.
    Institution building begins with having laws in place to provide the
    necessary legal framework for investigating, pursuing, apprehending,
    and prosecuting terrorists. It requires capable and motivated law
    enforcement personnel, investigators and prosecutors and judges.
    Therefore, aside from the many other benefits that may accrue from our
    foreign assistance programs, the U.S. Government must consider the
    status of a country's social institutions and our role in enhancing
    those capabilities to support the Global War on Terrorism.
        Foreign Assistance Programs Support CT Programs.--We cannot expect
    countries to be effective in deterring, detecting and capturing
    terrorists if their security guards and policemen are barely literate,
    poorly paid and susceptible to bribes, if the investigators,
    prosecutors and judges are poorly trained, and if the basic
    communications infrastructure is weak or virtually non-existent. In
    order to develop these institutional capabilities fully, countries need
    a good educational system to develop qualified personnel and even
    radios, computers, and other communications equipment that will allow
    foreign counterterrorism officials to exchange information in real
    time. We must do what we can to strengthen the institutions of our
    partners and thereby move less developed countries closer toward their
    full potential in combating terrorism. At the same time, we must also
    encourage our international partners to provide resources and expertise
    in support of this goal.
        Mr. Chairman, let me turn now to some of our specific
    counterterrorism programs.

                   STATE DEPARTMENT COUNTERTERRORISM PROGRAMS

        Antiterrorism Training Assistance (ATA).--For fiscal year 2005, the
    Administration is requesting $128 million in the NADR account to meet
    the ATA program's growing requirements. Of this amount, $25 million is
    specifically requested for programs in Indonesia, Afghanistan,
    Pakistan, Kenya, and Colombia. The ATA program was among the first
    specific counterterrorism programs funded at State, initially
    authorized in late 1983. It continues to serve as the primary provider
    of U.S. Government antiterrorism training and equipment to the law
    enforcement agencies of friendly countries needing assistance in the
    Global War on Terrorism. My office, the Office of the Coordinator for
    Counterterrorism (S/CT), provides policy guidance and funding to the
    Department of State's Bureau of Diplomatic Security Office of
    Antiterrorism Assistance (DS/ATA), which implements the program. My
    office determines the relative priority for select countries to receive
    a given type of training. If a country must be assigned a higher
    priority because of specific problems, we will do so. It is important
    to keep in mind that we receive far more requests for ATA training than
    we can accommodate in a year, and there are always countries waiting
    for the benefits of this program. Once the prioritization process is
    completed, our colleagues in DS/ATA then work out the details of the
    training schedules and make the arrangements.
        The ATA program provides a wide range of courses to strengthen the
    counterterrorism capacities of recipient countries. The Department
    works closely with the U.S. Embassy officers, especially the Regional
    Security Officers, to develop a tailored training package to meet each
    recipient country's needs. The training includes traditional courses,
    such as hostage negotiations, bomb detection, and airport security. In
    recent years, ATA has developed new courses for investigating terrorist
    organizations and defeating cyber-terrorism. The program has also
    provided a series of seven seminars to help other countries strengthen
    their counterterrorism legislation.
        In fiscal year 2005, we plan to continue a robust schedule of
    training and assistance with our partner nations to further enhance
    their capacity to counter terrorism. The highest priority for
    assistance remains the ``southern crescent'' countries, which extend
    from East Asia through Central and South Asia to the Middle East and
    into particularly vulnerable East African countries and even beyond to
    the western hemisphere. We will continue to support specialized
    programs conducted in-country in Indonesia, Afghanistan, Pakistan,
    Kenya, and Colombia. We will support the Counterterrorism Center in
    Kuala Lumpur, established by the Government of Malaysia to address
    pressing regional counterterrorism issues. We will aid the Government
    of the Philippines in the establishment of a new law enforcement
    counterterrorism unit. We also expect to develop new courses and
    programs to meet the evolving terrorist threat.
        Terrorist Interdiction Program (TIP).--The Administration's fiscal
    year 2005 budget request includes $5 million for TIP. TIP is designed
    to bolster the border security of countries confronted with a high risk
    of terrorist transit. Through this program, priority countries receive
    a sophisticated database system and training support to identify and
    track suspected terrorists as they enter and exit at-risk countries.
    TIP is currently operational in 18 countries, and is scheduled for
    deployment in five more countries this calendar year. The requested
    funds will be used for TIP installations in up to 6 new countries and
    continued work and maintenance on existing installations.
        CT Engagement.--The Administration is requesting $0.5 million in
    fiscal year 2005 to strengthen international cooperation and working
    relationships for counterterrorism. In pursuit of this goal, S/CT
    coordinates and participates in a variety of bilateral meetings and
    conferences with our allies. These meetings and conferences not only
    advance U.S. and international goals; they also stimulate the
    analytical and problem-solving skills of senior officials in the
    countries that currently confront the terrorist threat.
        Terrorist Finance Programs.--The Administration's budget request
    for fiscal year 2005 is $7.5 million for the NADR account to support
    counter/anti-terrorist finance programs. Understanding and interdicting
    the financial transactions that sustain terrorist activity is a core
    function of the State Department's efforts to combat international
    terrorism. We seek to stem the flow of funds to terrorist groups and to
    strengthen the capability of our partners to detect, disrupt and deter
    terrorist financing networks around the world.
        The groundwork for our counterterrorism finance offensive was
    actually laid many years before 9/11, through provisions that the State
    Department proposed and the Congress enacted in the Antiterrorism and
    Effective Death Penalty Act of 1996. The Act authorizes the Secretary
    of State, in consultation with the Attorney General and the Secretary
    of Treasury, to designate Foreign Terrorist Organizations (FTOs). Among
    other provisions, the Act prohibits U.S. persons and persons subject to
    the jurisdiction of the United States from knowingly providing material
    support or resources to an FTO, or attempting or conspiring to do so.
    Among the consequences of a designation, any financial institution that
    becomes aware that it has possession of funds of a designated FTO must
    retain control over the funds and report the funds to the Treasury
    Department's Office of the Foreign Assets Control (OFAC). Currently 37
    groups are designated as FTOs.
        Following the terrorist attacks of September 11, 2001, the
    President signed Executive Order 13224, which requires U.S. persons to
    freeze the assets of individuals and entities designated under this
    E.O. for their support of terrorism. There are currently over 250
    individuals and entities designated under E.O. 13224. The White House
    has established an interagency mechanism to coordinate the USG policy
    on counterterrorism training and technical assistance, including
    terrorist financing.
        We are not alone in our efforts to combat terrorist financing. The
    U.N. Security Council has also significantly enhanced efforts to combat
    terrorist financing after the September 11 attacks, calling on member
    countries to criminalize terrorist financing and to freeze the assets
    of terrorists and terrorist organizations. The U.N. Security Council
    created the 1267 al-Qa'ida/Taliban Sanctions Committee to maintain a
    list of individuals and entities associated with al-Qa'ida, the
    Taliban, or Usama bin Laden. All U.N. Member States are obligated to
    implement asset freezes, arms embargoes, and travel bans against those
    on the list. This list continues to expand as other countries join the
    United States in submitting new names to the committee. So far, the
    international community has frozen over $130 million in assets of
    persons or entities with ties to terrorist networks, and in many cases
    to al-Qa'ida. The U.N. Security Council's role in fighting terrorist
    financing through its resolutions on asset freezing and other
    sanctions, and especially its listing of al-Qa'ida-related names, has
    been crucial to our efforts in this area.
        We are working closely with the Financial Action Task Force (FATF),
    a 31-member international organization that sets standards to combat
    money laundering and more recently to combat terrorist financing. The
    FATF elaborated on two of its earlier recommendations to make the use
    of cross-border wire transfers and alternative remittance systems (such
    as hawalas) more transparent, and less subject to exploitation by
    terrorist groups. On the bilateral front, interagency teams led by the
    State Department are traveling to states critical to our
    counterterrorism efforts to evaluate their financial systems, identify
    vulnerabilities, and develop and implement comprehensive
    counterterrorism financing training and technical assistance programs.
        To help other countries combat terrorism financing, we have
    developed CT Finance Capacity Building programs that are jointly
    coordinated by S/CT and administered through the Department of State's
    Bureau for International Narcotics and Law Enforcement Affairs (INL).
    We coordinate these capacity-developing programs with counterpart
    entities at the Departments of Justice, Treasury, and Homeland
    Security, USAID, and the independent financial regulatory agencies.
    These programs provide front-line states with technical assistance in
    drafting anti-terrorist financing legislation, and training for bank
    regulators, investigators, and prosecutors to identify and combat
    financial crimes that support terrorism.
        The INL Bureau also runs a number of other programs that strengthen
    the fundamental law enforcement framework needed to fight a number of
    problems: terrorism, conventional criminals, and narcotics, including
    narcotics trafficking linked to the financial support of terrorism.
    Examples include the International Law Enforcement Academies in
    Budapest, Hungary; Bangkok, Thailand; Gaborone, Botswana; and Roswell,
    New Mexico. Bilateral training also is provided for a variety of
    courses on such topics as alien smuggling, border security and cyber
    crime, and some of this training has counterterrorism aspects.
        In addition to the counterterrorism programs mentioned above, the
    State Department also has a number of regional and country-specific
    assistance efforts, focusing heavily on countries where there are major
    terrorism threats.
        South East Asia.--The Bureau for East Asia and the Pacific (EAP)
    has put together a $70 million request in fiscal year 2005 using
    Economic Support Funds (ESF) program to continue to help Indonesia in a
    number of areas, including education, economic growth and
    implementation and enforcement of financial crimes and antiterrorism
    laws and policies. The education program initiative would be designed
    to improve the quality of secular and technical education and to
    moderate extremism in madrassas. In the Philippines, $35 million is
    requested in ESF for EAP and USAID to continue to help the government
    and the Autonomous Region of Muslim Mindanao to implement their peace
    agreement. This is accomplished by funding sorely-needed health,
    education, and small infrastructure improvements and the transition of
    Muslim separatist fighters to peaceful and profitable livelihood
    pursuits, such as corn, sorghum and seaweed farming.
        South Asia.--S/CT and ATA have several programs designed to allow
    countries in the region to defend themselves from terrorist groups. The
    ATA program has over the past year trained an indigenous presidential
    protective unit for the Afghan government. It has also recently
    completed the training of a dedicated civilian investigative unit in
    Pakistan that will significantly increase that county's capacity to
    investigate terrorist groups and their activities. Other ATA training
    conducted throughout the region is reinforcing the strong partnership
    between the United States and both Pakistan and India, as well as other
    South Asian governments cooperating in the Global War on Terrorism.
        In addition to the $6 million we are seeking for ATA programs in
    Pakistan to train counterterrorism specialists, International Narcotics
    Control and Law Enforcement (INCLE) funds are being requested to
    improve the effectiveness of that country's law enforcement efforts in
    border security, law enforcement coordination and development, and
    counternarcotics. The Administration has requested $40 million for
    fiscal year 2005 to help secure the western border of Pakistan from
    terrorists, criminals and narcotics traffickers.
        Africa.--The President's East Africa Counterterrorism Initiative
    (EACTI) announced in June of 2003 is designed to strengthen the
    capabilities of regional governments to combat terrorism and to foster
    cooperation among these governments. It includes military training for
    border and coastal security, a variety of programs to strengthen
    control of the movement of people and goods across borders, aviation
    security capacity-building, assistance for regional efforts against
    terrorist financing, and police training. EACTI also includes an
    education program to counter extremist influence and a robust outreach
    program. In addition to EACTI, we are using NADR funds, Economic
    Support Funds, and other diplomatic and developmental tools to help
    strengthen democratic institutions and support effective governance.
    Amounts devoted to these efforts are relatively small, but in Africa, a
    little goes a long way.
        General Law Enforcement Training.--As part of a broader
    institutional building effort, INL is funding a police development
    program begun in 2002 for national police in Tanzania, Uganda, and
    Ethiopia. While not specifically CT focused, the program is introducing
    essential skills-based learning and problem solving techniques to build
    the capacity of these East African police forces to detect and
    investigate all manner of crime, including terrorist incidents. INL is
    also funding forensic laboratory development programs in Tanzania and
    Uganda, designed to build the capacity of these governments to analyze
    evidence collected at crime scenes. In Kenya, INL is funding technical
    assistance and training for the Anti-narcotics Unit of the Kenyan
    national police and the anti-smuggling unit that works out of the Port
    of Mombassa. These units jointly search containers entering the port to
    interdict drugs and other contraband that may be brought into Kenya
    otherwise undetected.
        Last year we held a major counterterrorism conference for 13
    nations in southern Africa. The sessions, held in the International Law
    Enforcement Academy in Botswana, included crisis management workshops
    and discussions of ways to strengthen counterterrorism laws. In 2002,
    six African countries from various parts of the continent took part in
    a week-long CT legislation seminar in Washington that State co-
    sponsored with the Justice Department.
        Latin America.--Colombia remains a major trouble spot in the
    western hemisphere because of the unholy alliance between narcotics
    traffickers and FARC and other terrorist groups. The variety of
    assistance programs include the Andean Counterdrug initiative, and
    anti-kidnapping initiative and the ATA program. The Colombia programs
    can be and have been the subject of separate hearings. I mention them
    because they are also part of the overall program to counter terrorism
    even though the elements are different than the more widely-publicized
    threat from al-Qa'ida and related groups.
        Mr. Chairman, this concludes my overview of our foreign assistance
    programs that help support the GWOT. We had a productive meeting with
    your staff earlier this year to discuss my office's specific programs.
    If you or your staff want additional details, we would be glad to
    provide them. At this point, I'd be happy to take any questions.

        Senator McConnell. Great. Thank you, Mr. Ambassador.
        Let's just go right to some of the questions that have been
    prominent in the news lately. To what extent do you believe the
    liberation of Iraq has served to draw international terrorists
    to that country?
        Ambassador Black. Are you asking me, sir?
        Senator McConnell. Yes.
        Ambassador Black. I think, first of all, we need to
    appreciate this is a global war on terrorism. The strategy is a
    global one. I think it's important to recognize that we put our
    resources where the terrorists are. We also need to cover those
    areas where either there is a limited terrorist presence or
    areas where they could in surge to. Look at this globally. As
    an example, there are areas such as the tri-border area in
    South America where there is not an established presence now;
    the terrorists who were there to a large extent have left but
    we position ourselves to identify and be able to counter any
    terrorists that flee to this area. I think it is important to
    appreciate that the current violence and anti-terrorism
    activity in Iraq is founded upon several key pillars. One is
    the members of the regime that have nothing, that have lost
    everything and have nothing to gain are operating against us.
    There are also those from established groups that are rallying
    to what they believe to be a cause to operate against coalition
    forces, as well as an element of those that have been incited,
    essentially, by play in the media.
        Senator McConnell. To the extent that terrorists have gone
    to Iraq, that's a pretty good place to fight them, is it not?
        Ambassador Black. It is, indeed. You know, I do recall,
    Senator, at the height of the war in Afghanistan, where the
    commanding general there was being asked about his ability to
    prosecute the war against Al Qaeda. And if I may quote him, and
    I just forget his name, I just thought of this off the top of
    my head, his answer was essentially, you know, the Al Qaeda
    terrorists that present an immediate threat to the United
    States, we'll kill them here. And if they go somewhere else,
    we'll kill them there. So I think there is an element of that,
    Mr. Chairman, where there is a universe of these people that
    are determined to do us harm and this engagement is one that is
    global and right now we are paying particular attention, as are
    they, to the battlefield in Iraq.
        Senator McConnell. There are some that have suggested that
    by going on offense and taking the fight to the terrorists
    we're creating more terrorists. I'm curious as to your reaction
    to that line of argument.
        Ambassador Black. I am profoundly against that argument.
    There is no opportunity to negotiate. One cannot appease. There
    are a number of these people that are very set in their ways,
    that are absolutely determined to do us harm, to kill as many
    people as they possibly could, and our determination to engage
    these people and our will to continue, I think is vitally
    important.
        Senator McConnell. To what extent is the well-publicized
    decision by Spain and Honduras to withdraw their troops from
    Iraq going to embolden terrorists or in general create a
    problem for us?
        Ambassador Black. It's hard to estimate exactly how a
    terrorist will think in such a situation. I think the reality
    which they will have to confront, as these countries have been
    and continue to be good allies, the Spanish in particular have
    made significant contributions on the battlefield, is a
    democracy, their forces do respond to the actions of their
    government. I think that the loss has some significance. We
    want to have as many with us as we can. However, practically
    speaking, I think the position of the Spanish government is
    very clear. They know that they're playing a key role in the
    global war on terrorism. They've redeployed their forces to
    another area and I think the terrorists will fully appreciate
    that these losses are tactical and can be made up by reshifting
    of coalition forces, and that's what U.S. commanders have
    stated.
        Senator McConnell. Some in this country have argued, and
    you certainly have heard the argument, that the effort in Iraq
    is somehow detracting from the war on terrorism, as if they
    were two entirely separate issues. To what extent is the war in
    Iraq detracting from, or irrelevant to, as the critics have
    said, the war on terror? Or is it part of this larger effort?
    As you suggested earlier, we are confronting these people in a
    place where we're in a pretty good position to deal with them.
        Ambassador Black. Again Senator, this is a global war.
    There is currently a finite set of these terrorist enemies we
    need to engage and we have done this in Afghanistan; we are
    doing it in Iraq. And the United States with her allies are
    operating globally, around the world, and I think it's
    important to appreciate that these forces are being used
    productively against a terrorist set, that if we weren't
    engaged with them there then we would be operating against them
    in other places and in other contexts.
        Senator McConnell. One final question on this round. To
    what extent does sticking to the June 30 transfer date and
    handing over at least the political authority in Iraq to an
    Iraqi entity undermine terrorists' arguments in Iraq, or
    elsewhere for that matter?
        Ambassador Black. I believe there is a determination to
    conduct this action. I think that terrorists fear the emergence
    of a society where there's equitable representation. They fear
    what a democracy or a like or affiliated kind of a government
    does to their cause and they are intensifying their operational
    activity to do as much as they can to derail it.
        Senator McConnell. So it's reasonable to assume it could
    well get a good deal worse before June 30 than it has been?
        Ambassador Black. Well, it's hard to predict. I think there
    are significant actions underway now on the battlefield in Iraq
    but our enemies clearly do appreciate that the clock is
    ticking, that the new Iraq is one in which there is to be
    equitable representation, in contrast to all of their recent
    history. This is a bright future and they want to stop it for
    their own advantages so they're likely to do everything they
    can do derail it in the short-term.
        Senator McConnell. Well, the BBC/ABC poll taken of Iraqi
    citizens back in February, which got remarkably little coverage
    in this country, was a clear indication that the Iraqi people
    feel that they're a lot better off than they were a year ago.
    And there was a stunning level of optimism about how they would
    be a year from now. The kind of numbers that people in my line
    of work would love to see in this country.
        Ambassador Black. Absolutely, sir. And the folks that come
    back from Afghanistan and talk, you and I perhaps watch the
    news and TV and we see isolated incidents of, you know,
    violence and conflict. To a large extent it's looking at
    history, real time, through a straw. The vast majority of
    Iraqis want the kind of future that we're helping them to get.
    It's important that we do this and I think it is clear, at
    least in my view, history will say that Iraq is far better off
    as a result of these actions.
        Senator McConnell. Senator Leahy.
        Senator Leahy. Thank you, Mr. Chairman.
        Tell me, Ambassador Black, there was a horrible car bombing
    in Iraq, a number of children--I think it was in the last few
    hours--children killed. And horrible bombings in Saudi Arabia.
    The press, at least initially, reported that the Saudis had
    heard there might be six of these bombs; they were able to find
    and diffuse five. Now, in Saudi Arabia, is there any indication
    that Al Qaeda was involved?
        Ambassador Black. The most recent reporting that I have
    received, Senator, is that there is no definitive proof yet
    that it was Al Qaeda. But the actions underway, as you know, in
    Saudi Arabia, the government of Saudi Arabia is fully engaged
    countering these individuals, and there's a tremendous amount
    of operational activity that's underway.
        Senator Leahy. What about in Iraq? Do we have--what is the
    indication of who was responsible?
        Ambassador Black. Again, I would have to check. I think the
    forensics are underway. It almost always takes some time to
    actually prove this out, to find out exactly which particular
    group is involved.
        Senator Leahy. Did that appear to be internal, though, at
    least from initial reports?
        Ambassador Black. They always say, when you come down to
    speak before you, one should not speculate.
        Senator Leahy. I accept that. Well, let me ask you a
    question that maybe you could answer. This is Foreign Policy
    Magazine, the most recent copy, and it has articles about Al
    Qaeda, and on the cover it says, leadership is in disarray, the
    training camps are in ruins, so why is Al Qaeda's ideology
    spreading faster every day? Gentlemen?
        Ambassador Black. I think it's important, again, to
    emphasize what we know. What we know is, as the President has
    stated, more than two-thirds of the Al Qaeda leadership of the
    period of 9/11 is captured, detained, or killed.
        Senator Leahy. Accepting that, why is their ideology
    spreading faster every day?
        Ambassador Black. It is the convergence of communications,
    TV, the Internet and the like, incitement, where----
        Senator Leahy. Let's take it step by step. The TV and the
    Internet and all was there before, before we broke up the
    leadership. So we have to assume there's something more.
        Ambassador Black. Well, I think that there is a lot to see
    with greater regularity.
        Senator Leahy. Such as?
        Ambassador Black. Well, such as your 9/11, to start with.
    The images of that were transmitted around the world in such a
    way that----
        Senator Leahy. But subsequent to that we went to
    Afghanistan, we knocked out a lot of the Al Qaeda leadership.
        Ambassador Black. Yes, Senator, but also it goes the other
    way too, such as the bombings in Madrid, the bombings in
    Indonesia. And acts in one place of the world are transmitted
    around the other. The vast majority of these terrorists that
    formerly were very isolated have obtained comfort, if you will,
    in their objectives by seeing actions around the world.
        Senator Leahy. So these actions are why their ideology is
    spreading so fast?
        Ambassador Black. No, it's not why, it's an incitement or
    an encouragement of, you know, radicalized views which have
    not, in our view, been sufficiently countered by the programs
    such as being conducted by USAID, which essentially encourage
    appreciation of, you know, moderation as opposed to radicalism.

                            COST OF REBUILDING IRAQ

        Senator Leahy. You mention AID and Mr. Natsios has said,
    appropriately, that USAID is being increasingly called up to
    deal effectively with failed states, transnational problems,
    geo-strategic issues, and part of our responsibility is making
    sure we know how much it's going to cost. I remember last
    April, a year ago, you stated with some confidence, on
    ``Nightline,'' the American contribution to rebuild Iraq would
    be no more than $1.7 billion. So far we're more than 1,000
    percent higher than that. You were about $18 billion short. Are
    your estimates getting more accurate?
        Mr. Natsios. The estimate was not $1.7 billion. That was
    the amount of money that OMB told me they were going to give
    us, the U.S. Government, to reconstruct Iraq.
        Senator Leahy. Is that what you told OMB that you needed?
        Mr. Natsios. We weren't asked what we needed. We were told.
    We were not doing all the work, we were doing some of the work.
    Some of it was being done by State Department, some by some
    other Federal agencies, some by the Defense Department. There
    was an overall figure, I believe the figure was $2.7 billion;
    the amount of money that we were given of that $2.7 billion was
    $1.7 billion. I never said on ``Nightline'' that that was the
    amount that we estimated--because we did not know how much it
    would cost since we weren't in the country yet.
        Senator Leahy. Well, let me ask you this. We've
    appropriated $18 billion and we're told we had to do it
    immediately, needed it yesterday. I remember in the committee's
    conference, the White House said, we've got to have this money,
    we've got to have it right now. And that was 6 months ago and
    less than one-ninth of the money has been obligated. I expect
    far less than that has been expended. What happened between
    we've got to have it immediately and the fact we're not using
    it?
        Mr. Natsios. Well, I can only tell you what was given to
    us. We've been given $3.8 billion between the first and second
    supplemental. We've obligated $3.3 billion as of last week.
        Senator Leahy. How much have you expended?
        Mr. Natsios. That obligation means that there are signed
    contracts but the contracts are 1 year to 2 years long so some
    of them are being expended more rapidly because they're shorter
    contracts, some of them longer. But our expenditure rates are
    pretty good, I don't know the exact figure now.
        [The information follows:]

                            Expenditure Rates--Iraq

        As of April 2004, USAID has been apportioned a total of
    $4,338,263,000 from the Fiscal Year 2003 Iraq Relief and Reconstruction
    Fund and the Fiscal Year 2004 Iraq Relief and Reconstruction Fund. Of
    this amount, $3,328,194,000 has been obligated and $1,247,797,000 has
    been expended.

        Mr. Natsios. But obligation is a written contract with
    people on the ground spending money.
        Senator Leahy. If the people on the ground can get there.
    Under the circumstances there now, a lot of them are leaving
    because of the danger.
        Let me just read what you did say on ``Nightline.'' Koppel
    says, all right, this is the first, when you talk about $1.7
    you're not suggesting the rebuilding of Iraq is going to be
    done for $1.7 billion. Your answer was, well in terms of the
    American taxpayers' contribution, I do. This is it for the
    United States. They're going to get $20 billion a year in oil
    revenues but the American part of this will be $1.7 billion; we
    have no plans for any further funding for this.
        Mr. Natsios. Right.
        Senator Leahy. That's from the transcript. A little bit
    different than your answer today, Mr. Natsios.
        Mr. Natsios. Senator, if I could----
        Senator Leahy. I have supported USAID as much as any Member
    of this Senate and I just, you know----
        Mr. Natsios. My answer, a minute ago, just to be very clear
    sir, was that at the time that was put forward, that is what we
    were told the U.S. contribution was going to be. That is what
    we proposed in the first supplemental. What I just said was I
    never suggested on that program or elsewhere how much it would
    cost to reconstruct Iraq because we were not in the country
    yet. And until you're in a country and you do assessments,
    which the World Bank has done with UNDP and the U.S.
    Government, we did not know how much it would cost. We do know
    now how much it would cost, there's been a pledging session, I
    believe the amount pledged from all donors and international
    institutions is about $34 billion. So a substantial amount has
    been pledged, not just by the United States but by donor
    governments around the world, including the Bank and the United
    Nations.
        Senator McConnell. Okay, thank you, Senator Leahy. Senator
    DeWine.

                              AGRICULTURE PROGRAMS

        Senator DeWine. Thank you, Mr. Chairman. Mr. Natsios, you
    and I have discussed in the past the importance of agriculture
    development programs, and you're a big advocate for that, I'm a
    big advocate. Yet we keep seeing the requests from the
    administration going down. I was glad to see, when you all
    first took office, the program went up. We saw a high point, I
    think, of about $480 million in 2003, but your request for 2005
    I think is $419 million. That disappoints me and I just, you
    know, it seems to me that, you know, I just don't know why
    we're cutting the very initiatives that will reduce our need
    for emergency food assistance in the future. And if we're going
    to deal with the long-term problems, if we're going to shape
    the future in these developing countries, I don't know any
    other way of doing it than to put some investment and some
    money into agriculture. You want to talk a couple minutes--I've
    got another question--but do you want to talk a little bit
    about that?
        Mr. Natsios. I would like to, Senator, because I fully
    agree with you. I have been disappointed as well. We did have 2
    good years where we increased the resources. I am disappointed
    by the amount in the budget, but that's the reality. The
    reality is that agriculture is not very visible. You and I
    support it and I know members of this committee have supported
    it but----
        Senator DeWine. Well, let's get it done.
        Mr. Natsios. Let me tell you, though, what the consequences
    of our not funding this program. What happens when there's a
    huge gap in between rural areas in terms of lifestyle and
    public services and people's family income in urban areas, as
    people migrate from the rural areas to the cities. And they do
    not end up in middle-class neighborhoods.
        Senator DeWine. No.
        Mr. Natsios. They end up on the streets and in shanty
    towns. The most destabilizing thing in developing countries,
    particularly with large Muslim populations that are prone,
    potentially, to radicalization through these radical Islamic
    networks, is large scale migration to the cities without jobs
    in those cities. And so our strategy is, to the extent that we
    have the money to spend it, is to spend the money in the rural
    areas to rectify the inequality between the rural areas and the
    urban areas so they don't go to the cities. Because when they
    leave the rural areas, the natural constraining factors of the
    traditional mullahs, their family, their extended family, local
    institutions, local governance, which constrain and socialize
    young men's behavior as they're growing up, goes on everywhere
    in the world, not just in the southern countries. It's rich
    countries too, where that's the case. Those systems collapse
    when families move to urban areas. There are no substituting
    factors that constrain and socialize young men's behavior at
    that age. And so we don't want them to move to the cities. We
    want them to stay in the rural areas and improve life for them.
    However, it has not been a particularly popular thing, in the
    United States, to vote for this stuff because it's not as
    visible, and it's more remote and other things like health,
    which are very important, education, very important, other
    things, but in my view this is one of the critical and most
    important things that we can do.
        Senator DeWine. Well, I appreciate, you've articulated it
    very well. I just, you know, would hope that working with the
    administration we can do better in this area. I mean, there's
    many, many conflicting, you know, many drains on the budget,
    many demands on the budget but it seems to me this was a great
    investment. You've articulated it very well.

                                     HAITI

        Let me turn, if I could, to Haiti. Earlier this month, a
    couple of weeks ago, Secretary Powell testified in front of
    this community, and I asked him about how much money we're
    going to be able to set aside for Haiti this year. And I
    suggested to him that the $55 million that is budgeted is just
    not going to be enough. And he wholeheartedly agreed. In fact,
    let me quote what he said. ``The need is much, much greater,
    Senator. One hundred and fifty million dollars a year''--which
    is the figure I had just thrown out to him--he said, ``$150
    million a year would almost be a modest sum, frankly. This is a
    country that's been, once again, run into the ground that needs
    everything.'' Last month I asked Mr. Noriega, Mr. Franco
    similar questions. I asked about were such programs as
    agricultural development, rebuilding basic infrastructure would
    fit in in our future assistance strategy. Let me just tell you,
    Mr. Administrator, I want to be candid. While everyone says we
    have this great need in Haiti, everybody from the Secretary of
    State all the way down, I'm still waiting for a plan. I'm still
    waiting to see where the administration is going. Now, I
    understand that the USAID has come up with a draft emergency
    response plan. Is that correct and is that something you could
    share with us today?
        Mr. Natsios. We have not only a draft emergency plan but a
    draft transition plan.
        Senator DeWine. Can you give us any insight into that?
        Mr. Natsios. Yes. Just in terms of the funding, we are now
    reviewing our existing budgets because, of course, we're in the
    middle of the fiscal year, and we have spent much of our
    budget. So, that's a problem in terms of where we get the money
    from. And so we are reviewing the areas that we have discretion
    in. As you know, we cannot take money from the Eastern European
    accounts because legally you can't transfer money from those
    accounts; we can't take money from the Andean Initiative
    because it's for the Andean countries, which is the largest
    component of our aid program in Latin America. So there are
    restrictions in terms of our ability to transfer from other
    accounts into Haiti. Is it enough money? No. Secretary Powell
    was correct, I fully agree with him. We will obviously spend
    whatever money in fiscal 2005 that you give us, Senator. It is
    a serious problem, and if we don't deal with it we're just
    going to have a repetition of this again in another 5 or 10
    years.
        In terms of what's in the emergency plan, the first phase
    of it is to stabilize the existing situation, which is going on
    now. In the transition plan that we've done, we want to do
    three things we did not do 10 years ago when we went through
    this. One, we did not engage the Haitian-American diaspora,
    many of who are professional people and entrepreneurs. They
    have skills and values from American society that could be very
    useful in reconstructing Haiti. And they can transfer those
    values much more easily than we can. And so we're going to have
    three conferences with CIDA, the Canadian aid agency, and
    USAID, for the Haitian-American community to tell us how they
    think they could help us do this reconstruction in a way that
    would engage the large Haitian-American diaspora in the United
    States.
        The second is, we did not have a government to work with
    before. The new government, we're very, very pleased with. They
    are technocrats, they're honest people, they appear to be
    competent technically, and so we are going to coordinate with
    them. Because if you don't get the engagement of an indigenous
    government, it really reduces the effectiveness of your
    program. So we do have one good thing working in our favor.
        Economic growth is a critical part of this. If there aren't
    jobs, it's going to further destabilize the situation. So we've
    got to work on the issues around transformation of the economy.
    They were transforming in the early 1990s and the great sadness
    of what happened in the 1990s was all that industrial
    manufacturing that had created about 500,000 jobs, has all
    moved to Central America. And that's not going to come back
    easily. Some of it stayed, but much of it has left.
        So those are the three components right now.
        Senator DeWine. My time is up but I just want to say, that
    that's why I was so happy in the last hearing to hear Secretary
    Powell say that, you know, he supports our trade bill. And, you
    know, we've got to get that passed.
        So, thank you very much. Thank you, Mr. Chairman.
        Senator McConnell. Okay, thank you, Senator DeWine. Senator
    Durbin, to be followed by Senator Shelby.
        Senator Durbin. Ambassador Black, I really didn't come to
    this meeting prepared to ask you any questions. But I do have
    to ask one now, based on what you've said in your testimony. I
    believe you responded to the Chairman by suggesting that we
    don't have an accurate view of what is happening in Iraq. You
    gave an example of the television coverage and you said that we
    are, like, looking at the situation through a straw--your
    words--and focusing on: ``isolated instances of violence and
    conflict.'' Those were your words. I've heard Secretary
    Rumsfeld describe what has happened over the last 2 or 3 weeks
    as a flare up. I can't believe those words are being used in
    reference to what we've been through in the last several weeks.
    The death toll now of Americans is over 700 in Iraq, over 3,000
    injured seriously. More lives have been lost in the first 2
    weeks of April in Iraq than in any month since we invaded that
    country. The Iraqi police and army, that we trained, were
    totally ineffective when this offensive started. Ambassador
    Bremer announced this week not to expect them to take any
    responsibility on June 30 for the security of their country.
    Foreign armies have not come to our rescue; sadly, they are
    leaving, causing a greater burden for the American troops which
    remain. There have been orders for 20,000 additional American
    soldiers to be sent to this theatre. And I can tell you that
    any Senator at this table will tell you when they go home on
    the weekend the phone calls they will receive from the families
    of Guard and Reserve. Isolated instances of violence and
    conflict are how you described it. Last week, Secretary
    Rumsfeld, after some extensive questioning, finally conceded
    that the situation in Iraq is worse today than he thought it
    would be. Are you prepared to make that same concession?
        Ambassador Black. I think it's very important, Senator, for
    me to emphasize the response was to a specific question. The
    question was the viewpoint from the terrorists, in terms of
    incitement and terrorism. What I was trying to convey was that
    the terrorists are influenced by new forms of communication,
    television, the Internet and the like. And what I was trying to
    convey was that terrorists around the world can see acts of
    violence and it is covered pretty well, and this is an
    incitement to terrorists in areas other than on the
    battlefield, that there's a significance that we are
    heartbroken at the loss of life is all true and all of us as
    Americans view these developments very seriously. But what I
    was trying to answer was from the standpoint of the terrorists,
    and this is the end I know better, was, you know, what is the
    commonality terrorists in other areas of the world, what does
    this mean to them? And the commonality is they have instant
    communications, they can watch TV and these incidents are
    portrayed on a full TV screen and it has significant impact for
    terrorists. It is inciteful and it gives them comfort and
    continues to fuel their radical beliefs that are not to our
    advantage.
        Senator Durbin. I don't argue with that conclusion.
        Ambassador Black. Sir, that's what I was trying to say.
        Senator Durbin. But to suggest that the television
    reporting of what has happened in Iraq somehow distorts by
    focusing on isolated instances of violence and conflict is to
    ignore the reality of the danger of this situation.
        I'd like to ask you this question, because it's come up in
    many contexts. You're a 28-year veteran of the Central
    Intelligence Agency. When did you reach the conclusion, after
    9/11/2001, that the key to fighting terrorism in the world was
    the invasion of Iraq?
        Ambassador Black. As an intelligence officer I would not be
    involved in those decisions and gratefully I wouldn't have to
    make them. We provide--intelligence services provide analysis;
    my end was to provide analysis to facilitate that process, as
    well as to collect information for the decision makers and they
    would use that in factoring in what they decided to do.
        Senator Durbin. So you won't answer the question?
        Ambassador Black. I wasn't in a position to do it, sir. I
    was in the collection operational end. I wasn't in the decision
    making end of this. And frankly, my involvement with Iraq was
    very limited. I look at terrorism as a global issue and others
    specifically looked at Iraq. I did not, Senator.
        Senator Durbin. That is hard to believe. Ambassador, State
    Department Coordinator for Counterterrorism with the rank of
    Ambassador-at-Large, and you never had an opinion as to whether
    the invasion of Iraq----
        Ambassador Black. No sir. Senator, you asked me, if I
    understood you correctly, you were asking about my time in the
    Central Intelligence Agency, and I was speaking from that
    context.
        Senator Durbin. Well, can you speak to the context of your
    service to our Government? At what point did you reach the
    conclusion that the key to counterterrorism, after 9/11/2001,
    was the invasion of Iraq?
        Ambassador Black. I believe that there is an association
    among terrorist groups. I think the Secretary of State made the
    case in front of the United Nations. I think our, you know, our
    policy makers viewed this issue and took action that's in the
    interest of the United States. Tactically looking at
    terrorists, there have been association, terrorists have moved
    across Iraq and this is a whole separate story. But that was
    considered friendly territory; in fact, many of the Al Qaeda
    that had to flee out of Afghanistan transited numerous
    countries in the area. So looking at it from a terrorist
    organizational standpoint there was an association.
        Senator Durbin. Is my time up?
        Senator McConnell. Yes.
        Senator Durbin. I'll wait for another round.
        Senator McConnell. Thank you, Senator Durbin. Senator
    Shelby.
        Senator Shelby. Mr. Chairman, I was not here earlier. We
    had a banking committee hearing. I'd like that my opening
    statement be made part of the record in its entirety.
        Senator McConnell. It will be.
        [The statement follows:]

                  Prepared Statement of Senator Richard Shelby

        Mr. Chairman, thank you for holding this very important hearing and
    for the opportunity to address the subcommittee and the witnesses on
    the need to ensure adequate resources and attention remain focused on
    the vitally important role of foreign assistance in waging a long-term
    struggle against terrorism.
        Foreign aid programs, we all know, have long been very unpopular
    among the American public, which views the one-percent of the federal
    budget that goes towards aid programs as an unwarranted drain on higher
    priority domestic programs. Mr. Chairman, nothing could be further from
    the truth, and I commend you for the role you have played over the
    years in leading the effort to ensure that U.S. interests abroad
    receive the attention and resources they need. Since the devastating
    attacks of September 11, 2001, the importance of these programs has
    only grown, and you can be assured of my support in the months ahead as
    the budget process advances.
        Terrorist organizations like al Qaeda, Jemaah Islamiya, Palestinian
    Islamic Jihad, Hamas, and others prey on the destitute and the
    desperate in their efforts at replacing existing governments with
    fundamentalist regimes that eschew democracy and freedom and that
    advance their cause through the use of indiscriminate violence. The
    scale of the problem, I think it is safe to say, exceeds anything any
    of us anticipated even as the threat of terrorism emerged during the
    1990s as one of our most pressing national security challenges.
    Successes against al Qaeda in Afghanistan--and they have been
    considerable--have perversely resulted in a diffusion of the problem as
    less-centrally coordinated cells replace the hierarchy that once
    characterized the birth child of Osama bin Laden. The threat of
    terrorism today is enormous, and has already had a very fundamental
    transformational effect on the way we live our lives in history's
    strongest and most prosperous country.
        I am a supporter of the President's Millennium Challenge Account.
    Foreign aid programs should take into account recipient countries'
    commitment to the ideals of democracy and free enterprise. The war on
    terrorism, sadly, does not allow for as broad an application of that
    principle as many of us would like. Economic and security assistance to
    countries that share our interest in fighting terrorism but that do not
    represent our ideal recipient must remain a central tenet of U.S.
    foreign policy for the foreseeable future. We simply cannot afford to
    discount the role countries like Pakistan, Uzbekistan, Nepal, Egypt and
    others play in the struggle against terrorism. They need our
    assistance, and they should receive it. At the same time, we should not
    give out blank checks. Security assistance in particular must come with
    strings attached that ensure it is not abused for the purpose of
    repressing legitimate democratic aspirations. Economic assistance,
    similarly, must be oriented toward transition to free market systems
    where the rule of law and transparency are integral parts of those
    transitions.
        Mr. Chairman, I thank you again for the opportunity to address the
    hearing today, and look forward to the testimony of the witnesses.

        Senator Shelby. Ambassador Black, it's good to see you
    again. You have had a distinguished career at Central
    Intelligence Agency and I'd like to focus some of my remarks on
    terrorist financing. And I don't know what you can tell us here
    today. And the Banking Committee, as you probably know, is
    engaging in a comprehensive review of our government's ability
    to identify and track the financing of terrorists in their
    operations.
        I think it's a given in a lot of quarters that the terror
    finance issue is viewed as much diplomatic as it is enforcement
    at times. One example, there are material differences in many
    countries' view of the phrase, support for terrorism, as it
    relates to the sanctions program. As you look around the world,
    Ambassador Black, can we convince our allies that the
    President's standard is appropriate? And if so, how have we
    been able to do this? Have we hurt our long-term efforts for a
    short-term benefit, and what are our biggest challenges here,
    success in this area? Because I think it's important to get to
    the financing.

                              TERRORISM FINANCING

        Ambassador Black. I think absolutely, as I believe you will
    recall, the greatest progress and greatest growth in the field
    of counterterrorism has been in the financial area. It's been
    only in the last few years that this has been addressed
    aggressively and comprehensively. The experts that look at this
    first have to identify where we need to encourage the will of
    countries to look at their system in a critical way.
        Senator Shelby. That's hard sometimes.
        Ambassador Black. That's very hard to do. And then to take
    corrective action that may impact in other areas besides
    terrorism and that may not be necessarily instinctively
    appealing to some segments of a society in a particular foreign
    country. We look to encourage them to change their rules, the
    banking regulations, essentially to improve their will and
    capacity but to create a commonality of financial, legal rules
    and to make sure that there is a way to enforce the regulations
    in an international way. We do this by working not only
    bilaterally with countries but also through the United Nations,
    working with our partners in the G-8, work with other
    countries. So there has been growth, there has been progress,
    and it is tricky, Senator, because when you figure out a way to
    close off one avenue of fundings or one ploy from a terrorist
    group invariably they will seek to do something else. So we
    have broadened into such things as----
        Senator Shelby. Unconventional financing.
        Ambassador Black. Unconventional financing. And it's
    basically an offense and defense type thing; as we get a leg up
    in one area they shift to something else so we have to keep at
    it.
        Senator Shelby. But essential to our fight on terrorism, is
    it not?
        Ambassador Black. Yes, it is, absolutely. If armies move on
    supplies then the terrorists need access to funding, is the
    most important thing. And unfortunately for us, usually they
    don't need much. But we can severely threaten and curtail so
    that they cannot conduct training as they have in the past and
    do the big things. The small things are harder to catch but the
    big things we have some optimism what we can interdict on.
        Senator Shelby. Ambassador Black, while the focus of a lot
    of discussion is on the Middle East for various reasons, the
    scourge of terrorism and the harboring of terrorists has become
    a global phenomenon. From the tri-border area that we're both
    familiar with in South America to the continued consolidation
    of its position in Lebanon by Iranian- and Syrian-supported
    Hezbollah, to Uzbekistan currently experiencing either a
    resurgent Islamic Movement of Uzbekistan or whatever Al Qaeda
    offshoot is replacing it, to the jungles of Indonesia, the
    challenge that's facing us has grown beyond anything some of us
    imagined, you know. Maybe not you, you know, I mean, your
    special position a few years ago. In addition, I want to ask
    you, in addition to the countries and regions I've listed,
    where do you see the next challenges? And where in the context
    of harboring terrorist funds or using money for terrorist
    support are the real trouble spots?

                                GLOBAL CHALLENGE

        Ambassador Black. I think it's a commonality. Again, I
    think you've hit it exactly right, Senator, it's global. As you
    make progress in one particular geographical area or in one
    sector, invariably it will shift to the other side of the world
    then another sector. Essentially I'd look at it in two ways.
    One, we have to work exceptionally well with our partners at
    the financial centers, London, Hong Kong and the like, so that
    we can begin to inhibit the movement of funds of terrorist
    groups or those associated with terrorists as well as identify
    the main individuals and funding mechanisms by which the
    operators get their funding.

                      USAID PROGRAMS AND COUNTERTERRORISM

        Senator Shelby. How will assistance programs, USAID,
    address some of these programs?
        Mr. Natsios. Senator, there are a dozen countries now where
    USAID has programs on counterterrorism financing through the
    Central Bank. For example, in Central Asia, all of Central
    Asian Republics. Now employees in many of their commercial
    banks and their Central banks are being trained in money
    laundering and how to prevent it, how to notice whether or not
    transactions look out of the ordinary. We are running anti-
    money laundering programs. It's not just in the terrorist
    areas, I might add, it's also in narcotics trading, it's in
    human trafficking. The globalization of the world economy has a
    bright side to it--more jobs, more wealth, less poverty. It has
    a darker side to it too, which is all the criminal elements who
    are now using globalization for their own darker purposes.
    We're doing a financial crimes training program for the
    judicial system in a number of countries, including South
    Africa. And there's a unit within West Bank Gaza that USAID
    runs that deals with this bank supervision system to stop the
    flow.
        Senator Shelby. Working?
        Mr. Natsios. It is working, yes, to the extent that it's
    going through the formal system. You know Al Qaeda knows what
    we're doing now.
        Senator Shelby. Yes.
        Mr. Natsios. And they're moving money, some of their money,
    as I understand it, my friend Cofer Black tells me, I see him
    every morning at the morning staff meeting with the Secretary,
    that some of the money, I think you said at one point, was
    moved into gold bouillon. And you can't track that through a
    bank account. I signed with the finance minister of the
    Philippines, when President Arroyo visited last year, an anti-
    money laundering effort in the Philippines that the government
    asked for there, and we're helping work with them on new
    regulations to control it. So we're doing that in a number of
    countries as part of our worldwide corruption campaign.
        Senator Shelby. Mr. Chairman, thank you for your
    indulgence.
        Senator McConnell. Thank you, Senator Shelby.
        Let me shift to an area of the world where there appears
    not, at the moment, to be a difference between Senator Kerry
    and the President. On ``Meet the Press'' Sunday, when asked
    whether he supported the President's stance on Israel, Senator
    Kerry said yes, completely. On the same Sunday talk show,
    Senator Kerry also expressed support for the right of Israel to
    defend itself against Hamas terrorists. So it appears at least
    in this area there may not be a partisan debate during the
    election year and I think that's a good thing.
        Ambassador Black, has the killing of Hamas leaders,
    including terrorist Yassin and al-Rantisi disrupted that
    organization?
        Ambassador Black. I believe that it has disrupted it. The
    leadership being challenged like that certainly has a ripple
    effect on that society. You know, Israel has a right to defend
    itself; we've required them to be prudent and circumspect in
    what the objective is and the objective is peace. And currently
    there is a lot of violence with Hamas. Hamas will have
    difficulty replacing leadership individuals such as Rantisi.
        Senator McConnell. Do you see any difference in United
    States efforts to hunt down Osama bin Laden and Israel's
    targeting of Hamas terrorists?
        Ambassador Black. Well, I think that I can speak from, you
    know, Al Qaeda, we've lost 3,000 people. We have to take
    actions to defend ourselves against an imminent threat. Israel
    has a right to defend itself, it has lost people. We, in the
    case of Israel and Hamas, it is important, the objective is
    peace, the objective is an improvement in the quality of life.
    And we encourage both sides to reach that goal and Hamas and
    terrorists should stop violence and to allow some positive
    developments to take place.
        Senator McConnell. What impact, if any, has resulted from
    the elimination of these Hamas leaders, in terms of terrorist
    attacks against Israel?
        Ambassador Black. We would have to see and we'd need more
    time to see what effect that has had on their operational
    capability. I think all of us need to look at this and see what
    the developments are.
        Senator McConnell. Mr. Natsios, how have USAID-funded
    programs in the West Bank and Gaza countered--if they have--the
    efforts of Hamas to win the hearts and minds of the Palestinian
    people?
        Mr. Natsios. We have a number of programs, Senator, in West
    Bank and Gaza in a number of areas. First is in the area of
    civic education through the news media, and they are designed
    for young people, very young and teenage level people, that
    violence is not the solution. There are some things that we can
    measure precisely but the effect on people's behavior, while we
    know it takes place, you cannot quantify it as carefully as you
    can, let's say, child mortality rates or increases in income
    from micro enterprise, that sort of thing. We also are
    sponsoring----
        Senator McConnell. Have you all ever done any surveys, or
    are you familiar with any surveys of people in Gaza, for
    example, in terms of how widely a group like Hamas is
    supported?
        Mr. Natsios. I think some surveys have been done; I am not
    familiar enough with them from memory to give you the data. But
    we certainly would be willing to look and provide to you. I've
    seen some of them a year ago.
        Senator McConnell. Do you remember whether more people were
    favorable or unfavorable toward activities of Hamas?
        Mr. Natsios. I don't recall, Senator.
        Senator McConnell. Okay, go ahead.
        Mr. Natsios. We are running a series of town hall meetings,
    panel discussions and young leader training programs at the
    community level, where areas that we might think would be
    primary breeding grounds for suicide bombers, to at least get
    these issues out on the table and have discussions that there
    are alternatives to violence. We're also running a series of
    community service programs that will bring conflict resolution
    skills. We're doing this in a number of countries. In fact, we
    set up a new office in USAID called Conflict Mitigation and
    Management because it's very clear that there are some things
    you can do at community programming levels that can affect
    people's propensity to get drawn into these violent militias or
    these suicide bombing groups.
        Senator McConnell. I hate to interrupt you but I want to
    ask if you are confident that none of our U.S. tax dollars end
    up in pockets of Hamas.
        Mr. Natsios. We have an extensive program in the office we
    have set up in West Bank Gaza to monitor this; we have a system
    of certifications that we do where----
        Senator McConnell. Is the answer to my question yes, you're
    confident that U.S. tax dollars----
        Mr. Natsios. I am confident, yes.
        Senator McConnell. Let me shift to Syria for a minute with
    you, Mr. Ambassador. Have you noticed any change in Syria's
    support for terrorism since the fall of Saddam Hussein?
        Ambassador Black. There has been selective improvement in
    certain areas, certainly in the border area we see some
    positive signs there. We believe because of their strategic
    position in the region and their comprehensive support for
    established terrorist groups in Syria there's an awful lot more
    that they can do.
        Senator McConnell. Then they still are a haven to some
    extent for terrorists?
        Ambassador Black. Yes, they are.
        Senator McConnell. So there's been some improvement but not
    nearly enough? Would that be a way to describe it?
        Ambassador Black. Not anywhere near enough.
        Senator McConnell. To what extent is Iran supporting or
    directing Shiite cleric al Sadr?
        Ambassador Black. There are contacts between Iranian
    officials and members of that community. We are concerned about
    the involvement and the projection of Revolutionary Guard
    personnel and the like into that community with contacts but I
    have to leave the rest of that to the intelligence community.
    We're concerned there are contacts, yes.
        Senator McConnell. Senator Leahy.
        Senator Leahy. Thank you, Mr. Chairman. A couple of points
    I didn't mention, where Ted Koppel is speaking to Mr. Natsios,
    he said: ``I understand but as far as reconstruction goes, the
    American taxpayer will not be hit for more than $1.7 billion,
    no matter how long the process takes.'' Natsios answered:
    ``That is our plan, that's our intention.'' And these figures,
    outlandish figures I see, and I have to say there's a little
    bit of hoopla involved in this. And then later on when asked
    the question again, Natsios said: ``that's correct, $1.7
    billion is the limit on reconstruction for Iraq. It's a large
    amount of money compared to other emergencies around the world
    but in terms of the amount of money needed to reconstruct the
    country it's a relatively small amount.''
        Mr. Black, one of the things that the United States is
    admired most for is our values. As I travel around the world I
    speak of our basic values as a country, democracy, human
    rights, our respect for the rule of law. And I think the more
    we can point to that the easier it makes our diplomacy; I think
    it helps our intelligence gathering, it certainly helps us
    counter the message of extremists. Would you agree with that?
        Ambassador Black. I would, yes sir.
        Senator Leahy. And the world looks to us for leadership and
    I think back to some of the things we've done, we closed our
    eyes at times during the cold war, sometimes we would support
    dictators because they said they were anti-communist. And then
    sometimes we turned a blind eye to activities of some countries
    because they said that they'd help us combat drugs. And now if
    they will fight terrorism we close our eyes, whether they're
    repressing minorities or whatever. We still see a number of
    very autocratic regimes since September 11, including some we
    give large amounts of aid to, engage in repression under the
    rubric of fighting terrorism. How do you go to some of these
    autocratic countries, asking for their help in fighting
    terrorism, without giving them an excuse to violate the rights
    of their own people, to crack down on legitimate voices of
    opposition? For example, legitimate voices of dissent. I'm not
    talking about people trying to blow up their government or ours
    but people who protest peacefully. How do you do that balancing
    act?
        Ambassador Black. I think it is a challenge. I would
    underscore that in all of my experience it has been very clear
    in all the dealings that we've had in countries that the way
    you generically described them is that we're in the business of
    countering terrorism, countering terrorists, which means
    identify the terrorists and counter them. We're not in the
    business of countering anybody else. We are proponents and
    advocates for the principles of democracy, free speech and the
    like. I always make it very clear, and we're always mindful,
    and sort of, you know, ruthlessly mindful and focused to any
    country that is cooperating with us, if they show any sign, and
    we check these things out, of using religious expression or
    political expression as an example that these are actually
    terrorists or they should be countered or someone should engage
    them, this is relentlessly looked at. We are in the business,
    we as Americans, in the counterterrorism field, of countering
    the terrorists, which means terrorists are specific individuals
    who represent, in our case certainly, an imminent threat to the
    United States. We encourage freedom of speech, religious
    expression and the like. So it is difficult. It requires
    constant education and we, as Americans, regardless of what
    element or what agency we are with, attempt, to the best of our
    ability to underscore that principle. And they are, of course,
    as I'm sure you would advocate, they are related. You really
    can't do one without the other.

                                  USAID BUDGET

        Senator Leahy. I agree, but I could name a lot of countries
    where we give aid that are autocratic and we seem to be
    increasing our aid.
        Mr. Natsios has quoted the President's national security
    strategy, which says that: ``Poverty, weak institutions and
    corruption can make weak states vulnerable to terrorists
    networks.'' I certainly agree with the President on that, and
    with Mr. Natsios. Mr. Natsios testified that failed states,
    including Zaire, Lebanon, Somalia and Liberia had repercussions
    far beyond their own regions, and we're dealing with the
    consequences today. But the amount of aid we provide is not
    significantly more than the past, with one exception, Liberia,
    and there I had to offer an amendment over the administration's
    objections to provide emergency funding for Liberia because the
    administration had not done so. And we know what Senator DeWine
    has said about Haiti. I agree with all the rhetoric, I worry
    the reality of money is not there.
        Mr. Natsios. Senator, if I could, I want to first thank the
    committee for their help and leadership on the budgets, since
    I've been administrator. We really do appreciate the money
    you've given us. But just to give you a sense of the importance
    of AID, when I started in office the total amount of money AID
    spent, from all spigots, was $7.9 billion. That was in fiscal
    year 2001, the last year of the last administration. Last year
    we spent $14.2 billion. Our budget has basically doubled in 2
    years. That is not all Iraq. It's Afghanistan and we have
    increased the budget for Africa for the first time in 20 years,
    by a substantial amount, it's a 35 percent increase in the
    Africa Bureau budget. And it's been stable for 20 years, since
    the early 1980s.
        Senator Leahy. Some of that money came from the Congress
    over the objection of the administration.
        Mr. Natsios. Well actually, no, this is the money we asked
    for. You did give us more money for HIV/AIDS. I didn't include
    the 2004 budget.
        Senator Leahy. And Afghanistan, 1 year there was zero in
    there for Afghanistan.
        Mr. Natsios. I understand that. I understand that but the
    budget cycle in the case of Afghanistan started before 9/11
    took place, so. But if you look at all of our accounts, they've
    gone up. The President is putting a huge increase in foreign
    aid. Now I might add, ODA, which is Official Development
    Assistance, that's the standard used worldwide for donor
    governments. The donor-from all agencies, not just the U.S.
    Government, I mean, not USAID alone, was $10 billion in fiscal
    year 2001. We estimate ODA this year will be up 150 percent to
    $26 billion, and that is not primarily Iraq. In all these
    accounts, because of the Millennium Challenge account, because
    of HIV/AIDS, because of the President's 18 initiatives and
    foreign assistance, because of the increase in the Africa
    Bureau budget, because of the increase in famine assistance,
    there's a whole set of initiatives the President's made. So
    this is the largest increase in foreign aid since the Truman
    administration; we went back to our records.
        Senator Leahy. Including the $146 million cut in
    international health programs and developmental assistance?
        Mr. Natsios. Well, the priority of the Congress and the
    administration was in HIV/AIDS, and we put the money into those
    accounts.
        Senator McConnell. We need to move along here. We've got
    about 15 minutes left and Senators are still here. Senator
    DeWine.
        Senator DeWine. Thank you, Mr. Chairman.

                                     SUDAN

        Mr. Natsios, let me move to Sudan. When Secretary Powell
    testified before this subcommittee, I brought up the issue of
    Sudan. As the former special humanitarian coordinator for
    Sudan, maybe you can continue the dialogue I started with him.
    He testified that we're this close in regard to a peace
    agreement. But this week the Sudanese government requested the
    U.N. emergency relief coordinator to postpone his visit. The
    coordinator and the humanitarian agencies really need access to
    the affected region in order to help the people suffering
    there. Given the current crisis and the lack of access, as far
    as the U.N. Mission and the humanitarian organizations that
    they're facing, what are your thoughts about how the United
    States can play a constructive role now in ending this conflict
    and suffering?
        Mr. Natsios. I think there are two separate conflicts here.
    One is between the North and the South.
        Senator DeWine. Right.
        Mr. Natsios. That's been going on since 1982. And Secretary
    Powell was correct that there are about two remaining issues,
    one around power sharing, the other about the application of
    law in Khartoum for Southerners. Those issues are still
    outstanding. They are being dealt with but we're not at a
    resolution of those issues. There is a relative cease-fire in
    the South, and that's been holding with a couple of egregious
    examples, but for the most part it's been holding. The biggest
    tragedy in the world right now is in Darfur.
        Senator DeWine. That's correct.
        Mr. Natsios. You're specifically referring to.
        Senator DeWine. Right.
        Mr. Natsios. That is the worst disaster in the world. We
    are very concerned about it. President Bush has spoken to
    President Bashir about it; I've spoken to the foreign minister
    about it; Secretary Powell has spoken to Vice President Taha
    about it at length. We have gone to the Security Council for a
    review of what is happening. We have gone to the U.N.
    Commissioner on Human Rights for review of this. I've tried to
    get staff in; we do not have visas yet, in fact, the State
    Department is meeting for the second time with the Sudanese
    Charge here to get permission to get our DART teams, Disaster
    Assistance Response Teams, into the country.
        Senator DeWine. Do you have your staff in?
        Mr. Natsios. We have a small staff in Khartoum, but we need
    far more people to respond. We have negotiated with the
    European Union and the United Nations in agreement between the
    rebels and the government for access into Darfur. The problem
    is unless we have monitors in there we'll have no way of
    knowing whether the agreement is being enforced, Senator. So I
    just want to thank you for bringing this issue up; it is a
    great tragedy, that we're about to end one conflict, and we're
    starting a new one. The atrocities committed in Darfur are
    among the worst I have ever seen; 800,000 people displaced; 400
    villages have been burned to the ground; irrigation systems
    have been blown up. We are extremely disturbed by what has
    happened. I'm spending a very large amount of time on this; I
    talked with Jan Eglund, who is the U.N. Undersecretary General
    for Emergency Operations yesterday and we are trying to assist
    his office in getting his people in. The head of the World Food
    Program, who I spoke with yesterday, Jim Morris, is being sent
    in as the leader of that delegation next week but we have to
    get him a visa to get in, and there are problems with that. So,
    it is a serious problem, we're spending a lot of time on it at
    very high levels.
        Senator DeWine. Good. Well, I'm glad it's at a high level,
    and I, you know, I know that the President has spoken about it.
    We appreciate that, I commented on that before but, you know, I
    appreciate your focus on it very much.
        Let me ask another unrelated question. There's been a
    considerable amount of press and attention given to USAID's
    malaria control policies and programs. ``New York Times
    Magazine'' wrote a significant piece about DDT and USAID policy
    just last week. I wonder if you wish to comment or clarify
    USAID's position in regard to malaria and the use of DDT.

                                MALARIA PROGRAMS

        Mr. Natsios. There are two ways to control malaria at the
    household level in countries that are prone to it. One is
    through insecticide-treated bed nets, which is the policy we
    have been pursuing. We have empirical evidence from the field
    and tests that this dramatically reduces malaria because most
    people who get bitten, particularly children, get bitten at
    night. And if they do not have the bed nets they get bitten and
    many of the kids die if they are malnourished. That is the
    policy we have been pursuing. There are people who argue we
    should be spraying with DDT. Some Africans are saying to me,
    wait a second, you want us now to allow you to spray in our
    villages something that is illegal in the United States? Please
    explain that to me. So it's interesting to have it debated this
    way in the newspapers in the United States, but the fact is we
    haven't made it legal to use DDT in the United States. Are
    there arguments for it? Yes, there are. It can be used with a
    relatively minimal level of risk if it's used properly at the
    household level. However, we have a strategy, it has been
    working, and the question is, do we want to divert the money we
    are spending now in the insecticide-treated bed nets into DDT?
    We are reviewing this now, and this is not just my decision to
    make. If we shift strategies it needs to be discussed in
    Washington widely because it will be controversial.
        Senator DeWine. More to come. Thank you. Thank you, Mr.
    Chairman.
        Senator McConnell. Okay, we're going to do two more rounds
    and that will be it for the hearing. Senator Durbin, followed
    by Senator Shelby.

                                  MICRO CREDIT

        Senator Durbin. Thank you very much, Mr. Chairman.
        Mr. Natsios, 30 years ago an economics professor in Asia
    set out to prove a point that he believed, that if you loaned
    small amounts of money to very poor people amazing things would
    happen. Thirty years later that concept of micro credit
    Mohammed Unis initiated in Bangladesh now reaches some 70
    million people across the face of the earth. It's an incredible
    testament to this man's wisdom and tenacity and the fact that
    he had an open franchise; anyone can try it. And fortunately
    the United States has supported micro credit expansion in the
    name of economic development, certainly the liberation of
    women, the enrichment of families and increasing opportunities
    for education. We've had a pretty strong record in support of
    micro credit as a nation until this year. And I'm concerned
    about decisions made in your agency about micro credit. The
    President included no reference to micro enterprise in his
    budget; USAID did not include it in its Congressional
    presentation, either in the House or the Senate, either of your
    testimony; you've reduced the administrative status of the
    Office of Micro credit and cut its funding by as much as 50
    percent, and your 5-year strategic plan makes no mention of it.
    Why is USAID backing off of its commitment to micro finance?
        Mr. Natsios. Well Senator, I don't know where that
    information comes from. It is not accurate. We have made no
    cuts in micro finance.
        Senator Durbin. I can tell you exactly where the cuts were
    made.
        Mr. Natsios. Well Senator, if I could just finish.
        Senator Durbin. Sure.
        Mr. Natsios. First, there have been no cuts made in micro
    finance in this budget or next year's budget. The funding level
    remains at $150 million. Second, the status of the office has
    been the same since the Clinton administration. We reorganized,
    and we created a new Bureau on Economic Growth, Agriculture and
    Trade instead of in the Global Bureau. But the status of the
    office has not changed at all in 3 years.
        Senator Durbin. Well, what used to be the Office of Micro
    credit has been downgraded to the Micro credit Development Team
    within the Office of Poverty Reduction, accompanied by a cut in
    administrative funding by about 50 percent.
        Mr. Natsios. Well, that's because we're sending the
    programs to the field to be run.
        Senator Durbin. Well, let's talk about where they're going
    in the field, and that concerns me as well, because I think
    this tells a story. Listen. In 2002, less than half, 45 percent
    of your funding went to groups directly responsible for
    delivering micro enterprise funds. The majority of the funding
    went to organizations that were involved in consulting, other
    for-profit organizations, business associations, research and
    government agencies. Less money is going for micro enterprise
    and more money is going for bureaucracy and consulting.
        Mr. Natsios. Well, some of the NGOs that are providing that
    information, I think are misleading the Congress. I have to say
    I'm disturbed by it because it's not accurate, sir. We are
    attempting to convert many of Mohammed Unis's great ideas and
    by the way, we were the first to fund Mohammed Unis and his
    biggest funder and have been for 30 years. A review was just
    done of the USAID Micro enterprise Program. We were ranked, of
    17 bilateral and multilateral institutions, as having the best
    micro finance programs in the world. We are the model now for
    all development agencies and remain that. What we are doing now
    is converting and some of the NGOs are working in this. I could
    tell you a couple of NGOs that are doing this. NGO funding, by
    the way, has not been cut. They're still getting about 48
    percent. What we're doing with the rest of the money is some of
    it to create a savings and loans association in cooperative
    banks to convert what our informal networks into community-
    based banking. It is consumer-owned.
        Senator Durbin. Well let me just say, I have been, before
    your administration, I have been to South Africa and asked
    USAID, show me your micro enterprise. They took me to Soweto
    Township and showed me where they were loaning $10,000 a week
    to a gasoline station, owned by Blacks, which was quite an
    achievement in Soweto Township.
        Mr. Natsios. Sure.
        Senator Durbin. But that was their idea of micro credit and
    micro enterprise, $10,000 a week. What I have seen in micro
    credit and micro enterprise, and you have seen, I am sure, is
    that much, much, much smaller amounts of money have dramatic
    impacts on the lives of poor people and their families around
    the world. And my fear is that we're starting to look at this
    as a Junior Chamber of Commerce instead of what it was
    originally destined to be, and that is a way of liberating some
    of the poorest people in the world from their plight and
    helping them send their kids to school. Is this a change in
    philosophy?
        Mr. Natsios. No, actually those programs were run in the
    1990s that you mentioned and they remain programs. We don't
    support just $50 loans. We support loans that will produce more
    employment for poor people. Let's say a woman starts a micro
    enterprise program making dresses, let's say, for a $100 loan.
    Some people are more entrepreneurial than others, no matter how
    much training you give, some people have that instinct in some
    societies--if she's successful, what we then do is, we say, can
    we give you $500? Can you employ 10 women doing this in your
    business? And if she says she can then we give her larger
    loans. So there is an effort to take the more successful micro
    financed projects and scale them up so they employ more people.
    And I can show you examples all over the world where scaling
    up, in fact, is creating huge increases.
        Senator McConnell. We need to wrap up, Mr. Natsios, and
    give Senator Shelby a shot here.
        Mr. Natsios. Okay.
        Senator Durbin. Thank you, Mr. Chairman. I'd like to submit
    the remainder of my questions in writing.
        Senator McConnell. Yes, that will be true of everyone. I
    know that Senator Leahy has questions to submit for the record
    and we'll do that for everyone. Senator Shelby.
        Senator Shelby. I just have an observation, on picking up
    on what Senator Durbin was saying and some of what the
    Ambassador was saying. I have seen a lot of micro credit work
    in Africa, in Central Asia, myself, small loans, and they do
    grow. And I do believe that those are good programs, as you do,
    and I hope we will continue to expand them in the world because
    they give opportunities at $100 or $50 that they never dreamed
    they would have.
        Having said that, I want to get into a couple of more
    questions with you, Mr. Black.
        Mr. Natsios. If I could just say, Senator, I fully agree
    with you and that is what we are doing.
        Senator Shelby. Thank you. Thank you.

                                 IRANIAN TERROR

        Iran has long been categorized by the U.S. Government as
    the world's leading state-sponsor of terrorism. Just a few
    weeks ago the Iranian convened what they call a terrorist
    summit. Attending were representatives of Hamas, Islamic Jihad,
    Hezbollah, allies of Al Qaeda, such as Ansar al-Islam, along
    with 30 other groups, all designated by the United States as
    terrorist groups. Furthermore, Iran reportedly used Syrian
    planes that were flown to Iran for humanitarian purposes
    following their recent earthquake to supply arms back to
    Hezbollah in Lebanon on their return flights.
        Mr. Black, how and to what extent has Iran continued and
    expanded its material support for the Palestinian terror groups
    such as Hamas and Islamic Jihad in the two years since Israel
    intercepted the ship transporting arms in January of 2002?
        Ambassador Black. Iranian intelligence hasn't stopped one
    iota.
        Senator Shelby. Not a bit?
        Ambassador Black. Not a bit. You and I have talked about
    this----
        Senator Shelby. Yes sir.
        Ambassador Black [continuing]. Over many years, Senator.
        Senator Shelby. Yes sir.
        Ambassador Black. And they continue to be as formidable as
    they were in those days. A lot of effort goes into trying to
    keep up with what they're doing, to counter them, but their
    associations with many terrorist groups are long-standing and
    very deep. The most well-known of these, of course, is
    Hezbollah, where they provide a significant portion of their
    funding. Their operatives of the Iranian Revolutionary Guards
    are accomplished and active in various areas of the world. They
    represent a formidable threat in the field of terrorism.
        Senator Shelby. Sure. What can you tell us here about the
    coordination with Ambassador Bremer and the CPA regarding
    Iranian involvement in Iraq, particularly with Ayatollah
    Sustani?
        Ambassador Black. I would have to take that for the record.
    There are others that would know much more about this than I,
    Senator.
        Senator Shelby. Would you furnish that to us?
        Ambassador Black. Yes sir, I'll get back to you, sir.
        [The information follows:]

        We coordinate very closely with Ambassador Bremer and the CPA
    regarding all indications of foreign influences in Iraq.
        CPA and Iraqi officials share our concerns about the role Iran is
    playing in Iraq. We are particularly concerned about border security,
    and the potential inflow of foreign terrorists and weapons to Iraq.
        There are also concerns that the Iranians may have contacts with
    insurgent elements in Iraq, and are seeking to ensure their capability
    to influence events in Iraq.
        The CPA is working closely with Iraqi officials to address these
    issues related to Iraq's stability and security.
        Iran, like other countries, should abide by U.N. Security Council
    Resolution 1373 to deny safe haven to those who plan, support, or
    commit terrorist acts and to affirmatively take steps to prevent the
    commission of terrorist acts by providing early warning to other states
    by exchange of information.
        Iran should also abide by U.N. Security Council Resolution 1511
    which calls upon all Member States to ``prevent the transit of
    terrorists to Iraq, arms for terrorists, and financing that would
    support terrorists.''

        Senator Shelby. Is Iran using Hezbollah to funnel money to
    terrorists in the West Bank in Gaza?
        Ambassador Black. The amount of funds that goes to
    Hezbollah is substantial and to my personal knowledge and
    experience it's primarily used within Hezbollah itself but I
    would have to take that for the record.
        [The information follows:]

        Hizballah continues to be closely allied with and, at times,
    directed by Iran. The group continues to receive financial, training,
    material, political, diplomatic and organizational aid from Iran. We
    see clear evidence that Hizballah is actively undermining prospects for
    Middle East peace by taking an active role in supporting Palestinian
    terrorist groups. This assistance has come in various forms, to include
    guidance and encouragement, funding, training and other forms of
    material support.
        We will continue to apply pressure on all states and entities who
    use terrorism to threaten the prospects for a just and lasting Middle
    East peace. This includes working closely with our allies to put
    pressure on state sponsors Iran and Syria, seek support for U.S.
    terrorism designations (including U.S. Executive Order 12947--
    Prohibiting Transactions with Terrorists Who Threaten to Disrupt the
    Middle East Peace Process), and exposing the activities of these
    entities in our publications and public statements.

        Senator Shelby. Does that include bank transfers and other
    means, other unconventional means or some of both?
        Ambassador Black. It's through a variety of means; money in
    suitcases and, you know, wire transfers and the whole spectrum.
        Senator Shelby. Are we doing everything we can to try to
    stop that, as far as you know?
        Ambassador Black. Yes, we are, but there's always more we
    can do. This is a serious business and you know, we can always
    say there's a lot more that we can do and we are trying,
    Senator.
        Senator Shelby. The possibility of linking assistance to
    cooperation in combating terrorist financing--this has been
    brought up before. In testimony earlier this year, former
    Deputy National Security Advisor for Combating Terrorism,
    Richard Clarke, testified, suggested one approach to improving
    the level of cooperation among countries of interest would be
    the establishment of a certification process linking U.S.
    assistance to individual countries' records at cooperation in
    the war on terrorism including terrorist financing, very
    similar to the old process of certifying countries' cooperation
    in the war on drugs that we're familiar with. Is this a
    reasonable approach, to link this, or is it worth looking at?
    Mr. Ambassador, you want to?
        Mr. Natsios. Eighty-five percent of our funding does not go
    through governments. It goes through trade associations, it
    goes through NGOs, it goes through universities, it goes
    through private businesses in competitive contracts. And so, we
    don't go--there are only about four or five countries left in
    the world where we actually give large amounts of money to the
    governments. So what I don't want to do is have a sort of----
        Senator Shelby. And those countries are Israel and who
    else?
        Mr. Natsios. Egypt, Pakistan, and Jordan. There are a
    couple of, I mean, Bolivia, we're doing a little bit now but
    those are the big ones, that's where the 15 percent goes.
        Senator Shelby. Along this same line, it's interesting to
    note that of the seven countries listed by the Financial Action
    Task Force as non-cooperative in the effort to stem the flow of
    funds that support terrorist activities, one, the Philippines,
    has been a major recipient of counterterrorism assistance and
    another, Indonesia, presents us with one of our most serious
    long-term counterterrorism challenges in the entire world.
    Don't we need some kind of criteria? Or how do we do it? I know
    they need help, I know the Philippines definitely need help.
        Mr. Natsios. Right.
        Senator Shelby. Indonesia is a heck of a challenge.
        Mr. Natsios. In both countries, though, none of our money
    goes through the governments.
        Senator Shelby. Okay.
        Mr. Natsios. It goes through these other means, and that's
    why we do it through other means so we can control the money.
        Senator Shelby. Control the money.
        Mr. Natsios. Yep.
        Senator Shelby. Okay.
        Mr. Natsios. But we'll certainly look at it, Senator. It's
    a legitimate point.
        Senator Shelby. Well, it's not original with me, it's just
    something--we just want to make sure the programs were working.
        Mr. Natsios. Absolutely.
        Senator Shelby. Mr. Chairman, thank you for your
    indulgence.
        Senator McConnell. Thank you, Senator Shelby and Senator
    DeWine for staying to the end. And we thank you both for your
    service to our country and we'll look forward to getting the
    answers to the questions that are submitted in writing.
        Ambassador Black. Thank you Senator, for having this
    hearing.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator McConnell. There will be some additional questions
    which will be submitted for your response in the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

             Questions Submitted to Administrator Andrew S. Natsios

                 Questions Submitted by Senator Mitch McConnell

                                      IRAQ

        Question. Following the June 30 transition in Iraq, will USAID be
    the implementing agency for humanitarian, health, education and
    democracy and governance programs in Iraq?
        Answer. To date, USAID has been successfully implementing a large-
    scale development program in Iraq in the areas of humanitarian
    assistance, economic growth, health, education, democracy and
    governance, and infrastructure. We are currently building upon and
    expanding our interventions in each of these sectors with funding
    provided under the second supplemental. The allocations to date are
    articulated in the April 5, 2004, section 2207 report. USAID is
    prepared to increase its portfolio, consistent with its areas of
    expertise, at the request of the Secretary of State.
        Question. What impact can regional democracy activists--such as
    Egypt's Said Ibrahim--have in furthering political reforms in Iraq?
        Answer. While it is important for democracy activists in the region
    to continue their efforts and raise their voices in support of
    democratic systems of government in Iraq and throughout the Middle
    East, it is more important that Iraqis are in a position to advocate
    for democratic reforms in their own country. In order for democracy to
    take root culturally, below the level of institutional structures,
    there must be a genuine Iraqi demand for the reforms. USAID's
    assistance program facilitates this transformation by working directly
    with Iraqis to secure an environment that protects the rights of
    minorities and other marginalized populations, promotes a broad-based
    understanding of democratic rights and responsibilities,
    professionalizes the civil service, fosters freedom of expression, and
    establishes an independent and responsible media. These efforts,
    however, could be enhanced by political activists such as Said Ibrahim
    and other scholarly interpretations by Arab religious, academic, and
    opinion leaders regarding the consistency between Koranic teachings and
    democratic principles and institutions.
        Question. Has the liberation of Iraq already had an impact on
    freedom in the region--such as increased calls for reform in Syria or
    Libya's recent opening to the West?
        Answer. The liberation of Iraq has sent a strong message regarding
    the intention of the United States to oppose dictatorial regimes which
    terrorize their own people and offer haven to terrorist groups. Given
    the timing of the war and the calls for reform in Syria and Libya, a
    case could be made for there being a connection. Whatever the
    motivation for these new openings, the critical factor is to provide
    the support and encouragement necessary to turn the promise they hold
    out into reality. Activities to develop more democratic policies and
    mechanisms and a more open market economy should be undertaken to help
    facilitate transparency and equity in these countries' dealings with
    their own citizens and the rest of the world.

                                  AFGHANISTAN

        Question. What programs are being funded by the United States to
    provide alternatives to Afghan poppy farmers?
        Answer. It is generally agreed that a successful counter-narcotics
    effort is predicated on a three-legged approach (interdiction,
    eradication and alternative livelihoods). USAID operates under the
    alternative livelihood heading. Few crops can compete with poppy.
    However, USAID is implementing some programs which help farmers with
    alternative sources of income through production of high value crops,
    such as grapes, apricots, almonds, pomegranates, pistachios, walnuts,
    cherries, melons and peaches, in addition to food processing, as an
    alternative to poppy.
        USAID's agriculture program--Rebuilding Agricultural Markets
    Program (RAMP)--is working in several key areas of Afghanistan which
    are growing poppies--most notably Helmand, Nangarhar and Kandahar.
    Specifically, of the 32 projects which had been funded under RAMP by
    mid-April, five were exclusively directed at these provinces, with a
    total value of $7,610,291. These figures exclude projects which will
    impact these provinces but which have a regional or nationwide scope.
    USAID advisors have actually gone into villages where poppy is grown,
    and had discussions with the village headmen to ask them to sign
    affidavits attesting that they will disavow poppy cultivation in
    exchange for USAID assistance. Anecdotally, this has been a successful
    approach.
        In addition, USAID is rehabilitating farm-to-market roads and
    providing market and storage facilities to ensure that perishable
    produce can make it to the markets and facilitate their sale, once
    there. Under RAMP, improving market linkages and the ``value chain''
    from field to market to processing to final sale is a key strategy to
    improving farmer's incomes. By focusing this strategy on both
    traditional and innovative, high value crops, the relative
    attractiveness of poppy cultivation is greatly reduced. These market
    and storage facilities are being constructed in eight provinces,
    including Nangarhar, Helmand, and Kandahar. To date, three are
    completed, another 65 are under construction, and 100 will be completed
    by June 30, 2004. By late Summer, 141 market and storage facilities
    will be completed.
        Question. What importance do the British (who are in charge of
    counternarcotics operations in Afghanistan) place on alternative crops
    or employment opportunities?
        Answer. The United Kingdom has adopted a plan to support the Afghan
    National Drug Control Strategy. The Research in Alternative Livelihoods
    Fund (RALF) is a component of the UK's development assistance program
    to Afghanistan which is administered by the Department for
    International Development.
        RALF is a $5.4 million effort over three years, whose overall scope
    is applied research and the promotion of natural resource-based
    livelihoods specifically directed to rural areas currently affected by
    poppy production.
        We are working closely with the British to ensure that our programs
    are coordinated.
        Question. Are these [counternarcotics] activities sufficiently
    funded?
        Answer. The key to successful counternarcotics activity is a fully
    integrated and well-implemented program involving interdiction,
    eradication and alternative livelihoods. While additional funds are
    welcomed, emphasis must be placed on a well-coordinated strategy.
        Question. Are education programs in Afghanistan having an impact in
    mitigating radical Islam among the nation's youth?
        Answer. USAID's education program in Afghanistan is primarily
    geared at primary education, for grades one through six, though we have
    been providing textbooks through grade 12. With that said, there is an
    enormous cohort of youth who did not attend school under the Taliban
    and so need extra help in order to reach a grade appropriate for their
    age. Our accelerated learning is directed at these students. The
    program is expanding rapidly, with now 137,000 students enrolled in 17
    provinces. This program has also trained 4,800 teachers, specifically
    trained in methodologies for these students.
        We are also working to improve the quality of education in the
    regular curriculum. In the 2002 and 2003 school years we provided a
    total of 25 million textbooks, this year we will provide over 16
    million more. We are also implementing a radio-based teacher training
    program to improve the quality of teaching. The program is now
    broadcast in six provinces through local broadcasters and nationwide
    through a national broadcaster. Twenty-six of these programs have been
    broadcast to date and initial results from monitoring of the pilot
    programs found that approximately 80 percent of Afghan teachers in the
    listening areas listened to these programs.
        Lastly, data show that Afghan children and youth are increasingly
    returning to school. In 2001, under the Taliban, approximately 1
    million Afghan children went to school, in 2002, the first year we
    provided textbooks, UNICEF measured that 3 million children were in
    school. Data collection was poor in 2003, but education experts working
    in Afghanistan estimated that the total was approximately 4 million
    children in school. Finally, the latest data for 2004 show that 4.5
    million children are in school. Such significant percentage gains year
    over year in school enrollment indicate a vote of confidence in a
    peaceful, productive future among Afghan children, youth, and their
    parents.
        Question. What threat does Afghani Islamic fundamentalism pose to
    reconstruction efforts in Afghanistan?
        Answer. It is important to draw a distinction between Islamic
    fundamentalism and terrorist activities. Extremist political groups who
    sponsor terrorist activities continue to pose a threat to
    reconstruction in Afghanistan. Fundamentalism itself is not the
    problem.

                                 SOUTHEAST ASIA

        Question. How can the United States and international donors hold
    governments in the region more accountable for their actions--for
    example, in Cambodia where despite significant foreign aid, the country
    remains a corrupt narco-state that is a known haven to regional triads
    and terrorists?
        Answer. USAID does not engage directly with the Cambodian
    Government, except in the areas of HIV/AIDS treatment and prevention,
    programs to prevent trafficking in persons, and basic education. Many
    USAID-supported activities are funded specifically to encourage
    government transparency and accountability: legal clinics that
    challenge some of the most egregious situations; democracy projects
    that promote alternative political approaches; anti-trafficking
    programs that highlight some of the worst cases of abuse; and labor
    union programs that promote the free exercise of union rights.
        More broadly, USAID programs are not structured to ``reward'' the
    government. Rather, the aim is to improve Cambodia's human rights
    performance, introduce new ideas about good governance and address some
    of the most challenging social issues facing the country. With regard
    to terrorism specifically, it should be noted that since September 11,
    the Cambodian Government has been an active and cooperative participant
    in the fight against terrorism. Specific actions include sharing
    information, closing possible ``cells,'' and shutting down extremist
    sites and potential staging grounds for terrorist acts.
        During initial operations against the Taliban and al-Qaeda in
    Afghanistan, Cambodia quickly offered basing and over-flight rights for
    U.S. military aircraft (this offer still stands). It also arrested four
    people in May 2003 with alleged ties to a terrorist organization and
    closed two Islamic fundamentalist schools where these individuals were
    employed. In addition, Cambodia destroyed its entire stock of hand-held
    surface-to-air missiles. It also introduced an automated system to keep
    better track of people entering and leaving the country.
        Question. What programs are currently funded by USAID that
    encourage and foster regional cooperation among Southeast Asia
    reformers?
        Answer. USAID is funding four programs that are fostering regional
    cooperation efforts to address transnational issues and opportunities,
    promoting public-private partnerships, and facilitating the exchange of
    information and ideas among reformers in Southeast Asia. The Southeast
    Asia competitiveness initiative focuses on improving competitiveness of
    the Asian economy by building economic clusters in Vietnam, Thailand
    and Cambodia that work towards growth and help government and the
    private sector design and implement national competitiveness
    strategies. The Accelerated Economic Recovery in Asia program supports
    legal, judicial and economic reform in Thailand, Vietnam, Cambodia as
    well as Indonesia and the Philippines. The ASEAN program supports
    projects in three areas: bolstering the administrative and project
    implementation capacity of the ASEAN Secretariat; building regional
    cooperation on transnational challenges, including terrorism, human
    trafficking and narcotics, and HIV/AIDS and other infectious diseases;
    and fostering economic integration and development between the ten
    Southeast Asian member countries. The trafficking in persons program
    operates in Thailand, Laos and Vietnam, and focuses on prevention,
    protection and prosecution to combat trafficking.
        Question. What programs are currently funded by USAID to counter
    the efforts of madrassas to recruit the region's disaffected Muslim
    youth?
        Answer. In Indonesia, the new basic education program will also
    include assistance provided for school-to-work transition, especially
    to out-of-school youth. Over time, this will increase the prospects for
    employment among young job-seekers. Improved prospects for meaningful
    employment, and the better future that it can bring, should lessen
    frustration and alienation among those young people who could,
    otherwise, be willing recruits for leaders who advocate extreme
    solutions to social and economic problems. These efforts in the
    education sector will be complemented by the new emphasis on job
    creation in the new USAID economic governance and growth programs.
        In October 2003 President Bush announced in the Philippines that
    USAID would make available up to $33 million in fiscal year 2004-2008
    for education assistance in conflict affected areas of the
    Philippines--specifically in the Autonomous Region of Muslim Mindanao
    (ARMM). To counter the efforts of madrassas to recruit disaffected
    Muslim youth, the program's goal is to improve the quality of education
    in ARMM region schools where public schools are grossly under-funded
    and madrassas may be the only school within walking distance.
        The Improved Access to Quality Education in Poor, Conflict-
    Affective Communities program is designed to address the political,
    economic and social marginalization of Muslim and other impoverished,
    conflict-affected communities in Mindanao with a goal to building peace
    and economic security.
        Program focus areas are:
      --Increasing community-based learning opportunities--especially in
            school-less, conflict-affected areas;
      --Promoting reintegration of out-of-school youth into the peaceful,
            productive economy;
      --Improving teaching capacity in math, science, and English in both
            public and madrassa schools and providing opportunities for
            madrassa schools to adopt secular curriculum;
      --Reforming education policy.
        Key achievements to date:
      --A Congressional internship program for young Muslim leaders
            provided the first group of ten college graduates and graduate
            students with an understanding of the dynamics of the
            legislative branch.
      --Peace Corps volunteers in collaboration with the USAID education
            program are providing math, science, and English training for
            teachers from Muslim areas of Mindanao.
      --Public elementary and high schools in the ARMM have received up to
            five computers each, as well as software, printers, network and
            internet connection.
      --USAID is distributing books donated by U.S. publishers to schools
            and libraries in conflict-affected areas of Mindanao where
            reference and books materials are in critically short supply.
        In two other countries, Pakistan and Bangladesh, USAID is
    responding to vulnerable and at-risk Muslim youth. The emphasis of
    USAID's program in such countries is to develop a more credible public
    education system so families can select this option as a viable option
    over the madrassa system.
        To this end, USAID is working along several tracks. One approach
    being explored is the introduction of innovative approaches for early
    childhood learning. Some of these involve engaging parents, some of
    them semi-literate or even illiterate, to be proactive in the education
    of their children, having mothers take a greater interest in school
    operations and engaging unemployed or under-employed youths in the
    community with some level of education to act as tutors for children
    having difficulty in schools.
        Another element of USAID's support for early childhood development
    is through a mass media approach to improving literacy, numeracy and
    critical thinking skills in the next generation. In Bangladesh, a
    USAID-supported Bangladeshi-produced Sesame Street program will include
    messages of tolerance and non-violent conflict resolution, reaching out
    to a broad audience in Bangladesh in addition to preschoolers.
        Third, USAID is seeking a better understanding of the madrassa
    education system and its relationship with the mainstream public (and
    private) education systems. The objective is to identify incentives and
    resources to improve educational content at madrassas and to determine
    if there are appropriate entry points for U.S. assistance for those
    madrassas that are registered with the host government and subscribe to
    a government-approved curriculum.
        Finally, USAID is supporting innovative public-private partnerships
    to increase job skills of older students and better prepare those
    leaving schools for future employment.

                                     ISRAEL

        Question. How have USAID-funded programs in the West Bank and Gaza
    countered the efforts of Hamas to win the hearts and minds of the
    Palestinian people?
        Answer. USAID funds a broad range of activities in the West Bank
    and Gaza that engage the youth population, and are aimed at dissuading
    Palestinian youth from aspiring to be terrorists. For example:
      --Our democracy and governance projects teach the skills of
            democratic, civil, non-violent mobilization and advocacy. They
            reach out to school children and university students, providing
            mentoring, counseling, and structure, and at the same time
            imparting skills, knowledge, and appreciation for non-violent
            conflict resolution techniques.
      --USAID-supported civic education media programs are widely
            disseminated and designed to deliver and reinforce the message
            that there are problems, but that violence is not a solution.
      --Town hall meetings, panel discussions, and young leader training
            programs reach out into the heart of the communities that have
            been identified as prime breeding ground of suicide bombers,
            providing avenues of communication that are effective and
            healthy alternatives to violence.
      --Through our various community service programs, we are trying to
            inculcate skills and positive experiences that will support
            non-violent conflict resolution behaviors. For Palestinian
            teens and young adults, we support programs that ``get them off
            the street'' into positive, healthy, mentored situations where
            they are engaged in activities conducive to adopting non-
            violent approaches to resolving the national conflict.
        Additionally, Palestinians put a very high priority on education
    for children. While USAID/West Bank and Gaza does not work specifically
    on curriculum development or textbooks, we do fund significant training
    programs for teachers and students, which help students deal in
    alternative ways with trauma and anger. For example:
      --Our ``psycho-social'' training project has reached over 32,000
            students between the ages of 6 and 18 and their teachers.
            Activities under this project include play and art activities
            for children, geared towards helping them deal with the tension
            of the situation on the ground, and group discussions with
            parents and teachers.
      --Our People to People program works with Palestinian Ministry of
            Education and Israeli public school teachers on developing a
            curriculum that recognizes the views, values, narrative, and
            humanity of each side in the conflict.
      --We also improve the learning environment by building and repairing
            classrooms, libraries, and labs. The 800 classrooms that USAID
            has remodeled and rebuilt provide improved learning
            environments for children. Among other things, these new
            classrooms provide the opportunity for girls to go to school in
            areas that they previously were unable to because of space
            limitations.
      --USAID funds have also provided summer camp experiences for more
            than 8,500 girls and boys. Basic themes of these in-school and
            summer camp activities include moderation, reconciliation, and
            overcoming conflict through peaceful means.
      --Under our Tamkeen project one NGO in Gaza supports university
            students' work on issues of democratic practice, including peer
            mediation and conflict resolution.
      --Another NGO has provided extremely high quality civic education to
            thousands of people (mostly high school students) throughout
            the West Bank and Gaza.
      --Under our Moderate Voices program NGOs work with teachers, Ministry
            of Education, and school administrators on a peace curriculum
            integrated with the regular school curriculum. It has also
            supported an initiative with high school students promoting
            democratic dialogue, attitudes, and skills, and an ongoing
            project in the Gaza Strip to enrich and emphasize democratic
            and human rights oriented values in the standard curriculum.
      --Also in Gaza, a peer mediation and conflict resolution program
            conducted in UNWRA schools disseminates desired values and
            identifies and training peer leaders to act as mediators in
            conflict situations.
        Finally, a significant portion of our overall programming is geared
    to meeting emergency health and humanitarian needs, creating jobs,
    providing educational opportunities, and supporting economic
    development. In this way, USAID programs give Palestinian youth hope
    for a better life and future.
        This fiscal year we plan to use available funds to design and
    implement additional targeted activities, within the parameters of
    current U.S. law.
        Question. What plans does USAID have for its programs in Gaza--
    particularly those relating to water--should Israeli withdrawal become
    a reality?
        Answer. The primary issue that determines USAID Gaza water programs
    is the security situation and the cooperation of the Palestinian
    Authority in the investigation into the killing of three American
    Security Guards that occurred on October 15, 2003. On 4/28/04, the
    Department of State determined that the situation had not improved
    sufficiently for the major infrastructure projects--the Gaza Regional
    Water Carrier Project and the Gaza Desalination Plant Project--to
    continue. However, rather than terminate the project, the U.S.
    Government is simply continuing to suspend activity, and retain the
    funds allocated in the hopes that these important projects can be
    brought on line rapidly should the situation change. If the security
    risk level is considered acceptable and there is agreement that the PA
    has cooperated in the investigation, we will want minimal time to begin
    implementation of the Gaza Regional Water Carrier and perhaps six
    months to bid and award the Gaza Desalination Plant Project.
        Directly related to the Israeli withdrawal may be the need to
    replace water supplies now being provided by Israel's Mekorot Water
    Company, primarily (but not exclusively) to Gaza's southern
    settlements. Once the settlements are withdrawn it is conceivable that
    Israel will no longer pump water into Gaza. Piped connections may have
    to be modified so that Gaza communities will be able to benefit from
    the Mekorot lines. USAID/WBG will investigate the engineering
    implications of this issue over the coming weeks.
        In addition, we believe that several of the Israeli settlements in
    Gaza are now getting their potable water from local groundwater
    reserves. Where this is happening, it may be necessary to provide piped
    connections from the wells to the closest adjacent Palestinian water
    network. Whether and to what extent this may be required must also be
    investigated in the coming weeks.
        Question. How does USAID ensure that no U.S. taxpayer funds for the
    West Bank and Gaza end up in the hands of terrorists?
        Answer. The Mission is well aware of the dangers associated with
    providing assistance to terrorist organizations or those who are
    affiliated with such organizations. Country Team vetting and close
    oversight help the Mission ensure that funds do not fall into the hands
    of terrorists. Consequently, beginning in November 2001, the Mission
    implemented a program whereby Palestinian grantees and contractors must
    be vetted by the Country Team at the Embassy in Tel Aviv. This applies
    to all contracts in excess of $100,000 and to all grants regardless of
    dollar value. In each case, the organization and its key personnel are
    reviewed to determine whether they are engaged in terrorist activity.
    Also, individuals applying for scholarships or to participate in USAID
    funded training programs are similarly vetted. To date, the Mission has
    vetted more than 1,000 Palestinian organizations and individuals.
        Finally, the Mission, with congressional encouragement, has
    developed a robust risk assessment strategy. All Mission institutional
    contracts and grants--approximately 100--are audited on an annual basis
    by local accounting firms under the guidance and direction of USAID's
    Inspector General. Preliminary findings on the first 10 auditable units
    appear to indicate that except for some questioned costs, general
    compliance and internal controls appear to be adequate.

                                   INDONESIA

        Question. Will increased assistance for education and health
    programs help counterbalance the ability of JI and other extremist
    groups to recruit in Indonesia?
        Answer. The increased assistance from USAID for education and
    health programs should help to counterbalance the appeal of extremist
    groups and messages in Indonesia. The new basic education program will
    support our efforts to counter extremism through its focus on critical
    thinking, improved teaching methodologies, democracy, pluralism and
    tolerance. The focus on improving the quality of public school
    education, through improvements in school governance and teacher
    training, will allow schools that follow the government-mandated
    curriculum to offer a more attractive alternative to parents and
    students who are currently turning to private and religiously-based
    schools for basic education.
        The assistance provided on school-to-work transition and the
    special assistance to out-of-school youth should, over time, increase
    the prospects for employment among young job-seekers. Improved
    prospects for meaningful employment, and the better future that it can
    bring, should lessen frustration and alienation among those young
    people who could, otherwise, be willing recruits for leaders who
    advocate extreme solutions to social and economic problems. These
    efforts in the education sector will be complemented by the new
    emphasis on job creation in the new USAID economic governance and
    growth programs.
        Similarly, although perhaps over a longer time frame, increased
    assistance to health and other basic human services can lessen the
    appeal of extremists. The provision of better quality health, water and
    nutritional services to people and communities should improve their
    quality of life, particularly among poor Indonesians, and help address
    the feelings of abandonment that can fuel the anti-government and anti-
    societal appeal of extremists. More broadly, the delivery of improved
    services by local governments, through management systems that
    encourage community participation, ownership and control, offers
    citizens a real voice in their governance and, by extension, a more
    substantive role in the development of effective dispute resolution
    mechanisms at the local level.
        Question. How does USAID maximize information technology in its
    programs in a geographically challenging place such as Indonesia?
        Answer. The decision to make Indonesia one of three focus countries
    for the President's ``Digital Freedom Initiative'' (DFI), announced by
    President Bush at the October 2003 APEC meeting, offers the opportunity
    for USAID to pursue Information and Communication Technology (ICT)
    solutions to development issues using a more strategic approach than
    was possible in the past.
        In recent years, USAID has integrated ICT solutions into over
    thirty development programs, including efforts in: (a) electoral
    management (including GIS-assisted establishment of voting districts);
    (b) establishment of a website for the National Parliament; (c)
    promoting pluralist civil society and tolerant Islamic values by
    disseminating information on religious tolerance on-line; (d)
    international trade promotion and small- and medium-sized enterprise
    development; (e) establishment of a Center for Energy Information in
    the Ministry of Energy and Mineral Resources to facilitate private
    sector investment; (f) promotion of decentralized and strengthened
    management of Indonesia's forests, protected areas and coastal
    resources through on-line information centers; (g) establishment of a
    local government on-line support center to share decentralized
    governance ``best practices'' and provide access to donor agencies,
    associations of regional governments and regional government
    directories; and (h) establishing a nation-wide Nutrition and Health
    Surveillance System for households with mothers and children under five
    years of age.
        Under the new fiscal year 2004-2008 Strategic Plan for Indonesia,
    USAID will further integrate ICT solutions into all assistance
    programs, to be coordinated under a DFI Plan that is currently in
    preparation. In addition to a special focus on ICT services and access,
    especially for the underserved, we will pursue specific ICT
    applications in our new basic education program, health and emergency
    relief services (including a proposed joint emergency information
    system with Microsoft and the Indonesia Red Cross), and local
    government service provision programs.

                                  NORTH KOREA

        Question. Given the extremely closed nature of North Korea, can any
    programs be conducted inside that country to promote democracy and
    human rights?
        Answer. North Korea remains the most closed and isolated country in
    the world. The regime controls the people and ensures its survival by
    brutally restricting the flow of all information and ideas. In such an
    environment, it is virtually impossible to conduct any programs inside
    the country that overtly promote democracy and human rights.
        Question. What programs can be supported among North Korean
    refugees to create an organized opposition to the thugs in Pyong Yang?
        Answer. The United States is not pursuing regime change in North
    Korea; support for programs meant to create an organized opposition to
    the regime in Pyongyang would not be consistent with that policy.

                                  WEST AFRICA

        Question. Do you agree that drug addicted, demobilized rebels in
    Sierre Leone and Liberia pose an immediate threat to the resumption of
    hostilities in the region--and easy recruits for terrorist
    organizations?
        Answer. Based on extensive discussions in Sierra Leone with NGOs,
    youth groups, women's groups, traditional leaders, communities and
    peacekeepers, drug addiction among ex-combatants has not been found to
    be a serious problem.
        In Liberia, however, the situation is different and drug abuse is
    thought to be a significant issue among (ex-)combatants. Despite these
    problems, they are not seen as a threat to the disarmament,
    demobilization and reintegration (DDR) process.
        Question. What programs does USAID sponsor to ensure that these
    addicts are treated for their addictions?
        Answer. USAID is well aware of the drug problems in Liberia and
    intends to use International Disaster and Famine Assistance funds to
    support activities that address the issue. The current Annual Program
    Statement (APS) ``Achieve Peace and Security through Community
    Revitalization and Reintegration'' (APSCRR) clearly states that,
    ``USAID is interested in funding suitable drug treatment programs under
    this APS.''
        We are currently reviewing proposals in this area submitted in
    response to the APSCRR APS and plan to support activities that would
    begin in the next few months. Activities will focus on both drug
    awareness programs and the treatment of drug addiction through support
    groups and substance abuse treatment facilities, which would be linked
    with ongoing reintegration/employment programs.

                                 SOUTH AMERICA

        Question. Does USAID have lessons-learned from efforts to counter
    drug cultivation in Central and South America that may be applicable to
    on going counternarcotics efforts in Afghanistan?
        Answer. Three lessons from counter-drug programs in Central and
    South America are important for counter-narcotics activities in
    Afghanistan and other areas.
      --Drug production typically takes place in areas where there is no
            state presence. Expansion of state presence throughout the
            entire national territory is therefore critically important.
            Military and/or police forces must be able to arrest criminals
            and control illegal activities that take place anywhere in the
            country. The National Government must also provide, or support
            effective local governments that provide, essential government
            services such as access to justice, education, health, economic
            and social infrastructure, and other services that earn the
            trust, confidence and support of local people.
      --Local support for counter-narcotics programs is essential for
            success. This support is gained through alternative development
            assistance which increases legal employment and incomes as well
            as through local government or community development programs
            that provide local infrastructure and improved local
            governments in exchange for community support to eradicate drug
            crops.
      --If society views narco-trafficking as a foreign problem only,
            people will not support the actions needed to root it out.
            Communication programs are essential to teach and inform people
            at all economic levels about the dangers of drug production and
            narco-trafficking. People need information about how narco-
            trafficking affects their health, communities, the environment,
            families, and the economy. They also need to see examples of
            how narco-trafficking negatively impacts justice systems,
            institutions and democracy.

                                    PAKISTAN

        Question. Can you comment on the impact of U.S. assistance in
    Pakistan to counter the hateful ideology of madrassas and other
    extremists?
        Answer. The primary objective of USAID/Pakistan's education sector
    is to provide the knowledge, training and infrastructure to support the
    Government of Pakistan's educational reform program. USAID assistance
    emphasizes high quality education programs for boys and girls
    throughout Pakistan, including public and private schools and
    registered madrassas wishing to avail themselves of the assistance. Two
    pilot programs in early childhood education and adult literacy are
    proving highly successful in changing the approaches of teachers,
    parents and administrators and making public schools more effective and
    attractive to students and their parents. The Government of Pakistan is
    interested in expanding these programs nationwide.
        The ``Whole District Initiative'' provides materials and training
    to upgrade all schools wishing to participate in the initiative in four
    districts each in Balochistan and Sindh--two badly neglected areas of
    the country. These are demonstration projects, with the goal of
    replication in all districts of the country by Government with USAID
    and other donor support.
        The USAID Teacher Education project provides the opportunity for
    selected Pakistani educators to study in the United States and gain
    first hand knowledge of the American culture and values as well as
    academic training to become better teachers and mangers of educational
    services.
        USAID is exploring expansion of school feeding programs currently
    funded by USDA in one district.
        In June a project will begin to rehabilitate and refurbish 130
    shelterless schools across all the seven agencies in the Federally
    Administered Tribal Areas (FATA). Schools, water and health facilities
    are the priorities of these communities.
        Collectively, these measures may serve to undercut some of the
    appeal of Madrassa education in its more extreme forms. However, USAID
    programs cannot directly take on the problem of the Madrassas that
    foster or support terrorism. That responsibility must be assumed by the
    Pakistan Government.
        Question. How do you envision the democratic development of
    Pakistan, and what programs are supported by USAID to advance democracy
    in Pakistan?
        Answer. Recent developments indicate a positive trend towards
    democratic development of Pakistan. In 2002, Pakistan returned to
    democratic rule with elections of the national and provincial
    legislatures, with more than 70 percent of members being elected for
    the first time to parliament. This has created an opportunity to train
    these parliamentarians in the necessary skills to improve legislative
    governance, especially to be responsive to the needs of citizens.
    Pakistan has also opened up its electronic media to private sector
    ownership in the first time in its history. Now citizens have access to
    alternative choices and increased accountability in the media. Also,
    Pakistan is currently in the process of shifting political,
    administrative and fiscal responsibilities from central to local levels
    of government through a comprehensive devolution program.
        USAID built its governance interventions to capitalize on these
    developments through a three-year, $38 million program to help build a
    more participatory, representative and accountable democracy. It is
    designed to actively involve civil society, the key actors in eliciting
    democratic change in Pakistan, by (1) improving the capacity of
    legislators at national and provincial levels to effectively perform
    their legislative duties and better address the needs of citizens; (2)
    actively engaging civil society groups, media and political parties to
    address pressing social and economic issues; and (3) stimulating local
    governments to work with citizens to solve social and economic problems
    at the community level.
    1. Improving the capacity of national and provincial legislatures to
            respond effectively to the needs of citizens
        Program activities include:
      --Providing technical assistance and training in drafting specific
            legislation, such as conducting background research and
            drafting policy papers;
      --Assisting legislators and staff to improve legislative procedures
            and processes such as functioning of committees; and
      --Support public forums where interest groups will discuss current
            legislative agenda topics, from passing a budget to reforming
            laws affecting women.
    2. Civil society, media and political parties actively engaged in
            addressing key economic and social issues facing Pakistani
            society
        Examples of activities are to:
      --Improve the financial and operational sustainability of NGOs, such
            as introducing efficient auditing software programs;
      --Develop the capacity of new, private radio stations to improve
            their programming content, including professional quality
            weekly news programs on women's issues;
      --Train journalists to improve the quality of reporting through new
            university curriculum; and
      --Strengthen political party processes and structures, such as
            improving intra-party communication and development of party
            membership lists.
    3. Local governments working with citizens to solve social and economic
            problems at the community level
        Projects which are demonstrating to citizens that their local
    governments are part of positive solution include:
      --Small water systems for potable water and irrigation;
      --Ambulance services and improved health clinic equipment; and
      --Sanitation facilities such as latrines so that parents allow their
            children, especially girls, to stay in school.
        Question. How will the fiscal year 2005 request for Pakistan--
    particularly $300 million in economic aid--combat terrorism in that
    country?
        Answer. The U.S. program in Pakistan has counterterrorism as its
    priority strategic goal. All programs are designed to support the
    government of Pakistan to achieve their goal of becoming a modern,
    moderate Islamic state. U.S. assistance programs are varied but
    targeted to address critical barriers to achieving the social and
    economic prosperity which is essential to fight terrorism.
        Poverty and illiteracy are Pakistan's overriding limiting factors
    to becoming a modern state capable of offering alternatives to its
    citizens, and also to participating in the global economy. Without
    economic options and basic social services, the poor are easy prey for
    religious extremists.
        Economic aid for Pakistan addresses the need for a growing economy
    that can reduce poverty through increasing literacy, improving basic
    health services and expanding employment opportunities for the poor,
    especially youth and women. Education programs will strengthen the
    central and local governments in their ability to offer viable
    alternatives to religious schools. USG support ranges from sustainable
    investments such as updating education policy and teacher training to
    more immediate, practical investments in school infrastructure and
    teaching materials. Expanding access to basic health services is
    another targeted program which will help poor Pakistanis take advantage
    of economic opportunities. Through microfinance and small business
    loans, entrepreneurs will not only increase their own standards of
    living but also offer employment in their communities.
        In addition to a strong economy, Pakistan needs a stable democracy
    to become a moderate Islamic state. This requires strong institutions,
    trained civil society and government leaders, and an open environment
    for raising awareness of issues such as human rights. U.S. economic
    assistance programs offer training for legislators in basic governance
    processes which will strengthen Pakistan's national and provincial
    institutions. These programs will also expose legislators and their
    staff to the workings of modern Muslim and non-Muslim governance
    systems in other countries. Civil society organizations will be
    supported to prioritize, articulate and communicate citizen concerns to
    government officials at all levels, such as women's issues, poverty,
    and education.
        Other innovative assistance activities are being implemented in
    support of devolution. One program is helping local governments and
    communities work together for the first time to provide basic services,
    especially in health and education. Expanding this pilot program, which
    demonstrates transparency and accountability through direct experience,
    is a priority. It improves the quality of life for poor citizens and
    also reinforces the potential for a decentralized, grassroots
    democracy.

                                   SYRIA/IRAN

        Question. What programs can be conducted in both Syria and Iran to
    foster political and social reforms?
        Answer. There are few options for fostering political and social
    reforms that can be conducted in both Syria and Iran with Foreign
    Operations funds for political or social reform. Sec. 507 of the
    Foreign Operations, Export Financing, and Related Programs
    Appropriations Act, 2004 (Division D, Public Law 108-199) prohibits
    both Syria and Iran from receiving any funds appropriated under this
    act.
        However, Sec. 526 (Democracy Programs) instructs, ``that
    notwithstanding any other provision of law, not to exceed $1,500,000 of
    such funds may be used for making grants to educational, humanitarian
    and nongovernmental organizations and individuals inside Iran to
    support the advancement of democracy and human rights in Iran.''
        Per this section of the appropriation bill, the Department of State
    is actively exploring opportunities to promote democracy activities
    within Iran, in accordance with this fiscal year 2004 congressional
    authorization. The Bureau of Democracy, Human Rights and Labor recently
    solicited Iran proposals and hopes to be able to fund projects within
    Iran this fiscal year. These projects will support the Iranian people
    in their quest for freedom, democracy, and a more responsible,
    transparent, and accountable government that will take its rightful
    place as a respected member of the international community.
        Lacking an authority that would similarly allow assistance for
    Syria, foreign assistance funds cannot be used to foster political and
    social reform in Syria.
        The Bureau of Educational and Cultural Affairs (ECA) of the State
    Department is able to use its base funding in Syria and has developed a
    full range of exchange activities to reach out to Syrians, with a
    special emphasis on women and youth. The following exchange activities
    are currently underway with Syria. They directly and indirectly address
    social and political reform by focusing on themes or individuals with
    the capacity to foster new approaches in Syria:
      --Twelve Syrian undergraduates are among the 71 youth from the Middle
            East and North Africa to receive scholarships to U.S. colleges
            and universities in 2004 under Partnerships for Learning
            Undergraduate Scholarships.
      --The University of Oklahoma, funded through a grant from ECA, will
            conduct a series of exchanges with Syria focusing on water
            management and water conservation issues.
      --Ohio University, in partnership with ECA, is planning a summer
            institute for teachers of English as a Foreign Language from a
            half dozen NEA countries, including Syria. We currently have
            three English Language Fellows in Syria and expect to continue
            at this level in 2004-05. English language programs convey U.S.
            values and encourage access to economic opportunity.
      --Columbia University's Center for International Conflict Resolution
            is planning a one-year, multi-phased project to bring together
            Syrian and American civil society leaders.
      --10 Syrian high school students (out of 440 students from the
            region) will participate in the Partnership for Learning Youth
            Exchange Program and spend an academic year living with
            American families and studying in U.S. high schools.
      --The Fulbright program in Syria has grown in the last three years
            into a vibrant program encompassing visiting scholars
            (partially funded by Syria), visiting students placed in top
            U.S. universities, American scholars, and students.
      --The International Visitor exchange program with Syria has averaged
            about twenty participants a year. Projects have focused on
            journalism, energy, micro-credit, women, tourism, and the
            environment.
      --Each year, two to five Syrians participate in the Humphrey
            Fellowships Program which provides mid-career professionals in
            public service a year of academic training and professional
            experience in the United States.
        Regarding Iran, ECA has initiated educational exchanges through a
    grant to the Council of American Overseas Research Centers (CAORC).
    CAORC, working with the American Institute of Iranian Studies, has a
    very active exchange program focusing on Iranian studies. If it is the
    political will of the Department to further develop ties with Iran, ECA
    will be a full partner in implementing exchanges which promote mutual
    understanding and respect, as authorized by the Fulbright-Hays Act of
    1961.

                               EGYPT/SAUDI ARABIA

        Question. With respect to United States aid for Egypt, what should
    we be doing differently in that country to ``drain the swamp'' that
    foments extremism?
        Answer. The U.S. Government promotes economic and political
    development through USAID programs that improve the lives and welfare
    of the Egyptian people. The program expands economic opportunities,
    improves education and health systems and provides for the expansion of
    basic infrastructure. In addition, U.S. assistance addresses critical
    issues in the area of democracy and governance.
        The United States reviewed its democracy and governance programs
    during the year as part of a comprehensive assessment of its bilateral
    assistance to Egypt. Programs in 2003 and early 2004 focused
    particularly on justice sector reform; civil society with a special
    emphasis on gender equality; media independence and professionalism;
    and responsive local governance. These USAID-funded projects supported
    reform-minded individuals and progressive organizations that seek to
    modernize Egypt.
        United States aid for Egypt can continue to identify and fund
    activities that foster inclusion, citizen participation and
    modernization. By strengthening civil society, promoting greater
    independence and professionalism in the media, and modernizing the
    judicial sector, USAID is creating a firm foundation for a flourishing
    democratic society. We have encouraged the Government of Egypt (GOE) to
    support new initiatives to conduct free and fair elections that include
    updated voter registration lists and multi-party platforms. We have
    worked with the GOE to strengthen a more independent and representative
    Parliament. In partnership with the U.S. Embassy, USAID continues to
    support progressive and reform minded individuals who have the vision
    and charisma to mobilize Egyptian citizens and policy makers towards
    more democratic policies.
        Pursuant to the President's Middle East Partnership Initiative
    (MEPI), we are supporting programs that affect ordinary Egyptians
    directly. For example, we are supporting the National Council for Women
    in order to promote women's access to legal services throughout Egypt.
    We recognize that empowering women and promoting human rights is an
    effective way to combat terrorism and extremism because it allows
    citizens to better direct their frustration and exercise their rights.
    One non-traditional but creative way to use U.S. foreign assistance
    would be to foster peace and reconciliation programs in the region,
    thereby reducing violence and the incidence of extremism.
        U.S. aid is also helping the GOE to create a globally competitive
    economy through policy reforms that will increase foreign and domestic
    investment, encourage export-oriented growth, improve workforce and
    business skills, and invest in information technology. These
    transformations will help bring about a more competitive economic
    environment within Egypt, allowing the country to reach higher levels
    in the global economy. Additionally, U.S. aid is providing assistance
    for educational reforms that empower teachers and parents at the local
    level. This support goes to training teachers to promote the vocational
    skills and critical thinking skills necessary to seek and hold jobs.
    When people are given an adequate education, are able to provide for
    their families with decent jobs and generally have more hope for a
    brighter future, they are able to make informed choices, leading to
    fewer tendencies to succumb to terrorist rhetoric.
        Question. What impact would greater freedom of association in Egypt
    have in terms of releasing societal pressures that may give rise to
    extremism?
        Answer. As noted in the 2003 Human Rights Report, the Government of
    Egypt (GOE) record on freedom of peaceful assembly and association
    remained poor. Both USAID and the United States Embassy in Egypt
    acknowledge that many serious problems remain. Through USAID-funded
    projects and diplomatic dialogue at both the senior and working levels,
    the USG encourages the GOE to create an enabling environment to foster
    greater freedom of speech and assembly.
        This year, regardless of regular demonstrations that have anti-
    American sentiments, the United States Embassy strongly supported
    Egyptian citizens' rights to express openly and peacefully their views
    on a wide range of political and societal issues, including criticism
    of government policies and alliances. During the numerous unauthorized
    antiwar demonstrations, the U.S. Embassy reported on the large numbers
    of security personnel deployed to contain the demonstrators and
    followed the cases of those allegedly mistreated while in detention.
        It should be noted that from experience in other countries, it is
    difficult to predict the impact of greater freedom of association and
    speech. On one hand, it is possible that in Egypt there could be, for
    the short-term, an increased number of demonstrations with anti-
    American undertones. Reform minded individuals and progressive groups
    seeking modernization and moderation could be discouraged in the short-
    term from publishing their views in the media by pressures from
    fundamentalist voices. Civil society organizations, already restricted
    by the 2002 Law 84 that grants the Minister of Insurance and Social
    Affairs the authority to dissolve NGOs by decree, could be temporarily
    stifled, paralyzed from espousing any progressive or reform oriented
    platforms.
        On the other hand, the USG believes that freedom of association is
    defined too narrowly in the Egyptian context and needs to be broadened
    to include non-governmental organizations, the press, students, and
    professional associations. By increasing freedom of speech and
    association, this may encourage more reformist voices to participate
    and widen the space for political discourse. Through continuous
    dialogue in diplomatic channels and numerous USAID-funded programs, we
    encourage the GOE to encourage greater freedom of association and
    speech in the belief that this releases societal pressures and reduces
    the incidence of extremism.
                                     ______

                   Question Submitted by Senator Mike DeWine

                                     HAITI

        Question. You are familiar with my bill, S. 2261, the Haiti
    Economic Recovery Opportunity Act of 2004. As you know, the bill is not
    a substitute for increased U.S. assistance, but rather a compliment. In
    a 2003 study, USAID concluded that the old version of the bill would
    have a dramatic impact on employment in Haiti, and the new bill goes
    even further in helping to ``grow jobs.'' Secretary Powell voiced his
    support of the bill while in Haiti, and again before this sub-
    committee. Do you support the bill?
        Answer. I, along with Secretary Powell, support the Haiti Economic
    Recovery Opportunity Act of 2004. It is very important to help improve
    the economy of Haiti, the poorest country in the Western Hemisphere.
    This bill complements USAID's economic growth activities in Haiti.
                                     ______

                Questions Submitted by Senator Patrick J. Leahy

                            HUMANITARIAN ASSISTANCE

        Question. Mr. Natsios, there is nothing more basic to U.S. foreign
    aid than our humanitarian and development assistance programs. It is
    what the American people think of first, when they think of foreign
    aid.
        The President's has talked a lot about his commitment to combating
    world poverty. But, his fiscal year 2005 budget would make cuts in
    several key anti-poverty programs, including a $99 million cut in
    funding for international health programs and a $48 million cut in
    Development Assistance.
        I am sure this was an OMB decision and that you don't support these
    cuts. What effect will these cuts have, and how do you explain them
    given how hard we often have to work just to scrape together a million
    dollars here or there to keep good projects from shutting down?
        The Secretary of State has said that this budget represents a quote
    ``commitment to humanitarian assistance.'' Given these--and other--
    cuts, is that how it looks to you?
        Answer. As we all know, the United States is on a war-time footing
    and faces major budget challenges to meet the requirements of both
    homeland security and U.S. military defense needs overseas. But at the
    same time, foreign assistance is becoming a higher priority than it has
    been in many years, as evidenced by the President's additional funding
    requests for the Global HIV/AIDS Initiative (GHAI) and the Millennium
    Challenge Account (MCA).
        As I noted earlier in this hearing, the overall budget that USAID
    is currently managing also is much larger than it has been in many
    years. This increase is attributable to massive assistance efforts in
    Iraq and Afghanistan on top of maintenance of USAID's current
    portfolio. While there has been a slight decrease in USAID's
    traditional development accounts, we are already receiving some funds
    from the GHAI account, and additional transfers are likely. It is also
    anticipated that some USAID programs in countries that do not qualify
    for MCA programs (the threshold countries I mentioned in my opening
    remarks) may receive some MCA assistance to help them qualify later on.
    USAID will likely manage these programs, using MCA funds. USAID is very
    much on the front lines of major efforts to continue to assist those
    countries most in need, and I certainly agree with the Secretary's view
    that this budget reflects the Administration's commitment to maintain
    humanitarian assistance.

                                   EDUCATION

        Question. Mr. Natsios, the President announced a new education
    initiative for Indonesia, a Muslim country where millions of students
    are enrolled in Islamic schools similar to the madrassas in Pakistan.
    This initiative calls for some $150 million over five years, or about
    $30 million per year. That, I am told, is enough to reach maybe 10
    percent of the students. In other words, we will be barely scratching
    the surface.
        If we are serious about this--and I support it--shouldn't we be
    spending amounts that will reach enough students to produce a real
    impact? And shouldn't we be doing the same thing in other predominantly
    Muslim countries?
        Answer. It is true that, in our program planning, USAID/Indonesia
    has estimated that activities funded under the $157 million, six year
    Indonesia Basic Education Initiative will improve the quality of
    education and learning for approximately four million students, or ten
    percent of the enrolled student population in our target group. The
    target population encompasses grades 1 to 9, or Indonesian primary
    school and junior secondary school. At the time the concept paper for
    the new education initiative was developed, USAID/Indonesia had
    proposed a $250 million, five year program. Clearly, additional
    resources would allow us to directly assist additional Indonesian
    students and teachers.
        We are, however, designing our education activities with an eye to
    replication at the local level, using Indonesian local government and
    central government resources. We are also working closely with a number
    of other international donors to agree on a more standardized
    ``package'' of basic education approaches that can be extended to
    additional districts and students using other donor funding. In
    addition, we plan to work with a large number of Indonesian and
    international companies that have expressed an interest in supporting
    educational development, on a significant ``Indonesian Education
    Public-Private Alliance.'' Finally, we are working with the United
    States-Indonesia Society (USINDO) and the Indonesian Embassy in
    Washington to identify other potential partnerships.
        Through these innovative program approaches we seek to maximize the
    impact of the Indonesia Basic Education Initiative funded by the U.S.
    Government.

                     RECONCILIATION AND UNIVERSITY PROGRAMS

        Question. Mr. Natsios, I want to commend USAID for the way it is
    responding to our concerns about the need for a designated pot of
    money, with a designated person to manage it, to fund reconciliation
    programs and university programs. Both are strongly supported up here,
    and we need to be sure that universities and organizations that submit
    unsolicited proposals will not get lost in the bureaucracy down there.
        On the reconciliation programs, although most organizations that we
    know of are working in the Middle East--like the Arava Institute for
    Environment Studies--this is intended to be a worldwide program. We
    want to encourage organizations in places like Cote D'Ivoire, Colombia,
    and other conflict areas to participate, not only in the Middle East.
    And ideally, we would like to see a request in the President's fiscal
    year 2006 budget for these activities. So I appreciate your support and
    would welcome your thoughts on this.
        Answer. USAID's Office of Conflict Management and Mitigation (CMM)
    has been working closely with the State Department to develop a
    transparent, competitive process for the allocation of $8 million in
    the fiscal year 2004 Economic Support Fund earmarked for reconciliation
    programs. Several weeks ago both State and CMM staff briefed
    Congressional staff on progress in that regard.
        We intend to focus on critical countries representing all the
    regions of the world where we believe the provision of additional funds
    will have an impact. Country selection is based on a number of factors
    including a desire to assist reconciliation efforts among actors in
    countries currently experiencing conflict as well as those emerging
    from conflict. Proposals will be reviewed jointly by State and USAID on
    a competitive basis and judged against conflict criteria guidelines
    previously established by CMM.

                                  USAID STAFF

        Question. Mr. Natsios, in my opinion, USAID does not have nearly
    enough staff, particularly in your field missions, to manage the number
    of contracts and grants you should be funding. Because of the shortage
    of staff, the trend has been in favor of big Washington contractors,
    which are not always the best qualified for the job. But they are the
    only ones capable of navigating the regulations for applying for
    contracts, which have become so burdensome and expensive that smaller
    contractors and NGOs can't compete. This is wrong, it has gone on for
    too long, and it has repercussions for everything USAID is trying to
    do.
        How many staff have you lost since the mid 1990s, and how can we do
    the job that needs to be done if you don't have the people to do it?
    Are you requesting the budget you need to support the staff you need?
        What are you doing to make it easier for smaller NGOs and
    contractors to compete?
        Answer. In 1990, USAID had 3,262 U.S. direct hire staff (USDH). We
    now have just under 2,000. Many believe that we compensated for the
    loss of staff in the 1996 reduction in force (RIF) by hiring U.S.
    personal services contractors (USPSCs) and Foreign Service Nationals
    (FSNs). This is not accurate. FSN staff declined from 5,200 to 4,725
    from 1996 to 2002, while USPSC staff increased slightly from 591 to 628
    in the same period.
        In fiscal year 2004, to begin recouping the loss of staff during
    the 1990's, the Administration requested Congressional support for the
    USAID Development Readiness Initiative. Built on the same concept as
    the Secretary's Diplomatic Readiness Initiative for the Department of
    State, USAID is seeking to increase its baseline staff from 2,000 USDH
    to approximately 2,500 over a four year period. In fiscal year 2004,
    USAID received adequate funding to hire approximately 50 additional
    people above attrition. This will allow us to fill long standing field
    vacancies, allow more in-service training and respond to new program
    requirements such as the President's AIDS initiative and new programs
    in Iraq, Afghanistan, and Sudan.
        In 1995, prior to the RIF, USAID moved less than half the dollars
    we obligated last year with over 170 people in the Office of
    Procurement. Today we have 123 people to handle the funding increases
    associated with Iraq, Afghanistan, and now HIV/AIDS. In order to handle
    this workload while we rebuild our staff, we have been forced to award
    larger contracts and grants. We have also set the funding levels very
    high on our Indefinite Quantity Contracts (IQC) to allow for more
    flexibility. Without appropriate staffing to administer the contracts,
    the Agency is concerned about proper oversight of the awarded
    contracts. USAID consequently needs the planned increase in procurement
    staff to adequately handle the funding increases associated with
    Administration priorities.
        At the same time, USAID is attempting to meet the President's
    directive against bundling contracts and the increased subcontracting
    goals from the Small Business Administration. USAID has expanded its
    use of small business set-asides for IQC contracts and expanded its
    evaluation criteria to emphasize the importance of subcontracting
    requirements. For example, under USAID's Iraq Phase II Infrastructure
    award, the solicitation document included an incentive fee for firms
    that propose subcontracting opportunities with small businesses beyond
    the Coalition Provisional Authority (CPA) minimum goal of 10 percent.
    In addition, USAID proposed an incentive award payment of $1 million to
    any prime contractor exceeding 12 percent of all subcontracted dollars
    to small, disadvantaged, woman-owned or disabled veteran-owned
    businesses. This incentive for prime companies to incorporate small
    business into their sub-contracting plans is a first for USAID. While
    not the typical set-aside procedure found in private sector practices,
    we feel this is a major step toward encouraging prime contractors to
    engage U.S. small businesses at a broader and more profitable tier,
    while providing essential exposure to greater opportunities.
        USAID's Office of Small and Disadvantaged Business Utilization
    (OSDBU) has also pioneered efforts to reach the small business
    community. In the fall of 2003, a Procurement Forecast was published to
    assist small businesses with anticipating Agency contracting
    opportunities for up to one year in advance. OSDBU also has a
    publication, ``Creating Opportunities for Small Business,'' available
    in booklet and ``mini-CD,'' which provides both an overview of doing
    business and hyperlinks to useful sites both within USAID and
    throughout government. OSDBU also hosts small, monthly sessions where
    small businesses can meet with and learn about upcoming business
    opportunities from a broad range of the Agency's skilled technical
    officers.

                                    COLOMBIA

        Question. Mr. Natsios, in your prepared testimony, you mention
    Colombia, and that the, quote, ``only effective strategy is to
    literally clear the ground for the licit crops that will feed the
    nation while aggressively pursuing eradication of the others.''
    Unquote.
        We are spending hundreds of millions of dollars each year to spray
    herbicide to destroy the coca. But the amount we are spending to help
    communities in these areas with alternative sources of income is
    woefully inadequate. The work USAID is doing is excellent, but it
    barely scratches the surface. Isn't this strategy doomed to fail, if we
    don't provide the resources to give people the means to survive without
    growing coca?
        Answer. Thank you for recognizing USAID's efforts. Colombia's
    problems are extremely complex and require a combination of ``hard''
    and ``soft'' assistance. Military and police assistance is crucial
    because insecurity, lawlessness, and lack of state presence are at the
    heart of Colombia's problems. Military and police assistance create a
    positive security environment that is necessary for effective
    implementation of ``soft'' assistance like economic development,
    institutional reform, anticorruption, human rights, access to justice
    and humanitarian relief, trade, and private sector support to increase
    legal employment and incomes. But a program composed of only ``hard''
    assistance cannot succeed. USAID's ``soft'' assistance programs are
    essential complements to the military and police assistance programs,
    and are needed to make gains from the ``hard'' activities permanent.
    ``Soft'' developmental programs leave behind legal production systems
    and improved institutions at all levels which earn the trust and
    confidence of citizens and show them that they can work together to
    solve problems. Perhaps most importantly, soft side activities
    demonstrate that there is a legal way to survive and that citizens do
    not have to be part of a criminal organization that brings violence and
    insecurity into their communities and into their homes.

                               POPULATION GROWTH

        Question. Mr. Natsios, about 95 percent of world population growth
    is now occurring in the developing world. It is one of the defining
    characteristics of underdevelopment, and a key cause of political
    instability and economic stagnation in many countries. Shouldn't we be
    spending more on international family planning to slow population
    growth so that these underdeveloped economies have a chance to grow?
        Answer. In each year of the Bush Administration, the Agency has
    requested $425 million for population and reproductive health. The
    request level is $40 million higher than the appropriated levels in
    each of the preceding five years, which ranged from $356 to $385
    million.
        USAID has also has taken steps to be more strategic in allocating
    funding across countries. Beginning this year, population and
    reproductive health funds from the Child Survival and Health Account
    have been allocated according to criteria that emphasize need, taking
    into account population size and density, fertility, and indications of
    unmet need for family planning. By directing resources to countries
    with greater need--principally countries in Africa, Near East and South
    Asia--our funds can go further and have greater impact.
        As I stated in my remarks before the Senate Foreign Operations
    Subcommittee in April, the combination of a high concentration of young
    people, especially young men, with high rates of unemployment creates
    the conditions that foster political instability. USAID assistance for
    improving health, including family planning, combined with
    interventions that expand economic opportunity can help alleviate these
    conditions and bring greater stability to the developing world.

                       COORDINATION OF FOREIGN ASSISTANCE

        Question. Mr. Natsios, in your opening statement, you mentioned
    that ``development'' has been elevated as a third part of the
    President's national security strategy. I agree that development is
    important, but as the old saying goes, actions speak louder than words.
    I am concerned that the Administration's policies have undermined the
    ability to effectively coordinate foreign assistance by creating all
    sorts of new entities and initiatives. Let me give you some examples:
      --The Millennium Challenge Account, a new independent agency, will
            eventually provide $15 billion in foreign aid.
      --The Coalition Provisional Authority, a Defense Department entity,
            is administering, as you point out in your statement, the
            largest foreign assistance program since the Marshall Plan.
      --A new AIDS Coordinator, whose physical offices are not even located
            within either the State Department or USAID, will be in charge
            of $15 billion.
        These are just the ones that I can remember.
        Has the proliferation of new entities and initiatives--all of
    varying autonomy and reporting to different agencies--undermined our
    ability to effectively coordinate foreign aid programs?
        Answer. With the greater understanding of the importance of
    development, as well as the increase in resources being devoted to
    development, it is not surprising that there are more actors involved
    in foreign aid today than there have been in the past. We are living in
    a more complex era and face a much broader range of challenges than we
    have in earlier years. We are very closely involved, either as
    implementers or in other capacities, of all the new foreign aid
    initiatives you cite, and believe USAID has a valuable role to play in
    helping to coordinate these initiatives.
        USAID has developed a very close working relationship with the
    entities you mention, and looks forward to coordinating efforts with
    various implementing partners. In the case of the Millennium Challenge
    Corporation, as a Board Member I will be directly involved in
    overseeing its operations. USAID is currently working closely with the
    MCC staff to develop a strong institutional linkage both in the United
    States and in the field.

                                SECURITY IN IRAQ

        Question. Mr. Natsios, when Congress was debating the Iraq
    supplemental last October, Ambassador Bremer stated that reconstruction
    efforts directly affect the safety of our troops. News reports indicate
    that the latest violence in Iraq has seriously hampered reconstruction
    efforts. Perhaps the best evidence of this is that only \1/9\ of the
    funds from the Iraq supplemental, passed 6 months ago, has been
    obligated and I suspect that far less than that has been actually
    expended. How seriously is the violence in Iraq impeding reconstruction
    efforts? Is this slow down in the reconstruction threatening the safety
    of our troops, as Ambassador Bremer suggested last fall?
        As we all know, USAID, as well as the Defense Department, relies
    heavily on contractors and NGOs to implement many of its programs. We
    all saw the tragic events in Falluja where American contractors were
    brutally murdered, leading to the standoff in that town. Isn't a major
    part of the problem in Iraq that the CPA cannot provide security for
    many contractors there? What is being done to improve the ability of
    contractors and NGOs to operate in Iraq?
        Answer. USAID has strict security guidelines for its staff and
    technical experts, and these guidelines have served us well. USAID's
    security officers coordinate daily with the security advisors of all of
    its implementing partners to ensure everyone has the most up-to-date
    information on the security environment to inform program decisions.
        Our work in Iraq has not stopped, despite the recent violence in
    some areas of Iraq. Where it is safe, our expatriates are on the job,
    and in almost every area, our Iraqi assistance staff is still working
    with their counterparts. Where the situation is unsafe, we have
    temporarily relocated some of our expatriate staff.
                                     ______

                Questions Submitted by Senator Richard J. Durbin

                                   TERRORISM

        Question. Many have argued that especially since September 11,
    USAID needs to ensure that development assistance activities more
    directly complement the global war on terrorism. Through a variety of
    activities--basic education, health care, agriculture, expanding
    opportunities for women, job creation, micro-enterprise, promoting the
    rule of law--the United States can help counter conditions that give
    rise to terrorism. These programs and others like them have been core
    USAID priorities for many years, long before the terrorist attacks in
    the United States.
      --Given the requirement to augment American efforts to combat the
            threat of terrorism, what changes have you made in designing
            and implementing these activities so that they are more
            effective in the fight against terrorism?
      --Is this a matter of simply spending more money on these critical
            activities, or should the programs themselves be re-tooled and
            re-focused in order to achieve the intended results?
      --What indicators will you most closely monitor in order to assess
            the impact of development assistance and its contribution to
            combating terrorism?
        Answer. The War on Terrorism has sharpened the focus of our
    development assistance programs. In addition to addressing the social
    and economic needs of countries which combat terrorism in the long
    term, USAID is also working with other U.S. government agencies to
    target our assistance on specific short-term programs in three areas:
    denying terrorist access to new recruits, funds, and sanctuary.
        To counter terrorist recruiting we are doing three things. First,
    in communities that have radical Islamic schools, we are supporting
    secular and moderate madrassas that provide an attractive alternative
    to radical schools. Second, we follow up with skills training for youth
    that gives them an opportunity for employment and a viable alternative
    to going to the terrorist training camps. Third, we couple this
    training with small enterprise development programs to provide
    employment and allow youth to make a legitimate contribution to their
    communities.
        USAID also supports programs aimed at denying terrorists resources,
    primarily from money laundering activities. To shut down this illegal
    flow of funds, USAID has provided hardware and technical assistance to
    the Financial Intelligence Units (FIU) of Central Banks in key
    financial hubs to prevent suspicious transactions that lead to money
    laundering operations. We have approved support to the Palestinian
    Monetary Authority to help set up their FIU with the intent of stopping
    the flow of illegal funds into the West Bank/Gaza region. We have
    supported similar programs in Indonesia and the Philippines. In
    conjunction with the support of the FIU we have enhanced our technical
    support for bank supervisors to focus on these same crimes.
        A third area of programs aims at denying sanctuary to terrorist
    training operations. USAID is working to strengthen weak governmental
    structures that might be prime targets for terrorists, as in
    Afghanistan where we have focused our assistance through the interim
    government to establish a stable national government. People need to
    have confidence that the government will provide the public services
    needed to recover, such as schools where children will not be subject
    to terrorist indoctrination and refugee resettlement and repatriation
    programs that will not be breeding ground for terrorists. To counter
    their attempts to use Muslim communities with weak governmental
    institutions as training camps, we target these communities for
    institutional reform programs for both government and NGOs.
        To monitor the impact of our counter-terrorism and development
    programs, we will use our normal performance indicators with specific
    additions tailored to counter-terrorism objectives. For instance, we
    will pay particular attention to high risk areas, such as closely
    monitoring the number of new students in secular or legitimate
    madrassas. We will also monitor attendance in skills training programs
    and the increase in employment in vulnerable sections of critical
    countries. In financial institutions, we will monitor the number of
    suspicious transactions investigated by the FIUs. We are also closely
    tracking the number of countries that implement counter terrorism laws
    and anti-money laundering laws. These and other indicators will provide
    a clear signal on the effectiveness of these counter terrorism
    programs.
        Question. Substantial sums of foreign aid resources are being
    directed at the so-called ``front-line'' states in the war on
    terrorism. With the exception of HIV/AIDS resources (which I support),
    funding for most other development aid activities in USAID's fiscal
    year 2005 budget proposal is either flat or reduced when compared with
    fiscal year 2004 budget levels.
      --Are you concerned that development priorities in countries not
            directly related to counter-terrorism goals are being short-
            changed?
      --Some argue that unless a country is a strategic partner in the war
            on terrorism or has a severe health crisis, the fiscal year
            2005 foreign aid budget neglects them, even if assistance might
            meet other important U.S. foreign aid objectives. How do you
            respond to this criticism?
        Answer. What does an anti-terrorism program look like in a
    developing country? In addressing the root causes of terrorism, it
    would focus on developing respect for rule of law, through transparent
    and non corrupt practices; cutting off funding sources for terrorists
    by criminalizing money-laundering and prosecuting the offenders;
    providing options for legitimate ways for citizens to earn a living
    without fear of extortion; expanding education opportunities to reach
    the most disenfranchised groups to build hope for their own
    development; and building democracy and accountability within all
    elements of society. Not coincidentally, such programs also reflect the
    focus of USAID's development goals.
        Since its inception, USAID has been at the forefront of
    implementing programs that address the root causes of terrorism. While
    funding since September 11, 2001, has become more targeted with regard
    to correlating our programs with counter-terrorism programs, the nature
    of our work has not changed dramatically. Terrorist groups prey on the
    poor and weak countries as training grounds for their operations in
    other countries. USAID has both experience and expertise in developing
    effective programs to improve livelihoods of citizens in poor and weak
    countries, thereby eliminating the underlying conditions terrorist look
    to exploit. In this way, the goals of counter-terrorism and the goals
    of USAID are closely aligned and reinforce our national security goals.
        With the reality of funding constraints, allocation decisions are
    always a challenge. Thanks to the heightened emphasis the present
    Administration has placed on development as the third pillar of foreign
    policy, USAID has been able to expand its programs into countries of
    strategic importance to U.S. foreign policy. This expansion has come in
    addition to, rather than in replacement of, on-going programs in other
    needy countries.
        Question. In terms of the terrorist attacks that we have seen in
    recent months, the connection between failed states and the roots of
    terrorism appears to be more indirect than we used to believe. Instead
    of operatives coming out of places like Sudan and Afghanistan, for
    example, we seem to be witnessing the emergence of local terrorist
    organizations in states like Turkey and Spain taking up the goals or
    ideology of Al Qaeda.
      --How do you use foreign aid to fight an ideology that emerges in a
            relatively wealthy state?
      --With this emerging successor generation of Al Qaeda-associated
            operatives, from the perspective of counterterrorism, are we
            missing the point in directing our resources toward so-called
            front-line states? Where exactly is the ``front line''?
        Answer. The terrorist groups are primarily using poor and weak
    countries as training grounds for operations in other countries.
    Current terrorist groups have been able to link radical Islamic
    rhetoric with retribution for alleged grievances as a justification for
    violence. To win the ``war of ideas'' this linkage has to be broken and
    replaced with confidence in the law as a means to resolve grievances.
    USAID uses foreign aid to work on two fronts to achieve this objective.
    First, our Muslim Outreach and other democracy programs reinforce the
    principles of religious freedom and democratic governance, whether in
    ``relatively wealthy'' or poor states. Secondly, we continue to
    encourage weak states to build stronger and more responsive
    institutions on the foundation of the rule-of-law. As one example, in
    response to terrorists' use of legitimate charities for funds, we are
    working to develop and pass anti-money laundering laws, detection by
    bank examiners, and the prosecution for these financial crimes through
    the courts. In addition, there are numerous other USG agencies with
    active counter-terrorism programs working in countries, particularly in
    the Middle East, where USAID does not have a presence.
        Front line countries are those countries easily exploited by
    terrorists, either for operational bases or for laundering money. The
    new generation of terrorists, regardless of where they come from, will
    continue to look for bases of operations, communication, and for
    financing. It is in these front line countries where we have the best
    chance of defeating terrorism.
        Question. What specifically would you say has been the effect of
    the war in Iraq on the roots of terrorism in the Middle East?
        In what demonstrable way is foreign aid to Iraq reducing the
    terrorist threat against the United States and its allies?
        Answer. The UNDP's ``2003 Arab Human Development'' Report
    identified lack of education and economic opportunities and a generally
    repressive environment as causes of the sense of hopelessness that
    leads to terrorism. The war in Iraq has overthrown an oppressive
    regime, enabling for the first time in decades citizens to have a
    greater voice in public dialogue, and participate more freely in
    political processes. Schools have been rehabilitated, allowing more
    children, especially girls, to return to school. In addition, over
    30,000 teachers have been trained in new teaching methods that enhance
    tolerance and respect for diversity in the classroom. Tens of thousands
    of jobs have been created for Iraqis, and extensive progress has been
    made in strengthening local government and the delivery of essential
    services to the local level.
        Lack of educational and economic opportunities and a generally
    repressive environment are major causes of the sense of hopelessness
    and disenfranchisement that leads to terrorism. Ill-educated,
    unemployed youth are a major demographic group in the Middle East and
    they provide a fertile field for terror groups. The solution is to
    provide the guidance and resources necessary to develop an educational
    system that gives a graduate the appropriate skills (including computer
    training) to be gainfully employed. Assistance to small and micro
    enterprises, including micro-credit, is crucial as small businesses
    provide a key opportunity for employment. A business-friendly policy
    environment must be developed to encourage foreign investment and
    expedite the development of local industries. In addition, democratic
    practices need to be supported, providing citizens with the opportunity
    to hold government officials accountable and to participate directly in
    the decision-making processes that affect their daily lives. All these
    are development activities that must be provided in order to reduce the
    growing terrorist threat.
        Question. If terrorists are increasingly using advanced
    technologies like the Internet to do such things as coordinate
    operations, find information about weapons of mass destruction, and
    recruit members, how are we ensuring that we provide foreign aid in
    such a way that we avoid enabling members of terrorist organizations to
    be more effective?
        Answer. Modern technology allows terrorists to plan and operate
    worldwide from the shadows. The Bali bombing was planned in Malaysia,
    and the explosives were purchased in the Philippines with funds
    siphoned off Islamic charities in the Middle East. This was all handled
    thought the internet. Today's terrorists are smart, technologically
    sophisticated, and linked worldwide.
        To beat these terrorists we must be smarter, more computer wise and
    better linked than they are. We must use technology to close-off their
    operating space, to push them out of the shadows. We are doing this by
    sharing data among nations, by equipping our partners with IT equipment
    that works together, and being on top of information that can lead to
    terrorist plots. As one example, USAID is currently working with
    Central Banks in several countries to spot money laundering activities,
    by providing the computer equipment so Bank Financial Intelligent Units
    can process suspicious transaction reports quickly, identify who is
    conducting financial crimes, and build the body of evidence necessary
    for conviction.
        Terrorist are quick to convey information from one country to
    another through modern communications. The law enforcement community is
    getting even better and faster at communicating information, using
    detection techniques, and connecting terrorist data bases. USAID is
    working with the newly established, Terrorist Threat Integration
    Center, which acts as a hub for information provided by all sources on
    terrorist activities, known or suspected terrorist individuals or
    organizations, and other related data---even the most remote data. This
    allows all the different organizations to have instant, on-line access
    to the most recent information on the terrorist activities.

                                MICROENTERPRISE

        Question. USAID has been a global leader in the area of
    microenterprise, but we need to coordinate our efforts with other major
    players--particularly the World Bank and the United Nations Development
    Program (UNDP). The Microenterprise for Self Reliance Act of 2000
    directs the administrator of USAID to ``seek to support and strengthen
    the effectiveness of microfinance activities in the United Nations
    agencies, such as the UNDP, which have provided key leadership in
    developing the microenterprise sector.''
      --What steps have you taken to strengthen the effectiveness of
            microfinance activities in the UNDP?
        Answer. USAID and UNDP are both active members of the Consultative
    Group to Assist the Poor (CGAP), the 28-donor coordinating body for
    microfinance. USAID financial and technical support has strengthened
    donors including UNDP in a number of ways. Over the past 18 months, for
    example, CGAP has coordinated a ``peer review'' process to increase aid
    effectiveness in microfinance. Seventeen donors, including USAID and
    UNDP, have been assessed through this process. In each case, the peer
    review team has identified very specific areas for improvement and has
    proposed steps to strengthen the strategic clarity, staffing,
    instruments, knowledge management, and accountability of the
    microfinance activities of the agency being reviewed. The findings have
    been shared with other donors. UNDP has taken a number of concrete
    steps to respond to the findings, and Mark Malloch Brown, Administrator
    of UNDP, provides leadership to the microfinance peer review
    initiative.
        USAID has also worked with other CGAP members to develop stronger
    donor practices, including the recent drafting of core principles for
    microfinance that we expect to be endorsed by all CGAP members. At the
    last annual meeting, the CGAP member donors endorsed new requirements
    for membership, including comprehensive reporting of microfinance
    activities and results. We have also used CGAP to collaborate on
    developing new tools for microfinance donors, such as common
    performance measures. USAID, UNDP and CGAP took the lead in developing
    specialized microfinance training for donor staff, and many staff from
    UNDP and other donors have benefited from the week-long course.
        USAID also takes responsibility for developing knowledge and ``how-
    to'' materials in specific areas, such as post-conflict microfinance
    and rural and agricultural finance. We invite participation from other
    donors in this work. Next month, for example, we will convene a donor
    forum on recent innovations in rural finance and their implications for
    the donor community. UNDP will, of course, be invited to participate.
    Finally, in the field USAID is often involved with UNDP in in-country
    donor coordination efforts in the microfinance arena.
        Question. I am concerned that the UNDP has not joined USAID's
    efforts (required by Public Law 108-31) to develop cost-effective
    poverty-assessment tools to identify the very poor--those with an
    annual income 50 percent or more below the poverty line as established
    by the government of their country--and to ensure that substantial
    microenterprise resources are directed to them.
      --Will you work with Congress to encourage UNDP to expand its
            microenterprise efforts for the very poor and to use the
            poverty measurement methods that USAID is developing so that we
            can be sure that these funds are reaching the people who need
            them the most?
      --What specific efforts do you believe will be effective in
            convincing UNDP representatives of the importance of targeting
            to the very poor?
        Answer. USAID has invited the Consultative Group to Assist the
    Poor's (CGAP) technical and financial collaboration in developing the
    poverty assessment tools, as a means to ensure that the broader donor
    community is aware of and involved in this important work. An ambitious
    work plan is underway to have the tools designed, field-tested and
    ready for implementation by USAID in October 2005. Over the coming
    year, we will be testing preliminary tools in the field with diverse
    partners. This should begin to provide evidence of the value and
    practicality of the USAID tools for other donors. We would welcome
    closer involvement of UNDP and other donors in this work, through CGAP
    or directly. We expect that the tools will prove sufficiently valuable
    and cost-effective to suggest ways for donors and practitioners to
    better serve very poor clients.

                            BASIC EDUCATION FUNDING

        Question. Mr. Natsios, last December, 18 Senators and 63 Members of
    the House wrote to the President urging him to use the G-8 Summit this
    June as a venue to launch a significant U.S. initiative on basic
    education and galvanize the world community to achieve the goal of
    education for all by 2015. Basic education is important to our
    strategic and developmental interests around the world. Our National
    Security Strategy recognizes the link between poor education and
    reduced security. Unfortunately, the Administration's budget request
    would cut basic education support by $26 million under Development
    Assistance.
      --Can you explain the proposed funding cut for basic education in
            light of our strategic objectives?
        Answer. Education is a priority issue for this administration; it
    is an important long-term investment in sustaining democracies,
    improving health, increasing per capita income and conserving the
    environment. Economic growth in developing countries requires creating
    a skilled workforce. President Bush has helped to give education a
    strong profile in the G8 in recent years, and work is being carried
    forward actively both multilaterally and bilaterally. We are working
    internationally to support countries' efforts to improve their
    education programs and to produce measurable results on enrollment and
    educational achievement.
        Since the submission of the USAID fiscal year 2005 Congressional
    Budget Justification, projections on basic education levels have
    changed somewhat for both fiscal year 2004 and fiscal year 2005. While
    there is a $22 million reduction in Basic Education funded by the
    Development Assistance (DA) account from fiscal year 2004 to fiscal
    year 2005 (from $234 million to $212 million), the currently projected
    total for basic education from all accounts for each of fiscal year
    2004 and fiscal year 2005 is $334 million. The Administration intends
    to continue to maintain its strong interests in this area. In fact, the
    U.S. support for basic education from all accounts has more than
    doubled from fiscal year 2001 to fiscal year 2004, in recognition of
    its importance to giving people the tools to take part in free and
    prosperous societies.

                              COMBATTING HIV/AIDS

        Question. There is strong evidence that keeping children in
    school--especially girls who are much more susceptible to the AIDS
    virus--reduces the chance that they will become infected. A World Bank
    study reports that in Zimbabwe, girls who received primary and some
    secondary education had lower HIV infection rates--a trend that
    extended into early adulthood. In Swaziland, 70 percent of secondary
    school age adolescents attending school are not sexually active, while
    70 percent of out-of-school youth in the same age group are sexually
    active. Despite this, the focus has been on using schools as a venue
    for teaching about AIDS, rather than recognizing education as part of
    the fight against AIDS. I am pleased to see the Administration's
    recognition of the importance of education for AIDS orphans and
    vulnerable children, but given the value of education as the only
    vaccine against AIDS that we currently have:
      --Shouldn't the United States have a coordinated strategy on basic
            education and HIV/AIDS prevention?
        Answer. Basic education is a priority for the U.S. Agency for
    International Development. It is the linchpin for success in many of
    our development activities, including family planning, child health and
    HIV/AIDS.
        In order to be successful in the fight against HIV/AIDS, it is
    essential that we wrap all of our development programs around HIV/AIDS
    programs. One of the first things I did when I became administrator of
    USAID was to issue a cable urging all of our missions to do this. While
    USAID has a large HIV/AIDS prevention program, we also have programs in
    education, agriculture and other sectors. Our missions have been
    working to integrate AIDS prevention messages into all of the other
    sectors.
        Question. Funds from many sources are now available to implement
    both treatment and prevention programs to combat AIDS, TB, and Malaria.
    The influx of funds is still not commensurate with the extent of the
    problem, but the increase in partners is welcome and needed. I would
    like a clarification of how USAID is making sure its work is
    complementary to that of the President's Emergency Plan for AIDS,
    Relief (PEPFAR), the Global Fund to Fight AIDS, Tuberculosis and
    Malaria (Global Fund), the WHO 35 Initiative, the World Bank, and
    other programs during the scale-up that is occurring on the ground.
      --How are staff coordinating on the ground with other donors?
      --What are you doing to improve the effectiveness of USAID and other
            donor programs?
      --I envision a sea of paperwork for a country with 30-40 different
            donors. What procedures have you put in place to limit
            transaction costs and improve efficiencies relative to other
            donors?
        Answer. On April 25, the U.S. Government convened a meeting, along
    with UNAIDS and the United Kingdom, to address this very topic. The
    meeting ended with a pledge that countries will have one agreed HIV/
    AIDS Action Framework that provides the basis for coordinating the work
    of all partners; one national AIDS authority, with a broad-based
    multisectoral mandate; and one agreed country-level monitoring and
    evaluation system.
        These principles will allow donors to achieve the most effective
    and efficient use of resources, and to ensure rapid action and results-
    based management.
        This is a goal that USAID has been working toward for long time.
    USAID staff have been participating for several years in a working
    group with many other international donors to set up standardized
    monitoring and evaluation indicators used by all donors.
        Question. In a press release of April 13, 2004, USAID announced the
    first round of grants made under the President's Emergency Plan for
    AIDS Relief (PEPFAR) with fiscal year 2004 funding. Five grants were
    announced for projects in just some of the 14 countries eligible for
    PEPFAR funding, totaling less than $35 million. Only three of these
    grants--totaling just $18 million were directed to Orphans and
    Vulnerable Children (OVC) programs. Not one of these grants exceeded $7
    million, even though all were for efforts in multiple countries. Given
    the magnitude of the orphan problem, and the grave consequences it has
    for the children, their families and communities, and for their
    countries, these efforts seems far too tentative and too limited, far
    smaller than the effort anticipated by Congress in allocating 10
    percent of fiscal year 2004 HIV/AIDS funds for OVC programs.
        While I compliment USAID for recognizing the importance of OVC
    programs in assuring the long-term economic and social development of
    poor countries, I am concerned that our financial support to date is
    too limited to effectively address the needs of the rapidly growing
    numbers of orphans and other children affected by AIDS.
      --Can you tell me how much of the fiscal year 2004 appropriation for
            HIV/AIDS has in fact been committed to date for this purpose
            and how much will be committed in fiscal year 2005?
      --Can you assure me that fully 10 percent of the 2004 appropriations
            will be dedicated to this critical problem and that funding for
            OVC programs will expand significantly from what appears to be
            a slow and tentative beginning?
        Answer. In fiscal year 2004, the U.S. Government has allocated $50
    million, or 6 percent of the HIV/AIDS budget, to programs for orphans
    and vulnerable children. Levels for fiscal year 2005 are not available
    at this point.
        USAID has recognized the importance of funding programs to support
    children affected by AIDS for the past few years. Our programs in this
    area are beginning to grow significantly under the President's
    Emergency Plan for AIDS Relief. As you mentioned, grants for orphans
    and vulnerable children were some of the first announced under the
    Emergency Plan. These grants will provide resources to assist in the
    care of about 60,000 additional orphans in the Emergency Plan's 14
    focus countries in Africa and the Caribbean. Approaches to care
    services will include providing critical social services, scaling up
    basic community-care packages of preventive treatment and safe water,
    as well as HIV/AIDS prevention education.
        Prior to the implementation of the Emergency Plan, as of six months
    ago, USAID was funding 99 programs in 25 countries to specifically
    respond to the unique issues facing children affected by AIDS. In
    addition, USAID funds a consortium of groups who are working together
    as the ``Hope for Africa's Children Initiative.''
        Question. The HIV/AIDS pandemic has had an enormous impact on the
    world's youth. To date, 13-14 million children have been orphaned by
    AIDS, and that number is expected to reach more than 25 million by
    2010. This virtual tsunami' of orphans in sub-Saharan Africa will
    spread to new countries in Africa and to Asia as death rates from AIDS
    rise in those regions.
      --Within PEPFAR and other programs, what are you currently doing to
            scale up efforts regarding AIDS treatment, health care and
            getting these children into school?
        Answer. Under the President's Emergency Plan for AIDS Relief,
    caring for children affected by AIDS is one of the top priorities.
    While USAID has been working in this area for several years, we have
    recently been able to significantly scale-up our programs. We recently
    entered into agreements with the World Food Program and a consortium of
    organizations called ``Hope for Africa's Children Initiative'' to
    address issue specific to children affected by AIDS.
        In addition, the first round of grants USAID gave under the
    Emergency Plan were aimed at orphans and youth. Grants were given to
    five organizations for their work in 14 Emergency Plan focus countries
    to support children affected by AIDS and for abstinence and behavior
    change prevention programs targeted at youth.
        These grants will provide resources to assist in the care of about
    60,000 additional orphans in the Plan's 14 focus countries in Africa
    and the Caribbean. In addition, prevention through abstinence messages
    will reach about 500,000 additional young people in the Plan's 14 focus
    countries through programs like World Relief and the American Red
    Cross's Together We Can. USAID country missions also will receive
    additional dollars for orphans and youth upon the award of the
    remainder of the fiscal year 2004 President's Emergency Plan dollars.
        Question. The President's initiative on global AIDS includes a
    commitment to put two million people on life-saving antiretroviral
    treatment.
      --How many AIDS patients within all of our AIDS efforts are currently
            under treatment?
      --How many mothers have actually received treatment to reduce mother-
            to-child transmission?
      --What is USAID doing to scale up the numbers treated through your
            agency in the coming year?
        Answer. Treating two million people living with HIV/AIDS is the
    cornerstone of the President's Emergency Plan for AIDS Relief. With the
    first round of funds, an additional 50,000 people living with HIV/AIDS
    in the 14 focus countries will begin to receive anti-retroviral
    treatment, which will nearly double the number of people who are
    currently receiving treatment in all of sub-Saharan Africa. Today,
    activities have been approved for anti-retroviral (ARV) treatment in
    Kenya, Nigeria, and Zambia, and patients are receiving treatment in
    South Africa and Uganda because of the Emergency Plan.
        The first complete set of counts of patients served will be sent by
    U.S. Government country missions to headquarters early next Fall. As of
    March 31, 659,500 women have received services at ante-natal clinics
    with 76,000 women receiving a complete course of ARV prophylaxis to
    prevent mother-to-child transmission.
        USAID is working in a variety of ways to scale-up the numbers of
    people receiving ARV treatment. For example, we help developing
    countries establish effective and efficient supply chains, as a
    continuous, reliable flow of commodities is essential to ARV treatment.
    We also provide funding to ensure that health systems within developing
    countries are available to implement treatment programs.

                                  TUBERCULOSIS

        Question. Tuberculosis is the greatest curable infectious killer on
    the planet and the biggest killer of people with HIV. Treating TB in
    people with HIV can extend their lives from weeks to years. I am very
    concerned that the President's 2005 budget actually cuts TB and malaria
    funding by some $46 million. And the President's AIDS initiative fails
    to focus on expanding TB treatment as the most important thing we can
    do right now to keep people with AIDS alive and the best way to
    identify those with AIDS who are candidates for anti-retrovirals.
        I was just in India where TB is currently a far greater problem
    than HIV--though AIDS is rapidly catching up--and a new WHO report has
    shown that parts of the former Soviet Union and Eastern Europe have
    rates of dangerous drug resistant TB 10 times the global average. TB
    rates have skyrocketed in Africa in conjunction with HIV, yet only one
    in three people with HIV in Africa who are sick with TB even have
    access to basic life-saving TB treatment. The cuts in TB funding are
    short-sighted; TB efforts should be expanded. We are missing the boat
    on this issue--at our own risk.
      --Will you push to expand overall USAID funding to fight TB to our
            fair share of the global effort? (The United States is
            currently investing about $175M in TB from all sources
            including our contribution to the Global Fund.)
      --Will you ensure that the USAID makes it a priority to expand access
            to TB treatment for all HIV patients with TB and link TB
            programs to voluntary counseling and testing for HIV?
        Answer. Outside of HIV/AIDS, tuberculosis (TB) and malaria are our
    top priorities for infectious diseases. USAID is the largest bilateral
    donor providing support to the global effort to fight TB. Our total
    fiscal year 2004 budget (all accounts) for TB programs worldwide is $82
    million. This level has increased dramatically over the last several
    years, from just over $20 million in 2000. In addition, as you mention,
    the Global Fund to Fight AIDS, TB and Malaria supports grants for TB,
    and the USG is the largest contributor.
        In the fiscal year 2005 budget, we did have to cut our request for
    infectious disease funding overall to stay within our budget
    parameters. We will do everything we can to protect our core TB
    programs. Overall in TB, our priority is to expand and strengthen
    implementation of the WHO recommended DOTS (Directly Observed
    Treatments Short-course) strategy--which is the best means for getting
    effective TB treatment to patients. In addition, USAID is supporting
    critical research to identify better diagnostic methods, better and
    shorter treatment regimens and new approaches to improve program
    performance.
        With regard to TB and HIV/AIDS, we would strongly agree with the
    points you raised on the critical importance of getting access to TB
    treatment to those infected by HIV/AIDS. USAID is a leader in
    expanding, strengthening and testing approaches to improve the care of
    patients co-infected with TB and HIV/AIDS. One of the criteria for
    selection of our priority countries for TB is the prevalence of HIV. As
    such, we are supporting TB programs in many countries that have a heavy
    burden of both diseases such as South Africa, Kenya, Uganda, Ethiopia,
    Nigeria, Cambodia, and Haiti, as well as in countries such as Russia
    and India where TB is a serious problem and where HIV/AIDS is on the
    rise. In these and other countries, we need to expand access to DOTS in
    the general population, since many co-infected patients seek TB care
    without even knowing their HIV status.
        In addition, USAID supports country-level activities that
    specifically address TB-HIV/AIDS co-infection in Ethiopia, South
    Africa, Kenya, Malawi, Mozambique, Tanzania, Uganda and Zambia. These
    activities use HIV counseling and testing as an entry point to a
    package of prevention, care and support for those patients with
    suspected TB and/or HIV/AIDS.
        USAID also supports operations research to test approaches to
    improve identification and care of patients co-infected with TB and
    HIV/AIDS.
        Finally, TB technical advisors participated in the review of
    country plans to the President's Emergency Plan for AIDS Relief. While
    finalization of these plans is pending, TB-HIV/AIDS co-infection was
    particularly emphasized in the plans for Ethiopia, Mozambique, Nigeria,
    Tanzania, Rwanda, and South Africa.

                             FEMALE GENITAL CUTTING

        Question. It is my understanding that USAID is developing a
    strategy for eliminating female genital cutting around the world. I
    would like to call to your attention the work of the group Tostan in
    Senegal, which has impressed observers by inspiring the mass
    abandonment of female genital cutting in more than 1,200 villages since
    1997. This kind of extraordinary progress should be encouraged.
      --What is the timetable for the completion of USAID's strategy?
      --What is the likely role of multi-dimensional programs such as
            Tostan in that strategy?
      --What is your sense of whether it might be possible to begin
            supporting effective programs such as Tostan even before the
            strategy is completed?
        Answer. USAID will complete its FGC Abandonment Strategy and
    implementation plan by early summer 2004.
        Programs such as Tostan are currently integral to USAID's work.
        USAID incorporated eradication of FGC into its development agenda
    and adopted a policy on FGC in September 2000. To integrate this policy
    into programs and strategies, USAID:
      --Supports efforts by indigenous NGOs, women's groups, community
            leaders, and faith-based groups to develop eradication
            activities that are culturally appropriate and that reach men
            and boys as well as women and girls.
      --Works in partnership with indigenous groups at the community level,
            as well as with global and national policymakers, to reduce
            demand by promoting broader education and disseminating
            information on the harmful effects of FGC.
      --Collaborates with other donors and activist groups to develop a
            framework for research and advocacy and to coordinate efforts,
            share lessons learned, and stimulate public understanding of
            FGC as a health-damaging practice and a violation of human
            rights.
        USAID currently funds Tostan projects in Senegal, Guinea, Burkina
    Faso, and Mali.
        In addition to our work with Tostan, we are involved with other,
    comparable organizations. For example, in Nigeria, USAID's local
    partners include the Women's Lawyers Association and Women's
    Journalists Association. These groups work with us in programs
    involving community media and traditional media advocacy to change
    social norms regarding FGC.
        In Mali, we worked with an important women's Islamic group which
    reversed a previous stance when they affirmed that female circumcision
    is optional; that the practice is not mandatory under Islam.
                                     ______

                 Questions Submitted to Ambassador Cofer Black

                 Questions Submitted by Senator Mitch McConnell

        Question. Which terrorist groups are operating in Iraq, and do they
    receive support from Iraq's neighbors--if so, what kind of support?
        Answer. Terrorist groups operating or present in Iraq as of May
    2004 which have been designated by the United States as Foreign
    Terrorist Organizations (FTO) or under the Terrorist Exclusion List
    (TEL) include Ansar al-Islam/Ansar al-Sunna, and the Mujahedin e-Khalq
    (MEK). However, many individuals or entities with links to al-Qaeda,
    former regime elements, or other foreign terrorists or organizations,
    such as the network led by Abu Mus'ab al-Zarqawi or the Islamic Army in
    Iraq, have claimed responsibility for terrorist actions in Iraq, such
    as the August 2003 bombing of the UNHCR Headquarters. In addition to
    our extensive security and policing efforts within Iraq, we are also
    working with Iraq's neighbors, where possible, to track and cut off the
    cross-border flow of persons, weapons and funding to the terrorists in
    Iraq.
        Question. Has the Liberation of Iraq had an impact on the
    advancement of freedom in the region--such as increased calls for
    reform in Syria or Libya's recent opening to the West?
        Answer. U.S. resolve to see international law and more than a dozen
    U.N. Security Council resolutions upheld in Iraq clearly had a profound
    impact on most of the region, including on the historic decision by
    Libya's Muammar Qadhafi to give up his weapons of mass destruction and
    non-MTCR compliant missiles.
        Syria, however, remains a closed, autocratic state. We remain
    concerned about the repression of Syrian citizens, including religious
    and ethnic minorities. Given the nature of the Syrian regime, it is
    very difficult to gauge whether calls for reform from the Syrian public
    have increased over the past eighteen months. Syria also maintains a
    significant military and intelligence presence in Lebanon and continues
    to interfere in Lebanon's political life.
        In Libya's case, other factors also played a role, including a
    tough bilateral sanctions regime, years of sustained diplomacy, and
    United States and UK intelligence efforts to uncover the details of
    Libya's WMD efforts. It is also important to note that the courage and
    tenacity displayed by the families of the Pan Am 103 victims helped to
    persuade Libya to finally address the U.N. Security Council demands
    related to Pan Am 103, including transfer of the two suspects and
    renunciation of terrorism.
        Question. What is the nexus between the growing illicit narcotics
    trade and terrorism in Afghanistan?
        Answer. We do not know to what extent al-Qaida profits from the
    drug trade in Afghanistan. U.S. Government agencies have anecdotal
    reports of drug trafficking by elements aligned with al-Qaida, but
    there is no evidence that such activities are centrally directed. Al-
    Qaida continues to rely on private donations and funding sources other
    than narco-trafficking for most of its income, and there is no
    corroborated information in U.S. Government holdings to suggest that
    drug trafficking provides a significant percentage of al-Qaida's
    income. We remain deeply concerned about the possibility that
    substantial drug profits might flow to al-Qaida, however, and continue
    to be vigilant for signs that this is occurring.
        The involvement of anti-government Afghan extremists in the drug
    trade is clearer. U.S. troops in 2002 raided a heroin lab in Nangarhar
    Province linked to the Hizb-I Islami Gulbuddin and officials from the
    United Nations and the Afghan Government report that the Taliban earns
    money from the heroin trade. Based on the information available,
    however, we cannot quantify how much these groups earn from the drug
    trade, nor can we determine what percentage of their overall funding
    comes from drugs.
        In addition, extremists and terrorists in Afghanistan may sometimes
    turn to the same network of professional smugglers used by drug
    traffickers for help moving personnel, material, and money.
        Question. Is this illicit trade undermining reconstruction efforts,
    and what impact might the drug trade have in the country's future
    development?
        Answer. Disrupting the growth of the narcotics trade in Afghanistan
    continues to be a focus of international efforts. The United States has
    developed our counternarcotics program in close consultation with the
    United Kingdom and is coordinating with the UK in seeking
    counternarcotics assistance from the G-8, EU, other major donors, and
    some of Afghanistan's neighbors. A number of donors, including NATO
    Allies, have already contributed to broader law enforcement, border
    security, criminal justice sector, alternative development, and demand
    reduction programs.
        If narcotics cultivation and trafficking were to continue unabated
    in Afghanistan, it would threaten all of the gains that have been made
    there over the past three years. Among other negative effects, a
    narcotics economy corrupts government officials, damages Afghanistan's
    relationship with the international community, makes criminals out of
    much of the Afghan public, makes addicts out of the youth, and stunts
    the country's legitimate economic growth. If the problem is not
    addressed, and the Afghanistan narcotics trade continues to rise at its
    current explosive rate, Afghanistan risks becoming a failed state.
        Question. Are Afghan officials involved in this trade?
        Answer. Given the pervasiveness of the drug trade in Afghanistan--
    some estimates put it as high as 60 percent of the country's GDP--there
    is little doubt that Afghan officials are involved. There is anecdotal
    evidence of drug-related corruption within the Afghan police, the
    military, and the civilian government at national and provincial
    levels. President Karzai is keenly aware of the danger of government
    corruption and appears to be appointing high-level officials who he
    views as honest and trustworthy.
        Question. What role does the U.S. military play in counterdrug
    efforts in Afghanistan?
        Answer. As of May 2004, the U.S. military in Afghanistan has
    resisted active engagement in counternarcotics, out of concern that
    such assistance might turn the Afghan populace against U.S. forces. The
    military has agreed, however, to destroy drug-related facilities if
    found in the course of patrolling operations.
        Question. What threat does Afghan Islamic Fundamentalism pose to
    reconstruction efforts in Afghanistan?
        Answer. Islamic fundamentalism itself does not necessarily threaten
    reconstruction efforts in Afghanistan. Afghanistan is a deeply
    religious Islamic country, and that fact alone does not hamper our work
    there. In fact, many very religious Afghans are supporting our efforts.
    What does threaten our efforts are continued insurgent attacks--whether
    motivated by religion, politics, or other factors. Attacks on
    reconstruction workers and humanitarian organizations threaten to
    significantly slow our progress by increasing security concerns and
    costs.
        Even in the face of danger, our reconstruction efforts continue. As
    Coalition forces continue their fight against insurgents, we expect
    that the pace of insurgent attacks will slow.
        Question. As terrorist attacks have already struck the Philippines,
    Indonesia and Thailand, do you agree that the next major front in this
    war is Southeast Asia?
        Answer. As we have seen all too recently and tragically around the
    world, the threat from terrorism persists despite our best efforts and
    the progress we have made. Southeast Asia in particular remains an
    attractive theater of operations for regional terrorist groups such as
    Jemaah Islamiyah (JI). The governments in Southeast Asia continue to be
    reliable partners in the war on terrorism, but they face tremendous
    challenges to dealing with the terrorist threat. Most worrisome is the
    disparity between the level of threat--future attacks are a certainty--
    and the capacity of host governments to deter attacks, disrupt
    terrorist activity, and respond to incidents. The USG remains committed
    to cooperating closely with partner countries in Southeast Asia to help
    them develop and improve the law enforcement, finance and other tools
    necessary to combat terrorism.
        Question. How cooperative are governments in that region on
    terrorism--particularly Indonesia, Thailand and the Philippines? Do
    they understand the imminent threat regional terrorists pose?
        Answer. The United States enjoys excellent CT cooperation with
    Indonesia, Thailand, and the Philippines. These governments take
    counterterrorism very seriously. The October 2002 Bali bombings
    demonstrated the threat that terrorism poses not only to their own
    citizens and government, but also to their economies. Since Bali, the
    Indonesian government has arrested over 130 Jemaah Islamiyah (JI)
    suspects and convicted over 100 JI and affiliated terrorists. In 2003,
    Thai authorities captured Hambali, JI's operation chief and Al-Qaeda
    point man in Southeast Asia, a significant blow to the organization and
    an important victory in the war against terrorism. In the Philippines,
    we have seen success as the Philippine National Police have thwarted
    plots in Manila and arrested suspected members of JI and the Abu Sayyaf
    Group.
        Question. Do you agree with Philippine President Arroyo's recent
    assertion that the Al-Qaeda-linked Abu Sayyaf terrorist group is a
    ``spent force''?
        Answer. The Philippine government, working in part with the USG,
    has had some success against the leadership of the Abu Sayyaf Group
    (ASG). Several of the ASG terrorists involved in the kidnapping of
    Americans Martin and Gracia Burnham and Guillermo Sobero, for example,
    have been captured or killed. We are assisting Manila in everyway we
    can to keep the pressure on ASG. The ASG remains capable of launching
    terrorist attacks, however, as demonstrated by their responsibility for
    the February 2004 Superferry 14 bombing outside Manila which, killed
    over 100 people.
        Question. What should U.S. policy on terrorism be in those
    countries where repressive governments terrorize their own citizens,
    such as Cambodia?
        Answer. Comprehensive, effective U.S. counterterrorism policy is
    inseparable from overall foreign policy goals that advance good
    governance, human rights, promotion of the rule of law and promotion of
    economic and commercial development. We advance USG counterterrorism
    efforts by emphasizing these goals to our international partners on a
    bilateral basis and in various multilateral fora.
        In Cambodia, we are working with the government and civil society
    to implement good governance, promote human rights and greater respect
    for the rule of law and increase accountability. We have provided some
    limited counter-terrorism training to mid-level Cambodian officials
    through programs offered by the International Law Enforcement Academy
    (ILEA) in Bangkok.
        Question. What is your reaction to the recent news that Cambodia is
    re-opening Saudi charities shut down last year?
        Answer. On December 29, 2004, a Cambodian court convicted two Thai
    nationals and one Cambodian as accessories in ``attempted premeditated
    murder with the goal of terrorism'' for their role in supporting Jemaah
    Islamiyah (JI) operations chief Hambali while he was resident in
    Cambodia. They were sentenced to life imprisonment. A fourth
    individual, an Egyptian national, was acquitted. Hambali and two other
    JI operatives were convicted in absentia and given life sentences.
        The trial arose from the May 28, 2003, arrests of foreign members
    of the Umm al-Qura group, a Saudi-based charity that had been
    establishing schools for Cambodia's Cham minority community, an
    indigenous Muslim population. These convictions are a signal to
    terrorists that the Cambodian government is prepared to take effective
    action against those planning terrorist activities inside Cambodia.
        The Saudi-based Umm al-Qura charity has not resumed activities in
    Cambodia. The Mufti of Cambodia, Sos Kamry, has opened the Cambodian
    Islamic Center on the site of the former Umm al-Qura school. However,
    it has no relationship with the Saudi charity. Embassy personnel have
    visited the Cambodian Islamic Center on several occasions and have been
    warmly received by staff and students there.
        Question. Are there any links between Islamic terrorist
    organizations or individuals and Cambodian government officials?
        Answer. There is no evidence of links between Islamic terrorist
    organizations or individuals and the Cambodian government. The
    Cambodian government has taken decisive action against suspected
    Islamic extremist organizations and individuals in the closing the Umm
    Al-Qura School in May 2003 and deportation of many of its foreign
    staff. In December 2004, a Cambodian court convicted five individuals
    of plotting terrorist attacks, including the conviction in absentia of
    Jemaah Islamiyah operations chief Hambali.
        In March 2004 the Cambodian government demonstrated its commitment
    to combating terrorism by destroying with U.S. assistance its stocks of
    man-portable air defense systems (MANPADS).
        Question. How cooperative has China been in the war on terrorism,
    and what threat do indigenous Islamic fundamentalists in China pose to
    the Middle Kingdom and the region?
        Answer. United States-China counterterrorism cooperation is
    positive. We have been sharing information and consulting with each
    other to prevent terrorist incidents.
        The PRC is concerned about links between Xinjiang Uighur Autonomous
    Region separatist groups (composed mainly of ethnic Uighurs, but also
    other Muslims) and Islamic fundamentalists in Central Asia. There have
    been terrorist incidents in China, and there is evidence that some
    ethnic Uighurs have been trained in Afghanistan by Al-Qaeda. In
    September 2003, after careful review of all available information, the
    United States designated the East Turkistan Islamic Movement a
    terrorist organization under Executive order 13224. We have made clear
    to the Chinese, however, that counterterrorism cannot be used as an
    excuse to suppress peaceful dissent or the legitimate expression of
    political and religious views.
        Question. How do you explain Thai Prime Minister Thaksin's initial
    slow and ineffective response to terrorism in southern Thailand?
        Answer. The violence in southern Thailand appears to be an
    insurgency driven by historical separatist sentiment. We have not yet
    seen evidence of outside terrorist direction, although insurgents
    sympathize with global Muslim causes. In response to the ongoing
    violence in southern Thailand, the Thai government has increased the
    number of security personnel operating in southern Thailand and has
    announced development and educational programs to address long-standing
    tensions in the region.
        The Thai government remains a stalwart partner in the war on
    terrorism. In 2003, Thai authorities captured Hambali, Jemaah
    Islamiyah's operation chief and Al-Qaeda point man in Southeast Asia, a
    significant blow to JI. We are working with the Thai government to stop
    terrorists at border entry points by providing training and computer
    equipment to establish a name-check database called the Terrorist
    Interdiction Program. Through centers like the U.S.-Thailand
    International Law Enforcement Academy in Bangkok, we are providing
    counterterrorism training to law enforcement officers throughout the
    region.
        Question. How extensive are the activities of Saudi charities in
    the region, and do we know with any accuracy how many Islamic students
    from the region have been sent to Saudi Arabia or Pakistan for
    educational purposes?
        Answer. We have reports that Saudi charities are active in the
    region, particularly in Indonesia, as well as in southern Thailand and
    Cambodia, and we continue to monitor this situation. Many of these
    charities concentrate on community development projects such as
    building schools, but some contribute to anti-Western sentiments and
    espouse Islamic extremism. We are aware that Islamic students from the
    region do attend schools in Saudi Arabia and possibly Pakistan, but
    governments in the region have not been able to provide us with
    accurate counts of the number of students.
        Question. What connection exists between organized crime and
    regional terrorist groups in Southeast Asia?
        Answer. There is evidence that extremists and terrorists have taken
    advantage of the same network of professional smugglers used by drug
    traffickers for help moving personnel, material, and money. U.S.
    Government agencies have anecdotal reports of drug trafficking by
    elements aligned with al-Qaeda, but the evidence suggests that this
    activity reflects individuals' initiative and is not centrally directed
    by the organization. Al-Qaeda and regional terrorist groups in
    Southeast Asia continue to rely on private donations and funding
    sources, rather than trafficking for most of their income. We remain
    deeply concerned about the possibility that substantial drug profits
    might flow to al-Qaida and regional terrorist groups, however, and
    continue to be vigilant for signs that this is occurring. Kidnapping
    for ransom is another funding source, particularly for the Abu Sayyaf
    Group in the southern Philippines.
        Question. To what extent does the United States have a complete and
    accurate picture of terrorist groups operating in Indonesia,
    particularly Jemaah Islamiyah (JI)?
        Answer. Our picture of terrorist groups in Indonesia, particularly
    Jemaah Islamiyah (JI), is continually evolving. We have developed over
    time a clearer understanding of the senior leadership of JI,
    connections with other groups, JI's regional structure, and their
    training. However, we are aggressively seeking additional information
    about the group, in particular actionable intelligence that will enable
    us to disrupt future operations and track down JI leaders.
        Question. How would you characterize Indonesia's cooperation with
    the United States in the war on terrorism?
        Answer. Indonesia's counterterrorism cooperation with the United
    States is strong and getting stronger. The Indonesian government has
    taken decisive action against terrorism since the October 2002 Bali
    bombing; to date, they have arrested over 130 Jemaah Islamiyah (JI)
    suspects and convicted over 100 JI and affiliated terrorists. We
    continue to share relevant threat information and work together to
    prevent future attacks. The United States, along with other donor
    states such as Australia and members of the G-8, are working together
    to help Indonesia build its law enforcement and other capabilities to
    combat terrorism.
        Question. What are JI's funding sources?
        Answer. We know that much of the funding for terrorist groups in
    Southeast Asia is funneled through cash couriers, making it extremely
    difficult to track. In order to get into specific sources of funding,
    however, I would have to answer the question in a classified setting.
        Question. What role has Saudi Arabia (particularly Saudi charities)
    played in promoting Islamic extremism in Indonesia?
        Answer. Saudi charities are involved in many aspects of community
    building in Indonesia, heavily funding projects such as schools
    (pesantrans) and mosques. While providing schools is a great service
    for the poorer Indonesian communities, some of these schools promote
    Islamic extremism. We continue to speak with the Indonesian government
    about the importance of promoting moderate views on Islam, including in
    the school curriculum.
        Question. Please comment on the recent decision by Indonesia's
    Supreme Court to reduce the sentence of Muslim cleric Abu Bakar
    Ba'asyir.
        Answer. In September 2003, a Jakarta District Court convicted
    Jemaah Islamiyah (JI) spiritual leader Abu Bakar Ba'asyir of
    participation in treason and of various immigration violations. An
    appellate court overturned the treason conviction on appeal.
    Prosecutors and defense lawyers subsequently appealed to the Supreme
    Court, which reduced Ba'asyir's sentence to 18 months. Just prior to
    his April release, however, police re-arrested Ba'asyir on terrorism
    charges for his leadership of JI and his role in the August 2003
    Marriott bombing, as well as criminal charges for his role in the
    October 2002 Bali bombings. Ba'asyir's trial opened on October 28,
    2004, and is now continuing into its third month.
        Question. What impact will Bakar's pending release have on
    terrorist activities in Indonesia and throughout the region--especially
    in light of Bakar's public comment that ``we have to oppose America
    physically in Afghanistan, Iraq and elsewhere''?
        Answer. We were tremendously encouraged that the Indonesian
    government re-arrested Ba'asyir upon the expiration of his shortened
    sentence, and that Indonesian government prosecutors are now making a
    strong case against Ba'asyir in court. There is extensive evidence of
    Ba'asyir's leadership role and personal involvement in terrorist
    activities.
        Question. Is there any evidence that Indonesia's military is
    collaborating with indigenous terrorist groups and/or individuals?
        Answer. No, we do not have any evidence or indication that
    Indonesia's military is collaborating with indigenous terrorist groups
    or individuals.
        Question. To what extent is North Korea involved in the illicit
    narcotics trade, and is there any evidence that North Korean Drug
    Trafficking is used to support terrorism?
        Answer. Law enforcement cases and intelligence reporting over the
    years have not only clearly established that North Korean diplomats,
    military officers, and other party/government officials have been
    involved in the smuggling of narcotics, but also that state-owned
    assets, particularly ships, have been used to facilitate and support
    international drug trafficking ventures. Although some of the
    information gathered is incomplete or unverified, the quantity of
    information and quality of many reports give credence to allegations of
    state sponsorship of drug production and trafficking that can not be
    ignored. It appears doubtful that large quantities of illicit narcotics
    could be produced in and/or trafficked through North Korea without
    high-level party and/or government involvement, if not state support.
        The cumulative impact of these incidents over years, in the context
    of other publicly acknowledged behavior by the North Korean such as the
    Japanese kidnappings points to the likelihood, not the certainty, of
    state-directed trafficking by the leadership of North Korea.
        There is also strong reason to believe that there is party and/or
    government involvement in the manufacture of methamphetamine and heroin
    in North Korea , but we lack reliable information on the scale of such
    manufacturing.
        We believe the motivation for DPRK trafficking is primarily
    financial. We are unaware of any specific transfer of the proceeds of
    narcotics trafficking to any terrorist group.
        Question. North Korean criminals have surfaced periodically
    throughout Southeast Asia, including in Cambodia. What are the designs
    of these North Korean criminals and are they collaborating with
    regional terrorists?
        Answer. We have seen many reports of North Koreans involved in
    criminal activity. These reports point to involvement with narcotics
    trafficking, narcotics cultivation/production, using diplomatic status
    to smuggle controlled species, the counterfeiting and distribution of
    foreign currency, including U.S. currency, trade in fraudulent items,
    violation of intellectual property rights, and smuggling of tobacco
    products to benefit from differential pricing and to avoid taxation.
        We have seen clear evidence that North Koreans are involved with
    various organized crime groups on Taiwan, in Japan and elsewhere, but
    we are unaware of any contact between North Korean criminal elements
    and terrorists.
        Question. What programs can be supported among North Korean
    refugees and exiles to create an organized opposition to the thugs in
    Pyongyang?
        Answer. With the support of the Administration, Congress last year
    passed the North Korea Human Rights Act, and we are implementing the
    measures of the Act, consulting closely with Congress and with our
    allies, to promote improved human rights in North Korea. The specific
    objectives of the Act are to promote: respect for and protection of
    fundamental human rights in North Korea; a more durable humanitarian
    solution to the plight of North Korean refugees; increased monitoring,
    access and transparency in the provision of humanitarian assistance
    inside North Korea; the free flow of information into and out of North
    Korea; and progress towards the peaceful reunification of the Korean
    Peninsula under a democratic system of government.
         As explained in the Report of the Committee on International
    Relations, The North Korean Human Right Act ``is motivated by a genuine
    desire for improvements in human rights, refugee protection, and
    humanitarian transparency. It is not a pretext for a hidden strategy to
    provoke regime collapse or to seek collateral advantage in ongoing
    strategic negotiations. While the legislation highlights numerous
    egregious abuses, the [Congress] remains willing to recognize progress
    in the future, and hopes for such an opportunity.''
        The Act authorizes $2 million to be spent annually through fiscal
    year 2008 to provide grants to private, nonprofit organizations to
    support programs, including educational and cultural exchange programs,
    that promote human rights, democracy, the rule of law, and development
    of a market economy in North Korea. For fiscal year 2005, Congress has
    indicated that these funds should be granted to Freedom House to hold a
    conference on improving human rights in North Korea. The Act also
    expresses the sense of Congress that the United States should increase
    radio broadcasts into North Korea by Radio Free Asia and Voice of
    America to 12 hours per day, and authorizes $2 million annually through
    fiscal year 2008 to increase the availability of non-government-
    controlled sources of information to North Koreans.
        In addition, the Act mandates the appointment of a Special Envoy
    for Human Rights in North Korea within the State Department. Among
    other responsibilities, the Special Envoy is charged with supporting
    international efforts to promote human rights and political freedoms in
    North Korea, engaging in discussions with North Korean officials on
    human rights, consulting with NGOs, reviewing strategies for improving
    protection of human rights in North Korea, and making recommendations
    regarding USG funding of programs to promote human rights, democracy,
    rule of law, and development of a market economy in North Korea. As you
    know, the first annual report of the soon-to-be-appointed Special Envoy
    on actions taken to promote efforts to improve respect for the
    fundamental human rights of people in North Korean is due on April 15.
        We will continue to work closely with the Subcommittee to promote
    improved human rights in North Korea.

                                  WEST AFRICA

        Question. Is Hezbollah profiting from the diamond trade--or other
    illicit activities in that region?
        Answer. We do not think, based on the evidence, that Hezbollah as
    an organization directly participates in the diamond trade or other
    illicit ventures in west Africa. That said, Hezbollah profits
    indirectly from the diamond trade in west Africa. Hezbollah engages in
    widespread fundraising efforts worldwide, with particular emphasis on
    regions with sizable overseas Lebanese communities such as west Africa.
    Hezbollah raises money in west Africa from members of the Lebanese
    business community, some of whom are involved in both the licit and
    illicit diamond trade.
        Question. Is there a connection between Hezbollah and Al-Qa'ida in
    west Africa?
        Answer. We have seen no credible evidence indicating a connection
    between Hezbollah and Al-Qa'ida.
        Question. Do drug addicted, demobilized rebels in Sierra Leone and
    Liberia pose an immediate threat to the resumption of hostilities in
    the region--and as easy recruits for terrorist organizations?
        Answer. Yes, the rebels pose a threat to the region and could
    resume hostilities, however they are not likely recruits for
    International Terrorist Organizations. We strongly believe in the need
    for swift and effective reintegration and rehabilitation (RR) programs
    for disarmed and demobilized combatants worldwide, including in Liberia
    and Sierra Leone.
        The U.S. Agency for International Development is spending $60
    million on RR programs, based on our Depression-era Civilian
    Conservation Corps, in Liberia for 20,000 ex-combatants and 15,000
    others, including women and children associated with those fighters.
    The United Nations (UN) and European Union (EU) are creating programs
    in Liberia for another 23,000 ex-combatants, leaving a shortfall of
    60,000 people formally classified as ex-combatants.
        U.N. Secretary-General Annan recently said that another $60 million
    in RR programs are needed to employ, retrain, educate, and counsel
    these remaining ``volatile and restive'' ex-combatants in Liberia. As
    part of our supplemental budget request, we are proposing additional
    funding for reintegration and rehabilitation programs for Liberian ex-
    combatants. A senior interagency delegation will visit Brussels and
    Luxembourg January 10-13 to urge the EU to spend more on similar RR
    programs.
        Diamond fields and forests in the Mano River region have attracted
    significant illicit commercial activity, and these governments have
    minimal capability to control their borders or enforce customs
    regulations. Strengthening their capacity to combat arms smuggling,
    money laundering, and other activities supporting terrorism is a top
    priority.
        Liberia is resource rich and potentially a good place for direct
    foreign investment that would help create jobs for the unemployed
    youth. We are working with the Government and international financial
    institutions to address pervasive corruption that is currently a major
    impediment to spurring economic activity.
        Question. Is there any evidence of al-Qaida operations in Colombia?
        Answer. There is no corroborated reporting that al-Qaida
    operational cells exist in Colombia. Colombia, like many other
    countries in the Western Hemisphere, could be vulnerable to
    exploitation by terrorists for safe haven, fundraising, recruiting, or
    spreading propaganda. The United States Government works on a bilateral
    and multilateral basis to enhance the counterterrorism capacity of
    Colombia, as well as other hemispheric partners, to prevent the
    movement of terrorists in the hemisphere, deny terrorists access to
    fraudulent travel and identity documents, strengthen border security,
    and combat terrorism financing.
        Question. Is Venezuela providing sanctuary to terrorist operating
    in Colombia?
        Answer. It is unclear to what extent or at what level the
    Venezuelan Government approves or condones the use of its territory as
    safehaven by Colombia's Revolutionary Armed Forces of Colombia (FARC),
    National Liberation Army (ELN), and United Self-Defense Forces/Groups
    of Colombia (AUC)--all three U.S. Government-designated Foreign
    Terrorist Organizations (FTOs).
        Venezuela has been unwilling or unable to assert control over its
    1,400-mile border with Colombia. Consequently, the FARC and ELN have
    used the area for cross-border incursions and have regarded Venezuelan
    territory near the border as a safe area for rest, recuperation, and
    probable transshipment of drugs and arms. The AUC has admittedly
    operated in Venezuela, principally targeting FARC and ELN groups
    operating there. The AUC does not appear to hesitate to cross the
    porous Venezuela-Colombia border to disrupt or exploit the FARC's and
    ELN's strategic supply lines.
        President Chavez' stated ideological affinity with the FARC and ELN
    limits Venezuelan cooperation with Colombia in combating terrorism.
    However, the Venezuelan and Colombian Governments have worked together
    in some cases to enhance border security and bring terrorists to
    justice.
        Question. Do we have a full and accurate picture of the
    proliferation activities of A.Q. Khan in Pakistan, and how would you
    characterize the Pakistani government's cooperation in determining the
    breadth and depth of Khan's activities?
        Answer. The Government of Pakistan is continuing its own
    investigation of the A.Q. Khan network and has already taken steps to
    shut down the network. It has shared information that it has developed
    from that investigation and it has agreed to continue to share
    information with us. The information Pakistan has provided to us has
    been important to our global efforts to dismantle the network.
    President Musharraf's efforts to shut down the activities of the
    network in Pakistan have contributed to our overall effort. However, we
    remain concerned that the network could be reconstituted. For this
    reason, we are reassured by President Musharraf's statements that Khan
    remains under close watch and his movements are restricted. It is also
    notable that Khan's pardon is conditioned on his continued cooperation.
    We remain concerned, however, about Pakistan's decision to release all
    of the individuals detained in connection with the Khan case, with the
    exception of Dr. Muhammed Farooq, formerly head of procurement at Khan
    Research Laboratories.
        Question. How cooperative has Pakistan been in engaging Al-Qaeda
    and Taliban remnants in Pakistan--particularly along the border with
    Afghanistan.
        Answer. Under the leadership of President Musharraf, Pakistan cut
    its ties to the Taliban and became a critical partner in the war on
    terror. The GOP is aggressively pursuing al-Qaida and their allies
    through large-scale military operations in the Federally Administered
    Tribal Areas (FATA). Along with the United States, Pakistani forces
    have borne the brunt of fighting against al-Qaida, facing intense
    resistance and suffering many casualties, including the deaths of at
    least 200 Pakistani servicemen. Pakistan's FATA military operations
    have significantly degraded al-Qaida's command and control capabilities
    in the region.
        In addition to these counterterrorist operations in the tribal
    areas, Pakistani law enforcement--maintaining close cooperation with
    the USG in border security and investigative training--continues an
    extremely successful anti-terrorist campaign in other areas of the
    country, particularly in major cities. Pakistani authorities have
    apprehended over 600 terrorist suspects, turning over to the United
    States such key al-Qaida figures as Khalid Sheikh Mohammad and Abu
    Zubaydah. The arrestees have provided valuable information leading to
    further investigations and arrests.
        While the GOP has been very successful in targeting members of al-
    Qaida and other foreign militants throughout the country, it has faced
    more difficulty confronting Pakistani militants and the Pashtun-
    dominated Taliban, which enjoys close ties to some local tribes.
        Question. Why have Afghan President Karzai and the U.S. Ambassadors
    to both Afghanistan and Pakistan been critical of Pakistani efforts to
    combat terrorism along the border?
        Answer. Pakistan had supported the Taliban government in
    Afghanistan prior to September 2001. Though President Musharraf
    withdrew his government's support and Pakistan became a critical ally
    in the war on terrorism, suspicions lingered in Afghanistan over the
    sincerity of the GOP's support for the new Afghan government. Despite
    the GOP's successful efforts to target al-Qaida and other ``foreigner
    fighters'' within the Federally Administered Tribal Areas (FATA), the
    GOP has faced more difficulty confronting the Taliban, who enjoy close
    ethnic ties with the FATA tribes, as a result of which problems remain
    with cross-border infiltration into Afghanistan.
        In recent months, there has been significant progress in Pakistani-
    Afghan bilateral relations. President Musharraf was the first foreign
    leader to visit Karzai in Kabul after his October election, signaling
    GOP support for Karzai and his government. Additionally, the GOP has
    intensified its counterterrorism operations against al-Qaida remnants
    in Waziristan, and the activities of the Tripartite Commission are
    providing a useful forum for deliberations between Afghan, Pakistani,
    and U.S. military and security representatives at the working level on
    sensitive border and security issues.
        Question. How do you explain the reluctance of Egyptian President
    Hosni Mubarak to embark on much-needed political and legal reforms in
    Egypt?
        Answer. The Egyptian government always has stressed the need for
    gradual reform to preserve stability, but there are signs that mind-set
    is changing somewhat.
      --President Mubarak and other senior Egyptian officials always have
            argued the need for a gradual process of political, economic,
            and social reform to avoid social upheaval in Egypt, where
            population densities in the Nile delta and valley are among the
            highest in the world. They point to the 1977 riots that damaged
            large swaths of Cairo after President Sadat removed bread
            subsidies, and to their struggle against domestic Islamic
            extremists in the 1980's and 1990s, as proof of the need for
            such gradualism.
      --We and other donors have argued that, conversely, an insufficiently
            rapid pace of reform is likely to increase rather than decrease
            Egypt's instability in the mid- to longer-term. High-level
            bilateral discussions and the Broader Middle East and North
            Africa (BMENA) initiative are key venues for delivering that
            message.
      --Over the past year, we have seen increasing signs that Egypt is
            ``getting it,'' although the evidence is still much more on the
            economic than political side.
      --The new Prime Minister and cabinet have announced and begun to
            implement the most ambitious economic reforms in years,
            including sharp cuts in tariffs, income and sales tax reforms,
            reductions in subsidies, liberalizing Egypt's exchange rate
            regime, and reinvigorating the privatization program, including
            in the financial sector.
      --We will continue to urge the government to accelerate that reform
            process, which we support through our USAID assistance program.
      --Egypt's political system remains dominated by President Mubarak and
            the ruling National Democratic Party, and citizens do not to
            date have a meaningful ability to change their government.
            There are, however limited signs of liberalization, such as the
            recent registration of two new political parties, tolerance of
            a significantly more open debate on presidential succession,
            the Government's agreement to our plan to make direct democracy
            grants to NGOs without its approval, and its support for the
            Alexandria meeting of intellectuals and declaration on the need
            for reform in the Arab world.
      --We will continue to press the GOE at the highest levels to open up
            its political system and improve its poor record on human
            rights.
        Question. Has Mubarak's reluctance to create a more open and
    pluralistic society created conditions favorable to Islamic extremism
    and terrorist recruitment efforts?
        Answer. We believe that an overly cautious approach to economic and
    political reform in Egypt would be more rather than less conducive to
    instability in Egypt, while greater political and economic opportunity
    would provide more moderate outlets for the expression of public will.
    Our Broader Middle East and North Africa (BMENA) and Middle East
    partnership Initiative (MEPI) convey the same message region-wide.
        The lack of a credible legal alternative to the ruling National
    Democratic Party (NDP) appears to have caused many people to gravitate
    towards the still-illegal Muslim Brotherhood, generally considered the
    most powerful political group in Egypt aside from the NDP.
        Terrorists may also seek to exploit a lack of economic opportunity
    to advance their violent ideology.
        However, both the Muslim Brotherhood and the jailed leadership of
    the more radical Egyptian Islamic Jihad have publicly renounced
    violence as a means to political change in Egypt.
        We continue to believe, and to advocate with Egypt's political
    leadership, that it must open up its political process to provide a
    middle ground between the NDP and religious extremism.
        Question. What concrete steps has Saudi Arabia taken to crackdown
    on ``charities'' which seem bent on sowing sees of Wahabism intolerance
    wherever Muslim communities exist?
        Answer. Saudi Arabia has made important strides, both in
    coordinated steps with the United States and on its own, to combat
    terrorist financing. Most recently, on January 22, 2004, we jointly
    submitted the names of four overseas branches of the Riyadh-based al-
    Haramain Foundation to the U.N. 1267 Sanctions Committee for world-wide
    sanctions, including asset freezing.
        The addition of these four entities made for a total of 10 United
    States-Saudi joint submissions to the U.N. 1267 Sanctions Committee
    since December 2002, the largest number with any country over that
    span, and we continue to work together to look for additional entities
    and individuals providing support to al-Qaida.
        The Saudis have announced that they will establish a Financial
    Intelligence Unit (FIU) to coordinate government efforts to monitor and
    track suspicious transactions. The Saudis also enacted an Anti-Money
    Laundering Law last year which criminalizes terrorist financing and
    money laundering.
        The Saudis have also removed cash boxes from mosques and shopping
    centers in an effort to enhance oversight and accountability of
    charitable giving.
        We are awaiting the establishment of the Saudi High Commission on
    Charities, which was announced in 2004. If approved and fully
    implemented, the High Commission will ensure government oversight of
    all charitable giving overseas.
        While there is more to be done, we are seeing clear indications
    that Saudi actions are having a real impact in terms of making it more
    difficult for suspect charitable branches around the world to obtain
    funding.
        Question. Do we have a complete picture of all the regions where
    Saudi charities are active--or a list of countries they have
    specifically targeted?
        Answer. The Saudi government supports relief efforts and
    educational programs in many areas of the world. Saudi officials have
    told us repeatedly that they do not support terrorists or terrorism
    anywhere in the world. We do have evidence that some individuals in
    Saudi Arabia provide funds to terrorists. Private contributions to
    HAMAS are a particular concern. Through our intensive, high-level
    dialogue with the Saudi government, we believe we have made important
    progress, but there is more to be done to see that funds in support of
    terrorism do not emanate from Saudi Arabia.
        Question. How can the flow of funds originating in Saudi Arabia--
    particularly cash--be better monitored and interdicted?
        Answer. The 2004 Financial Action Task Force (the FATF, which
    produced a set of recommendations which define best international
    practice as regards procedures to combat money laundering and terrorist
    financing) report for Saudi Arabia states that: ``Significant steps
    have been taken to discourage large cash transactions and to encourage
    the use of bank transfers in order, inter alia, to improve the ability
    of the law enforcement authorities to monitor cash transactions. Saudi
    Arabia also monitors the physical movement of cross-border
    transportation of cash. The import or export of currency in excess of
    SR 10,000 must be declared at the border, or point of entry, and a
    record is maintained of declarations and investigations carried out if
    there are doubts as to the source of the money. Saudi Arabia applies
    strict controls on the movement of Saudi currency. Saudi banks are
    encouraged to buy any excess Saudi riyals that they may have
    accumulated in other countries, and persons leaving Saudi Arabia with
    large amounts of cash are encouraged to deposit the funds in a bank
    (and thus transfer the funds by wire or convert them to another
    currency) before departure. Consequently there is very little cross-
    border transportation of currency.''
        The Saudis are establishing a Financial Intelligence Unit (FIU) to
    coordinate government efforts to monitor and track suspicious
    transactions. The Saudis also enacted an Anti-Money Laundering Law in
    2004 which criminalizes terrorist financing and money laundering. The
    Saudis have also removed cash boxes from mosques and shopping centers
    in an effort to enhance oversight and accountability of charitable
    giving.
        We will continue to work closely with the Saudis to better monitor
    cash flows and interdict illicit funding.
        Question. To what extent are Saudi charities or other Islamic
    extremist organizations active in the Balkans and what specific
    activities are they involved in?
        Answer. The vast majority of Muslims in Europe have no interest in
    and nothing to do with violent extremism. Hundreds of Islamic
    organizations are active in the Balkans ranging from business to NGOs,
    to political groups; the overwhelming majority are engaged in
    legitimate activities. In some cases, however, groups with extremists
    connections have been active in attempts at recruitment and Islamic
    extremists seem to hope to utilize the Balkans as a religious foothold
    in Europe and as a possible transit route to other locations. While
    some groups' rhetoric has on occasion been vocally anti-Western, actual
    attacks have been all-but non-existent. Nonetheless, we continue to
    monitor closely the activities of possible extremist Balkan groups.
        Question. Is there a rise in intolerance and extremism within
    Muslim communities in the Balkans as a result of these activities?
        Answer. The vast majority of Balkan Muslims, like Balkan Islam
    itself, are tolerant and moderate. Despite considerable missionary
    effort over recent years by extremists, most Balkan Muslims have
    maintained their traditional moderate approach to religion.
    Nonetheless, extremist groups on the fringes of Europe's Muslim
    communities continue to seek to recruit and propagandize, and
    particularly seek to target young people.
        Question. In May 2003, American Cargo Pilot Ben Padilla
    disappeared--along with a Boeing 727--in Angola. Do you have any
    updated information on Mr. Padilla's whereabouts, or information on his
    disappearance?
        Answer. Neither the aircraft nor the missing pilot has been
    located. Over the last year, we have received several reports of
    sightings of the missing 727, but in each case, the sighted aircraft
    has been shown to be a different aircraft.
        We and the FBI continue to monitor the situation.
                                     ______

                Questions Submitted by Senator Patrick J. Leahy

        Question. Mr. Black, I had a chance to read through some of Mr.
    Clarke's book, Against All Enemies. I should point out that he
    consistently praises your efforts to combat international terrorism.
        In one part of the book, Mr. Clarke talks about Mossad's policy of
    assassinating terrorists. He writes: ``The assassinations had also done
    little to deter further attacks on Israelis. Indeed, Israel had become
    caught in a vortex of assassination and retaliation that seemed to get
    progressively worse.''
        Do you agree with Mr. Clarke's assessment? As the United States
    moves forward with efforts to combat terrorism, how do we avoid the
    same trap?
        Answer. We believe that Israel has the right to defend itself from
    terrorist attacks. We have consistently urged Israel to carefully
    consider the consequences of its actions. We are gravely concerned for
    regional peace and security, and have urged all parties to exercise
    maximum restraint.
        Question. Mr. Black, Jordan has been indispensable in developing
    intelligence and helping to thwart attacks by al Qaeda against the
    United States. King Abdullah and the rest of the Jordanian Government
    deserve our thanks for the role they have played against terrorism, an
    in support of peace between Israel and the Palestinians--a role that
    has not always been popular with other Arab countries.
        Unfortunately, our relations with other Muslim nations pales
    compared to our close relations with Jordan, and even that relationship
    is under stress with the King canceling his visit. After September
    11th, there was an outpouring of good will towards the United Sates,
    including from moderate Muslim nations. That good will has been
    squandered, and today our reputation among Muslims around the world is
    in tatters. How do we regain the good will?
        Answer. Outreach to Muslim populations around the world is a
    priority for the Department, especially in the context of the war on
    terrorism. Many of our public diplomacy programs and initiatives are
    aimed at the Muslim-majority regions of the world, including
    communities in the Middle East, South Asia, Africa, East Asia and
    Central Asia.
        In order to strengthen our relationships with these communities, we
    must counter the false perception that the United States is anti-
    Islamic. In addition, we must demonstrate long-term and sustained
    commitment to the well-being of Muslim populations.
        Our outreach to the Muslim world encompasses public diplomacy and
    development assistance programs that promote economic and political
    freedom, tolerance and pluralism in Muslim communities, as well as
    mutual understanding with Americans. We must not only provide
    assistance to these communities but be recognized for the assistance we
    provided.
        Political and economic conditions vary by region and country, but
    in all regions we must increase exchanges of students, scholars and
    religious and community leaders, publicize U.S. assistance efforts more
    widely, increase youth programming, expand English teaching and broaden
    media outreach in local languages. For example:
      --The Bureau of Educational and Cultural Affairs (ECA) provided $40
            million in fiscal year 2004 for programs for the Arab and
            Muslim World through their Partnerships for Learning
            initiative. The fiscal year 2005 budget funds this initiative
            at the $61 million level.
      --Under Partnerships for Learning, ECA is planning to bring 1,000
            high school exchange students from countries with significant
            Muslim population to the United States in fiscal year 2005, a
            fourfold increase over fiscal year 2002, the first year of the
            program.
      --The Bureau of Public Affairs is directing to the Arab and Muslim
            world at least 50 percent of Department TV co-operative
            projects, foreign media interviews, sponsored journalists
            tours, and video news releases.
      --Thirty-four American Corners are currently in operation in cities
            with significant Muslim populations. The Bureau of
            International Information Programs is working with NEA and SA
            to establish forty-three more American Corners in those
            regions, including ten in Afghanistan and fifteen in Iraq.
        While we will continue to engage Islamic leaders and influential
    elites, we must also reach those young people who are the critical next
    generation in the war on terrorism.
        The President's Middle East Partnership Initiative (MEPI)
    integrates policy, public diplomacy and development and technical
    assistance programs throughout the region. MEPI's mission is to support
    economic, political, and educational reform in the Middle East and
    North Africa and to champion opportunity for all people of the region,
    especially women and youth.
        Question. In my opening statement, I mentioned the memo written by
    Secretary Rumsfeld. One of the other things he writes is--and I am
    quoting--``the cost-benefit ratio is against us! Our cost is billions
    against the terrorists' costs of millions.'' What is your opinion of
    the Secretary's assessment?
        Answer. The asymmetrical nature of the war against terrorism is one
    of the factors contributing to its difficulty: in general, destroying
    things--particularly when one has selected and focused on a specific
    target--is substantially cheaper than defending an infinite list of
    possible targets, which is the task that confronts us and our allies.
    At the same time, our greater resources give us the ability to go after
    the terrorists in a myriad ways and in myriad places.
                                     ______

               Questions Submitted by Senator Barbara A. Mikulski

        Question. Central Intelligence Agency Director George Tenet and
    Director of the Defense Intelligence Agency, Vice Admiral Lowell E.
    Jacoby have testified publicly as to the pressing threat that Colombia
    poses to U.S. interests. In his testimony before the Senate Select
    Committee on Intelligence, Vice Admiral Jacoby testified that ``The
    Revolutionary Armed Forces of Colombia (FARC) remains the most potent
    terrorist threat to U.S. interests in Colombia.'' Of note is that the
    ``FARC's perception that U.S. support is the direct cause of the
    Colombian government's recent successes, increases the likelihood the
    group will target U.S. interests in 2004.''
        Similarly, George Tenet testified that ``The FARC may increasingly
    seek to target U.S. persons and interests in Colombia, particularly if
    key leaders are killed, captured, or extradited to the United States.
    The FARC still holds the three U.S. hostages it captured last year and
    may seek to capture additional U.S. citizens.''
        As part of the ``Anti-terrorism'' package, the U.S. increased
    military presence and aid to Colombia. Since 2001, we have given over
    2.5 billion in aid and significantly increased our military presence.
        Has increased U.S. engagement in Colombia turned what was
    essentially a national revolutionary resistance and terrorist group in
    Colombia into a terrorist group that specifically targets and directly
    threatens the United States?
        Answer. The Revolutionary Armed Forces of Colombia (FARC) have had
    a long history of planning, threatening, and conducting terrorist
    attacks in Colombia, since its creation in 1964. The FARC have been
    responsible for conducting bombings, murder, mortar attacks,
    narcotrafficking, kidnapping, extortion, hijacking, as well as
    guerrilla and conventional military action against political, military,
    and economic targets in Colombia. Before significant increases in U.S.
    Government assistance to Colombia, the U.S. Government recognized that
    the FARC's terrorist activities threatened the security of United
    States nationals and the national security of the United States, first
    designating the FARC as a Foreign Terrorist Organization (FTO) in
    October 1997. In March 1999, the FARC murdered three U.S. Indian rights
    activists on Venezuelan territory after it kidnapped them in Colombia.
    The U.S. Government holds the FARC responsible for the safety and
    welfare of the three Americans it currently holds hostage and for any
    attack that it conducts against U.S. interests in Colombia, regardless
    of U.S. assistance levels to the Colombian Government.
        United States assistance to Colombia is dedicated to help the
    Colombian Government strengthen its democracy, respect human rights and
    the rule of law, and end the threat of narcotics trafficking and
    terrorism. To do so, we are carrying out programs to provide training,
    equipment, infrastructure development, funding, and expertise to the
    Colombian Government and civil society in the areas of counternarcotics
    and counterterrorism, alternative development, interdiction,
    eradication, law enforcement, institutional strengthening, judicial
    reform, human rights, humanitarian assistance for displaced persons,
    local governance, anti-corruption, conflict management and peace
    promotion, rehabilitation of child soldiers, and preservation of the
    environment.
        Question. During this year's annual threat report, CIA director
    George Tenet warned that ``al-Qaida has infected other organizations.''
    He said that ``even as al-Qaida has been weakened, other extremist
    groups within the movement have become the next wave of the terrorist
    threat. Dozens of such groups exist.'' He named the Zarqawi network as
    an example.
        Al-Zarqawi, the Jordanian who is suspected of committing the Madrid
    bombings, is viewed by intelligence officials to be at the forefront of
    the next wave of terrorist threat. The next wave identified as fluid
    elements that are know to be collaborators of Osama bin Laden, who
    share his ideology but are more diffuse and operate outside his
    control.
        The Zarqawi network and another group with an al-Zarqawi
    affiliation, Ansar al-Islam, have been blamed for continued bombings in
    Iraq. The groups are suspected to attack Iraqi and foreign targets,
    especially Shiite pilgrims or Iraqi police and hotels inhabited by
    foreigners. Their aim is sowing discord and perhaps civil war and
    raising opposition against U.S. occupation.
        Tenet further testified that our main challenge now is ``preventing
    the loosely connected extremists from coalescing into a cohesive
    terrorist organization.'' He said that we had started to see a ``few
    signs of such cooperation at the tactical or local level.''
        (a) What is your assessment of the reach of these new diffuse
    organizations? What is our strategy to deal with these emerging
    threats?
        Answer. Locally-based groups ideologically linked to, but
    operationally distinct from al Qaeda, like those that carried out the
    March Madrid bombings, may represent the wave of the future. The threat
    we face is a global one and we prioritize responses to enable us act in
    an appropriate and effective manner to address differing challenges in
    different regions. The key to addressing immediate threats lies in
    developing timely, useable intelligence in conjunction with partners
    around the world. In the medium and longer terms, we must ensure that
    law enforcement and judicial authorities have the tools they need to
    prevent terrorists from achieving their objectives. In many countries,
    a government's inability to find, arrest, and prosecute terrorists is
    the main impediment to coping with the threat. We have therefore
    initiated cooperative programs designed to increase partner nations'
    will and CT capabilities and to build ties among United States. and
    foreign CT communities. These programs include long-term capacity-
    building efforts in border security, criminal investigations,
    intelligence support, and training/advice to combat terrorist
    financing, as well as a robust Anti-Terrorism Assistance program to
    bolster the CT capabilities of law enforcement.
        Question. (b) How would you categorize the impact of the Zarqawi
    network and Ansar al-Islam on disrupting our reconstruction efforts and
    inciting opposition, especially among the Shia, against the United
    States?
        Answer. The violence and intimidation committed by the Zarqawi
    network, Ansar al-Islam and other terrorists and insurgents has clearly
    had an impact on the scale and pace of reconstruction. Nevertheless, we
    have made a great deal of progress in rebuilding Iraq's infrastructure
    and services and in preparing for the handover to an interim Iraqi
    government on June 30. New roads, bridges, schools, hospitals have been
    built; provision of local services like electricity and water, has been
    extended in many parts of the country; advisors are assisting Iraqi
    officials to develop strong, functioning institutions; many countries
    are engaged in training Iraqi police and security forces. The vast
    majority of Iraqi citizens--Sunni, Shia, Kurd, Turkomen, and others--
    want peace and freedom and a better life for their children. We will
    continue to pursue the terrorist organizations so they cannot take this
    future away from the people of Iraq.
        Question. (c) What is the status of the Kurdistan Worker's Party or
    PKK? How has the Unite States-led occupation of Iraq affected the PKK?
        Answer. In April 2002 at its 8th Party Congress, the PKK changed
    its name to the Kurdistan Freedom and Democracy Congress (KADEK) and
    proclaimed a commitment to nonviolent activities in support of Kurdish
    rights. Despite this pledge, a PKK/KADEK spokesman stated that its
    armed wing, The People's Defense Force, would not disband or surrender
    its weapons for reasons of self-defense. In late 2003, the group sought
    to engineer another political face-lift, renaming the group Kongra Gel
    (KGK) and brandishing its ``peaceful'' intentions, while continuing to
    commit attacks and refuse disarmament. Kongra Gel now consists of
    Approximately 4,000 to 5,000 members, most of whom currently are
    located in a remote mountainous section of northern Iraq. Kongra Gel
    has claimed to be under a self-imposed cease fire, but they have
    continued to engage in violent acts in Turkey--including at least one
    terrorist attack--against the Turkish state in 2003. Several members
    were arrested in Istanbul in late 2003 in possession of explosive
    materials.
        The United States is committed to the elimination of the PKK threat
    to Turkey from Iraq. President Bush has said there will be no terrorist
    haven in a free Iraq, and that includes the PKK.
                                     ______

                Questions Submitted by Senator Richard J. Durbin

        Question. In January, USAID released a foreign aid ``white paper''
    arguing that given the broad range of national security threats facing
    the United States, including the threat of terrorism, foreign
    assistance must go beyond more traditional humanitarian and development
    objectives. The white paper outlines five key operational goals that
    foreign aid should address: (1) promoting transformational development;
    (2) strengthening fragile states; (3) providing humanitarian relief;
    (4) supporting U.S. strategic interests; and (5) mitigating global and
    transnational ills. How do each of these goals contribute to making
    foreign aid a better tool and instrument for American policymakers in
    the global war on terrorism?
        Answer. Foreign aid can be a powerful CT tool for achieving our
    medium and long-term CT objectives. The five goals cited are designed
    to make it as effective as possible. Achieving these goals will enable
    us to better attain our overall objectives of defeating terrorist
    organizations with global reach by diminishing the underlying
    conditions of poverty, ignorance, intolerance, and desperation that
    terrorists seek to exploit.
        As I noted in my opening statement, we recognize that in many of
    the countries where we work, the overall institutions of the government
    and society are not sufficiently robust for the task of aggressive
    counterterrorism programs. For this reason, institution building is
    vital and all those tasks serve to do so. We should take the necessary
    steps to strengthen the institutions of our partner nations and thereby
    move less developed countries closer toward their full potential in
    combating terrorism. At the same time, we must also encourage and work
    closely with other international donor nations to provide resources and
    expertise in support of this goal.
        Question. How do you respond to those who argue that poverty is not
    a root cause of terrorism; that other factors, such as economic
    isolation and U.S. foreign policy positions that are perceived as being
    anti-Islam, are more important at getting at to the heart of why
    America faces this threat?
        Answer. Whole libraries have been written about the ``root causes
    of terrorism. Obviously, all of these factors contribute to the problem
    we now face. It is difficult to assess the true motives of these
    killers, apart from their desire to spread death, terror, and chaos. We
    have clearly seen their willingness to make outrageous claims and
    demands on the civilized world, and use whatever stated motivations are
    most expedient for their crimes.
        Question. In terms of the terrorist attacks that we have seen in
    recent months, the connection between failed states and the roots of
    terrorism appears to be more indirect than we used to believe. Instead
    of operatives coming out of places like Sudan and Afghanistan, for
    example, we seem to be witnessing the emergence of local terrorist
    organizations in states like Turkey or Spain taking up the goals or
    ideology of Al Qaeda. How do you use foreign aid to fight an ideology
    that emerges in a relatively wealthy state? With this emerging
    successor generation of Al Qaeda-associated operatives, from the
    perspective of counter-terrorism, are we missing the point in directing
    our resources toward so-called front-line states. Where exactly is the
    ``frontline.''
        Answer. Unfortunately, the ``front line'' is everywhere. The threat
    we face is a global one and we continually monitor regions that could
    serve as terrorist sanctuaries. To that end we prioritize our responses
    to enable us act in an appropriate and effective manner to address
    differing challenges in different regions. Al Qaeda itself, now serves
    as an idea and an inspiration to a decentralized worldwide extremist
    network that exploits weak CT regimes and global linkages to recruit,
    raise funds, spread propaganda and plan and conduct terrorist attacks
    on almost every continent. The changing nature of the terrorist threat
    puts a focus on capacity building and on working with partner
    governments to build and sustain international will to continue the
    effort.
        Question. What specifically would you say has been the effect of
    the war in Iraq on the roots of terrorism in the Middle East? In what
    demonstrable way is foreign aid to Iraq reducing the terrorist threat
    against the United States and its allies?
        Answer. The war in Iraq removed a brutal dictator from power,
    eliminated a state sponsor of terrorism, and greatly reduced the
    ability of terrorists to freely use Iraqi territory for training or
    safehaven. A free, independent and democratic Iraq will have a positive
    effect on the region. In addition, the U.S. works through many
    different programs to develop other countries' will and capacity to
    fight terrorism and, through economic development and political reform,
    to diminish the conditions that terrorists exploit to advance their
    violent ideology. Enhancing security by helping the Iraqis defeat
    terrorists and criminal elements is one of the key elements of U.S.
    assistance to Iraq. The United States and allied nations are engaged in
    an extensive training program for Iraqi Police and Security forces;
    more plentiful and more capable security forces are critical to
    defeating insurgent elements within Iraq. U.S. assistance funds have
    also been prioritized to generate employment, stimulate economic
    activity, and provide immediate assistance to areas threatened by the
    insurgency. Additional State Department programs include Anti-Terrorism
    Assistance training, terrorist financing and anti-money laundering
    assistance, border security assistance and training, and diplomatic
    engagement. Activities and programs such as the Forum for the Future
    and the Millennium Challenge Account help strengthen our partners to
    more effectively combat terrorism.
        Question. If terrorists are increasingly using the advanced
    technologies like the Internet to do such things as coordinate
    operations, to find information about weapons of mass destruction and
    recruit members, how are we ensuring that we provide foreign aid in
    such a way that we avoid enabling members of terrorist organizations to
    be more effective?
        Answer. We seek to target our assistance to address key CT
    weaknesses in partner countries and work with our more capable partner
    to assist countries where the will is there, but abilities are limited.
    Rigorous screening of NGO program participants and others, as well as
    follow-up on programs and projects helps prevent misuse or diversion of
    U.S.-provided resources, including knowledge and technology.

                              SUBCOMMITTEE RECESS

        Senator McConnell. Thank you all very much. The
    subcommittee will stand in recess to reconvene on Tuesday, May
    18.
        [Whereupon, at 4:17 p.m., Wednesday, April 21, the
    subcommittee was recessed, to reconvene at 10:30 a.m., Tuesday,
    May 18.]

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                             TUESDAY, MAY 18, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:35 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Mike DeWine presiding.
        Present: Senators McConnell, DeWine, Leahy, Durbin, and
    Landrieu.

                              DEPARTMENT OF STATE

                   Office of the U.S. Global AIDS Coordinator

    STATEMENT OF HON. RANDALL L. TOBIAS, COORDINATOR

                  OPENING STATEMENT OF SENATOR MICHAEL DE WINE

        Senator DeWine. Let me welcome all of you today. Senator
    McConnell asked that I preside and begin the hearing as he
    currently has another commitment, but he will be here shortly
    to join us.
        Today's subcommittee hearing on the fiscal year 2005 budget
    request for HIV/AIDS consists of two panels. Global HIV/AIDS
    Coordinator Randall Tobias will be the sole witness on the
    first panel, followed by DATA founding member Bono on the
    second.
        Senator Leahy and I will make brief opening remarks,
    followed by Ambassador Tobias. We will then proceed to 5-minute
    rounds of questions and answers. At approximately 11:20, about
    the time we may have a vote on the floor, we will move to our
    second panel.
        In the interest of time, I ask that our witnesses summarize
    their remarks and we will insert their full statements into the
    record. My colleagues should know that we will keep the record
    open for any written questions they wish to submit to our
    witnesses, and I request our witnesses to respond to these
    questions, of course, in a timely manner.
        Our hearing today is a chance for us to take a look at
    where we have been in terms of how our funding allocations have
    been spent in regard to AIDS and what the plans are for the
    future of the President's Global AIDS Initiative. We are
    privileged to have before us today on the first panel
    Ambassador Tobias, who serves as the Coordinator of this very
    important initiative. He will testify on the progress to date,
    as well as provide us with details on what lies ahead for the
    initiative.
        We have an historic opportunity with the funding that has
    been made available for the Global AIDS Initiative. I say that
    because the money, that money, can and should be used not only
    to fight HIV/AIDS, but also to lay a foundation for improved
    health systems in the developing world: health care systems for
    children, women, and families. The money that we put forward in
    regard to this fight against AIDS has the potential to yield
    tremendous dividends in other areas of public health.
        The fact is that in many of the countries that we will be
    spending and are spending this money for HIV/AIDS, many of
    these countries do not currently have a good health
    infrastructure. So it is really going to be impossible for us
    to deal with the AIDS problem without helping these countries
    build up that health infrastructure.
        So the two are going to be linked. One of the things that I
    want to explore with Ambassador Tobias today is how he sees us
    working with these countries to build up their health
    infrastructures.
        I think that is going to also, though, while it is a
    challenge, frankly it also has the benefit of providing extra
    dividends: that what we will end up with, we hope, in the
    future and what these countries and the people of these
    countries will end up with is not only fighting AIDS, but end
    up with the ability to do so much more in their health systems
    and end up with truly a good health system in many of these
    countries.
        What I hope to hear from Ambassador Tobias today are his
    plans on how to take advantage of the $15 billion in
    opportunities over the next 5 years. How can we make certain
    that we provide care and treatment to as many people as
    possible, treatment that includes the millions of children with
    HIV/AIDS and other infectious diseases like malaria and
    tuberculosis?
        Mr. Ambassador, having read your testimony, I know that you
    will speak to the issues of procuring low-cost antiretroviral
    medicines for adults. But what about the children? We need to
    ensure that children infected with HIV are not overlooked in
    the drug approval and procurement process. I would ask that in
    your comments you clarify what your office is doing to ensure
    safe pediatric formulations and how your office plans to
    increase the number of children receiving treatment.
        We know from experience that the core features of the
    prevention of mother-to-child transmission programs--voluntary
    counseling and testing, the establishment of pharmacies and
    drug distribution mechanisms, and the training of health care
    workers--all provide a sound foundation on which to build, on
    which to build expanded care and treatment. So I would like to
    hear from the Ambassador on his plans for the mother-to-child
    transmission program. What are your plans to increase the
    number of clinics capable of providing services to prevent the
    transmission of the virus from mother to child, especially
    since fewer than one percent of women have access to MTCT
    services in some of the most infected countries. What can we do
    to get more women treated before they give birth to HIV-
    positive babies?
        Let me say again, we have $15 billion in opportunities to
    help build health care infrastructures, to increase the number
    of children, women and families receiving treatment and care,
    to invest in human capital development, and to put programs in
    place to take care of orphans and other vulnerable children.
        Let me again thank both of our witnesses for being here
    today, and also thank both of them for their great commitment
    to this cause. Ambassador Tobias, I look forward to hearing
    your vision on how we can take advantage of these opportunities
    and hearing what you have already done so far.
        Let me also say that I am pleased that Bono could join us
    and I look forward to hearing his thoughts on debt relief. We
    do not know anyone else who has really had the vision in this
    area and who has captured the attention of the public, not only
    in the United States but around the world, and we salute him
    for his great work as well.
        Let me at this point turn to Senator Leahy, the ranking
    member of this committee, who has also been just a great leader
    in this anti-AIDS work. Senator Leahy, thank you.

                 OPENING STATEMENT OF SENATOR PATRICK J. LEAHY

        Senator Leahy. Thank you, Mr. Chairman.
        You know, it is interesting, some of the odd couplings in
    the Senate. Not only is Senator DeWine a close personal friend,
    but we have, coming from different parties and different
    philosophical spectrums, we have worked very closely on these
    issues.
        Ambassador Tobias, I am glad to see you. I enjoyed our chat
    outside before we came in and I really would welcome the
    opportunity to travel to parts of Africa with you. I am
    delighted that a long-time friend, Bono, is here. He is a close
    friend of the Leahy family. We have spent time together, each
    member of the family with him, and we think the world of him.
        I met just briefly the lady from Uganda before and we will
    be seeing more of her, of Agnes Nyamayarwo. And I probably--and
    I apologize. I have probably totally butchered the
    pronunciation of the name, and the poor reporter here is
    getting panicky at how to handle that, and I know you will do
    better. But I admire--as I told you privately before, I admire
    your courage, I really do, and you are in our thoughts and
    prayers.
        When you think of the statistics--Ambassador, we talked
    about that outside. We talked about these horrible statistics--
    8,000 people will die of AIDS today. And as you said very
    rightly, the number is overwhelming, but each one has a name.
    And you have seen those, as has Bono and the others, as I. My
    wife is a registered nurse. We have been in some of these
    clinics. We have seen the people who are dying.
        During the hour and a half of this hearing, 513 will die,
    856 will become infected. That shows we have yet to confront
    this disease.
        I support President Bush's AIDS initiative. I have been
    impressed with the progress you have made in the very short
    time since you took on this responsibility. We are allocating
    far more to this crisis. The momentum is positive. But the
    President and Secretary Thompson and others in the
    administration, as well as some in Congress who defend the
    President's budget, say we are spending as much as can be
    effectively used to prevent the spread of HIV and treat those
    who are sick.
        I disagree. I think that is misinformed. In any of your 14,
    soon to be 15, focus countries, the medical facilities are
    grossly inadequate, health care workers are too few, often
    poorly trained, they are always underpaid. Private voluntary
    organizations are overwhelmed. Orphans are caring for other
    orphans. People are dying alone, often ostracized by their
    families.
        There is a huge unmet need to build the capacity in those
    countries to fight this pandemic. That is how it is in your
    focus countries, which are shown in white on this chart I have
    got over here.
        In the rest of the world, with half the HIV-infected
    people, we either have no programs or funding has been frozen
    at the fiscal year 2003 level due to a shortage of funds. So
    while the rate of infection soars in some non-focus countries,
    funding there is actually decreasing when you consider
    inflation and the growing number of victims and people at risk.
    This is a terrifying, terrifying chart.
        The President has proposed to cut funding for the Global
    Fund to Fight AIDS, TB, and Malaria from $547 million in 2004
    to $200 million in 2005, at a time when the Global Fund says it
    needs $3.6 billion, of which our share would be $1.2 billion.
    And when we ask the administration, why can we not have
    additional emergency funding to combat AIDS, we are told we do
    not need it, we cannot use it.
        It reminds you a little bit of the Department of Defense,
    which, despite overwhelming evidence of the contrary, insists
    we do not need more troops in Iraq.
        Mr. Tobias, we should be allocating $28 billion next year,
    not $2.8 billion. We are 20 years late, we are $20 billion
    short.
        Three other quick points. First, the generic drug issue,
    which has been the subject of a lot of press attention and has
    taken too long to resolve. Now that U.S. drug companies are
    finally interested in manufacturing fixed-dose combinations,
    the administration's opposition seems to have miraculously
    disappeared and the FDA will soon be reviewing the safety of
    these drugs. It makes you wonder.
        Second is your emphasis on faith-based groups and
    abstinence. Faith-based groups have a role to play and where
    abstinence programs work we should support them, but we risk
    millions of new infections if we apply an ideological lens to
    prevention rather than relying on methods that have been tested
    and proven and that deal with the world as it really is.
        Then third is your definition of ``high risk'' group. I
    heard, for example, that a 15-year-old girl in sub-Saharan
    Africa, where the percentage of HIV-positive females can be as
    high as 20 percent, could not receive condoms under your
    program because she is not high-risk. Yet today that girl is
    more likely to become infected and to die of AIDS than she is
    to live her life free of AIDS, more likely to have it than not.
    Now, I hope that girl does not have to expose herself to HIV
    before she can receive condoms or even information about them
    under your program.
        Mr. Tobias, I have been trying for more than 15 years to
    get more funding to combat AIDS. I believe we could and should
    be doing more. But I hear good things, particularly from my own
    staff, who traveled there, and the Global Health Council, which
    I admire greatly, notwithstanding the fact it is based in my
    home State of Vermont, I hear good things about the way you are
    taking on this challenge, that you are doing it with great
    energy and openness. I commend you for that.

                               PREPARED STATEMENT

        Just as Senator DeWine and I work together, we all have to
    work together. You know, when somebody is dying of AIDS we do
    not ask them what their politics are. We ask what we could do
    to stop it. Again, you look at that map; your heart has to cry
    out.
        Thank you.
        Thank you, Mr. Chairman.
        [The statement follows:]

                 Prepared Statement of Senator Patrick J. Leahy

        Mr. Tobias, we appreciate you being here. We all know the
    statistics. 8,000 people will die of AIDS today. Just during the hour
    and a half of this hearing, 513 will die and another 856 will become
    infected. To me, that shows that, so far, we have failed miserably to
    confront this disease.
        I support President Bush's AIDS initiative, and I have been
    impressed with the progress you have made in the short time since you
    took on this responsibility. We are allocating far more than before to
    this crisis, and the momentum is positive. But the President, Secretary
    Thompson, and others in the administration, as well as some in Congress
    who defend the President's budget, say we are spending as much as can
    be effectively used to prevent the spread of HIV and treat those who
    are sick.
        That is either misinformed, or disingenuous. In any of your 14--
    soon to be 15--focus countries, medical facilities are grossly
    inadequate, and health care workers are too few, often poorly trained,
    and always underpaid. Private voluntary organizations are overwhelmed.
    Orphans are caring for each other. People are dying alone, ostracized
    by their families. There is a huge, unmet need to build the capacity in
    those countries to fight this pandemic. That is how it is in your focus
    countries, which are shown in white on this chart. In the rest of the
    world--with half the HIV infected people--we either have no programs,
    or you have frozen funding at the fiscal year 2003 level due to a
    shortage of funds.
        So while the rate of infection soars in some non-focus countries,
    our funding there is actually decreasing, if you consider inflation and
    the growing number of victims and people at risk of infection. And the
    President proposes to cut funding for the Global Fund to Fight AIDS, TB
    and Malaria from $547 million in 2004 to $200 million in 2005, at a
    time when the Global Fund says it needs $3.6 billion, of which our
    share would be $1.2 billion. Yet what we hear from the administration,
    when we try to get additional emergency funding to combat AIDS, is that
    we don't need it. We can't use it. It reminds me of the Department of
    Defense, which despite overwhelming evidence to the contrary, insists
    that we don't need more troops in Iraq.
        Mr. Tobias, we should be allocating $28 billion next year, not $2.8
    billion. We are twenty years late and $20 billion short.
        Three other quick points:
        First, the generic drug issue, which has been the subject of a lot
    of press attention, has taken far too long to resolve. However, now
    that U.S. drug companies are finally interested in manufacturing fixed-
    dose combinations, the administration's opposition seems to have
    miraculously disappeared and the FDA will soon be reviewing the safety
    of these drugs. It makes you wonder.
        Second is your emphasis on faith-based groups and abstinence.
    Faith-based groups have a role to play and, where abstinence programs
    work, we should support them. But we risk millions of new infections if
    we apply an ideological lens to prevention, rather than relying on
    methods that have been tested and proven, and that deal with the world
    as it really is.
        Third is your definition of ``high risk'' group. I heard, for
    example, that a 15-year-old girl in sub-Saharan Africa, where the
    percentage of HIV-positive females can be as high as 20 percent, could
    not receive condoms under your program because she is not ``high
    risk.''
        Yet, today that girl is more likely to become infected and to die
    of AIDS than she is to live her life free of AIDS. I hope that girl
    does not have to expose herself to HIV before she can receive condoms,
    or even information about condoms, under your program.
        Mr. Tobias, I have been trying for more than 15 years to get more
    funding to combat AIDS. I believe we could and should be doing much
    more. But I hear good things--including from my staff and from the
    Global Health Council in my own state of Vermont--about the way you are
    taking on this challenge, with great energy and openness. I commend you
    for that. We need to work together.

        Senator DeWine. Mr. Ambassador, thank you very much for
    joining us. We do have your written statement, which will be
    made a part of the record, and will you please proceed.

                  SUMMARY STATEMENT OF HON. RANDALL L. TOBIAS

        Ambassador Tobias. Mr. Chairman, members of the
    subcommittee: I am very pleased to be here to testify this
    morning in support of the President's budget request and to
    report to you on the progress in implementing the President's
    emergency plan for AIDS relief. I appreciate the committee's
    indulgence in the fact that we were scheduled to do this
    earlier and I was suffering from laryngitis, which as you can
    probably tell I am not totally over yet; and then on another
    occasion the President asked me to go to South Africa to
    represent him at the inauguration of the president.
        But I am very pleased to be here today and particularly to
    be here with my friend Bono. It would be hard to find anybody
    who is working any harder on this issue than he is. As you have
    both said, this is a fight where we need everybody we can find
    to work together.
        With your permission, I will submit a longer written
    statement for the record and I would like to make a few opening
    comments.
        As you are aware and as you have made reference to, in his
    State of the Union Address last year, President Bush called for
    an unprecedented act of compassion to turn the tide against the
    ravages of HIV/AIDS with $15 billion over 5 years, more money
    than has ever been committed by any nation for any
    international health initiative: $5 billion directed at 100
    bilateral programs, $9 billion intended for new or expanded
    programs in 14--soon to be 15--focus countries; and $1 billion
    intended to support our principal multilateral partner, the
    Global Fund.
        The goals of this program are to help provide
    antiretroviral treatment to 2 million people in the focus
    countries, contribute to the prevention of 7 million new
    infections, and to help provide care for 10 million who are
    infected or affected, including the orphans and vulnerable
    children.
        Today I am pleased to report that we have made significant
    progress in beginning to implement the actions that will be
    necessary to achieve the goals of this initiative. On February
    23, a very short time after Congress appropriated fiscal year
    2004 funding for the first year of the plan, I announced the
    first release of funds for the focus country programs, totaling
    $350 million. This money is already being used in
    antiretroviral treatment programs, prevention programs, safe
    medical practices programs, and programs to provide care for
    orphans and vulnerable children. With just this first round of
    funding, an additional 50,000 people living with HIV/AIDS in
    the 14 focus countries will receive treatment, which will
    nearly double the number of people who are currently receiving
    treatment in sub-Saharan Africa. Prevention programs will reach
    about 500,000 additional people and about 60,000 additional
    orphans will receive help.
        For each of the focus countries, we have recently completed
    reviews of their annual operational plans to be addressed with
    the remaining 2004 appropriation. These plans represent the
    overall U.S. Government-supported HIV/AIDS programs in each of
    the focus countries.
        As a result of these reviews, Mr. Chairman, we are already
    moving beyond this first wave of funding, and we will be
    providing to this committee and other congressional committees
    very shortly the required notification for the obligation of
    approximately $300 million in the next tranche of funding from
    the Global AIDS Coordinator's Initiative and an additional $200
    million in funds appropriated to the Department of Health and
    Human Services and the U.S. Agency for International
    Development. That will bring to about $850 million the funds
    that we will have committed to new or expanded programs since
    the first of the year.
        While our short-term focus has been on putting funds to
    work in the field quickly and with accountability to ensure
    that those in need get help as quickly as possible, we are also
    working to ensure that host governments and local organizations
    are well prepared to fight this deadly disease. And similarly,
    we need to ensure that our own U.S. Government staffs in the
    field are properly sized in order to do this increased task
    that they are facing.
        But this is all only the first step. In fiscal year 2005 we
    have requested $1.45 billion for the Office of the AIDS
    Coordinator as part of the President's $2.8 billion total
    request. The President's request represents a $400 million
    increase over fiscal year 2004. An appropriation of $2.8
    billion will keep the emergency plan on path toward meeting the
    goals that have been set by the President and the Congress and
    is in keeping with our belief that as the emergency plan takes
    root and is scaled up additional resources are clearly going to
    be needed to effectively deliver assistance.
        Mr. Chairman, in February I also submitted to Congress a
    comprehensive integrated 5-year strategy. This strategy is
    driving everything that we are doing in the Office of the
    Global AIDS Coordinator. We have enlisted the help of the U.S.
    chief of mission in each country to bring together the local
    country team so that everybody is working in a coordinated
    effort, and I am very pleased with the way that effort is
    working.
        Within that framework, we are striving to coordinate and
    collaborate our efforts in order to respond as best we can to
    the priorities and the strategies of each of the host country
    governments, challenges which in many cases are different. In
    addition, we are increasingly coordinating our own worldwide
    response with those of our international partners--U.N. AIDS,
    the World Health Organization, the Global Fund--as well as
    nongovernmental and faith-based and community-based
    organizations and increasingly private sector companies who are
    stepping into the fray.
        Since my confirmation 7 months ago, I have had the
    opportunity to visit many of the countries in which we are
    focusing our efforts, including South Africa, Uganda, Kenya,
    Botswana, Zambia, Namibia, Rwanda, Ethiopia, and Mozambique. I
    will be leaving in a few days to visit Nigeria, Cote d'Ivoire,
    and Tanzania, and then going to Haiti and Guyana in the early
    summer.
        Finally, Mr. Chairman, I would like to say a few words
    about our policy to procure antiretroviral drugs under the
    emergency plan, a topic that has generated a significant amount
    of interest. I have consistently and repeatedly expressed our
    intent to provide, through the emergency plan, AIDS drugs that
    are acquired at the lowest possible cost, whether they are
    brand name products, generics, or copies of brand name
    products, regardless of their origin or who produces them, as
    long as we know that they are safe and effective and of high
    quality.
        As you know, this past Sunday Health and Human Services
    Secretary Thompson and I held a joint press conference in
    Geneva, where the World Health Assembly is currently taking
    place. Our purpose was to make two very important announcements
    that impact these issues.
        First, Secretary Thompson announced an expedited process
    for FDA review of AIDS drugs that combine already-approved
    individual HIV therapies into a single dose, known as fixed-
    dose combination. The drugs that are approved under this
    expedited process will meet all FDA standards for safety,
    efficacy, and quality. This new FDA process will include the
    review of applications that may come from research-based
    companies that developed the individual therapies and now want
    to put them into fixed-dose combinations, or the applications
    may come from companies who are already manufacturing copies of
    those drugs for sale in the developing nations.
        For my part, I announced in Geneva that when a new
    combination drug for AIDS treatment receives a positive outcome
    under this expedited FDA review, then the Office of the Global
    AIDS Coordinator will recognize that positive result as
    evidence of the safety and efficacy of that drug, and thus the
    drug will be eligible for funding by the President's emergency
    plan so long as the various international patent agreements and
    local government policies allow for their purpose.
        Where it is necessary to do so, I will also use the
    authority that has been given to me by the Congress to waive
    buy-American requirements that might normally apply.
        Thanks to the generosity of the American people, as well as
    the growing number of donor nations, the donors to the Global
    Fund, and other multilateral sources, the human and physical
    capacity to deliver AIDS treatment is being scaled up to make
    it possible for millions more patients to follow those who are
    already receiving this life-extending therapy. As
    infrastructure is scaled up, drug availability will also need
    to be scaled up to an unprecedented level in order to fuel this
    newly expanded set of health care systems that can deliver this
    treatment capacity.
        It is in some ways in large part because of the President's
    emergency plan that the issue of drug safety needs to be
    addressed on an entirely new scale. With such a massive
    expansion of ARV treatment, the stakes have increased. If we do
    not apply appropriate scientific scrutiny to this vastly
    expanding flow of AIDS medicines, we will run the risk of
    causing the HIV virus to mutate and overcome specific drugs or
    even whole classes of drugs, and that is why getting it right
    at the outset is so important and requires great care.
        Our commitment from the beginning has been to move with
    urgency to help build the human and physical capacity that is
    needed to deliver this treatment and then to fund the purchase
    of AIDS drugs to be used in providing this treatment at the
    most cost-effective prices we can find, but only drugs that we
    can be assured are safe and effective.
        Patients in Africa deserve the same assurances of safety
    and efficacy that we would expect for our own families here in
    the United States. There should not be a double standard. But
    how to do that has presented some serious challenges. So with
    our colleagues at the World Health Organization and UNAIDS and
    the Southern African Development Community, the U.S. Government
    has been carefully examining this issue and considering
    alternatives.
        Many of the copies of the research-based AIDS drugs that
    are on the market today in developing countries may very well
    be totally safe and effective. The challenge stems in part from
    the fact that they have never been reviewed by any of the
    world's stringent regulatory authorities, and the same will
    likely be true of the additional copies of these drugs that
    will be coming to the market in the days ahead as new companies
    and particularly indigenous companies enter this market,
    something that we expect and indeed hope will happen.
        Many people and organizations have noted the World Health
    Organization's prequalification pilot program and have urged
    that we simply rely on that. We have the highest respect for
    the World Health Organization and for its program. However, the
    World Health Organization is not a regulatory authority and
    does not represent itself as such. And in my conversations with
    Dr. J.W. Lee, Director General of the World Health
    Organization, as recently as 2 days ago, he has been very
    supportive, and has said so publicly, of what we are doing with
    this new program.
        For drugs that are used in the United States, the already
    existing answer has been FDA approval, whether it is generic
    drugs or brand name drugs. Now we have a process that every
    drug company in the world who wants to participate in this
    program can submit for review to the FDA and do this very
    expeditiously.
        Today the most limiting----
        Senator DeWine. Mr. Ambassador, if you could wrap up.
        Ambassador Tobias. Okay.

                               PREPARED STATEMENT

        Today the most limiting factor in providing treatment is
    not the drugs; it is the human and physical capacity in the
    health care system in Africa. But we are making progress on
    that and it is now time to get moving with the drugs.
        I pledge that the Office of the Global AIDS Coordinator
    will continue to move with urgency in all that we do, and I
    appreciate very much the opportunity to be here today.
        [The statement follows:]

                  Prepared Statement of Hon. Randall L. Tobias

        Mr. Chairman, members of the subcommittee, I am pleased to appear
    before you to testify in support of the President's Budget request for
    fiscal year 2005 for global HIV/AIDS, and to report to you on our
    progress in implement the President's Emergency Plan For AIDS Relief.
        In his State of the Union address last year, President Bush called
    for an unprecedented act of compassion to turn the tide against the
    ravages of HIV/AIDS.
        The President committed $15 billion over five years to address the
    global HIV/AIDS pandemic--more money than ever before committed by any
    nation for any international health care initiative:
      --$5 billion intended to provide continuing support in the
            approximately 100 nations where the U.S. Government currently
            has bilateral, regional, and volunteer HIV/AIDS programs.
      --$9 billion intended for new or expanded programs to address HIV/
            AIDS in 14 of those countries that are among the world's most
            affected--with a 15th country to be added shortly. The initial
            14 countries account for approximately 50 percent of the
            world's HIV/AIDS infections.
      --And finally, $1 billion intended to support our principal
            multilateral partner in this effort, the Global Fund to Fight
            AIDS, Tuberculosis and Malaria, which the United States helped
            to found with the first contribution in May 2001.
        Today, I am pleased to report that we have made significant
    progress in beginning to achieve the President's, the Congress's, and
    the American public's goal of bringing prevention, treatment, and care
    to millions of adults and children courageously living with HIV/AIDS
    and replacing despair with hope.
        On February 23, just 4\1/2\ months after we launched the Office of
    the U.S. Global AIDS Coordinator, and less than a month after the
    Congress appropriated fiscal year 2004 funding for the first year of
    the President's Emergency Plan for AIDS Relief, I announced the first
    release of funds for focus country programs totaling $350 million.
        This money is being used by service providers who are bringing
    relief to suffering people in some of the countries hardest-hit by the
    HIV/AIDS pandemic to rapidly scale up programs that provide anti-
    retroviral treatment; prevention programs, including those targeted at
    youth; safe medical practices programs; and programs to provide care
    for orphans and vulnerable children.
        These target areas were chosen because they are at the heart of the
    treatment, prevention and care goals of President Bush's Plan.
        The programs of these specific recipients were chosen because they
    have existing operations among the focus countries, have a proven track
    record, and have the capacity to rapidly scale up their operations and
    begin having an immediate impact.
        Our intent has been to move as quickly as possible to bring
    immediate relief to those who are suffering the devastation of HIV/
    AIDS.
        By initially concentrating on scaling up existing programs that
    have proven experience and measurable track records, that's exactly
    what we have been able to do.
        With just this first round of funds, an additional 50,000 people
    living with HIV/AIDS in the 14 focus countries will begin to receive
    anti-retroviral treatment, which will nearly double the number of
    people who are currently receiving treatment in all of sub-Saharan
    Africa. Today, activities have been approved for anti-retroviral
    treatment in Kenya, Nigeria, and Zambia, and patients are receiving
    treatment in South Africa and Uganda because of the Emergency Plan.
        In addition, prevention through abstinence messages will reach
    about 500,000 additional young people in the Plan's 14 focus countries
    in Africa and the Caribbean through programs like World Relief and the
    American Red Cross's Together We Can.
        The first release of funding from the President's Emergency Plan
    will also provide resources to assist in the care of about 60,000
    additional orphans in the Plan's 14 focus countries in Africa and the
    Caribbean. These care services will include providing critical social
    services, scaling up basic community-care packages of preventive
    treatment and safe water, as well as HIV/AIDS prevention education.
        U.S. Government staff recently completed reviews of each of the
    focus country's annual operational plans to be addressed with the
    remaining fiscal year 2004 appropriation. These plans represent the
    overall U.S. Government-supported HIV/AIDS prevention, treatment, and
    care activities in each focus country.
        As a result of these reviews, Mr. Chairman, we will be providing to
    this Committee and other congressional committees the required
    notification for the obligation of approximately $300 million in the
    next tranche of funding from the Global HIV/AIDS Initiative account. In
    addition to that $300 million, another $200 million of funds
    appropriated to the U.S. Department of Health and Human Services and
    the U.S. Agency for International Development will be put to work in
    the field, bringing to approximately $850 million the funds already
    committed to new or expanded programs since the first of the year.
        As we make additional awards, the numbers of persons receiving
    treatment and care will increase substantially. I also expect our
    efforts to strengthen and expand safe blood transfusion and safe
    medical injection programs, as well as our efforts to strengthen human
    and organizational capacity through healthcare twinning and volunteers.
    And I also expect to place an additional focus on attracting new
    partners, including more faith-based and community-based organizations
    that can bring expanded capacity and innovative new thinking to this
    effort.
        Mr. Chairman, as I mentioned, our short-term focus has been putting
    funding to work in the field quickly and with accountability to ensure
    that those in need get help as quickly as possible. In addition to
    these important ideals and the achievement of our treatment, prevention
    and care goals, in the long term we are focused on strengthening
    indigenous capacity. We need to ensure that host governments and local
    organizations are well prepared to fight this deadly disease.
    Similarly, we need to ensure that our own U.S. Government staff in the
    field is properly sized to work closely with host governments over the
    next four years in accomplishing the goals of the Emergency Plan.
        But this is only the first step. In fiscal year 2005 we requested
    $1.45 billion for the Office of the Coordinator as part of the
    President's $2.8 billion request. With these funds we will continue to
    expand access to care, treatment and prevention and also take the next
    steps to build the necessary U.S. Government and host country capacity
    needed for this Initiative. To this end, we are working with HHS and
    USAID now to create a vehicle to help provide the necessary technical
    assistance to small indigenous non-governmental and faith-based
    organizations to become a more integral part of the solution to
    fighting HIV/AIDS in their country. We are also working with USAID, HHS
    and other relevant agencies to determine a long-term staffing plan.
        As I mentioned, the President's total Emergency Plan request for
    fiscal year 2005 is for $2.8 billion, a $400 million increase over the
    fiscal year 2004 appropriation--the first year of the Emergency Plan.
    This request is in keeping with our belief that as the Emergency Plan
    takes root and is scaled up, additional resources will be needed to
    effectively deliver assistance. An appropriation of $2.8 billion will
    keep the Emergency Plan on the path toward meeting the prevention,
    treatment and care goals set by the President and the Congress. The
    appropriation will also maintain U.S. leadership in the Global Fund to
    Fight AIDS, Tuberculosis and Malaria.
        Mr. Chairman, in addition to announcing the first round of funding
    and preparing to obligate the remaining fiscal year 2004 funds, I also
    submitted to this Committee and other appropriate Congressional
    committees in February a comprehensive, integrated, five-year strategy
    for the President's Emergency Plan for AIDS Relief.
        This Strategic Plan is guiding our efforts to deploy our resources
    to maximum effect:
      --We are concentrating on prevention, treatment and care, the focus
            of the President's Emergency Plan.
      --In the 15 focus countries, over the five years of the Emergency
            Plan:
        --We will help to provide anti-retroviral treatment for two million
                people;
        --We will contribute to the prevention of 7 million new HIV
                infections; and,
        --We will help provide care to 10 million people who are infected
                or affected by the disease in the focus countries,
                including orphans and vulnerable children.
      --We are not starting from scratch. Rather, we are capitalizing on
            existing core strengths of the U.S. Government, including:
        --Established funding and disbursement mechanisms;
        --Two decades of expertise fighting HIV/AIDS in the United States
                and worldwide;
        --Field presence and strong relationships with host governments in
                over 100 countries; and,
        --Well-developed partnerships with non-governmental, faith-based
                and international organizations that can deliver HIV/AIDS
                programs.
        Starting with this foundation, we are implementing a new leadership
    model for those existing capabilities--a model that brings together,
    under the direction of the U.S. Global AIDS Coordinator, all of the
    programs and personnel of all agencies and departments of the U.S.
    Government engaged in this effort. This leadership model has been
    translated to the field, where the U.S. Chief of Mission in each
    country is leading an interagency process on-the-ground. In addition to
    the work that has been done to develop the programs for fiscal year
    2004 that we are or soon will be funding, in early fall each country
    team will submit to my office a unified five-year overarching strategic
    plan to define how the President's prevention, care and treatment goals
    will be achieved in that country.
        The Emergency Plan is built on four cornerstones, which guide my
    office:
        1. Rapidly expanding integrated prevention, care, and treatment in
    the focus countries by building on existing successful programs that
    are consistent with the principles of the Plan--as we have already
    begun with the $350 million announced in February.
        2. Identifying new partners, including faith-based and community-
    based organizations, and building indigenous capacity to sustain a
    long-term and broad local response.
        3. Encouraging bold national leadership around the world, and
    engendering the creation of sound enabling policy environments in every
    country for combating HIV/AIDS and mitigating its consequences.
        4. Implementing strong strategic information systems that will
    provide vital feedback and input to direct our continued learning and
    identification of best practices.
        Within that framework, we are striving to coordinate and
    collaborate our efforts in order to respond to local needs and to be
    consistent with host government strategies and priorities.
        In addition, we intend to amplify our own worldwide response to
    HIV/AIDS by working with international partners, such as UNAIDS, the
    World Health Organization, and the Global Fund, as well as through non-
    governmental organizations, faith- and community-based organizations,
    private-sector companies, and others who can assist us in engendering
    new leadership and resources to fight HIV/AIDS.
        Since my confirmation seven months ago, I have had the opportunity
    to visit many of the countries in which we are focusing our efforts,
    including South Africa, Uganda, Kenya, Botswana, Zambia, Namibia,
    Rwanda, Ethiopia, and Mozambique. I'll be leaving in a few days for a
    visit that will include Nigeria, Cote d'Ivoire and Tanzania.
        In these visits, I have witnessed how these countries have
    responded, in whatever way they can, to fellow community members in
    need. As we embark on this effort, it is inspiring to observe the
    remarkable self-help already under way in fighting HIV/AIDS by some of
    the most under-resourced communities in the world. With our support, we
    hope to broaden, deepen and sustain their efforts to combat the
    devastation of HIV/AIDS.
        That is why getting the first wave of funding released quickly
    after the appropriation was so critical, and I appreciate the
    Congress's assistance in ensuring that was able to happen. I again seek
    your support in ensuring that we are able to quickly move the
    additional resources about to be sent up so we can respond with the
    urgency these individuals in need require.
        Finally, Mr. Chairman, I would like to say a few words about our
    policy to procure anti-retroviral drugs under the Emergency Plan--a
    topic that has generated a significant amount of interest.
        I have consistently and repeatedly expressed our intent to provide,
    through the Emergency Plan, AIDS drugs that are acquired at the lowest
    possible cost, regardless of origin or who produces them, as long as we
    know they are safe, effective, and of high quality. These drugs may
    include brand name products, generics, or copies of brand name
    products.
        To define the terms here, when you or I go to our neighborhood
    pharmacy and have a prescription filled with a generic drug, we do so
    with the confidence that we are being given a drug that has undergone
    regulatory review to ensure that it is comparable to the version
    manufactured by the research-based company that originally created it,
    but no longer has the patent rights to the product. It is the same drug
    in dosage form, strength, route of administration, quality, performance
    characteristics, and intended use. Drugs that have not gone through
    such a process are more accurately described as copy drugs rather than
    generics, as they are sometimes called.
        This past Sunday, Health and Human Services Secretary Tommy
    Thompson and I held a joint press conference in Geneva where the World
    Health Assembly in currently taking place. Our purpose was to make two
    very important announcements that impact on these issues.
        First, Secretary Thompson announced an expedited process for FDA
    review of applications for HIV/AIDS drug products that combine already-
    approved individual HIV/AIDS therapies into a single dosage. These
    combined therapies are known as fixed dose combinations or FDCs. Drugs
    that are approved by FDA under this process will meet all FDA standards
    for drug safety, efficacy, and quality.
        This new FDA process will include the review of applications from
    the research-based companies that developed the already-approved
    individual therapies and want to put them into fixed dose combinations,
    or from companies who are manufacturing copies of those drugs for sale
    in developing nations. There are no true generic versions of these AIDS
    drugs because they all remain under intellectual property protection
    here in the United States.
        For my part, I announced that when a new combination drug for AIDS
    treatment receives a positive outcome under this expedited FDA review,
    the Office of the Global AIDS Coordinator will recognize that result as
    evidence of the safety and efficacy of that drug. Thus the drug will be
    eligible to be a candidate for funding by the President's Emergency
    Plan, so long as international patent agreements and local government
    policies allow their purchase. Where it is necessary and appropriate to
    do so, I will also use my authority to waive the ``Buy American''
    requirements that might normally apply.
        The issue of determining the safety and efficacy of the copy drugs
    is, in some ways, a positive problem to have. Many have argued over the
    years that bringing antiretroviral therapy to places like Africa on a
    large scale could never happen--that the problems were too complex.
    Well they were wrong. It is happening now--today.
        Because of the President's Emergency Plan For AIDS Relief, and with
    the partnerships between this initiative and those who are directly
    delivering treatment--the NGO's and faith-based organizations, the
    medical care-givers and the health-care delivery facilities of the
    governments of these nations themselves, just a few short months after
    launching the President's Emergency Plan, we have already increased by
    thousands the numbers of patients suffering from HIV/AIDS who are now
    on life-extending ARV treatment.
        Thanks to the generosity of the American people as well as a
    growing number of donor nations, the donors to the Global Fund and
    other multi-lateral sources, companies in the private sector, private
    foundations and others, as the human and physical capacity to deliver
    AIDS treatment is scaled up to make it possible, millions more patients
    will follow those who are already receiving this life extending
    therapy.
        Drug availability will also need to be scaled up to an
    unprecedented level in order to fuel this newly expanded treatment
    capacity. It is in large part because the President's Emergency Plan
    for AIDS Relief has made such a dramatic commitment to making drug
    treatment available that issues of safety need to be addressed on an
    entirely new scale. With such a massive expansion of ARV treatment, the
    stakes have increased.
        If we don't apply appropriate scientific scrutiny to this vastly
    expanded flow of AIDS medicines, we will run the risk of causing the
    HIV virus to mutate and overcome specific drugs or even whole classes
    of drugs. That could render our current drugs useless--and, incredibly,
    it could leave Africa even worse off than it is today. That's why
    getting this right at the outset is so important and requires great
    care.
        Our commitment, from the beginning, has been to move with urgency
    to help build the human and physical capacity that is needed to deliver
    this treatment, and then to fund the purchase of AIDS drugs to be used
    in providing this treatment, at the most cost effective prices we can
    find--but only drugs that we can be assured are safe and effective.
    Patients in Africa deserve the same assurances of safety and efficacy
    that we expect for our own families here in the United States. There
    should not be a double standard. But how to do that has presented some
    serious challenges. With our colleagues at the WHO, UNAIDS, the
    Southern African Development Community, and many others, the U.S.
    Government has been carefully examining this issue--and considering
    alternatives.
        Many of the copies of the research-based AIDS drugs that are on the
    market today in developing countries may well be safe and effective.
    The challenge stems in part from the fact that they have never been
    reviewed by any of the world's stringent regulatory authorities. And
    the same will likely be true of the additional copies of those drugs
    that will surely be coming on the market in the days to come, as new
    indigenous companies enter this market--something we expect and hope
    will happen.
        Many people and organizations have noted the World Health
    Organization's prequalification pilot program and have urged that we
    simply rely on it. We have the highest respect for the WHO and its
    program. However, the WHO is not a regulatory authority and does not
    represent itself as such.
        For drugs that are used in the United States, the already existing
    answer to ensuring safety and efficacy is simple: both research-based
    companies and generic companies submit their products to the U.S. Food
    and Drug Administration for review and approval. What FDA has announced
    is a process that will not only make it possible, but relatively fast
    and easy, for every manufacturer to now submit their AIDS drugs to that
    same scrutiny, including those that will only be made available in
    developing countries. If those drugs meet the appropriate standards--as
    we hope many or all will do--they can then be approved for potential
    funding by the President's Emergency Plan.
        I hope that FDA will receive applications as soon as possible from
    many companies that will want their drugs to be candidates for U.S.
    funding for use in the treatment programs of the President's Emergency
    Plan. If this process enables us to get safe and effective drugs at
    lower prices than we do now, that would indeed be a great success.
        Today the most limiting factor in providing treatment is not
    drugs--it is the human and physical capacity in the health care systems
    of Africa. The continent is desperately short of health care
    infrastructure and health care workers. Both are needed in order to
    deliver treatment broadly and effectively. We find that African leaders
    and African AIDS advocates are quite focused on addressing this
    limitation--because they know that all the drugs in the world won't do
    any good if they're stuck in warehouses with no place to go to actually
    be part of the delivery of treatment to those in need.
        But as we successfully attack that issue and Africa's capacity to
    deliver drug treatment grows, drug availability will become an
    increasingly significant constraint on treatment. We can't let that
    happen.
        For our part, I pledge that the Office of the Global AIDS
    Coordinator will continue to move with urgency in all that we do.
    President Bush has made clear to me that this is an emergency at the
    top of the list of America's priorities. We will act accordingly.
        Mr. Chairman, I am grateful for this Committee's resolve to defeat
    the HIV/AIDS pandemic. Your leadership and support has facilitated the
    speed with which we are responding to people in need, and that
    commitment will ensure our success--success that will be measured in
    lives saved, families held intact, and nations again moving forward
    without the shadow of this terrible pandemic.
        I would be pleased to respond to any questions you may have.

        Senator DeWine. Mr. Ambassador, let me turn to the
    prevention of mother-to-child transmission issue. Fiscal year
    2004 is actually the last year of this program. My
    understanding is that your plan is that beginning with fiscal
    year 2005 the budget does not provide any specific line item
    for this and that this program would be incorporated actually
    under your office.
        I wonder if you could tell us what you are anticipating for
    this program, how much you are looking at spending under your
    office, and what your plans are for the non-initiative
    countries for this program?
        Ambassador Tobias. Senator, the prevention of mother-to-
    child transmission program has been very important, not only in
    treatment terms but also one could argue in orphan terms. I
    think you could make the case that the most effective orphan
    program we can have is keeping the mothers alive so that we do
    not have the orphans. The program to prevent mother-to-child
    transmission has been very effective. It is relatively
    inexpensive and it is a program that we will expand, not only
    in the countries in the program where it exists but well beyond
    that as we can.
        We are now going to something that is generally referred to
    as the mother-to-child transmission plus program, in that the
    mother-to-child transmission program per se really focused on
    protecting the health of the child and ensuring that when the
    baby was born the odds were improved that the baby would be
    infection-free. But what about the mother, what about the
    father, what about the siblings that are in that family? So the
    mother-to-child transmission plus program will begin to address
    those, too.
        This program, as you know, was started in the countries
    that became the focus countries. I think it gave us an
    important jump start on getting the emergency plan implemented.
    I would hope that we can find ways to take the lessons that we
    are learning in the focus countries and begin to expand those
    lessons into the so-called non-focus countries as we go forward
    and as funding permits.
        Senator DeWine. The plus program is certainly a wonderful
    idea and I think we all understand how important it is to keep
    the mother alive and keep the mother there for the children. I
    guess the concern would be that that prevents us--that focus
    might--you know, these are tough choices--might prevent us from
    moving forward into other communities and to other areas and
    expanding the mother-to-child program.
        What are the tradeoffs here? Let us be honest. What are we
    talking about?
        Ambassador Tobias. Well, you are exactly right with respect
    to the issue of tradeoffs. There are tradeoffs virtually
    everywhere we look.
        Senator DeWine. I mean, the mother-to-child program can be
    a fairly cheap program if you have got the infrastructure to
    implement it. It certainly is cheap as far as what the drugs
    cost if you can get the infrastructure going.
        Ambassador Tobias. I certainly do not anticipate that we
    are talking about an either-or situation here. I think that we
    need to, as you suggest, expand the mother-to-child
    transmission program, but with the building of increased
    infrastructure and the capabilities that we are putting in
    place I also believe that we can expand that into the mother-
    to-child plus program also.
        Much of what we do will be driven by the policies that are
    established by the health officials and the government leaders
    in each of the countries in which we operate, and we need to
    pay close attention to that.
        Senator DeWine. Let me move to another area because I have
    one last question and my time is almost up. Let me move to the
    pediatric treatment, which I touched on in my opening
    statement. How does the President's 5-year strategy incorporate
    the special needs of children who are infected with HIV and
    require HIV treatment? What is the administration going to do
    to ensure that all HIV/AIDS drugs are available for pediatric
    use? And what is the administration going to do to ensure that
    both pediatric professionals and other HIV/AIDS workers have
    the necessary information and training to treat children
    infected with HIV/AIDS?
        Ambassador Tobias. I think you are very correct, Senator,
    that not only in this field but in other fields the amount of
    pediatric-specific research that has been done has been too
    little, and we clearly need more in this field. I will rely on
    the medical experts and the technical experts as to exactly how
    we need to address this, but we do need to expand the care to
    HIV-infected young people.
        But again, the best answer to that is the mother-to-child
    transmission program and things like that to keep that
    infection from going----
        Senator DeWine. No doubt about it, it is the most cost-
    effective and we can save the most lives with the mother-to-
    child. But still, every country I visited--and I visited a
    number of them--we have got kids out there who are dying and
    there are kids out there who could be saved if we could get the
    treatment to them, and we do not want to forget them.
        Senator Leahy.
        Senator Leahy. Thank you, Mr. Chairman.
        As you may have gathered by some of the demonstrators here
    this morning, there is some concern on the question of generic
    drugs. For months you had said: ``There is no process, no
    principles, no standards in place today,'' to assure the safety
    of generic fixed-dose combinations manufactured overseas. Now,
    many health experts and the World Health Organization disagreed
    with you.
        Now we have a new review process. How do you answer the
    fact that it appeared the review process came up after U.S.
    companies were interested in manufacturing their own fixed-dose
    combination drugs? And even then, how long is it going to take
    for this review process? I am just wondering if we have just
    one more unnecessary obstacle to getting these drugs out to the
    people who need them desperately.
        Ambassador Tobias. Well, Senator, first let me say that the
    World Health Organization does not present their
    prequalification program to be the equivalent of regulatory
    review. I would simply refer to the statement that has been
    released by Dr. J.W. Lee, the head of the World Health
    Organization, in total support of the program that we are
    putting in place to review these drugs.
        Senator Leahy. When will we have the drugs out there?
        Ambassador Tobias. The FDA tells me that if, for example,
    companies are applying today, which they could, that in some
    cases approval could be received in as little as 2 weeks. In
    some cases it could be 6 weeks or so, depending on the data.
    Then it will depend on the programs in individual countries.
    But we will be certainly ready to go.
        Senator Leahy. Would we have gone to a generic fixed-dose
    combination if American drug companies had not shown an
    interest in producing it themselves?
        Ambassador Tobias. Well, the announcement that I have read
    in the media, as you have, from the American companies, came
    after we announced this program, which we have been working on
    with the FDA for some time. I have said on a number of
    occasions that we are totally in favor of fixed-dose
    combinations. The issue has never been whether fixed-dose
    combinations are good or bad. I do not think there is any
    question with anybody that they are good because they make it
    easier for doctors to administer the program and patients to
    adhere.
        Senator Leahy. I am just trying to see what this is. This
    is today's New York Times and, for what it is worth: ``A WHO
    official familiar with both his agency's approval process and
    the outlines of the proposed American one said, `Although the
    United States has not exactly been in love with our
    prequalification process, they are now going to do exactly the
    same. If they want to create a parallel structure and do a good
    job, that is fine.' ''
        Let me ask you this--and I will put the whole article in
    the record. Over the next 5 years, you say you hope to prevent
    7 million new HIV/AIDS infections. We all agree that would be a
    great achievement. There are 5 million new ones each year. So
    even if you succeed, there will be at least 18 million new
    infected people by the end of 5 years, 2.5 times the number we
    have prevented.
        I raise this because in my opening statement you remember I
    mentioned the issue of absorptive capacity, what can we do. How
    did you come up with the number $2.8 billion for fiscal year
    2005? Could we not be doing a lot more? Because it seems to me
    we are in some ways chasing after the train. We are not keeping
    up with even the rate of infection, to say nothing about
    helping those who are direly in need.
        I am told by so many that we have the capacity, if the
    money was there, we have the capacity to do more. We have
    private organizations, private groups. The Gates Foundation did
    a lot more on this than the United States was willing to
    initially.
        [The information follows:]

                [From the New York Times, Tuesday, May 19, 2004]

                  Views Mixed On U.S. Shift On Drugs For AIDS

                           (By Donald G. McNeil Jr.)

        AIDS activists and doctors who treat patients in poor countries
    greeted the Bush administration's shift in its policy on procuring AIDS
    drugs with mixed reviews yesterday.
        Many were delighted that the administration had decided to buy
    anti-AIDS cocktails that combine three drugs in one pill, and that it
    for the first time was willing to consider buying drugs from low-cost
    generic manufacturers, who are now the only companies making 3-in-1
    pills.
        ``I think it's fabulous,'' said Dr. Merle Sande, who treats 4,000
    AIDS patients in Uganda, most of whom cannot afford drugs. Most of
    those who can are on Triomune, a 3-in-1 pill from Cipla Ltd., an Indian
    company. Three-in-one drugs, he said, ``are exactly what we need out
    there.''
        At the same time, some activists expressed frustration that the
    White House had set up a new approval process overseen by the United
    States Food and Drug Administration when one overseen by the World
    Health Organization already existed.
        ``This just another roadblock,'' said William Haddad, an American
    generic manufacturer who now consults for Cipla. ``The W.H.O. process
    was a pain in the neck--it took us two years to get Triomune approved.
    Why do we have to bend over and let them kick us again?''
        Henry A. Waxman, a Democratic Los-Angeles area congressman who has
    harshly criticized the Bush administration's previous refusal to spend
    money on generic drugs said yesterday that he was ``disappointed that
    the plan does not involve cooperation with the World Health
    Organization.''
        ``We need to see the fine print before we can tell if the new
    process will actually improve access to these affordable, effective
    drugs,'' he said.
        Even though the administration indicated that it would waive the
    usual $500,000 fee for approving a drug and will let companies submit
    published data instead of starting new clinical trials, any new
    approval process involves reams of paperwork, legal expenses and time,
    critics said.
        The World Health Organization had no official reaction yet to the
    decision, a spokeswoman said.
        But a W.H.O. official familiar with both his agency's approval
    process and the outlines of the proposed American one, speaking on
    condition of anonymity, shrugged off the problem. ``Although the United
    States has not exactly been in love with our prequalification process,
    they are now going to do exactly the same,'' he said. ``If they want to
    create a parallel structure and do a good job, that's fine.''
        The official questioned how Tommy G. Thompson, the secretary of
    health and human services, could promise to approve new drugs in as
    little as two to six weeks unless it simply accepted all the data
    submitted to the W.H.O. ``For us, even if everything is perfect, it
    takes a minimum of three months,'' he said.
        Dr. Mark Goldenberger, director of the Food and Drug
    Administration's office that evaluates drugs for infectious diseases,
    said that ``two weeks would be at the extreme short end'' and would
    probably apply only to something like putting three already-approved
    drugs in one plastic blister pack, because all the agency would look at
    was the packaging.
        Asked if the F.D.A. would accept information gathered by W.H.O.
    inspectors, Jason Brodsky, an agency spokesman, said that there was not
    any agreement allowing it, ''but we would be willing to consider any
    information that we got from other countries in deciding whether or not
    we'd inspect.''
        On Sunday, as health ministers from around the world were gathering
    in Geneva for their annual meeting, the Bush administration made a
    surprise announcement that it would speed up its approval process for
    AIDS drugs to be bought for very poor countries and would consider
    generic drugs, 3-in-1 pills and letting different companies package
    their drugs together. The administration had been expected to face
    heavy criticism at the weeklong meeting for its previous reluctance to
    approve generic AIDS drugs.
        Some companies appeared to have been told of the administration's
    announcement in advance. Merck, Bristol-Myers Squibb and Gilead
    Sciences immediately issued a joint statement saying they planned to
    develop a 3-in-1 pill. GlaxoSmithKline and Boehringer Ingelheim said
    they were discussing packaging three of their drugs together.
        ``Obviously, they had inside information,'' complained Dr. Paul
    Zeitz, director of the Global AIDS Alliance, which pushes for cheaper
    AIDS drugs for the third world. ``That calls into question the honest
    broker role' of the U.S. government.''

        Ambassador Tobias. Senator, I think there is no question
    that the magnitude, the broad magnitude of this problem, goes
    well beyond the resources and the focus of the President's
    emergency plan. I do not think the emergency plan was intended
    to attack the entire problem. We need to get more resources and
    more participation from other people in the world.
        In 2003 the contributions of the U.S. Government for
    international HIV/AIDS totaled more than the rest of the
    world's governments combined. We are on a path so that in 2004
    our contributions may well be close to twice as much as the
    rest of the world combined. So we are doing a lot, but the rest
    of the world needs to do more.
        I think the issue is not where do these dollars fit in with
    the magnitude of the problem. It really is can we efficiently
    and effectively absorb the resources that we are bringing to
    bear and use them as well as possible, and I think reasonable
    people can disagree. But we are moving pretty quickly, and I
    think we will know more in the months ahead.
        Senator Leahy. My time is up, but I wonder if the chairman
    would allow me one more question here. And we should carry on
    that conversation.
        Ambassador Tobias. Yes, sir.
        Senator Leahy. Because I believe we could be doing a lot
    more than we are, and I believe we have set some artificial
    barriers to doing more.
        But I looked at an editorial today saying that the
    administration feels condoms are not effective in preventing
    the spread of HIV in the general population. I mentioned in my
    opening statement the 15-year-old African girl. ``On average,
    adolescents become sexually active at 16 to 17 years of age,
    some even younger. In some African countries, infections among
    women are rising fastest among those who are married. Sexual
    abuse and coercion within marriage is widespread.''
        I mean, how long do you have to wait to receive accurate
    information about the importance and effectiveness of condoms
    in preventing AIDS? You have taken--I understand this was taken
    off, this information was taken off the CDC and USAID web
    sites. How do we answer these questions?
        They say, in the editorial, it says: ``Randall Tobias, its
    AIDS Coordinator, has said numerous times that condoms are not
    effective at preventing the spread of AIDS in the general
    population.'' The editorial goes on to say: ``Mr. Tobias is
    wrong.''
        Here is your chance to respond.
        Ambassador Tobias. Senator, here is the report in my hand
    from the London School----
        Senator Leahy. School of Hygiene and Tropical Medicine.
        Ambassador Tobias [continuing]. The London School of
    Hygiene and Tropical Medicine, which allegedly does not exist.
    And it says exactly what I have said before, that in their
    study less than 7 percent of women used a condom in their last
    sex act with their main partner; less than 50 percent of women
    with casual partners used a condom.
        There is a new study from----
        Senator Leahy. Less than 50 percent do; does that mean
    that, say, 40 percent or so do?
        Ambassador Tobias. Well, this is again a study in a broad-
    based population. But the point is--and let me make just one
    more reference. There is a new UNAIDS study out that was peer-
    reviewed by the Population Council's peer review process, and
    just one quote from that: ``There are no clear examples that
    have emerged yet of a country that has turned back a
    generalized epidemic primarily by means of condom promotion.''
        Senator Leahy. Primarily, primarily.
        Ambassador Tobias. Yes.
        Senator Leahy. Do you believe they should be withheld----
        Ambassador Tobias. No.
        Senator Leahy [continuing]. From 15- or 16-year-olds?
        Ambassador Tobias. No, absolutely not. Our program is A, B,
    C.
        Senator Leahy. Absolutely not. A 15-year-old, it would not
    be withheld?
        Ambassador Tobias. The person that you described earlier,
    as I understood your description, would be someone that ought
    to have condoms available. I was in an area in northern Kenya
    recently where the incidence rate in 15- to 24-year-old girls
    is 24 percent and it is 4 percent in boys. But the evidence is
    that is not going to solve the problem, and we need to do a
    number of other things. That is why we are putting a lot of
    emphasis on the messages that Uganda has proven can be
    effective by getting young people to understand that if they
    delay the age at which they become sexually active and then if
    people who become sexually active reduce their number of
    partners, hopefully to one, those are the two factors that have
    been demonstrated to make a big difference.
        But condoms are an important part of our program.
        Senator Leahy. It would also help if that woman who reduces
    it to one, if her partner had reduced it to that one, too.
    Often that is not the case.
        Ambassador Tobias. Well, and that is where testing is so
    critically important. You are absolutely right.
        Senator Leahy. Thank you, Mr. Chairman.

                 OPENING STATEMENT OF SENATOR MITCH MC CONNELL

        Senator McConnell [presiding]. Thank you, Senator Leahy.
        The President's HIV/AIDS initiative is focused on 14
    countries in Africa and the Caribbean. Congress added an
    additional country in the fiscal year 2004 Foreign Operations
    bill. Have you identified the fifteenth focus country and what
    criteria are you using to select that country?
        Ambassador Tobias. Senator, we have not identified the
    country yet. I have gotten input from a variety of sources
    throughout the government and beyond. We identified 39
    candidate countries that anybody could think of. We put
    together a list of criteria looking at the infection rate, the
    health care system, the national leadership, which is a
    critically important issue, and how helpful the leadership
    could be and so forth.
        We are in the process of getting that down to a very short
    list and I am hoping that in a relatively short time we will be
    in a position to make that selection.
        Senator McConnell. Some have expressed concern that the
    administration is actually shortchanging countries that are not
    on the focus list of 15 and that more should be done to address
    rising infection rates in certain non-focus countries. Do you
    have any response to those criticisms? And are non-focus
    countries targeted for increases in bilateral assistance next
    year?
        Ambassador Tobias. Senator, one of the important principles
    of the President's program is focus. It is to try to keep this
    from being an inch wide--or an inch deep and a thousand miles
    wide and not really being able to make an impact.
        But we also need to recognize that this is not a disease
    that respects political boundaries. So we need to do what we
    can in the so-called non-focus countries. I am looking for some
    ways to shift at least some amount of resources into some of
    the non-focus countries that are being hit the hardest. But I
    think it is very important that we not lose sight of the focus
    aspect of this program, because the focus countries really
    represent 50 percent of the infections in the world and I think
    it is very important that we make a major impact there.
        Senator McConnell. I agree.
        The fiscal 2005 budget request for a contribution to the
    Global Fund to Fight AIDS, Tuberculosis, and Malaria is $200
    million. In the fiscal year 2004 Foreign Operations bill
    Congress provided not less than $400 million as a contribution
    to the Fund, which was $200 million above the request.
        Has the congressionally mandated increase leveraged
    additional contributions from other donors? How can we get, for
    example, donors like Russia--$20 million, Saudi Arabia--$10
    million, and Singapore--$1 million--to contribute more?
        Ambassador Tobias. Well, I think there are a number of ways
    we can do that. One of them is leadership. I have asked the
    President to mention this subject every time he has the
    opportunity. The Secretary of State is doing the same thing. I
    think the work that Bono is doing to draw attention to this and
    encourage the rest of the world to step up to this is extremely
    important, because we need to make this a program that gets
    broad support from all governments.
        Senator McConnell. Do you think Congress should provide
    $400 million for the Global Fund next year? And if we did that,
    do you anticipate U.S. contributions exceeding 33 percent of
    the total amount contributed to the fund?
        Ambassador Tobias. Mr. Chairman, the amount that the
    President has requested in his budget of $200 million is
    consistent with the original $15 billion proposal. This is one
    of those arguable tradeoff areas in the sense that the
    incremental difference between what the administration
    requested and what was appropriated to the Global Fund is money
    that might have been available for us to use to focus on the
    non-focus countries.
        So it is a matter of the tradeoffs of how we want to do
    that. The Global Fund is a very important part of our overall
    strategy.
        Senator McConnell. Is it being effective, yielding results
    out in the field?
        Ambassador Tobias. Well, it is new. It is only 2\1/2\ years
    old. They are experiencing the kinds of growing pains that
    would be expected. We are putting money into technical support
    in countries where the Global Fund is issuing grants in order
    to try to help those countries, first of all, be more effective
    in writing their grant proposals to the Global Fund, and then
    in utilizing and implementing the resources that come from the
    Global Fund.

                               prepared statement

        Senator McConnell. I have great hope for the Global Fund
    over time. But again, it is relatively new and it is just
    getting started.
        Thank you, Mr. Ambassador.
        [The statement follows:]

                 Prepared Statement of Senator Mitch McConnell

        Today, HIV/AIDS is recognized as a significant transnational crisis
    that poses an immediate and growing threat to social, economic and
    political stability across the globe. While it may be expedient to
    frame the pandemic in geopolitical terms, it is far more difficult--
    indeed horrific--to comprehend the devastation of the virus in
    personal, human terms.
        The statistics are staggering. As many as 46 million people live
    with HIV/AIDS today, and an estimated 20 million have already perished
    from complications of the virus. Last year alone, 5 million people
    became newly infected, and 3 million died from AIDS complications.
        This viral holocaust creates widows and orphans and destroys entire
    families. It is especially brutal to youth, and saps the hope and
    promise of future generations. If left unchecked in developing
    countries, it is conceivable that HIV/AIDS will destroy entire
    societies, economies and political systems.
        Under President Bush's leadership, America has significantly
    increased its contributions to combating this disease. Over a five year
    period, we will contribute a total of $15 billion to HIV/AIDS programs
    and activities. Fifteen countries, primarily in Africa and the
    Caribbean, are the main focus of this initiative, although funding will
    continue to some 100 countries where we have ongoing programs, and to
    the Global Fund to Fight AIDS, Tuberculosis and Malaria.
        There are no shortages to the challenges in successfully managing
    this disease. Some argue that we--and other nations--should spend more
    on HIV/AIDS, and that we shortchange the cause by not providing the $3
    billion authorized by Congress in the AIDS bill.
        Perhaps America should spend more, but that will ultimately be
    determined by fiscal constraints. I would point out, however, that last
    year's budget request for HIV/AIDS programs exceeded the total amount
    provided from fiscal years 1993 through 2001. Further, the President's
    plan gradually increases spending over the five year period so that
    beginning in fiscal year 2006, the budget request exceeds $3 billion
    and tops nearly $4 billion in fiscal year 2008.
        Funding alone is not enough. To stem the tide of HIV/AIDS, nations
    must have committed leadership, the most basic health care delivery
    systems, and the capacity to absorb substantial assistance targeted
    toward the health and welfare of all people--regardless of ethnic,
    tribal, political, gender, or religious affiliation.
        It will be an uphill battle. Of the 12 focus countries included in
    the Transparency International Corruption Perception Index 2003, only
    one--Botswana--is above a half-way mark of five. Nine countries rated
    below a three. In 2003, Freedom House scored only four focus counties
    as ``free''--seven were rated ``partly free'' and three ``not free''.
        ``A business as usual'' approach by focus countries will only
    translate into more lost lives and greater tragedy for millions of
    people. Many stand ready to help, including such faith-based
    organization as Lott-Carey International (LCI). I strongly encourage
    the Coordinator's office to use the experience and indigenous contacts
    that LCI and other groups bring to this effort.
        Let me close with brief comments on Burma and South Africa--
    countries which represent the range of freedom in the developing world.
    In Burma, a military junta daily abuses and denies the rights of its
    citizenry, including access to even the most basic health care and
    medicines. While we may not accurately know the extent of the HIV/AIDS
    infection rate in Burma, we do know that the pandemic cannot be
    addressed by an illegitimate regime that places the welfare of the
    people far below the acquisition of Russian MiGs, nuclear reactors and
    money laundering.
        In South Africa, a country whose journey toward democracy has been
    nothing but inspirational, the lack of political will by the Mbeki
    government to address the HIV/AIDS pandemic head-on has wasted precious
    time in stemming the tide. South Africa's heroes are the health care
    workers at the grassroots level; the current government must be willing
    to partner with them--and available science--to combat the disease.
        It is my hope that in the future President Mbeki will be as
    vigilant on this issue as both our witnesses here today.

        Senator McConnell. Senator Durbin.

                 OPENING STATEMENT OF SENATOR RICHARD J. DURBIN

        Senator Durbin. Mr. Ambassador, thank you very much.
        Sometimes I get the impression that different rooms on
    Capitol Hill are really living in different worlds. Last week
    we entertained people from the administration who, having told
    us in February they would need no additional funds for the war
    in Iraq, had a different point of view and came to tell us that
    they needed $25 billion and then, Assistant Secretary Wolfowitz
    said, maybe $50 billion on an emergency basis.
        The reasoning was hard to argue with. They said the war is
    not going well, our national interests are at stake, we cannot
    turn our back on our commitments, and we cannot turn our backs
    on people whose lives are at stake as well.
        I might say the same thing about the global AIDS epidemic.
    That war is not going well either, our national interests are
    at stake, we cannot turn our back on our commitments, there are
    people who have their lives at stake.
        As I look at the administration, I thought that the
    President's announcement a little over a year ago of a $15
    billion commitment was historic, receiving broad bipartisan
    support. His first budget request, the first of the 5 years was
    $2 billion. With the kind efforts of Senator DeWine and my
    colleagues, we raised that to $2.4 billion on the floor.
        Then came this year's budget request of $2.8 billion, still
    short of the mark of keeping up with the $15 billion
    commitment. With Senator Lugar and Senator DeWine and others,
    we brought this up to $3.3 billion in the budget resolution.
        But, going to a point that Chairman McConnell raised, how
    can we rationalize or justify such a dramatic decrease in our
    commitment to the Global Fund? You received a letter from Dr.
    Feicham on March 25 of this year and he made it clear that the
    amount that we are talking about appropriating for the Global
    Fund is dramatically inadequate. For this effort to reach its
    goal and to save lives across America, he believes $1.2 billion
    is needed from the United States.
        I think good evidence is there to support that position.
    Why do you feel that, instead of increasing our commitment to
    the war on AIDS, that we can start retrenching and pulling back
    in this next fiscal year?
        Ambassador Tobias. Well, Senator, the budget request for
    2005 is in fact the same amount that the administration
    requested in the previous year and that is reflected in the
    billion dollar component of the first $15 billion request. I am
    very supportive of the Global Fund, but I am also very
    supportive of the President's emergency plan. I want to be sure
    that we are not making tradeoffs that get in the way of our
    doing the things that we are demonstrating we can do of getting
    the money out and getting it to work very quickly.
        Dr. Feachem is talking about the broad need out there. I
    think we need to focus on the money we are getting out the door
    today and next month and in the next year.
        Senator Durbin. So do you think he is overstating his need
    for next year?
        Ambassador Tobias. No, I do not think he is overstating the
    need, but he may be overstating the ability to utilize those
    funds that quickly. But again, I want to make clear that the
    Global Fund is certainly a very important aspect of our overall
    strategy.
        Senator Durbin. I would say, Ambassador, that that is a
    fundamental error of this administration. I believe it is
    important for us to maintain our bilateral commitment to the 14
    nations, ultimately 15. But the Global Fund is serving a large
    part of the world that we are not addressing with bilateral
    assistance. I have seen that part of the world--India for
    example, desperate to see their Global Fund projects not only
    initially authorized, but carried on. When we fall so far short
    of what is needed, it is going to mean a cutback on fighting
    this epidemic in India.
        Let me also address the cutbacks in the budget relative to
    TB and malaria, a cutback of some $46 billion. I have been to
    India just a few weeks ago to see DOTS, the Direct Observed
    Therapy, and it is done on the cheap. I saw it in a shoe store
    in one of the poorest neighborhoods in New Delhi.
        How can we, in light of the fact that TB is such a killer
    and linked so many times to HIV/AIDS, how can we rationalize or
    justify cutting back in our commitment to TB and malaria?
        Ambassador Tobias. Well, TB and malaria are very important
    components of the program. Testing people who have HIV to
    determine whether or not they have TB and can be put into TB
    programs is a very important component of this. We do need to
    stay very focused on TB and malaria.
        Senator Durbin. We need more than focus; we need money.
    Focus is good; money is better. In this situation, a little bit
    of money goes a long, long way. Ten dollars for the therapy to
    deal with tuberculosis, and the observation of a shoe store
    owner of a person taking their medicine has created a health
    infrastructure which nobody knew could exist in this country,
    this vast country of India.
        I am just troubled by the fact that with such facility we
    talk about $25 billion more here and $50 billion more there,
    and when it comes to these issues of the war on AIDS and the
    war on tuberculosis, frankly, we are talking about a hollow
    army and a hollow commitment. I think we can do better. I think
    the President called on us to do better. But frankly, the
    President's rhetoric is not matched by his budget numbers, and
    people will die as a result of that.
        Ambassador Tobias. Well, we are very much on a path to meet
    the President's commitment of $15 billion over 5 years and we
    are implementing the needs in people and infrastructure in a
    very aggressive way. I think as we get more health care system
    improvement in place we are certainly going to be able to
    implement more quickly.
        Senator Durbin. My last point--thank you for your
    forbearance, Mr. Chairman--is that is an argument I
    categorically reject, and here is how it goes: We cannot give
    them the money; they do not have the health infrastructure.
    Well, how do you get the health infrastructure? You start
    training people to be doctors and nurses and medical
    professionals. You start setting up clinics.
        How are they going to do that? Is this supposed to spring
    just automatically? I think we have to invest in the
    infrastructure to deliver the drugs, to bring the people in, to
    monitor their activity, for public education. To say we are
    going to wait on the infrastructure before we send the money
    means basically we may not ever send the money.
        Ambassador Tobias. Well, we are not waiting on the
    infrastructure. That is exactly where the initial money is
    going, is to help build the health care systems and the
    infrastructure. The greater operating expense going forward is
    going to be the things that we put into that system.
        But there is no question that the magnitude of this problem
    is well beyond what this program is focused on and we need to
    get more help from everybody that we can find that will provide
    help.
        Senator Durbin. Thank you.
        Senator McConnell. Thank you, Mr. Tobias.
        Thank you, Senator Durbin. We are going to complete your
    appearance right now, Mr. Tobias. Any Senators who wish to
    submit questions in writing, may do so. We have a vote at
    11:30, so what I am going to do is to have a very short recess.
    We are going to catch the vote. We will come back and have the
    second panel as soon as I return, which will be shortly.
        Senator Leahy. Mr. Chairman.
        Senator McConnell. Senator Leahy.
        Senator Leahy. If I might, there will be questions for the
    record. I would just let Ambassador Tobias know that one
    question I will ask, and I really want a straight answer on
    this, is that we have been told that even though the
    administration's own experts have rated some of the faith-based
    organizations very, very low as to their abilities, they are
    getting preference for funding.
        I have some faith-based organizations I feel highly about.
    But what I feel most urgently is to do something to stop AIDS,
    and I do not want to think, with all the money we are doing,
    that it is being passed out as a political goodie. So look at
    my question. It is a very, very serious one.
        Senator McConnell. All right. We thank you, Mr. Tobias. We
    will take a brief recess and then resume the hearing shortly.
    STATEMENT OF BONO, FOUNDER OF DATA, DEBT AIDS TRADE
                AFRICA
    ACCOMPANIED BY AGNES NYAMAYARWO, NURSE AND AIDS ACTIVIST, UGANDA

        Senator McConnell. This hearing will resume.
        Our second witness needs no introduction. In this town he
    is known as much for his music as he is for his work on behalf
    of HIV/AIDS and debt relief. He is an effective spokesman for
    these causes and his political skills are as good as any on
    this subcommittee, perhaps even better.
        So welcome, Bono. I understand that with you is Ms. Agnes
    Nyamayarwo, a nurse and AIDS activist from Uganda. I will leave
    the formal introduction of her to you, but I would request Ms.
    Nyamayarwo take a seat next to Bono, if you will. We want to
    give our colleagues an opportunity to ask questions to someone
    whose personal insights will undoubtedly be very, very helpful.
        Before you make a brief opening statement, let me take a
    moment to thank you for your eloquent description in Time
    magazine, Bono, of a woman we both admire and support, Burmese
    democracy leader Aung San Suu Kyi. Last week she, the National
    League for Democracy and ethnic nationalities made the
    courageous and correct decision to boycott the junta's sham
    constitutional convention in Rangoon.
        I unabashedly use this opportunity, while the spotlight
    shines on a high-profile activist such as yourself, to
    highlight her plight. At this critical moment she and the
    people of Burma need the world's attention and support. I am
    pleased that the United Nations, the European Union, Japan,
    Malaysia, and Thailand have expressed concern with the regime's
    unwillingness to move forward in a meaningful reconciliation
    process with the NLD and the ethnic minorities.
        The Burmese people should find encouragement from these
    remarks. As we approach the anniversary of Burma's 1990
    elections and last year's massacre, which almost took Suu's
    life, I would urge my colleagues in both the Senate and House
    to quickly renew import sanctions against the junta. Bono, I
    know you agree that we cannot fail Suu Kyi or freedom in Burma.
        Senator Leahy will be back shortly and I will allow him to
    make his comments then. I think what we will do is proceed,
    Bono, with your opening remarks.
        Bono. Thank you very much. Thank you very much, Chairman
    McConnell. It is an honor to be asked to share my thoughts
    today. I would like to thank friends Leahy, DeWine, and Durbin.
    When they come back I will. They have shown great leadership on
    this subject and, I have to say, patience in dealing with a
    rock star, and a rock star who asks for a seat at your
    distinguished table, then refuses to leave. And frankly, there
    is a lot of people who wish I had stayed in the studio,
    including my band.
        But you let me in the door. You let me in the door on debt
    relief. We have worked together on AIDS and the Millennium
    Challenge. And now I am going to abuse your hospitality by
    hanging around, talking loudly, when you really ought to be
    hearing from people who truly live the subject, like Jim Kim at
    the World Health Organization or a treatment advocate like
    Zackie Achmet in South Africa, or indeed a true heroine like
    Agnes here, whom many of you know.
        But I promise to talk briefly and politely. I think it is
    really brilliant to be here, and my testimony will be suitable
    for family audiences. Your children, your country, are safe,
    safe from my exuberant language.
        I have just come back from Philadelphia and it was an
    extraordinary day there yesterday with various religious groups
    and student activists. We are putting together a campaign to
    unite everybody all across the country, all across the United
    States, to unite the country under this issue of AIDS and
    extreme poverty.
        I think we are going to succeed. You listen to these people
    talk about America taking the lead on this and you would be
    very proud. I think they know--their message to me was: This is
    a critical time. And I think we all agree with that.
        We are making progress in the fight against AIDS. We are
    gaining speed, building momentum, but only as long as we keep
    our foot on the gas, because, Senator, as you know, we have a
    lot more road ahead. Our success so far should make us
    confident, but it cannot make us content. We are off to a great
    start. Only you here can make sure that it is not a false
    start. If we stop at AIDS, oddly enough, we will not beat AIDS,
    because we need to do more about the conditions, the extreme
    poverty in which AIDS thrives.
        But lest this sound like a burden or ``more money, more
    money,'' can I just say this is actually the exciting bit,
    because we can use this disease to knock poverty out. This is
    an incredible opportunity for America. I am not a Pollyanna on
    this stuff. I have seen it work. I have seen it save and
    transform lives.
        Just at this moment in the world, it just feels important,
    as a fan of America, to see America knocking poverty out and
    taking the lead on AIDS. I think it is a great, great message.
        So let me talk a little bit about the results that we are
    seeing, because a few years back I was here to talk about debt
    cancellation and I think it is important that I give you a
    report back on what we did with that money. I remember sitting
    in your office, Senator McConnell, and going through this, and
    you were listening to this. It was my first sort of foray here
    and you were very patient with me as I had my hand in your
    wallet.
        But I feel an obligation to explain to you all on this
    committee what we did with that money, because it is an
    astonishing thing, and I hope America is aware of what it did.
    There are 27 countries who had chronic debts owed to the United
    States from way back and they have been cancelled. With that
    money there has been astonishing results.
        Three times the amount of children, where Agnes is from,
    three times the amount of children going to school. What an
    astonishing thing. I have even had Senator Frist witness some
    of this stuff. Together we saw water holes built by moneys
    freed up by debt cancellation. When others said the money was
    going down a rat hole, in fact it was going down a water hole.
    A very, very proud moment for me and I hope for America.
        So more recently we have been working together on the
    Millennium Challenge, something we worked on with this
    administration and then across with support on both sides of
    the aisle. This is important stuff and I am not sure people
    have--it has really sank in what the Millennium Challenge was
    all about. It is important. It is a paradigm shift because it
    is rewarding countries that are fighting corruption and that
    are actually tackling poverty and the poverty of their people.
        Because wherever we go in America, that is the only issue
    we hear about that makes people cautious about development
    assistance. They want to know that the money is going to the
    people it is promised to. So corruption is absolutely essential
    that we deal with.
        The Millennium Challenge is this kind of new way of seeing
    aid as a reward for people who do the right thing. Where there
    is civil society, clear and transparent process, good
    governance, let us fast track those people. It is common sense
    and, by the way, it is going to be imitated around the world
    and it was invented here in this city. It is a new paradigm
    shift, deserves a lot of support.
        The President asked you for $2.5 billion for 2005 and I
    figure that is a little more persuasive than my asking you, but
    I will just urge you to support him on that. DATA, D-A-T-A, the
    organization I helped start, has found that the 16 well-
    governed poor countries selected for the Millennium Challenge,
    are ready to use all of that funding on sound poverty reduction
    plans. They need only what you can give them, which is really a
    chance. So it is a good start, but only that, a start.
        We are not here today for a victory lap. We are here to
    pick up the pace, because AIDS, as Senator Durbin mentioned, is
    outrunning us. It is killing 6,500 Africans a day, 7,000
    Africans a day. Whoever you are talking to, the number is hard
    to stomach. 9,000 more Africans a day infected.
        The most incredible part about this is it is fully
    preventable and treatable, which is an incredible opportunity
    for America. As I say, at this moment of all moments, when
    people are not necessarily sure about us in the West that our
    intentions are benign even in Europe and America, there is a
    lot of suspicion about our intentions in the rest, in the wider
    world, this is an incredible opportunity because America has
    the power to make this stop. It is an achievable goal.
        There will soon be a day when AIDS is gone. There will be a
    vaccine, it will be gone. I think when the history books are
    written, would it not be nice to see the United States right
    out in front. Like going to the Moon: We did it first, there it
    is.
        The tough thing about this realization that we have the
    power to make it stop is that it means we have actually got to
    do something about it. For the first time in history, we have
    the know-how, we have the cash, we have the life-saving drugs.
    Do we have the political will?
        Ambassador Tobias does. As we heard, he sees the fire
    raging and he has got a fire brigade. That is a great thing. He
    needs your support, fully funding of around $2.5 billion for
    the bilateral programs. Every dollar counts.
        That is why the debate over generic medications is so
    frustrating, because when there is a fire raging you do not
    fight it with bottled spring water; you turn on the hose and
    put the fire out. There are safe generic drugs saving lives
    right now at a fraction of the price of their brand-named
    twins. Here is an advert for one sitting right beside me,
    someone who is a great advertisement for those generic drugs.
    And we have to ask the experts, like Medecin Sans Frontier, one
    of the first people to involve ARV's in the treatment of AIDS.
    They are doctors. They believe it is safe.
        I think what we talk about--President Bush when he spoke
    about AIDS he was very inspiring because he spoke about
    bicycles: We will get them on bicycles and motorcycles. This is
    exactly the tone, this is what we need. But the bicycles right
    now are wrapped in red tape, is the truth, and we need to cut
    through the red tape. We need the spirit of that announcement
    of $15 billion over 5 years in the actual follow-through.
        So we have this news in the last couple of days that could
    be great news, that we are considering generics and fast-
    tracking a breakthrough on generics in 6 weeks. But this is, 6
    weeks of red tape, is very costly. That is 250,000 lives. So I
    would just caution us, this 6 weeks.
        So Americans want the biggest bang for their buck, that is
    true. They want to treat as many people as possible. Let us get
    together on that and make sure they get the biggest bang for
    their buck.
        Every dollar counts, but some dollars count for triple. By
    this I am talking about the Global Health Fund, an essential
    part of the fight and a vital partner to what the United States
    is doing. Every contribution America makes gets other countries
    to kick in more. Tony Blair says so, so does President Chirac,
    so does Paul Martin. I know because I have spoken to all these
    people recently. I make their lives miserable, too, you will be
    relieved to hear.
        But to date the United States has made one-third of the
    fund's contributions. I would urge you to maintain that
    commitment in the neighborhood of $1.2 billion for next year.
    Yes, the fund has growing pains, but the fact that it is
    growing in scale and in impact, not only on AIDS but on other
    killer diseases that worsen it like malaria and TB, is
    encouraging.
        Of course miracle drugs alone are no miracle cure. We
    cannot defeat AIDS unless we do more about the extreme poverty
    in which it spreads. Otherwise our efforts will come to naught.
    You cannot take a pill if you do not have water to swallow it,
    clean water that is. You cannot strengthen your immune system
    if there is no food in your belly. And you cannot teach kids to
    protect themselves if they do not go to school. That is why the
    Millennium Challenge and other key programs you fund through
    USAID are essential.
        More investment is needed, a lot more investment is needed.
    President Bush has asked for a lot more, over $21 billion in
    total for foreign ops in 2005. I think that is because he, like
    many of you, sees that a victory in this battle is vital to
    national security.
        Our issues, people tend to think of them as fringe, not
    central to the action here in Washington, D.C. If I can
    convince you of one thing, it is that at this time in the world
    these issues that you have gathered to talk about on this
    committee has a role to play in very central policymaking that
    will affect the way America is viewed everywhere in the world.
    It is where America meets the world, outside of commerce and
    the military.
        The Senate, in passing a bipartisan budget resolution, has
    gone a step further on these issues, and I applaud that. I
    trust the Senate will hold on to increases in the
    appropriations process. I do want to say thank you personally
    to the Senate for their leadership here and all of you sitting
    here. It is very, very, very important.
        Let me say this in closing. I know I spend a lot of time in
    this country and I am sure it is too much for your liking. But
    I also spend a lot of time in buses, truck stops, town halls,
    church halls, and I am not even running for office. But I have
    spent a lot of time in this country campaigning on these
    issues.
        You know what is amazing? Everywhere I go, people feel more
    American when you talk about these issues that affect people
    whom they have never met and who live far away. They feel more
    American. It is kind of extraordinary to me as an Irishman to
    observe this.
        I think that they are thinking big, as you always have.
    Sixty years ago there was another continent in trouble, my
    continent Europe in ruins after the Second World War. America
    liberated Europe, but not just liberated Europe; it rebuilt
    Europe. This was extraordinary. And it was not just out of the
    goodness of your heart, which it certainly was. It was very
    smart and strategic, because the money spent in the Marshall
    Plan was indeed wise money. It was a bulwark against Sovietism
    in the cold war.
        It was 1 percent of GDP over 4 years, I believe. I would
    argue that this stuff we are discussing today is a bulwark
    against the extremism of our age in the hot war. I believe
    there is an analogy.
        I believe brand USA, because all countries are brands in a
    certain sense, never shone brighter than after the Second World
    War, when a lot of people in my country and around the world
    just wanted to be American--wanted to wear your jeans, wanted
    to listen to your stereos, wanted to watch your movies. That
    was because this is an astonishing place, America.
        It cost money, that place in the world, I know, and I know
    how expensive the Marshall Plan was--point one. We are looking
    for numbers that I think are about half that to completely turn
    the world around at a time--on a positive thing, like a health
    crisis, making that a positive thing. So please bear with us.
        In turbulent times it is cheaper and smarter to make
    friends out of potential enemies than to defend yourself
    against them. A better world happens to be a safer one as well.
    I think it is a pretty good bargain.

                               PREPARED STATEMENT

        The attention of the world might sometimes be somewhere
    else, but history is watching. It is taking notes and it is
    going to hold us to account, each of us. There is so much you
    can do with your power, with your leadership, to ensure that
    America here is on the right side of history. When the story of
    these times gets written, we want to say that we did all we
    could and it was more than anyone could have imagined.
        Thank you.
        [The statement follows:]

                           Prepared Statement of Bono

        Thank you, Chairman McConnell. It is an honour to be asked to share
    my thoughts today. Let me also thank some very good friends: Senators
    Leahy, DeWine, Durbin and so many others who have shown such leadership
    on these issues.
        And such patience in dealing with a rock star who asks for a seat
    at your distinguished table, then refuses to leave or to turn down the
    music he's blasting. Frankly there are a lot of people who wish I'd
    stay in the studio--including my band.
        You let me in the door on debt relief; we've worked together on
    AIDS and the Millennium Challenge; and now I'm going to abuse your
    hospitality by hanging round and talking loudly when you really ought
    to be hearing from someone who knows better--a medical doctor like Jim
    Kim at WHO, or a treatment advocate like Zackie Achmet of South Africa,
    or a true heroine like Agnes, here, whom many of you know.
        That said, I promise to talk briefly--and politely. Though I think
    it's really brilliant to be here my testimony will be suitable for
    family audiences. Your children, your country, are safe from my
    exuberant language.
        I've just returned from your nation's first capital--Philadelphia--
    where my organisation, DATA, and an array of other groups launched a
    new effort we're calling ``The ONE Campaign.'' These organisations
    represent millions of Americans, from evangelicals to student
    activists. They came from all over the country. And they're speaking
    with one voice in the fight against AIDS and extreme poverty.
        What are they saying?
        They're saying--as I think we all agree--this is a critical moment.
        We're making progress in the fight against AIDS. Gaining speed.
    Building momentum. But only as long as we keep our foot on the gas.
    Senators, as you know, we've got a lot more road ahead.
        Our success so far should make us confident. But it can't make us
    content. We're off to a great start--but only you can make sure it's
    not a false start. If we stop at AIDS, we won't beat AIDS. We need to
    do more about the conditions--the extreme poverty--in which AIDS
    thrives.
        Now, I'm not a Pollyanna on this stuff; I've seen it work. I've
    seen it save and transform lives. So let me talk briefly about the
    results we're seeing.
        As I mentioned, I met many of you a few years back when we worked
    to cancel the debt that burdens the poorest countries. Today, 27
    countries--almost all in Africa--are investing that money in schools,
    vaccinations, and roads instead of in debt payments. In Uganda, I've
    stood with Senator Frist at a clean water well built thanks to debt
    relief. Debt money didn't go down a rathole--it went down a waterhole.
        More recently, we've all worked together on the Millennium
    Challenge. This is smart money, new aid in new ways, rewarding poor
    countries who are leading in the fight against corruption. Though it's
    only just up and running, it's already having an impact, encouraging
    countries to reform.
        The President has asked you for another $2.5 billion for 2005. I
    figure that's a little more persuasive than my asking you, so I'll just
    urge you to support him on that. DATA, the organization I helped start,
    has found that the 16 well-governed poor countries selected for MCA are
    ready to use all of that funding on sound poverty reduction plans. They
    need what only you can give them: a chance.
        All in all, then, we've made a good start. But only that. A start.
        We're not here today for a victory lap; we're here to pick up the
    pace. Because AIDS is outrunning us, Senators; it's killing 6,300
    Africans a day, infecting 8,800 more Africans a day; and the most
    incredible part is it's fully preventable, it's fully treatable.
        We actually have the power to make this stop. But the tough thing
    about that realization is that it means you've actually got to do
    something about it. For the first time in history, we have the brains,
    we have the cash, and we have the life-saving drugs. But do we have the
    political will?
        Ambassador Tobias does. As we heard, he sees the fire raging and he
    is leading a fire brigade, and that's a great thing. He needs your
    support, full funding of around $2.5 billion for bilateral programs.
        Every dollar counts. That's why the whole debate over generic
    medications is frankly frustrating. When there's a fire raging, you
    don't fight it with the finest spring water You turn on the hose and
    put the fire out. There are safe generic drugs saving lives right now
    at a fraction of the price of their brand-name twins.
        I know that Americans want to get the biggest bang for their buck:
    to treat as many people as possible. That's the whole point, right? If
    that's your goal, isn't the administration's position on generics
    untenable? Hopefully this is starting to change, we still need to hear
    the details.
        As I said, every dollar counts, and some dollars count for triple.
    I'm talking about your contributions to the Global Fund--an essential
    part of the fight and a vital partner to what the United States is
    doing. Every contribution America makes gets other countries to kick in
    more. Tony Blair says so. So does President Chirac. So does Paul
    Martin. I know because I've been making the rounds with the tin-cup in
    those countries too.
        To date, the United States has made one-third of the Fund's
    contributions--I urge you to maintain that commitment, in the
    neighbourhood of $1.2 billion for next year. Yes, the Fund has had
    growing pains, but the fact is it's growing--in scale and in impact:
    not only on AIDS but on the other killer diseases that worsen it,
    malaria and TB. Combined with bilateral, this is about $3.6 billion
    which is allowed under last year's law.
        Of course, miracle drugs alone are no miracle cure: we can't defeat
    AIDS unless we do more about the extreme poverty in which it spreads.
    Otherwise our efforts will come to naught. You can't take a pill if you
    don't have clean water to swallow it. You can't strengthen your immune
    system if there's no food in your belly. And you can't teach kids to
    protect themselves if they don't go to school.
        That's why the Millennium Challenge and other key programs you fund
    through USAID are essential. More investment is needed a lot more.
    President Bush has asked for a lot more--over $21 billion total--for
    Foreign Operations for 2005, because he, like many of you, I think,
    sees victory in this battle as vital to your national security. The
    Senate in passing a bipartisan budget resolution has gone a step
    further on these issues, and I applaud that. I trust the Senate will
    hold onto its minimum amounts and keep up the pressure for more.
        Let me say this in closing.
        Senators, I spend a lot of time in this country. Maybe too much for
    your liking. I spend a lot of time in buses. At truck stops. In town
    halls. In church halls. I do all this, and I'm not even running for
    office.
        But you know what's amazing? Everywhere I go, I see very much the
    same thing. I see the same compassion for people who live half a world
    away. I see the same concern about events beyond these borders. And,
    increasingly, I see the same conviction that we can and we must join
    together to stop the scourge of AIDS and poverty.
        Americans are thinking big. As you always have. You know, almost 60
    years ago, another continent was in danger of terminal decline--not
    Africa, but Europe. And Europe is strong today thanks in part to the
    Marshall Plan. It was great for Europe, but it was also great for
    America. Brand USA never shined brighter.
        Today we need the same audacity, imagination, and all-out
    commitment of a modern Marshall Plan. The Marshall Plan built a bulwark
    against Communism; today, for half the cost, we can build a bulwark
    against the extremism of our age.
        In turbulent times it's cheaper, and smarter, to make friends out
    of potential enemies than to defend yourself against them. A better
    world happens to be a safer one as well. That's a pretty good bargain.
        The attention of the world might sometimes be elsewhere, but
    history is watching. It's taking notes. And it's going to hold us to
    account, each of us. There is so much you can do, with your power, with
    your leadership, to ensure that America is on the right side of
    history. When the story of these times gets written, we want it to say
    that we did all we could, and it was more than anyone could have
    imagined.
        Thank you.

        Senator McConnell. Thank you very much, Bono.
        Ms. Nyamayarwo, I see that you have a piece of paper in
    front of you. Do you want to make a brief statement as well?

                     SUMMARY STATEMENT OF AGNES NYAMAYARWO

        Ms. Nyamayarwo. Thank you so much. I am happy to be in this
    house today. I want first of all to introduce myself. I am
    Agnes Nyamayarwo. I come from Uganda from an AIDS organization
    called TASO, the AIDS Support Organization in Uganda. I am a
    nurse and working as a volunteer with this organization.
        I have lived with HIV for 15 years. I want to share with
    you briefly what happened to my family with the AIDS epidemic.
    My husband died of AIDS in 1992. My youngest son died of AIDS
    at the age of 6\1/2\ because I passed the virus to him
    unknowingly. You can imagine as a parent giving a death
    sentence to a child. It is very painful.
        My other son, who was age 17, got overwhelmed by the
    problem of AIDS in the family and suffered depression and he
    disappeared from my family and up to today I have never seen
    him again, still searching for him.
        I have been very lucky. I have been on treatment,
    antiretroviral treatment. I started by taking generic drugs and
    now I am on the branded drugs from TASO, which is supported by
    the U.S. Government, and I am very grateful for that. Actually,
    I see that they work the same, because I was down and I started
    with generic drugs and they improved my life, and now that
    there are branded drugs I started taking branded drugs and they
    work exactly the same.
        Last year in July I met with President Bush and I told him
    I was in treatment and my life had improved, but my concern is
    the other people living with HIV in Uganda and in Africa who
    die every day. And every time I go back to the community, where
    we move around creating awareness about HIV/AIDS, I find so
    many people have died, so many people dying. That is very
    painful indeed.
        The President promised that he was going to give treatment
    to all people living with AIDS in Africa quickly and
    immediately. It is almost a year now. We have just got money to
    start on treatment on not even a quarter of the people in my
    organization. So it has given me hope, it has given us hope,
    all of us. But we are still asking for more.
        In my work with DATA I have been in about 10 States in
    America. It exposed me to many Americans and their response was
    excellent and they were willing to help. This has always given
    me a lot of hope, although every time I go back my people think
    I have carried medicines for them. But I tell them: I have
    hope; Americans are ready to help.
        Today I am here to request this house as you are going to
    make decisions on the programs to fund just to remember me, my
    family, and all the people living with HIV in Uganda and
    Africa, and the many orphans in Africa, and the young people
    who need the education, because the more they keep in school
    the more they delay to get infection, and the more they are
    educated the more they know about how they can avoid catching
    HIV. So good education is very, very important.
        Then we also have that problem of poverty. Even with the
    mother-to-child transmission, mothers are given the medicine to
    reduce the infection, but these mothers have to give the
    formula and they do not have the formula. They do not even have
    the money to buy it. Or if they have it, they may mix it with
    dirty water and these children end up dying of diarrhea. So
    clean water is also very, very important.
        I am still also asking you to really look at the trade with
    Africa. It is very important because one day maybe we shall be
    able to stand on our own. So please, help us fight AIDS and
    poverty in Africa.
        Thank you so much.
        Senator McConnell. Thank you very much.
        Even though this hearing is about HIV/AIDS, I do want to
    address once again, Bono, an issue that you and I are extremely
    interested in. For the record, do you support renewal of import
    sanctions against the Burmese junta, as Senator Leahy and I
    have proposed?
        Bono. I do not just support it; I applaud it as loudly as I
    can. Let me say, your leadership on this--there is no one
    leading support for Aung San Suu Kyi like you, and to have
    Senator Leahy by your side, and make sure that this is the
    support of all Americans is amazing.
        These toenail-pullers, these thugs, are also running this
    country like a business, so the place they will feel the pain
    is in business. Sanctions are crucial.
        Senator McConnell. One of my big frustrations, which I know
    you share, is that the only way sanctions are going to really
    have an impact is if they are multilateral. Is there anything
    we could do that we are not currently doing to convince the
    European Union that a tougher approach ought to be in place
    toward the generals in Rangoon?
        I had hoped that the attempted assassination of Suu Kyi
    last year might have gotten their attention, but apparently
    not. What thoughts do you have about how we get the Europeans
    fully engaged in the sanctions regime?
        Bono. I am deeply ashamed as a European of the pitiful lack
    of volume in support for her. I think Prime Minister Blair has
    been doing some good work, but we need more and we need the
    rest of Europe to pay attention. I will personally speak to
    Roman Prodi, who is the President of the European Union, about
    this and see at their next meeting if we can get a resolution.
        Senator McConnell. In your statement you indicated that
    America must have the political will to combat HIV/AIDS. How do
    you cultivate political will in countries that do not respect
    the basic rights of their citizens? In Burma, for example,
    where, instead of stopping HIV/AIDS and poverty, the junta may
    actually be spreading the disease and misery through rape,
    forced labor, and illicit narcotics?
        Bono. I think what is extraordinary about the Millennium
    Challenge Account, which I was talking about earlier, is that
    it provides assistance for countries who are doing the right
    thing by their people and tackling corruption, etcetera. I
    think with Burma we have a particular evil to deal with that
    needs a different and stronger response.
        So I would suggest sanctions. I think they should be
    punitive and I think those people should feel our mettle. They
    cannot walk over this woman, who is a true hero. In a way, with
    the Millennium Challenge we are trying to encourage the kind of
    leadership she represents. This is the future in the end for
    all of the issues that we are talking about today, is
    leadership. Leadership is everything.
        Even with AIDS, we talk about A, B, C. What is important is
    a balanced approach. But you know, the reason why abstinence
    and these kinds of programs, preventive programs, worked in
    Uganda was because of another letter ``L'', ``L'' for
    leadership and ``L'' for local, understanding the local. To me,
    Aung San Suu Kyi is great leadership.
        Senator McConnell. Ms. Nyamayarwo, in Cambodia sex workers
    refused to participate in a Gates Foundation-funded anti-HIV
    drug test because of concerns with potential long-term health
    impacts. How do we ensure that impacted groups, such as
    Cambodian sex workers, have the will themselves to participate
    in education and treatment programs?
        Ms. Nyamayarwo. Back in the country where I come from, they
    have been asking us about the sustainability of this treatment
    and that was--maybe that may have been the same reason why in
    Cambodia these people are not going in for this treatment. But
    as a person living with HIV I told them that for me if I live
    another 5 years for my children that is very important indeed,
    because they will have the guidance from me and the parental
    care.
        So I think maybe we need to, Uganda needs to go and share
    with those people what is happening in Uganda and what we
    people living with HIV in Uganda feel about this treatment.
        Senator McConnell. Thank you.
        Senator Leahy.
        Senator Leahy. Thank you, Mr. Chairman.
        Bono, you and I have been friends for many years. I think
    we also, on this Appropriations Committee, we also sit on the
    question of money for terrorism, and of course if somebody
    comes up and says this is for terrorism we can find enormous
    amounts of money.
        But I was struck by something you said in your statement,
    and I wrote it down: A better world is also a safer world. That
    really goes to the bottom line on everything you are trying to
    do. You have seen probably more than anybody this effect of
    AIDS and what is being done to combat it. You have traveled
    everywhere.
        You heard me ask Mr. Tobias about the potential of these
    countries to absorb more funds. Can they absorb more funds? And
    if they can, what would they spend it on? What should they
    spend it on?
        Bono. You know, we use this word ``absorptive capacity'' a
    lot, but the truth is there is a distributive capacity problem.
    I think what I object to sometimes was when it is characterized
    as, oh, Africa or whatever country in Africa or elsewhere, they
    just could not take the money, so it is kind of their fault. I
    object to that.
        I think what we should say is: Yes, there are difficulties
    spending the money effectively and efficiently, but we have to
    spend on building the capacity. That is what you do in an
    emergency, in a war. You have to build the infrastructure. And
    this is a war against AIDS.
        What is great about this war is we really are going to win.
    The only opposition is our own indifference.
        Senator Leahy. But you also have a chicken-egg sort of
    thing.
        Bono. Yes.
        Senator Leahy. You say building the capacity, but that can
    be done. There are models for doing that in parts of the world,
    bringing in everything from the roads to the training. We are
    not talking about building Johns Hopkins in every village that
    we see.
        Bono. No.
        Senator Leahy. But the basics are so absent. And I agree
    with you, we could be doing more.
        We are somewhat limited in time and I know you have to
    leave. An area that we are aware of, we do not talk enough
    about: What about AIDS orphans? What do we do to help the AIDS
    orphans?
        Bono. There is your chaos right there. Again, maybe
    sometimes it is obvious. It sounds grating to always describe,
    to describe the war against poverty as being connected to the
    war against terror, but I did not say that; Secretary of State
    Colin Powell said that. And it is very wise when a military man
    starts talking like that.
        There is a connection. We have a situation now--and I have
    seen it first-hand myself--where you have children bringing up
    children. And we should see Africa as not the front line in the
    war against terror, but it might be one day. You take a country
    like Nigeria, Nigeria is an oil-wealthy nation. It has 120
    million people. It is the whole of west Africa, essentially. In
    northern Nigeria every week a new village falls under sharia
    law and they are then--we have the madrassas, we have the
    schools that teach them to hate us.
        So these groups, they take advantage of the chaos, though
    in northern Nigeria the chaos is not as great as it is in
    southern, in some of the southern African countries. It is an
    example, the AIDS orphans is an example of the chaos waiting
    for order to be brought to it, either by them or by us. I am
    arguing that it is cheaper to prevent the fires than to put
    them out later.
        Senator Leahy. Oh, I agree with you.
        Mrs. Nyamayarwo, like you my wife was trained as a nurse,
    and I appreciate our conversations we had before this hearing.
    I do not know if I mentioned to you, we traveled to Uganda back
    in 1990. We visited a TASO center. We met HIV-positive
    volunteers there. In fact, most of the volunteers were HIV-
    positive. We were so impressed by their courage, their
    selflessness, and the fact they were helping others even though
    they were living under a death sentence.
        In Uganda, if you could just take that one country, what
    has worked best in combatting AIDS? What could you use the
    most?
        Ms. Nyamayarwo. In Uganda it is not one thing, but first we
    have the good leadership of our president who has been open
    about HIV and AIDS and accepted to support us. The government
    has involved people living with HIV, and people living with HIV
    have got the heart to save other people's lives, like the
    volunteers in TASO. Myself, after losing my child to AIDS, I
    felt I should go out with those volunteers and talk to people,
    talk to parents, so that they do not go through what I went
    through, because it was very difficult for me, to try to save
    lives, go to schools and try to save the youth, to know more
    about HIV/AIDS.
        I think the education has been very, very important on this
    issue. That is why I feel that education is real great. Then
    there is one problem which still stands, is the poverty. The
    orphans remain vulnerable. It is going to be like a circle, re-
    infection, because they do not have the support. Debt
    cancellation helps children to go to school just through
    primary. They cannot go to secondary schools, they cannot go to
    technical institutions. If all that is in place, I think we
    shall be able to really fight AIDS in Uganda.
        Senator McConnell. Thanks.
        Senator Leahy. Thank you very much.
        Senator McConnell. Because of the lateness of the hour, we
    are going to do one round of questioning and we will have to
    submit the others.
        Senator DeWine.
        Senator DeWine. Mr. Chairman, thank you very much.
        Mrs. Nyamayarwo, thank you very much for your very
    compelling testimony. We just very, very much appreciate it.
        Bono, thank you very much for being with us again. Again,
    very compelling testimony as well. You have really been at the
    forefront. If you look at the issues that matter, the
    Millennium Challenge, you have advocated for that. Debt relief,
    that matters so very much. AIDS. All three of those issues, you
    have been there. You have been a leader.
        Your testimony today I think has been so compelling because
    you have talked about AIDS from really a holistic point of
    view, that we cannot just look at AIDS separately; we have to
    look at it from the point of poverty, we have to look at it
    from the point of view of the whole medical system when we go
    into these countries that is connected to everything else.
        You truly understand this issue. You have done such a good
    job, I think, of focusing the public's attention on AIDS. I
    would just ask you, as you have gone around, not just in the
    United States, but in other countries, what works and what does
    not work when you are either addressing people in towns in the
    United States or when you are dealing with leaders in other
    countries? What is compelling and what is not compelling when
    you talk about this issue? What works and what does not work?
    And how are we doing with other countries, too?
        Bono. I think we need both bilateral and multilateral, is
    the truth. But we need them, we need everyone talking together.
    What does not work is when we play politics with people's
    lives. When everyone can get--when there is a parity of pain
    and sort of parity of applause--I think it is important there
    are people in other countries who are doing a lot more as a
    percentage of their GDP than the United States, and they get
    very upset when, just because the United States is giving more
    money--they say, well, hold on a second; we are spending a lot
    more as a percentage. So that does not work.
        I think some humility in saying we have different ways of
    doing things, but we want to work together and we are not
    trying to score points, that works. I think this is an
    opportunity to unite people in a way that there is very little
    else out there to. I think you have--what else are President
    Chirac, President Bush, and President Blair going to agree on?
        This is the one thing they can all hold hands on, and I
    think that might be a good symbol right now in the world. Maybe
    not holding hands, but--and I think seeing the historic side of
    things works. To tell--I know it is an absurd, an Irish rock
    star to do this, but to explain that when the dust settles and
    when the history books have been written, this entire era will
    be remembered for probably three things: the Internet, the war
    against terror, and what we did or did not do about this AIDS
    virus and what it did, what it did.
        It will be astonishing, like your children, like me,
    reading about the bubonic plague in the Middle Ages, which took
    a third of Europe. A third of Europe died from the bubonic
    plague, the Black Death. Now, imagine if China, say, had
    treatment at that time that could have saved those lives, but
    did not get it out there because, ah, it was a little difficult
    and it was expensive. How would we be reading about China now?
    That is the position we are in. That is where Europe and
    America is right now, and I think it is a great opportunity.
        Senator DeWine. Thank you very much.
        Thank you, Mr. Chairman.
        Senator McConnell. Thank you, Senator DeWine.
        Senator Durbin, you are it. After you finish the hearing is
    completed except for whatever questions that we may want to
    submit. So if you would proceed.
        Senator Durbin. That is a lot of pressure, Mr. Chairman.
        Senator McConnell. See how short you can be.
        Senator Durbin. Well, I thank you very much.
        I want to thank our witnesses for your patience in waiting
    for us to vote and come back and do other things in an
    extremely important session.
        Thank you for your leadership. I have told you, Bono, that
    you are a consummate pest on Capitol Hill and please keep up
    your good work, pestering us to be mindful of the rest of the
    world and what we are facing.
        It is no, I think, revelation that over the past several
    weeks we in America have been embarrassed and ashamed by some
    of the disclosures in the world press. The President has said
    and we have repeated that what happened in that prison is not
    indicative of American values. What I have found interesting in
    your tour of Wheaton College and other places in my State was
    that time and again you have said that you find us to be a good
    and caring people, and as a good and caring people there are
    things that we can do to prove that premise.
        I find the same thing when it comes to this commitment,
    when it comes to global AIDS. You really call on us to do our
    best and I think we should and we must.
        I would like to ask you specifically on this Global Fund
    issue. I am very concerned. If we do not increase the $200
    million commitment in this budget to a much higher level, I am
    fearful that ongoing projects may be cut back and new ones will
    not even be considered. What has been your impression of the
    work of Global Fund and if they had to retrench and fall back
    the impact it would have on this battle?
        Bono. There are some difficulties with the Global Fund
    right now, growing pains. I might suggest that some of those
    difficulties come out of an environment and a mood where they
    just do not want to make a mistake, because they know if they
    do make a mistake there is a lot at stake. I actually, I can
    understand their caution. They just do not want to screw up,
    and I think as a result things have moved a little slowly
    there.
        However, they have in Richard Feachem a really great
    leader. They have in their structure of the organization a
    really great design. And I think in a funny way it is a very
    American design. It is McKinsey Management. They have a 4
    percent overhead. They have auditors in place, PriceWaterhouse,
    Stokes Kennedy Crowell, all these people. Where the money is
    being spent on the ground, they have cut deals with them to
    make sure that these things are being effectively operated.
        Is there enough money out the door at the moment? No. But
    remember, they cannot--without having the cash in their bank,
    they cannot even have the discussion with the groups on the
    ground.
        The most important message to get out to Americans about
    the Global Health Fund is it is not a new bureaucracy. They are
    just supplying people in the regions who have effective
    programs with more money. They are scaling them up. It is
    really important. Some people do not understand that.
        So I think they are critical, they are extremely critical,
    because President Bush's brilliant AIDS initiative only applies
    to 16 countries. So this is the other side. This is the rest of
    the world. It has to work. It will work.
        I tried to say to them, you know, you are going to make
    mistakes; it is wonderful that you are so careful, but actually
    you are going to make mistakes; relax just a little bit about
    that.
        Senator Durbin. If I might ask you one last question. I do
    thank the committee for their patience here. People here in the
    audience earlier were removed with signs relative to drug
    companies and pharmaceutical companies and how much they are
    doing. I have heard you say something which is kind of self-
    confessional about your own attitude in dealing and working
    with pharmaceutical companies and drug companies. Tell us now
    what you think is the appropriate approach to make certain that
    as quickly as possible affordable medications are in the hands
    of the poorest people in the world?
        Bono. Okay. Well, let me just say I fully, fully understand
    the frustration of my friends behind me who have their hopes
    raised when they hear of a $15 billion AIDS initiative and then
    have them dashed when they hear that none of the money is going
    to go to the cheapest drugs.
        What I would say to this issue is we need the
    pharmaceutical companies, is the truth. We need their brains,
    we need their know-how, we need their scientists. But there is
    an opportunity for them here to compete that they have not as
    yet made. They could really be heroes of the hour here. We need
    them.
        I want them involved, and I am not going to ask a business
    to behave like a philanthropy. I do not think we should do
    that. But make their profits. Sure, make their profits--just
    not on the greatest health crisis in 600 years, on the backs of
    poor people. I think they do a great business. I am happy for
    them to make profit on me, make profit on my friends, make
    profit on everyone in this room, in this country, but not on
    what is going on in the everyday lives of people like Agnes
    here.
        So I would say these drugs are a great advertisement for
    America. I told President Bush: Paint them red, white, and
    blue, you know, whatever. Get them out there. They are the best
    of the West.
        So that is my own position and I hope that is clear.
        Senator Durbin. Thank you, Agnes. Thank you, Bono.
        Thank you, Mr. Chairman.
        Senator McConnell. Thank you, Senator Durbin.
        Thank you, Bono. Thank you, Ms. Nyamayarwo. It is nice of
    you to be here and to tell your story. It was very helpful.

                         ADDITIONAL COMMITTEE QUESTIONS

        There will be some additional questions which will be
    submitted for your response in the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                 Questions Submitted by Senator Mitch McConnell
        Question. Voices for Humanity (VFH), a Kentucky-based non-profit,
    is slated to receive funding from USAID for a pilot project on HIV/AIDS
    education in Nigeria using cutting edge information technology. I
    strongly encourage you to follow VFH's efforts in Nigeria.
        What importance do you place in using cutting edge information
    technology to educate and inform illiterate or semi-literate
    populations?
        Answer. The unprecedented goals set by the President's Emergency
    Plan for AIDS Relief--to provide treatment to 2 million persons living
    with HIV, to prevent 7 million new HIV infections, and to provide care
    to 10 million people infected and affected by HIV/AIDS, including
    orphans and vulnerable children, will require that we actively seek new
    approaches to addressing HIV/AIDS, including through the use of cutting
    edge information technologies to reach as many people as possible.
        The Emergency Plan not only brings hope through the commitment of
    extraordinary resources, but, as important, the opportunity to find new
    and more effective ways to fight the HIV/AIDS pandemic--our approach
    will not be ``business as usual.'' We are committed to implementing
    programs that are responsive to local needs--countries and communities
    are at different stages of HIV/AIDS response and have unique drivers of
    HIV, distinctive social and cultural patterns, and different political
    and economic conditions. Effective interventions must be informed by
    local circumstances and coordinated with local efforts.
        The Office of the U.S. Global AIDS Coordinator has met with
    representatives of Voices for Humanity to be briefed on their project
    in Nigeria and will be meeting with them again as the project is
    implemented.
        Question. Faith-based organizations, such as Lott Carey
    International (LCI), have decades of experience working overseas and
    have cultivated broad contacts among indigenous organizations and
    groups.
        A. What are your goals and objective for utilizing faith-based
    organizations in combating HIV/AIDS?
        B. Do you have a recruitment plan or strategy to increase
    participation of these groups?
        C. How many faith-based organizations currently receive funding for
    HIV/AIDS activities--from USAID and your office?
        Faith-based and other organizations interested in combating HIV/
    AIDS have contacted the Subcommittee to complain that the process for
    securing funding under this initiative is NOT user friendly.
        D. Are you aware of these difficulties, and what steps can you take
    to ensure that the funding process is less bureaucratically cumbersome?
        Answer. In implementing the President's Emergency Plan for AIDS
    Relief, we have sought to fund a broad range of innovative new
    partners, including faith-based and community-based organizations, to
    bring not only expanded capacity but also innovative new thinking to
    our efforts. Faith-based organizations not only bring expanded capacity
    and innovative new thinking to our efforts, but they are also among the
    first responders to the international HIV/AIDS pandemic, delivering
    much needed care and support for fellow human beings in need. Their
    reach, authority, and legitimacy--like other organizations--identifies
    them as crucial partners in the fight against HIV/AIDS, and we are
    committed to encouraging and strengthening such partners.
        Our intent in the initial, first round of grants under the
    Emergency Plan has been to move as quickly as possible to bring
    immediate relief to those who are suffering the devastation of HIV/
    AIDS. The Office of the Global AIDS Coordinator chose programs in the
    first round because they have existing operations among the focus
    countries of the Emergency Plan, have a proven track record, and have
    the capacity to rapidly scale up their operations and begin having an
    immediate impact.
        By initially concentrating on scaling up existing programs that
    have proven experience and measurable track records, an additional
    175,000 people living with HIV/AIDS in the 14 initial focus countries
    will begin to receive anti-retroviral treatment. Prevention through
    abstinence messages will reach about 500,000 additional young people,
    and assistance in the care of about 60,000 additional orphans will soon
    commence in those same countries.
        As of March 30, 2004, we have partnered or sub-partnered with some
    45 faith-based organizations. Grants to these organizations total
    $57,528,298 thus far, and we are committed to expanding our work with
    both new and current faith-based organizations as Emergency Plan
    implementation progresses.
        We recognize that the windows for applications in our initial
    rounds of funding have been relatively quick, and anticipate that
    future rounds will allow more time for applicants to prepare and submit
    funding proposals.
        Question. Repressive regimes that commit widespread human rights--
    such as the Burmese junta's policies of rape, forced labor, and use of
    child soldiers--have a direct and substantial impact on the general
    health of the population.
        A. What programs or projects can the Coordinator's office support
    to better understand--and mitigate--the impact widespread human rights
    violations have on populations, including the failure to prioritize
    HIV/AIDS prevention and treatment in places such as Burma, China and
    Russia?
        B. How can ``political will'' be cultivated in repressive countries
    to address the HIV/AIDS pandemic, or to ensure the treatment is
    provided on an equitable basis and not only to supporters of a regime,
    for example?
        Answer. The Emergency Plan for AIDS Relief Emergency Plan is the
    largest commitment ever by a single nation toward an international
    health care initiative. The vision of the President's Plan embraces a
    multifaceted global approach to combating the HIV/AIDS pandemic. Within
    this global framework, leadership is a fundamental lever to ensure that
    governments respect human rights and appropriately prioritize HIV/AIDS
    prevention, treatment, and care.
        The mission of the U.S. Office of the Global AIDS Coordinator is to
    work with leaders throughout the world to combat HIV/AIDS, promoting
    integrated prevention, treatment, and care interventions. While we are
    proceeding with an urgent focus on 15 countries that are among the most
    afflicted nations of the world, we continue to pursue on going
    bilateral programs in more than 100 countries, including Burma, China,
    and Russia. Our Five-Year Strategy for the Emergency Plan, released in
    February, articulates our goals, including a commitment to encourage
    bold leadership nationally at every level to fight HIV/AIDS.
        Under the Emergency Plan, USAID's fiscal year 2004 budget for its
    South East Asia Regional HIV/AIDS programs includes an additional $1
    million for programs in Burma, primarily in Shan and Karen States,
    which border China and Thailand. We are committed to ensuring that our
    assistance is consistent with our primary objectives of supporting
    democracy and improved human rights in Burma. No assistance is being
    provided directly to the regime. Our support is channeled though
    established international non-governmental organizations, such as
    Medicins Sans Frontiers, renowned for their resistance to government
    interference. In conjunction with the President's Plan, HHS recently
    launched its Global AIDS Program (GAP) in China, the offices of which
    HHS Secretary Tommy G. Thompson helped inaugurate in October 2003. In
    an unmistakable demonstration of leadership, U.S. Ambassador to China
    Clark Randt led the Embassy delegation and attended a ceremony at the
    rural village with the first recorded case of AIDS in China. In March
    1998, the United States and Russia began collaborating to control the
    spread of HIV and other sexually transmitted diseases. Since then, the
    United States and Russia have steadily advanced joint programs for HIV/
    AIDS prevention and capacity building. At their bilateral summit
    meeting in September 2003, Presidents Bush and Putin committed to
    reinforce this joint cooperation and coordination. At the just held G-8
    Summit in Sea Island, they reaffirmed the U.S.-Russian HIV/AIDS
    Cooperation initiative with focus on: prevention, treatment, and care;
    surveillance and epidemiology; basic and applied research, including
    vaccine development; bilateral policy coordination in Eurasia and with
    the Global Fund for AIDS, Tuberculosis, and Malaria; and involving
    senior officials in support of public-private partnerships to combat
    AIDS. Such leadership at the highest levels underscores the President's
    commitment to ensure that all governments pursue appropriate national
    strategies to confront the HIV/AIDS pandemic as the global health
    emergency it is.
        Regarding political will, as noted above, the Emergency Plan places
    a high value on leadership to persuade all governments to address the
    HIV/AIDS pandemic and to ensure that HIV/AIDS services are provided on
    an equitable basis to all comers based on clinical eligibility,
    particularly with repressive government. We are committed to encourage
    our partners, including multilateral organizations and other host
    governments, to coordinate at all levels to strengthen response
    efforts, to embrace best practices, to adhere to principles of sound
    management, and to harmonize monitoring and evaluation efforts to
    ensure the most effective and efficient use of resources.
        In the global battle against HIV/AIDS, it is imperative that the
    many actors coordinate their efforts and make maximum use of increasing
    but still limited resources. To this end, in April, the United States,
    through the Office of the Global AIDS Coordinator, was instrumental in
    achieving donor government approval for a set of principles dubbed the
    ``Three Ones'' by UNAIDS. These basic principles, aimed at coordinating
    national responses to HIV/AIDS and applicable to all stakeholders
    involved in country-level HIV/AIDS, are: one agreed HIV/AIDS Action
    Framework that provides the basis for coordinating the work of all
    partners; one National AIDS Coordinating Authority, with a broad based
    multi-sector mandate; and one agreed country level monitoring and
    evaluation system.
        The ``Three Ones'' Principles provide a constructive framework for
    coordination while permitting individual donors to fulfill their own
    program goals and mandates and disburse money to partners in their own
    ways, without having any one government or organization claim exclusive
    ownership of the coordinating authority. For the Emergency Plan, our
    focus worldwide is anchored in care, treatment, and prevention
    available to all comers based on clinical eligibility.
        Question. On March 9, 2004, Director of Central Intelligence George
    Tenet testified that HIV/AIDS continues to endanger social and
    political stability, and warned that the virus is gaining a foothold in
    the Middle East and North Africa, ``where governments may be lulled
    into overconfidence by the protective effects of social and cultural
    conservatism''.
        Do you agree with the Tenet's assessment that HIV/AIDS is gaining a
    foothold in the Middle East and North Africa?
        Answer. As it has around the globe, AIDS is certainly gaining a
    foothold in the region. Although the Middle East as a region has one of
    the lowest rates of HIV/AIDS infection (an estimated 0.3 percent) of
    its adult population, even this rate is higher than East Asia and the
    Pacific region, and by UNAIDS' estimates the Middle East and Near Asia
    has the second-highest rate of increase of HIV after the former Soviet
    Union and Eastern Europe. While not a health and social crisis
    presently, HIV/AIDS is a growing and potentially serious problem in the
    region.
        Drug use is on the rise in the Middle East, and in some countries
    such as Bahrain and Iran, injecting drug use is the primary cause of
    HIV infection. Prevailing social attitudes, cultural norms and
    religious tradition limit discussion of premarital sex, homosexuality,
    and adultery, all sexual behaviors that contribute to the spread of
    HIV/AIDS. Civil society, which in many other regions actively combats
    the disease, has not yet taken up the HIV/AIDS problem in the region.
    Unsafe medical practices are also a mode of HIV/AIDS transmission in
    countries such as Algeria and Iraq.
        The underlying vulnerability of the region, therefore, is
    significant, especially given rapidly changing social norms in many
    countries and exposure to high-risk behaviors for HIV/AIDS
    transmission. Poverty and pronounced gender inequality in the region
    are also drivers of the epidemic.
        While not calling for large-scale interventions or program
    investments, the HIV/AIDS situation in the region needs to be closely
    monitored. Middle Eastern and North African governments need to be
    urged to assess the vulnerability of their own countries and respond
    appropriately. Leadership by religious and political leaders at all
    levels at this early stage of the epidemic is the most effective means
    to ensure that its potential destructiveness is not realized.
        Question. AIDS orphans generally do not have access to education in
    Africa, which often requires the payment of a school fee.
        Do school fees create obstacles to stemming the spread of the
    disease by excluding vulnerable segments of the population to both the
    traditional ABC's and ``Abstain, Be Faithful, use Condoms''?
        Answer. Many children in Africa, particularly those impacted by
    HIV/AIDS, are unable to attend school because their families do not
    have the resources to pay school fees. This is particularly an issue
    for children orphaned due to HIV/AIDS. As part of a comprehensive
    assistance package for children affected by AIDS, school fees are
    sometimes included. However, it is important to note that school fees
    are often only one of several barriers to accessing education, and the
    right intervention can only be determined at the local level.
        Basic education is the linchpin for success in many of the U.S.
    Government's development activities, including family planning, child
    health and HIV/AIDS. In order to be successful in the fight against
    HIV/AIDS, it is essential that we wrap all of our development programs
    around HIV/AIDS programs. We have been working around the world to
    integrate AIDS prevention messages into all of the other sectors,
    including education.
        Question. Given Rotary International's superb work in combating
    polio internationally, do you have any plans to use Rotary--and its
    networks--to tackle HIV/AIDS, malaria or TB issues?
        Answer. In implementing the President's Emergency Plan for AIDS
    Relief, we have sought to fund a broad range of innovative new partners
    to bring not only expanded capacity but also innovative new thinking to
    our efforts. We would welcome the opportunity to consider partnering
    with Rotary International in our efforts, especially in countries such
    as Kenya with strong local clubs. Health and Human Services Secretary
    Tommy G. Thompson traveled with the Chairman of the Rotary
    International Foundation, Jim Lacy, to India, Pakistan and Afghanistan
    in April 2004, and encouraged him to fund ways for the Foundation and
    individual Rotary chapters to engage with the President's Emergency
    Plan.
        Question. The 2002-2003 outbreak of SARS in Asia highlighted
    deficiencies in mounting a concerted international response to a
    rapidly spreading disease. In a recent GAO report, delays in the
    initial response were attributed to China's reluctance to share
    information on SARS or to invite specialists to investigate the
    outbreak in a timely manner.
        A. With respect to HIV/AIDS, are there particular countries that
    are less than willing to provide information or access to international
    medical specialists to help stem the spread of the disease?
        B. Given that SARS underscored weaknesses in many Asian
    governments' disease surveillance systems and public health
    capacities--to say nothing of communications systems and effective
    leadership--how confident should we be that these same governments are
    capable of monitoring HIV/AIDS?
        Answer. In Asia, as with other regions of the developing world,
    there has been a perceived reluctance on the part of some countries to
    share specific information, including numbers of HIV/AIDS cases, issues
    relating to safe blood supplies, and other information relating to the
    treatment and care of HIV/AIDS patients. There are a number of
    political, cultural, economic, and security reasons that influence some
    East and Southeast Asian countries to withhold valuable information
    during health and environmental crises and fail to seek appropriate
    outside assistance. In recent years, the world has increasingly
    acknowledged the dire threat that HIV/AIDS poses, not only as a health
    crisis, but also as a threat to economic growth, an overwhelming burden
    on health care infrastructure, and the potential for undermining
    national stability. Recently, there have been positive developments in
    Asia demonstrating a new level of political will to meet the challenges
    imposed by the pandemic. In addition, the inadequate response to the
    SARS epidemic served as an important lesson, particularly for China, on
    the consequences of inaction during a health crisis. Since the Severe
    Acute Respiratory Syndrome (SARS) emergency, China has significantly
    strengthened its political will to openly address the HIV/AIDS
    pandemic. China has formed the State Council Working Group on HIV/AIDS,
    which includes 21 ministries and has increasingly sought information on
    the most effective way to respond to HIV/AIDS, including dialogue on
    technical assistance to support the health care sector and health
    infrastructure.
        With regard to monitoring for HIV/AIDS, along with an increased
    level of political will to effectively address HIV/AIDS, many Asian
    countries now recognize the importance of significantly improving data
    quality. For example, in China, the Global AIDS Program of the U.S.
    Department of Health and Human Services has a surveillance component as
    part of its technical assistance project in China. This will help the
    country develop systems to monitor rates of infection and the impact of
    prevention programs. The Chinese government is supportive of this type
    of technical assistance, and continues to work with donor countries and
    nongovernmental organizations to develop more effective strategies in
    the fight against HIV/AIDS.
        Question. What weight do you put on efforts to combat malaria--
    which kills over 1 million people a year--and what is the role of your
    office in anti-malarial efforts of the U.S. Government?
        Answer. As you suggest, opportunistic infections, such as
    tuberculosis (TB) and malaria, play a fundamental role in the overall
    health of HIV infected individuals. Malaria is the most common life-
    threatening infection in the world. It is endemic in more than 90
    countries, and a child dies every 30 seconds from it, mostly in Africa.
    Causing more than one million deaths and 500 million infections
    annually, malaria impedes economic development in Africa, Asia, and the
    Americas. Because of the annual loss of economic growth caused by
    malaria, gross domestic product in endemic African countries is up to
    20 percent lower than it would have been if there were no malaria in
    the last 15 years.
        The Emergency Plan for AIDS Relief, will coordinate and integrate
    anti-malarial efforts into HIV/AIDS prevention, care and treatment.
    This is especially critical in the context of providing HIV care to
    pregnant women. Moreover, the Office of the U.S. Global AIDS
    Coordinator is committed to coordinating with the global anti-malarial
    activities of both the U.S. Agency for International Development and
    the U.S. Department of Health and Human Services.
                                     ______

                Questions Submitted by Senator Patrick J. Leahy

        Question. Do you agree that any faith-based organization that
    receives U.S. funds, if it provides information about condoms the
    information must be ``medically accurate and include the public health
    benefits and failure rates of such use?'' Do grant agreements with
    faith-based groups require them to adhere to this requirement, as
    Senator Frist and I recommended in a colloquy on the Senate floor? How
    do you plan to monitor adherence to the law?
        I am told that funding for USAID's commodity fund to purchase
    condoms has remained stagnant for several years, despite the steady
    increase in HIV infections. Do you plan to spend more on condoms in
    fiscal year 2005 than last year, or less?
        Answer. In the Acquisition and Assistance Policy Directive dated
    February 26, 2004, the U.S. Agency for International Development
    mandates that information provided by any organization receiving
    funding--including faith-based groups--must be medically accurate.
    Specifically, the following wording is now included as a standard
    provision of all new agreements, as well as older agreements that add
    new funding:

        ``Information provided about the use of condoms as part of projects
    or activities that are funded under this agreement shall be medically
    accurate and shall include the public health benefits and failure rates
    of such use.''

        Organizations not in compliance could be considered in violation of
    the terms of their agreement.
        The Commodity Fund was established in fiscal year 2002 to remove
    financial constraints to the availability of condoms for missions who
    wish to make them available as part of their AIDS prevention programs.
    The amount allocated for this purpose increased in 2003, and then
    remained constant in 2004. Funding decisions have not yet been made for
    fiscal year 2005, but the importance of this resource is acknowledged.
    Total condom shipments--paid by central and field resources--have
    increased significantly from 233 million units in calendar year 2002 to
    550 million units expected by final shipment in 2004.
        Question. The Administration declined to apply the Mexico City
    Policy to HIV/AIDS funds, but there is still confusion in the field
    about this. Can you clarify for U.S. officials and foreign NGOs that
    there is no legal impediment to supporting a foreign NGO for AIDS
    prevention or treatment efforts, even if that organization would be
    barred under Mexico City from receiving family planning funds?
        Answer. As you note, the Mexico City Policy applies only to
    assistance for family planning activities by foreign non-governmental
    organizations, not to assistance for HIV/AIDS funding or other health
    activities that do not involve assistance for family planning. The
    President's extension last year of the Mexico City Policy to State
    Department programs expressly did not apply to HIV/AIDS assistance. Any
    group, subject to other relevant provisions of U.S. law, will be
    eligible to apply for HIV/AIDS funding under the President's Emergency
    Plan.
        Question. The Statement of Managers accompanying the Fiscal Year
    2004 Foreign Operations Act requires you to report back to us by April
    1 (60 days after enactment) on how much the Administration will spend
    this year on AIDS prevention activities and what amount of that will go
    towards ``abstinence until marriage'' programs. As far as I know, the
    report has not been submitted, or am I mistaken? When will we get it?
        A provision in the United States Leadership Against HIV/AIDS,
    Tuberculosis and Malaria Act of 2003 requires that at least one-third
    of all global HIV/AIDS prevention funds be set aside for ``abstinence-
    until-marriage'' programs. When Senator Feinstein offered an amendment
    to the Fiscal Year 2004 Foreign Operations Appropriations bill to
    clarify the congressional intent of the provision, you wrote a letter
    to Senator McConnell that was read on the Senate floor expressing
    opposition on the grounds that it would have restricted the
    administration's flexibility and undermined your ability to implement
    the full variety of abstinence until marriage approaches.
        How exactly do you define an ``abstinence-until-marriage'' program?
    Was this definition available during debate on the Fiscal Year 2004
    Foreign Operations Appropriations bill? If not, why were you so sure
    that Senator Feinstein's amendment would have undermined your ability
    to fund the full variety of abstinence until marriage approaches?
        If a program is successful in leading to increased abstinence with
    a comprehensive message that places a priority, rather than exclusive,
    emphasis on abstinence, would it be eligible for funds under the one-
    third earmark?
        Based on your experience, is it appropriate to devote one-third of
    prevention funds to abstinence until marriage programs? If so, what
    empirical evidence do you base that on?
        Answer. First, the Office of the U.S. Global AIDS Coordinator
    apologizes for the delay in submitting the report in question to
    Congress. The Office is working on completing the report and submitting
    it to Congress within the next several weeks.
        Under the Emergency Plan for AIDS Relief, the ``ABC'' model
    (Abstinence, Be Faithful, and, when appropriate, correctly and
    consistently use of Condoms) will support behavior change for the
    prevention of the spread of HIV. The Emergency Plan will balance and
    target the application of A, B, and C interventions according to the
    needs and specific circumstances of different populations and
    individuals.
        The success of the ABC model in countries such as Uganda, Zambia,
    and Ethiopia, among others, has demonstrated that promoting behavior
    change and healthy lifestyles, including abstinence and delayed sexual
    initiation, faithfulness and fidelity in marriage and other committed
    relationships, reduction in the number of partners, consistent and
    correct use of condoms, and avoidance of substance abuse, has been and
    can be successful in preventing the spread of HIV/AIDS.
        Abstinence-until-marriage programs, as part of a comprehensive
    prevention approach, should appeal to the specific needs of specific
    groups. For example, in many countries the average age of marriage is
    17 or 18. Once married, a message underlining the importance of
    faithfulness is more appropriate than an abstinence-only approach that
    would be appropriate for unmarried, single, school-age youth. Reliable
    data exists to show that youth can and do respond to abstinence-until-
    marriage messages and programs, and that delaying sexual activity and
    being faithful to one partner is not only protective for young people
    but can also have widespread impact on the growth of the HIV/AIDS
    pandemic.
        As such, under the Emergency Plan for AIDS Relief, abstinence-
    until-marriage programs will include two goals:
      --Encouraging individuals to be abstinent from sexual activity
            outside of marriage as a way to be protected from exposure to
            HIV and other sexually transmitted infections (STIs). These
            activities or programs will promote the following:
        --Importance of abstinence in reducing HIV transmission among
                unmarried individuals;
        --Decision of unmarried individuals to delay sexual activity until
                marriage;
        --Development of skills in unmarried individuals for practicing
                abstinence; and
        --Adoption of social and community norms that support delaying sex
                until marriage and that denounce forced sexual activity
                among unmarried individuals.
      --Encouraging individuals to practice fidelity in sexual
            relationships, including marriage, as a way to reduce risk of
            exposure to HIV. These activities or programs will promote the
            following:
        --Importance of faithfulness in reducing the transmission of HIV
                among individuals in long-term sexual partnerships,
                including marriage;
        --Elimination of casual sexual partnerships;
        --Development of skills for sustaining marital fidelity, including
                the ability to voluntarily seek counseling and testing to
                know the serostatus of persons in relationship;
        --Endorsement of social and community norms supportive of
                refraining from sex outside of marriage, partner reduction,
                and marital fidelity using strategies that respect and
                respond to local customs and norms; and,
        --Diffusion of social and community norms that denounce forced
                sexual activity in marriage or long-term partnerships.
        Question. The President's Emergency Global AIDS Plan does not
    ensure that additional funds will be available for developing safe and
    effective microbicides. The plan appears to leave this to the
    discretion of HHS and NIH. Yet NIH spends barely 2 percent of its HIV/
    AIDS research budget on microbicides.
        Given that married women who get infected from their husbands
    urgently need options like microbicides, what if anything do you plan
    to do to mobilize more funds for this research?
        Answer. Microbicides, once successfully developed, will help reduce
    the transmission of HIV/AIDS. Under the Emergency Plan, the National
    Institutes of Health (NIH) within the U.S. Department of Health and
    Human Services (HHS) is pursuing a comprehensive program for
    discovering, developing, testing, and evaluating microbicides for HIV
    prevention. HHS/NIH is the major federal sponsor of microbicide
    research and development. The Emergency Plan provides opportunities for
    HHS/NIH to expand its HIV Prevention Trials Network, a worldwide
    network of clinical trial sites established to evaluate the high
    priority area of safety and efficacy of non-vaccine HIV prevention
    interventions such as microbicides. As we use the tools available today
    to bring immediate relief to the millions suffering from consequences
    of HIV/AIDS, we will continue to pursue strategies, such as
    microbicides, that will allow us to make greater strides against this
    disease in the future.
        We appreciate the concerns voiced by many about the vulnerabilities
    of women and girls to HIV/AIDS, including women coerced or forced to
    have sex, and who have few options for negotiating sex with their male
    partners. There is increasing recognition that women and girls
    represent nearly half of all HIV infections worldwide and that the
    disease disproportionately affects them in many ways. HHS/NIH supports
    an extensive AIDS research portfolio on women and girls. The President
    preceded his announcement of the Emergency Plan by his announcement in
    June 2002 of his $500 million International Mother-and-Child HIV
    Prevention Initiative for Africa and the Caribbean. That initiative,
    now part of the Emergency Plan, is intended to treat one million women
    annually and reduce mother-to-child transmission of HIV by 40 percent
    within five years or less in target countries.
        Several U.S. Government agencies, including the U.S. Agency for
    International Development (USAID) and the U.S. Department of Health and
    Human Services (HHS), are working with women's organizations, public
    health groups, and others to define mechanisms to address even better
    the gender dimensions of the HIV/AIDS pandemic. For example, USAID is
    supporting policy changes, research and interventions that address
    issues related to gender and HIV/AIDS and seeks to reduce women and
    girls' vulnerabilities to HIV/AIDS. Such activities include public
    outreach materials and peer-education programs directed toward men and
    boys to address cultural norms about violence and sexual promiscuity;
    promotion of abstinence and fidelity; research on issues related to
    women's vulnerability, including cross-generational sex, stigma, and
    gender-based violence; and identifying and training women's grassroots
    organizations to participate in policy making processes regarding HIV/
    AIDS.
        Question. We have reports of preferential treatment in the
    allocation of U.S. funds to ``faith-based'' organizations. We have
    heard that in several instances, organizations with little or no
    experience in public health; with ideological or religious objections
    to offering information about safer sex and condoms; and whose
    proposals for funding received low scores under review by technical
    experts, nevertheless were given preference for funding over other
    organizations with strong technical capability and long-term
    experience. Can we get copies of the recent proposals and scores
    evaluating organizations that are receiving funding?
        What specific guidelines are there to ensure that scientific,
    medical, and public health expertise is put above religious or
    ideological preferences in the granting of contracts?
        Answer. In implementing the President's Emergency Plan for AIDS
    Relief, we have sought to fund a broad range of innovative partners,
    including host government agencies, non-governmental organizations,
    faith-based organizations, networks of persons living with HIV/AIDS and
    their families, and U.S. institutions, to bring not only expanded
    capacity but also innovative new thinking to our efforts. The Office of
    the Global AIDS Coordinator has provide general guidance to U.S.
    Government agencies in the field to foster partnerships with a broad
    array of organizations, including organizations that minimize
    administrative and other costs that do not directly contribute to
    prevention, treatment and care for persons in needs. Guidance has also
    been provided that a partnering organization should not be required, as
    a condition of receiving assistance, to endorse or use a multi-sectoral
    approach to combating HIV/AIDS, or to endorse, use, or participate in a
    prevention method or treatment program to which the organization has a
    religious or moral objection. Neither should any organization advocate
    against any other component of the U.S. Government's programs. In
    reviewing funding proposals, criteria for the eligibility of
    applications include that organizations have a track record of
    experience in directly providing or assisting in providing treatment,
    care and prevention in the focus countries of the Emergency Plan.
        Faith-based organizations were among the first responders to the
    international HIV/AIDS pandemic, and deliver much needed care and
    support for fellow human beings in need. Their reach, authority, and
    legitimacy--like other organizations--identify them as crucial partners
    in the fight against HIV/AIDS; we are committed to encouraging and
    strengthening such partners. No organization, secular or faith-based,
    however, has received preferential treatment in funding on the basis of
    its affiliation or background.
        Our intent in the initial, first round of grants under the
    Emergency Plan has been to move as quickly as possible to bring
    immediate relief to those who are suffering the devastation of HIV/
    AIDS. The Office of the Global AIDS Coordinator chose programs for
    funding in the first round because their recipients have existing
    operations among the focus countries of the Emergency Plan, have a
    proven track record, and have the capacity to rapidly scale up their
    operations and begin having an immediate impact.
        By initially concentrating on scaling up existing programs that
    have proven experience and measurable track records, an additional
    175,000 people living with HIV/AIDS in the 14 initial focus countries
    will begin to receive anti-retroviral treatment. Prevention through
    abstinence messages will reach about 500,000 additional young people,
    and assistance in the care of about 60,000 additional orphans will soon
    commence in those same programs.
        Regarding copies of proposals and evaluation scores, the Office of
    the U.S. Global AIDS Coordinator did not contract directly for these
    proposals, but rather worked through our partner U.S. Government
    agencies--the U.S. Agency for International Development and the U.S.
    Department of Health and Human Services. Each has advised that federal
    executive guidelines establish that absent a Committee request (and the
    strict protections that are imposed pursuant to such release),
    proposals or evaluation materials are not released to Members of
    Congress as a matter of course when they contain (1) proprietary
    business confidential or ``competitively useful'' information and (2)
    protectable deliberative process and privacy information that might be
    publicly disclosed pursuant to such release. Please see, by reference,
    Federal Acquisition Regulation 5.403 and . Both HHS and USAID, however, have
    expressed their willingness to release, on an expedited basis, the
    requested Request for Applications (RFA), which include the evaluation
    criteria, and any actual awards that have been made, such awards being
    appropriately redacted to reflect business proprietary or privacy
    concerns.
        Question. Our law requires recipients of U.S. funds to have a
    policy opposing prostitution and sex trafficking. However, Senator
    Frist and I made clear in a colloquy that this requirement would be
    satisfied if the grant agreement for United States funding states that
    the grantee opposes prostitution and sex trafficking, rather than by
    requiring the grantee to have an explicit policy to that effect. Is
    that colloquy being followed, both with respect to United States and
    foreign organizations?
        Answer. As you note, Section 301(f) of the United States Leadership
    Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 (Public Law
    108-25) states that ``No funds made available to carry out this Act, or
    any amendment made by this Act, may be used to provide assistance to
    any group or organization that does not have a policy explicitly
    opposing prostitution and sex trafficking.'' Also of note is Section
    301(e), which expressly prohibits funds from being used to promote or
    advocate the legalization or practice of prostitution or sex
    trafficking; yet does allow for the provision of HIV/AIDS prevention,
    treatment and care services to victims of prostitution or sex
    trafficking.
        Proper implementation of these two provisions is critical, and the
    Office of the U.S. Global AIDS Coordinator intends to implement the law
    consistent with the U.S. Government's opposition to prostitution and
    related activities, especially those that contribute to trafficking in
    persons. To this end, Congress's views, including the legislative
    history, report language and floor statements, have been informative
    and helpful.
        To ensure that the relevant provisions of Public Law 108-25 are
    met, both the U.S. Department of Health and Human Services (HHS) and
    the U.S. Agency for International Development (USAID) require that
    primary grantees affirmatively certify their compliance with the
    applicable restrictions regarding prostitution and related activities
    prior to the receipt of any federal funds.
        In addition, under the Emergency Plan, HHS and USAID are including
    the limitation on funds expressed in Section 301(e) in HIV/AIDS funded
    grants and requiring that primary recipients include the funding
    limitation in all subagreements. USAID is applying this same process
    for all HIV/AIDS funded contracts.
        Regarding the implementation of Section 301(f), the Office of Legal
    Counsel (OLC) in the U.S. Department of Justice is considering the
    constitutional implications of the funding restrictions of Public Law
    108-25, particularly Section 301(f). In provisional advice, OLC
    determined that Section 301(f) can only be constitutionally applied to
    foreign organizations when they are engaged in activities outside of
    the United States.
        Currently, HHS and USAID are including the Section 301(f)
    limitation in their international HIV/AIDS funded grants, cooperative
    agreements, contracts and subagreements with foreign organizations. If
    a U.S. organization is the primary recipient of funds, they must
    include the Section 301(f) limitation in any subagreement with a
    foreign organization, as well as ensure, through contract,
    certification, audit, and/or any other necessary means, that the
    foreign organization complies with the limitation.
        In addition, the Fiscal Year 2004 Foreign Operations, Export
    Financing and Related Programs Appropriations Act amends Section 301(f)
    of Public Law 108-25 by exempting the Global Fund to Fight AIDS,
    Tuberculosis and Malaria (Global Fund), the World Health Organization
    (WHO), the International AIDS Vaccine Initiative (IAVI) and United
    Nations agencies from that section. Awards to these organizations
    include the limitation on funds expressed in Section 301(e).
        Question. Ambassador Tobias, you have said that the fact that less
    than 7 percent of women used a condom in their last sex act with their
    main partner and that less than 50 percent of women have used a condom
    with casual parters shows that condom are not effective. Would you also
    say that the low abstinence rates that exist in many countries show
    that abstinence promotion is not effective in the general population
    and should therefore be abandoned?
        Answer. Under the President's Emergency Plan for AIDS Relief,
    policy decisions will be evidence-based and will build on the best
    practices established in the fight against HIV/AIDS. I am committed to
    bringing the resources of sound science to bear in selecting and
    developing interventions that achieve real results. Determining which
    approach is best will depend upon numerous variables, including local
    needs and circumstances. The Office of the U.S. Global AIDS Coordinator
    will promote the proper application of the ABC approach through
    population-specific interventions that emphasize abstinence for youth,
    including the delay of sexual debut, fidelity for sexually active
    couples, and correct and consistent use of condoms by persons engaging
    in behaviors that put them at increased risk for HIV transmission. The
    success of the ABC model in countries such as Uganda, Zambia, and
    Ethiopia, among others, has demonstrated that promoting behavior change
    and healthy lifestyles, including abstinence and delayed sexual
    initiation, faithfulness and fidelity in marriage and other committed
    relationships, reduction in the number of partners, and consistent and
    correct use of condoms, has been and can be successful in preventing
    the spread of HIV/AIDS. Under the Emergency Plan, abstinence-until-
    marriage programs will have two goals: (1) Encouraging individuals to
    be abstinent from sexual activity outside of marriage, and (2)
    Encouraging individuals to practice fidelity in sexual relationships,
    including marriage, as ways to reduce risk of exposure to HIV and other
    sexually transmitted infections (STIs).
        Abstinence from sexual intercourse or maintaining a mutually
    faithful long-term relationship between partners known to be uninfected
    is the surest way to avoid transmission of HIV and other sexually
    transmitted infections (STIs). Outside of those conditions, condoms
    have been an important and successful intervention in many places,
    particularly when made available in commercial and other casual sexual
    encounters, areas of high prevalence, or amongst those who do not know
    their serostatus. While no barrier method is 100 percent effective,
    correct and consistent use of latex condoms can reduce the risk of
    transmission of HIV by about 90 percent. The body of research on the
    effectiveness of latex condoms in reducing sexual transmission of HIV
    is both comprehensive and conclusive--if they are used correctly and
    consistently. Certainly, in many of the Emergency Plan focus countries,
    gender inequities and other issues may impact whether or not people can
    and will use condoms. However, part of our role in these countries will
    be to facilitate a shift in cultural norms around HIV prevention
    behaviors--abstinence, being faithful, and when necessary correct and
    consistent condom use. When cultural norms shift and prevention
    mechanism is available, great changes can occur. For example, Thailand
    slowed its explosive HIV epidemic by promoting ``100 percent condom''
    use in brothels but at the same time discouraging men from visiting
    prostitutes. As a result of this policy and an accompanying public
    information campaign, as well as improved STI treatment services,
    condom use among sex workers increased to more than 90 percent,
    reported visits to sex workers by men declined by about half, HIV
    infection rates among military recruits decreased by about half, and
    the cases of five other STIs decreased by nearly 80 percent among
    brothel workers. Given the evidence around condom effectiveness, condom
    use programs the Emergency Plan supports will be leveraged across a
    range of situations in which those persons at increased risk for
    becoming infected by or for transmitting HIV will have access to them,
    and will include communication components to encourage responsible
    behavior.
                                     ______

               Questions Submitted by Senator Barbara A. Mikulski
        Question. PEPFAR only covers 14 countries in Africa and the
    Caribbean. Other regions such as Eastern Europe, Latin America and Asia
    are left behind. Reports indicate that although Africa and the
    Caribbean have the largest rates of infection presently, however if
    left unaddressed, countries like China and India, with their large
    populations will easily overtake Africa in number of infections. For
    example, estimates show that by 2010, the number of HIV infections in
    India is predicted to rise from 4 million to 20-25 million, the current
    number of infections on the entire continent of Africa.
        How are we looking to the future and addressing the emerging
    threats in other parts of the world?
        Answer. The vision of the President's Emergency Plan is to turn the
    tide of HIV/AIDS. Recognizing that HIV is a virus that knows no
    borders, the Emergency Plan continues to support strengthened
    programming across the world in order to achieve this vision. The
    President's Emergency Plan includes nearly $5 billion to support on-
    going bilateral HIV/AIDS programs in approximately 100 countries
    worldwide.
        Question. In 2003, 58 percent of the 26.6 million people living
    with HIV/AIDS in sub-Saharan Africa were women. Young women between the
    ages of 15-24 in Africa and the Caribbean are 2.5 times more likely to
    have HIV than young men and teenage women are 5 times as likely. The
    vast majority of these women are identified as having only one mode of
    exposure to HIV--sex with their husbands.
        Given that most sexually transmitted HIV infections in females
    occur either inside marriage or in relationships women believe to be
    monogamous, what targeted and appropriate prevention policy do we have
    that addresses this most vulnerable segment of the population?
        Answer. I share your concerns about the vulnerabilities of young
    women to HIV/AIDS. Targeted and appropriate prevention strategies to
    address the vulnerability of women to exposure to HIV are integral to
    the President's Emergency Plan. The U.S. Five Year Global HIV/AIDS
    Strategy includes not only preventing seven million infections in some
    of the most afflicted countries in the world, but also continues
    bilateral, regional and multilateral efforts to prevent new infections.
        Limitations in human resources and sites able to provide PMTCT are
    major impediments to implementing national PMTCT programs. The
    President's Mother and Child Initiative, now folded into the Emergency
    Plan.focused on the need to develop capacity to effectively scale-up
    programs. Through the President's International Mother and Child HIV
    Prevention Initiative and the Emergency Plan for AIDS Relief, the U.S.
    Government provided $143 million for PMTCT activities and programs from
    October 1, 2002, to March 31, 2004. As a result, 14,700 health workers
    received training in the provision of PMTCT services and 900 health
    facilities received financial and technical support, which enabled the
    provision of a minimum package of PMTCT care, including (1) voluntary
    counseling and testing for pregnant women, (2) anti-retroviral
    prophylaxis to HIV-infected women to prevent HIV transmission, (3)
    counseling and support for safe infant-feeding practices, and (4)
    voluntary family planning counseling and referral. The focus on
    training and developing sites for PMTCT lays the foundation for
    scaling-up national programs, thus making a substantial step towards
    the Emergency Plan goal of averting seven million new HIV infections.
    Moreover, reaching women during pregnancy provides a critical
    opportunity for those who test negative to receive counseling to avoid
    infection.
        PMTCT centers also foster and build healthy families by offering
    counseling and testing for expectant fathers. For example, the U.S.
    Government and the Elisabeth Glaser Pediatric AIDS Foundation support
    the Masaka Health Center in Rwanda. It has developed unique program to
    encourage couples to participate jointly in pre-natal care and
    subsequently HIV testing. A personalized written invitation is prepared
    in the local language (Kinyarwanda) for all women who participate in
    pre-natal care at the center and agree to be tested for HIV after
    counseling. They are invited to return with their partner the following
    weekend for a special session. This approach has resulted in a 74
    percent HIV testing rate for male partners at Masaka, as compared to 13
    percent for 12 other sites in the same program. Based on the success of
    this approach, the Foundation intends to introduce this concept to its
    other sites as part of an overall initiative to increase partner
    testing.
        Under the Emergency Plan, we also foster approaches that recognize
    father/husband have a role to play as far as violence and HIV
    prevention are concerned. In Soweto, South Africa a PMTCT unit employed
    six counselors in 2003, one of whom one was an HIV-positive male who
    lost his baby son to HIV/AIDS. This counselor helped men talk about
    their disease and its consequences.
        The Emergency Plan also supports activities to stimulate male
    involvement in HIV/AIDS prevention efforts. On March 27, 2004, a
    Solidarity Center in South Africa supported by the Emergency Plan
    organized a ``Men as Partners'' and voluntary counseling and testing
    (VCT) day for various workers unions in the community. The daylong
    program was designed to get men involved in preventing HIV transmission
    and violence against women.
        Increasingly, young women and men who are sexually active are
    committing to a monogamous relationship. The President's Emergency Plan
    Strategy supports comprehensive and effective prevention approaches
    that reflect the complex influences on young people's decision-making
    and the need to address the broader social factors that shape their
    behaviors. Internationally, a number of programs have proven successful
    in increasing abstinence until marriage, delaying first sex, reducing
    the number of partners, and achieving ``secondary abstinence'' among
    sexually experienced youth.
        The Emergency Plan recognizes several categories of activities as
    part of its rapid scale-up of prevention programs for young adults:
        Scale up skills-based HIV education, especially for younger youth
    and girls.--We need to reach young people early, before they begin
    having sex, with skills-based HIV education that provides focused
    messages about the benefits of abstinence until marriage and other safe
    behaviors. Best practices suggest that curricula that target specific
    risk factors for early sexual activity in the local context, delivered
    through interactive methods that help young people clarify values,
    build communication skills and personalize risk are most effective.
    Ideally, programs go beyond sexuality to build on young people's assets
    of character and encourage them to stay in school and plan for their
    futures.
        Broad social discourse on safer norms and behaviors.--Communities
    need to mobilize to address the norms, attitudes, values, and behaviors
    that increase vulnerability to HIV, including multiple casual sex
    partners and cross-generational and transactional sex. The Emergency
    Plan supports groups that seek to generate public discussion about
    harmful social and sexual behaviors through a variety of media and
    other activities, at both the community and national levels.
        Reinforcement of the role of parents and other protective
    factors.--Parents are potentially the most powerful protective factors
    in young people's lives; they have great potential to guide youth
    toward healthy and responsible decision-making and safer behaviors. In
    Emergency Plan countries, where many youth have lost their parents to
    AIDS, other adult caregivers and mentors also have an important role to
    play in providing guidance to youth. The Emergency Plan will support
    efforts to reach out to parents and other adult caregivers to educate
    and involve them in issues relating to youth and HIV and to empower
    them by improving their communication skills in the areas of sexuality
    as well as broader limit-setting and mentoring.
        Address sexual coercion and exploitation of young people.--
    Adolescents need a safe environment where they can grow and develop
    without fear of forced or unwanted sex, which often precludes the
    option of abstinence. The Emergency Plan supports psychosocial and
    other assistance for victims of sexual abuse. The Emergency Plan also
    supports efforts to target men with messages that challenge norms about
    masculinity and emphasize the need to stop sexual violence and
    coercion.
        In sum, the President's Plan recognizes that prevention is a
    continuum in which all members of the community the young and the
    mature, girls and women, and boys and men must be meaningfully engaged
    to prevent the spread of HIV/AIDS.
        Question. There are currently 14 million people co-infected with TB
    and HIV. TB is the leading killer worldwide of people who die of AIDS,
    responsible for one third of all AIDS deaths. Fewer than half of those
    with HIV who are sick with TB in the 14 countries targeted in PEPFAR
    have access to TB treatment.
        How does the PEPFAR initiative address the issue of TB co-
    infection?
        Answer. The Office of the U.S. Global AIDS Coordinator is committed
    to the appropriate coordination, integration and support of
    tuberculosis (TB) and HIV/AIDS services and programs. As you are aware,
    opportunistic infections, such as TB and malaria, play a fundamental
    role in the overall health of HIV infected individuals. TB is
    frequently the first manifestation of HIV/AIDS disease, the reason many
    people first present themselves for medical care, and the leading
    killer of people with HIV/AIDS.
        Since both tuberculosis treatment and HIV/AIDS treatment require
    longitudinal care and follow-up, successful TB programs provide
    excellent platforms upon which to build capacity for HIV/AIDS
    treatment. The Emergency Plan for AIDS Relief will support TB treatment
    for those who are HIV-infected and develop HIV treatment capacity in TB
    programs. In addition, interventions that increase the number of
    persons diagnosed and treated for HIV/AIDS will increase the need for
    TB treatment and care. Therefore, action is required to build or
    maintain necessary tuberculosis treatment capacity. For example,
    laboratories, clinical staff, community networks, and management
    structures used for TB control can be upgraded to accommodate HIV/AIDS
    treatment. Finally, because the prevalence of HIV infection is high
    among persons with tuberculosis, TB programs will be important sites
    for HIV testing in the focus countries, and the Emergency Plan will
    work toward ensuring the availability of TB testing in HIV testing,
    treatment and care sites.
        Question. The Global Fund to Fight AIDS, TB and Malaria
    specifically addresses co-infection issues has seen a cut in funding.
    How can you justify this?
        Answer. The President's Emergency Plan for AIDS Relief made a
    pledge of $200 million each year for the five-year period of 2004-2008.
    Our fiscal year 2005 request therefore remains the same as our request
    in fiscal year 2004. We were the first donor to make such a long-term
    pledge of support to the Global Fund, which together with our previous
    donations to the Fund still represents nearly 40 percent of all pledges
    and contributions through 2008.
        The American people can be extremely proud of our record of support
    for the Global Fund, which is an integral part of the Emergency Plan
    for AIDS Relief. When the United States contributes to a project of the
    Global Fund, it means that our dollars are leveraged in these grants by
    a factor of two, since the United States thus far has provided one-
    third of all Fund monies. The Fund has so far committed $2.1 billion to
    224 grants in 121 countries and three territories. So it is in our
    interests, as well as the interest of all people struggling against
    HIV/AIDS, malaria and tuberculosis, to see to it that the Global Fund
    is an effective partner in the fight against these diseases.
        The Global Fund nevertheless is a relatively new organization,
    particularly in comparison to the 20 years of bilateral HIV/AIDS
    programs carried out by the United States and other bilateral donors.
    As of May 15, 2004, the Global Fund had disbursed approximately $311
    million since the Global Fund's Board approved its first round of
    funding in January 2002. This compares to the first $350 million under
    the President's Emergency Plan sent to our focus countries only three
    weeks after the program first received its funding.
        This is not to criticize the Global Fund for being slow--indeed,
    the United States is one of the donors that has been urging the Global
    Fund to move carefully to ensure accountability and avoid waste. It
    does highlight, however, the potential effectiveness of bilateral
    assistance where donors already have an in-country presence.
        We need both multilateral and bilateral avenues of assistance;
    neither the Global Fund nor bilateral donors can do it all. Other
    bilateral donors also need to step up with greater technical assistance
    to Global Fund projects, without which those projects will founder.
        In addition, the United States believes that in order for funds to
    be effectively and efficiently disbursed, Country Coordinating
    Mechanisms (CCMs) and Local Fund Agents (LFAs) must actively engage in
    overseeing the implementation of grant activities. The United States
    would like to see, in particular, a stronger representation of the
    private sector, non-governmental organizations, and people living with
    the diseases on CCMs, largely chaired now by government ministries.
    Engaging a broader representation of various stakeholders will help
    reduce potential acts of corruption and will allow for a wider
    distribution of funds to serve more individuals in need.
        The Global Fund has already announced, in advance of the June Board
    meeting, that Round Four proposals approved by the Technical Review
    Panel will not exceed the cash already on-hand, so that, at least
    through this Round, no funding gap exists. And we, along with other
    donors, believe that as a new organization, the Global Fund should not
    press its current capacity too far, and our position is that Round Five
    should not occur until late 2005 and Round Six no earlier than the
    following year. The Fund's first projects will not come up for review
    and possible renewal until August 2004, and we will have a better sense
    at that time of its performance record and future needs.
        Question. On April 6, 2004, the Global Fund to Fight AIDS, TB and
    Malaria, the World Bank, UNICEF and the Clinton Foundation brokered a
    deal to announce that high quality AIDS medicines would be available
    for prices 50 percent less than currently available.
        Will the President's initiative take advantage of these of these
    options?
        Answer. It has always been our policy to provide, through the
    Emergency Plan, drugs that are acquired at the lowest possible cost,
    regardless of origin or who produces them, as long as we know they are
    safe, effective, and of high quality. These drugs could include brand-
    name products, generics or copies of brand-name products.
        Our commitment from the beginning has been to move with urgency to
    help build the human and physical capacity needed to deliver this
    treatment, and to fund the purchase of HIV/AIDS drugs to provide this
    treatment at the most cost-effective prices we can find--but only drugs
    we can assure ourselves are safe and effective. The people we are
    serving deserve the same assurances of safety and efficacy that we
    expect for our own families here in the United States. There should not
    be a double standard for quality and safety.
        On May 16, Health and Human Services (HHS) Secretary Tommy G.
    Thompson and U.S. Global AIDS Coordinator Ambassador Randall L. Tobias
    held a joint press conference in Geneva, Switzerland, in advance of the
    World Health Assembly. Secretary Thompson and Ambassador Tobias made
    two very important announcements on these issues.
        First, Secretary Thompson announced an expedited process for HHS,
    through its Food and Drug Administration (FDA), to review applications
    for HIV/AIDS drug products that combine already-approved individual
    HIV/AIDS therapies into a single dosage, often referred to as ``fixed-
    dose combinations'' (FDCs), and for co-packaged products, often
    referred to as ``blister packs.'' Drugs approved by HHS/FDA under this
    process will meet all normal HHS/FDA standards for drug safety,
    efficacy, and quality.
        This new HHS/FDA process will include the review of applications
    from research-based companies that have developed already-approved
    individual therapies, or from companies that are manufacturing copies
    of those drugs for sale in developing nations. There are no true
    generic versions of these HIV/AIDS drugs because they all remain under
    intellectual property protection here in the United States. The steps
    taken by HHS/FDA could encourage the development of new and better
    therapies to help win the war against HIV/AIDS.
        Second, Ambassador Tobias announced that when a new combination
    drug for HIV/AIDS treatment receives a positive outcome under this
    expedited HHS/FDA review, the Office of the U.S. Global AIDS
    Coordinator will recognize that evaluation as evidence of the safety
    and efficacy of that drug. Thus the drug will be eligible to be a
    candidate for funding by the Emergency Plan for AIDS Relief, so long as
    international patent agreements and local government policies allow
    their purchase. Where it is necessary and appropriate to do so,
    Ambassador Tobias will also use his authority to waive the ``Buy
    American'' requirements that might normally apply.
        We hope HHS/FDA will receive applications as soon as possible from
    many companies that will want their drugs to be candidates for use in
    the treatment programs of the President's Emergency Plan.
        Because of the President's Emergency Plan for AIDS Relief, and with
    the partnerships between the Emergency Plan and those individuals and
    organizations who are delivering treatment on the ground, we expect to
    increase the number of HIV-infected persons who are receiving treatment
    in our 14 focus countries by approximately 175,000. Today, patients are
    receiving treatment in Kenya and Uganda because of the Emergency Plan,
    and I expect that as we and others scale up our efforts, millions of
    more people will follow those who are already receiving this life-
    extending therapy.
        Finally, we note that the most limiting factor in providing HIV/
    AIDS treatment is not drugs--it is the human and physical capacity in
    the health care systems in the countries we are seeking to assist. Many
    countries are desperately short of health care infrastructure and
    health care workers. Both are needed to deliver treatment broadly and
    effectively. We are focused on addressing this limitation as well.
                                     ______

                Questions Submitted by Senator Richard J. Durbin

        Question. Mr. Ambassador, I would like to get clarification on the
    Administration's position on contributions to the Global Fund for 2005.
        The President's 2005 budget provides only $200 million for the
    Global Fund in 2005. This is less than half of the $547 million
    Congress provided in 2004 and far less than the most conservative
    estimate of Global Fund need from the United States for 2005 of $1.2
    billion. The Global Fund is a critical partner in the 14 countries that
    are part of the President's Emergency Plan for AIDS Relief (PEPFAR) and
    is needed in all the other countries that PEPFAR won't reach (the
    Global Fund currently has grants in 122 countries). The Global Fund is
    currently the most important new funder of TB and malaria, as well as
    AIDS programs, globally.
        (1) Mr. Ambassador, can you justify the President's $200 million
    request for the Global Fund in 2005, explaining why this amount is
    sufficient when it represents only 37 percent of what was appropriated
    for the Global Fund for 2004, only 24 percent of what the Global Fund
    has already raised for 2005, and only 6 percent of what the Global Fund
    will need in 2005 if it approves two rounds for that year?
        (2) Why has the Administration proposed such severe cuts to the
    Global Fund?
        (3) How can we provide leadership to the Fund while providing only
    $200 million, only six percent? $200 million isn't even a third of
    what's needed to keep existing programs running--that would be around
    $530m.
        (4) How will the Global Fund be able to renew existing grant awards
    from Rounds 1-3 and be able to award grants in Rounds 5 and 6 to the
    many countries left out of your 14 country initiative, yet equally
    needy?
        (5) Will you support funding the Global Fund at a level of $1.2
    billion to meet its 2005 need?
        Answer. The President's Emergency Plan for AIDS Relief made a $200
    million per year commitment of pledges for the five-year period of
    2004-2008. Our fiscal year 2005 request therefore remains the same as
    our request in fiscal year 2004. We were the first donor to make such a
    long-term pledge of support to the Global Fund, which together with our
    previous donations to the Fund still represents nearly 40 percent of
    all pledges and contributions through 2008.
        The American people can be extremely proud of our record of support
    for the Global Fund, which is an integral part of the Emergency Plan
    for AIDS Relief. As you note, we cannot make every country a focus
    country, and there are other nations equally needy. When the United
    States contributes to a project of the Global Fund, it means that our
    dollars are leveraged in these grants by a factor of two, since the
    United States thus far has provided one-third of all Fund monies. The
    Fund has so far committed $2.1 billion to 224 grants in 121 countries
    and three territories. So it is in our interests, as well as the
    interest of all people struggling against HIV/AIDS, malaria and
    tuberculosis, to see to it that the Global Fund is an effective partner
    in the fight against these diseases.
        The Global Fund nevertheless is a relatively new organization,
    particularly in comparison to the 20 years of bilateral HIV/AIDS
    programs carried out by the United States and other bilateral donors.
    Like all new organizations, it is quite understandably undergoing some
    growing pains. As of May 15, 2004, the Global Fund had disbursed
    approximately $311 million to Principal Recipients since the Global
    Fund's Board approved its first round of funding in January 2002. This
    compares to the first $350 million under the President's Emergency Plan
    sent to our focus countries only three weeks after the program first
    received its funding.
        This is not to criticize the Global Fund for being slow--indeed,
    the United States is one of the donors that has been urging the Global
    Fund to move carefully to ensure accountability and avoid waste. It
    does highlight, however, the potential effectiveness of bilateral
    assistance where donors already have an in-country presence.
        We need both multilateral and bilateral avenues of assistance;
    neither the Global Fund nor bilateral donors can do it all. Other
    bilateral donors also need to step up with greater technical assistance
    to Global Fund projects, since without which those projects will
    founder.
        In addition, the United States believes that to disburse funds
    effectively and efficiently, Country Coordinating Mechanisms (CCMs) and
    Local Fund Agents (LFAs) must get actively engaged in overseeing the
    implementation of grant activities. The United States in particular
    would like to see a stronger representation of the private sector, non-
    governmental organizations, and people living with the diseases on
    CCMs, which are largely (approximately 85 percent) chaired by
    government ministries. Engaging a broader representation of various
    stakeholders will help reduce potential acts of corruption, and will
    allow for a wider distribution of funds so that more individuals in
    need can be served.
        The Global Fund has already announced, in advance of the June Board
    meeting, that the two-year budgets of Round Four proposals recommended
    by the independent Technical Review Panel will not exceed the cash
    already on-hand, so that, at least through this Round, no funding gap
    exists. And we, along with other donors, believe that as a new
    organization, it might be best for the Global Fund not to press its
    current capacity too far, and our position is that Round Five should
    not occur until late 2005 and Round Six no earlier than the following
    year. The Global Fund's first projects will not come up for review and
    possible renewal until August 2004, and we will have a better sense at
    that time of its performance record and future financial needs.
        Question. Ambassador Tobias, tuberculosis is the greatest curable
    infectious killer on the planet and the biggest killer of people with
    HIV. Treating TB in people with HIV can extend their lives from weeks
    to years. I am very concerned that the President's 2005 budget actually
    cuts TB and malaria funding by some $46 million. And the President's
    AIDS initiative fails to focus on expanding TB treatment as the most
    important thing we can do right now to keep people with AIDS alive and
    the best way to identify those with AIDS who are candidates for anti-
    retroviral drugs.
        I was just in India where TB is a currently far greater problem
    than HIV--though AIDS is rapidly catching up--and a new WHO report has
    shown that parts of the former Soviet Union and Eastern Europe have
    rates of dangerous drug resistant TB 10 TIMES the global average! TB
    rates have skyrocketed in Africa in conjunction with HIV, and yet only
    one in three people with HIV in Africa who are sick with TB even have
    access to basic life-saving TB treatment. We are missing the boat on
    this issue--at our own risk! The cuts in TB funding are short-sighted
    and I think TB efforts should be expanded.
        (6) Make it a priority to expand access to TB treatment for all HIV
    patients with TB and link TB programs to voluntary counseling and
    testing for HIV.
        (7) Push to expand overall funding to fight TB to our fair share of
    the global effort? (The United States is currently investing about $175
    million in TB from all sources, including our contribution to the
    Global Fund.)
        (8) Consider appointing a high-level person in your office to be
    the point person for TB efforts?
        Answer. The Office of the U.S. Global AIDS Coordinator is committed
    to the appropriate coordination, integration and support of
    tuberculosis (TB) and HIV/AIDS services and programs across the U.S.
    Government. As you are aware, opportunistic infections, such as TB and
    malaria, are great risks to the overall health of HIV-infected
    individuals. TB is frequently the first manifestation of HIV/AIDS
    disease, the reason many people first present themselves for medical
    care, and the leading killer of people with HIV/AIDS.
        Since both tuberculosis treatment and HIV/AIDS treatment require
    longitudinal care and follow-up, successful TB programs provide
    excellent platforms upon which to build capacity for HIV/AIDS
    treatment. The Emergency Plan will improve referral for TB patients to
    HIV testing and care, support TB treatment for those who are HIV-
    infected and develop HIV treatment capacity in TB programs. In
    addition, interventions that increase the number of persons diagnosed
    and treated for HIV/AIDS will increase the need for TB treatment and
    care. Therefore, action is required to build or maintain necessary
    tuberculosis treatment capacity. For example, laboratories, clinical
    staff, community networks, and management structures used for TB
    control can be upgraded to accommodate HIV/AIDS treatment. Finally,
    because the prevalence of HIV infection is high among persons with
    tuberculosis, TB programs will be important sites for HIV testing in
    the focus countries as well as ensuring that TB testing is available in
    HIV testing, treatment and care sites.
        Finally, the Office of the U.S. Global AIDS Coordinator will take
    into consideration your suggestion for identifying an individual within
    the Office of the Coordinator to have specific responsibilities related
    to coordinating TB and HIV/AIDS efforts.
        Question. Ambassador Tobias, in September 2002, the National
    Intelligence Council released a report that identified India, China,
    Nigeria, Ethiopia and Russia, countries with large populations and of
    strategic interest to the US, as the ``next wave'' where HIV is
    spreading rapidly. India already contains one-third of the global TB
    burden, and because AIDS fuels TB, TB rates will also skyrocket as AIDS
    spreads.
        (9) Congress mandated a 15th country be included as a part of the
    President's AIDS Initiative. The PEPFAR strategy report stated that
    this 15th country will be named shortly. When will you make a decision?
    Do you know what country this will be?
        (10) What consideration is being given to including India as the
    15th country, given the large number of HIV cases already present, the
    growing HIV problem that is likely to become a more generalized
    epidemic and India's strategic importance?
        India also has a remarkable TB program that has expanded over 40
    fold in the last 5 years, and treated 3 million patients and trained
    300,000 health workers. I would suggest that India's TB program has
    important lessons for scale-up of AIDS treatment programs in India and
    globally and we should support it and use it as a model.
        Answer. Consultations regarding the selection of a 15th country
    have been underway. As a first step, the U.S. Global AIDS Coordinator
    has consulted with senior officials within the Administration,
    including at the U.S. Agency for International Development (USAID), the
    U.S. Department of Health and Human Services (HHS), and the U.S.
    Department of State, about possible candidate countries for the 15th
    focus country. From this consultative process, the Coordinator's Office
    has identified the following list of 39 countries by one or more of the
    agencies named above as a potential candidate for the 15th focus
    country.

     EMERGENCY PLAN FOR AIDS RELIEF 15TH FOCUS COUNTRY--INITIAL CANDIDATE
                                   COUNTRIES

        Albania, Armenia, Azerbaijan, Bangladesh, Belarus, Bolivia, Brazil,
    Burma, Cambodia, China, Croatia, Egypt, El Salvador, Estonia, Georgia,
    Guatemala, Honduras, India, Indonesia, Jordan, Kazakhstan, Kyrgystan,
    Latvia, Lithuania, Macedonia, Mexico, Moldova, Nepal, Nicaragua, Peru,
    Philippines, Romania, Russia, Tajikistan, Thailand, Turkmenistan,
    Ukraine, Uzbekistan, and Vietnam.
        Currently, these countries are being considered in the context of
    the 10 standards listed below. These considerations provide a basis for
    comparative analysis and discussion regarding the potential candidates.
    It is important to note that these do not represent weighted criteria
    against which Ambassador Tobias will quantitatively evaluate to
    recommend one to the President. We do not expect that any one country
    will excel in all areas; instead, Ambassador Tobias and his staff are
    evaluating each country for its collective strengths and weaknesses.
      --Severity and Magnitude of the Epidemic.--The prevalence rate, the
            rate of increase in HIV infection, and the total number of
            people living with HIV/AIDS.
      --Commitment of Host-Country Government.--The basis of leadership's
            willingness to address HIV/AIDS and stigma and its desire to
            partner in an amplified response.
      --Host-Country commitment of resource potential.--The degree to which
            the host government has the capacity and the determination to
            make trade-offs among national priorities and resources to
            combat HIV/AIDS.
      --Enabling Environment.--The level of corruption, stigma, free press,
            state of government bureaucracies and the strength of bilateral
            partnerships, all of which help determine whether we can use
            Emergency Plan resources effectively.
      --U.S. Government In-country Presence.--Whether the country has a
            strong U.S. Government bilateral in-country presence through
            USAID and/or HHS.
      --Applicability of Emergency Plan Approaches.--Whether modes of
            transmission of HIV/AIDS in the host country are receptive to
            Emergency Plan interventions.
      --Potential Impact of Emergency Plan Interventions.--How many people
            we can reach and the effect of intervention on the trajectory
            of disease.
      --Gaps in Response.--Whether the U.S. Government's technical
            expertise, training, development and strengthening of health
            care systems and infrastructure would fill gaps in the current
            response.
      --Existence of Other Partners.--Whether non-governmental
            organizations and other partners have a substantial in-country
            presence and can facilitate rapid expansion of services and the
            efficient use of funds.
      --U.S. Strategic Interests.--The Emergency Plan is ultimately a
            humanitarian endeavor. At the same time, applicability of U.S.
            strategic interests could further the sustainability of
            programming, engender new sources of support, and offer
            increased opportunities for partnerships.
        With regard to India, it is among the potential candidates for the
    15th focus country. As you know, India has the second-largest
    population of HIV-infected persons in the world, second only to South
    Africa. Regardless of its selection as a 15th focus country, an
    amplified response is necessary to stem the potential for a generalized
    epidemic that would greatly increase India's HIV/AIDS burden. India has
    a well-developed national strategic plan to address HIV/AIDS and a
    comparatively large pool of health professionals to assist in its
    implementation.
        In addition, the Emergency Plan for AIDS Relief includes nearly $5
    billion to support on-going bilateral HIV/AIDS programs in
    approximately 100 countries worldwide, including India. USAID and HHS
    are highly engaged and active in the HIV/AIDS response in India. India
    is a participating country in HHS' Global AIDS Program through which
    the Department allocated $2.3 million for HIV/AIDS programs in India in
    fiscal year 2002, and $3.6 million in fiscal year 2003. USAID allocated
    $12.2 million to HIV/AIDS prevention and care activities in India in
    fiscal year 2002, and $13.5 million in fiscal year 2003. Additionally,
    both the U.S. Departments of Defense and Labor have HIV/AIDS programs
    underway in India. Numerous other donors, including governments, the
    private sector, multilateral organizations, and foundations, also fund
    HIV/AIDS programs in India.
        With regard to using India's tuberculosis program as a model for
    HIV/AIDS treatment, the President's Emergency Plan for AIDS Relief is
    focused on identifying and promoting evidence-based best practices in
    combating HIV/AIDS. The Directly Observed Therapy Short-Course (DOTS)
    treatment that has been so effective in India has served as a model for
    HIV/AIDS treatment programs in Haiti and elsewhere. One of the most
    important lessons drawn from the DOTS program is its use of community
    health workers to expand access to treatment. The network model of
    treatment and care promoted by the President's Emergency Plan
    implements this lesson by using community health workers to expand
    access to HIV/AIDS treatment in rural areas where consistent access to
    medical health professionals is limited.
        The President's Emergency Plan for AIDS Relief also recognizes the
    importance of local context in implementing effective HIV/AIDS
    treatment programs. India's human resource capacity is significantly
    greater than that of many focus countries of the President's Emergency
    Plan, as is the reach of its health care infrastructure. These
    advantages play a significant role in India's tuberculosis treatment
    success, but represent limiting factors in access to treatment in the
    focus countries. Thus, the Emergency Plan, while actively implementing
    best practices identified from the success of DOTS therapy, focuses
    significant resources in building human capacity and strengthening
    health infrastructure in the focus countries to support expanded
    treatment programs.
        Question. In a press release of April 13, 2004, USAID announced the
    first round of grants made under PEPFAR with fiscal year 2004 funding.
    Five grants were announced for projects in just some of the 14
    countries eligible for PEPFAR funding, totaling less than $35 million.
    Only three of these grants--totaling just $18 million were directed to
    orphans and vulnerable children (OVC) programs. Not one of these grants
    exceeded $7 million, even though all were for efforts in multiple
    countries.
        Given the magnitude of the orphan problem, and the grave
    consequences it has for the children, their families and communities,
    and for their countries, these efforts seems far too tentative and too
    limited, far smaller than the effort anticipated by Congress in
    allocating 10 percent of fiscal year 2004 HIV/AIDS funds for OVC
    programs.
        I am concerned that our financial support to date is too limited to
    effectively address the needs of rapidly growing numbers of orphans and
    other children affected by AIDS.
        (11) Can you tell me how much of the fiscal year 2004 appropriation
    for HIV/AIDS has in fact been committed to date for this purpose and
    how much will be committed in fiscal year 2005?
        (12) Can you assure me that fully 10 percent of the 2005
    appropriations will be dedicated to this critical problem and that
    funding for OVC programs will expand significantly from what appears to
    be a slow and tentative beginning?
        Answer. Each of the identified focus countries has submitted a
    Country Operational Plan (COP) for approval to Office of the U.S.
    Global AIDS Coordinator. Each COP describes the activities the U.S.
    Government will undertake for the remainder of fiscal year 2004 in that
    country. Once these plans are approved, the amount of fiscal year 2004
    resources committed for activities to address orphans and vulnerable
    children will be available, and the Global AIDS Coordinator will be
    pleased to share the information with your office.
        The United States Leadership Against HIV/AIDS, Tuberculosis, and
    Malaria Act of 2003 (Public Law 108-25) provides that for fiscal years
    2006 through 2008 not less than 10 percent of the amounts appropriated
    for bilateral HIV/AIDS assistance be expended for assistance for
    orphans and vulnerable children affected by HIV/AIDS. The Office of the
    U.S. Global AIDS Coordinator is committed to meeting this funding
    requirement through a broad-range of activities targeted at the needs
    of orphans and vulnerable children. In addition, USAID has recognized
    the importance of funding programs to support children affected by HIV/
    AIDS for the past few years. USAID's programs in this area are
    beginning to grow significantly under the Emergency Plan. Grants for
    orphans and vulnerable children were some of the first announced under
    the Emergency Plan. These grants will provide resources to assist in
    the care of about 60,000 additional orphans in the Emergency Plan's 14
    focus countries in Africa and the Caribbean. Approaches to care will
    include providing critical, basic social services, scaling up basic
    community-care packages of preventive treatment and safe water, as well
    as HIV/AIDS prevention education.
        Prior to the implementation of the Emergency Plan, USAID was
    funding over 125 programs in 27 countries to specifically respond to
    the unique issues facing children affected by HIV/AIDS. In addition,
    USAID funds a consortium of groups who are working together as the
    ``Hope for Africa's Children Initiative.''
        Question. Scale-Up: The HIV/AIDS pandemic has had an enormous
    impact on the world's youth. To date, 13-14 million children have been
    orphaned by AIDS, and that number is expected to reach more than 25
    million by 2010. The virtual ``tsunami'' of orphans in sub-Saharan
    Africa will spread to new countries in Africa and to Asia as death
    rates from AIDS rise in those regions.
        (13) Within PEPFAR and other programs, what are you currently doing
    to scale-up efforts as regards AIDS treatment, health care and getting
    these children in school?
        Answer. Under the Emergency Plan for AIDS Relief, activities
    targeted at orphans and vulnerable children will be aimed at improving
    the lives of children and families affected by HIV/AIDS. The emphasis
    is on strengthening communities and families to meet the needs of
    orphans and vulnerable children affected by HIV/AIDS, supporting
    community-based responses, helping children and adolescents meet their
    own needs, and creating a supportive social environment. Program
    activities could include the following:
      --Training caregivers;
      --Increasing access to education;
      --Economic support;
      --Targeted food and nutrition support;
      --Legal aid;
      --Support of institutional responses;
      --Medical, psychological, or emotional care; and,
      --Other social and material support.
        Question. Yesterday Secretary Thompson announced a major shift in
    AIDS policy relating to anti-retroviral (ARV) drugs. It is good news
    that the administration has created a policy that will be more
    streamlined than the usual HHS/FDA process for approval of anti-
    retroviral (ARV) generic and combination drugs. But it also seems to be
    creating a parallel process to that which the World Health Organization
    has set up to pre-qualify generic and combination ARV drugs.
        I am concerned that this policy undermines the authority of the
    World Health Organization, which did such an admirable job combating
    SARS and that we need now to be strong in fighting AIDS. It also seems
    a slap in the face to our European allies whose regulatory authorities
    are the underpinning of the WHO's pre-qualification process.
        (14) Are you at all concerned at the message this sends to our
    partners abroad about the level of respect we are prepared to give
    them?
        (15) How will you ensure that the WHO retains its role and has the
    resources to expand its provision of technical assistance?
        Answer. It has always been our policy to provide, through the
    Emergency Plan, drugs that are acquired at the lowest possible cost,
    regardless of origin or who produces them, as long as we know they are
    safe, effective, and of high quality. These drugs could include brand-
    name products, generics or copies of brand-name products.
        Our commitment from the beginning has been to move with urgency to
    help build the human and physical capacity needed to deliver this
    treatment, and to fund the purchase of HIV/AIDS drugs to provide this
    treatment at the most cost-effective prices we can find--but only drugs
    we can assure ourselves are safe and effective. The people we are
    serving deserve the same assurances of safety and efficacy that we
    expect for our own families here in the United States. There should not
    be a double standard for quality and safety.
        On May 16, Health and Human Services (HHS) Secretary Tommy G.
    Thompson and U.S. Global AIDS Coordinator Ambassador Randall L. Tobias
    held a joint press conference in Geneva, Switzerland, in advance of the
    World Health Assembly. Secretary Thompson and Ambassador Tobias made
    two very important announcements that impact on these issues.
        First, Secretary Thompson announced an expedited process for HHS,
    through its Food and Drug Administration (FDA), to review applications
    for HIV/AIDS drug products that combine already-approved individual
    HIV/AIDS therapies into a single dosage, often referred to as ``fixed-
    dose combinations'' (FDCs), and for co-packaged products, often
    referred to as ``blister packs.'' Drugs approved by HHS/FDA under this
    process will meet all normal HHS/FDA standards for drug safety,
    efficacy, and quality.
        This new HHS/FDA process will include the review of applications
    from research-based companies that have developed already-approved
    individual therapies, or from companies that are manufacturing copies
    of those drugs for sale in developing nations. There are no true
    generic versions of these HIV/AIDS drugs because they all remain under
    intellectual property protection here in the United States. The steps
    taken by the HHS/FDA could encourage the development of new and better
    therapies to help win the war against HIV/AIDS.
        Second, Ambassador Tobias announced that when a new combination
    drug for HIV/AIDS treatment receives a positive outcome under this
    expedited HHS/FDA review, the Office of the U.S. Global AIDS
    Coordinator will recognize that evaluation as evidence of the safety
    and efficacy of that drug. Thus the drug will be eligible to be a
    candidate for funding by the Emergency Plan for AIDS Relief, so long as
    international patent agreements and local government policies allow
    their purchase. Where it is necessary and appropriate to do so,
    Ambassador Tobias will also use his authority to waive the ``Buy
    American'' requirements that might normally apply.
        We hope HHS/FDA will receive applications as soon as possible from
    many companies that will want their drugs to be candidates for use in
    the treatment programs of the President's Emergency Plan.
        With regard to the World Health Organization (WHO), we have the
    highest respect for the WHO and its prequalification pilot program.
    However, the WHO is not a regulatory authority. We must be assured the
    drugs we provide meet acceptable safety and efficacy standards and are
    of high quality. Under the Emergency Plan, we intend to support
    programs that will have a sustainable positive impact on health. If the
    medications in question have not been adequately evaluated, have had
    problems with safety or cause resistance issues in the future, the
    patients we serve and the international community we appropriately hold
    us accountable. We will continue to work with the WHO and the
    international community on this important area.
        Because of the President's Emergency Plan for AIDS Relief, and with
    the partnerships between the Emergency Plan and those individuals and
    organizations that are delivering treatment on the ground, we expect to
    increase the number of HIV-infected persons who are receiving treatment
    by approximately 175,000. Today, patients are receiving treatment in
    Kenya and Uganda because of the Emergency Plan, and we expect that as
    we and others scale up our efforts, millions of more people will follow
    those who are already receiving this life extending therapy.
        Finally, we note that the most limiting factor in providing HIV/
    AIDS treatment is not drugs--it is the human and physical capacity in
    the health care systems in the countries we are seeking to assist. Many
    countries are desperately short of health care infrastructure and
    health care workers. Both are needed to deliver treatment broadly and
    effectively. We are focused on addressing this limitation as well.
        Question. Ambassador Tobias, while we know that your PEPFAR mandate
    keeps you focused on ramping up treatment and current preventive tools
    as quickly as possible in the countries hit hardest by the epidemic,
    the unfortunate truth is that treatment is unlikely to keep up with the
    growth of the epidemic. The President's plan calls for putting two
    million people on much-needed treatment by 2008, yet millions more will
    have been infected by then--5 million a year, according to UNAIDS.
        (16) What role do you see your office playing to catalyze efforts
    underway to develop and distribute a preventive vaccine?
        (17) What synergies do you see between the medical infrastructure
    needed for providing testing and treatment, and ongoing clinical trials
    in the developing world?
        (18) How can PEPFAR programs lay the groundwork for future delivery
    of vaccines and other preventive technologies like microbicides?
        Answer. I am strongly supportive of the need for research and
    development on new technologies for preventing HIV transmission, such
    as a preventive HIV vaccine, microbicides, and improved means to
    prevent mother-to-child HIV transmission (PMTCT). The U.S. Government,
    through the U.S. Department of Health and Human Services (HHS), the
    U.S. Department of Defense, and the U.S. Agency for International
    Development, has been substantially engaged in biomedical and
    behavioral research efforts in these areas for the past 20 years.
    Findings from HHS/National Institutes of Health (NIH) sponsored
    research provide the crucial scientific basis for HIV/AIDS treatment
    regimens, prevention interventions, and standards of care. My office
    intends to continue to support and promote research through leadership
    in continuing to advocate for such research, and to assure that it is
    well-coordinated with the goals of the President's Emergency Plan for
    AIDS Relief.
        In the field, there are a number of ways our new and expanded
    programs for HIV/AIDS prevention, care, and treatment will help to
    promote this important research into new prevention technologies.
    First, the core of our treatment and care activities will be
    implemented through the ``Network Model''. This model supports Central
    Medical Centers and other community settings where prevention research
    can take place in a quality health care setting, including the
    provision of anti-retroviral therapy and other HIV/AIDS prevention,
    care, and treatment (including PMTCT). Expanding these services through
    the Emergency Plan will provide an increased number of settings where
    HIV/AIDS prevention research can be supported. Second, the emphasis on
    ``institutional twinning'' (defined as matching hospitals; clinics;
    schools of medicine, nursing, pharmacy, public administration, and
    management; and other institutions in the United States and other
    countries with counterparts in the 14 focus countries for the purposes
    of training and exchanging information and best practices) primarily
    focused on improving the capacity to provide HIV prevention, care, and
    treatment, will serve to expand strong relationships among institutions
    that also conduct research. Third, the capacity-building supported
    through the Emergency Plan that develops infrastructure and trains
    staff will have a spillover effect in ways that will promote research,
    such as training health care workers, establishing public health
    communications infrastructure, and improving clinical and laboratory
    capacity.
        It is not a coincidence that it has been the same developing
    countries that, with assistance from the U.S. Government, first
    participated in extensive clinical and vaccine research efforts that
    also have been the most successful in fighting the HIV/AIDS epidemic,
    especially by translating knowledge gained from clinical research into
    medical practice (e.g., Thailand, Uganda, Senegal, and Brazil). A
    robust clinical research infrastructure can be a foundation for
    building excellent clinical care and making the best use of the
    investments of the Emergency Plan for AIDS Relief.
        In addition to catalyzing research into new preventive
    technologies, the Emergency Plan also will lay the groundwork that will
    accelerate the ability to implement any new technologies that are found
    to be safe and effective. For instance, if a safe and effective HIV
    vaccine is identified, high-risk HIV-uninfected persons will be an
    appropriate target group for implementation. Such persons could be
    identified through the network of HIV testing sites built up through
    Emergency Plan investments. Likewise, if a safe and effective HIV
    microbicide is identified, it could be promoted widely through the same
    behavior change programs we are expanding to meet the HIV prevention
    goals of the Emergency Plan, and supplies of microbicide could be
    distributed through the same supply-chain management systems
    strengthened through Emergency Plan investments.
                                     ______

                Questions Submitted by Senator Mary L. Landrieu

        Question. (1) Domestic Violence.--Women make up 58 percent of the
    HIV/AIDS population in Africa. This higher number can be attributed to
    cultural vices within Africa about the reluctance permit women to take
    drugs to prevent mother-to-child transmissions and a high rate of
    domestic violence where men refuse to let women negotiate condom use,
    according to Human Rights Watch.
        What efforts are you pursuing to overcome the cultural obstacles to
    effectively treat and prevent HIV/AIDS? What efforts are you
    undertaking to curb domestic violence so that women may have a stake in
    both their physical safety from abuse and their medical well-being?
        Answer. Stigma and discrimination against persons living with HIV
    and AIDS, real or perceived, does present a significant obstacle to
    combating HIV/AIDS. It strengthens existing social inequalities and
    cultural prejudices, especially those related to gender, sexual
    orientation, economic status, and race. Stigma and denial also create
    barriers to our integrated multifaceted prevention, treatment, and care
    strategy.
        Under the Emergency Plan for AIDS Relief, we will act boldly to
    address stigma and denial through three operational strategies: (1)
    Engage local and national political, community, and religious leaders,
    and popular entertainers to speak out boldly against HIV/AIDS-related
    stigma and violence against women, and to promote messages that address
    gender inequality, encourage men to behave responsibly, promote HIV
    testing, and support those found to be HIV-positive to seek treatment;
    (2) Identify and build the capacity of new partners from a variety of
    sectors to highlight the harm of stigma and denial and promote the
    benefits of greater HIV/AIDS openness; and (3) Promote hope by
    highlighting the many important contributions of people living with
    HIV/AIDS, providing anti-retroviral treatment to those who are
    medically eligible, and involving those who are HIV-positive in
    meaningful roles in all aspects of HIV/AIDS programming.
        With regard to domestic violence, evidence from Uganda, Tanzania,
    and Zambia shows that violence against women is both a cause and
    consequence of rising rates of HIV infection--a cause because rape and
    sexual violence pose a major risk factor for women, and a consequence
    because studies have shown that HIV-positive women are more likely to
    suffer violence at the hands of a partner than those who are not
    infected. For many women, fear of sexual coercion and violence often
    precludes the option of abstinence or holds them hostage to their
    husband's or partner's infidelity. The Emergency Plan will work closely
    with communities, donors, and other stakeholders to reduce stigma,
    protect women from sexual violence related to HIV, promote gender
    equality, and build family skills through conflict resolution. The
    Emergency Plan will also support interventions to eradicate
    prostitution, sexual trafficking, rape, assault, and sexual
    exploitation of women and children.
        Question. (2) Orphans.--Ambassador Tobias, as you may know, I am
    the Chair of the Congressional Coalition on Adoption, and I will be
    traveling next week to Uganda with a focus on orphans and Uganda's
    efforts to curb the HIV/AIDS epidemic. Last year's legislation to
    combat the international HIV/AIDS epidemic included language to
    allocate 10 percent of U.S. funding to assist children orphaned by
    AIDS. The United Nations estimates we could have 20 million AIDS
    orphans by 2010.
        Could you outline how you office plans to use its funds to benefit
    orphans? What efforts are you taking to make it possible for these
    children to be adopted?
        Answer. The United States Leadership Against HIV/AIDS,
    Tuberculosis, and Malaria Act of 2003 (Public Law 108-25) provides that
    for fiscal years 2006 through 2008 not less than 10 percent of the
    amounts appropriated for bilateral HIV/AIDS assistance be expended for
    assistance for orphans and vulnerable children affected by HIV/AIDS.
    The Office of the U.S. Global AIDS Coordinator is committed to meeting
    this funding requirement through a broad-range of activities targeted
    at the needs of orphans and vulnerable children. The Emergency Plan for
    AIDS Relief, will aim activities at improving the lives of orphans and
    vulnerable children affected by HIV/AIDS and their families. The
    emphasis is on strengthening communities and families to meet the needs
    of orphans and vulnerable children affected by HIV/AIDS, supporting
    community-based responses, helping children and adolescents meet their
    own needs, and creating a supportive social environment. Program
    activities could include the following:
      --Training caregivers;
      --Increasing access to education;
      --Economic support;
      --Targeted food and nutrition support;
      --Legal aid;
      --Support of institutional responses;
      --Medical, psychological, or emotional care; and,
      --Other social and material support.
        U.S. policy is to encourage extended families to care for children
    who have lost their parents. If families are not available, the
    Emergency Plan will often provide support to communities to care for
    children orphaned by AIDS. For example, several programs in the focus
    countries are supporting the integration or re-integration of orphans
    and vulnerable children into their communities of origin, as well as
    identifying foster families in local communities to care for affected
    children.
        Programs that are part of the Emergency Plan for AIDS Relief are
    coordinated with polices and strategies of host governments and are
    responsive to local needs. Countries and communities are at different
    stages of HIV/AIDS response and have unique drivers of HIV, distinctive
    social and cultural patterns, and different political and economic
    conditions. Local circumstances must inform effective interventions,
    and the Emergency Plan will coordinate with local efforts.
        Question. (3) I mentioned, I will be traveling to Uganda next week,
    and Uganda has been praised for its ABC Plan, Abstinence, Be Faithful,
    and Condoms. Even with their successes, they still have a long way to
    go.
        Could you please name some of the countries taking proactive steps
    to fight HIV/AIDS? As I mentioned, even those countries taking the
    right steps have a long way to go, and will need long-term assistance
    to from the United States. Are there any efforts set up a graduation
    plan whereby countries will stop receiving U.S. assistance for meeting
    certain milestones? I worry we often set the bar too low for
    graduation. I see that in Eastern Europe we are curbing assistance
    because they are ``graduating'' toward democracies and market
    economies. What steps are being taken to make sure countries don't
    graduate too soon from HIV/AIDS assistance?
        Answer. All of the focus countries of the Emergency Plan for AIDS
    Relief are taking proactive steps to address the HIV/AIDS pandemic in
    their country. Examples include beginning anti-retroviral treatment
    pilot programs (Mozambique, Guyana), scaling up anti-retroviral
    treatment sites (Haiti, Namibia, South Africa, Uganda), increasing HIV
    testing and counseling opportunities through the expanded use of
    community health workers (Namibia), enhancing HIV surveillance,
    laboratory support, and blood-safety efforts (Tanzania), distributing
    culturally relevant HIV-prevention messages (Botswana) and working to
    effectively integrate or re-integrate orphans and vulnerable children
    into local communities (Haiti, Rwanda). However, as you suggest, these
    countries are facing many difficult challenges in fully addressing
    their HIV/AIDS epidemic. These challenges must be addressed before any
    of these countries are positioned to respond on their own.
        As you know, the Emergency Plan for AIDS Relief is a $15 billion,
    five-year initiative targeted to reaching the following goals across
    the 15 focus countries:
      --Providing treatment to 2 million HIV-infected adults and children;
      --Preventing 7 million new HIV infections; and,
      --Providing care to 10 million people infected and affected by HIV/
            AIDS, including orphans and vulnerable children.
        By developing and strengthening integrated HIV/AIDS prevention,
    treatment, and care, the Emergency Plan is focused on building local
    capacity to provide long-term, widespread, essential HIV/AIDS services
    to the maximum number of those in need. Key strategies include creating
    and/or enhancing the human and physical infrastructure needed to
    deliver care; supporting the host government and local, indigenous-led
    organizations in their response to their nation's epidemic; ensuring a
    continuous and secure supply of high-quality products to patients who
    need them at all levels of the health system; and coordinating with
    other donors to eliminate duplication of efforts and fill gaps. As the
    five-year initiative comes to a close, assessments will be made about
    the continuing need for U.S. Government bilateral support, especially
    in light of the host government's HIV/AIDS activities and the impact of
    the Global Fund to Fight AIDS, Tuberculosis, and Malaria.
        Question. (4) African Capacity to Make Its Own Drugs--
    Independence.--The Bible tells us that if you give a man a fish he will
    eat for a day. If you teach a man to fish he will eat for a lifetime.
    Africa has very little capacity to treat this pandemic with its own
    resources. All drugs are imported and there have been reports of price
    gauging or the purchasing of dummy drugs.
        What efforts is your office undertaking to increase Africa's
    capacity to make its own drugs, to create a pharmaceutical
    infrastructure within Africa that can go from manufacturer to clinic to
    patient? This should reduce the cost for drugs.
        Answer. Ensuring procurement of high quality pharmaceutical
    products is absolutely essential for the HIV/AIDS programs under the
    Emergency Plan. The U.S. Department of Health and Human Services (HHS)
    recently announced an expedited process for U.S. Food and Drug
    Administration (FDA) review of applications for HIV/AIDS drug products
    that combine already-approved individual HIV/AIDS therapies into a
    single dosage--many of these products are currently made in the
    developing countries, including South Africa. The Office of the U.S.
    Global AIDS Coordinator also announced that when a new combination drug
    for HIV/AIDS treatment receives a positive outcome under this expedited
    HHS/FDA review, it will recognize that tentative approval as evidence
    of the safety and efficacy of that drug. Thus the drug will be eligible
    to be a candidate for funding by the Emergency Plan, so long as
    international patent agreements and local government policies allow its
    purchase. Where necessary and appropriate to do so, the U.S. Global
    AIDS Coordinator will also use his authority to waive the ``Buy
    American'' requirements that might normally apply. Second, HHS plans to
    announce a solicitation for a contract to provide technical assistance
    to regulatory authorities and pharmaceutical quality assurance. The
    U.S. Government will seek a contractor to perform specified tasks
    related to the quality assurance of HIV/AIDS-related pharmaceutical
    products. Final products purchased by the supply management system will
    meet appropriate standards for quality, safety and effectiveness. This
    activity will also be able to support provision of direct technical
    assistance to increase the capacity for quality assurance in-country
    and strengthen quality-testing procedures.
        Question. (5) Tulane/West Africa Health Organization.--Congress has
    expressed its support for a West African AIDS Initiative involving the
    Economic Community of West African States (ECOWAS), the West African
    Health Organization (WAHO) and American schools of public health
    (TULANE). The objective of such an initiative would be to develop and
    implement a coordinated effort to provide AIDS education, prevention
    and treatment in the West African states. As in all African countries,
    the ECOWAS nations struggle with overwhelming rates of infection for
    HIV/AIDS, a situation that poses grave potential crises in the loss of
    human life among the people of Africa. What are your views on such an
    initiative involving the West African Health Organization, supported by
    ECOWAS and American schools of public health?
        Answer. The scope and urgent timing for expansion of training
    programs places a high priority in recruiting all available,
    experienced institutions for the effort in fighting the global HIV/AIDS
    pandemic, including outstanding implementing partners like Tulane that
    are interested and willing to establish twinning relationships with
    local institutions in the 15 focus countries of the President's
    Emergency Plan. Tulane is already highly involved, and its involvement
    was recently and substantially scaled up, through the HHS University
    Technical Assistance Program (UTAP). We expect to depend greatly on the
    steadily expanding work of all such outstanding partners over the
    course of this Initiative.
        Questions. (6) Ambassador Tobias, would you explain how you plan to
    ship the anti-retrovirals and other drugs needed to treat HIV/AIDS, TB
    and malaria to Africa? Do you intend to use containerized shipping?
        (7) In light of this, to what extent do you expect the drugs to
    experience degradation in quality as a result of high temperatures and
    humidity during oceanic shipment and port clearance?
        (8) What is the effect of such degradation on resistance to anti-
    retrovirals among the patient population?
        (9) Would you agree that production of these drugs in Africa could
    address this problem of degradation if accompanied by stringent quality
    controls?
        Answer. On behalf of the U.S. Global AIDS Coordinator, the U.S.
    Agency for International Development (USAID) plans to announce for
    public comment imminently a request for proposal for a supply-chain
    management contract. The purpose of this contract is to establish a
    safe, secure, reliable, and sustainable supply chain and to procure
    pharmaceuticals and other products needed to provide care and treatment
    of persons with HIV/AIDS and related infections. This contract will ask
    for a consortium to perform a number of tasks, including procurement,
    in-country assistance, logistical management information system, as
    well as freight forwarding. We anticipate the contractor will ensure
    timely, accurate, safe, and cost-effective freight-forwarding services
    for all products, and we will expect it to make efforts to minimize any
    product degradation. The contractor will conduct periodic reviews of
    freight-forwarding practices, and identify special or reoccurring
    delivery problems and devise timely and cost-effective solutions for
    them. In addition, the contractor will establish quality-assurance
    procedures to ensure that required storage and handling standards for
    products shipped are met, to guarantee that a safe, effective, and
    high-quality product reaches the patient. To make certain of that, we
    anticipate the contractor will devise and carry out random testing of
    production lots purchased by the system and released for shipment. The
    contractor will make efforts to purchase products that require minimal
    shipping times, as long as it meets the Emergency Plan's goal of
    procuring pharmaceuticals at the lowest possible cost while
    guaranteeing safety, quality and effectiveness.
        Question. (10) Finally, in last year's appropriations report
    language, the managers encouraged you to consider a pilot program,
    including public-private partnerships and faith-based organizations,
    aimed at increasing sustainability through indigenous production of
    drugs in Africa. What steps, if any, have you taken to explore the
    possibility of producing the required drugs in Africa while respecting
    intellectual property rights?
        Answer. Ensuring procurement of high quality pharmaceutical
    products is absolutely essential for the HIV/AIDS programs under the
    Emergency Plan. The U.S. Department of Health and Human Services (HHS)
    recently announced an expedited process for U.S. Food and Drug
    Administration (FDA) review of applications for HIV/AIDS drug products
    that combine already-approved individual HIV/AIDS therapies into a
    single dosage--many of these products are currently made in the
    developing countries, including South Africa. The Office of the U.S.
    Global AIDS Coordinator also announced that when a new combination drug
    for HIV/AIDS treatment receives a positive outcome under this expedited
    HHS/FDA review, it will recognize that tentative approval as evidence
    of the safety and efficacy of that drug. Thus the drug will be eligible
    to be a candidate for funding by the Emergency Plan, so long as
    international patent agreements and local government policies allow its
    purchase. Where necessary and appropriate to do so, the U.S. Global
    AIDS Coordinator will also use his authority to waive the ``Buy
    American'' requirements that might normally apply. Secondly, HHS plans
    to announce a solicitation for a contract to provide technical
    assistance to regulatory authorities and pharmaceutical quality
    assurance. The U.S. Government will seek a contractor to perform
    specified tasks related to the quality assurance of HIV/AIDS-related
    pharmaceutical products. Final products purchased by the supply
    management system will meet appropriate standards for quality, safety
    and effectiveness. This activity will also be able to support provision
    of direct technical assistance to increase the capacity for quality
    assurance in-country and strengthen quality-testing procedures.
        Question. (11) Fixed-Dose Combinations and Pediatric Treatment.--
    Children are not small adults when it comes to medicines and HIV/AIDS
    is no exception. Many AIDS medicines, particularly fixed dose
    combinations and other non-brand medicines have yet to be tested for
    use by children. With 2.5 million children infected with HIV around the
    world, it is essential that children are not an afterthought in our
    care and treatment activities.
        A. Will the new HHS/FDA review process require that fixed-dose
    combinations (FDCs), both generic and brand, be available for pediatric
    use?
        B. How does the President's five year strategy address the special
    needs of children who require HIV treatment?
        C. What is the Administration doing to ensure that both medical
    professionals and others have the necessary information, equipment and
    training to treat children with HIV/AIDS?
        Answer. The announcement on May 16 by U.S. Health and Human
    Services Secretary Tommy G. Thompson and U.S. Global AIDS Coordinator
    Ambassador Randall L. Tobias included two important components that
    address these issues.
        First, Secretary Thompson announced an expedited process for the
    U.S. Department of Health and Human Services (HHS), through its Food
    and Drug Administration (FDA), to review of applications for HIV/AIDS
    drug products that combine already-approved individual HIV/AIDS
    therapies into a single dosage, often referred to as ``fixed-dose
    combinations (FDCs),'' and for co-packaged products, often referred to
    as blister packs. Drugs HHS/FDA approves under this process will meet
    all normal HHS/FDA standards for drug safety, efficacy, and quality.
        This new HHS/FDA process will include the review of applications
    from research-based companies that have developed already-approved
    individual therapies, or from companies that are manufacturing copies
    of those drugs for sale in developing nations. There are no true
    generic versions of these HIV/AIDS drugs because they all remain under
    intellectual property protection here in the United States. The steps
    taken by HHS/FDA could encourage the development of new and better
    therapies to help win the war against HIV/AIDS.
        Second, Ambassador Tobias announced that when a new combination
    drug for HIV/AIDS treatment receives a positive outcome under this
    expedited HHS/FDA review, the Office of the U.S. Global AIDS
    Coordinator will recognize that evaluation as evidence of the safety
    and efficacy of that drug. Thus the drug will be eligible to be a
    candidate for funding by the Emergency Plan for AIDS Relief, so long as
    international patent agreements and local government policies allow its
    purchase.
        We hope HHS/FDA will receive applications as soon as possible from
    many companies that will want their drugs, including drugs for treating
    children, to be candidates for use in the treatment programs of the
    President's Emergency Plan.
        With regard to how the President's Emergency Plan will further
    address the special needs of children who require HIV treatment, you
    might recall that before the President announced the Emergency Plan in
    his January 2003 State of the Union address, in June 2002 he announced
    his $500 million International Mother-and-Child HIV Prevention
    Initiative for Africa and the Caribbean. After more than a year of
    implementation, that initiative is now part of the Emergency Plan, and
    is intended to treat one million women annually and reduce mother-to-
    child transmission of HIV by 40 percent within five years or less in
    target countries.
         With regard to ensuring that both medical professionals and others
    have the necessary information, equipment, and training to treat
    children with HIV/AIDS, under the Emergency Plan we are committed to
    developing sustainable HIV/AIDS healthcare networks. We recognize the
    limits of health resources and capacity in many, particularly rural,
    communities. To more effectively address that shortfall, we will build
    on and strengthen systems of HIV/AIDS healthcare based on the
    ``network'' model. Prevention, treatment, and care protocols will be
    developed, enhanced, and promoted in concert with local governments and
    Ministries of Health. With interventions emphasizing technical
    assistance and training of healthcare professionals, healthcare
    workers, community-based groups, and faith-based organizations, we will
    build local capacity to provide long-term, widespread, essential HIV/
    AIDS care to the maximum number of those in need.
        Question. (12) Prevention of Mother-to-Child Transmission (MTCT).--
    The President's Global HIV/AIDS strategy recognizes that by giving a
    simple dose of anti-retroviral drugs to pregnant women and to the
    infant shortly after delivery, we can reduce mother-to-child
    transmission of HIV by almost 50 percent. For fiscal year 2005, MTCT
    activities will be integrated and financed through the Global HIV/AIDS
    Initiative.
        A. Out of your $1.4 billion request, how much are you requesting
    for MTCT?
        B. Will funding for MTCT be considered as part of the 55 percent
    target for treatment programs? If so, will you track spending and
    numbers of people covered separately for these MTCT activities?
        C. In countries hardest hit by the pandemic, less than 1 percent of
    women have access to MTCT services. Do you have any plans to scale up
    existing MTCT programs? If so, how will this be implemented?
        D. How will the Administration expand MTCT services to people who
    do not have access?
        Answer. Ambassador Tobias will make fiscal year 2005 funding
    decisions based upon the submission of a unified annual Country
    Operational Plan (COP) from each of the 15 focus countries. This plan
    maximizes the core competencies and comparative advantages of all U.S.
    Government departments and agencies with in-country HIV/AIDS activities
    and allocates resources according to those core competencies and
    comparative advantages. The COPs for fiscal year 2005 will further
    illuminate how each focus country will harness those core competencies
    to reach the overall five-year Emergency Plan goals and how the
    allocation of resources among departments and agencies in the annual
    operational plan will contribute to reaching those goals. After
    Ambassador Tobias has approved the COPs, the Office of the U.S. Global
    AIDS Coordinator will be able to determine how much of fiscal year 2005
    funding to allocate to the prevention of mother-to-child transmission
    (PMTCT) activities.
        Regarding program classification, the Emergency Plan will consider
    traditional PMTCT activities as prevention activities and tracked
    accordingly. Under the Emergency Plan, the package of care for
    preventing mother-to-child transmission will include counseling and
    testing for pregnant women; anti-retroviral prophylaxis to prevent
    mother-to-child transmission; counseling and support for safe infant
    feeding practices; and voluntary family planning counseling or
    referral. The Emergency Plan will consider PMTCT-plus (HIV anti-
    retroviral treatment for HIV-infected mothers and other members of the
    child's immediate family) treatment activities.
        As you note, the President's International Mother and Child HIV
    Prevention Initiative (MTCT Initiative) has become a major pillar of
    the President's Emergency Plan for AIDS Relief. During the initial
    phase of the MTCT Initiative's programming, anti-retroviral treatment
    was not broadly available, and our emphasis was on saving those babies
    at-risk for HIV infection during childbirth and early infancy. Now, the
    Emergency Plan is scaling up ARV treatment programs to provide ongoing
    ARV therapy to communities at large.
        Building on the significant work already accomplished under the
    MTCT Initiative in 14 of the 15 focus countries, the Emergency Plan is:
      --Scaling up existing PMTCT programs by rapidly mobilizing resources;
      --Providing technical assistance and expanded training for health
            care providers (including family planning providers,
            traditional birth attendants, and others) on appropriate
            antenatal care, safe labor and delivery practices,
            breastfeeding, malaria prevention and treatment, and voluntary
            family planning;
      --Strengthening the referral links among health care providers;
      --Ensuring effective supply-chain management of the range of PMTCT-
            related products and equipment; and,
      --Expanding PMTCT programs to include HIV anti-retroviral treatment
            for HIV-infected mothers and other members of the child's
            immediate family (commonly known as ``PMTCT-plus'').
        In addition, two key strategic principles of the Emergency Plan are
    the development and strengthening of integrated HIV/AIDS prevention,
    treatment, and care and the development of sustainable HIV/AIDS health
    care networks. With interventions that emphasize technical assistance
    and training of health care professionals, health care workers,
    community-based groups, and faith-based organizations, the Emergency
    Plan is committed to building local capacity to provide long-term,
    widespread, essential HIV/AIDS care to the maximum number of those in
    need.
        Question. (13) HHS/FDA Process for Review of Fixed Dose Combination
    (FDC) Products.--Two days ago, Secretary Thompson announced that HHS/
    FDA will establish an expedited review process for products that
    combine individual HIV/AIDS therapies into a single pill, also known as
    fixed-dose combination drugs. For the Administration's global AIDS
    initiative to be successful, it is critically important that we are
    able to purchase high-quality drugs at the most affordable price. If we
    move quickly, we can serve larger numbers of children and adults who
    are in need of AIDS drugs.
        A. How soon do you expect this new system to be in place, and when
    do you think we'll have FDCs approved for use in resource-poor nations?
        B. Some countries only allow for the purchase of brand or generic
    drugs. For example, in South Africa you can only buy brand drugs. Do
    you think this new process will provide momentum for countries to allow
    for the purchase of both brand and generic drugs? What are we doing in
    this area?
        C. I understand that you will also be creating a competitive
    procurement process to purchase medications. When will this process be
    in place? Do you have estimates for how much drugs might cost under
    this system?
        Answer. Guidance proposed by the U.S. Department of Health and
    Human Services (HHS) through its Food and Drug Administration (FDA) to
    implement the rapid review process of fixed-dose combination and co-
    packaged HIV/AIDS drugs has outlined four scenarios for reviewing
    different FDC and co-packaged products. Some of the scenarios could
    permit approval in as little as two to six weeks after submission of a
    high-quality application. For companies that make products for which
    another firm owns the U.S. patent rights, HHS/FDA could issue a
    tentative approval when it finds the product meets the agency's normal
    safety and efficacy standards.
        To obtain approval of new products, manufacturers could cite
    existing clinical data to demonstrate the safety and effectiveness of
    the individual drugs in the new combined product--and new data to show
    effectiveness of the new combination could be developed quickly. HHS/
    FDA has pledged to work with companies to help them develop that data
    rapidly if they do not already have access to such data. HHS/FDA is
    also evaluating whether it can waive or reduce user fees, normally
    charged to companies making new drug applications, for products
    reviewed under this rapid review process.
        With regard to the creation of a competitive procurement process to
    purchase HIV/AIDS medications under the Emergency Plan, as described in
    the answer to questions 6-9 above, USAID plans to announce for public
    comment imminently a request for proposal for a supply-chain Management
    contract. The purpose of this contract is to establish a safe, secure,
    reliable, and sustainable supply chain for the Emergency Plan and to
    procure pharmaceuticals and other products needed to provide care and
    treatment of persons with HIV/AIDS and related infections at the lowest
    possible cost with guaranteed safety, quality and effectiveness. This
    contract will include procurement, in-country assistance, logistical
    management information system, as well as freight forwarding.
        Question. (14) a. Given that other disease treatment programs
    involving inexpensive drugs and treatments are still major health
    problems in Africa due to the lack of a human resource infrastructure
    (malaria being a very good example), why do you believe that the more
    complex to deliver anti-retroviral programs for HIV/AIDS will succeed?
    What needs to be in place for this effort to be successful?
        Answer. A lack of human resources for health (HRH) is holding back
    health interventions in Africa for malaria and other health problems,
    even though the interventions for malaria and other are technically
    much cheaper and simpler than anti-retroviral treatment. The Emergency
    Plan needs several things to be successful:
        A. Better data on the current health workforce in place in
    countries (both employed and unemployed), a better understanding of the
    underlying reasons for the dismal current status, morale and
    performance of HRH, and concerted short- and medium-term actions by the
    U.S. Government in collaboration with national governments and other
    donors to address those causes;
        B. Short-term actions to rapidly prepare and deploy more health
    care workers to meet the requirements for emergency delivery of needed
    care [local health care workers (nationals) must be the bulwark of the
    response, but expatriate volunteers placed through institutional
    twinning arrangements can be important in assisting in emergency care
    and in the initial phase of building sustainable capacity for ongoing
    training in more complex interventions such as anti-retroviral
    treatment]; and
        C. Medium-term actions to begin increasing the numbers of health
    care workers available to the expanding HIV/AIDS needs (while not
    damaging other important efforts such as those against malaria), and to
    better use scarce resources, such as doctors, nurses, pharmacists, and
    other cadres through realigning certain tasks to less intensively-
    trained staff (such as community health workers).
        Each of these activities are underway as part of the Emergency
    Plan; all will likely need to be done in nearly all countries in a
    concerted fashion if the Emergency Plan is to ultimately succeed. If
    done properly with careful design and implementation, the Emergency
    Plan could begin a reversal of the serious decline in HRH seen in sub-
    Saharan Africa and the Caribbean over the past two decades.
        Question. (14) b. Does USAID have an estimate of the additional
    trained individuals required to implement retro-viral programs? Have
    you analyzed the need for retraining current tertiary service delivery
    personnel for the HIV/AIDS initiatives?
        Answer. The U.S. Global AIDS Coordinator's Office, in collaboration
    with USAID and other partners, does have preliminary estimates of the
    additional trained personnel needed, based on the targets proposed in
    the first-year plans. However, those estimates are based on crudely
    estimated numbers of providers already trained and in place. Moreover,
    they are lacking essential data such as the current attrition rate from
    HIV/AIDS care programs, either from brain drain, retirement, HIV/AIDS
    infection itself, or other reasons. A critical step over the next few
    months and first full year of the Emergency Plan is to establish a
    reliable database with estimates of: (1) the currently qualified
    workforce, and (2) the workforce required to meet the Emergency Plan
    goals for each year of the Emergency Plan. Retraining current tertiary
    service delivery personnel is usually the quickest route to rapidly
    initiating anti-retroviral treatment programs, and is part of every
    country's program.
        Question. (14) c. There is only a handful of institutions in the
    United States that have a history of supporting African health training
    institutions. For example, Tulane University and its School of Public
    Health and Tropical Medicine have played a very significant role in
    terms of the number of African health professionals trained over the
    years. Are these institutions actively involved in the HIV/AIDS human
    resource development and training efforts?
        Answer. The scope and urgent timing for expansion of training
    programs places a high priority in recruiting all available,
    experienced institutions for the effort in combating HIV/AIDS,
    including outstanding implementing partners like Tulane that are
    interested and willing to establish twinning relationships with local
    institutions in the 15 focus countries of the President's Emergency
    Plan. Tulane is already highly involved, and their involvement was
    recently substantially scaled up, through the HHS University Technical
    Assistance Program (UTAP). We expect to depend greatly on the steadily
    expanding work of all such outstanding partners over the course of the
    Emergency Plan.
        Question. (14) d. Is the Agency exploring the use of information
    technology as a means of getting the message for HIV/AIDS training to
    the local institutions as efficiently as possible?
        Answer. The Office of the U.S. Global AIDS Coordinator is
    interested in the most cost-effective, sustainable approaches to
    meeting the goals of the Emergency Plan. We try to match the
    technological approach to the specific needs and context of the
    training situation, rather than the other way around. In that context,
    we do expect (and will pay for) information technology for training as
    well as to support the strengthening of networks for bi-directional
    communication that enhances the quality of health care. We expect
    exciting models for a mixture of e-learning, telemedicine, and enhanced
    monitoring and evaluation to emerge from our U.S. Government staff's
    efforts at problem-solving and building sustainable capacity in the
    coming years.
        Question. (14) e. To what extent are capacity building efforts
    among appropriate African educational and research institutions being
    involved to create an environment that can sustain the President's
    initiatives?
        Answer. The dual principles of cost-effectiveness and
    sustainability require us to conduct training predominantly through
    African educational and training institutions. The Emergency Plan will
    look for African (or Caribbean) institutions to be implementers at
    every opportunity, especially to have them work with their peers in
    other of the 15 focus countries. In the many contexts in which
    technical assistance from United States or third-country providers
    might be needed to initiate programs, a requirement of all grants will
    be to force international grantees to have a plan to develop capacity
    such that they can turn their activities over to local, in-country
    organizations.

                             CONCLUSION OF HEARINGS

        Senator McConnell. Thank you all very much for being here.
    That concludes our hearing.
        [Whereupon, at 12:36 p.m., Tuesday, May 18, the hearings
    were concluded, and the subcommittee was recessed, to reconvene
    subject to the call of the Chair.]

          FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS
                      APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.

                           NONDEPARTMENTAL WITNESSES

        [Clerk's note.--The subcommittee was unable to hold
    hearings on nondepartmental witnesses. The statements of those
    submitting written testimony are as follows:]

       Prepared Statement of the Center for Intercultural Education and
                       Development, Georgetown University

        Mr. Chairman, ranking member Leahy and members of the subcommittee,
    I appreciate this opportunity to update you on the success of two
    programs which have been funded by the Agency for International
    Development over the years with this Subcommittee's support: the East
    Central European Scholarship Program (ECESP) and the Cooperative
    Association of States for Scholarships (CASS). As you are no doubt
    aware, these two programs were initiated by the Congress, and I am
    proud to say that they have fully measured up to the confidence members
    of the Senate have shown in them.
        I would also make the point that these two models, with appropriate
    adaptations, can effectively serve national policy objectives in the
    regions in which they currently operate as well as elsewhere.
    Instability such as that confronting Haiti, Venezuela and Colombia in
    this hemisphere and the challenges of establishing strong market
    economies and democratic institutions in the Central Asian republics of
    the former Soviet Union argue for U.S.-supported intensive training
    programs carefully tailored to economic development strategies and
    toward government and private sector institution building. These
    programs provide excellent opportunities at the same time to emphasize
    our democratic values. CASS and ECESP have the experience and record of
    success to help meet national objectives in these regions--and others--
    without delay.
        Last fall, an opinion piece was published in The Washington Post
    entitled, ``Letting Fear Flourish.'' The article made the point that
    ``Throughout the hemisphere, new leaders are promulgating a kind of
    rhetoric about U.S. imperialistic ambitions eerily reminiscent of Cold
    War conspiracy theories of a generation ago. The problem this time
    around is that Washington is doing little to improve its image in the
    region and to counter such notions and the fears they engender.'' The
    article goes on to reference ``. . . the Central American Peace
    Scholarship program, which brought thousands of economically
    disadvantaged students to junior colleges in the United States, . . .
    .'' CASS is the current embodiment of the highly successful Central
    American Peace Scholarship program. The article went on to note that
    ``a new generation of nontraditional Latin American leaders rises--
    leaders who have not experienced cultural and academic exchanges.''
    While recent attention has focused on the importance of bolstering U.S.
    public diplomacy in the Arab and Muslim world, I would hasten to add
    that we should refocus attention as well on our neighbors to the South.
    Further, I offer up CASS as a ready-to-go approach to meeting this need
    and one with a proven track record.
        CASS and ECESP take somewhat different approaches and focus on
    different needs and populations, but they share common goals:
      --strengthening understanding of the United States and our values,
      --establishing effective government and non-profit institutions and
            supporting free market development, and
      --building a well-educated middle class capable of providing
            leadership in civic society critical to sustaining the economic
            and political progress of nations facing tremendous challenges.
        The East Central European Scholarship Program (ECESP) trains
    professionals who can spearhead the processes of democratic, economic
    and social transformation of their societies. Community and government
    leaders, experts, administrators, managers, and educators in East
    Central Europe are provided with the knowledge and skill base to become
    leaders and agents of change. This is accomplished through a range of
    U.S.-based, in-country and regional training programs leading to
    certificates and, in some instances, degrees. Five goals define what
    ECESP has worked to achieve in the countries served:
      --more effective, responsive and accountable systems of local
            government,
      --stronger institutions fostering democratic decision making and
            civil society,
      --more efficient health and social service delivery systems,
      --support for sustainable economic development, and
      --approaches to education that is responsive to local needs in
            changing environments.
        In the first 8 years of its existence, ECESP provided a dynamic
    long-term educational experience to approximately 700 participants from
    the Czech Republic, Hungary, Poland and Slovakia. Many of the ECESP-
    trained individuals have contributed significantly to the
    transformation, both economically and politically, of those nations and
    their entry into the European Union. Since 1998, an additional 924
    participants have been trained from Albania, Bulgaria, Macedonia and
    Romania with another 72 participants prepared to start training in May
    and August this year. Again, those who have been trained from this
    second group of nations have been key players in the reform of their
    governmental and economic systems.
        ECESP alumni have returned home to careers in the public and
    private sectors, which have contributed, to the economic and social
    development of their countries. They have held high government
    positions and have entered the business world. One example is Arben
    Ahmetja of Albania who, after completing the ECESP program in public
    administration became Executive Director of H-Communications, the first
    private telecommunications company in Albania. The company is bringing
    for the first time phone service to rural areas of Albania.
    Subsequently, he has returned to public service as the Vice Minister
    for Energy and Industrial Development. In that capacity, he has focused
    on strategies to improve the utilization of natural resources, which is
    key to Albania's economic development strategy.
        ECESP funds are overwhelmingly expended in the United States, with
    86 percent committed at U.S. colleges and universities. Today, major
    ECESP programs operate at the University of Wisconsin-La Crosse and the
    University of Kentucky. The program is having the impact that was
    intended. In fact, the program has been a contributing factor to the
    ``graduation'' of some countries out of USAID assistance programs. An
    evaluation funded by USAID found that ``[M]any [ECESP] returnees have
    taken on important policy roles, high positions in dimensions of public
    life, key positions in the growing private sector, and significant
    roles in advocacy and social improvement.'' It also noted ``[L]ong term
    (U.S. based training) appears to have a substantial impact on the
    attitude, vision and career path of participants.''
        We appreciate the fact that the Appropriations Committees recognize
    the potential of the ECESP approach and during last year's
    appropriations process encouraged USAID to expand ECESP so that it can
    serve the Central Asian republics of the former Soviet Union. While we
    have had initial conversations with USAID officials about means of
    following up on the recommendations accompanying the fiscal year 2004
    foreign operations appropriations, we have been advised that existing
    funds, which are managed by the missions for the region, are already
    obligated under large Indefinite Quantity Contracts of multi-year
    duration.
        Although secularism has prevailed in Central Asia, democracy has
    not taken root. Economic development is slow, unemployment rates are
    very high, youth is disaffected and looking to more radical solutions,
    and most Central Asian republics still face the daunting task of health
    reform. These factors continue to threaten the stability of this
    region. ECESP's expertise in building grass roots democracy and
    training for privatization and economic development, financial and
    banking reform, active labor market strategies, and health care reform
    can help alleviate the situation. Unfortunately, the concentration of
    training activities in the region under large Indefinite Quantity
    Contracts and the lack of additional resources in the proposed budget
    have made it impossible to follow up on the fiscal year 2004
    recommendations. We ask your help in addressing this situation.
        Clearly, there are a number of cultural and economic-sector
    differences between the Central Asian region and the areas where ECESP
    has functioned to date. Nevertheless, the experience we have had in
    being a successful partner in efforts to reshape political, social and
    economic realities in former Soviet bloc countries can bear on the
    challenges facing Central Asian republics. The experience of working in
    Albania, a country with no history of democracy and civil society
    development, is of particular relevance. Furthermore, Georgetown
    University is also home to two highly regarded National Resource
    Centers with expertise in this region. They can and have worked with
    CIED to ensure the necessary program adaptations and regional
    connections that will enable CIED to move quickly and effectively into
    this critical region.
        Georgetown's Center for Intercultural Education and Development is
    ready to work with you and USAID to continue the mission we have
    effectively served to date and to expand our services with
    modifications necessary to reflect the realities and needs of other
    nations.
        Whereas ECESP focuses on meeting the training needs of
    professionals, CASS provides training to disadvantaged students with
    demonstrated leadership qualities at U.S. educational institutions.
    Today, we partner with eighteen colleges, universities and community
    colleges in twelve states. The program provides technical training in
    agriculture, business, primary education, various industrial
    technologies, environmental sciences, and health care and infectious
    disease control. The training programs are carefully tailored to ensure
    that they also strengthen civic responsibility and leadership skills of
    participants. CASS has successfully served groups that historically
    have been overlooked in our foreign aid programs--women, ethnic
    minorities, the rural poor and individuals with disabilities. We are
    also extremely proud that the program includes the right mix of
    training and placement services to achieve a 98 percent rate of return
    to participants' home countries and a 92 percent alumni employment
    record. Alumni are working in fields that support private sector
    growth, humanitarian assistance and development objectives of their
    home countries. There are currently 417 CASS scholars in the United
    States and over 5,300 alumni contributing to the social and economic
    growth of their home countries.
        Nearly 90 percent of CASS funds are spent in U.S. communities. CASS
    students are involved in the life of the communities where they are
    hosted. Visiting students have tutored K-12 students in foreign
    languages, worked to fill and place sandbags to fight flooding along
    the Mississippi River, and regularly help on an array of other types of
    community service. On a number of the participating campuses, CASS
    students have been the only international presence.
        The U.S. host institutions provide a 25 percent local match to
    augment the AID funds. Providing the match is posing a serious
    challenge to some of the host institutions that have seen their state
    funding reduced in the face of state budgetary troubles. These partner
    institutions have proven highly effective in achieving the program's
    mission; hence, we are very concerned that the match requirement not
    result in schools not being able to continue their participation. This
    factor makes it particularly important that the participating
    institutions know that they can count on the CASS program continuing so
    that their campus investments continue to provide long-range benefits.
        As the Committee is aware, the CASS program is in its second year
    of a 5-year agreement with USAID. The new agreement includes new
    activities in Mexico in support of the Administration's efforts to
    strengthen the United States-Mexican relationship. Those new activities
    include the implementation of a regional strategy to foster growth
    through training and development. Economically disadvantaged Mexican
    youth will receive technical and leadership training at U.S. community
    colleges alongside North American students and CASS scholars from
    Central America and the Caribbean.
        To build on Mexico's strong regional development efforts, CASS is
    focusing on the less developed, marginalized populations of Mexico.
    Fields of study are selected for the potential they provide scholars to
    participate in opportunities created by export-driven economic growth,
    while ensuring environmental protection, through course work in
    agricultural production, industrial and information technologies, and
    industry-related environmental technologies.
        In 2003, CASS targeted recruitment in the states of San Luis
    Potosi, Queretaro and Guanajuato. In 2004, CASS expanded recruitment to
    include indigenous candidates from the states of Chiapas and Jalisco.
    Fields of study include Quality Control, Industrial Engineering
    Technology, Computer Information Technology, Agribusiness for Export,
    Food Technology, Telecommunications, and Strengthening Education for
    Indigenous Children. As members of the Subcommittee are well aware, in
    recent years Chiapas has experienced considerable political
    instability. The CASS training is part of a strategy to address
    underlying economic issues there.
        In addition, the Center for Intercultural Education and Development
    has worked with USAID outside the framework of our CASS agreement to
    develop a scholarship program aimed at bringing individuals from Cuba
    to the United States for training purposes. I think it is fair to say
    that USAID was interested in us managing this particular initiative
    because of the success of CASS in handling the training of populations
    that many aid programs do not reach. At this point, CIED has secured
    strong support from partner colleges slated to provide training and has
    20 scholars selected to begin training. However, in light of the
    current political environment vis-a-vis Cuba, the issuance of visas and
    other paperwork necessary for prospective students to leave Cuba have
    resulted in delays. The 20 scholars are poised to commence their
    studies in the United States as soon as these overarching issues are
    resolved.
        Finally with regard to CASS, I might add an observation regarding
    the current situation in Haiti and its impact on CASS alumni in the
    country and the 33 Haitian students currently studying in the United
    States. Sixteen Haitian students are preparing to return home this
    summer when they complete their 2-year training programs. When they do,
    CASS staff in Haiti will be there to receive them. CASS will provide
    them with a reentry seminar and job fair specifically geared to their
    particular employment skills. A network of successful alumni is also
    there to provide support to returning graduates, helping them in their
    readjustment to Haiti. Despite the difficult political situation in
    Haiti, CASS alumni are excelling and we are confident that, despite the
    unrest, these individuals will be successfully placed and contribute to
    the nation's economic well-being.
        I would like to cite the example of CASS alumnus Pierrot Marcel,
    who was born in Jeremie, an isolated town in the western end of Haiti,
    where services, supplies, and communication lines with urban centers
    are scarce. Children in Jeremie rarely finish secondary school and most
    everyone depends on menial jobs to survive. The average family income
    ranges from $90-$300 per year. Despite this, Pierrot was able to finish
    high school and in 1990 he was awarded a CASS scholarship.
        Upon returning to Haiti, he secured employment with the Fondation
    Haitienne de Developpement. Later he was hired as a local consultant by
    USAID, which he saw as ``an opportunity to pay back the U.S. Government
    for (his) scholarship.'' He worked the following 5 years with CARE
    International training farmers in marketing, management and food
    processing techniques. He taught them how to increase their income by
    adding value to their products such as processing raw cassava into
    cassava flour and cassava bread and shipping the final product to
    supermarkets as far away as Port-au-Prince. Pierrot has also helped
    connect cacao farmers with the Hershey chocolate plant in the United
    States.
        Pierrot Marcel is currently the Manager of the Jeremie Station for
    Tropical Airways d'Haiti S.A. and supervises all flights to his
    hometown. In addition, he founded the ``Grande Anse 2009'' school
    which, to date, has trained about 480 people in computer skills,
    employs nine people and has been accredited by the Haiti Ministry of
    Education. On a personal level, Pierrot has financed the education of
    each of his younger brothers.
        Over 500 Haitians have joined Pierrot Marcel in making the most of
    their CASS opportunity, which as a result has impacted their lives and
    those of countless others. Additional support specifically targeted for
    Haiti would enable CASS to develop a construction-training program for
    Haitians similar to the successful reconstruction initiatives CASS
    launched after Hurricane Mitch in Central America. Likewise, CASS could
    quickly implement expanded training in the field of agriculture, which
    is central to the Haitian economy. Such programs could play a critical
    role in developing a strong workforce capable of handling
    infrastructure repairs and revitalizing Haitian agriculture both of
    which are essential to putting the Haitian economy back on track while
    fostering political stability.
        At this critical juncture, both in terms of the nation's foreign
    policy priorities and with regard to defining the future of these two
    programs, we request your continued support in this year's
    appropriations process.
        Thank you.
                                     ______

                  Prepared Statement of The Nature Conservancy

        The Nature Conservancy (TNC) urges the Committee to continue its
    strong tradition of support to international conservation by
    appropriating, in fiscal year 2005, $175 million for conservation of
    biodiversity within the Development Assistance account of the Agency
    for International Development (AID), enough to begin addressing
    critical funding gaps; $178 million for the Global Environment facility
    (GEF), enough to allow for full payment of the U.S. pledge and progress
    toward payment of accumulated arrears; $30 million for the Tropical
    Forest Conservation Act (TFCA), a debt-for-forest program that
    leverages taxpayers' funds with private donations from groups like the
    Conservancy; and $8.4 million for international conservation programs
    within the International Organizations and Programs (IO&P) account at
    the Department of State.
        The mission of The Nature Conservancy is to preserve the plants,
    animals, and natural communities that represent the diversity of life
    on Earth, by protecting the lands and waters they need to survive. Our
    work in the United States and abroad is closely related. For example,
    it is not possible to protect migratory birds in their summer ranges,
    inside the United States, without also taking care of their winter
    ranges in Latin America and the Caribbean. More broadly, a healthy
    natural environment is a key element in genuinely sustainable economic
    and social development around the world. Too often, short-term
    considerations drive bad choices, whose results can be catastrophic for
    both the natural world and for the people who live with and by means of
    that world. When a tropical rain forest is destroyed the people, who
    live in and depend upon that forest, often go extinct nearly as fast as
    the animals.
        In our work outside the United States, we support local
    conservation groups that work to raise the effective level of
    protection at parks and nature preserves established by the local
    governments. We work with local communities to increase the
    constituency for conservation. We support sustainable development
    projects to improve the productivity and standard of living of rural
    people living in and near protected areas. We work cooperatively with
    landowners to promote conservation on private lands. We are a private,
    non-profit organization. Our recent private capital fund campaign
    raised more than $1 billion. One hundred twenty million dollars will be
    for our work outside the United States. About 83 percent of our
    operating budget is raised from non-governmental sources, but
    government grants fill a critical need. For example, the assistance we
    receive through our cooperative relationship with AID is vital to our
    international operations. It is difficult to raise private dollars for
    international operating (as distinct from capital) expenses. Without
    AID's support, these programs would be severely damaged.
        Our Parks in Peril (PiP) program in Latin America and the Caribbean
    and our similar efforts in the Asia/Pacific region are widely regarded
    as among the most successful and respected in the world. Our
    conservation work helps bring real protection to more than sixty major
    ``sites''--parks and nature preserves in 27 foreign countries,
    comprising over 80 million acres, while also generating economic
    benefits to communities and individuals. In a typical recent year, AID
    has supported PiP with about $6 million. The leverage on the U.S.
    Government's investment in PiP is very high--more than $300 million
    raised by us and by our local partners for conservation work at or near
    the PiP sites. We have signed a new 5-year agreement for Parks in
    Peril, under which we will leverage its proven methodology to many more
    places through at least 2006. Your Committee has praised Parks in Peril
    in its past reports, and we hope you will do so again.
        We are also grateful for AID's support to our other international
    projects, especially through the Global Conservation Program (GCP) and
    through the President's Initiative Against Illegal Logging. The GCP,
    for example, helps support our work on the coral reef that surrounds
    Komodo Island in Indonesia: for park rangers, marine patrol boats to
    enforce the ban on destructive fishing, and alternative development
    projects for local people.
        AID's support to biodiversity is by far the largest portion of all
    U.S. Government funding to international conservation: $155 million in
    fiscal year 2004. Your Committee has long supported AID's biodiversity
    work. We recognize the need for priorities at this moment of
    international crises. But, in view of the critical needs for survival
    of the world's natural heritage and the strong contribution that a
    healthy environment makes to social and political peace, we urge the
    Committee to raise overall grants to environmental work by AID. The
    Nature Conservancy as part of an alliance of conservation groups urges
    that AID's biodiversity funding (part of its environmental line item)
    for fiscal year 2005 be increased by $20 million to $175 million. Even
    after such an increase, the AID environmental share of the $21.3
    billion Foreign Operations total will remain small--barely 1 percent.
    Should an increase for biodiversity prove impossible despite your best
    efforts, we strongly urge the Committee to provide clear legislative
    guidance that AID's actual investment in conservation of global
    biodiversity should at the least not decline, and that only in situ
    conservation should count against the congressionally mandated level.
        The Tropical Forest Conservation Act (TFCA), known as the Portman
    Act, is also funded within Foreign Operations. The Administration has
    requested $20 million for fiscal year 2005 in the Treasury account, the
    same as in fiscal year 2004. We strongly support this request, and
    recommend that if possible it be increased to $30 million. If more
    funds were available, the TFCA could certainly put them to prompt and
    good use. The TFCA uses debt reduction deals to create long-term income
    streams to protect forests. The Conservancy donated more than $1
    million each to the TFCA deal with Belize and Panama, and over $400,000
    each to the deals with Peru and Colombia. These debt-for-forest deals
    leverage the U.S. taxpayers' dollar: typically, there is about $2 of
    conservation benefit for each $1 of appropriated funds. If TFCA gets
    $20 million, it will be possible to do several deals beyond Colombia,
    including such countries as Jamaica, Ecuador, Guatemala, and Paraguay.
    TNC stands willing to donate additional private funds in each case. If
    TFCA receives $30 million, the size of the deals could be increased and
    additional countries could participate.
        The Global Environment Facility (GEF) is the largest single source
    of environmental funds (including conservation) in the world,
    leveraging U.S. Government contributions four-to-one. The
    Administration's request level for fiscal year 2005 is $121 million,
    down significantly from the $138 million and $147 million appropriated
    in the last 2 years. This fiscal year 2005 level of funding would be
    barely adequate to meet the U.S. pledge level, and would allow
    virtually no progress toward paying the U.S. arrears. We urge the
    Committee to fund the GEF at $178 million, enough to meet the
    Administration's original goal of clearing all arrears within 3 or 4
    years.
        TNC appreciates the opportunity to submit this testimony for the
    record, and in closing suggests the following Committee report language
    regarding biodiversity, Parks in Peril, and the Tropical Forest
    Conservation Act.
        Draft Report Language:

                    AID'S SUPPORT TO CONSERVING BIODIVERSITY

        The Committee has repeatedly urged that AID make biodiversity
    conservation a high priority. The Committee directs that $175 million
    shall be made available for programs and activities that directly
    protect biodiversity in developing countries. The Committee further
    directs that, in meeting this goal, AID shall count only programs that
    help in situ protection of native wild animals and plants.

                                 PARKS IN PERIL

        The Committee strongly reiterates its continued support for the AID
    Parks in Peril (PiP) program, a partnership with the Nature Conservancy
    to promote biodiversity conservation in imperiled ecosystems throughout
    Latin America and the Caribbean.

                    TROPICAL FOREST CONSERVATION ACT (TFCA)

        The Committee strongly supports this program, which brings
    ``leverage'' to forest conservation. Under TFCA debt deals, the amount
    directed to forest conservation is always substantially more than the
    U.S. appropriated funds. The Committee directs that, of the amount
    appropriated, up to $1 million may be used for costs of U.S. federal
    agencies to administer the program.

                                        The Nature Conservancy,
                                            Lexington, KY, May 5, 2004.
    Attn: Brytt Brooks,
    Office of Senator Mitch McConnell, Subcommittee on Foreign Operations,
            Senate Committee on Appropriations, Washington, DC.
         Dear Senator McConnell: On behalf of the Kentucky Chapter of The
    Nature Conservancy I wanted to offer our support for the fiscal year
    2005 budget of the Agency for International Development (AID) and other
    programs that conserve biological diversity in developing countries.
        Our international programs and those of dozens of conservation
    organizations globally, benefit from AID support. Parks in Peril is a
    successful, multi-year Nature Conservancy effort that benefits from
    important AID help. I urge your committee to again put language
    strongly supportive of AID biodiversity conservation work and of Parks
    in peril in the report.
        We support more AID biodiversity money for the Tropical Forest
    Conservation Act, up from $20 million to $30 million if possible. We
    also support the international program of the U.S. Forest Service.
    While they are appropriated in Interior, not Foreign Operations, they
    do work on the Mexico side of the San Pedro and we are supporting an
    increase from $6 to $8 million.
        Thank you for your past support. Please fell free to call me at
    859-259-9655.
                Sincerely yours,
                                              James R. Aldrich,
                                         Vice President/State Director.
                                     ______

                   Prepared Statement of Rotary International

        Chairman McConnell, Senator Leahy, members of the Subcommittee,
    Rotary International appreciates this opportunity to submit testimony
    in support of the polio eradication activities of the U.S. Agency for
    International Development (USAID). The effort to eradicate polio has
    been likened to a race--a race to reach the last child. This race
    requires the dedication to make the sacrifices necessary to achieve
    success. Like some great relay team, the major partners in the global
    polio eradication effort have joined with national governments around
    the world in an unprecedented demonstration of commitment to cross the
    finish line of this historic public health goal. We cannot allow the
    great distance we have traveled to diminish our resolve. Though we may
    be weary, our adversary is weakening. The victory over polio is closer
    than ever!!
        I would like to take this opportunity to thank you Chairman
    McConnell, Senator Leahy and members of the Subcommittee for your
    tremendous commitment to this effort. Without your support of USAID's
    polio eradication activities, the battle against polio would be
    impossible. We appreciate the long-term investment you have made
    through USAID to strengthen the basic health care infrastructure of
    many polio-endemic countries. This solid infrastructure has provided
    the foundation on which the polio eradication program has succeeded.
    Additional support of the polio eradication program further strengthens
    this infrastructure because it gives confidence to the health care
    workers, provides dramatic assistance to families who no longer suffer
    the ravages of polio, and provides hope that other diseases can also be
    eliminated.

               PROGRESS IN THE GLOBAL PROGRAM TO ERADICATE POLIO

        Thanks to your leadership in appropriating funds, the international
    effort to eradicate polio has made tremendous progress.
      --The number of polio cases has fallen from an estimated 350,000 in
            1988 to less than 800 in 2003--a more than 99 percent decline
            in reported cases (see Exhibit A). More than 200 countries and
            territories are polio-free, including 4 of the 5 most populous
            countries in the world (China, United States, Indonesia, and
            Brazil).
      --Transmission of the poliovirus has never been more geographically
            confined. The Western Hemisphere, the Western Pacific and the
            European regions have been certified polio-free and wild
            poliovirus transmission is confined to a limited number of
            polio ``hot-spots'' within six countries.
      --More than 2 billion children worldwide have been immunized during
            NIDs in the last 5 years, including more than 150 million in a
            single day in India.
      --All polio-endemic countries in the world have conducted NIDs and
            established high quality surveillance of Acute Flaccid
            Paralysis (AFP). The eradication of polio in the Democratic
            Republic of Congo, Sudan, and Somalia shows that polio
            eradication strategies are successful even in countries
            affected by civil unrest.
        From the launch of the global initiative in 1988, to the
    eradication target date of 2005, 5 million people who would otherwise
    have been paralyzed will be walking because they have been immunized
    against polio. Tens of thousands of public health workers have been
    trained to investigate cases of acute flaccid paralysis and manage
    massive immunization programs. Cold chain, transport and communications
    systems for immunization have been strengthened. A network of 147 polio
    laboratories has been established to analyze suspected cases of polio
    and monitor transmission of polio. This network will continue to
    support the surveillance of other diseases long after polio has been
    eradicated.
        Give the tremendous progress that has been made in reducing the
    incidence of polio and diminishing the areas in which the virus
    circulates, the world currently faces an unprecedented opportunity to
    stop the transmission of wild poliovirus. However, significant
    challenges remain as obstacles to the ultimate achievement of our goal
    of a polio-free world. In 2003, Nigeria surpassed India to become the
    country with the highest number of polio cases. The surge in polio
    cases in Nigeria also resulted in importations of cases into several of
    the countries that neighbor Nigeria. The risk of importations into west
    and central African countries, and around the world, is magnified by
    financial constraints that limit the scope of immunization activities.
        Continued political commitment is essential in all polio endemic
    countries, to support the acceleration of eradication activities. The
    ongoing support of donor countries is essential to assure the necessary
    human and financial resources are made available to polio-endemic
    countries. Access to children is needed, particularly in Nigeria, where
    political and financial differences between key states and the federal
    government were unexpectedly given voice in the form of untrue rumors
    about the safety of the oral polio vaccine. As a result, immunization
    activities in the states that need them most were delayed and/or
    suspended during the effort to address local concerns. Polio-free
    countries must maintain high levels of routine polio immunization and
    surveillance. The continued leadership of the United States is critical
    to ensure we meet these challenges.

                        THE ROLE OF ROTARY INTERNATIONAL

        Since 1985, Rotary International, a global association of more than
    30,000 Rotary clubs, with a membership of over 1.2 million business and
    professional leaders in 166 countries, has been committed to battling
    this crippling disease. In the United States today there are nearly
    7,700 Rotary clubs with some 400,000 members. All of our clubs work to
    promote humanitarian service, high ethical standards in all vocations,
    and international understanding. Rotary International stands hand-in-
    hand with the United States Government and governments around the world
    to fight polio through local volunteer support of National Immunization
    Days, raising awareness about polio eradication, and providing
    financial support for the initiative. In 2003, members of Rotary clubs
    around the world announced the results of their second polio
    eradication fundraising campaign. Rotarians far exceeded the U.S. $80
    million goal they had set by raising U.S. $119 million in cash and
    commitments. Rotary firmly believes that the vision of a world without
    polio can be realized and that the time for action is now. By the time
    the world is certified polio-free, Rotary's contribution to the global
    polio eradication effort will exceed U.S. $600 million.
        Rotary International's commitment to the global polio eradication
    represents the largest contribution by an international service
    organization to a public health initiative ever. These funds have been
    allocated for polio vaccine, operational costs, laboratory
    surveillance, cold chain, training and social mobilization in 122
    countries. More importantly, tens of thousands of Rotarians have been
    mobilized to work together with their national ministries of health,
    UNICEF and WHO, and with health providers at the grassroots level in
    thousands of communities.
        In the United States, Rotary has formed and leads the United States
    Coalition for the Eradication of Polio, a group of committed child
    health advocates that includes Rotary, the March of Dimes Birth Defects
    Foundation, the American Academy of Pediatrics, the Task Force for
    Child Survival and Development, the United Nations Foundation, and the
    U.S. Fund for UNICEF. These organizations join us in expressing our
    gratitude to you for your staunch support of the international program
    to eradicate polio. For fiscal year 2004, you appropriated a total of
    $27.5 million for the polio eradication efforts of USAID. This
    investment has helped to make the United States the leader among donor
    nations in the drive to eradicate this crippling disease.

                        FISCAL YEAR 2005 BUDGET REQUEST

        For fiscal year 2005, we are requesting that your Subcommittee
    specify $30 million for global polio eradication in USAID's budget.
    These funds will support USAID's delivery of vaccine and the
    development of the infrastructure necessary to maintain its Polio
    Eradication Initiative. This would represent a funding increase of $2.5
    million from the fiscal year 2004 level. This funding level will
    provide much-needed stability to the program and ensure that the United
    States remains a leader in the global polio eradication effort. In
    addition, we are seeking report language specifying that this funding
    is provided specifically to combat polio. It is important to meet this
    level of funding due to the increased costs of the accelerated
    eradication program, and to respond to the increase in supplementary
    immunization activities in endemic countries, the need to maintain
    immunity in polio-free areas and maintain certification standard
    surveillance.

       THE ROLE OF THE U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT (USAID)

        In April 1996, with the support of the 104th Congress and in
    response to the strong urging of your Subcommittee, USAID launched its
    own Polio Eradication Initiative to coordinate agency-wide efforts to
    help eradicate polio. Over the subsequent 4 years, despite decreases in
    the overall Child Survival budget, Congress directed that $25 million
    be allocated to USAID's international polio eradication efforts. In
    fiscal year 2001, Congress increased this allocation to $27.5 million--
    an amount that was maintained since that time. Some of USAID's
    achievements in the past, and their planned Polio Eradication
    Initiative activities in 2004, include:
        Increased National Activities Throughout Africa.--USAID-supported
    synchronized multi-country national immunization days in 20 West and
    Central African countries reached more than 96 million children in 2001
    and 2002. In 2002, Sao Tome and Principe joined the group of West
    African counties that synchronized NIDs. Subnational immunization days
    targeting children under age 5 were conducted mainly in countries of
    East and Southern Africa. In East Africa, five countries participated
    in coordinated cross-border activities. Border districts in Djibouti,
    Ethiopia, Sudan, Kenya, and Somalia shared data about wild poliovirus
    and surveillance indicators. These activities will continue and expand
    during 2003.
        Intensified Efforts in South East Asia.--WHO's South East Asia
    region accounted for more than 80 percent of the global total of polio
    cases in 2002. Across the region, USAID grants to WHO, UNICEF, and the
    International Clinical Epidemiology Network supported immunization
    programs, NIDs, and follow-up campaigns. USAID support for these
    partners also strengthened planning, surveillance, laboratory,
    training, social mobilization, and information collection activities.
    USAID also supported country-specific activities in Bangladesh, India,
    Indonesia, and Nepal.
        PVO and NGO Collaborations.--In India, private voluntary
    organizations (PVOs) belonging to USAID's Child Survival and Resources
    Collaboration (CORE) Group helped the vaccination program in Uttar
    Pradesh state reach high-risk Muslim families. At the request of the
    Ministry of Health, the PVOs and their local partners provided support
    for social mobilization and marshalling volunteers to counsel Muslim
    families who were resisting immunizations for their children. In
    Calcutta, a nongovernmental organization (NGO) that partners with a
    CORE PVO was asked to cover slum wards because of its outstanding
    record of service. Because of the high-quality work performed by the
    NGO's volunteers, the health department assigned them the task of
    cross-checking for missed children during follow-up efforts. CORE NGOs
    are tackling the most difficult to reach populations in Nepal, Angola
    and Ethiopia in addition to India. Hundreds of thousands of children
    who had never been immunized against polio were located and vaccinated
    due to the diligence of CORE volunteers. All CORE members have
    identified AFP cases and participate on national interagency
    coordinating committees.
        Global Contributions.--USAID supported the certification commission
    in the European region, provides funds for accreditation and operations
    of the global laboratory network, intensified efforts in Afghanistan
    and Pakistan, and continued its role in polio communication through VOA
    and UNICEF. Working in collaboration with WHO USAID has developed
    guidelines for validating polio containment activities. USAID staff at
    all levels are actively engaged in planning, monitoring and evaluating
    activities and serve as observers during NIDs.

                      OTHER BENEFITS OF POLIO ERADICATION

        Increased political and financial support for childhood
    immunization has many documented long-term benefits. Polio eradication
    is helping countries to develop public health and disease surveillance
    systems useful in the control of other vaccine-preventable infectious
    diseases. Already all 47 countries of the Americas are free of
    indigenous measles, due in part to improvements in the public health
    infrastructure implemented during the war on polio. The disease
    surveillance system--the network of laboratories and trained personnel
    established during the Polio Eradication Initiative--is now being used
    to track measles, rubella, yellow fever, meningitis, and other deadly
    infectious diseases. NIDs for polio have been used as an opportunity to
    give children essential vitamin A, which, like polio, is administered
    orally, saving the lives of 1.25 million children since 1998. The
    campaign to eliminate polio from communities has led to an increased
    public awareness of the benefits of immunization, creating a ``culture
    of immunization'' and resulting in increased usage of primary health
    care and higher immunization rates for other vaccines. It has improved
    public health communications and taught nations important lessons about
    vaccine storage and distribution, and the logistics of organizing
    nation-wide health programs. Additionally, the unprecedented
    cooperation between the public and private sectors serves as a model
    for other public health initiatives. Polio eradication is a cost-
    effective public health investment, as its benefits accrue forever.

            RESOURCES NEEDED TO FINISH THE JOB OF POLIO ERADICATION

        The World Health Organization estimates that $765 million is needed
    from donors for the period 2004-2005 to help polio-endemic countries
    complete the polio eradication strategy. In the Americas, some 80
    percent of the cost of polio eradication efforts was borne by the
    national governments themselves. However, as the battle against polio
    is taken to the poorest, least-developed nations on earth, and those in
    the midst of civil conflict, many of the remaining polio-endemic
    nations can contribute only a small percentage of the needed funds. In
    some countries, up to 100 percent of the NID and other polio
    eradication costs must be met by external donor sources. We ask the
    United States to continue its financial leadership in order to see this
    initiative to its successful conclusion as quickly as possible.
        The United States' commitment to polio eradication has stimulated
    other countries to increase their support. Other countries that have
    followed America's lead and made special grants for the global Polio
    Eradication Initiative include the United Kingdom ($425 million), the
    Netherlands ($112 million), and Canada ($85 million). Japan, which has
    contributed $231 million, recently expanded its support to polio
    eradication efforts in Africa. Even the tiny country of Luxembourg has
    invested in global polio eradication by contributing $4.2 million. In
    both 2002 and 2003 the members of the G8 committed to provide
    sufficient resources to eradicate polio as part of its Africa Action
    Plan. In addition to the ongoing contributions made by historic donors
    such as United States, the United Kingdom, and Canada, new commitments
    of $37 million and $4 million were made by France and Russia in
    response to the G8 pledge.
        Intense political commitment on the part of endemic nations is also
    essential to ensuring polio eradication is achieved. In January 2004,
    health ministers of the six remaining endemic countries (Afghanistan,
    Egypt, India, Niger, Nigeria, and Pakistan) gathered at a meeting
    convened at WHO in Geneva to declare their commitment to supporting
    intensified supplementary immunization activities in the ``Geneva
    Declaration for the Eradication of Poliomyelitis.'' In addition,
    resolutions supporting polio eradication were taken by the African
    Union and the Organization of the Islamic Conference. Each of these
    resolutions encourages member states to place a high priority on
    completing the job of polio eradication.
        Your discipline, commitment and endurance have brought us to the
    brink of victory in the great race against this ancient scourge. Polio
    cripples and kills. It deprives our children of the capacity to run,
    walk and play. Other great health crises loom on the horizon. Your
    continued support for this initiative helps ensure that today's
    children possess the strength and vitality to grow up and fight against
    the health threats of future generations.

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page
    Black, Ambassador Cofer, Coordinator for Counterterrorism,
      Department of State............................................   121
        Prepared statement...........................................   136
        Summary statement............................................   134

    Center for Intercultural Education and Development, Georgetown
      University, prepared statement.................................   267

    DeWine, Senator Mike, U.S. Senator from Ohio, questions submitted
      by............................................................79, 174
    Durbin, Senator Richard J., U.S. Senator from Illinois, questions
      submitted by............................................103, 178, 199

    Landrieu, Senator Mary L., U.S. Senator from Louisiana, questions
      submitted by...................................................   114
    Leahy, Senator Patrick J., U.S. Senator from Vermont:
        Opening statements...........................................4, 123
        Prepared statements..........................................6, 124
        Questions submitted by.................................79, 174, 196

    McConnell, Senator Mitch, U.S. Senator from Kentucky:
        Opening statements...........................................1, 121
        Prepared statements..........................................3, 122
        Questions submitted by.................................53, 163, 186
    Mikulski, Senator Barbara A., U.S. Senator from Maryland,
      questions submitted by........................................97, 197

    Natsios, Hon. Andrew S., Administrator, United States Agency for
      International Development......................................   121
        Prepared statement...........................................   129
        Summary statement............................................   125

    Powell, Hon. Colin L., Secretary, Department of State............     1
        Prepared statement...........................................    15
        Summary......................................................     8

    Rotary International, prepared statement.........................   273

    Shelby, Senator Richard, U.S. Senator from Alabama, prepared
      statement......................................................   149

    The Nature Conservancy, prepared statement.......................   270

                                 SUBJECT  INDEX

                                  ----------

                              DEPARTMENT OF STATE

                            Office of the Secretary

                                                                       Page

    Additional Committee Questions...................................    52
    Afghanistan......................................................    11
        Release of 2004 Supplemental Funds for Afghan Women..........    99
    Basic Education Funding and the G-8 Summit.......................   104
    Caring for the World's Most Vulnerable People....................    21
    Colombia Cap Increase............................................    71
    Colombian Contractors............................................    86
    Coordinated Education and HIV/AIDS Strategy....................117, 118
    Critical Languages...............................................   116
    Diplomatic Readiness Initiative..................................    13
    Emergency Plan for AIDS Relief...................................   107
    Female Genital Cutting...........................................   104
    15th Focus Country--Initial Candidate Countries..................   107
    Girls' Education.................................................   117
    Haiti............................................................34, 49
    HIV/AIDS.........................................................    12
    Humanitarian Assistance..........................................    81
    Iraq.............................................................     2
        Reconstruction...............................................     5
    Israel Fence.....................................................    24
    Israel/Egypt.....................................................    65
    Israeli-Palestinian Conflict/Middle East Reform..................    86
    Keeping Americans Safe at Home and Abroad........................    22
    Microenterprise..................................................   109
    Millennium Challenge Account.....................................    13
        And Core Development Accounts................................   102
    Millennium Challenge Corporation.................................    93
    NATO.............................................................    14
    Oil for food.....................................................    38
    Our new Approach to Global Prosperity............................    20
    People With Disabilities.........................................    32
    Reconstruction Programs in Iraq..................................    45
    Role of Women in Afghanistan.....................................    44
    Shortfall of Arabic Linguists....................................   116
    Strategy options.................................................     5
    Sudan............................................................    40
    Tuberculosis Treatment...........................................   106
    U.N. Resolution..................................................    15
    U.S. Emergency Fund..............................................     3
    Voice for Humanity...............................................    48
    Weapons Dumps....................................................    29
    Winning the War on Terrorism..................................... 9, 16

                   Office of the U.S. Global AIDS Coordinator

    Additional Committee Questions...................................   239
    Emergency Plan for AIDS Relief 15th Focus Country--Initial
      Candidate Countries............................................   254
    Uganda...........................................................   225
    Views Mixed On U.S. Shift On Drugs For AIDS......................   217

               UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

    Additional Committee Questions...................................   163
    Afghanistan......................................................   164
    Agriculture Programs.............................................   145
    Basic Education Funding..........................................   182
    Broad Challenges of Foreign Aid..................................   126
    Colombia.........................................................   177
    Combatting HIV/AIDS..............................................   183
    Coordination of Foreign Assistance...............................   178
    Cost of Rebuilding Iraq..........................................   143
    Economic Growth and Job Creation.................................   127
    Education........................................................   175
        And Training.................................................   128
    Egypt/Saudi Arabia...............................................   173
    Expenditure Rates--Iraq..........................................   144
    Female Genital Cutting...........................................   186
    Geographic Isolation.............................................   127
    Global Challenge.................................................   151
    Governance Issues................................................   128
    Haiti..........................................................146, 174
    Humanitarian Assistance..........................................   174
    Indonesia........................................................   168
    Iranian Terror...................................................   160
    Iraq.............................................................   163
        Security in..................................................   178
    Israel...........................................................   167
    Malaria Programs.................................................   158
    Micro Credit.....................................................   158
    Microenterprise..................................................   181
    North Korea......................................................   169
    Pakistan.........................................................   170
    Population Growth................................................   177
    Reconciliation and University Programs...........................   175
    South America....................................................   170
    Southeast Asia...................................................   165
    Sudan............................................................   156
    Syria/Iran.......................................................   172
    Terrorism........................................................   178
        Financing....................................................   150
    Tuberculosis.....................................................   185
    USAID:
        Budget.......................................................   155
        Programs and Counterterrorism................................   151
        Staff........................................................   176
    West Africa....................................................169, 192