[Senate Hearing 110-226]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 110-226
 
                            IRAN: AN UPDATE 

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

                                HEARING



                               BEFORE THE



                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE



                       ONE HUNDRED TENTH CONGRESS



                             FIRST SESSION



                               __________

                             MARCH 29, 2007

                               __________



       Printed for the use of the Committee on Foreign Relations


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                     COMMITTEE ON FOREIGN RELATIONS

                JOSEPH R. BIDEN, Jr., Delaware, Chairman
CHRISTOPHER J. DODD, Connecticut     RICHARD G. LUGAR, Indiana
JOHN F. KERRY, Massachusetts         CHUCK HAGEL, Nebraska
RUSSELL D. FEINGOLD, Wisconsin       NORM COLEMAN, Minnesota
BARBARA BOXER, California            BOB CORKER, Tennessee
BILL NELSON, Florida                 JOHN E. SUNUNU, New Hampshire
BARACK OBAMA, Illinois               GEORGE V. VOINOVICH, Ohio
ROBERT MENENDEZ, New Jersey          LISA MURKOWSKI, Alaska
BENJAMIN L. CARDIN, Maryland         JIM DeMINT, South Carolina
ROBERT P. CASEY, Jr., Pennsylvania   JOHNNY ISAKSON, Georgia
JIM WEBB, Virginia                   DAVID VITTER, Louisiana
                   Antony J. Blinken, Staff Director
            Kenneth A. Myers, Jr., Republican Staff Director

                                  (ii)

  


















                            C O N T E N T S

                              ----------                              
                                                                   Page

Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware, opening 
  statement......................................................     1
    Prepared statement...........................................     3
Burns, Hon. R. Nicholas, Under Secretary of State for Political 
  Affairs, Department of State, Washington, DC...................     6
    Prepared statement...........................................    10
    Responses to questions submitted by Senator Casey............    43
Lugar, Hon. Richard G., U.S. Senator from Indiana, opening 
  statement......................................................     4

                                 (iii)

  


                            IRAN: AN UPDATE

                              ----------                              


                        THURSDAY, MARCH 29, 2007

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:45 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Joseph R. 
Biden, Jr. (chairman of the committee) presiding.
    Present: Senators Biden, Feingold, Obama, Cardin, Casey, 
Webb, Lugar, Hagel, Coleman, Corker, Voinovich, Murkowski, and 
Isakson.

        OPENING STATEMENT OF HON. JOSEPH R. BIDEN, JR.,
                   U.S. SENATOR FROM DELAWARE

    The Chairman. Let me begin by explaining to our visitors 
that the reason why this hearing has begun so late is there 
were a series of unexpected votes on the floor of the U.S. 
Senate. And every time we came back over to begin the hearing, 
there were a series of procedural votes.
    And I apologize to our distinguished witness, Secretary 
Burns, who is someone who is listened to with real interest and 
viewed with overwhelming respect by all members of this 
committee. He said he had time, and I pointed out I'd rather 
him be out negotiating than in here. I--and I appreciate his 
being here.
    This testimony that Secretary Burns is about to give, and 
hopefully the exchange we'll have with him, comes at a very 
important moment. Tensions with Iran are rising. Its government 
refuses to release 15 British servicemembers it illegally 
detained last week. And in Iraq, the Iranians are accused of 
supplying deadly weapons to militias who have attacked our 
troops. We've arrested some Iranians in Iraq who we believe are 
part of that process.
    The President has dispatched two aircraft carrier battle 
fleets to the Persian Gulf. And they are currently in the midst 
of extensive military exercises, as we see, and Americans see 
when they turn on their television sets. And President 
Ahmadinejad's incendiary threats to wipe Israel off the map, 
and his denial of the Holocaust, combined with Iran's nuclear 
ambitions, have led to a very legitimate concern, not only 
here, but in the region, around the world, of the intentions of 
the Iranian President.
    Iran's perceived expansionism, including its support for 
Hezbollah and Hamas, has sparked deep fears, not merely in 
Israel, but across the Arab world. Iran and Saudi Arabia--Iran 
and the Sunni-Arab States are on opposite sides of a growing 
Sunni-Shia rift that extends from Lebanon through Iraq to the 
Gulf States and into South Asia. One of the things we're going 
to be asking--I'm going to be asking the Secretary today is to 
help, sort of, quantify some of these things, give a sense of 
how close to the edge some of these concerns that I'm raising 
are. All of this contributes to a regional tinderbox that 
could, with the wrong move, ignite a physical conflict. And an 
otherwise minor incident has the potential to spiral out of 
control. I'm not suggesting that will happen, but I'm 
suggesting we should talk about it.
    My dad used to have an expression, ``The only war worse 
than one that's intended is one that wasn't intended.'' I'll 
alter it slightly, ``If there's anything worse than a poorly 
planned intentional war, it's an unplanned unintentional war.'' 
So, we need very cool heads to prevail, and we have one of the 
coolest heads and best negotiators and most talented men in the 
State Department before us today.
    My view is, I think we have to be patient, and we need some 
hardheaded diplomacy, not based on any naive assumptions, but 
just hardheaded diplomacy. And that is what you have pursued at 
the U.N. Security Council, Mr. Secretary. Last May, the 
administration--I would have characterized it as, ``reversed 
course,'' but maybe that's not fair, and joined forces with our 
European allies. Since then, you personally have secured two 
unanimous U.N. Security Council resolutions, which have not 
been easy to do, sanctioning Iran for its defiance on its 
nuclear program. And although the critics say these have been 
modest, the point is, they have been modest, but incremental. 
You've kept the world onboard.
    One of the discussions you and I had a long time ago was 
the--I think one of the objectives is to make sure that Iran is 
viewed as the world's problem, not us viewed as the problem. 
And keeping the world onboard has not been easy.
    The sanctions, in my view, have highlighted Iran's 
international isolation, and I think they have helped reveal 
some severe cracks in Iran, in their political establishment. 
Ahmadinejad is no longer riding so high, in my observation. I'm 
going to ask you about that. He's increasingly constrained, as 
other power centers in his country criticize him for his 
diplomatic and economic failures. There is--I won't call it an 
``economic meltdown,'' but there is not an--it's not happy 
times in Iran right now. Your efforts, and the efforts of the 
administration and the President, have had some positive 
impacts on making it clear to the Iranian people and to the 
business community that there are prices to pay for 
irresponsibility. There are more open challenges of the regime. 
In recent weeks, Iranian women bravely took to the streets to 
challenge the government's discriminatory policy.
    And, in short, Mr. Secretary, I support what you've been 
doing, and I applaud you for what you've accomplished thus far. 
But, Mr. Secretary, after all that has happened in Iraq, with 
everything that's happening here at home--with notable 
exceptions, the administration has--let me put it more 
diplomatically--has considerably less credibility and goodwill 
than it started with several years ago, or 5 years ago. Many 
people, here and abroad, are skeptical that the 
administration--whether it's actually made a fundamental break 
with its past policies, and that it's really focused on 
results, as opposed to ideology. I know you too well. I don't 
want to hurt your reputation with the administration, but 
you're the furthest thing I know from an ideologue. You're an 
incredibly well-informed and tough-minded diplomat who seeks 
objectives, and is pretty good at achieving them.
    So, I hope you can answer a couple of questions relating to 
the administration's strategy, going forward.
    The first is: Is the administration's goal in Iran regime 
change or behavior change? Now, some would argue they're not 
inconsistent, but I would argue there is a distinctive 
difference between regime change and seeking behavior change. 
Your counterpart, in Korea, who's been given, it seems to me, a 
pretty wide berth, has made similar progress. But it seems to 
rest, in my view, on having moved off of the insistence on 
regime change and focusing more on behavioral change. No one 
likes this regime, but I hope we keep our eye on the first 
prize, as preventing Iran from developing nuclear weapons. And 
so, how can we tell Iran not to go nuclear, but then, in the 
next breath, say, ``After you commit to not go nuclear, we're 
going to change your regime''?
    So, the second question I'm going to--I'd like you talk 
about, as well, when it comes my turn, is--the pressure we're 
applying: Is it aimed at improving our position and weakening 
Iran in any future negotiations, or is it designed to prepare 
the battlefield for war? I realize that's always an option any 
President has to leave on the table, but these are central 
questions, which I know our constituents are being--are asking 
us and I'd like an opportunity to have you discuss.
    I would ask unanimous consent, in the interest of time, the 
remainder of my statement be put in the record, and conclude by 
saying I have no doubt in my mind, Mr. Secretary, there are 
those in Iran who prefer confrontation to cooperation. But it 
seems to me it's pretty important for the Iranian people--
beyond their government, the Iranian people--to understand that 
our hand is extended, that we're not the ones standing in the 
way of peaceful coexistence, and possibly even fruitful 
cooperation.
    So, I compliment you for the--what you have accomplished 
thus far. I think the government in Tehran has a fundamental 
choice to make. As Iran's new year begins, I hope they begin to 
make the right choices with the proper prodding from you and 
our diplomatic corps.
    [The prepared statement of Senator Biden follows:]

  Prepared Statement of Hon. Joseph R. Biden, Jr., U.S. Senator From 
                                Delaware

    Secretary Burns, welcome. Your testimony comes at an important 
moment. Tensions with Iran are rising. Its government refuses to 
release 15 British service members it illegally detained last week. In 
Iraq, its Quds Force is accused of supplying deadly weapons to militias 
who have attacked our troops; we've arrested some of its members.
    The President has dispatched two aircraft carriers to the Persian 
Gulf. They are currently in the midst of extensive military exercises. 
President Ahmadinejad's incendiary threats to wipe Israel off the map, 
and his denial of the Holocaust, combined with Iran's nuclear program, 
have led to legitimate concern over his intentions.
    Iran's perceived expansionism, including its support for Hezbollah 
and Hamas, has sparked deep fear across the Arab world. Iran and the 
Sunni Arab states are on opposite sides of a growing Sunni-Shia rift 
that extends from Lebanon, through Iraq, the Gulf States, and into 
South Asia. All of this contributes to a regional tinderbox that could 
ignite with one wrong move.
    An otherwise minor incident could quickly spiral into military 
confrontation. If there is anything worse than a poorly planned 
intentional war, it is an unplanned, unintentional war. We need cool 
heads to prevail. We need patient, hardheaded diplomacy.
    That is what you have pursued at the U.N. Security Council. Last 
May, the administration reversed course and joined forces with our 
European allies.
    Since then, you have secured two unanimous U.N. Security Council 
resolutions sanctioning Iran for its defiance on its nuclear program.
    The sanctions are modest, but their effect has been 
disproportionate. They have highlighted Iran's international isolation 
and they have helped reveal cracks in Iran.
    Ahmadinejad is no longer riding so high. He's increasingly 
constrained as other power centers in Iran criticize him for his 
diplomatic and economic failures. There are more open challenges to the 
regime. In recent weeks, Iranian women bravely took to the streets to 
challenge the government's discriminatory policies.
    I support what you are doing and applaud what you've accomplished. 
But, Mr. Secretary, after all that has happened in Iraq, and with 
everything that is happening here at home, this administration has much 
less credibility and good will than when it started.
    Many people are skeptical that the administration has made a 
fundamental break with its past policy, that it is really focused on 
results, not ideology. So I hope that you can answer authoritatively 
two questions about the administration's strategy going forward.
    First, is the administration's goal in Iran regime change or 
behavior change?
    No one likes this regime, but let's keep our eye on the first 
prize: Preventing Iran from developing nuclear weapons. How can we tell 
Iran not to go nuclear, but then in the next breath tell the regime our 
goal is to take it down?
    Second, is the pressure we are applying aimed at improving our 
position and weakening Iran's in any future negotiations or is it 
designed to prepare the battlefield for war? These are the central 
questions I hope you will address directly in your testimony.
    I believe we must continue to intensify pressure on Iran over its 
nuclear program with coordinated international sanctions that isolate 
Tehran, not the United States.
    We should complement this pressure by presenting a detailed, 
positive vision for United States-Iran relations if Iran does the right 
thing. And we should engage Iran directly to exploit fissures within 
the government and between the government and the people.
    But engagement is not an end in itself. It has to serve a larger 
purpose.
    In my judgment, that purpose is to make clear the conditions under 
which the United States and Iran can have a more normal relationship 
and Iran can be integrated into the regional and international systems. 
We also must find more effective ways of getting our message to the 
Iranian people.
    Some in Iran may prefer confrontation to cooperation. But it is 
important Iranians understand that our hand is extended. We are not the 
ones standing in the way of peaceful coexistence and even fruitful 
cooperation.
    The government in Tehran has a fundamental choice to make. As 
Iran's new year begins, we all hope that it makes the right choice.

    The Chairman. Senator Lugar.

          OPENING STATEMENT OF HON. RICHARD G. LUGAR,
                   U.S. SENATOR FROM INDIANA

    Senator Lugar. Well, thank you, Mr. Chairman.
    I join you in welcoming Secretary Burns back to the 
committee. We appreciate his efforts on so many diplomatic 
fronts, and look forward to his testimony on the critical topic 
of American policy toward Iran.
    In testimony before our committee last September, Secretary 
Burns outlined the administration's policy of supporting an 
international dialog with Iran while backing up their 
willingness--or backing up that willingness to negotiate with 
the prospect of U.N. sanctions. Six months have passed, and 
Iran's leaders have, thus far, rebuffed the international 
community's offer to negotiate an acceptable arrangement for 
their nuclear program. As a result--thanks, in part, to U.S. 
leadership--the U.N. Security Council has voted twice to impose 
sanctions, and may do so again, should Iran continue on the 
path of defiance. This multilateral approach to the problem, I 
believe, has directly bolstered United States efforts to 
encourage foreign governments and banks to curtail commercial 
benefits to Iran, thereby enhancing the impact of the United 
Nations sanctions. The task for American diplomats must be to 
sustain international will, and solidify an international 
consensus, in favor of a plan that presents the Iranian regime 
with a stark choice between the benefits of accepting a 
verifiable cessation of their nuclear program and the 
detriments of proceeding along their current course.
    The United States has in place extensive unilateral 
economic sanctions against Iran, and some have suggested the 
Congress should pass legislation targeting additional 
unilateral sanctions against foreign companies that invest in 
Iran. I understand the impulse to take that step, but, given 
the evident priority that the Iranians assign to their nuclear 
program, I see little chance that such unilateral sanctions 
would have any effect on Iranian calculations. Such sanctions 
would, however, be a challenge to the very nations that we are 
trying to coalesce behind a more potent multilateral approach 
in Iran. We should not take steps that undermine our prospects 
for garnering international support for multilateral sanctions, 
which offer better prospects for achieving our objectives than 
unilateral measures.
    Iran poses challenges to United States interests in the 
region, beyond the nuclear program. Iranian policies in Iraq, 
Lebanon, and in the Israeli-Palestinian arena threaten our 
interest in a stable Middle East. Iran's expansionist foreign 
policy and the bombastic rhetoric of its President have also 
fed concerns among its neighbors that it seeks to dominate the 
region and interfere in their internal affairs. As with the 
nuclear issue, an effective United States strategy for Iran 
should leverage the concerns of other governments, in pursuit 
of a united front toward objectionable Iranian policies. While 
enlisting the support of regional governments is critical, we 
should avoid any calls to exploit Shiite-Sunni tensions. The 
spread of sectarian conflict from Iraq to other parts of the 
Middle East is decidedly not in the interests of the United 
States or the people of the region.
    As the United States pursues sanctions at the United 
Nations, it's important that we continue to explore potential 
diplomatic openings with Iran, either through our own efforts 
or those of our allies. Even if such efforts ultimately are not 
fruitful, they may reduce risks of miscalculation, improve our 
ability to interpret what is going on in Iran, and strengthen 
our efforts to enlist the support of key nations.
    In this regard, the United States decisions to participate 
in the conference of Iraq's neighbors earlier this month was a 
welcome step forward. Secretary Rice's personal effort in 
pursuit of peace between Israel and the Palestinians also is a 
welcome development that could help diminish the appeal of 
extremism in the region, backed by Iran, who calls for 
confrontation with Israel. History has demonstrated that 
progress on this difficult issue rarely is achieved without 
sustained and active U.S. diplomacy.
    Therefore, it's a special pleasure, Secretary Burns, to 
have you with us today. We look forward to your insights and 
your progress report on these matters.
    I thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Secretary, we welcome you and are anxious to hear what you 
have to say. And take as much time as you want, but, as you 
know, your entire statement, if you choose not to read it all, 
will be placed in the record.

 STATEMENT OF HON. R. NICHOLAS BURNS, UNDER SECRETARY OF STATE 
   FOR POLITICAL AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

    Ambassador Burns. Mr. Chairman, thank you very much. It's a 
pleasure to be before you once again to discuss United States 
policy toward Iran, and to be with all of your colleagues. I 
did submit my testimony yesterday. I will not read it; I'll 
spare you that.
    The Chairman. No, no, it's very----
    Ambassador Burns. But I thought, Mr. Chairman, with your 
permission, that what I'd do is just comment--make a few 
comments on what you and Senator Lugar have just said to get us 
started, and that by--that might also give you a sense of the 
basic thrust of our strategy on this priority issue of Iran.
    I agree with both of you--and I've had a chance to talk to 
many of the members of this committee individually--that, next 
to Iraq, next to the challenge of success in Iraq, there's 
probably no other issue that's so important to American foreign 
policy and to our future than dealing successfully with the 
challenge posed by Iran. And we would see four interconnected 
challenges in the Middle East. The Middle East certainly is now 
the area of priority attention for our foreign policy; the way 
Europe was, in the last century.
    Four challenges posed by Iran:
    First, the obvious attempt by Iran to seek a nuclear 
weapons capability. Nobody doubts it. I have been the American 
liaison now for 2 years, with Russia and China and the 
Europeans, and no one has ever told me, from any of these 
governments, that they think there's a benign intention here on 
the part of the Government of Iran. Everyone's convinced that 
this supposedly peaceful nuclear research program is actually 
intended to produce a nuclear weapons capability.
    Second is the problem that Iran and Syria and Hezbollah are 
trying now to unseat the democratically elected government of 
Prime Minister Siniora in Lebanon.
    Third, Iran is the leading opponent of Israel in the 
region, the leading opponent of the attempts by the United 
States and others to establish a peace between Israel and the 
Palestinians.
    And, fourth, as you know, the Iranians have not played a 
positive and useful role in Iraq. They have enormous influence 
there. Many of the current Shia leaders in the Iraqi Government 
took refuge in Iran during the Saddam years. They know the 
Iranians well. The Iranians could be arguing for a policy that 
would unite the various warring factions in Iraq, but they're 
not, they're actually taking sides. And as the President said 
in the early part of January, we know that they're providing--
the Iranians--sophisticated EFP technology, explosive 
technology, to Shia militant groups, and that those groups are 
using that technology to target and wound and kill American 
soldiers. So, the challenge posed by Iran goes right to the 
heart of our most vital interests in the Middle East. And so, 
we're right to focus on it, and this committee is, as well.
    On the issue of Iran's nuclear ambitions, the policy of our 
Government is to deny Iran a nuclear weapons capability. And we 
are trying to exact multiple points of pressure on the Iranians 
in an effort to convince them that the preferred way to deal 
with this problem is not through confrontation, and certainly 
not--certainly not through a military conflict, but through 
diplomacy and through peaceful negotiations. And so, what we've 
tried to do over the last 2 years--and it was about 2 years 
ago, this month, that President Bush made the decision that, 
for the first time, we'd actually support the international 
negotiations with Iran on the nuclear issue; multiple points of 
pressure should be applied from different perspectives to 
convince the Iranians there's a cost to what they're doing; and 
that the cost is going to rise, and there'll be ever-
increasing pressure if they refuse to go to the negotiating 
table. And you, Mr. Chairman and Senator Lugar, you've referred 
to the primary point of pressure. Iran is now one of 11 
countries, of 192 in the U.N. General Assembly, subject to 
chapter 7 sanctions, and the United States has led, in December 
and again last Saturday, by 15 to 0 votes--very forceful, 
united votes--two increasingly tough sanctions resolutions 
against the Iranians. Iran is not like North Korea; it's not a 
country that can, or would like to, live in isolation. It wants 
to be integrated, economically and politically, with its 
neighbors in the Arab world and with Europe. And these 
sanctions will increasingly isolate and distance Iran from 
those profitable relationships. We think that's a good start.
    Second, we have used--the Treasury Department has used our 
311 authority in the Patriot Act to impose additional United 
States economic sanctions on Iran. So, you've seen Treasury 
sanction Bank Saderat and Bank Sepah. Bank Sepah is the fourth 
largest bank in Iran. It is the front company by which the 
Iranian Government funnels money to fund its ballistic-missile 
and WMD activities, so it's a very important set of sanctions 
that we've applied.
    Third, Secretary Paulson and Secretary Rice have used their 
influence with corporate and financial leaders around the world 
to essentially give the message to European, Arab, and Asian 
bankers that Iran is not a good credit risk and that if Iran is 
going to be subject to international sanctions and national 
sanctions, companies and financial institutions ought to think 
twice about long-term investments. We've seen three major 
European banks in the last 8 months shut down all lending to 
Iran, and 20 others begin that process. And the Iranians are 
beginning to feel that pinch.
    Fourth--and, Mr. Chairman, you referred to this--we do have 
two carrier battle groups in the gulf. They are not there to 
provoke any kind of conflict with Iran. We have had American 
naval forces in the gulf since 1949. But the message is, we 
have 170,000 troops in Iraq, we have obvious security interests 
throughout the gulf region; the gulf is not an Iranian lake, it 
is an international waterway, and we will protect, as we have 
since the late 1940s, the right of companies and nations to use 
the gulf for international commerce and for it to be a peaceful 
region, not a violent region.
    And, of course, Mr. Chairman--you referred to this, as 
well--we have pushed back against the Iran attempts to use the 
Quds Force, which is an arm of the Iranian Revolutionary Guard 
Corps Command, to funnel this explosive technologies to Shia 
militant groups in Iraq. The President said, back on January 
10, that he has a fundamental responsibility to protect 
American men and women in Iraq--our soldiers--and he does. And 
so, we have detained several Iranian military and intelligence 
figures who were caught redhanded in this network, providing 
this technology to the Shia militant forces.
    So, these combination of pressures that we've deployed, 
economic and political and diplomatic, and some military in 
Iraq, are all impinging upon the Iranians, they're increasing 
the pressure on the Iranians to do one thing: Not to lead the 
confrontation with us, but to lead to negotiations, because 
we're convinced that diplomacy is the way to proceed. We are 
most definitely on a diplomatic track, and we believe diplomacy 
can succeed, and we do not believe a conflict with Iran is 
inevitable.
    For diplomacy to succeed, we're going to need to be 
patient, as well as persistent. I was intrigued, Mr. Chairman, 
to read the Washington Post lead editorial today, which said 
some nice things about the administration's efforts in Iran, 
and then said, ``But they're not--they haven't yet been 
successful in convincing the Iranians to give up their nuclear 
weapons.'' I guess my answer to the Washington Post would be, 
``If you want to pursue or support a diplomatic path, you have 
to have the patience and perspective to allow diplomacy to play 
out.'' And we have some time to do that. There is no reason for 
us to choose a confrontational path now. We have time to pursue 
diplomacy, and President Bush and Secretary Rice have been 
doing that.
    We also, I think, are trying to leave exit doors for the 
Iranians. And what I mean by that is, in any negotiation or 
prospective negotiation, you don't want to corner your 
negotiating partner and leave that country with no options.
    And so, about a year ago, China and Russia and the 
Europeans and the United States got together, and we offered 
two choices to the Iranian Government. We said, ``We want to 
negotiate with you.'' We offered them an economic and 
scientific and technological incentives package. We offered to 
help create a civil nuclear industry in Iran, without access to 
the fuel cycle. This was President Putin's idea. And we all 
supported this and said, ``Please come and negotiate with us.''
    And, of course, the Iranians took about 4\1/2\ months to 
consider that offer, and they finally answered, and they said, 
``No; we're not going to negotiate.''
    And so, we said, ``Well, if you're not going to negotiate, 
there's another path, and that path is that you're going to be 
increasingly isolated in the world, and pressured, and 
sanctioned.''
    And what's, I think, very powerful about this diplomatic 
coalition that we built over 2 years--it's not just the United 
States versus Iran, it's all of the European Union; it's China 
and Russia; it is South Africa, one of the leading members of 
the Non-Aligned Movement; it's the largest Muslim country in 
the world, Indonesia--they voted, last week, to sanction Iran; 
it's Qatar, an Arab State on the gulf; India and Brazil have 
now enacted sanctions legislation against Iran because of their 
U.N. obligations.
    So, I know that sometimes people get frustrated with 
multilateral diplomacy, but when you pull everything together, 
you have this very powerful multiplier effect of every big 
country in the world speaking, singing off the same sheet, 
saying, ``The Iranians shouldn't develop nuclear weapons, and 
we're all going to act together to prevent that.''
    This last resolution, Mr. Chairman, was especially 
important. For the first time, we were able to say that Iran 
shall not be able to export or transfer or deliver arms to 
anyone. That includes Hezbollah, that includes Hamas, it 
includes Syria. We won that in the sanctions resolution voted 
upon successfully last Saturday. We have a specific sanction by 
the United Nations against Bank Sepah, the bank that I referred 
to. We have a specific sanction against the Iranian 
Revolutionary Guard Corps Command--this organization that, in 
the 1980s, sponsored the terrorist attacks against our Marines 
in Lebanon, in 1983; in 1996, against our housing facility at 
Dhahran, at Khobar Towers; and the organization that sponsors 
the Quds Force, which is the force trying to strike indirectly 
through Shia militants at our soldiers in Iraq. There are now 
international sanctions against the IRGC, and we led that 
fight.
    And, finally, we opened up the door in the resolution 
toward further international effort to diminish expert credits. 
This is important, because as recently as 2005, there were $22 
billion in export credits made available by European companies 
to their firms to do business with Iranian firms. And our 
message to the Europeans has been, ``It can't be business-as-
usual with Iran. Please reduce those export credits.'' And the 
resolution, just passed, encourages countries to do that.
    So, we think this diplomatic path is a powerful one. We 
think it is beginning to show results. I would judge that--the 
last time I appeared, Mr. Chairman, before this committee, was 
in September 2006; at that time, the Iranians were riding high. 
They had just sponsored the Lebanon war against Israel, they 
were behind Hezbollah in that war; they instigated it. There 
was no apparent impediment to their nuclear progress. But if 
you fast-forward to today, they now have lots of impediments 
before them, and they have a wider international coalition 
against them.
    So, we need to be successful in this diplomacy, we need to 
be tough-minded to push back against their attempts to use 
terrorism against our friends in the region. And, finally, Mr. 
Chairman, I'd--my last point--we need to engage with the 
Iranian people. It's been 27 years since the hostages were 
released. And, in those 27 years, we've produced the most 
unusual diplomatic relationship of any country in the world. We 
have no relationship with them, we have no embassy there, we 
have very few American businesses there, very few American 
journalists. There literally has been no contact between our 
countries. And so, while we are opposed to the Iranian regime, 
we ought to be open to increased contacts with the Iranian 
people. And the irony here is that the public opinion polls in 
the Middle East consistently show--this is very ironic--that 
the Iranian people are among the most pro-American of all the 
people in the Middle East. So, Congress was good enough to give 
us, last year, $75 million to expand our Persian-language VOA 
TV, to expand our Persian-language radio into Iran, to allow us 
to create Web sites that are keyed to each of the regions of 
Iran, and we can talk to people. And, more importantly, to 
bring Iranians here--we brought a group of medical 
professionals here in January. We're bringing, in the near 
future, a group of disaster-relations experts. And they'll go 
around to our cities and States and meet average Americans and 
build connections. And we sent the United States National 
Wrestling Team to Iran in January, because wrestling is the 
Iranian national sport. And our team was received with 
thunderous applause in the arena. They spent a week competing, 
making friends. One of our wrestlers actually won his weight 
class, which is also an added benefit. But we're convinced 
that, as we oppose the regime, we need to build up bridges to 
the people of Iran. And Congress has been good enough to enable 
us to do that. And I just wanted to advertise that we're asking 
for an additional $108 million for all of these efforts in 
fiscal year 2008, and I hope that that will have some agreement 
here on Capitol Hill.
    So, Mr. Chairman, I just wanted to respond to your basic 
points. And you have my testimony for the record, and I'm very 
pleased to answer whatever questions you may have.
    [The prepared statement of Mr. Burns follows:]

 Prepared Statement of R. Nicholas Burns, Under Secretary of State for 
         Political Affairs, Department of State, Washington, DC

                              introduction
    Thank you, Chairman Biden, Ranking Member Lugar, and distinguished 
members of the committee. I last appeared before this committee in 
September to discuss our strategy for addressing the challenges posed 
by Iran. At that time, Iran appeared to be riding high. The Iranian 
regime had spurned a historic offer to begin negotiations on its 
nuclear weapons ambitions with the United States and our P5 partners. 
Instead, it proceeded openly and in unimpeded fashion in pursuit of a 
nuclear weapons capability. It was escalating its efforts to fund 
Hezbollah and Hamas and sow discord in both Lebanon and Iraq. At home, 
the Iranian regime's disastrous economic policies and radical rhetoric 
went largely unchallenged, except by the brave efforts of a small 
number of dissidents and activists. Since that time, however, the 
United States--in concert with an ever-widening coalition of concerned 
states--has taken significant steps to check Iran's nuclear ambitions, 
contain its regional troublemaking, and intensify Tehran's isolation. 
We have coordinated a series of diplomatic initiatives with allies 
across the world to knock Iran off its stride, and I believe, put it on 
the defensive for the first time.
    Just this past weekend, the United States led the Security Council 
in a 15-0 vote to condemn and sanction Iran for the second time in 3 
months.
    Despite the fulminations of President Ahmadinejad, Iran is not 
impervious to financial and diplomatic pressure. It is clear to us that 
concerted international pressure is helping to undercut the Iranian 
regime's sense of ascendancy, unnerve its overly confident leadership, 
and clarify to it the costs of its irresponsible behavior. Indeed, 
although the Iranian regime remains obstinate and we have not yet 
succeeded in either stopping, altogether, its nuclear research programs 
or blunting its support for terrorism, we are making progress. I 
believe that this active and focused diplomatic strategy is the best 
way forward for our country.
    As you know, we face a complex, interconnected set of four crises 
in the Middle East: The need to achieve a stable and more peaceful 
Iraq; to strengthen the democratically elected government of Lebanon 
against Iran's, Syria's, and Hezbollah's attempt to unseat it; to block 
Iran's nuclear and regional ambitions; and to establish the foundations 
for peace between the Israeli and the Palestinian people. The Middle 
East is now the region of greatest importance for the United States 
worldwide, and our critical interests are engaged in all of these 
areas. But beyond our responsibility to help stabilize Iraq, nothing is 
more vital to the future of America's role in the Middle East than 
addressing the challenges posed by the radical regime in Iran, whose 
public face is the vitriolic President Mahmoud Ahmadinejad.
    For nearly three decades, dealing with Tehran's confrontational 
ideology and strident anti-Americanism has been a persistent dilemma 
for our country. But never have the concerns regarding Iran's 
intentions been more serious, the intricacies of Iranian politics more 
significant, or the policy imperatives more urgent than they are today. 
Under President Ahmadinejad, Tehran has embarked on a dangerous 
course--repeatedly defying its obligations under international law and 
appalling the world with the most abhorrent, irresponsible rhetoric 
from a world leader in many years. Ahmadinejad has declared that Iran's 
nuclear program has ``no brakes,'' and the Iranian regime has brazenly 
disregarded demands from both the International Atomic Energy Agency 
and the United Nations Security Council for a full suspension of its 
enrichment-related and reprocessing activities. We have created a 
coalition of all the leading countries of the world who are concerned 
that Iran's so-called peaceful nuclear program is actually designed to 
produce a nuclear weapon.
    Beyond its pursuit of nuclear weapons, Iran has endeavored to sow 
chaos and instability throughout the region, particularly in the 
precarious democracies of Iraq and Lebanon, where Iranian-funded 
militants seek to thwart the democratic will of the Iraqi and Lebanese 
people. And as the regime has escalated its longstanding and violent 
rejection of a Middle East peace settlement between the Israeli and the 
Palestinian people, its human rights record at home has once again 
taken a dismal turn.
    In order to deal with the challenge that Iran poses, we have a 
policy of applying multiple points of pressure against the Iranian 
regime. First, we are working at the United Nations, bilaterally, to 
increase pressure on Iran to abandon its apparent quest for a nuclear 
weapons capability. As a result, there is now a major international 
coalition of countries asking Iran to abandon a nuclear weapons 
capability. This coalition includes all of Europe, Russia, China, 
India, Brazil, Egypt, and now Indonesia and South Africa. Second, we 
have applied U.S. financial sanctions on Iran's leading banks. Third, 
we have used our influence to convince leading European banks to stop 
all lending to Iran. We have convinced European governments and Japan 
to begin reducing export credits. Fourth, we continue our efforts to 
discourage the Iranian regime's support for terrorism and extremism, 
while expanding engagement with the Iranian people. Finally, we have 
stationed two carrier battle groups in the gulf to reassure our friends 
in the region that it remains an area of vital importance to us and we 
have taken steps to counter the destructive activities of Iran in Iraq 
itself. All of these points of pressure have had an impact on Iran, 
which is now essentially without friends on the nuclear issue.
    Diplomacy is our best and preferred course of action in blocking 
and containing the Iranian regime. I do not believe a military 
confrontation with Iran is either desirable or inevitable. If we 
continue our skillful diplomatic course and have the patience to see it 
play out over the mid to long term, I am confident we can avoid 
conflict and see our strategy succeed. Our strong hope is that Iran 
will accept the offer to negotiate with the United States and our P5 
partners so that we can achieve a peaceful end to Tehran's apparent 
nuclear weapons ambitions.
    Any effective diplomatic strategy must provide one's adversary with 
exit doors when, as Iran has certainly done, it paints itself into a 
diplomatic corner. We have offered the regime a path for direct dialog, 
and with the passage of the new U.N. resolution we will reaffirm that 
this path remains open. We hope the Iranian regime will seek a 
constructive end to its isolation and choose to meet us at the 
negotiating table. Javier Solana has begun, on behalf of the P5 
countries and Germany, an active effort to convince the Iranian 
Government to reconsider our negotiating offer.
    We are responding to the challenge of a nuclear-armed Iran with a 
comprehensive strategy that relies on American diplomatic leadership 
and the creation over the last 2 years of a robust multilateral 
coalition. First and foremost, we have made clear to the Iranian regime 
that its provocative and destabilizing policies will entail painful 
costs, including financial hardship, diplomatic isolation, and long-
term detriment to Iran's prestige and fundamental national interests. 
Second, and equally important, we have worked to alter the regime's 
actions and behavior and convince it that another, more constructive 
course is available to it.
    We have seen both elements of this strategy play out over the past 
week at the United Nations Security Council (UNSC), where we joined our 
European partners--France, Germany, and the United Kingdom--as well as 
Russia and China in putting forward a robust new sanctions resolution 
that was adopted by the full Council on March 24. Iran must now face 
the fact that it is isolated nearly without friends in the world. In 
last week's vote, the world's largest Muslim nation, Indonesia, one of 
the Non-Aligned Movement (NAM) leaders, South Africa, and an Arab 
neighbor, Qatar, all voted against it. This second chapter VII 
resolution in 3 months was a resounding repudiation of Iran's radical 
nuclear course. This resolution builds on the elements of Resolution 
1737, which was a significant milestone following 2 full years of 
patient diplomacy among the United States, our European partners, 
Russia and China, and represented a crucial turning point in 
international willingness to pressure the Iranian regime to comply with 
its obligations.
    In addition to reaffirming the requirements set out in UNSCR 1737, 
the new resolution is substantially stronger than the first in 
establishing new sanctions on the Iranian Revolutionary Guard Corps 
Command (IRGC), on Iran's fifth largest bank, Bank Sepah, and on 
introducing for the first time, measures to reduce countries' export 
credits made available to stimulate trade with Iran. The resolution 
establishes additional travel restrictions for Iranians involved in 
nuclear and ballistic missile programs; expands the number of 
individuals and organizations subject to travel restrictions and assets 
freeze; imposes a ban on Iranian arms exports (including to Hezbollah 
and Hamas); urges countries to limit transfers of some weapons to Iran; 
and encourages both states and international financial institutions to 
halt new financial assistance agreements and loans with the Iranian 
Government. All of these measures are carefully targeted to isolate the 
Iranian regime and make clear to it that it will face increasing costs 
for its continued defiance.
    While we are acting vigorously to isolate the Iranian Government, 
we are also offering to it a diplomatic way forward by seeking 
engagement with Iran. Secretary Rice and her P5 Foreign Minister 
colleagues issued a statement just after the U.N. resolution passed 
last week reaffirming our strong desire to find a way to the 
negotiating table. Javier Solana has reached out to the Iranian 
Government on our behalf to attempt once again to convince Iran to join 
the talks. For this reason, Secretary Rice has agreed to join her P5+1 
colleagues in direct discussions with Iran regarding the nuclear and 
other issues ``at any place and at any time,'' provided Iran verifiably 
suspends its enrichment-related and reprocessing activities. This 
avenue continues to represent the best path for Iran to satisfy the 
international community's concerns about its nuclear program, and for 
Iran and the United States to move toward resolving our differences.
    Iran must know that the world is united in our aim to deny it a 
nuclear weapon. Our coalition is diverse and robust, and it has only 
grown stronger as Iran's defiance has persisted. Leading states across 
the globe--including India, Egypt, and Brazil--supported this effort at 
the International Atomic Energy Agency. The Governments of Russia, 
China, Japan, and our many European allies are committed to our joint 
effort to thwart Iran from crossing the nuclear threshold. The Iranian 
Government finds itself in profound isolation on the nuclear issue.
    Outside of the Security Council, we have worked cooperatively with 
major governments to curtail business transactions tied to Iran's 
nuclear activities and support for terrorism. Under the International 
Emergency Economic Powers Act (IEEPA), we have sanctioned Iran's Bank 
Sepah and cut off Iranian state-owned Bank Saderat from all access to 
the U.S. financial system. As my colleague, Treasury Under Secretary 
Stuart Levey and I discussed with the Senate Banking Committee last 
week, these steps have had a snowball effect, as banks and businesses 
worldwide are recognizing the serious risk associated with Iran and are 
beginning to scale back their Iran activities. In 2006, several leading 
European banks reduced lending to Iran. I expect international 
financial institutions will make this same choice now that we have 
passed a second chapter VII resolution.
    We have also acted to blunt Iran's regional ambitions. In Iraq, 
Iran continues to provide lethal support to select groups of Shia 
militants who target and kill U.S. and coalition troops, as well as 
innocent Iraqis. We have made clear to Tehran that this is absolutely 
unacceptable, and our troops on the ground in Iraq are acting to 
disrupt Iran's networks in Iraq that provide deadly weapons to Iraqi 
groups. These actions are consistent with the mandate granted to the 
Multi-National Forces in Iraq by both the United Nations Security 
Council and the Iraqi Government to take all necessary measures to 
contribute to the maintenance of Iraq's security and stability. We have 
an absolute and indisputable obligation to defend our soldiers from 
such attacks.
    At the same time, we are supporting the Iraqi Government's efforts 
to solicit international support for stabilizing Iraq. To this end, the 
United States joined representatives of Iraq's neighbors and the P5 in 
Baghdad on March 10 as part of an Iraqi-led effort to discuss 
strategies to end bloodshed and sectarianism. We hope Iran will commit 
itself to a constructive and positive role in Iraq as a result of those 
discussions, and along with other neighbors it will work for peace and 
stability in the region. We expect these discussions with all of Iraq's 
neighbors and other concerned countries to resume in the near future.
    We are also working with France, Saudi Arabia, Egypt, Jordan, and 
others to signal our strong support for Prime Minister Siniora's 
democratically elected government in Lebanon, to enforce the arms 
embargo imposed by Security Council Resolution 1701, and to prevent 
Iran and Syria from rearming Hezbollah. We have stationed two carrier 
battle groups in the gulf, not to provoke Iran, but to reassure our 
friends in the region that it remains an area of vital importance to 
us. And at the regional level, Secretary Rice, last autumn, launched a 
series of ongoing discussions with our Gulf Cooperation Council 
partners, as well as Egypt and Jordan, regarding issues of shared 
concern, including most especially the threat posed by Iran.
    Combined with our long-term efforts to promote peace and stability 
in the region and reassure allies, including Israel, these steps mark 
the natural evolution of our efforts to demonstrate international 
resolve against Iran's disregard for international law and its 
aspirations to dominate the region. And they have all had an impact. 
Iran is now more isolated and under more intense international scrutiny 
than ever before.
    Part of charting a new course for United States-Iranian relations 
is intensifying our engagement with the Iranian people. While it is now 
not feasible for us to have formal diplomatic relations with Iran, it 
is within our grasp to bridge the divide between our peoples. So in 
addition to our diplomatic efforts to persuade Tehran to alter its 
foreign policy, we have launched a program to increase contacts between 
the American and Iranian peoples. We sent the U.S. National Wresting 
Team to compete in Iran in January; we are also bringing hundreds of 
Iranians on exchange programs to the United States. These efforts have 
been helped tremendously by congressional support for the 
administration's 2006 supplemental funding request. In the long term, 
assuaging the separation between our peoples is critical to overcoming 
the nearly 30-years estrangement that currently divides the United 
States from Iran.
    Our diplomatic success vis-a-vis Tehran, and the endurance and 
vitality of our international coalition, are no small achievements. 
They reflect the leadership of President Bush and the sustained efforts 
of Secretary Rice, the State Department, and contributions from other 
government agencies. As the President and Secretary Rice have 
reiterated and I cannot emphasize this enough--we seek a diplomatic 
solution to the challenges posed by Iran.
    Today, I would like to provide some details on the additional steps 
we are pursuing, at the United Nations and bilaterally, to increase 
pressure on Iran to abandon its quest for a nuclear weapons capability. 
I will also touch briefly on our continued efforts to discourage the 
Iranian regime's support for terrorism and extremism, while expanding 
engagement with the Iranian people.
                     iranian nuclear proliferation
    The greatest immediate threat posed by the Iranian regime is its 
pursuit of a nuclear weapons capability. For some 18 years, Iranian 
leaders pursued a clandestine enrichment program and other undeclared 
nuclear activities in violation of their international obligations. It 
is this continued abuse of the world's trust that is at the heart of 
the international community's impasse with Iran.
    The United States and the entire permanent membership of the U.N. 
Security Council recognize Iran's right to peaceful, civil nuclear 
energy under relevant articles of the Nuclear Non-Proliferation Treaty 
(NPT). However, that right comes with responsibilities, paramount among 
them a legal obligation to forgo the pursuit of nuclear weapons and to 
subject all nuclear activities to International Atomic Energy Agency 
(IAEA) monitoring. As IAEA Director General ElBaradei's most recent 
report to the Security Council makes clear, the Iranian regime remains 
in noncompliance with its international obligations and has been 
anything but transparent. Despite multiple requests over more than 3 
years, the regime has yet to clarify several outstanding issues and the 
IAEA is unable to verify that Iran's program is solely peaceful.
    A review of Dr. ElBaradei's report is instructive and alarming. 
Iran has repeatedly failed not only to meet the IAEA's requirements; it 
has also failed to even have the courtesy of responding to many of the 
IAEA's direct questions on behalf of a concerned international 
community.
    The regime has refused to enable the IAEA to clarify the past 
history of its P1/P2 centrifuge work, plutonium separation experiments, 
and uranium contamination. It has refused to agree to IAEA requests for 
access to Iranian officials and documentation, including a 15-page 
document that describes the procedures for casting and machining 
uranium into hemispheres, for which the only plausible purpose is 
manufacturing nuclear weapons. And it has refused to accept and 
implement the safeguards measures that the IAEA believes are necessary 
to ensure nondiversion of enriched uranium at the Natanz enrichment 
plant.
    The Iranian regime has, of course, had sufficient time to clarify 
questions regarding its nuclear activities. Since 2003, the IAEA Board 
of Governors has called on Iran to meet its obligations under the 
Nuclear Nonproliferation Treaty. The U.N. Security Council called on 
Iran several times--both in March 2006 and again in July 2006--to 
suspend all enrichment-related and reprocessing activities and to 
cooperate with the IAEA's ongoing inspections. Iran, however, ignored 
these requests as well as the generous P5+1 incentives package offered 
last June. Faced with the Iranian regime's blatant disregard for its 
international nuclear obligations, the U.N. Security Council had no 
choice but to unanimously adopt Resolution 1737 on December 23, 2006, 
and 1747 on March 24, 2007. If Iran does not comply with U.N. 
Resolution 1747 by May 24, it will be subject to even stronger 
sanctions in a third resolution. And in the face of Iran's continued 
defiance, we expect that the Council will continue to incrementally 
increase pressure on Iran.
    While President Ahmadinejad continues to scorn the Security 
Council's efforts and declare its resolutions ``torn pieces of paper,'' 
we have observed that the international community is increasingly 
determined to prevent Iran from obtaining a nuclear weapons capability. 
We see evidence of this in our unprecedented cooperation with our 
European partners at the UNSC--cooperation one country recently 
described as ``the best in more than a decade.'' We see evidence of 
this in Russia's decision to suspend cooperation on the Bushehr reactor 
until Iran complies with its international obligations. And we see 
evidence of this in the international community's concerted efforts to 
implement these two chapter VII sanctions resolutions and cooperate on 
other financial measures outside of the UNSC framework.
                          financial pressures
    Over the past several months, Treasury Department Under Secretary 
Stuart Levey and I have engaged with foreign governments and private 
firms, reminding them of the financial and reputational risks of doing 
business with Iran. Iran is one of the largest beneficiaries of 
official export credits and guarantees, with $22.3 billion in exposure 
reported by OECD countries as of the end of 2005. Noting that a number 
of major international banks have now reduced their business with Iran, 
we are also encouraging governments in Europe and Asia to reduce the 
official export credits they provide to Iran. Governments should not 
take on the financial risk that private companies are facing in that 
country. Europe should now repudiate a business as usual approach with 
Iran. Many countries share our concerns and are starting to decrease 
their official lending. Some countries have capped their exposure at 
current levels, while others have begun scrutinizing Iranian credit 
applications to ensure they comply with the strict, nonproliferation 
guidelines contained in Resolution 1737. France, Germany, and Japan 
have reduced export credits limits sharply for Iran, while others have 
committed privately to doing the same, and especially, reducing the 
medium- and long-term credits that Iran uses for capital goods and 
project finance.
    Under domestic legal authorities, we have designated Iranian 
entities associated with Iran's weapons of mass destruction and missile 
programs, effectively denying them access to the U.S. financial system. 
Termination of Iran-based Bank Sepah and Bank Saderat's ability to 
conduct transactions in dollars has further limited that access and we 
are asking other nations to follow our lead.
    We also worked last year with Congress on the reauthorization and 
amendment of the Iran and Libya Sanctions Act (ILSA) which, thanks to 
the success of our diplomatic and economic efforts with respect to 
Libya, is now simply the Iran Sanctions Act (ISA). ISA has been 
valuable in emphasizing to foreign government our concerns about Iran 
and highlighting the risks of investing there. Indeed, we attribute the 
continued lack of investment in Iran's oil and gas sectors, in part, to 
ISA. We could not support, however, modifications to this act now being 
circulated in Congress that would turn the full weight of sanctions not 
against Iran but against our allies that are instrumental in our 
coalition against Iran.
    We will continue to engage relevant companies and countries 
regarding their potential investment in Iran's oil and gas sector. In 
making clear our opposition to such deals, we have emphasized how they 
would undermine international efforts to resolve the nuclear issue, as 
well as the legal implications of future investment under our law. Most 
of these deals remain in the negotiation stage. Our discussions are 
intended to diminish the likelihood of seeing them finalized. More 
broadly, Iran continues to encounter great difficulties in attracting 
foreign investment to its hydrocarbon sector and few foreign companies 
have committed to developing Iranian oil and gas fields. Iran's own 
behavior and policies have contributed to this situation, but ISA has 
also helped.
    The net effect of these efforts, along with those at the United 
Nations, has been to make it more difficult for the Iranian regime to 
fund its illegal nuclear efforts.
              curbing iran's destabilizing actions abroad
    Looking beyond its nuclear aspirations, the Iranian regime's 
aggressive foreign policy and hegemonic aspirations constitute an 
increasing threat to regional security and U.S. interests.
    I noted in my opening remarks our serious concerns regarding Iran's 
lethal support to Iraqi militants, and the steps we are taking to 
counter these destructive activities in Iraq. But Iranian interference 
is also evident in Lebanon, where its efforts to rearm and financially 
bolster Hezbollah threaten to set back the democratic progress of the 
past 2 years. President Ahmadinejad's repeated threats to ``wipe Israel 
off of the map,'' and the regime's internationally condemned Holocaust 
denial conference in December, highlight regime hostility toward a 
major U.S. partner and a United Nations member-state, as does continued 
Iranian financial and military support to Palestinian terrorist groups 
such as Hamas and Palestinian Islamic Jihad.
    As Secretary Rice noted during recent testimony to the House 
Appropriations Subcommittee on State, Foreign Operations, and Related 
Programs, we are intensifying our efforts to lay the foundation for a 
Palestinian state that can exist peacefully alongside Israel. We have 
also enhanced our support to Lebanon's democratically elected 
government, and will sustain our efforts to enforce all applicable U.N. 
Security Council resolutions pertaining to the rearmament of Hezbollah. 
Secretary Rice's trip to the Middle East this week sought to achieve 
these important objectives.
    More broadly, we are enhancing our security cooperation with 
longstanding partners throughout the region. The deployment of a second 
aircraft carrier battle group to the gulf reinforces these efforts, 
reassures our allies, and underscores to Tehran our commitment to 
protect our vital interests.
                 blocking iran's support for terrorism
    No discussion of Iran would be complete without mentioning the 
regime's long and established record of supporting terrorism.
    Tehran has long been the world's leading state sponsor of 
terrorism; the regime sponsored and was responsible for the deaths of 
hundreds of Americans in the 1980s and 1990s. Through its efforts to 
rearm Hezbollah, the Iranian regime has violated its obligations under 
UNSCR 1701 and it has violated UNSCR 1267 and successor resolutions by 
failing to impose sanctions on al-Qaeda and continues to refuse to 
bring to justice or confirm the whereabouts of senior al-Qaeda members 
it detained in 2003.
    Recognizing Iran's role as the central banker of global terrorism, 
the Departments of State and the Treasury have enlisted foreign support 
in efforts to deny suspect Iranian individuals and entities access to 
the international financial system. The termination of Iranian Bank 
Saderat's ``U-turn'' authorization effectively prohibits one of Iran's 
largest banks from conducting business in U.S. dollars.
    Utilizing E.O. 13224, Treasury has also designated two entities 
(Bayt al-Mal and the Yousser Company for Finance and Investment) that 
have functioned as Hezbollah's unofficial treasury by holding and 
investing the group's assets and serving as intermediaries between the 
terrorist organization and international banks. Additionally, we have 
disrupted Hezbollah's financial support network by designating and 
blocking the assets of individuals and two entities affiliated with 
Hezbollah in the Tri-Border region of South America.
                    empowering iranian civil society
    Before I conclude, I would like to discuss briefly the Iranian 
regime's repressive treatment of its own people. The regime recently 
celebrated the anniversary of the 1979 Revolution. But the history of 
the past 28 years has been a betrayal of the aspirations of the Iranian 
people.
    The regime's record of human rights abuse remains among the worst 
in the world. As our recently released annual Human Rights Report 
emphasizes, this record has worsened over the past year. The regime 
denies its people freedom of expression by cracking down on journalists 
and bloggers, closing independent newspapers, censoring Internet use 
and blocking satellite dish ownership--all in an effort to control its 
citizens' access to information. These actions prompt a basic question: 
Why is this regime so afraid of its own people?
    We believe the Iranian people deserve better from their leaders. To 
counter the regime's abuses, we are promoting greater freedom in Iran 
by funding a variety of civil society programs.
    As a result of the generous $66.1 million in funding from Congress 
in the FY06 supplemental, we have implemented a wide range of 
democracy, educational, and cultural programs, as well as significantly 
expanded our efforts to improve the free flow of information to the 
Iranian people. Twenty million dollars of these funds are going to 
support civil society, human rights, democratic reform and related 
outreach, while $5 million was given to the Bureau of International 
Information Programs (IIP) for increased Persian language electronic 
and speaker programming about American society, institutions, policy 
and values. An additional $5 million was allocated to the Bureau of 
Education and Cultural Affairs (ECA) for new cultural and educational 
exchange programs to increase mutual understanding between our two 
peoples. The Congress allocated the remaining $36.1 million of FY 2006 
supplemental Iran funds directly to the Broadcasting Board of Governors 
(BBG) for media programming into Iran, including our VOA Farsi 
television service and Radio Farda.
    Our programs are open to all who are committed to peaceful, 
democratic progress in Iran. Their goal is to support different parts 
of Iranian society by promoting basic human rights and religious 
freedoms; building civil society; improving justice, accessibility, and 
the rule of law; and promoting a deeper understanding of our culture, 
values, and ideas.
    Given Iran's restricted political climate, progress toward our 
goals has been predictably difficult. But we are moving forward, and 
many brave men and women are helping promote basic civil rights and the 
necessity of political dialog. In the long term, we hope that a more 
open political climate that encourages, rather than represses, dialog, 
will stimulate a change in the behavior of the Iranian Government.
                      engaging the iranian people
    State Department officials are also reaching out to the Iranian 
people to convey our policies. Secretary Rice and I have given 
interviews on Persian language media highlighting the Iranian people's 
aspirations for increased respect for human rights and civil liberties, 
as well as a more democratic, open government.
    With the recently appropriated funds, the United States has resumed 
official educational and cultural exchange programs between the United 
States and Iran, which the U.S. Government suspended at the time of the 
Iranian Revolution in 1979. In late 2006, a group of medical 
professionals were the first Iranians to visit the United States as 
part of this reinvigorated effort. Their nonpolitical visit brought 
them in contact with medical professionals from the Centers for Disease 
Control, Harvard Medical School, and other major medical institutions. 
Several professional, athletic, and cultural exchanges are planned for 
2007, with the goal of building greater understanding between the 
people of the United States and of Iran. Additionally, we are 
encouraging American athletes, artists, religious leaders, and others 
to visit Iran, as well, to help promote greater mutual understanding. 
It is our hope that increased exchanges will provide the Iranian people 
with a clearer and more accurate understanding of American society, 
culture, and democratic values.
    For FY 2008, the President has requested over $100 million in Iran 
funding, including roughly $20 million for VOA's Persian service and 
$8.1 million for Radio Farda, as well as $5.5 for consular affairs, and 
$75 million in economic support funds to civil society and human rights 
projects in Iran. We appreciate the committee's continued support of 
efforts in these areas which are a vital component of our comprehensive 
Iran strategy.
                               conclusion
    The United States is committed to pursuing a diplomatic solution to 
the challenges posed by Iran and we are making every effort to improve 
United States-
Iranian relations. But that cannot happen without a change in the 
Iranian regime's actions and policies.
    Secretary Rice offered the Iranian Government an extraordinary 
opportunity, in June 2006, when she pledged to engage in direct talks 
alongside Russian, China, and our European partners if Iran verifiably 
suspends enrichment and cooperates with the IAEA. This offer remains on 
the table, and we will continue to make clear to the Iranian regime 
that the best way to ensure its security is by complying with, not 
ignoring its international nuclear obligations and by seeking peace 
through negotiations with the United States and our partners. As the 
President has stated, we look forward to the day when the Iranian 
people live in freedom and America and Iran can be good friends and 
close partners in the cause of peace.

    The Chairman. Well, thank you very much, Mr. Secretary. 
You've just, in a very short time, made the case, in my view, 
why I think you're one of our superior diplomats.
    I don't think I'm misrepresenting, I think you've expressed 
a view that has been shared by at least the senior members of 
this committee for some time, and I say it's about time. And I 
would say, to those who suggest that you haven't, 
``accomplished it yet,'' that--dealing with their nuclear 
program--that this is a process, and it's the only rational 
process.
    Let me--and I just--we should start the clock. I'm sorry, 
Bertie, thank you. We'll do 7 minutes, if we can, each round 
here.
    And let me get right to it. We had a very brief discussion, 
Mr. Secretary, in the anteroom, before you came in. And if 
every American, in my view, could hear what you just said--
there is such a logic to it, I suspect you--we would dampen 
down concerns about the motives of the administration and 
their--it's not a secret to suggest, some question the 
motives--what the intention is, whether this is a prelude to 
another circumstance similar to Iran. You've laid out, clearly, 
a strategy which, at least--speak for myself--I fully embrace.
    One of the--a key phrase you used, I think, is the phrase 
that I'd like you to elaborate on, off of which everything else 
pivots, and that is, you said, ``We have some time.'' If you 
listen to some quarters within the administration, as well as 
here in the Congress, as well as in the think-tank community, 
as well as from some of our friends abroad, is--the argument 
is, ``We have no time. We have no time, as it deals with the 
nuclear program. And, as a consequence, we have no time to 
focus on anything else, because that's the--that is the 800-
pound gorilla, that is the gigantic issue, that is the ultimate 
objective of the Iranians to pursue it, and us to stop it.'' 
And one of my--one of the things--and I think, in a sense, 
maybe we're a little responsible for this not being clear--is 
that--I don't think the American public, nor the majority of 
our colleagues, have a really, sort of, unvarnished, clear-eyed 
view of Iranian capability and Iranians' present circumstance. 
Everyone's sort of still in the mode that they are riding high, 
that they are 10 feet tall, that they're on the verge of being 
able to mount a nuclear warhead on top of a missile, that they 
have an economic--they're an economic juggernaut, that all of 
their oil puts them in a position where they are impervious to 
sanctions, that--and the list goes on and on and on, when the 
reality is, when I say to constituents, ``You know, look, the 
Iranians import most of their refined oil,'' they look, and 
they go, ``Huh? I didn't know that.'' If you listen to what's 
going on out there, these guys are this gigantic juggernaut 
that the only thing that can stop them is physical power.
    And so, without going into all those areas, and before my 
time expires, I'd like to ask you to speak to two things, Nick, 
if you would. There is, again, in--I think, a sense among many 
of our colleagues in both houses, in both parties, as well as 
the public at large, that the Iranian President is in total 
control of the Iranian Government, that he controls all the 
security apparatus, that he calls all the shots; and he is 
obviously someone who is viewed by a lot of people as not being 
particularly stable. His denials of the Holocaust, his talks 
about wiping Israel off the map, his absolute insistence about 
the way he's going to proceed with nuclear capability, I think, 
feeds a sense that we don't have time. And when people think we 
don't have time, then they say, ``Well, there's not much time 
for diplomacy.'' So, I think these are connected. Would you 
speak a little bit for the record about the relative power and 
position, as best we know it, of the Iranian President versus 
the Supreme Leader versus political opposition that exists 
within Iran?
    And the last point I'll make is, the most important point I 
think you made today is the way we're viewed by the Iranian 
people. My greatest criticism of the administration is, we 
basically pushed the mute button when it came to discussions. 
Now, you've pointed out you're going to be looking for--$180 
million, I think your number was?
    Ambassador Burns. $108--one-zero-----
    The Chairman. $108.
    Ambassador Burns. Yeah.
    The Chairman. I think--you will have no trouble with this 
chairman, and I think you'll have no trouble with this 
committee, getting that, and possibly more, which, if you fold 
into my question about Ahmadinejad--Why is it, if you're 
reaching out--why does the administration continue to oppose 
our proposal to expand American NGOs, exempt them from 
sanctions, that without--with those sanctions in place, it 
makes it very difficult, if not impossible, for them to be 
engaged in supporting democratic movements and human rights 
activities within Iran. Are they inconsistent? Is it 
inconsistent to propose, as I have, that the NGOs be able to 
engage in Iran and engage the human rights community, engage 
the democratic movement within Iran, and what you're calling 
for?
    So, I--with--I'll yield the floor, with a minute or so left 
here, and ask you to respond, if you would, generally, to those 
two points.
    Ambassador Burns. Thank you, Mr. Chairman, I'd be happy to.
    On the subject--maybe I'll just reverse them, if I could, 
and just start with Ahmadinejad. He's an odious figure. If you 
try to trace, you know, history over the last 40 to 50 years, 
and find a world leader who calls for the destruction of 
another country, who denies that the Holocaust existed, whose 
whole foreign policy seems to be negatively oriented, you can 
find few people like Ahmadinejad. We take him seriously. We 
have to take him seriously. He's the President of Iran. And so, 
we follow what he says, and we try to oppose, as best we can, 
what he does.
    But it's also true that Iran, as you suggest, Mr. Chairman, 
it not a monolithic political entity. In fact, it's a 
cacophonous sea of disputation right now between various power 
centers. And what's remarkable about the politics of Iran over 
the last half year is how much infighting there is on this 
issue of a nuclear posture of Iran. The Supreme Leader, Ali 
Khamenei, whom almost everyone believes is the most powerful 
person in the country, the newspaper associated with him was 
very critical of Ahmadinejad about a month ago, publicly, and 
for his stewardship, or lack thereof, of the nuclear issue, and 
for the fact that Iran had become so isolated because of its 
uncompromising nuclear weapons ambitions. So, Ahmadinejad is a 
powerful figure, but the Supreme Leader Ali Khamenei, Ali Akbar 
Rafsanjani, the former President, there are many others who can 
balance his power. And our handicap is, we don't have an 
embassy there, we don't have a lot of--as much expertise in our 
own government on Iran as we would like, because, for a 
generation, we haven't been able to send anyone to that 
country. But we're rapidly building up our capacity to 
understand Iran, and I think what I've just told you is--
probably reflects most international opinion about Ahmadinejad. 
We take him seriously, but he also is now under some strain 
within the Iranian system, as well, for these nuclear policies 
and also for his disastrous economic policies that have been 
very injurious to the Iranian people.
    I think your--I just wanted to address your point about 
NGOs. We very much want American NGOs to be able to work inside 
Iran. Here's the problem. And you've--Congress has given us 
money to try to promote civil society in Iran. If we--if an 
American NGO tries to have a direct relationship--or the 
American Government--with an Iranian NGO or a democracy 
activist, those people will be harmed by that association. And 
so, what we have done with the money that Congress has given 
us--and we've issued reports to you to let you know how we 
think we've done--is try to support international efforts, 
multilateral efforts, sometimes European and Arab efforts, 
because those organizations would work--can work with a greater 
degree of flexibility, and, sometimes, credibility, inside Iran 
itself. So----
    The Chairman. Nick, are American-based NGOs able to work 
with NGOs based in other countries as, not the front, but 
participating in efforts to promote human rights and democracy 
and other laudable efforts within Iran, or are they permitted, 
as you read the law now--prohibited from being able to do that?
    Ambassador Burns. There have been some legal prohibitions, 
under OFAC, the Office of Foreign Asset Controls, and others, 
that we have built up through the unilateral sanctions that we 
have deployed over the last 27 years, that Senator Lugar 
referred to. There have been some prohibitions. But since we 
agreed with the Congress, about a year and a half ago, that we 
would try to help stimulate civil society, we've been able to 
give some exceptions to that. And we are quite willing to do 
that, and quite flexible. But the--I think it's more of a 
political barrier right now, inside Iran itself, than anything 
else.
    The Chairman. Well, I would hope we could work out an 
arrangement whereby we would reduce the legal barrier, to the 
extent that it requires a signoff. But if--anyway, my time is 
up. I appreciate your answer. And I yield to my colleague.
    Senator Lugar. Thank you very much, Mr. Chairman.
    Secretary Burns, in the past 2 weeks, Iran has taken the 
action, which you described, of arresting the United Kingdom 
sailors. And the Russian Government has indicated that nuclear 
fuel will not be available for Bushehr. Characterize, if you 
can, these developments as to how they are helpful, in terms of 
your diplomatic track. By this, I mean, in the past, the 
criticism would be that unilaterally the United States was 
attempting to sanction Iran, that we did not cooperate, until a 
couple of years ago, with European allies who had been visiting 
with the Iranians. But, nevertheless, we determined that it 
would be in our best interest, and in theirs, to move on this 
multilateral front. And now, in the United Nations, the 
successes you've reported are apparent. It's curious to me why 
the Iranians would deliberately provoke another country, other 
than the United States. And, furthermore, what have they done 
to provoke the Russians to the point that they are unwilling to 
send the fuel?
    Ambassador Burns. Senator Lugar, thank you very much.
    On the first issue, I think there's been universal 
condemnation of the Iranian Government for having taken 
prisoner the U.K. personnel--the 15 people--14 men and 1 
female--a couple of days ago. I was at NATO at the earlier part 
of this week, and all the NATO countries agreed to be 
supportive of the United Kingdom. I believe you'll see that 
also occur at the U.N. Security Council today. So, we hope--
obviously, all of us hope--that Iran will make the right 
decision and release these people, because they're entirely 
innocent, and they were operating under U.N.--United Nations 
authority as part of the multinational coalition. And they were 
clearly inside Iraqi waters.
    The Russian example, I think, is very instructive of what's 
been happening around the world. About a year or two ago, there 
weren't many countries around the world that felt that they 
were in a coalition trying to limit the Iranian Government. In 
fact, I think there was widespread indifference to the fact 
that Iran was making this buildup toward nuclear weapons, with 
the exception of the European countries. But you've seen this 
rapid development now of a major international coalition. The 
only countries that I can find that are actually speaking up on 
behalf of Iran--so the friends of Iran would be Syria and 
Belarus and Sudan and Venezuela and Cuba; the gang of five. And 
that's a pretty notorious group of countries. Everyone else, 
including all that I mentioned in my opening remarks, including 
some of the nonaligned leaders--India, Brazil, Egypt, 
Argentina, South Africa, Indonesia--are now all on record 
supporting sanctions against Iran--tough sanctions. And I think 
it's because the Iranians have essentially miscalculated. 
They've not given anyone hope that they're going to negotiate, 
listen to the--Dr. ElBaradei, the chairman of the International 
Atomic Energy Agency, or the U.N. Security Council, and they 
seem just to be going full bore toward a nuclear weapons 
capability. And the world doesn't want that. And I think you 
put your finger on it, the most instructive has been what 
Russia has done. Russia has delayed delivery of fuel to 
Bushehr. Russia has clearly indicated, publicly in the last few 
weeks, its frustration with Iran.
    And we worked very well with Russia over the 4 weeks in the 
lead-up to last Saturday's vote for the chapter 7 sanctions 
resolution. In fact, we went to Russia first. Secretary Rice 
had a conversation with Minister Lavrov, and then she asked me 
to go and meet the Russian Government in London, which I did, 
and we drafted this resolution with them. So, Russia is fully 
part of this effort to sanction Iran and to squeeze Iran and to 
show Iran that there are consequences for not being willing to 
negotiate.
    Senator Lugar. Well, I think it's a very important 
development, and it offers, perhaps, another opportunity for 
our diplomacy with Russia. The Russians have shared our views 
about nonproliferation and the dangers of nuclear power in the 
hands of others, and, for a period of time, as a business 
transaction, were prepared to help with the Bushehr situation, 
and may do so again at some point. But it seems to me that one 
of the productive features of your diplomacy may be a new 
opportunity for an avenue of discussion with the Russians about 
not only Iran, but other situations that may arise and that are 
often threatened. You know, the thought is often that if 
somehow Iran continues to develop nuclear weapons, so will a 
host of other countries in that region, it not elsewhere. And a 
view of Russia and the United States, plus our allies in the 
United Kingdom and others coming together on those issues may 
speak to the criticism you mentioned, in the Washington Post 
this morning. They applaud diplomacy, but, nevertheless, they 
would like to have seen, by this time, Iran abdicate its 
program, an unrealistic view, I think. But I applaud the 
innovations in diplomacy that we are employing, and, likewise, 
our work with persons that we might not have anticipated would 
be helpful at this point.
    Now, let me just follow up on the chairman's question a 
little bit. Clearly, it is a big break from 2 years ago, in 
which we simply did not have much to say to Iran, one way or 
the other. And, as you say, really for a generation. Now, how 
can we come to a--really, a full-court press by the State 
Department or by our Government, in which we think of all sorts 
of ways to promote exchanges between Americans and Iranians. 
Your answer may well be, ``Well, the Iranians just simply won't 
tolerate this. They won't offer visas, they won't let these 
people in the country,'' and what have you. Maybe so, maybe 
not. I think there is certainly evidence that, as Americans who 
have been innovative, attempting to get to know the Iranians 
better, and have going into the country and so forth, there 
have been productive results. And I appreciate this is such a 
broad switch from a couple of years ago. People in diplomacy 
may not quite assimilate this, but it just seems to me 
critically important that we get to know Iran better--a lot of 
us--and that there be more press reports, better information 
about the economy. We say, from time to time, that the Iranian 
economy is faltering, that the President of Iran isn't 
understanding the needs of poor people in the rural areas, and 
so forth. Perhaps. But it's awfully hard to find that except 
anecdotally, and maybe once a month in some report.
    Ambassador Burns. Mr. Chairman, I'm in full agreement. And 
it's what our administration has tried to do, and it's nice to 
see that--I think we have bipartisan support for this, because 
Congress has been good enough to vote the funds that allow it 
to happen. But look at it this way. I think it--from--and I 
agree with your perspective--if we cannot have a normal 
relationship with the Iranian Government, and we're--we don't 
have one right now, and there's no hope of an early resumption 
of diplomatic relations--surely we can open up connections to 
people in Iran. So, we've done that through our athletes. We 
can do that through scientists. We can do it by bringing 
Iranian students--we've all seen the huge long-term impact of 
having someone study in our country and get to know the 
American people, and what that means 30, 40 years--when that 
person's in a position of some influence in their society. 
There are some in the Senate and the House who want to 
establish connections with the Majlis, and we support that. We 
think that would be a very positive contribution, if some in 
the Congress could break down some of the barriers that we're 
currently unable to break down, as in the executive part of the 
Government.
    And we've tried to get smarter, ourselves. When Secretary 
Rice came in as Secretary of State more than 2 years ago, we 
had about--we had one person--I was tempted to say one and a 
half--working full-time on Iran. We now have an Iran desk of 
more than eight people--and its director, Barbara Leaf, is 
seated directly behind me--and they're doing a great job. 
They're focused solely on Iran. We've constructed an office of 
six people in Dubai, whose job--they're all Farsi speakers--is 
to talk to the thousands of Iranians in Dubai. We have Iran-
watchers, people who are focused on Iran, in Kabul and in 
Baghdad, in Frankfurt, in London, places where the Iranian 
diaspora congregates. And it's very reminiscent to what we did 
in the 1920s during the period between Versailles and when 
Franklin Roosevelt was inaugurated. We had no diplomatic 
relationship with the Soviet Union; and so, we established what 
we called Riga station, which is where--which was the 
diplomatic outpost designed to look into the Soviet Union, 
understand it, and try to connect with it. And we sent people 
like Chip Bohlen and George Kennan there, as young diplomats. 
And we had Riga station in mind when we designed our office in 
Dubai.
    And so, I think we, in government, need to be smarter about 
Iran, and we're attempting to do that. And I think we need to 
unleash the power of our private sector and the American people 
to create the kind of bridges that ultimately can bring, in the 
long term, these two societies more closely together.
    Senator Lugar. I would applaud those efforts.
    Thank you, Mr. Chairman.
    Senator Casey [presiding]. I want the ranking member, 
Senator Lugar, to know I'm here temporarily.
    Senator Lugar. Oh, I see.
    Senator Casey. Senator Biden will be back shortly.
    I'll exercise my own prerogative, as a temporary Chair, to 
start my questions now. I don't see anyone outranking me over 
here.
    Secretary Burns, thank you for being here, and thank you 
for your great public service, especially when it comes to the 
threat posed by Iran. And I appreciate the testimony you gave.
    I wanted to ask you a couple of questions about 
intelligence. I think you'd agree with me, wouldn't you, that 
when we're talking about any kind of successful effort in the 
area of diplomacy, that one of the underpinnings of that, one 
of the foundations of that, or, to use another analogy, one of 
the pillars to hold that up, would be a credible and an 
effective set of intelligence data? And there have been 
questions--we know the questions that were raised, serious 
questions about intelligence failures in the lead-up to the war 
in Iraq. And, just in February, a Los Angeles Times story 
calling into question U.S. intelligence as shared with U.N. 
nuclear watch--the U.N. nuclear watchdog agency, IAEA--the 
assertion made by diplomats--and this story was out of Vienna--
is that that intelligence was inaccurate, and serious questions 
raised about it. So, I ask you, Do you have full confidence 
that the intelligence that our Government is producing with 
regard to Iran, generally, but, specifically, the nuclear 
threat, and the detail and the data that undergirds those 
intelligence conclusions or estimates--do you have full 
confidence in American intelligence efforts in this question?
    Ambassador Burns. Senator Casey, thank you for your 
question.
    Let me just say that I do have full confidence in our 
intelligence community. I think that they are objective. They 
work extremely hard. They understand that one of our primary 
foreign policy challenges is Iran, so a tremendous amount of 
resources are being devoted to the question of trying to 
understand the society, its politics, but particularly to focus 
in on the nuclear question, and to look at some of the 
questions that we've got to answer about the pace of work at 
the nuclear complex at Natanz. Most of--I can only speak in 
generalities, because we would have to go into a classified 
session to speak in specifics, so I'll just refer to the 
generalities by saying I'm very well acquainted with the 
individuals leading this effort in our intelligence community, 
and I have every reason--every confidence that they are 
objective, that they are calling them as they see them, and 
that's our obligation as Federal civil servants. And this is 
such an important issue for our country. The threat of a 
nuclear-armed Iran, it would change the balance of power in 
Europe, in negative terms, for the United States, for Israel, 
our friend and ally. And we need to get this right. And we're 
all dedicated to getting it right. And I think I can say, as 
someone who works with them day to day, that I have every 
reason to believe that they're approaching this with the degree 
of seriousness that you would want, that you would expect.
    Senator Casey. And based upon your answer, from what you 
can tell us that's not--obviously, not classified--what has our 
intelligence indicated to us, in terms of the duration of time 
from the present until--we hope this doesn't come to pass, but 
sometime in the future, where Iran could, in fact, develop a 
nuclear weapon? There are all kinds of estimates that are on 
the record. There are all kinds of opinions. But from what you 
know today, and based upon our intelligence, what can you tell 
us about that?
    Ambassador Burns. Senator, I am--I just want to be very 
clear in stating the obvious, I'm not an intelligence official, 
and I think there has to be a clear line between those who are 
responsible for intelligence predictions and those who are in 
the policy community. And I'm in the latter community. So, I 
have some degree of humility in trying to answer your question, 
and I would refer you to Director McConnell's testimony before 
the Senate in February, where he, I think, addressed a question 
from Senator Hillary Clinton and gave a very specific answer as 
to what he believed was the timeline, the answer to the 
question that you posed.
    I would just say, to--just to add to that, is, there's no 
more serious threat. We take it--we have to take very seriously 
and be tough-minded about that threat. We have to, of course, 
watch the intelligence, but keep this issue--the question you 
asked--So, how many years will it take for them to produce 
either the capacity to produce fissile material in a nuclear 
warhead, or actually to have an industrial process that could 
do that, at an accelerated rate? And we have to keep that under 
constant review, because there are so many variables that go 
into that process that the Iranians are engaged in. You need to 
watch all of them, individually and in combination. And that is 
what our Government is attempting to do.
    So, I think there has been a very clear intelligence 
estimate made by Director McConnell, and I think it's best for 
me, as a policy official, to leave the intelligence to them. 
But, as a policy official, it has to be under constant review, 
because there's nothing more important to us.
    Senator Casey. My time is short. I just want to try to get 
one or two more in.
    The whole question of refining capacity, we know that's the 
ability of the Iranians to have the consumption of gasoline at 
a level where they can sustain their economy. I know that's an 
advantage we have, I guess, in terms of negotiations. But, 
because of their lack of domestic refining capacity, what can 
you tell us about strategies that we might employ, because of 
that disadvantage that they have, in terms of short-term or 
long-term negotiations? Is that something--do you think it's 
viable as a point of leverage? And is this something that 
you've already employed or begun to think about?
    Ambassador Burns. Thank you, Senator.
    I think, actually that's a really pertinent point of our 
negotiations. The irony is that, for one of the largest oil and 
gas producers in the world, they import about 40 percent of 
their gasoline, and they have not been able to build up their 
refining capacity to the degree they'd like. They keep the 
price of gas artificially low, which has all sorts of negative 
effects in their economy and the streets of Tehran--and I've 
never been there--but I understand that it's impossible to 
drive there, because there are so many cars on the road, 
because gasoline is so cheap.
    But you're right to suggest that there's--this is a point 
of leverage to us. And, as we look at all these points of 
leverage--and I have listed five of them in my opening 
remarks--that are diplomatic, economic, and military--most of 
us believe that what we can do economically is probably, in the 
short term, the most effective leverage we have against the 
Iranians, because I think the most important thing we can say 
about their motivations as a country, as a government, is that 
they don't want to be isolated, they don't want to live the way 
the North Koreans have lived. They want to integrate, and they 
want investment capital, and they want trade from Europe and 
the Arab world. They see Dubai as their banking capital, for 
instance. And the more that we can convince countries not to do 
business as usual--for instance, for Japan to reduce its export 
credits; Germany, Italy, and France, the four of them have done 
that--for us to see more international financial institutions 
shut down lending to Iran--I think you were right to suggest 
that that's the point of vulnerability. And if--and the whole 
point of this is not just to be needlessly punitive, but to 
drive up the cost to Iran of its behavior, and to increase the 
chance that we can get it to the negotiating table, resolve the 
nuclear conflict peacefully rather than militarily. The 
President has said, many times, ``We keep all options on the 
table.'' And he's right to say that. But there's no question 
that we are focused on a diplomatic solution, and that's where 
the great majority of our energies should be.
    Senator Casey. Thank you. I'm out of time.
    Senator Hagel.
    Senator Hagel. Mr. Chairman, thank you.
    Secretary, welcome. As you noted, you have had, over the 
course of the last few years, many discussions with a number of 
us on this committee about this issue. Most of those have been 
off the record, and we have always noted, and appreciated, your 
candid exchanges. And I share Chairman Biden's appreciation of 
your abilities and leadership, as well as what Senator Lugar 
said.
    I also wish to associate myself with both Senator Lugar's 
comments and Chairman Biden's, in--of putting a focus on the 
efforts with the NGOs, as you noted, widening our exchange 
efforts. As you noted, we have some opportunities here with the 
younger generation in Iran, and you and I have talked about 
that, at some length. You also appeared before the Senate 
Banking Committee, 2 weeks ago, on this issue, and we 
appreciated your comments then.
    And I also would like to acknowledge the efforts that 
Secretary Rice is making, as well as yours and others in the 
State Department, to what I perceive to be a refocusing of our 
priorities using some new diplomatic initiatives. It is my 
opinion that that is going to be the most important leverage we 
have within the arc of our instruments of power--military, 
economic, and diplomatic--and a wise use of each in a 
coordinated, comprehensive way is what's going to be required. 
And I believe that you and Secretary Rice and others are 
focused on that. And you should be recognized for that. And I 
think it's important that Congress acknowledge that.
    You know, Secretary Burns, that this week the Senate has 
been consumed with Iraq, specifically the supplemental 
appropriations request from the President. And, as you have 
noted, as others have, we cannot separate Iraq from Iran; they 
are woven into the same fabric, as is the Middle East, in 
general; specifically, Israel, the Palestinian issue. And it 
is, in my opinion, not only appropriate and responsible to have 
this debate and have the Congress involved, but it's essential. 
And, as we look at the papers this morning, strikes in 
Baghdad's Green Zone increased; 6 of the last 7 days, rockets 
have hit inside the Green Zone, killed one America soldier, 
wounded another, contractors. Papers continue to be full of 
other headlines, like, ``Gunmen Go On a Rampage in Iraqi 
City.'' This is Tal Afar, policemen loose on the streets, 
assassinating people. This is the same city that President Bush 
talked about as a model city, how peace, tranquility had come 
to Tal Afar. The President said, ``It gives me confidence in 
our strategy.'' Other headlines about what the King of Saudi 
Arabia said, calling the United States involvement in Iraq--I 
believe his exact quote was ``an illegitimate occupation of 
Iraq.'' And then, on the same page, headline, ``Iran May Skip 
Talks on Iraq if U.S. Keeps Six Detainees.'' You have addressed 
that issue, generally.
    Now, with all of that playing out--and that, Mr. Secretary, 
is reality; that's not an abstraction, that's not a political 
statement, that is reality as to what's happening in Iraq. And 
we can have all the verbiage about supporting our troops and 
all the other debate points that have been made, but what I 
have just inventoried here, and we could continue for some 
time, are realities. Things aren't getting better, they're 
getting worse.
    Now, in Iraq, as you have noted, the Iranians have 
considerable influence. Let's start with the fact that the 
Iraqi Prime Minister and the Shia senior Government of Iraq, 
our allies, our friends, those we helped put in office, are 
closely associated with the Iranians. You and I have talked 
about this. Most were exiled in Iran during the reign of Saddam 
Hussein. And my question is: Does this enhance, does this 
inhibit--how does it factor into our relationship with Iran, 
what we are attempting to do with Iran through the United 
Nations, through our partners--and all the pieces, not just the 
nuclear piece, but the Hezbollah piece? Are we working with the 
Iranians and Iraqis together? Are we working with our allies, 
the Iraqis? The Iraqis are in and out of Tehran in a fairly 
regular interval. How are we using that relationship, or are we 
using that relationship, between the Iraqi Government and the 
Iranian Government?
    Thank you.
    Ambassador Burns. Thank you, Senator.
    We're seeking, and we hope to see, a change in Iranian 
actions and behavior in Iraq. And, more broadly, that's the 
focus of our policy toward Iran, to see a change in behavior, a 
change in the actions.
    Now, we have tried to connect with them. As you know, on 
March 10, Zal Khalilzad, who was then our Ambassador to Iraq, 
met with the Iranian Deputy Foreign Minister, the Syrian Deputy 
Foreign Minister, with the Iraqi Foreign Minister, at that 
first international meeting, and we agreed at that meeting, to 
attend additional meetings both, at that ambassadorial level, 
but also at the ministerial level. Secretary Rice would hope at 
some point to sit down with her Iranian and Syrian counterparts 
to talk about Iraq. And we're trying to manage that schedule 
now with the Iraqi Government.
    So, it is true that we understand the need to deal with the 
reality of Iraq, and that is that Iran and Syria have some 
influence. But our point to them is that they're not using that 
influence in a positive or productive way. I mean, look at the 
actions of Syria to allow foreign fighters to fly into the 
Damascus airport, go overland, across Syria, right across the 
Iraqi border, and then to direct their attacks against American 
soldiers. We can't countenance that. And look what the Iranian 
Government was doing. As I said before, they're in a privileged 
position. Most of the Shia leadership of the Iraqi Government 
now took refuge in Iran. There's a degree of personal knowledge 
and familiarity with the leadership in Tehran, the leadership 
of Baghdad, that ought to give Iran a perch from which to be 
influential, but they've not used that power. They've used it 
positively; they've used it negatively. And so, our beef with 
the Iranians on the subject of Iraq is, instead of just 
supporting a narrow group of people--Shia militants--and giving 
them explosive technology to attack American soldiers, they 
ought to be arguing for the unity of Iraq, and they ought to be 
arguing for an end to the violence between Shia and Sunni. But 
they're not. And so, you can believe that when we go to the 
table with them, as Zal did--Ambassador Khalilzad--on March 10, 
and when we see them again, in the month of April, we have an 
agenda, and it's to ask the Iranians to play a more productive 
role in Iraq itself.
    And I would also just say, Senator, we're seeking to sit 
down with them on the nuclear issue, and they're avoiding us. 
We have a Perm 5 offer to negotiate, and they've avoided us now 
for 8 months. So, it's not for lack of trying that there isn't 
much of a conversation these days between the Government in 
Iran and the Government of the United States.
    Senator Hagel. Part of the question revolved around whether 
the Iraqi Government was attempting to use this--or, how were 
they attempting to use their relationship with the Iranians in 
Iraq. Not just us. And if--in fact, as I understand it, the 
Secretary says that unless there is a verifiable suspension in 
Iran's enrichment program, then she will not go to the 
ministerial meeting. Is that correct?
    Ambassador Burns. Actually, we've separated the two issues. 
On the question of Iran's nuclear weapons ambitions, we, the 
Chinese, the Russians, and the Europeans have said, together, 
``We will only negotiate if you suspend your enrichment 
programs.'' Now, suspend the programs for the life of 
negotiations. And the reason is, if we went to negotiations 
with them, the five of us, but allowed Iran to continue its 
nuclear research, there would be every incentive for them to 
keep us at the negotiating table for years, and they'd just 
proceed with their nuclear research. They'd have it both ways.
    But we have--apart from the nuclear issue, we've said that 
we're willing to sit down and talk to them about Iraq in this 
multilateral setting that the Iraqi Government made available, 
back on March 10. And we've said that we're willing to go to 
future meetings with them. We've made that very clear. But we 
want there to be--we're going to insist on a change of Iranian 
behavior, because right now they're not adding to those--to 
the--they're not adding their voice to those who are arguing 
for a peaceful resolution of disputes inside Iraq, as opposed 
to the violence that you correctly say is dominating our news 
today.
    Senator Hagel. So, the Secretary would, in fact, would go 
to a ministerial including the Iranians, without a verifiable 
enrichment agreement or suspension commitment from the 
Iranians.
    Ambassador Burns. Well, she and our other representatives 
are willing to have future meetings on the issue of Iraq, with 
the Iraqi Government, with some of the other neighbors--you 
know, Egypt's been involved--with some of the European 
countries, perhaps. Yes.
    Senator Hagel. So, she would.
    Ambassador Burns. She's--yes. And we are willing to do 
that. But what we're not willing to do is change our policy on 
the nuclear side, which is not just a U.S. policy, it's a 
Russia-China-United States-European policy, which is quite 
strongly felt by all of us.
    Senator Hagel. Thank you.
    Mr. Chairman.
    Senator Casey. Senator Feingold.
    Senator Feingold. Thank you very much, Under Secretary 
Burns, for your testimony today and for being here.
    And thank you, Mr. Chairman, for holding a hearing on this 
subject.
    There are few higher priorities than getting our policy 
toward Iran right. We must be realistic, both about the very 
real threat from Iran and about the consequences of different 
courses of action. We got it wrong in Iraq, and are suffering 
the consequences: An overworked military, mountains of debt, 
and an increase in the negative perceptions of the United 
States overseas. We cannot afford to get it wrong this time 
around; the stakes are too high. Mistakes could cause the 
situation in the Mideast to spin out of control, and, before we 
know it, we could be faced with even greater security threats 
than we're facing now.
    But I do thank you for the hard work you've done so far. 
And, first, I'd like to ask you--I note, Mr. Burns, in your 
testimony you state that, ``If we continue our skillful 
diplomatic course, and have the patience to see it play out 
over the mid to long term, I am confident that we can avoid 
conflict and see our strategy succeed.'' What kind of a 
timeframe were you talking about?
    Ambassador Burns. Senator, thank you. It's hard to be 
precise about that, because it does get to the question of when 
we think the Iranian Government will have the capacity to 
produce fissile material and nuclear weapons. And that's a--our 
intelligence community watches that, as you know, and they've 
given their own assessment to the Congress, which is the right 
thing, independent of the policy community. And we need to keep 
it under urgent review and constant review, because there are 
so many variables that fit into that question. And you have to 
try to measure, sometimes from a distance, how well the 
Iranians are doing.
    One of the problems we have now, for instance, just to 
illustrate this, is that Iranians have begun to kick out some 
of the IAEA inspectors. They began this several months ago. 
They've downgraded their relationship with the IAEA, because, 
they say, of their anger over these two Security Council 
sanctions resolutions. And so, we rely a lot on the 
International Atomic Energy Agency and Dr. Mohamed ElBaradei to 
give us a sense of the pace at which they're proceeding on a 
scientific basis at Natanz, on the enrichment and reprocessing 
issue. So, it's under constant review. And, frankly, I don't 
think it would make sense for me to say, ``Well, we've got X 
number of months or X number of years,'' because I think that 
might be a misleading answer.
    So, what I have said in my testimony, and what I repeated 
earlier today, is that I'm confident that we have some time 
with which to work and that--the key thing about diplomacy is, 
you've got to have a little patience. And you have to be 
willing to be persistent and let diplomacy play out. And so, I 
was--before you came in, I was taking advantage of this 
microphone to say I read the Washington Post lead editorial 
today, and they gave us some compliments for our strategy, then 
they said, ``But they haven't stopped the nuclear weapons 
program.'' And I thought to myself, that's a little ambitious; 
we've only been at this now, in the Perm 5, for a year, but 
we've built this major international coalition. And when you 
have Russia and China and Indonesia and South Africa and Brazil 
on our side, and you have Syria and Venezuela and Cuba on 
Iran's side, that's a pretty good lineup for us. And we should 
be----
    Senator Feingold. Speaking of that, I want to pursue that a 
little bit, because I--when I was in Indonesia last year, I 
asked President Yudhoyono about why--I believe, at the time 
Indonesia was one of five countries that had not voted to refer 
Iran to the Security Council, and he indicated it was a 
question of timing. And now I note that, in fact, Indonesia 
was, as I understand it, supportive. And I think this is 
critical, because I think sometimes people think of this in 
terms of the five permanent members of the Security Council, 
but Indonesia is the largest Islamic country in the world and 
has a real relationship with Iran. So, tell me a little bit 
about how we're going about enlisting countries like that, and 
indicating to them that this is at our very highest--one of our 
very highest priorities that we want from our relationship with 
them.
    Ambassador Burns. We've actually--this has been a high 
priority for us in our relations with Brazil, India, South 
Africa, Indonesia, Egypt, just to name five leading members of 
the Non-Aligned Movement. And what we've said to them is, 
``Look, we're not trying to deny Iran--the Iranian people a 
nuclear--civil nuclear power, because under the Non-
Proliferation Treaty, all countries have that right, but we are 
trying to deny them nuclear weapons.'' And there's a big 
distinction, and we can keep the two separate. And we've had a 
lot of success. When I was in Brazil, in the month of the 
February, and the Brazilians were just debating in their 
Parliament the implementing legislation for the first U.N. 
Security Council sanctions. That's a powerful instrument, when 
it's not just the United States or France saying to the 
Iranians, ``You can't have nuclear weapons.'' It's all of their 
brethren from the developing world, countries that they 
respect, countries with which they have diplomatic relations 
and some economic ties. And so, it's been very effective for us 
to see these countries step forward. And, frankly, we had very 
tough negotiations at the Security Council over the last 2 
weeks, but to see South Africa, Qatar, and Indonesia join the 
rest of us, that was a powerful----
    Ambassador Burns. How tough was it--how challenging was it 
to get Indonesia to come onboard here?
    Ambassador Burns. Well, I think that--I think that those 
countries, rightfully--what happened was, the countries of the 
Perm 5, including the United States, came to the rest of the 
Council and said, ``We have this resolution. It's a chapter 7 
sanctions resolution. We'd like you to vote for it.'' And I 
think, quite rightfully, a lot of them--Indonesia and Qatar and 
South Africa--said, ``OK, wait a minute. Let's not rush into 
this. Let's talk about it.'' And so, we spent 8 days, about 20 
hours a day, talking in New York, talking between capitals. 
Secretary Rice got on the phone and talked to President Mbeki; 
the President talked to the President of Indonesia. And we took 
the time to try to help them understand what was motivating us 
and why their climbing onboard would really reinforce efforts 
toward peace and a peaceful resolution, that we weren't trying 
to somehow use this as a way to have a military confrontation 
with Iran.
    Senator Feingold. Well, I congratulate you on that 
approach, and I'm glad it's bearing some fruit.
    You said, in your opening statement, that an active and 
focused diplomatic strategy is the best way forward in dealing 
with Iran, and I'm pleased to hear your comments today, and 
also those of Secretary Gates yesterday, which signal the 
possibility of higher level diplomatic engagement. Will you 
outline for me what these higher level engagements would look 
like?
    Ambassador Burns. Yes, sir. On the nuclear issue, we think 
the only way we're going to resolve this, on a diplomatic 
front, is to get the negotiations to a very high level. So, 
what we proposed is, if the Iranians would agree to 
negotiations, Secretary Rice has said she would be there, 
personally. It would be the first time since the hostage crisis 
of 1979 to 1981, that we would have had such a high-level 
interaction with Iranian officials. But all of us have said--
Russia, China, France, Britain, Germany, and the United 
States--``There's just one part of the price of admission. 
You've got to suspend your nuclear efforts.'' And we've said, 
``We'll suspend out sanctions implementation if you'll suspend 
your enrichment program.'' So, it's suspension for suspension. 
We think it's a pretty fair deal. And the Iranians have not yet 
said yes, but what we have asked Javier Solana to do on our 
behalf--he's the European Foreign Policy Chief--we've asked him 
to make contact with the Iranians. And he called Ali Larijani, 
on Monday, the Director of the Security Council in Tehran, and 
say, ``OK, now that we've sanctioned you again, is there a way 
for us to work with you to get you to the negotiating table?'' 
And since the United States does not have diplomatic relations 
with Iran, and it wouldn't be in our best interest to lead 
those kinds of direct talks, Mr. Solana will lead them for us, 
and for the rest of the Perm 5 countries. And we hope Iran will 
know that this offer that we made to negotiate with them is on 
the table; we haven't taken it off. It's the best way forward.
    Senator Feingold. Thank you, Mr. Burns.
    Thank you, Mr. Chairman.
    Senator Casey. Senator Coleman.
    Senator Coleman. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary.
    I'm pleased to hear you talk about a need to reengage with 
the Iranian people. I think sometimes there is a confusion as 
we focus on the comments of Ahmadinejad and his threats to 
destroy Israel, and the danger of Iran having a nuclear weapon, 
that that's a separate issue from the Iranian people, as you 
indicated, by--even public opinion polls say they're still pro-
American, and about 70 percent of the population of Iran is 
under 30, so there's, I think, tremendous potential there, and 
I hope that we provide the resource--and I was pleased to hear 
the chairman say that he'd be supportive of that--those 
resources that will allow us to extend our engagement and 
contact with the Iranian people. I think it's critically 
important.
    I should also note, when I was in Dubai, I found it 
fascinating that the language of choice among our diplomats 
seemed to be Farsi. And the need to understand the language 
issue is critical. And so, I think that's also very positive. 
Engagement is absolutely critical.
    Let me--I read in the paper that--the comments--or at least 
descriptions of the comments of the Saudi King. And it's been 
my understanding, in dealing with the Saudis, dealing with the 
Egyptians, they want us in Iraq. They don't want us leaving 
Iraq. They have deep concerns about the Iranian influence in 
the region. And so, could you help me understand the 
perspective on the comments of the Saudi King that describes--
apparently describes--our presence in Iraq as an illegitimate 
foreign occupation. Is that a--somehow, a change in the 
perspective from the Saudis and others in the region?
    Ambassador Burns. Senator, thank you very much.
    I will admit we were a little surprised to see those 
remarks. We disagree with them. We're under--United States 
military forces are in Iraq under United Nations authority, and 
the United Nations votes every year to authorize that mission. 
It's an international coalition sanctioned by the United 
Nations and at the invitation of the Iraqi Government and of 
the Shia, Sunni, and Kurd leaders of that government. And so, 
obviously we'll seek clarification from the Saudis. You know, 
in these instances, you never know, it could have been an 
interpretation issue, it could have been misreported. So, I 
think we have to allow for that. And I'm sure this is not going 
to disrupt the very good work that we've been doing with Saudi 
Arabia of recent months on this particular issue.
    Senator Coleman. And my concern goes not just to the nature 
of our relationship with the Saudis, but I'm looking at the--
one of the things I find frustrating is that the Iranian 
efforts to destabilize the region, Iranian efforts to use 
Hezbollah as a proxy, to support Hamas, to, you know, provide 
deadly IEDs, EFPs, whatever they're called now--it's not just a 
concern for us, but I have always understood that the 
Egyptians, the Saudis, the UAE, others within the region--
particularly, by the way, Sunni governments--have a--should 
have a deeper interest in supporting efforts at stability, and 
I don't see that interest. And so, I don't see the fruits or 
the action that would somehow correspond with what appears to 
be a real interest. They've got a dog in this hunt--the 
Egyptians and the Saudis and others. And so, I guess my 
question is, you know: What can be done to somehow facilitate 
others in the region--Sunni governments, in particular--from 
playing a more active role in dealing with Iran and challenging 
Iran's efforts to destabilize and cause conflict in the region?
    Ambassador Burns. Senator, I think you're right to focus on 
this aspect. We give so much attention to the nuclear problem, 
as we should, but the other big problem with Iran is, it's 
essentially become the central banker of Middle East terrorism. 
It's the leading funder of Hezbollah, Hamas, Palestinian 
Islamic Jihad, and the PFLP General Command. And if you think 
about the Iranian agenda, it is contrary to the Arab agenda in 
the Middle East, and there's a lot of concern among the Gulf 
Cooperation Council countries about increased Iranian 
influence. Ahmadinejad has said--he says that the destiny of 
Iran is to be the most powerful state in the Middle East. And 
we see a country with an entirely negative regional agenda. I 
mean, think of it this way, they oppose the moderate 
Palestinians; they oppose, and are the sworn enemy of, the 
State of Israel, our ally; and they're using their influence 
very negatively inside Iraq, and also in Lebanon against a 
democratically constituted government. And so, we're very 
concerned by this regional role.
    Secretary Rice has had four meetings of the gulf countries 
plus Egypt and Jordan, together as a group, since the month of 
September. And there's a real regional effort beginning, to 
push back against the Iranians. And I think you've seen us 
begin to do that with our deployments in the gulf, with our 
actions in Iraq. And I can tell you, behind closed doors those 
Arab countries do not wish to see Iran become the dominant 
country in the Middle East.
    Senator Coleman. And that's clear--the sense I have. I 
would suggest--and I think it's pretty obvious--that the Iraqi 
Government plays a role in this, that the fear among some 
others in the region is that the Maliki government or--I 
don't--a tool, a pawn of Iran, but perhaps so closely aligned 
and not showing the kind of resolve to deal with Iranian 
influence--and perhaps, obviously, they're not showing resolve 
to reconcile and deal with the Sunni-Shia divide. And so, I 
would suggest, perhaps, the obvious, that the Iraqi Government, 
by its own actions, in showing a commitment--and certainly 
that's the hope with this surge and changing rules of 
engagement, taking on Shia extremism--will play a role in 
perhaps convincing some of the others in the region that they 
have a stake in stability in Iraq, and they have a stake in 
that government surviving.
    Ambassador Burns. Well, I would agree with you, and I--you 
know, our new Ambassador has arrived. Ryan Crocker was sworn in 
yesterday. And I think we all recognize that the Maliki 
government faces an extraordinary number of challenges, and we 
have a great deal of sympathy with them. My sense, very 
respectfully, would be that they're not a--beholden to Iran; 
there are natural ties there, personal and institutional, from 
the anti-Saddam coalition, but that the Maliki government 
understands that they have to have a unified national effort 
that includes Sunni and Kurd, if they're going to be ultimately 
successful. And we think they do understand that.
    Senator Coleman. One last question. Do you believe that we 
have shut down the flow of these--the most deadly kind, now, of 
IEDs? I think they're called EFPs, but--and I--when I was in 
Iraq, I had discussion with our troops and the ability of 
shooting projectiles from the side, with devastating impact--if 
we know they're coming from Iran, they're killing American and 
coalition forces, have we shut it down? And, if not, what else 
do we have to do to shut it down?
    Ambassador Burns. I think it might be best to ask our 
military to give you an assessment of that. But what I can tell 
you is, I don't believe we have shut it down, unfortunately. We 
saw an alarming rise in the number of these attacks--this is 
armor-piercing explosive technology--in the latter months of 
2006. And that's why we chose to push against them in detaining 
the two groups of Iranian operatives, on December 20 and 28 of 
2006, and that's why we're still--have detained several of 
those individuals. And what the President said on January 10 
stands, we will--you know, we will not allow these Iranian 
networks essentially to give the capacity to Shia militant 
groups to take aim at our soldiers. And they understand that. 
And we will push back against them, as we have done.
    Senator Coleman. Thank you.
    Thank you, Mr. Chairman.
    Senator Casey. Senator Obama.
    Senator Obama. Thank you, Mr. Chairman.
    Mr. Secretary, it's good to see you again. And I am 
encouraged, for the most part, by your testimony and the 
progress that's been made on the diplomatic front.
    I want to pick up on an issue that at least is related to 
the previous question, and that is the expression on the part 
of this administration, at least in the press, of Iranian 
influence in financing or encouraging destabilizing activities 
inside Iraq. There are a lot of Americans who are concerned 
that there is the potential, at least, for backing into 
military action in Iran--not based on concerns with respect to 
the--not solely premised on incapacitating their nuclear 
capabilities, but under the guise of expanding the theater of 
war in Iraq. Now, obviously we're going to defend American 
troops and personnel if they're attacked in Iraq, or anywhere 
else in the region. And we want to give the administration some 
flexibility in making sure Americans and American facilities 
are safe and secure--you know, imminent attacks, hot pursuit, 
there might be certain intelligence-collection activities. So, 
let's stipulate up front that those actions would be fully 
supported by the American people and Congress. But I want to 
get to the heart of the question. Senator Webb and Senator Byrd 
have offered an amendment that would require the administration 
to get congressional authorization before using force against 
Iran, with the--some of the exceptions that I just mentioned. I 
personally believe it would be a mistake for us to back into a 
military conflict with Iran. So, I'm interested in what the 
administration's position is, in terms of having to obtain 
authorization before using force in Iran, akin to the 
authorization that was provided in Iraq.
    Ambassador Burns. Thank you, Senator. I'm happy to respond 
to your question.
    I guess I would say this, that I want to assure you, as I 
know Secretary Rice has done, that we are not seeking a 
military confrontation with Iran. The whole thrust of our 
efforts has been diplomatic for roughly the last 2 years, on 
the nuclear issue, as well as on the other issues concerning 
Iran's regional capacity.
    Senator Obama. And, as I said, I'm encouraged by the 
progress that's been made, at least recently. I think some time 
was lost, but that's water under the bridge. I think the 
actions you guys are taking now are constructive. But I do want 
to get to, sort of, the central issue that I asked, and that 
is, if we were to--if the administration made an assessment 
that military action, in order to preserve the integrity of 
Iraq, might be required, is it the administration's position 
that authorization would be needed to do that?
    Ambassador Burns. Senator, I'm well aware of why you're 
asking the question. I know Senator Webb, in fact, directed 
this in writing to Secretary Rice after the January 11 
testimony, I believe, and we responded to Senator Webb. So, 
I'll be happy to respond to you. It's an important issue.
    I guess I'd say three things:
    First is, it's not our intention--I just want to repeat 
that--to seek a military conflict with Iran. We believe that 
diplomacy has a possibility of succeeding, and we ought to try 
it. And we're doing that.
    Second, as a matter of the President's constitutional 
authorities, I'm not a constitutional lawyer, but I know it's 
the position--it's the position of our Government that the 
President obviously has the constitutional duty to protect the 
American people and protect the United States, and, as 
Commander in Chief, has to be able to exercise that authority 
as he sees fit.
    Senator Obama. I just want to amend that. I think you meant 
it's the position of our administration, as opposed to our 
Government, the----
    Ambassador Burns. When I say ``Government,'' I mean the 
executive branch.
    Senator Obama. OK. I just wanted to make sure----
    Ambassador Burns. So, I'm happy to amend it and say the 
position of the executive branch.
    Senator Obama. All right.
    Ambassador Burns. I'm used to talking to foreigners about 
our Government----
    [Laughter.]
    Ambassador Burns [continuing]. Which is, to them, the----
    Senator Obama. I understand.
    Ambassador Burns [continuing]. Executive branch of the 
United States.
    Senator Obama. Right.
    Ambassador Burns. And so, I--we have given--we sent, to 
Senator Webb, a letter essentially making that argument, that 
there's a constitutional issue. And I would just say there's a 
policy issue, as well. And I'm much more, I think, able to 
address the policy issue, as opposed to the constitutional and 
legal issues.
    Third, I would say--and I don't mean to disregard your 
question or, kind of, not answer it by saying this--but it's 
hard to answer hypothetical questions, because you never know 
what your interests will be at the time, you don't know what 
the balance of forces will be at the time. And so, it's a 
little bit--it's not really possible for me to say, in a 
hypothetical situation, (a) the President would do this, 
because it's really his decision and his authority, as opposed 
to anyone else's in the executive branch.
    I'd be happy to make available to you the letter that we 
did send, which does represent the considered views of the 
State Department and the White House, from a legal perspective, 
on Senator Webb's question.
    Senator Obama. I will let Senator Webb pursue this question 
further, since he's done a lot of work on it. I just wanted to 
get the ball rolling, since we all--we had some--limited time.
    Let me shift to the issue of economic sanctions. I think we 
obviously made progress with the most recent vote in the 
Security Council. I am still trying to figure out what the 
status of European financial interactions are. Are we seeing 
moves to tighten financial sanctions, limit export credits, 
reduce trade, et cetera, across the board? Which countries are 
being helpful? Which countries are--we wish were more helpful 
on this issue.
    And, since we only--I only have a limited amount of time, 
why don't I tack on just a couple of other questions to that.
    What kind of progress are we making in actually impacting 
the Iranian economy on issues like, for example, their gasoline 
imports? It strikes me that's obviously someplace--a point at 
which you could end up having significant influence on domestic 
views of Ahmadinejad's policies and rhetoric.
    And one final point. I guess there has been some talk about 
the possibility of--some states have talked about the 
possibility of divestment as a strategy of leveraging--applying 
leverage on Iran. And I'm curious as to whether the 
administration or the State Department has any views on that.
    Ambassador Burns. Thank you very much, Senator. I'll--I'm 
happy to address these questions.
    We're trying to produce multiple points of pressure on Iran 
so that they'll have a greater incentive to negotiate with us. 
So, those are political, diplomatic, military, and economic. 
And I think the ones that you've focused on are probably the 
most important. Most people who know Iran well think that 
they're most vulnerable to economic sanctions and economic 
leverage, so we put a lot of attention there. In the last 
Security Council resolution, passed Saturday, we were able to 
convince the other countries to sanction Bank Sepah. It's their 
fourth largest bank. It's the bank that funds their WMD and 
ballistic-missile program. That was positive.
    Second, we open up, in that resolution, for the first time, 
that countries should now begin to watch with ``vigilance and 
restraint,'' are the two words used, their export credit 
relationship. In 2005, the OECD figures show 22 billion 
dollars' worth of export credits made available by European 
companies--countries for their companies to stimulate trade 
with Iran. And our message to the Europeans is, ``If we want to 
pressure the Iranians, we've got to do it through economics, 
not just through diplomacy. And so, you need to reduce the 
level of those export credits.''
    In the last 3 or 4 months--and we've been at this--arguing 
this for about 6 or 7--we've seen Italy, France, and Germany, 
the three largest countries with an economic relationship with 
Iran, reduce--begin to reduce their export credit levels--not 
enough to our satisfaction, but the trend is good. Japan has 
done more. The Japanese state lending agencies have 
dramatically reduced their exposure in Iran.
    So, we think this is important. We're trying to push on 
this. In fact, I was in Brussels on Monday and Tuesday, and 
talked to Javier Solana, and said, ``Is it now possible for the 
European Union to begin to take stronger collective measures'' 
in this area that you suggest, of economics and finance? And we 
hope it will.
    There are other countries, like Russia, with a business-as-
usual attitude. You know, Russia sells arms to Iran. They just 
sold Tor-M1 missiles, air-defense missiles. And we are strongly 
opposed to that.
    China, and its state corporations, is really open for 
business with the Iranians, and we've told the Chinese, ``You'd 
better be aware of--there is a U.S. law, Iran sanctions law, 
that prohibits a certain level of oil and gas investment, and 
if you pass--if you cross that threshold, you may be subject to 
that law.'' So, I think the presence of that law is positive 
for us as a deterrent effect.
    Now, finally, you've talked--you've asked about divestment 
and other options. I guess I'd say this--I know there's a bill 
in the Senate that would toughen up the Iran sanctions law, and 
there's two in the House--that we would be open to supporting 
bills that would turn the attention to tighten pressure on 
Iran. But if we choose tactics that will essentially focus most 
of the efforts of our country on the Europeans, then we end up 
disrupting this major coalition we've built, and it becomes a 
U.S. fight against the Europeans, rather than an American-
European fight against Iran. And so, we've said, very--
respectively to Chairman Lantos and Congressman Ross-Lehtinen 
in the House, that we could not support their bill that would 
effectively take the waiver authority of a law away from the 
President and that would turn most of our attention toward our 
own allies. We want to see the heat turned up on the Iranians, 
as a general proposition.
    Senator Obama. Thank you.
    Ambassador Burns. Thank you.
    Senator Casey. Senator Webb.
    Senator Webb. Thank you, Mr. Chairman.
    And, Secretary, appreciate your testimony. Very valuable, 
today.
    With respect to the question that Senator Obama asked, and 
the letter that was sent to me, I'd just like to make sure that 
Senator Obama understands that the letter that was sent in 
reply to my question did leave open this whole issue of the 
federal system division of responsibilities between the 
executive and the legislative branches, which is why I decided 
to introduce the legislation that I did. So, I just wanted to 
Senator Obama to understand that.
    The key question really, constitutionally, is whether 
general operations in Iran, as opposed to specific reactions to 
tactical situations, would be considered the commencement of a 
war, rather than an extension of the President's powers that 
were already granted to him by other congressional 
authorization; and, if not, whether he has that power, as the 
Commander in Chief. And it's a--it is a very complicated area. 
It's probably--a very difficult area to answer in a letter, 
which is why I decided to put something in legislation, just to 
clarify, from the view of the Congress, if the legislation 
passes, where we believe one set of authorities end and another 
begin.
    I would like to go into a couple of other areas in the 
short time that I have here.
    The first is, watching your exchange with the Senator from 
Minnesota, I was sitting here remembering that, 20 years ago, 
when I was Secretary of the Navy, I was at a--present at the 
creation of this whole attempt to develop a strategy when 
people were looking at the future of Iranian potential 
expansion under this regime. There were a number of people in 
the Government at that time who were talking about what they 
were calling a Pan-Arab strategy, sort of a desire to, in 
effect, contain Iran. And that resulted in the tilt toward Iraq 
during the middle of the Iran-Iraq war. And I think I may have 
been the only member of the Reagan administration who opposed 
the tilt toward Iraq in writing, for many of the same reasons, 
that I had great concerns about the notion of invading Iraq, 
rather than attempting to deal with that situation in a lot 
different way and allowing us to focus more heavily on 
international terrorism.
    And--I feel compelled to say this because of the exchange 
that was going on with the Senator from Minnesota.--I strongly 
believe that the occupation of Iraq has basically worsened this 
concern with respect to Iran, not alleviated it. I think that, 
as many people predicted, as--we have seen Iran empowered as a 
result.
    And so, the question becomes: What do we do from here? 
Where do we go? How do we deal with this situation? And I have 
been very gratified over the past few months about how 
Secretary Rice has stepped up and--I know the administration 
wouldn't say this--but has, I think, begun to take the level of 
diplomacy to a higher instrument of concern, in terms of 
policy.
    And my view on--my concern about where the executive power 
ends, in terms of use of force, does not reduce the concern 
that I, and other people, have about the situation in Iran. And 
I've been following, as best I can, the impact of the sanctions 
that have been put on Iran. I think The Economist did a really 
fine job outlining the strong impact of these sanctions; an 
article that they had in February--one of the February issues. 
And to me, the worst thing you can do in these kinds of 
situations is to rattle the saber to the point that an 
authoritarian government can use it to bring people inside the 
country to its side, where, otherwise, they would not be, that 
the proper use of sanctions does two things. One is that it 
isolates the leadership from its own people. And we tend to 
forget that. And then, the second thing is that it can isolate 
a regime from most of the rest of the world. And, you know, 
we--your testimony talking about thinking people in the Iranian 
Government not wanting to end up in the situation of North 
Korea, I think, is right on point. But would you care to 
comment on that?
    Ambassador Burns. Senator, thank you.
    I think you're right to suggest that there's a very 
delicate balance of tactics here between sanctions and 
diplomatic pressure and military exercises, on the one hand, 
and the threat of force, on the other. And it's my view that 
the President is absolutely right not to take any option off 
the table. I think in the Middle East, it's understood. But the 
balance of our efforts are clearly focused on the diplomatic 
side.
    Senator Webb. If I may, on that, I--because we don't have a 
lot of time--I--the concern that I, and a number of people, 
have is that the option of a general strike against Iran is 
not, in the view of many people in the Congress, an option that 
this President has without coming to the Congress. And this is 
the--sort of, the dividing line where we continue to have this 
debate.
    Ambassador Burns. I understand we're having that debate, 
and, you know, we did our best to send our response to you when 
you received the letter from our Assistant Secretary. But I 
would say, from a diplomatic perspective, that all these 
options remaining possible strengthen the position of the 
United States, strengthen our hand in dealing with the Iranians 
and is not unexpected in that kind of environment in the Middle 
East. But it's----
    Senator Webb. But you would agree that these sorts of 
sanctions tend to isolate this type of government from its own 
people. I think it's important for Americans to understand 
that.
    Ambassador Burns. Yes; I agree with you wholeheartedly that 
the objective here should be not to wage an offensive against 
the Iranian people, but to show the Iranian people we have high 
regard for them, but the problem is with their government, and 
sanctions enable you to do that.
    Senator Webb. Well, I've been watching words. I'm a writer. 
You know, I've been watching words, and we keep talking about 
Iran, Iran, Iran. And I think if you watched what the Chinese 
did in the early 1970s, they were very smart, talking about the 
American Government and the American people. I mean, let's just 
accept the fact that they were very smart about it. And we need 
to start doing that, as well.
    I'm running out of time. I would like, in brief form, to 
get your thoughts about the results of the indirect 
multilateral talks that occurred in Baghdad, as it might impact 
confidence-building and a new approach to relations with Iran.
    Ambassador Burns. Thank you.
    You're right, we are very careful to almost always say, in 
our pronouncements, Iranian ``regime'' versus ``people.'' I 
just wanted to agree with you on that.
    On the second question, I think it's too early to tell much 
about the promise of these talks, the Baghdad talks that 
started on March 10. We had an initial meeting. It was mainly a 
process-
oriented meeting--it lasted a couple of hours--to determine: 
Will we meet again? At what level? We would want to use that 
forum to try to see a change of actions and behavior on the 
part of both Syria and Iran. It's obvious that that should be 
our focus. And that's the Iraqi Government focus, as well. So, 
we're open to these conversations. But I think I'd mislead you 
if I said that somehow this presents the opportunity for a 
breakthrough. I'm not sure we know that yet, until we see more 
of what they do on the ground, because the basis of our policy 
is to see a change in actions----
    Senator Webb. But a useful----
    Ambassador Burns [continuing]. And behavior.
    Senator Webb [continuing]. Confidence-builder.
    Ambassador Burns. I think--we thought it was the right step 
to take, to open up this channel to talk to them, yes.
    Senator Webb. Thank you.
    Senator Webb [presiding]. Senator Lugar, I believe I have 
the chair. Were there any other business to be conducted? Oh, 
I'm sorry, Senator Voinovich; did not see you.
    Senator Voinovich. Thanks very much. I apologize for not 
being here for the other part of the hearing. I had the head of 
the Social Security Administration to come in and talk about 
the gigantic backlog that they've got in appeals there.
    And I want to welcome you here, and thank you for the great 
service that you have provided our country, in many capacities, 
and congratulate you and the Secretary of State on a team 
effort to involve many more people in decisionmaking, in terms 
of some of the problems that were confronted with great success 
in North Korea. I'm not so sure I--the 1701 in--between Lebanon 
and Israel, I want to talk a little bit about that. And, of 
course, you've gone into the detail about the sanctions, in 
terms of Iran.
    I would like to start with Iran's involvement in places in 
the world. And let's start off with 1701, that's been entered 
into between Israel and Lebanon. It's my understanding that the 
provisions of 1701 are not being fulfilled, that, for example, 
the representation was made that Israeli--two Israelis would be 
returned; they haven't been returned. It's my understanding 
that the infrastructure that was in place in Lebanon was 
supposed to be destroyed; it's not being destroyed. It's my 
understanding that weaponry that's supposed to be not coming 
into Lebanon is continuing to be brought into Lebanon. And I'd 
like to know just what is the role that Iran is playing right 
now in Lebanon. I know, for example, that the Saudis are 
finally working to help out that government there, but what is 
Iran doing to prevent the provisions of 1701 being carried out? 
And, beyond that, how in the world can anyone think that you're 
going to get any kind of settlement between the Palestinians 
and the Israelis if the commitments made in that agreement 
aren't fulfilled?
    Ambassador Burns. Senator, thank you.
    We still believe the 1701 was a positive step, because it 
helped us to end the war last summer between Hezbollah and 
Israel. But you're right to say that there have been some 
severe problems in implementation.
    UNIFIL has done a good job. UNIFIL has done a better job 
than I think many people had suggested. And there's a 
significant number of countries doing good work there. But it's 
true that, on those crossing points, on the Syrian/Lebanon 
border, there was such a problem last summer, there still is 
trafficking of arms between--from Iran and Syria to Hezbollah 
through those crossing points. The border is porous, it's not 
being monitored as effectively as it should be under 1701. We 
are constantly working at that. But we--it's not within our 
power to produce that kind of effective mediation. That's the 
job of the United Nations.
    It is also true that Hezbollah is beginning--is trying to 
solidify its position. I would----
    Senator Voinovich. OK, but the question----
    Ambassador Burns. I would want to give you a----
    Senator Voinovich. Yeah. What is--what involvement is Iran 
actively--how actively are they involved in frustrating the 
provisions of 1701 from being carried out?
    Ambassador Burns. One of the reasons we insisted in the 
U.N. sanctions resolution, passed last Saturday, on an arms ban 
from Iran outward was because we're still concerned by this 
resupply relationship between the Iranian Government, the IRGC, 
and Hezbollah, through Syria and into Lebanon. We're very 
concerned about it. Israel's concerned about it, as they should 
be. So, it's an issue of great attention. And it's now a 
sanctionable act, it's illegal under the United Nations 
Resolution, for Iran to transfer arms to anybody, including 
Hezbollah.
    Senator Voinovich. Well, I was up to the see the new 
Secretary General 3 weeks ago, and I had tried to emphasize to 
him how important it was that they make sure that the 
provisions of that 1701 are carried out. And one of the easiest 
things would--let's return those soldiers. That's an easy one. 
I mean, that's a----
    Ambassador Burns. You're right.
    Senator Voinovich. Talk about a PR thing, they're foolish 
that they've got--they ought to be doing that right away.
    The other issue is: Have you really ascertained what 
involvement Iran is having in Iraq? You made reference to it, 
and people have been reluctant to speak about it, because they 
don't want to make statements, because they want to make darn 
sure that the information is good so we're not portraying them 
as we should not be portraying. But my feeling is that they're 
very involved, and the real question I have is: Who are they 
involved with? And I have this theory, and maybe it's wrong, 
but I really believe that Sadr wants to become the next 
Ayatollah of Iraq. I think he wants to end up running that 
place. And the issue is: What's the relationship between the 
people in Iran and Mr. Sadr?
    Ambassador Burns. Thank you, Senator.
    There's no question in our mind, we're absolutely certain 
that Iran has been providing this EFP explosive technology to 
Shia militant groups.
    Senator Voinovich. Which Shiite group is--are they giving 
it to? Are they giving it to Sadr, or who--or his competitor 
there?
    Ambassador Burns. I would want to go back and give you a 
written answer on that so I can be completely accurate, but 
there have been more than one. And I'd be happy to provide a 
written answer to that if you'd like.
    Senator Voinovich. But would Sadr be one of them that would 
be the recipients of it?
    Ambassador Burns. I don't know the answer to that question, 
but I will look at it and get back to you.
    [The written information provided by the State Department 
follows:]

    Iran's Islamic Revolutionary Guard Corp--Quds Force (IRGC-QF) is 
the primary vehicle for Iran's lethal activities in Iraq. The Quds 
Force provides lethal support in the form of weapons, training, 
funding, and guidance to select groups of Iraqi Shia militants who 
target and kill coalition and Iraqi forces, as well as innocent Iraqi 
civilians. Specific weapons that the Quds Force has provided to Shia 
militants include: Small arms, mortars, battlefield rockets, 
explosives, and probably man-portable air defense systems. The Quds 
Force has also provided Shia militants with the capability to assemble 
improvised explosive devices (IEDs) with explosively formed projectiles 
(EFPs), similar to those developed by Iran and Lebanese Hezbollah.
    The Quds Force's relationship with Shia cleric Moqtada al-Sadr is 
difficult to assess given uncertainty about the degree of Sadr's 
control over elements of his militia, the Jaysh al-Mahdi (JAM). The 
Quds Force supports Jaysh al-Mahdi (JAM) ``Secret Cells'' or ``Special 
Groups,'' which are responsible for bombings, kidnappings, extortion, 
sectarian murders, illegal arms trafficking, and other attacks. The 
Special Groups are JAM offshoots that evolved over the past 3 years 
into a cellular structure, which allows them to operate independently. 
They are active predominantly in central and southern Iraq.
    In March 2007, coalition forces detained Qais Khazali, a former 
senior aide and spokesperson to al-Sadr, and his brother Laith Khazali. 
From June 2006 until approximately the time of his capture, Qais was in 
charge of Special Groups throughout Iraq, and his brother Laith was a 
member of the Special Groups networks. The Khazali brothers ran an EFP 
network in Iraq and, starting in 2004, received funding, training, and 
weapons from the Quds Force, including EFPs, machine guns, rockets, 
sniper rifles, RPGs and IEDs.
    Information from the Khazali brothers and Ali Musaq Daqduq, a 
detained member of Hezbollah, who trained the JAM Special Groups, 
indicates the Quds Force has supported and been involved in the 
planning of attacks against the coalition. Ali Musa Daqduq and Qais 
Khazali have both stated that senior leadership within the Quds Force 
knew of and supported planning for the eventual attack on the Karbala 
Provincial Joint Coordination Center on January 20, 2007, which killed 
five coalition soldiers. Daqduq and Qais confirmed that Qais authorized 
the operation and Azhar al-Dulaymi, a Special Groups Commander killed 
by the coalition earlier this year, executed the operation.

    Senator Voinovich. The question was asked by Senator Webb: 
Do you think that this sitting down with them will cause them 
to reevaluate their involvement in Iraq?
    Ambassador Burns. It remains to be seen. We'll have to test 
the proposition. The Iranians say they want to be a positive 
influence in Iraq. We disagree. We don't think they are. One 
way to evaluate that is to talk to them directly, as we have 
begun to do, but also to bring other countries into the picture 
with us, so that a lot of countries will be sending that same 
message to the Iranians simultaneously around one table.
    Senator Voinovich. Will the--will they listen to the Saudis 
and others that are non-Shiite?
    Ambassador Burns. We'll continue to judge the Iranians by 
their actions, not by what they say.
    Senator Voinovich. But are they--but are the Sunnis really 
trying to talk with them about explaining that if this thing 
blows up, it's going to not be good for them, or for anyone 
else?
    Ambassador Burns. Oh, I think there's been a major effort 
made by the major--by the Sunni states, by Saudi Arabia an many 
of the Gulf States, to try communicate to the Iranians how 
destructive and negative their whole policy has been in the 
gulf region--in Iraq and also in the gulf. And there's a lot of 
concern in the gulf about Iran these days, about what countries 
perceive to be an increasingly powerful Iran, and there is a 
great appreciation, I can tell you, for the role--on the part 
of these Arab countries, for the role that the United States is 
playing, militarily, in the region, including the fact that we 
continue, as we have since 1949, to deploy our fleet in the 
gulf itself.
    Senator Voinovich. One thing--I'd just finish on this note, 
that--I didn't discover this until I started reading the 
history of that region, that back during the days of Franklin 
Delano Roosevelt we made an agreement with the Saudis that we 
would protect their ability to transport oil in consideration 
of their being our good friend. And we have spent billions of 
dollars in that region over the years, and I don't think the 
American people have ever been aware of how much involvement--
that we get this idea, ``Well, we're going to get out of 
there,'' but the truth of the matter is, we've been there for a 
long, long, long time; and the fact is, even though Iraq may--
we may do something there, we're going to continue to be in 
that region for a long, long, long time.
    Ambassador Burns. I very much agree. There was a famous 
meeting between President Roosevelt and King Saud at the end of 
World War II that cemented our relationship with Saudi Arabia, 
and we have been an active participant, probably the leading 
participant, in providing for security in the gulf since the 
close of the Second World War. And you've seen that very 
constant through Democratic and Republican administrations, a 
very constant theme of American interest in the region. And 
we're right to continue it.
    Senator Voinovich. Thanks for your service.
    Ambassador Burns. Thank you.
    Senator Cardin [presiding]. Secretary Burns, thank you for 
your patience. Thank you for your service to our country.
    As the United States deals with Iran on various issues--its 
position on Iraq, its border issues, its financing of terrorist 
organizations, such as Hezbollah, or its nuclear program, our 
success is dependent upon the effectiveness of our sanctions, 
our international diplomatic efforts, and our ability to secure 
the cooperation of other nations, and on Iran believing that we 
can, in fact, isolate their policies.
    What nations would you identify as critical to this effort? 
Where do we need to work to improve cooperation in order to 
have effective policies with regard to Iran?
    Ambassador Burns. Senator, I would say that Russia and 
China are particularly important, because both have trading--
major trading relationships, both actually sell arms to Iran, 
and both have a degree of political influence, which is 
important. And so, we have been working with Russia and China 
for about a year and a half now in a coalition to give the same 
message and to try to actually sit down together with the 
Iranians to resolve this nuclear dispute. And I think both 
those countries are important.
    I would also say the Gulf Arab States and Saudi Arabia are 
important. They're immediate neighbors, there is a degree of 
commerce and diplomatic relations that exists, but there's also 
a great concern by the Sunni Arab world about Iran.
    And, last, I'd say, Israel. We have a fundamental 
obligation to help protect Israel, and we are a very close 
partner with the Israelis in trying to pursue this effective 
diplomacy to safeguard Israel's interests, as well as ours, 
from Iran.
    Senator Cardin. Well, let me start with Russia and China, 
the first two countries that you mentioned. We have so many 
issues with those two countries today, well beyond just Iran. 
My question is: Is it a high enough priority within the 
administration to elevate the issue of Iran with Russia and 
with China, that it gets the attention it needs? Because I 
agree with you that those two countries are absolutely 
essential to have effective diplomatic policies in regard to 
Iran. So, I understand that there are multiple issues that are 
important. But clearly this is one that needs to be a priority. 
Is it a priority?
    Ambassador Burns. Yes; it is. In fact, I can safely say 
that, you know, of all the issues we deal with, with the 
Russian leadership and the Chinese leadership, we have put the 
Iranian issue at the very top. So, when President Bush talks to 
President Putin, President Hu Jintao, when Secretary Rice talks 
to her counterparts in both capitals, we let them know that, 
for us, what they do on Iran with us is at the very top of our 
relationship with both Russia and China. They're--that's not 
misunderstood. That's understood.
    Senator Cardin. I concur with Senator Voinovich's 
assessment of the Saudis' and your comments. I also agree with 
your position on Israel. Is there something specifically more 
that we need in regard to our relationship with Israel, as it 
relates to Iran?
    Ambassador Burns. I included Israel, in answer to your 
question, because I think if you talk to most Israelis these 
days, and the political leadership, and just average Israeli 
citizens, this has become an existential question for them. 
Here you have a President, Ahmadinejad, who says it's the 
policy of his country to wipe out Israel, wipe it off the map 
of the world. And he's also the leading Holocaust denier and 
has held conferences to deny the historical accuracy of the 
Holocaust.
    So, I was in Israel in January, and I talked to Prime 
Minister Olmert, and I talked to the Foreign Defense Ministry, 
but just some average people, too. And there's a degree of 
concern there which is quite palpable. And so, we keep very 
close to the Israelis. We talk to them frequently. I had a 
whole strategic dialog with the Israelis in January on Iraq. 
And we'll continue that, because we want to assure the Israelis 
that we think we can cope with this challenge through the 
strategy that I suggested to this committee today.
    Senator Cardin. Well, I agree with you. The statements of 
the Iranian leadership in regard to Israel--and, by the way, in 
regard to the United States--are quite frightening, and we need 
to take them very, very seriously.
    I come back to the point that you have raised over and over 
again: It's absolutely critical that we get international 
support, and that Iran understands that it will be isolated if 
it does not move forward in a constructive way in regards to 
the borders or Iraq or dealing with--supporting terrorism or 
their nuclear program.
    Senator Voinovich, anything further?
    Senator Voinovich. I'm finished. I'm just listening.
    Senator Cardin. We will keep the record open for 3 business 
days for any additional statements and questions.
    And, once again, Mr. Secretary, Mr. Ambassador, I want to 
thank you very much, not only for your appearance here today, 
but for your extraordinarily record of public service to our 
country. Thank you very much.
    Ambassador Burns. Thank you, Senator.
    Senator Cardin. The hearing will stand adjourned.
    [Whereupon, at 12:45 p.m., the hearing was adjourned.]
                              ----------                              


              Additional Material Submitted for the Record


 Responses of Under Secretary Burns to Questions Submitted by Senator 
                                 Casey

    Question. Please describe the purpose and functions of the Iran-
Syria Policy Operations Group (ISOG). Who chairs the ISOG? Which U.S. 
Government departments and agencies are represented on the ISOG? How 
often does the ISOG meet? Please detail any working groups that have 
been established under the auspices of the ISOG, their respective 
participants, and their respective functions.

    Answer. The ISOG was established in March 2006 and disbanded in 
March 2007 in favor of a more standard process of Policy Coordinating 
Committee coordination. The ISOG provided coordination for interagency 
implementation of Iran and Syria policy, drafting policy implementation 
plans, and reporting to senior level policymakers on U.S. activities to 
support policy toward Iran and Syria.
    The ISOG was cochaired by a representative from the National 
Security Council staff and a representative from the State Department.
    The ISOG participants included individuals from a range of Federal 
Government agencies that formulate and implement Iran policy, 
including: The National Security Council staff, State, Defense, Office 
of Management and Budget, Treasury, and the Intelligence Community.
    The ISOG had four working groups which focused on nuclear issues, 
counterterrorism, regional affairs, and public diplomacy and democracy. 
The working groups met on a weekly basis until late 2006.

    Question. Please articulate the history and background of the ISOG. 
When was it initially formed?

    Answer. The ISOG was established in March 2006 to tighten 
interagency coordination regarding Iran and Syria. The ISOG encompassed 
a series of interagency working groups to coordinate policy 
implementation. The ISOG was disbanded in March 2007 and interagency 
coordination reverted to the more traditional Policy Coordinating 
Committee process.

    Question. What is the relationship between the ISOG and the State 
Department's Office of Iranian Affairs?

    Answer. The ISOG worked in conjunction with the growing Office of 
Iranian Affairs until the ISOG was disbanded in March 2007. All actions 
were coordinated with the office to ensure clarity on foreign policy 
involving Iran, and the Office of Iranian Affairs cochaired several of 
the ISOG working groups. The State Department official, who cochaired 
the ISOG, oversees the Office of Iranian Affairs.

    Question. Has the President issued a National Security Presidential 
Directive (NSPD) regarding U.S. policy toward Iran? If so, does the 
President intend to share this Directive with the U.S. Congress?

    Answer. NSPDs are typically confidential communications between the 
President and his closest advisers on national security and foreign 
policy. The Department of State does not comment on these 
communications. We have worked to keep Congress informed of the U.S. 
Government's Iran policy and will continue to do so.

    Question. Recent statements by senior officials and official 
communiques indicate that Egypt and members of the Gulf Cooperation 
Council are considering the establishment of civilian nuclear programs 
for peaceful purposes, partly in response to Iran's nuclear program. 
Significant concern exists that, if Iran's nuclear program continues to 
progress, these nations may be tempted to use these programs to develop 
nuclear weapons or, at a minimum, a ``virtual'' option for a weapons 
program.
    What is the strategy of the U.S. Government to help ensure that 
other nations in the region do not follow in Iran's footsteps and 
develop nuclear programs that may spin off into virtual or actual 
weaponization efforts?

    Answer. As Secretary Rice and the President have made very clear, 
we believe that civil nuclear power will be an increasingly important 
energy source. States that are members of the NPT and are in good 
standing should have access to nuclear power, and as long as they abide 
by their international obligations, the United States wants to support 
those efforts.
    Part of our support for these efforts involves working to ensure 
that states can gain the benefits of the peaceful use of nuclear power 
without developing sensitive nuclear technologies. As President Bush 
stated in his February 2004 speech on Weapons of Mass Destruction 
Proliferation, ``The world must create a safe orderly system to field 
civilian nuclear plants without adding to the danger of weapons 
proliferation. The world's leading nuclear exporters should ensure that 
states have reliable access at reasonable cost to fuel for civilian 
reactors, so long as those states renounce enrichment and 
reprocessing.''
    We have been aggressively pursuing this track. In partnership with 
other uranium enrichment suppliers, we have proposed an assured fuel 
supply mechanism that relies on the commercial market with backup 
arrangements through the IAEA. The IAEA is now producing a report for 
Board of Governors consideration that addresses this and other 
mechanisms that have been proposed to provide reliable ccess to nuclear 
fuel. In addition, one of the goals of our Global Nuclear Energy 
Partnership is to provide fuel leasing, which would relieve states from 
the responsibility of both providing fuel and disposing of it. We 
believe both these programs provide very positive incentives to 
countries not to develop reprocessing and enrichment technology.
    We have discussed the responsible development of nuclear power with 
States in the Middle East. These discussions will continue. We believe 
that it is important that we demonstrate support for the responsible 
development of nuclear power in the region in order to highlight the 
irresponsible approach of Iran and to dispel the notion Iran is trying 
to create that our policy is aimed at preventing less developed 
countries from using nuclear power rather than curbing Iran's nuclear 
weapons ambitions.

                                  
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