[Senate Hearing 110-552]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-552
 
                  ADDRESSING IRAN'S NUCLEAR AMBITIONS

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

                                HEARING

                               before the

                FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT
                   INFORMATION, FEDERAL SERVICES, AND
                  INTERNATIONAL SECURITY SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 24, 2008

                               __________

       Available via http://www.gpoaccess.gov/congress/index.html

       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs

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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas              NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
BARACK OBAMA, Illinois               PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri           JOHN WARNER, Virginia
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                  Michael L. Alexander, Staff Director
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                  Trina Driessnack Tyrer, Chief Clerk


FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, FEDERAL SERVICES, 
                AND INTERNATIONAL SECURITY SUBCOMMITTEE

                  THOMAS R. CARPER, Delaware, Chairman
CARL LEVIN, Michigan                 TOM COBURN, Oklahoma
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
BARACK OBAMA, Illinois               GEORGE V. VOINOVICH, Ohio
CLAIRE McCASKILL, Missouri           PETE V. DOMENICI, New Mexico
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                    John Kilvington, Staff Director
                  Katy French, Minority Staff Director
                       Monisha Smith, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Carper...............................................     1
    Senator Coleman..............................................    10
    Senator Coburn...............................................    12
Prepared statement:
    Senator Obama................................................    55

                               WITNESSES
                        Thursday April 24, 2008

Hon. Arlen Specter, a U.S. Senator from the State of Pennsylvania     1
Hon. Dianne Feinstein, a U.S. Senator from the State of 
  California.....................................................     5
Patricia McNerney, Principal Deputy Assistant Secretary, Bureau 
  of International Security and Nonproliferation, and Jeffrey 
  Feltman, Principal Deputy Assistant Secretary, Bureau of Near 
  Eastern Affairs, U.S. Department of State......................    13
Hon. Dennis Ross, Counselor and Ziegler Distinguished Fellow, 
  Washington Institute for Near East Policy......................    34
Stephen G. Rademaker, Senior Counsel, Barbour Griffith and 
  Rogers, LLC....................................................    38
Graham Allison, Director, Belfer Center for Science and 
  International Affairs, and Douglas Dillon Professor of 
  Government, Harvard University's John F. Kennedy School of 
  Government.....................................................    41
Jim Walsh, Research Associate, Massachusetts Institute of 
  Technology.....................................................    43

                     Alphabetical List of Witnesses

Allison, Graham:
    Testimony....................................................    41
    Prepared statement...........................................   127
Feinstein, Hon. Dianne:
    Testimony....................................................     5
    Prepared statement...........................................    74
Feltman, Jeffrey:
    Testimony....................................................    13
    Prepared statement...........................................    77
McNerney, Patricia:
    Testimony....................................................    13
    Prepared statement...........................................    77
Rademaker, Stephen G.:
    Testimony....................................................    38
    Prepared statement...........................................   121
Ross, Hon. Dennis:
    Testimony....................................................    34
    Prepared statement...........................................    90
Specter, Hon. Arlen:
    Testimony....................................................     1
    Prepared statement...........................................    56
Walsh, Jim:
    Testimony....................................................    43
    Prepared statement...........................................   132

                                APPENDIX

Question and Responses for the Record from:
    Mr. Ross.....................................................   150
    Mr. Allison..................................................   152
    Mr. Walsh....................................................   159
``A Study of USG Broadcasting into Iran Prepared for the Iran 
  Steering Group,'' submitted by Senator Carper..................   164


                  ADDRESSING IRAN'S NUCLEAR AMBITIONS

                              ----------                              


                        THURSDAY, APRIL 24, 2008

                                 U.S. Senate,      
        Subcommittee on Federal Financial Management,      
               Government Information, Federal Service,    
                              and International Security,  
                          of the Committee on Homeland Security    
                                        and Governmental Affairs,  
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 9:31 a.m., in 
Room SD-342, Dirksen Senate Office Building, Hon. Thomas R. 
Carper, Chairman of the Subcommittee, presiding.
    Present: Senators Carper, Coburn, Coleman, and Collins.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. The Subcommittee will come to order. 
Welcome, Senator Specter. And very soon we will be joined by 
Senator Feinstein and a number of my colleagues. I want to 
thank you for joining us today, and our other witnesses who 
will be coming in the moments ahead.
    I am especially delighted that Senator Specter, ranking 
member of the Senate Judiciary Committee and former chairman of 
the Senate Intelligence Committee, and Senator Feinstein, a 
member of both the Intelligence and the Judiciary Committees, 
can join us this morning to kick off this hearing. Thank you 
both for your willingness to share your informed views on what 
the United States should be doing in relation to Iran. If now 
is a time for creative, courageous ideas, your voices, 
colleagues, should figure prominently in that discussion.
    Senator Specter, your entire statement will be entered into 
the record. Feel free to summarize it, however you wish. But we 
are delighted that you are here, and we thank you for your 
leadership on this issue and, frankly, for encouraging us to 
reach out openly to other countries with whom we do not always 
agree. Thank you.

  TESTIMONY OF HON. ARLEN SPECTER,\1\ A U.S. SENATOR FROM THE 
                     STATE OF PENNSYLVANIA

    Senator Specter. Thank you, Mr. Chairman, and I begin by 
complimenting you for starting on time. I note the presence of 
all the other expected participants, but it is a unique 
practice in these hallowed halls.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Specter appears in the 
Appendix on page 56.
---------------------------------------------------------------------------
    I compliment you, Mr. Chairman, and the Subcommittee for 
undertaking this issue because it is of such vast importance 
that it ought to be considered by a broader range of Members of 
Congress in trying to move a realistic policy toward Iran.
    All of the major issues confronting the world are tied up 
in the U.S.-Iran conflict: Terrorism, military nuclear 
capabilities, energy, Iraq, the Palestinian dilemma, the 
presence of Hamas and Hezbollah, as destabilizing forces. And 
in this context, for some strange, I think inexcusable reason, 
at least in my opinion, the United States refuses to engage in 
direct bilateral talks with Iran.
    Two propositions span centuries but articulate what I think 
are the sensible approaches. Sun Tzu's advice was to ``keep 
your friends close and your enemies closer.'' President Ronald 
Reagan said, on November 21, 1985, in an address to Congress 
following the U.S.-Soviet Geneva Summit, ``We agreed on a 
number of matters. We agreed to continue meeting. There is 
always room for movement, action, and progress when people are 
talking to each other instead of about each other.''
    Perhaps not relevant, but the first assignment I had as an 
assistant district attorney decades ago was to interview 
inmates under the death sentence at the Pennsylvania State 
Prison. My job was to get their views as to why they ought to 
have the death sentence changed to life imprisonment. And I 
found that they were people like anybody else--thugs, violent 
criminals, reprehensible, but human beings.
    The experience I have had in my work on the Senate Foreign 
Operations Subcommittee and the Intelligence Committee, which I 
chaired during the 104th Congress, has led me into contacts 
with some of the world's reportedly unsavory people: Syrian 
President Hafez al-Assad; his successor, President Bashar al-
Assad; Palestinian Chairman Yasser Arafat; Iraqi President 
Saddam Hussein; Cuban President Fidel Castro; Venezuelan 
President Hugo Chavez; and Libyan leader Muammar Gaddafi.
    I have found that there is an ingredient which runs through 
all of these discussions, and that is the ingredient of 
civility and courtesy in dealing with people and not to demean 
them. I think it is a great act of foolishness to try to tamper 
with somebody else's pride. And I think that is what we do with 
Iran when we take the proposition that we will engage in 
bilateral talks on the condition that they cease enriching 
uranium.
    Well, that is the object of the discussion. So how in good 
faith can there be an insistence that the other party make the 
concessions sought in the dialogue, in the negotiations, as a 
precondition to meeting? It seems to me it is exactly wrong, 
and I have asked the Secretary of State and the Deputy 
Secretary of State on the record that question recently and 
have gotten a very unsatisfactory answer.
    In discussions that I have had with Hafez al-Assad on many 
visits to Syria since 1984, I think it is not an overstatement 
to say that perhaps there was little influence on Assad. He was 
totally opposed in 1991 to attending the Madrid Conference 
unless all five superpowers participated. He wanted to have 
four allies with the United States being Israel's only ally. 
And he finally relented and sent representatives to Madrid with 
only the United States and the U.S.S.R. I had early 
conversations with him about letting the Jews leave Syria, and 
he was opposed to the idea. They were Syrians and they ought to 
stay in Syria. Whatever factors ultimately led Hafez al-Assad 
to change his mind, he did, and he let the Jews leave.
    There has been no blacker thug terrorist in history than 
Muammar Gaddafi. Maybe others could challenge him for that 
title, but I do not think any could exceed him, and I doubt 
that any even equaled him. He blew up the discotheque in 
Berlin, which resulted in the killing of American soldiers; 
brought down Pan Am 103, which he has later conceded; has made 
reparations, has decided that he wants to come back into the 
family of nations; and he stopped his activities on developing 
nuclear weapons. And if you can talk to Gaddafi and you can 
make a deal with Gaddafi, you can make a deal, I think, with 
anyone.
    Regrettably, the jury is still out on North Korea, but 
there have been promising developments, but only when the 
United States was willing to, in a dignified way, negotiate 
bilaterally with North Korea. And I think that is an 
illustration of where you have to maintain the multilateral 
talks, because I think we must continue with multilateral talks 
with Iran. But there is no substitute for direct, dignified 
negotiations.
    Two more brief points. You have been very generous, Mr. 
Chairman, in not starting the time clock, but I will not abuse 
the courtesy.
    One is a comment which was made to me by Walid al-Mouallem, 
who is now the Syrian Foreign Minister. When he was the Syrian 
Ambassador to the United States, a position he held for about a 
decade, he said to me, ``We like you because you do not hate 
us.'' I thought that was a most extraordinary statement. Such a 
modest, really low threshold for acceptance. Why should it be a 
unique mark for one man or woman not to hate another man or 
woman? But that is what he said to me. And when I wrote a book 
8 years ago, I wanted to put it in the book, but before I did 
so, I asked Walid al-Mouallem if it was acceptable to him to 
put it in the book. But that is the level of courtesy which is 
sub-minimal.
    The final point on the Iranian-U.S. relations is what I 
think is the importance of developing the idea by Russian 
President Putin to have Russia enrich Iran's uranium, and that 
way there could be certainty that the uranium was not being 
used for military purposes. And that idea has gotten very 
little publicity. And when Secretary of State Rice was before 
the Appropriations Committee a couple of weeks ago, I raised 
the issue with her. She thought it was a good idea. And I urged 
her to develop it.
    I think we put Iran on the defensive, justifiably, on that 
point. They have no reason, aside from national sovereignty and 
pride, which is insufficient reason in the premises, not to do 
that.
    Thank you, Mr. Chairman.
    Senator Carper. Senator Specter, thank you for an excellent 
statement.
    We have been joined by Senator Feinstein, and just before I 
recognize Senator Feinstein, let me just ask two quick 
questions of you, Senator Specter. And we are just delighted 
that you are both here today. Just delighted.
    Senator Specter, you were a member of the Senate for, I 
think, the final decade of the Cold War. You have alluded to 
that in your statement. Let me just ask what parallels can be 
drawn between that conflict and the current impasse that we 
face with Iran. What lessons should we take from our experience 
in the Cold War and apply those to the formulation of our 
policy today with respect to Iran?
    Senator Specter. I believe there is a close parallel and a 
great lesson to be learned; that is, to note that President 
Reagan declared the Soviet Union to be the ``Evil Empire,'' 
just as President Bush has declared Iran to be part of the 
``Axis of Evil.'' And then President Reagan promptly initiated 
bilateral direct talks, a series of summit meetings, and the 
quotation I read was the agreement on many matters, and the 
agreement to continue talking, which President Reagan 
recommended. And he is a pretty good role model for the current 
Administration, I think.
    Senator Carper. Thank you. How do you respond to the 
argument that Tehran is at fault for the absence of a U.S.-
Iranian dialogue as the Bush Administration has, I believe, 
offered Iran bilateral discussions but Tehran has turned the 
offer down by not first suspending their enrichment and 
reprocessing efforts?
    Senator Specter. To offer bilateral negotiations with a 
precondition is no offer at all, in my judgment, especially 
when the precondition is the object of the negotiations. Beyond 
that, Mr. Chairman, I would be more direct and say that it was 
insulting, which I think characterizes a good bit of U.S. 
foreign policy, which has earned us the title of ``The Ugly 
America.'' But it is not a one-way street. Iran does pretty 
well on bilateral insults. The object is to try to move from 
that level of discourse to civility.
    Mr. Chairman, as I told you before, I have to excuse 
myself. I will follow what Senator Feinstein has to say, as I 
always do. But I am ranking on the Judiciary Committee, and I 
expect to have some civil but fiery dialogue on the 
confirmation issue in 15 minutes.
    Senator Carper. As you prepare to take your leave, again, I 
thank you. I have been in the Senate for 7 years. I have very 
much admired both of you, the work that you do, and most of 
all, I appreciate the partnership that you have shown in 
providing leadership for the rest of us on a wide range of 
issues. That certainly includes the issue that is before us 
today. So, Senator Specter, thank you so much. We will see you 
later on the floor today, but much obliged.
    Senator Specter. Thank you, Mr. Chairman.
    Senator Carper. Senator Feinstein, welcome. We are 
delighted that you have come. Thank you. I know you had to 
adjust your schedule, but it means a great deal to me that you 
are here, and we welcome you. Whatever statement you have for 
the record, it will be included in its entirety. You are 
welcome to summarize as you wish, but thanks so much for 
joining us.

TESTIMONY OF HON. DIANNE FEINSTEIN,\1\ A U.S. SENATOR FROM THE 
                      STATE OF CALIFORNIA

    Senator Feinstein. Thank you very much. I thank you and 
Senator Coleman.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Feinstein appears in the 
Appendix on page 74.
---------------------------------------------------------------------------
    For many years now, I have been interested in trying to be 
a constructive force for peace and stability in the Middle 
East, which I think most of us regard as the ``powder keg'' in 
which nations and values collide.
    I have watched as the Iraq War continues, Israeli and 
Palestinian peace remains elusive, Iran begins to exert itself 
in the region, and Sunni nations grow more and more concerned.
    Iran, today--isolated and belligerent--constitutes both a 
present and future challenge to the stability and security of 
many concerned nations, as well as our own.
    Last year, the United States indicated its alarm about 
Iran's supplying of weapons and tactical support to Shia 
militias, and the Administration has called Iran ``public enemy 
number one in Iraq.'' Also, Iran's support of terrorist 
organizations, particularly Hezbollah and Hamas, remains of 
deep concern and continues unabated. And, finally, the 
government of Iran's intransigent hatred of Israel and its 
willingness to deny Israel the right to exist is unacceptable 
and a major hurdle to peace and security in the region.
    So it is within this context that we must understand the 
number one question of the day: Does Iran seek nuclear weapons 
and for what purpose?
    In November 2007, the U.S. intelligence community released 
a National Intelligence Estimate (NIE), on Iran's nuclear 
program. It was an eye-opener and the source of major 
controversy.
    The NIE's first conclusion, front and center, was that the 
intelligence community judges, ``with high confidence that in 
the fall of 2003, Tehran halted its nuclear weapons program. . 
. .'' This signified a major shift from the judgments of past 
intelligence reviews. I serve on the Intelligence Committee. I 
have reviewed both the classified and unclassified versions. To 
my knowledge, they have never been contraindicated.
    A footnote in the NIE made clear that a nuclear weapons 
program has three parts: One, the enrichment of fissile 
material; two, a ``weaponization'' program to make that 
material into a weapon; and, three, a means to deliver the 
weapon.
    Now, the halt refers specifically to the weaponization 
part. The other two parts--the enrichment of fissile materials 
and the making of a delivery system--remain serious concerns.
    But equally as clear, the NIE judged--again with high 
confidence--that until the fall of 2003, Iran was pursuing an 
illegal, covert nuclear weapons program.
    This was the strongest intelligence statement to date--it 
is backed up with evidence in the classified text of the NIE--
that Iran had, in fact, a program and that Iran's leaders in 
Tehran could turn that program back on at any time.
    Finally, the NIE made a statement that is central to the 
question of whether and how to approach Iran diplomatically. It 
said, ``Our assessment that the [nuclear] program probably was 
halted primarily in response to international pressure suggests 
Iran may be more vulnerable to influence on the issue than we 
judged previously.''
    The NIE, in essence, suggests a window of opportunity to 
begin to engage Iran in discussion, and with the help of 
European and other allies, to see if Iran can be moved toward 
positive engagement with the Western World--on this vital 
question, as well as other issues of concern.
    So this NIE, in my view, presents the first opening for 
real engagement.
    How should we proceed with Iran? I believe we should begin 
to pursue a robust, diplomatic initiative with Iran on all 
issues and, like Senator Specter, without preconditions.
    Working with our European allies, the United Nations, and 
the International Atomic Energy Agency, we should put together 
a package of carrots and sticks that will serve as the basis 
for discussion with Iran.
    The goal would be to convince Iran to: Permanently abandon 
any intention to re-start a nuclear weapons program;
    Second, to allow the International Atomic Energy Agency 
inspectors full access to all Iranian nuclear facilities and 
suspected nuclear facilities;
    Third, to comply once again with the additional protocol to 
the Nuclear Non-Proliferation Treaty for intensified 
inspections by the International Atomic Energy Agency (IAEA). 
Iran had actually accepted this in 2003 and then suspended 
compliance in 2005;
    Fourth, provide an accounting for all past nuclear 
activities and allow full transparency to international 
inspectors;
    Fifth, cease its support for the terrorist activities of 
Hamas and Hezbollah worldwide; and
    Sixth, promote stability and cease lethal support to 
militias in Iraq.
    The key is this: We can recognize that Iran has a right to 
a peaceful, civilian nuclear energy program, but not to nuclear 
weapons programs.
    Now, of course, there is no guarantee that these talks will 
succeed. It is likely to be a long and difficult road. But we 
are sure to fail if we do not at least try.
    One proposal that deserves a closer look is one which was 
described to me by Iran's former Ambassador to the United 
Nations. It is similar to one made by Ambassador Bill Luers, 
Secretary Thomas Pickering, and Jim Walsh. Mr. Walsh is on the 
second panel today.
    The basic premise is this: Establish an ``on-the-ground 24/
7 International Consortium'' to manage and monitor all aspects 
of nuclear activity. This is something that Iran might actually 
consider--as long as there is an openness on the part of the 
United States to discuss other issues as well. In other words, 
no preconditions, an open table, come in, and both sides 
present their views. Participants could include the United 
States, the United Kingdom, France, Germany, China, Russia, the 
United Nations, and the IAEA.
    Such a proposal deserves serious consideration and could go 
a long way toward building confidence on both sides. Remember, 
we have not talked to Iran in 30 years. Our military does not 
talk to their military. Isolation, we should have learned well 
by now, is a very dangerous posture to push a Nation into. We 
saw it with North Korea, and it is happening with Iran as well.
    I believe that an Iranian policy based on a military 
solution makes little sense. Only by talking and bringing to 
bear the best efforts of diplomacy can real progress be made.
    The next Administration must evaluate anew our Nation's 
approach to this Middle Eastern arena and evolve a new 
approach--one based on robust diplomacy, rather than constant 
threat of war. The process is likely to be difficult--we all 
know that, but the rewards may well be significant. And one 
day, it could lead to a more stable and peaceful Middle East.
    Thank you very much.
    Senator Carper. Senator Feinstein, thank you for an 
excellent statement and for thinking outside the box, as you do 
in so many other arenas.
    Do you have time for one quick question from me?
    Senator Feinstein. I do.
    Senator Carper. And I know you have your Judiciary 
Committee that is about to begin its work as well.
    Just thinking again about the proposal that you have laid 
on the table, a question I would ask, not just rhetorically but 
just ask, what do we have to lose in pursuing what you have 
just prescribed? What is the downside?
    Senator Feinstein. We do not have anything to lose, and I 
think there is a very limited understanding of the Iranian 
Government as well. The President, Ahmadinejad, this is not his 
arena. It is the arena of the Supreme Leader. And the need is 
really to develop contacts that run to the Supreme Leader and 
try to open a floor for constructive dialogue.
    There have been some back-channel negotiations among 
certain Americans and Iranians. I think there is reason to 
believe that there are many Iranians that do not want their 
country to have a nuclear weapons program. There are many 
Iranians that see that peace and stability and economic upward 
mobility of their country offers their citizens much more than 
a belligerent stance does, and that isolation is not to the 
benefit of Iran. It is not to the benefit of other nations as 
well.
    And as we watch Iran extend its influence, as we watch the 
Revolutionary Guard buy properties in Iraq, set up businesses 
in Iraq, extend their influence into Iraq, coming to grips with 
Iran becomes more and more important if we ever want to effect 
a stable region.
    Senator Carper. Thank you.
    Senator Feinstein. You are very welcome.
    Senator Carper. Senator Coleman, would you like to ask a 
question of Senator Feinstein?
    Senator Coleman. No. I know that the Senator is busy. I 
appreciate it. The Senator is one of the most thoughtful 
members of this institution. I have perhaps some different 
perspectives on some of this, but I always greatly appreciate, 
as you talked about, the out-of-the-box thinking and very 
thoughtful approach, and hopefully we will figure out some 
common ground and a way to move forward. But I thank the 
Senator for her presentation.
    Senator Feinstein. Thank you, Senator. I appreciate it.
    Senator Carper. Thank you so much.
    Senator Feinstein. Thank you, Mr. Chairman.
    Senator Carper. I am going to go ahead and give an opening 
statement. It is going to run a bit beyond 5 minutes, and I 
would just beg your indulgence of my colleagues, Senator 
Coleman and then others who have joined us.
    Before we welcome the first panel, let me just say that 
Iran is considered the world's most active state sponsor of 
terrorism. We know Iran is behind Hezbollah, Hamas, Palestinian 
Islamic Jihad, as well as militant Shia elements in Iraq. Our 
first two Senators have already indicated as much in their 
statements.
    In his Senate statement and testimony on April 8, General 
Petraeus stated that Iranian armed militias are the biggest 
threats to stability in Iraq. Furthermore, Iran has started 
arming the Taliban. Iran is a formidable threat. Obviously, a 
nuclear weapon makes it even more so by giving Iran the 
confidence to frustrate U.S. policy objectives without fear of 
U.S. reprisals.
    Although military strikes against Iranian nuclear sites 
should remain on the table, they would prompt widespread 
retaliation throughout the region, would lack international 
support, and would, therefore, be ill-advised presently.
    In fact, our Secretary of Defense said at a meeting that we 
had several months ago with a number of Senators, when asked 
what the practical effect would be of a military strike by the 
United States against the Iranian nuclear targets, he said they 
are a lot smarter than the Iraqis were. The Iraqis, they built 
their nuclear facilities out in the open, above ground, almost 
like you put a bull's eye around it and said come and get us. 
The Iranians are smarter. They have dispersed their nuclear 
activities. They have put them underground. And Secretary 
Gates, I will paraphrase what he said. He said, ``one thing--I 
am not so sure that we would be effective in taking out their 
nuclear facilities. One thing I know for sure, we would rally 
the Iranian people to the support of their President in no 
other way that I could think of.''
    But, anyway, there was little evidence that deterrence has 
or would work. Regime change after Iraq is no longer viewed as 
a realistic short-term option, even to those in the Bush 
Administration.
    Given the lack of good alternative options, a more robust 
diplomacy, to quote Senator Feinstein, which would include 
comprehensive talks with the Iranians that address both its 
nuclear program and its support of terrorism, might be better 
than the not-so-good options presently before this country.
    The December 2007 National Intelligence Estimate stated 
that Iran has stopped its nuclear weapons development program 
in the fall of 2003. And although the NIE's release led some to 
question the immediacy of the Iranian threat, it affirmed 
Iran's continued enrichment of uranium and its simultaneous 
pursuit of ballistic missile delivery capabilities.
    As former Under Secretary of State Nicholas Burns recently 
said, ``The straightest avenue to nuclear weapon capability is 
not weaponization but enrichment and reprocessing.''
    Given that the production of fissile material is the most 
challenging aspect of the process of building a nuclear weapon, 
Iran's continued enrichment of uranium is cause for real 
concern and warrants the continued action by the United States 
and the international community.
    While there is a shared view among most observes to prevent 
a nuclear Iran, the primary goal of the Bush Administration's 
policy, there is vigorous disagreement about how the United 
States should try to achieve that goal. I called this hearing 
for that purpose: To examine what the United States and its 
allies must do to develop a more effective Iran strategy and to 
discuss specifically what actions we should consider taking in 
light of what we learned last December.
    I believe that the way to stop or at least to mitigate 
Iran's enrichment activities is to present Iran with an 
enhanced set of carrots and sticks not unlike those suggested 
by Senator Feinstein in order to change its cost/benefit 
analysis of the issue. Hammering out those incentives and 
disincentives is the challenge that is before us.
    To its credit, the Bush Administration has shifted rather 
significantly in recent years from rhetoric centered on regime 
change to a more pragmatic approach in dealing with Iran 
through multilateral talks with other permanent members of the 
U.N. Security Council--China, France, Russia, Britain, plus 
Germany.
    Part of this diplomacy included a package of incentives 
that the United States offered Iran in 2006 with the stated 
objective that if Iran suspended its enrichment-related and 
proliferation-sensitive activities, our Secretary of State, 
Condoleezza Rice, would meet directly with her Iranian 
counterpart to discuss anything, but Iran refused.
    Two years of respectable but inadequate diplomatic efforts 
and four U.N. Security Council resolutions later, the last 
three of which imposed sanctions on Iran until it suspends its 
enrichment-related and reprocessing activities, have not let 
Iran to do so. Nor do many experts think that this path will 
prevent a nuclear Iran from emerging. In fact, some now assume 
a nuclear Iran as their starting point for how the United 
States should approach Iran.
    I am not of that mind-set and agree that it should be U.S. 
policy to prevent a nuclear Iran. Add to this the Iranian 
President's April 8 pronouncement that Iran's scientists and 
experts have started to install 6,000 new centrifuges at 
Natanz, the uranium enrichment facility. These are in addition 
to the 3,300 that the Director of the International Atomic 
Energy Agency said are already operating there. Furthermore, 
Iran has stated that it will move toward large-scale uranium 
enrichment that will ultimately involve 54,000 centrifuges.
    Finally, last week's talks in Shanghai by the permanent 
members of the U.N. Security Council, plus Germany and the 
European Union, which focused on incentives to get the Iranians 
to stop their nuclear program, ended with no clear outcome.
    These disturbing facts lead to a series of urgent 
questions. First of all, last weekend Secretary Rice stated, 
``This is not the time, I think, to expect major changes'' in 
terms of either incentives or sanctions. What, therefore, will 
the United States do in the short term, say between now and 
January 2009, vis-a-vis Iran? And how further along down the 
nuclear road, will Iran be?
    Although I continue to be a believer in progressively 
ratcheting up sanctions on the Iranian regime, which is why I 
cosponsored S. 970, the Iran Counterproliferation Act, can we 
expect the relatively low impact sanctions of the U.N. 
resolutions to ultimately force Iran to cease its enrichment 
activities? If not, what are we aiming at?
    Why does the United States continue to insist on 
preconditions to negotiations with the Iranians? What other 
changes in U.S. policy should be considered that may alter the 
Iranian decisionmaking calculus with regard to its nuclear 
ambitions? To what extent would a position that allows Iran to 
continue enrichment work while negotiations on a final 
settlement are proceeding undermine the four U.N. resolutions 
that demand that Iran suspend uranium enrichment? Should the 
next Administration consider direct talks with Iranians without 
preconditions? Realistically, what would direct talks 
accomplish? How should those talks be structured?
    What lessons can we learn from our involvement with North 
Korea and Libya? And are any of those lessons applicable to 
Iran? And, finally, how do we prepare for the possibility that 
our best efforts might not persuade Iran's leaders?
    Today, with those questions in mind, I want to try to do 
the following: First of all, to accurately assess to date the 
diplomatic efforts of the Bush Administration; and, second, to 
discuss the most effective or least bad strategic policy option 
regarding Iran; third, to analyze the pros and cons of specific 
proposals about how to approach Iran; and, fourth, to review 
what lessons, if any, can be gleaned from the U.S. involvement 
with North Korea and with Libya and how those actions might be 
applicable to Iran; and finally, to solicit ideas about how 
Congress can play an active and effective role in the path 
forward.
    Again, we welcome our witnesses. We thank you all for 
joining us today and for the time and energy that you put into 
preparing for your statements and your responses to our 
questions. Senator Coburn is going to be joining us shortly. I 
am delighted that we have been joined by my colleague from 
Minnesota, and I would be pleased to recognize Senator Coleman 
for whatever statement he might wish to make.

              OPENING STATEMENT OF SENATOR COLEMAN

    Senator Coleman. Thank you, Mr. Chairman. I do not have a 
formal statement. I want to make just some observations. And it 
is dangerous because I do not have notes on this, but I want to 
respond a little bit, just at least to set the stage and then 
listen to the witnesses and inquire further with them.
    But I do appreciate the thoughtful presentations of my 
colleagues, and I appreciate the thoughtful manner in which you 
approach this. And these are complex issues. This is not easy 
stuff.
    What do we have to lose without preconditions moving 
forward? I would suggest that particularly if you look at the 
North Korean example, what we have to lose, if not done 
correctly, is the support and confidence of our allies in the 
Middle East. As the ranking member on the Near East 
Subcommittee, I can tell you that the Iranians are of deep 
concern to the Saudis, to the Jordanians, to the Egyptians. The 
greatest threat facing stable governments in the Middle East is 
terrorism. It is Hamas. It is Hezbollah. It is a threat in 
Syria and Lebanon.
    And so if you look at the North Korean experience where we 
actually pulled together the Six-Party Talks, because we 
understood that direct negotiation was unlikely to yield any 
fruitful results due to the prior history with North Korea, it 
needed others in the region who have a stake in this. The 
reality is that Iran is not just the U.S.'s problem, and it is 
not just Israel's problem. Iran is a threat to the House of 
Saud. Iran is a threat to Abdullah in Jordan. Iran is a threat 
to stability in the entire region. And I do not think that it 
is asking too much when we say negotiate without preconditions. 
Iran right now is engaged in what I would call--and I am going 
to say this very straightforward--acts of war against this 
country. They are killing American soldiers. There is no 
question whatsoever that there is Iranian support for the 
Revolutionary Guard, the Qods Force support of terrorist 
organizations in Iraq, supplying them with the most modern 
explosively formed projectiles. They are actively involved in 
killing coalition soldiers. In other times, that is an act of 
war. And I do not think it is asking too much as a precondition 
to sit down and talk about the larger issues. I agree certainly 
with this issue of the nuclearization, which is the big issue. 
That is the 800-pound gorilla. But before you sit down with 
someone to say as a precondition for us to have a fruitful 
conversation, we would like you to step back from supplying 
weapons that are killing our soldiers; we would like you to cut 
off your training of terrorists in the region, then we could 
talk to you. Because I do believe, Mr. Chairman, that we need 
to be ratcheting up the talks at a higher level than they are 
now. There is just no question that I think we are missing 
opportunities.
    There are talks going on--I think this is public 
information--at the sub-ambassador level. But I do believe that 
it is reasonable in international diplomacy, before you sit 
down with someone, particularly if they are involved in killing 
your soldiers, to have that kind of conversation. And my fear 
would be that if we did not, the way we would be looked at in 
the region would undermine our entire ability to move forward 
with promoting stability in the entire region. Talk to the 
Saudis. Talk to the Egyptians. Talk to the Jordanians. Talk to 
the Kuwaitis.
    And so this is a complicated area. We have to have levels 
of discussion beyond what we have now. The threat is real. The 
NIE talked about Iran suspending weaponization, but not uranium 
enrichment, which we know they are doing in violation of U.N. 
resolutions, and not the delivery capacity, which we know they 
are doing. The easiest thing to re-start is weaponization. And 
our intelligence only goes back to 2003. We do not know what 
they are doing today.
    And so I applaud your efforts at pursuing a rational kind 
of conversation about how we move forward, but I would suggest, 
Mr. Chairman, that there is an affirmative answer of what we 
have to lose if done incorrectly, and what we have to lose is 
an undermining of our efforts to promote stability in one of 
the most dangerous regions of the world. And so I look forward 
to the witnesses, and I look forward to the conversation, and I 
appreciate your leadership on this matter.
    Senator Carper. Thank you so much. Dr. Coburn.

              OPENING STATEMENT OF SENATOR COBURN

    Senator Coburn. Thank you. Mr. Chairman.
    The real principle here is reconciliation. Where we find 
ourselves is alienated. But the real practical matter in the 
world today is we have no means of containment with which we 
can deal with the situation in Iran. And before we give up and 
lose all leverage with Iran in terms of high-level talks, you 
have to have some other leverage somewhere. And I know I missed 
part of Senator Coleman's talking points, but as I look at how 
we handled North Korea and how we are, in my thoughts, 
regrettably handling it today, with no accountability and no 
transparency, we send a signal to the Iranians to stand ground 
because we are never going to do anything any different.
    So I am adamantly opposed to how we are handling North 
Korea today because I think it complicates our ability to deal 
with Iran. They see weakness rather than strength. They see 
delay as their asset. They see lack of unity on our part. And 
what you hear from their leaders is statements about the 
destruction of one of our allies. And it ought to be U.S. 
policy that if you attack Israel, you have attacked the United 
States. And that ought to be our policy, and that ought to be 
first and foremost our policy. And then we stand on that, and 
then we act in regards to that.
    So the rhetoric does need to calm down. Our statements 
against Iran or about Iran have nothing to do with the Iranian 
people because they have what I would consider a despot 
government that does not reflect the true values of the Iranian 
people that I know and their desires for a future.
    So I look forward to our hearing, and I look forward to our 
testimony. We have a big problem in front of us, and it is not 
just this country that has a big problem. The entire world has 
a big problem because uranium enrichment in Iran means uranium 
enrichment in multiple other places throughout the Middle East. 
You can deny that if you want, but that is what is going to 
happen. And we need to be prepared for that. We need to be 
unified in how this country stands. And there is a place for 
reconciliation, but reconciliation has to be built on trust, it 
has to be built on verification. And there is none of that now 
in terms of true verification and true trust.
    And so one of my biggest concerns is that we have failed in 
terms of our diplomacy through things such as Voice of America, 
through Radio Farda, through presenting the options in a 
standard way, with a complete view of our viewpoint, one that 
directs our respect and love for the Iranian people but 
expresses our disdain for the statements that have been made by 
the Iranian leadership.
    This is a different area, not just for this country, and I 
have some concern over our allies in terms of the--we have 
three United Nations resolutions on sanctioning, which are not 
effective, obviously, since we continue to see enrichment. And 
if we are not going to push for more sanctions, then what we 
have said is that we, in fact, are going to allow enrichment to 
continue. And if we are going to allow enrichment to continue, 
then we are going to allow enrichment throughout the whole 
Middle East. And we need to recognize that as the endpoint in 
this game, and then see what we have done, i.e. that we have no 
more nonproliferation treaties because we will have had 
proliferation throughout the entire Mideast.
    Thank you.
    Senator Carper. Dr. Coburn, thank you very much.
    I am going to invite our first panel of witnesses to join 
us, and as they come to the table, I will introduce each of 
them.
    Jeffrey Feltman is a career member of the U.S. Foreign 
Service currently serving as the Principal Deputy Assistant 
Secretary in the Office of Near Eastern Affairs, previously 
served as U.S. Ambassador to the Republic of Lebanon. He also 
headed the Coalition Provisional Authority's Office in the 
Irbil province of Iraq. He spent much of his career in the 
Eastern European and Near East Affairs. Welcome.
    Joining Mr. Feltman is Patricia McNerney. She is the 
Principal Deputy Assistant Secretary for the International 
Security and Nonproliferation Bureau, acting head of that 
bureau.
    We are delighted that you are here. Your entire testimony 
will be entered and made part of the record. You are welcome to 
summarize it as you prefer, and with that, Mr. Feltman, if you 
would like to kick it off, and then we will turn to Ms. 
McNerney.
    Ms. McNerney. We had arranged that I would set it off and 
then turn to Ambassador Feltman.

 TESTIMONY OF PATRICIA MCNERNEY,\1\ PRINCIPAL DEPUTY ASSISTANT 
        SECRETARY, BUREAU OF INTERNATIONAL SECURITY AND 
    NONPROLIFERATION, AND JEFFREY FELTMAN, PRINCIPAL DEPUTY 
   ASSISTANT SECRETARY, BUREAU OF NEAR EASTERN AFFAIRS, U.S. 
                      DEPARTMENT OF STATE

    Ms. McNerney. Mr. Chairman, Members of the Subcommittee, I 
very much welcome the opportunity to speak with you today, and 
I look forward to your questions. I request that our full joint 
statement be placed in the record.
---------------------------------------------------------------------------
    \1\ The joint prepared statement of Ms. McNerney and Mr. Feltman 
appears in the Appendix on page 77.
---------------------------------------------------------------------------
    Senator Carper. It will be, without objection.
    Ms. McNerney. Iran presents a profound threat to U.S. 
national security interests. The radical regime in Tehran 
threatens regional and international security through its 
pursuit of technologies that would give it a nuclear weapons 
capability, obviously its support of terrorist groups and 
militants in Iraq and Afghanistan, its expansive regional 
ambitions, and its lack of respect for human rights and civil 
society.
    From its location at the crossroads of the Middle East and 
South Asia, a nuclear-armed Iran could threaten U.S. national 
security interests on three continents, and even U.S. homeland 
directly. The international community's failure to prevent 
Iran's acquisition of such weapons would additionally imperil 
the international nonproliferation regime, as Senator Coburn 
had indicated, by casting doubt on our collective ability and 
commitment to prevent the spread of weapons of mass destruction 
abroad.
    Our goal is to convince Iran to abandon its nuclear weapons 
program and urge Tehran to become a partner in bringing peace 
and stability to the region. The diplomacy to which we remain 
committed is the best course of action, we believe, in 
pressuring the Iranian regime to change its behavior.
    However, to respond to the range of challenges presented by 
Iran, the Administration has stressed the use of a range of 
diplomatic tools available: Multilateral diplomacy, support for 
the IAEA, financial measures, counterproliferation actions such 
as interdictions, and, as a final resort, hold available the 
threat and use of military force.
    The U.S. diplomatic strategy toward Iran consists of a 
dual-track approach in concert together with the permanent five 
members of the U.N. Security Council--China, France, Russia, 
the United Kingdom, the United States--plus Germany (the P5+1). 
These tracks are mutually reinforcing and complementary. The 
first is the incremental escalation of pressure on the Iranian 
regime to help prompt a revision of their strategic nuclear 
calculus, specifically, a decision to abandon once and for all 
Iran's long-term nuclear weapons ambitions. The second track is 
an offer to negotiate a generous package of incentives that 
cover the gamut of political, economic, technological, and 
social benefits that would accrue to the Iranian people were 
the regime to resolve international concerns with its nuclear 
activities. As part of this offer, Secretary Rice announced in 
May 2006 that, should Iran create the necessary conditions for 
negotiations by meeting its U.N. Security Council obligation to 
suspend all uranium enrichment and reprocessing activities, the 
United States would be willing to meet with Iran at any time, 
any place, to discuss any issue.
    Ambassador Feltman will provide some introductory remarks 
addressing Iran's regional behavior and U.S. civil engagement 
programs, but I would like to discuss the nuclear front by 
noting that we seek to present Iran with an increasingly stark 
choice between two paths: Confrontation and isolation, or 
cooperation and reward.
    While we believe we are having an impact, we have yet to 
achieve our objective of persuading Iran to step off its 
current nuclear course. No one tool can succeed on its own. 
Iran's past behavior shows that it can be responsive to 
international pressure. This dual-track approach is our best 
tool for making clear to Iran the costs and benefits for its 
defiance and dissuading the Iranian regime to take a different 
path.
    At a minimum, these sanctions are limiting Iran's access to 
sensitive technologies and goods, with the possible impact of 
slowing Iran's nuclear and missile development. These sanctions 
are also impairing their ability to access the international 
financial system, to fund its weapons programs and terrorist 
activities, and to secure investment for its strategic sectors, 
as many States and firms no longer wish to associate themselves 
with the Iranian regime. The sanctions keep Iran on the 
defensive, forcing it to find new finance and trade partners 
and replace funding channels it has lost--often through more 
costly and circuitous mechanisms.
    Major banks such as Commerzbank, Credit Suisse, and HSBC 
have decided that the risk of doing business in Iran is too 
great and have ended or limited their relationships with Iran. 
The effects of Iran's growing international stigma may, in the 
end, be as substantial as the direct economic impact of any 
sanction. Losing the ability for a single Iranian bank, such as 
Iran's Bank Sepah, to conduct business overseas is painful to 
the Iranian economy. Having major international financial 
institutions refuse to do business with Iran because of the 
legitimate business risks that such trade present is even 
worse.
    The sanctions are also having a psychological impact. Iran 
has demonstrated its desire to assume the economic and 
political role it believes it deserves in the region, and to be 
seen as a legitimate player in the international community. But 
the series of U.N. resolutions has shown the world and Iran 
that it is isolated by the international community and will not 
be tolerated as an irresponsible actor.
    In addition to sanctions, a key element of our strategy is 
to work with the International Atomic Energy Agency in its 
ongoing investigation of Iran. As the main international 
institution with responsibility for verifying the non-diversion 
of nuclear materials and providing credible assurances of the 
absence of undeclared nuclear activities, the IAEA's work in 
Iran is essential.
    Press reports have indicated that many States are sharing 
more and more information with the IAEA to further its 
investigation; we look forward to the IAEA's continued efforts 
to uncover the true extent of Iran's nuclear weapons-related 
work and ambitions. We will continue to lead strong 
international consensus that Iran must make a full disclosure 
of any nuclear weapons-related work and allow the IAEA to 
verify that it has stopped. Anything short of a demand for full 
disclosure would undermine not only our efforts to provide 
international verification that Iran is not developing or 
preserving a nuclear weapons option, but also would undermine 
the integrity of the IAEA safeguards regime worldwide.
    Mr. Chairman, I will yield to my colleague to address some 
of the regional aspects, and I look forward to your questions.
    Senator Carper. Thank you, Ms. McNerney. Mr. Feltman.
    Mr. Feltman. Thank you, Chairman Carper, Dr. Coburn, 
Senator Coleman, for this opportunity to discuss U.S. policy 
options regarding Iran.
    As Ms. McNerney has described, we are taking many steps to 
address the challenges posed by Iran on the nuclear front, but 
we are also deeply concerned by Iran's overall behavior, both 
in terms of Iran's malign influence in the region as well as 
Iran's oppression of its own people.
    Iran poses multiple threats to U.S. interests, as your 
opening remarks have indicated. It destabilizes its neighbors. 
It is the world's No. 1 state sponsor of terrorism, continues 
the oppression of Iranian civil society, and I would add 
Iranian-funded militias and Iranian-funded weaponry are killing 
our troops and diplomats in Iraq.
    I had the honor to serve as U.S. Ambassador to Lebanon for 
3\1/2\ years, and I saw every day the malign Iranian influence 
in Lebanon in terms of Iran's support for Hezbollah--Hezbollah 
that, with Iranian support, dragged Lebanon into war with 
Israel in 2006; Hezbollah, which continues to try to undermine 
legitimate institutions of the government of Lebanon and seeks 
to create a state within a state there.
    Iran's Revolutionary Guard Corps-Qods Force continues to 
bolster Hezbollah financially as well as rearming the group 
with rockets and other weapons, which are systematic violations 
of multiple U.N. Security Council resolutions.
    Iran also supports other terrorist groups, including 
certain Shia militant groups in Iraq, Palestinian Islamic 
Jihad, and Hamas. Farther to the east, Iran seeks to 
destabilize the Karzai government in Afghanistan by sending 
lethal assistance to the Taliban, once Iran's enemy.
    Through its malign influence, Tehran undermines the elected 
Government of Iraq and endangers our soldiers and diplomats by 
providing lethal support to Iraqi militants. The President has 
made clear that Iran has a choice to make. It can choose to 
live in peace with its neighbors, enjoying strong economic, 
religious, and cultural ties, or it can continue to arm, fund, 
and train illegal militant groups, which are terrorizing the 
Iraqi people and, in fact, turning them against Iran. America 
would welcome a peaceful relationship between Iran and Iraq, 
but make no mistake: The United States will act to protect its 
interests, our troops, and our Iraqi partners.
    In terms of the nuclear file. Ms. McNearney has already 
outlined our dual-track strategy towards Iran and our approach 
to the challenges posed by Iran's pursuit of nuclear 
capabilities. But let me emphasize that the United States 
remains committed to finding a multilateral diplomatic solution 
to address the threat posed by Iran's proliferation-sensitive 
nuclear activities and its overall destabilizing influence in 
the region. As Ms. McNerney outlined, we are working closely 
with our P5+1 partners to both pressure the Iranian regime and 
offer it incentives to revise, as you said, Chairman Carper, 
the cost/benefit analysis that Iran has. The P5+1 package of 
incentives covers the gamut of political, economic, 
technological, and social benefits, including active 
international cooperation to help Iran develop state-of-the-art 
civil, peaceful nuclear energy technology and obtain an assured 
nuclear fuel supply for a genuinely civilian nuclear energy 
program.
    In addition to that offer, Secretary Rice has said multiple 
times since May 2006 that, should Iran create the necessary 
conditions for negotiations by suspending all proliferation-
sensitive activities, including uranium enrichment, she 
personally would sit down with her Iranian counterpart any 
place, any time, to discuss any interest--an issue of interest 
to Tehran, to discuss all of the multiple issues that you 
addressed in your opening remarks, Senators.
    Let's talk about human rights for a second. Iran's foreign 
and nuclear policies are only part of the challenge Iran poses 
to the world. The regime's record of human rights abuse remains 
abysmal and has only grown worse over the years. The regime 
regularly commits torture and other forms of inhumane treatment 
on its own people and restricts the basic freedoms of 
expression, press, religion, and assembly in order to 
discourage political opposition. The regime has purged liberal 
university professors, threatened, imprisoned, and tortured 
dissidents, journalists, labor leaders, and women's rights 
activists.
    The regime also denies its people the freedom of expression 
and press by cracking down on bloggers, closing independent 
newspapers, censoring Internet use, and blocking satellite dish 
ownership--all in an effort to control access to information.
    Secretary Rice noted at Davos earlier this year that the 
United States has no desire to have a permanent enemy in Iran, 
even after 29 years of difficult history. We have no conflict 
with the Iranian people. An important component of our Iran 
strategy is to build bridges--bridges directly to the Iranian 
people--through official exchanges and civil society 
development programs. We have grave problems with Tehran on a 
range of issues, but we have the greatest respect for the 
citizens of Iran, their culture, and their rich heritage.
    Through official, professional, educational, cultural, and 
athletic exchanges, we are attempting to strengthen mutual 
understanding of our two peoples. Additionally, we are trying 
to provide the Iranian people with a better understanding of 
American foreign policy, our society, and our culture through 
our Persian language television and radio broadcasting on Voice 
of America and Radio Farda, as well as through the Internet and 
other media.
    The United States stands with the Iranian people in their 
struggle to advance democracy, freedom, and the basic civil 
rights of all citizens.
    In closing, I would note that we have presented Iran an 
option. The regime can continue down its current path toward 
isolation and further sanctions, or it can choose to reengage 
with the international community, opening up opportunities for 
better relations and a brighter future. Should Iran comply with 
its U.N. Security Council obligations to suspend all 
proliferation-sensitive nuclear activities, including 
enrichment, and cooperate with the IAEA, the Secretary has 
said, ``We could begin negotiations and we could work over time 
to build a new, more normal relationship, one defined not by 
fear and mistrust, but growing cooperation, expanding trade and 
exchange, and the peaceful management of our differences.''
    The choice is Iran's. The challenges posed by Iran are 
daunting, but we are confident that our current approach, 
working in concert with the international community on the 
nuclear and other issues, will move us toward a peaceful 
resolution to the problems posed by Iran. Thank you.
    Senator Carper. My thanks, our thanks to both of you for 
your testimony and for your service to our country.
    Let me just start off with a question to both of you, if I 
could. One of the underlying points of the NIE was that Iran 
responds to pressure and calculates the costs and the benefits 
of certain actions that we might take against them. The idea is 
that Iran stopped work on designing a nuclear weapon because of 
the perceived costs internationally of pursuing such work.
    First of all, has the Administration done an assessment to 
determine the magnitude of economic pressure needed to dissuade 
the Iranian Government from continuing to pursue all the 
unacceptable elements of its nuclear program, including 
enrichment?
    Ms. McNerney. Well, I think as we review that question, 
partly you have to understand what the regime itself is willing 
to bear in order to continue pursuit of these weapons--or this 
nuclear path.
    We have seen some polling and sort of calculated that the 
Iranian people as a whole, believing that their program is for 
the civil nuclear purposes, indicate that they would like to 
pursue the nuclear path. But when you ask them a different 
question, which is what costs are you willing to take for 
pursuit of that path, the calculus starts to change, and public 
support starts to diminish in terms of the support for what 
they believe to be a civil nuclear path.
    So our goal is to start to have an impact to such a degree 
that you start to change that popular support for the path the 
regime is on. We believe we are starting to have that impact. 
We do not believe there is sufficient pressure yet in that 
direction. Obviously, we have been trying to do this in a 
multilateral way so it is--sometimes working through the United 
Nations is a little more painful, a little slower. But over 
time it is the accumulation of these impacts. And as I 
mentioned in my testimony, the additional downstream impact of 
businesses themselves choosing to withhold investment and look 
elsewhere for their business are all ways that we are looking 
to increase that pressure and change that calculus.
    One of the things, too, looking back to the 2003 decision, 
there were no sanctions at the time, but there was obviously a 
lot of activity happening in the region. So the mix of 
pressures is beyond simply the sanctions, but also 
international scrutiny, that was the time that the programs 
were revealed, the covert nature of these programs; obviously a 
build-up in Iraq in the region. And so there is this really, I 
think, broad set of tools and pressures that we want to bring 
to bear.
    Senator Carper. This is for either of you. Do you have any 
idea of the level of pressure that we need to apply to the 
Iranians, in order to succeed in our goal of no nuclear weapon 
capability? We have these three U.N. Security Council 
resolutions. We have imposed unilaterally additional sanctions 
of our own. They appear to be having some effect. 
Unfortunately, since the promulgation of the NIE, it looks like 
some other countries, particularly the Russians and the 
Chinese, have decided that they need not be as stringent, I 
think, in adhering to pressure on the Iranians themselves.
    Ms. McNerney. I do not think we have--there is no sort of 
magic ``this is the amount'' that sort of tips the balance. But 
I think if you actually look to the Libya situation, it 
actually took some 10-plus years to really get to that balance. 
We do not believe we have that kind of time and----
    Senator Carper. I do not believe we do either.
    Ms. McNerney. Yes. And so the question is how do you get 
there quicker, and, obviously the high price of oil has really 
helped this regime weather some of these sanctions in a way 
that they might not have otherwise?
    Senator Carper. Although I am told that their ability to 
pump oil drops each year by about 500,000 barrels.
    Ms. McNerney. Yes, I am no oil expert. I understand that is 
the case.
    Senator Carper. And, meanwhile, their consumption of oil 
continues to rise.
    Ms. McNerney. But the price that they get for what they do 
pump continues to rise as well. So some of the other things 
that work in our favor are that the actual economic management 
of this leadership is particularly weak, so that also 
exacerbates some of the sanctions as well.
    But, again, I do not know that we know what is that magic 
number or amount of economic isolation.
    Senator Carper. Mr. Feltman.
    Mr. Feltman. I would echo what my colleague has said. We do 
not know exactly at what point that cost/benefit analysis will 
start turning, the cost/benefit analysis that you referred to 
in your opening remarks, Mr. Chairman. But we are going to 
continue to pursue this dual track multilaterally, that we will 
look at how we, ourselves, can impose unilateral pressure in a 
variety of ways on Iran, and we will work through the P5+1 and 
through the IAEA to see how we can impose international 
pressure.
    The Security Council resolutions, the three Chapter VII 
Security Council resolutions, have had an increasing number of 
sanctions of punishment and penalties on Iran, and I do not 
believe we have seen the full impact of those yet.
    Senator Carper. When are we likely to?
    Mr. Feltman. Well, right now we, ourselves, are bringing 
our own system into compliance with the most recent resolution. 
The European Union is doing the same in adopting resolution 
1803 into their common policy. The European Union is looking at 
making some autonomous sanctions beyond resolution 1803. We are 
doing the same. We are doing this all in coordination 
multilaterally because I think all of us recognize that the 
danger is multilateral and that the sanctions also have to be 
multilateral to have this sort of impact. But we do not know 
the exact point where the cost/benefit analysis will start 
switching in the way we want.
    Senator Carper. Ms. McNerney, Libya is a lot smaller, as we 
know, than Iran, and it does not have the oil reserves that 
Iran enjoys. So if it took Libya--what did you say?--7 to 10 
years in order to, if you will, change their course, according 
to your calculation how long do you think it is going to take 
for the Iranians to change their course? And do we have the 
luxury of waiting that long?
    Ms. McNerney. The point I was making is just that sometimes 
over time these pressures build. I do not think we have that 
kind of luxury. But I also think that Libya was a little 
different in the sense of perhaps relishing that isolation in a 
different way than Iran. As a country, the people are very 
certainly used to traveling globally, used to visiting Europe, 
used to a very different kind of life, I think, than perhaps 
you would compare to the Libyan people, and certainly have a 
more robust kind of society. So, there are some differences.
    I think the original--one of the values of the U.N. 
Security Council process is not only these economic sanctions 
but the fact that the entire Security Council unanimously 
continues to line up against the Iranian pursuit of nuclear 
weapons capability. So all these things we believe can have a 
larger and more direct impact on the civil society kind of 
impact.
    Senator Carper. All right. Dr. Coburn.
    Senator Coburn. Thank you for your testimony.
    I am concerned about the time frame that Senator Carper 
mentioned, and you mentioned, Secretary McNerney, further 
sanctions may be needed. How do we know when further sanctions 
are needed? And why wouldn't we put the full press of all the 
sanctions that we can now? You have in the press and stated by 
the President of that country that they are adding 6,000 
centrifuges right now. They intend to go to 50,000 centrifuges. 
Is there a real nuclear need for power in that country when 
they have the world's second largest reserves of natural gas 
that can generate power for 500 years if they needed to? If 
there are further sanctions that are needed--and I have some 
concern that Secretary Rice has signaled that no further 
sanctions are going to be brought before the United Nations in 
the near term--where is the balance there?
    Ms. McNerney. Well, I think her statement was just to 
suggest that we are not going to move away from the policy that 
we are following. We do intend to continue working the U.N. 
Security Council track, including additional sanctions. At the 
same time, we are also trying to renegotiate this package of 
incentives, and Dan Fried led meetings in China last week, and 
they are continuing to work among the P5+1 to redevelop or 
refresh that package of incentives.
    Additionally, the United States has had a complete embargo 
on Iran for many years. What we have been trying to do with 
this strategy is really broaden that, especially to our 
European allies, as well as some of the key Asian economic 
powers. And that, we believe, is where we need to continue to 
ratchet up the pressure. Thus, the importance really of 
maintaining this U.N. Security Council track to increase--many 
of those countries are much more comfortable doing these 
sanctions with the U.N. Security Council mandates.
    Now, when we work with them, you use that as a starting 
point, but it also is an opportunity to expand beyond the 
strict requirements of the U.N. Security Council resolutions. 
So when the EU reviews its sanctions package in the coming 
weeks, they intend to go beyond the strict requirements of the 
U.N. Security Council, and we believe that is an important 
avenue as well. So we do not want to simply suggest that the 
U.N. track is the only way to do sanctions.
    Senator Coburn. Should we believe the President of Iran 
when he said there are not any incentives that they would ever 
accept? Is that posturing?
    Ms. McNerney. I mean, when it comes from him, I do not want 
to pretend to know what he is thinking.
    Senator Coburn. Well, I mean, it is a fairly 
straightforward statement: ``There are no incentives you can 
offer us to stop us from our nuclear enrichment program.''
    Ms. McNerney. Well, I think they have made statements in 
the past that they will not do things, but then if you look at 
how things have evolved, they were not going to talk to the 
IAEA about nuclear weapons issues. They did announce this week 
that they will, in fact, be doing that next month. Now, whether 
they do that in any real way or in any substantive way, that 
remains to be seen. But, some of these statements certainly can 
be posturing.
    I do think, as I mentioned before, that the Iranian people 
actually can put pressure on their leadership in ways maybe in 
a country like a North Korea would certainly not even be an 
element.
    Senator Coburn. There is no question it is difficult to get 
consensus on the P5+1. Obviously, it has been a hard road to 
get there.
    What if you cannot get consensus for the next step? What 
are we doing in terms of building relationships for containment 
given the ultimate plan which most of our leaders think is 
nuclearization of Iran? What are we doing in terms of building 
containment?
    Ms. McNerney. The U.N. path and the P5+1 path is one 
element. We reach out regularly through dialogues and through 
our embassies to countries, particularly in the Gulf Region, to 
countries in Asia--Japan and Korea and China--Russia is 
obviously difficult in the U.N. Security Council context, but 
they every step of the way also have agreed with this policy 
that we need enrichment and reprocessing to stop in Iran and 
that there is a threat posed by Iran to international peace and 
security. So, whether the P5+1--that is one element of our 
strategy, but certainly part of containment is maintaining a 
coalition, and that is a key element of what we are doing.
    It was mentioned earlier, the Russian plan for an 
enrichment and reprocessing facility in Russia, we think that 
is part of the P5+1 package and remains a viable avenue for 
allowing Iran to get the benefits of nuclear energy without the 
know-how that can bleed into the nuclear weapons capability.
    Senator Coburn. In 2007, the State Department gave half of 
the 2007 Iran democracy promotion funding to the Broadcasting 
Board of Governors. Much of this money was diverted from 
democracy promotion to general infrastructure--half of it, as a 
matter of fact. The BBG also claims its mission is not to 
promote democracy but to balance news between the U.S. 
perspective and regime propaganda. Farsi-speaking BBG 
whistleblowers and a 2006 National Security Council report said 
the BBG many times fails to balance the regime's propaganda 
with the truth.
    In light of this, does the State Department plan to divert 
any of the 2008 Iran democracy funding to the BBG?
    Mr. Feltman. Dr. Coburn, the short answer to your question 
is yes, but I would like to talk a minute about the 
broadcasting part of the overall strategy, because the 
broadcasting part has two goals: One is to be able to allow us 
to send messages directly to the Iranian people, not through 
the filter of their government, and not through the filter of 
their state-controlled media.
    Senator Coburn. I understand that.
    Mr. Feltman. The second is to provide an example of what 
would a free media look like. If they were not living in this 
oppressive regime under this dictatorship, under this crazy, 
autocratic regime, what would a free media look like? And a 
free media has a wide variety of views expressed in it.
    Now, at the same time, we have discussed the issues you 
allude to with the Voice of America, Radio Farda, and 
Broadcasting Board of Governors officials. As you know, there 
is new leadership now. There is new management. They are 
changing personnel. They are looking at the content. They are 
addressing some of the concerns that you have raised, that we 
have raised. But the important thing, I believe, is that we 
have now increased the broadcasting to Iran. Voice of America 
is now 24 hours a day, up from 8 hours a day. The original 
Persian language content----
    Senator Coburn. What is the content in the Voice of America 
broadcasts?
    Mr. Feltman. The content is now--there is original content 
that is now up to 6 hours a day; it was only 2 hours a day. It 
is news.
    Senator Coburn. How do we know what it is?
    Mr. Feltman. We have a constant discussion with the new 
leadership of VOA, with the BBG, about the content because----
    Senator Coburn. They have nobody on the board and nobody in 
the leadership that speaks Farsi. They have no idea what they 
are broadcasting because we cannot get translation from the 
State Department about what they are broadcasting. We do not 
know what they are doing, and we know what they have done. And 
it is not about a balance. It is about giving oftentimes, in 
many instances, where we give credence to what their own 
government is saying in an unbalanced fashion.
    And so the only way to see if we get that is to have 
translation services of what we are promoting. If we are going 
to use the people of Iran as a tool for freedom, then we ought 
to know what we are saying. And we have an absolute refusal to 
present to this category and the American people what we are 
broadcasting into Iran. And based on the track record of the 
2006 report plus the track record of whistleblowers, what we 
know is it is not what the Secretary has suggested. It is 
oftentimes supportive of the regime.
    If we are going to use it as a tool to help the Iranian 
people see what a free democracy is about and have a true 
balanced point of view, not one that supplants and supports the 
leadership of Iran, we have to have transparency. And there is 
no transparency now because nobody at BBG knows, because none 
of them speak Farsi. How will we know? How do we know that we 
are effective in the tool that you want to use to promote 
freedom and liberties inside Iran through Voice of America and 
Radio Farda? How do we know?
    Mr. Feltman. All I can say, Dr. Coburn, is that the 
Secretary is using her position as an ex officio member on the 
BBG in order to have these sorts of conversations directly with 
the leadership, the new leadership of VOA and Radio Farda, 
about these issues. This is an important part of our strategy, 
and the Secretary and those below the Secretary are engaged 
with the BBG on these issues.
    Senator Coburn. Well, it would just seem to me that if we 
are going to use that as a tool, the State Department ought to 
know what we are saying. We ought to know what we are saying to 
see if it is an effective tool. It is called a metric, and it 
is called transparency. That is the only way you get 
accountability. And, quite frankly, based on what we have heard 
from whistleblowers inside Voice of America, inside BBG, is 
they do not know, and oftentimes the message is not what we 
want to send.
    So the only way to do that is if you require transparency, 
then they are going to know that we are going to know what we 
are saying. To me it is unconscionable that we would use a tool 
and not know whether the tool is working and not know whether 
it is the appropriate tool.
    Senator Carper. All right. Your time has expired.
    Let me just say for the record, Dr. Coburn and I have a 
different take on this issue. I think one of the important 
things is if we want people in these countries to listen to 
what is being reported on in the news, we have to provide fair 
and objective reporting. People in these countries do not 
listen to their own radio--their own media because they do not 
believe it. They know it is propaganda. And one of the best 
ways for us to make sure they do not listen to our stuff is for 
them to be convinced that we are putting out propaganda as 
well.
    Senator Coleman.
    Senator Coleman. Thank you, Mr. Chairman. Just one addition 
to this discussion, and that is, in terms of democracy funding, 
Iran also blocks access to the Internet. What we have seen in 
this country is bloggers are very effective for us in getting 
at independent voices. Are we focusing on the prospect or 
opportunity to unleash the voices of the people in Iran through 
some blogging and other things? Are there some technological 
things that we could be supporting with democracy funding?
    Mr. Feltman. Senator, thank you. We actually do have an 
active blogging program. That is part of our program. In fact, 
we have an active website. We are using technology as best we 
can, and the number of hits we get is actually quite 
impressive. I am not a technological expert myself, but those 
that are tell me that they can trace back that most of the hits 
that we are getting, something over 4 million hits last year, 
are from Iran itself on our website. So we are using the 
blogging tool.
    Senator Coleman. In addition to our website, what I am 
talking about is technological strategies that unleash the 
potential blogs in Iran itself--in other words, the capacity of 
Iranians to tap into that. The voice of the people of Iran is 
the voice that should be heard, and certainly that presents an 
opportunity.
    Let me get back to you, Ms. McNerney, you mentioned the 
Russians and, one of the concepts that this Administration has 
talked about that the President has been supportive of is the 
Russian concept of we can go in there and we can work with the 
Iranians and oversee that their nuclear capacity is for 
civilians, civil and not weaponization means. My concern is 
with the Russians and about Russian behavior, and the problem 
we have right now is that, on the one hand, it would be one 
thing if that is all the Iranians were doing, but, on the other 
hand, they are doing enrichment. They are doing delivery 
systems. And so we are talking about giving them, on the one 
hand, opportunities to develop a nuclear capacity, and yet we 
know that they are not listening, not responding to IAEA 
requests, not responding to Security Council resolutions.
    Let me just talk about the Russians for a second. It has 
been my understanding that the Russians continue to assist the 
Iranians in a long-range missile program, and again, there are 
three parts to having a nuclear weapon: The enrichment, 
weaponization, and delivery. So the delivery part is a critical 
part. And, by the way, that would put a significant portion of 
NATO under the threat of Iran having a nuclear weapon.
    Have we certified that the Russians have ended their 
support of the Iranian long-range missile program?
    Ms. McNerney. Without getting into, obviously, intelligence 
judgments, my understanding is that the part we are still 
concerned about with Russia is not in the ballistic missile 
side, but in these defensive missiles, like the SA-15 and 
things of that sort. We believe that Russia should not be 
selling any kind of weapons system to Iran given the situation. 
They have continued to supply, however, these defensive kinds 
of missiles which are below any threshold for the U.N. Security 
Council resolution list of conventional weapons.
    So that is our area where we believe they continue to 
cooperate, but, again, that would not be in the ballistic 
missile side.
    Senator Coleman. It seems to me that it is inconsistent to 
push for a American-Russian nuclear civil cooperation 
agreement, which I understand will be signed in several weeks, 
and I can tell you that I plan to send a letter from numerous 
colleagues to demonstrate there is a real concern with Congress 
over this deal, and that it undermines our diplomacy with 
respect to Iran. Now, we have got the Russians, who are, 
whether it is below the level or not, they are involved in 
developing Iranian missile programs. In January, Moscow made a 
final shipment to the nuclear facility with the massive power 
reactor at Bushehr, so that will give the Iranians the capacity 
to produce enough near weapons grade plutonium for roughly 60 
nuclear weapons. Russia has been involved in this assistance 
for a period of time.
    Russians have refused to limit conventional arms sales to 
Iran, something even the Clinton Administration made a point of 
demanding, as I recall, and looking at my notes here, in the 
1990s as a condition of U.S.-Russian cooperation. So now we 
have them selling advanced air defenses that could be deployed 
to defend Iranians' nuclear sites. Can you describe the logic 
for reversing the policies of the Clinton Administration?
    Ms. McNerney. Well, the way we have looked at the civil 
nuclear agreement is in the context of working with Russia to 
create incentives for Iran not to go down the enrichment and 
reprocessing path but, rather, the proposal is that within 
Russia you develop this enrichment and reprocessing capability. 
And when we look globally at countries, there is a growing 
interest in nuclear with the energy shortages and greenhouse 
gases. Many countries around the world are beginning to look at 
nuclear energy. What we have been encouraging is they do that 
in a way that does not create this enrichment and reprocessing 
technology.
    And so Russia really is the key to having this ability to 
produce the fuel and also take back the spent fuel. And so the 
whole approach with Russia is to further that kind of approach 
and make it a contrast to Iran. For example, we have reached 
some memorandums of understanding with UAE, Bahrain, Jordan, 
and it is all done with the explicit requirement that there not 
be enrichment and reprocessing capability development. So we 
are getting the benefits of civil nuclear without some of these 
nonproliferation problems.
    Similarly, the Russian relationship with Iran on Bashehr is 
not with the enrichment and reprocessing side but simply with 
this light water reactor technology and the fuel--and there is 
an agreement that there be IAEA safeguards and also a takeback 
of the spent fuel.
    So all this in the context of creating the right way to do 
civil nuclear and receive the NPT promises, the benefits of 
civil nuclear, but also to limit or redirect some of the desire 
to have this enrichment and reprocessing.
    Senator Coleman. And I understand what the goal is. My 
concern is that you cannot deal with this in kind of an 
abstract sense, so you have got a goal of saying if we could 
get a nuclear program with all the safeguards, that would be a 
very good thing. And if the Russians could take back the spent 
fuel, that would be a very good thing. But at the same time, 
you have the Iranians ignoring U.N. Security Council 
resolutions. You have the Russians providing support for Iran 
when part of our efforts are to cut off Iran, not to do it 
unilaterally. This is a country that needs to import 40 percent 
of its gasoline. This is a country that needs hundreds of 
billions of dollars of investment to maintain its oil 
infrastructure. And we have the Swiss and Iranians doing a gas 
deal worth 18 billion euros and 27 billion euros over a 25-year 
period.
    So, on the one hand, you have this laudable goal, but the 
circumstances in which it is being implemented cause a lot of 
concern, and so in the end, it is very easy to move from 
civilian--dual purpose, to civilian to military purposes. And I 
know my time is up, but I just want to reflect on something 
that my colleague Senator Coburn said earlier on. The fact is 
that if the Iranians get a nuclear weapon, the Saudis are going 
to buy one. The Egyptians are going to buy one. And we are 
going to live in a world in which I am not going to sleep well 
at night because we will have lost all ability to contain 
proliferation in very unstable areas.
    And so it would just appear to me that those efforts, if we 
are really looking to put pressure on Iran economically and a 
country that we believe is susceptible to that pressure, then 
we need to have a little more support from our ``allies,'' 
including the Russians, and the idea of us moving forward on a 
Russian-U.S. civilian civil nuclear arrangement I think is 
counterproductive in light of the Russian relationship and 
trade and other things that they are doing with Iran.
    Ms. McNerney. Well, I think the way we have looked at it, 
actually this agreement creates more leverage for us to 
continue to put pressure on Russia to do it the right way. We 
have the Bush-Putin initiative where they talk about doing 
broader civil nuclear cooperation around the world, but with 
these nonproliferation requirements and fencing around it. The 
creation of this enrichment center in Russia would allow for 
less of the proliferation of that kind of technology. It keeps 
me up at night as well to worry about Saudi Arabia and Egypt 
and others starting to go down the nuclear weapons path.
    So what we are trying to do is create a different way of 
approaching this so that Iran really is isolated as going down 
the wrong path and that countries around the world instead are 
looking at a different way to get the benefits of nuclear 
energy. A light water reactor obviously still can be abused, 
but much less. The problem with a lot of the enrichment and 
reprocessing capability that we worry about is once you develop 
that knowledge, you can take it underground and take it out of 
the public eye, and our ability from the intelligence 
standpoint to detect that activity is much more difficult when 
you are talking about some of these other paths to nuclear 
energy.
    Senator Coleman. Thank you. Thank you, Mr. Chairman.
    Senator Carper. I want to talk with you just a little bit 
about who calls the shots in Iran. I think I understand for the 
most part how government works in this country, although every 
now and then I get illuminated that I did not have it quite 
figured out. But they have recently had parliamentary elections 
over there, but instead of having a multi-party system, if I 
use an analogy, it is like we permitted elections for the 
Congress here and only one party could run candidates, but only 
the extreme wing of that one party could run candidates and 
nobody else could. And in spite of that kind of situation, they 
have gone through where a lot of people who used to be members 
of parliament are not allowed to run, and folks who would like 
to run were not allowed to run unless you happened to be at one 
extreme end of the spectrum in their political thinking. Those 
folks got to run and some of them got elected, but apparently 
they are having a run-off here in the next week or two. What is 
going on?
    Mr. Feltman. Mr. Chairman, the short answer of who is in 
charge, it is the supreme commander more than the president. In 
terms of the parliamentary elections, yes, parliamentary run-
offs are tomorrow, in fact, for the seats that have not yet 
been decided. Iran went to extraordinary lengths this year in 
manipulating those parliamentary elections. Even by Iranian 
standards, they went to extraordinary lengths in disqualifying 
a record number of candidates, in manipulating the information 
that was available to voters. They claimed that there was a 65-
percent turnout of vote. We estimate it was more like 50 
percent, and those people probably turned out in large part 
because they wanted to make sure that their voter registration 
card was stamped because that stamp is important for university 
registration, for the equivalent of food stamps, things like 
that.
    But basically the system went to extraordinary lengths to 
manipulate the parliamentary election to produce the result 
that you said, which is that the parliament is in control of 
the extremist wing of one party there.
    One wonders why they had to go to that--the analysis that 
is interesting is why did they go to that extreme this year. Is 
there a sense of desperation? Is there something happening 
inside that we need to know, that we need to be evaluating? We 
do not have a diplomatic embassy in Tehran for all the reasons 
we know, so we do not have some of the normal diplomatic tools 
to look at Iranian society. So the analysis is still out, and 
we will see how these run-offs go.
    But I think you have seen a shift in who runs the country 
away from the sort of traditional clerics who ran it with the 
onslaught of the revolution 30 years ago to much more of the 
sort of Revolutionary Guard type force. There are more and more 
people who are coming out of the Iran Revolutionary Guard in 
positions of influences. This is not a healthy development. 
This is not a good development. The Revolutionary Guards are 
not just some rogue criminal element that is carrying out 
terrorism through the Qods Force outside of Iran. They are part 
of the system inside. The IRGC is doing economic projects. They 
are controlling the black market. They are expanding the Tehran 
metro. They are mentioned in the Constitution of the Islamic 
Republic. But the Revolutionary Guard and the Qods Force as one 
of the five pillars of that Revolutionary Guard seem to be 
playing an ever more prominent role in reporting directly to 
the supreme commander.
    Senator Carper. Do we have a pipeline to the supreme 
commander, direct or indirect?
    Mr. Feltman. No. Our channel, our official channel to the 
Iranians is via the Swiss. We have used the Swiss for almost 30 
years now to convey information. Much of what we use the Swiss 
for is consular related. There are many American citizens who 
are either living in Iran or have connections with Iran. And so 
we use the Swiss for our official communications.
    On the subject, though, of talks and of communication, I 
think it is worth looking at the example of where we do have an 
official means of communication, and that is Iraq. There are 
trilateral talks in Iraq that we are doing at the request of 
the Iraqi Government. The Iraqi Government asked us to go into 
these talks. We made the decision to say yes in order to help 
support the Iraqi Government. So there is a history of direct 
communication with the Iranians via these trilateral talks. 
There have been three sessions since April of last year--two 
chaired at the ambassador level, one was chaired on our side by 
the political military counselor in Baghdad, Ambassador Marie 
Ries. And, frankly, I think that it was clear from the 
testimony given by General Petraeus and Ambassador Crocker a 
few weeks ago up here that it has not been a real encouraging 
example of the sort of talk that many people would like to see 
us engage in, because we have had these three things, and the 
Iranians at the same time have continued to supply, fund the 
special groups that are basically killing our troops, killing 
our diplomats, firing into the international zone, and trying 
to destabilize the Iraqi Government.
    So the one area where we do have direct talks with the 
Iranians, which is the tripartite talks in Baghdad, has not 
been an encouraging example.
    Senator Carper. All right. In the testimony of one of our 
other witnesses, they talked about one of the things that the 
mullahs fear is the economic destabilization, the deterioration 
of the economy, where people's earning power, standard of 
living continues to deteriorate. Rather than Ahmadinejad being 
able to deliver on his campaign promises, actually things are 
getting worse, not better, and one of the other witnesses says 
that is something that they fear.
    How do we make that even worse for them? Not that we have 
it in for the Iranian people. I have a lot of affection for 
them, and I think if they were actually able to vote for their 
parliament and vote for their leaders, we would probably have a 
pretty good relationship with those folks. But how do we 
ratchet up the economic pressure? And one of the ways, it seems 
to me, to ratchet up the economic pressure is it is not enough 
for us to put in place our unilateral sanctions, which we have 
done and which we are doing; it is not enough for us to work 
with the British, Germans, French, and others, and hopefully 
the Russians and the Chinese. But there are too many leaks in 
the sanction, there is too much give in it, and we have to be 
able to make it tighter if we are going to have any success 
here.
    One of the thoughts that comes to mind for me is as much as 
I admire what Secretary Rice has said, ``Stop enriching your 
uranium, your fissile materials, we will meet you anywhere, 
anytime, talk about anything.'' That is a pretty generous 
offer. It has not worked, and in the meantime, the Iranians are 
doing more bad stuff than they were before.
    If we were to say we will meet you anytime, anywhere to 
talk about anything without preconditions, how does that 
strengthen our ability to go out and get the Russians to stand 
shoulder to shoulder, to get the Chinese to stand shoulder to 
shoulder with us, and some of these other countries that are 
going around our back and continuing to have activities with 
the Iranians that tend to take away the economic pressure that 
the mullahs apparently fear?
    Ms. McNerney. Well, I think we made the same judgment, that 
is the fear. You saw the gas rationing and sort of the impact 
it had in terms of certainly the uprising by people. We are 
looking to figure out ways to obviously have these kind of 
economic impacts.
    One of the practical reasons why talking without them 
stopping enrichment and reprocessing is important is if that 
activity continues while we are doing the talking, if you look 
at the North Korea example, for example, it was about 4 years 
before we got them to shut Yongbyon. So 4 years of talking and 
4 years of developing enrichment and reprocessing technology, 
it is pretty clear that they could potentially, according to 
the NIE, have the capability and master that enrichment and 
reprocessing----
    Senator Carper. That is a good point, but let me just 
interrupt you. Whether it is 4 weeks or 4 months, certainly 4 
years is unacceptable. But something has to happen during that 
period of time during which those open negotiations are being 
offered, the invitation for those open negotiations are being 
extended, and that is, the other countries that are not 
supporting the efforts of a number of us in clamping down 
economically on the Iranians. That has to kick in on a much 
higher level than is currently existing, and that has to happen 
a lot sooner than 4 years from now.
    Ms. McNerney. Well, that was going to be my next point. If 
you look at how internationally they tend to react in terms of 
sanctions, when there seems to be some engagement, some 
softening, the ability to get countries to actually impose 
those sanctions will only diminish. We see that in the case of 
North Korea. We have seen that in other examples.
    So this notion that somehow if we started talking we would 
be able to increase the pressure that other countries would put 
on, I just do not think that is the way things tend to operate. 
And so, again, part of the practical reason for this condition 
is that we need that activity to stop so that we can talk and 
deal with these issues in as long or as short a time as we need 
without Iran basically using that process to, in fact, develop 
their capability.
    Senator Carper. Thanks very much. Dr. Coburn.
    Senator Coburn. Thank you. I would like unanimous consent 
to put the NSC 2006 report on Radio Farda and Voice of America 
in the record.\1\
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    \1\ The study referred to appears in the Appendix on page 164.
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    Senator Carper. Without objection.
    [The information follows:]??? WAITING FOR COPY
    Senator Coburn. And with all deference to my good friend 
and Chairman, I do not want us to have propaganda either. I 
want us to have the truth. So I will spend one second on this 
and get off it, the BBG.
    I would like for you to answer in written form why the 
American people shouldn't have transcribed to them what is 
being broadcast into Iran, both from Radio Farda and Voice of 
America, why the American people shouldn't know what we are 
saying, and as a check. Transparency creates accountability, 
and so tell me why we should not do that. And I will stop with 
that.
    We are having some hearings today in other aspects of the 
Senate on the nuclear facility in Syria, and there is no 
question that there was involvement from a couple of countries 
on that. One was Iran and one was Korea. What do we know about 
Iran's involvement in that facility that you can speak about at 
this hearing?
    Ms. McNerney. Senator, I think I will have to defer to the 
experts to do it in these other briefings, and they will be 
providing some of that information through all the committees.
    I do not think you will find that there is an Iranian 
angle, except to the degree it really highlights the 
destabilizing influence of these covert activities, nuclear 
activities, and the importance of really rallying international 
support to put the pressure on Iran to stop its ability, 
because as I said, once they develop this enrichment and 
reprocessing technology, unlike the plutonium-based example you 
will be hearing about, the enrichment and reprocessing effort 
can quickly go underground and be almost undetectable.
    Senator Coburn. But does it say anything about 
proliferation? We have been spending all this time talking with 
North Korea, and at the same time they are building a nuclear 
facility in Syria, and we are going to a point where we have 
limited verification.
    Ms. McNerney. I think it really speaks to the significant 
challenges. Obviously, we have been very cautious and promising 
good results from North Korea given the record and what we saw 
in the 1990s and their ability to talk to us and do one thing, 
and then obviously quietly be also engaged in an enrichment and 
reprocessing program.
    One of the key elements that we are talking about now in 
the next phase is verification, and having North Korea come 
clean and actually open up, declare its facilities and open 
them up will be a key challenge of that next process. I do not 
want to pretend that I would guarantee that North Korea is 
being completely honest with us, because I think their record 
says otherwise.
    Senator Coburn. Do we have any knowledge that during all 
this discussion that this was initiated in Syria at the same 
time they were negotiating with us about nonproliferation?
    Ms. McNerney. I think we will just have to defer to the 
other briefings for now.
    Senator Coburn. OK. I want to go back a little bit where 
Senator Coleman was, in terms of the proliferation to Iran, and 
in terms of nuclear material. If we look the other way with 
Russia on this one aspect, does it not send the wrong signal to 
other countries that might be helping Iran proliferate? In 
other words, basically they are sending the material in there, 
but they are on our team. We are saying, OK, there are no 
consequences to that that we can actually do something about 
right now.
    Ms. McNerney. Well, one of the things, their activities are 
allowable under the U.N. Security Council resolutions. What is 
not allowable is cooperation on enrichment and reprocessing and 
the heavy water reactor. And so, obviously, we would prefer no 
cooperation with Iran, but at the same time, it can be a 
counter example of civil nuclear, light water reactor versus 
these real concerning proliferation----
    Senator Coburn. So does the United Nations sanctions trump 
U.S. law?
    Ms. McNerney. Well, I think it----
    Senator Coburn. It is not allowable under U.S. law now to 
promote and ship enriched uranium to Iran.
    Ms. McNerney. Are you talking about the fuel for the----
    Senator Coburn. Yes.
    Ms. McNerney. But that is low-enriched uranium versus 
highly enriched.
    Senator Coburn. I understand, but they are building the 
capability to build highly enriched.
    Ms. McNerney. That is through the enrichment and 
reprocessing, which are separate, obviously, nuclear pathways.
    Senator Coburn. So there is no question it is difficult to 
bring everybody together with a common purpose. What is your 
hope, you and Ambassador Feltman, as you look at where we are 
today and where we are going, what is your hope 2 years from 
now, a year and a half from now, what do you see in terms of 
the sanctions, the ongoing process? Where do you think we are 
going to be?
    Ms. McNerney. I guess I would look at a couple places. I 
would hope that we could continue to build increasing support 
within Europe, within Asia, within the Gulf countries and other 
Middle East countries to continue to really apply these 
resolutions not only strictly, but also the spirit of the 
resolutions, which is to hold Iran accountable for violating 
its Security Council obligations. The other, obviously, in 
terms of Iran, we hope that they will realize that this is a 
path that is going to continue. The isolation will only 
increase. And we need to find a way to start talking about this 
under a baseline that not only the United States but the entire 
international community has laid out for them, which is to stop 
enrichment and reprocessing activities.
    And with that, obviously, then you can have a fullsome 
conversation because you do not have these nuclear activities 
continue. But, I think Ambassador Feltman may talk about this a 
little more, but obviously that is just one aspect. They are 
shipping arms to the Taliban, to Iraqi insurgents. They are a 
destabilizing influence through Hamas and other organizations. 
Again, all of that is important to a broader dialogue.
    Senator Coburn. Ambassador Feltman.
    Mr. Feltman. I will not touch on the nuclear side because I 
will let Ms. McNearney's words stand for themselves. But our 
agenda with Iran is enormous. We want Iran to realize it is 
unacceptable to be killing our troops, our diplomats--and 
destabilizing Iraq. We want Iran to realize that they must stop 
funding Hezbollah, Hamas, and Palestinian Islamic Jihad. They 
must stop shipping arms to the Taliban. The agenda is huge. And 
we are working unilaterally and multilaterally to try to change 
Iran's behavior across the board, not simply on the nuclear 
file. The nuclear file is the trigger for the possibility of 
direct talks on these things, following up on Secretary Rice's 
initiative from 2 years ago. But it is certainly not the only 
issue and it is not the only important issue.
    Iraq is an interesting venue to watch right now because 
there are some signs that perhaps the Shia Iraqis are disgusted 
with what Iran has done in funding Shia militias in Iraq. This 
is almost a parallel to the fact that the Sunnis are disgusted 
to see the Sunni militia activity. And Iran must be noticing 
that there was a revulsion in Iraq against what the Iranians 
were doing in terms of providing arms.
    Senator Coburn. OK. Thank you.
    Senator Carper. Thank you. Senator Coleman.
    Senator Coleman. Thank you, Mr. Chairman.
    I want to ask perhaps a little philosophical question. One 
of the things that frustrates--not frustrates me, but I 
listened to some of the discussion about conversation with 
Iran, and I do believe that we need to ramp up and be more 
aggressive. But my concern is that there is almost a sense that 
every--let me step back. We often get criticized for some of 
our actions, for instance, in the Middle East by saying we do 
not understand the culture, we do not understand tribal 
culture, we do not understand what is going on, and we do not 
understand the forces that kind of hold things together in the 
Middle East. And at the same time, we have folks who are 
saying, if we just sat down and had a conversation, did not 
have any preconditions, and just walked in there, that somehow 
we could make this better. And to me, I think there is a 
conflict there. The fact is that not everyone perceives with 
Western thought that flowed from the Enlightenment, Rousseau, 
to where we are today, and analyzes things the same way.
    I would suggest from my certainly more limited knowledge 
than the witnesses and others, but strength is something that 
is measured in the Middle East. And weakness has great 
consequences; perception of weakness has consequences. I am 
going to say this: President Carter's conversation with Hamas; 
I am shocked by it. I think Hamas is a terrorist force, 
committed to the destruction of Israel, has killed Americans. 
And I think it sends a signal, one that gives legitimacy and 
kind of sends almost a sense of weakness that I think we pay a 
price for.
    Mr. Ambassador, you have said a number of times, it's 
unacceptable to keep killing our troops. Iran is killing our 
troops. They are supplying weaponry. They are killing American 
soldiers. If we were to simply walk in and say we are going to 
sit down and without any preconditions, including a 
precondition that says stop killing our soldiers, if you want 
to expand economic opportunity, if we want to work out a 
resolution to this very complex issue of the nuclearization 
with understanding the consequences of failure to resolve it, 
stop killing our soldiers, stop having Qods Force supply 
advanced weaponry to terrorists, and by the way, maybe while 
you are at it, put a little hold on Hezbollah and sending 
rockets into Sderot and maybe step back a little bit on Hamas 
and have a little stability in the Palestinian areas.
    President Abbas is in town today. He is being undermined by 
Hamas. He is being undermined by Iran. And so Iran is--we 
actually have this unique opportunity in the Middle East now 
that you have many other Arab nations looking at Iran as the 
enemy. Not the Jews, not Israel, not the United States, but 
Iran.
    If we were simply to walk forward--the question the 
Chairman raised earlier--into a discussion without 
precondition, the most significant being stop killing our 
troops, would that be perceived by the Saudis, the Egyptians, 
and others as a lack of strength? And would that have the 
potential to undermine some of the influence and stability that 
we are seeking in the region?
    Mr. Feltman. Senator, you addressed this in a sort of 
philosophical way, and I will say that when we hear the 
discussions about talking to Iran, it is at one level a 
philosophical issue. Some say that we should be talking without 
preconditions, we should simply try it, what do we have to 
lose? Others will say, my gosh, the conditions you put on 
suspension of enrichment and proliferation-sensitive activities 
is not sufficient given everything else that is going on, we 
need to have more conditions, not less conditions. So it is a 
philosophical question.
    But if there is ever a decision to talk to the Iranians, 
even if the Iranians would meet the Secretary's requirement, 
there needs to be a serious conversation with the Gulf Arabs 
and other allies so that they understand what it is that we are 
doing. You mentioned this in your opening remarks, and I could 
not agree more. Again, having served in Lebanon for 3\1/2\ 
years, I can guess how the Lebanese would see it perhaps better 
than I can guess how the Gulf Arabs would see it. But they 
would want to understand what it is we are doing, why we are 
doing it, and that we are doing it from a position of strength, 
that we are not doing it from a position of weakness.
    If we are talking philosophically, I have to ask myself 
just based on my limited knowledge of what happens in Iran, do 
the Iranians really want to talk to us at the leadership level? 
Because if they did want to talk to us, I would think that they 
would be sending us different signals that would be 
unmistakable. Regarding the tripartite talks in Baghdad that I 
mentioned earlier, if they wanted us to see that talking 
actually work, you would think that they would stop shipping 
arms, and stop funding the Shia militias that are attacking us 
in Iraq.
    You are probably aware of the American citizen that 
disappeared on Kish Island more than a year ago, in March of 
last year. I met with his wife and other family members on 
March 6, about the 1-year anniversary of his disappearance. We 
have sent numerous notes via the Swiss, numerous messages about 
help investigate, and help find what happened to this guy in 
Iran. We do not find the answers or the lack of answers to be 
credible from Iran. There are signals they could be sending us 
if, in fact, they were interested in talking to us. I am 
expressing my personal view from looking at the information.
    Our policy is the Secretary's offer remains valid. If they 
suspend enrichment and proliferation-sensitive activities--
which is an international obligation. It is not simply a U.S. 
condition; it is an international obligation on Iran--we are 
willing to talk. But if we get to that point, I agree with you 
100 percent, we need to have a serious talk with our Gulf 
partners and others, and we need to be talking from a position 
of strength.
    Senator Coleman. Thank you, Mr. Chairman.
    Senator Carper. This has been illuminating, and I much 
appreciate it. We appreciate your being here today, the service 
you have provided for our country, and your responses to our 
questions. There may be some follow-up questions that we will 
ask for the record, and others that are not here, and we would 
appreciate your prompt response to those questions.
    Mr. Feltman. Thank you, Mr. Chairman.
    Ms. McNerney. Thank you, Mr. Chairman.
    Senator Carper. Thank you very much.
    Now we welcome the second panel. I am going to go ahead and 
ask our panelists to take their seats, and I am going to begin 
the introduction of each of them while they do that.
    Ambassador Dennis Ross is Washington Institute's Counselor 
and Ziegler Distinguished Fellow. Ambassador Ross played a 
leading role in shaping U.S. involvement in the Middle East 
peace process. He was the U.S. point man on the peace process 
in both the Administration of George Herbert Walker Bush and 
President Clinton, where he was awarded the highest State 
Department honor. He was instrumental in helping the Israelis 
and Palestinians reach the 1995 Interim Agreement, brokered the 
1997 Hebron Accord successfully, and participated in the 1994 
Israel-Jordan Peace Treaty.
    Stephen Rademaker joined Barbour Griffith and Rogers. Is 
that Haley Barbour, Governor Barbour?
    Mr. Rademaker. He was one of the founders.
    Senator Carper. Mr. Rademaker joined Barbour Griffith and 
Rogers in January 2007. He previously served, I understand, as 
Assistant Secretary of State for the Bureau of Arms Control and 
the Bureau of International Security and Nonproliferation where 
he directed nonproliferation policy toward Iran and North 
Korea. He also recently served as policy director for National 
Security Affairs and senior counsel for our colleague, former 
Senator Bill Frist. And rumor has it you may have spent some 
time in Delaware. Did you grow up in Delaware? Where did you go 
to high school?
    Mr. Rademaker. Newark High School.
    Senator Carper. Well, welcome. We are glad that you are 
here. It is not every day we have a Yellowjacket to come by and 
share some thoughts with us. We are glad that you have come 
here. Thank you for joining us.
    Dr. Graham Allison is Director of the Belfer Center for 
Science and International Affairs at Harvard University's John 
F. Kennedy School of Government, where he also served as dean. 
Dr. Allison previously served as Special Adviser to the 
Secretary of Defense under President Reagan and as Assistant 
Secretary of Defense for Policy and Plans under President 
Clinton. He has been a member of the Secretary of Defense's 
Defense Policy Board for Secretaries Weinberger, Carlucci, 
Cheney, Aspin, Perry, and Cohen. His 1971 book, which I 
understand was your first, ``Essence of Decision: Explaining 
the Cuban Missile Crisis,'' ranks among the best sellers in 
political science in the 20 Century. I do not know what you are 
going to do for an encore, but that is pretty impressive.
    Dr. Jim Walsh, a research associate at Massachusetts 
Institute of Technology, where my son is a sophomore in 
mechanical engineering, so this is a home game for you. Dr. 
Walsh previously served as Director of the Managing the Atom 
Project at the Belfer Center at Harvard's Kennedy School of 
Government, and he chaired Harvard's International Group on 
Radiological Terrorism. Dr. Walsh has traveled to Iran twice in 
the past 6 months for discussions with Iranian officials and 
analysts and will return to Iran in June. He also participates 
in three Track 2 projects that bring together former U.S. 
officials and experts with current and former Iranian 
officials.
    Senator Collins has joined us. Senator Collins, welcome. We 
are delighted that you are here. Actually this is officially 
our second panel, but actually it is number three. We welcomed 
and led off with Senators Specter and Feinstein. We are just 
delighted with the people that are here. This is a great panel 
as well. Would you like to make any brief statements before we 
go to the panel?
    Senator Collins. No, Mr. Chairman. I did have a very busy 
schedule today, including a classified briefing, which is why I 
am late. But I actually think I have timed my arrival perfectly 
because this panel has the expertise that I really want to 
hear, and I commend you for holding this hearing on such an 
important topic.
    Senator Carper. We are delighted that you are here. Thank 
you so much for joining us today.
    Senator Collins. Thank you.
    Senator Carper. To our panel, I normally do not stick real 
closely to the clock. We are going to start voting at 12:15. We 
have a couple of votes in sequence. We want to get as much from 
you and back and forth in the Q&As, so I am going to ask you to 
try to stick fairly close to 5 minutes, and if you get much 
over it, I will tap the gavel.
    Our friend, Mr. Ross, welcome. We are delighted you are 
here.

    TESTIMONY OF HON. DENNIS ROSS,\1\ COUNSELOR AND ZIEGLER 
DISTINGUISHED FELLOW, WASHINGTON INSTITUTE FOR NEAR EAST POLICY

    Mr. Ross. Thank you, Mr. Chairman. I have submitted 
testimony for the record. What I am going to do is just offer a 
number of observations, in part based on the testimony, but 
also based on what I heard you say earlier. And, actually, I 
want to start off with a question that Dr. Coburn asked the 
last two panelists.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Ross appears in the Appendix on 
page 90.
---------------------------------------------------------------------------
    You asked them what is it that they hope for in the next 
year or two, and I have to say, as someone who has been in 
administrations and had to testify in the past, oftentimes when 
you are up here you have to say what the administration line 
is. Obviously, we are free of that. And I can say given where 
we are, given the path we are on right now, next year Iran is 
going to be a nuclear power. The path we are on right now is 
one that is going to put them there.
    Certainly, it is quite possible that President Ahmadinejad 
was exaggerating in terms of where they are in terms of being 
able to install the 6,000 new IR-2 centrifuges which are five 
times as efficient as the 3,300 that are already there. But the 
fact is, they are going to be in a position where they can 
begin to stockpile fissionable material, and the problem with 
what we heard from the Administration witnesses is there is a 
mismatch between the character of the pressure that they are 
applying and the pace of the Iranian activities. So what we 
have to do is ask ourselves the question: Where are we going to 
be and how can we change the situation that unquestionably is 
about to unfold?
    There are some people who look at the path that we are on 
right now, and they say, you know what? It is impossible to 
stop the Iranians. They are going to become not just a nuclear 
power but a nuclear weapons state. And given that reality, the 
only thing we can do is let's focus on containment, let's focus 
on deterrence, and let's just live with it. There are others 
who say, well, the problem is you have a regime that has 
messianic elements in it, and you heard Jeff Feltman say that 
the Revolutionary Guard is increasingly important in terms of 
the overall control in the system. True, they answer to the 
Supreme Leader, but the fact is they are very heavily guided by 
a spirit that they have to spread the revolution. And, by the 
way, they are the ones who control the nuclear program.
    So others say, well, this is not a group that can be 
deterred, and even if it is possible to prevent them from 
actually carrying out direct attacks and Iran with nuclear 
weapons is going to cast such a shadow over the region, it is 
going to produce the Saudis and others going nuclear. It will 
be the end of the NPT. It will embolden Hamas. It will embolden 
Hezbollah. It will change the landscape in the region. We 
really cannot afford it. So not only can we not live with it, 
we need to use military force against them--to forestall it.
    Those are two poles in the discussion. One basically says 
you can live with it. The other says you cannot. And I would 
say that if each of those are going to produce outcomes that 
are not particularly acceptable, we ought to look for a third 
way. And what I am going to try to do here is suggest to you 
that there may be a set of diplomatic options that are worth 
pursuing as a third way. And even if they do not succeed, they 
put you in a better position to pursue one of those two other 
approaches more effectively than you might otherwise.
    So let me start with what I will describe as a statecraft 
approach. Having written a book on statecraft, necessarily I 
tend to talk about things through that lens.
    One critical element of statecraft is leverage, and the key 
here is recognizing that the Iranians actually do have 
vulnerabilities. It is not wrong to try and put pressure on the 
Iranians. What is wrong is that we are not putting on pressure 
that is going to be effective. They do have vulnerabilities 
that are economic and quite pronounced, whether it is the fact 
that they have very high inflation right now, very high 
unemployment. The price of oil, in fact, has not changed their 
economic vulnerabilities, although obviously it helps them to 
some extent. The mullahs do want to preserve their power and 
their privilege. They do need to be able to buy off their 
publics, and that is why they use the revenues they generate 
from their oil exports.
    The fact is it is hard for them to continue to produce what 
they are doing in the oil area and export what they have been 
exporting at a time when their own internal consumption is 
rising. Can we squeeze them more effectively through economic 
means? Yes, I think we can, but only if, in fact, we come up 
with different ways to do so.
    I am not going to go through all this. Let me just sort of 
encapsulate the options in the following fashion:
    Option No. 1, again, focused on their vulnerabilities, is 
tighten the noose. Now, that could be a good approach if you 
can persuade others to join with you. It is clear that the path 
we are on right now is not getting others to do as much as they 
would need to to be able to affect the Iranians. And I would 
also say if you are focused only on the tighten the noose 
option, the problem is going to be the Iranians may also feel 
this is an effort to not just humiliate them but to defeat 
them; and if we are about regime change, from their standpoint 
better not to give in because the consequences are too high. 
Look at some of the speeches that both Ahmadinejad and the 
Supreme Leader have made, and you will find that they focus 
heavily on, using their language, if we concede to the arrogant 
powers, they will never stop.
    Option No. 2 would be some of what we have heard today, 
which is engage the Iranians without any conditions. They have 
great suspicions. They have too much leverage. They still have 
cash to insulate them, at least for the time being. And the 
fact is unless you go in an unconditioned way to them, you 
cannot get anywhere, and put everything on the table. 
Everything. In a sense, a comprehensive approach where what you 
put on the table is responding to some of their desires, which 
are they want regime recognition. They want to know that they 
have a place in the region that is accepted. They want the 
economic boycotts to end. They want us to unfreeze the assets 
we have held since the time of the revolution. They want to be 
able to have civil nuclear power. That is what they want. But 
for them to get that, then the counterpoint would be, well, you 
want to be accepted in the region, you want us to accept the 
regime as well. Well, you cannot be engaged in terror. You 
cannot be supporting Hamas and Hezbollah. You cannot be 
opposing the idea of peace. You cannot be declaring that Israel 
is not only illegitimate but is going to collapse imminently. 
And if you want civil nuclear power, then there has to be a 
kind of intrusiveness in terms of inspections to ensure you do 
not have a covert program and you do not have a breakout 
capability. In other words, a comprehensive approach puts 
everything they want on the table, but also everything we 
require in return.
    The problem I have with this option, I will tell you, is 
that I am a veteran of negotiating in the Middle East. I know 
something about the mind-sets. Senator Coleman, you raised the 
issue of sort of culture and mind-set when it comes to 
negotiations. I can tell you, in my experience, what I have 
found with everybody I negotiate with in the area is when they 
were strong, they did not feel the need to compromise; when 
they were weak, they felt they could not afford to compromise. 
So the key here is in the Iranian case, if you concede up front 
and there are no conditions and you are just going to engage 
them, my guess is that they are going to think, OK, we have now 
conceded to the fact that we are going to accept them being a 
nuclear weapons state. Whatever we say, the negotiations are a 
process, but eventually we will simply give in.
    So that leads me to a third option, and the third option is 
what I would call engage the Iranians without conditions but 
with pressure. They must not think that, in fact, we have 
already surrendered when we go to the table. And so I would, in 
effect, say marry option 1 and 2. Marry and tighten the noose 
with the engagement.
    Now, one of the issues that I think one of you raised was--
the idea of talking, if we talk that will make it easier for 
others to do more in the sanctions area, and I think that one 
of the panelists before was saying, look, when we do that, the 
fact is others just go ahead and they think they really do not 
have to apply sanctions. I would actually suggest a somewhat 
different approach.
    I would say our readiness to talk should be, in effect, 
with others conditioned on them doing more. In other words, 
rather than focusing on the conditionality vis-a-vis the 
Iranians, you focus on the conditionality vis-a-vis others.
    With the Europeans, say to them, you know what? You want us 
to go to the table. You think there is a deal there. We might 
even be prepared to do that. We might even be prepared to put a 
comprehensive proposal on the table along with you that goes 
beyond what has been put on the table so far. But the price is 
you have to cut the economic lifeline before we go so the 
Iranians know it. Cutting the economic lifeline means no more 
credit guarantees to your companies doing business there. You 
do not do any commerce, you do not do business with any of the 
Iranian banks.
    With the Chinese, who frequently fill in whenever the 
Europeans cut back, we focus on, yes, we are willing to talk, 
but we have to do more than that.
    The Saudis have enormous financial clout, and if the 
Chinese had to choose between Iran and Saudi Arabia, they would 
choose Saudi Arabia. Right now, just to put it in some 
perspective, the Saudis and the Chinese right now are--I will 
take one more minute? Thirty seconds?
    Senator Carper. Thirty seconds.
    Mr. Ross. All right. Thirty seconds. Just to put it in 
perspective how you could use Saudi leverage if, in fact, you 
are going to have a comprehensive approach where you are trying 
to build the pressures even as you are prepared to talk, the 
Saudis right now are filling the Chinese strategic petroleum 
reserve with Saudi oil. The Chinese are investing enormously in 
the petrochemical industry in Saudi Arabia. And, jointly, they 
are developing and investing in refineries around the world. So 
if it is a choice between Saudi Arabia and Iran, China, given 
their mercantile mind-set, they are going to choose Saudi 
Arabia. We have to have a strategy with the Saudis that makes 
them more likely to take these steps. They are not doing it 
right now.
    So let me just wrap up by saying you do not want to leave 
yourself with two unacceptable outcomes. Try a diplomatic 
approach. But if you are going to try that diplomatic approach, 
from my standpoint talking makes sense, but you have got to 
have the talking take place in a context in which the Iranians 
do not think they have already won and that they are under 
pressure. You concentrate the Iranian mind even as you show 
them a pathway that says, all right, there is a way out for 
you.
    Senator Carper. Thank you very much for an excellent 
statement. Thank you.
    Mr. Rademaker, welcome.

 TESTIMONY OF STEPHEN G. RADEMAKER,\1\ SENIOR COUNSEL, BARBOUR 
                    GRIFFITH AND ROGERS, LLC

    Mr. Rademaker. Thank you very much, Mr. Chairman.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Rademaker appears in the Appendix 
on page 121.
---------------------------------------------------------------------------
    First let me say to you, Mr. Chairman, and to Dr. Coburn 
and Senator Coleman, I was very interested in your opening 
statements, and I thought all of you did an excellent job 
identifying the seriousness and intractability of the problem 
that we face with Iran. And, Mr. Chairman, I think I agree with 
your observation that the basic challenge before us is 
identifying the least bad approach among the approaches that we 
have available.
    Broadly speaking, there are three alternatives before our 
country on Iran. One is to essentially accept that we are not 
going to stop Iran from achieving a nuclear weapons capability 
and just plan for that eventuality. The second is to decide 
that that is unacceptable and to use military force to prevent 
that eventuality from coming to pass. And the third is to put 
together some sort of diplomatic approach to the problem that 
successfully keeps the Iranian nuclear threat under control, 
that persuades the Iranians to change their current course. And 
obviously, among those three options, there is no question that 
a diplomatic solution that persuaded Iran to change course 
would be far and away the best.
    It is in that context that in my prepared remarks I spend a 
considerable amount of time explaining why the National 
Intelligence Estimate that came out last December was such a 
damaging development for not just U.S. foreign policy and not 
just Bush Administration foreign policy, but the foreign policy 
of the entire international community, particularly our 
European allies. And I was gratified to see that Ambassador 
Ross in his prepared remarks appears to agree fully with my 
assessment of the NIE and its implications, and the fundamental 
problem with the NIE.
    The fundamental problem is not the intelligence 
conclusions. The fundamental problem is the way that those 
conclusions were expressed. They were expressed in a way that 
lent them to being misunderstood, misinterpreted, and thereby 
undercut the prospect that the diplomatic efforts that we and 
our allies have been undertaking can succeed. And that is a 
most unfortunate development because to the degree the 
prospects for successful diplomacy recede, the prospects that 
we will have to go with one of the other alternatives--either 
accepting the Iranian nuclear weapons program or using military 
force--the prospects of one of those two alternatives having to 
be embraced increases.
    One of the observations that I make in my prepared remarks 
and that I will repeat here is that with regard to the phrasing 
of the National Intelligence Estimate, I simply do not know 
which is worse: That the authors of that estimate did not 
appreciate the implications for the international diplomacy of 
the way they expressed their conclusions, or that they fully 
appreciated those implications and were indifferent to them. I 
do not know which is worse, but I think it is a question that 
maybe someone in the U.S. Congress ought to start asking.
    Now, I think one of the principal issues that is on the 
mind of everyone and has figured prominently in the hearing so 
far today is the question of whether we should drop the 
existing precondition to direct U.S. negotiation with Iran 
about the nuclear issue and engage the Iranians directly. I 
make two observations about that notion in my testimony.
    The first is that if we are going to engage directly with 
Iran, we want our engagement to be successful. We want to be 
able to reach a negotiated outcome that is acceptable to us. In 
order to do that, we have to come into the negotiations from a 
position of strength.
    The NIE guarantees that, as of today, we are in a position 
of considerable weakness. The Iranians perceive us as weak. 
They perceive U.S. policy as collapsing. And I think to drop 
the existing precondition, the precondition that has been in 
effect for many years, will be seen by the Iranians as a 
further U.S. concession, further evidence that U.S. policy, the 
demands that the United States has been making up until now, 
are falling by the wayside and that they are winning.
    In other words, to engage successfully diplomatically, I 
think we have to figure out a way to overcome the problems that 
were created for us by the NIE and engage from a position of 
strength.
    Ambassador Ross in his prepared statement outlines such an 
approach. I think he agrees with what I am saying about needing 
to negotiate from a position of strength. He outlines a way 
that we could try to do so. I think it is an interesting 
approach to try and work with Europeans in advance of 
negotiations.
    I think I read into his testimony, though, that should such 
an effort to get the Europeans to join with us in imposing 
sanctions up front--strengthening sanctions up front--fail, 
should they not be prepared to agree to do that, I think he 
would agree with me that then it would not be ripe to drop the 
existing precondition. I do not want to put those words in his 
mouth, but----
    Senator Carper. Let the record show that Ambassador Ross 
was nodding his head yes.
    Mr. Rademaker. The second point I make about direct 
negotiations with the Iranians is we need to figure out what 
outcome we are prepared to accept. Here I think the critical 
question is: Are we prepared to accept enrichment in Iran or 
not? U.S. policy up until now and the policy of our allies and 
the policy of the U.N. Security Council as reflected in four 
binding resolutions is there should not be enrichment in Iran.
    Dr. Walsh in his prepared testimony says that is 
unrealistic, that we are not going to achieve that, and so we 
should stop demanding that and, in fact, we should develop a 
fallback proposal that we think the Iranians would accept.
    I am not prepared personally to agree that the U.N. 
Security Council has it wrong and our allies have it wrong and 
we have it wrong and we have to give the Iranians--we have to 
move in the Iranian direction and allow them to enrich in Iran. 
I think that would be a dangerous development because, yes, 
there might be enhanced safeguards, enhanced inspections, 
enhanced verification, but I think we would never have 
confidence with the current regime that if enrichment was 
taking place in Iran at declared locations that were under 
international supervision, that there was not a parallel covert 
program somewhere using some of the same equipment, the same 
technology, and engaging in enrichment, producing fissile 
material, without our being aware of it. I do not have the same 
high level of confidence in the ability of international 
verification mechanisms to detect covert enrichment at 
undeclared sites that Dr. Walsh has.
    Let me make one final observation and then I will finish. 
Dr. Walsh also says as part of his suggestion that we need to 
accept enrichment in Iran that what we should do is talk to the 
Iranians, propose to the Iranians that they multilateralize or 
multinationalize the enrichment facility in Iran, take the 
Natanz facility and bring in foreign partners. As a former 
diplomat, I do not think I would have a whole lot of trouble 
selling that idea to the Iranians. I think it is an idea that 
would sell itself. I would go to the Iranians and say, boy, do 
I have a deal for you. You are under international sanctions. 
You cannot get the technology you need. You are a pariah 
because of what you are doing. Here is the bargain: We will 
help you raise capital. We will bring in foreign investors. 
They will invest in your plant. They will bring in expert 
managers to help you run it. They will bring in foreign 
technology to overcome the technical problems you have been 
having. And best of all, you will get international legitimacy. 
Your nuclear program will no longer be an outlaw nuclear 
program. All you have to do is agree to some enhanced 
inspections and some foreign involvement in your program, and 
the future changes.
    I think the Iranians would be foolish to reject such an 
offer. Would we be foolish to offer it?
    Senator Carper. I am going to ask you to wrap it up. But go 
ahead, finish your thought.
    Mr. Rademaker. President Bush in 2005 proposed that there 
be a global ban on transfer of enrichment and reprocessing 
technology to any country that does not currently have it. He 
proposed that the Nuclear Suppliers Group adopt that as a 
policy. The NSG has not yet done that, but pending that, since 
2005, the G-8 members have every year agreed that they will not 
transfer enrichment and reprocessing technology to any country 
that does not have it.
    I do not understand how, if we are going to stand up a 
multinational enrichment facility in Iran, we do not undermine 
this notion that there should not be transfers of that kind of 
technology to any country that does not have it, because if it 
is a multinational facility the foreign partners are going to 
fully expect to be able to bring in the technology for the 
project to succeed. And once Iran gets it, how can you justify 
denying that same sort of capability to others?
    Thank you, Mr. Chairman.
    Senator Carper. Mr. Rademaker, thank you very much.
    And, Dr. Allison, I think he set you up pretty well here to 
come right in and say your piece. But you are recognized. Your 
full statement will be made part of the record.

  TESTIMONY OF GRAHAM ALLISON,\1\ DIRECTOR, BELFER CENTER FOR 
SCIENCE AND INTERNATIONAL AFFAIRS, AND DOUGLAS DILLON PROFESSOR 
 OF GOVERNMENT, HARVARD UNIVERSITY'S JOHN F. KENNEDY SCHOOL OF 
                           GOVERNMENT

    Mr. Allison. Thank you very much for your leadership in 
drilling down on what is certainly the central challenge to 
American national security going forward over the next several 
years. And I think you introduced the conversation in just the 
right terms, recognizing that the choices at this point are 
between very bad and horrible. Those are the alternatives. 
There are no good choices.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Allison appears in the Appendix 
on page 127.
---------------------------------------------------------------------------
    I also agree very much with Dr. Coburn's earlier 
proposition that the challenge that Iran poses is not simply a 
challenge in itself. It is a challenge to the entire global 
nuclear order and the nonproliferation regime, and I address 
both of those in the testimony that I have submitted.
    I also submit for you a case from the course that I teach 
at Harvard that I gave to my students a month ago in which they 
had to play a red team exercise as if they were working for the 
Iranian Supreme Leader who wants three bombs by the end of 
2009. If you are going to drill down on this, I suggest you 
look at the case because you will find it interesting. It 
stretches the facts of the current situation to the very worst 
case. Getting three bombs by the end of 2009 will be extremely 
ambitious for Iran, but just at the edge. And I think as one 
goes through this, one sees a lot about the strategy that we 
have been following and its consequences.
    In my prepared testimony, I offered short answers to seven 
quick questions, and let me go through them quickly.
    First, is Iran seriously seeking nuclear weapons? Yes.
    Two, is the Bush Administration's strategy of a slow 
diplomatic squeeze that we heard presented today working? No.
    Three, what has the Bush Administration's approach achieved 
and not achieved at this point? I would say that diplomacy in 
getting four Security Council resolutions has been nothing 
short of extraordinary. But the fact is that Iran is 7 years 
closer to its goal line than it was when the Bush 
Administration came to office. So in one line, the Bush 
Administration's efforts to organize diplomatic sanctions have 
essentially succeeded in giving Iran more time to advance 
nuclear facts on the ground.
    Four, has the Bush Administration's approach missed 
opportunities to stop Iran's program? Yes. The best opportunity 
we had was in the spring of 2003. The exchanged piece of paper 
had a list of all the things to be negotiated that needed to be 
negotiated. We do not know whether we would have succeeded if 
negotiations had been entered, but we know that we failed to 
try.
    Five, on the current track, when will Iran acquire its 
first nuclear bombs? The NIE offers the best consensus judgment 
that Iran will not produce enough highly enriched uranium (HEU) 
for a nuclear weapons before the end of 2009, and even that is 
unlikely. It is more likely Iran would have this capability 
during the 2010-2015 time frame. So I would not disagree with 
that proposition, and I think as you go through the exercise of 
how Iran would actually seek and get a nuclear weapon, the case 
that I gave you, that becomes even more plausible.
    Six, responding to the question you raised in the letter 
that you sent inviting us to testify, are there lessons from 
the wrestling match with North Korea that provide relevant 
insights for dealing with Iran? And I think the answer is yes. 
The results of the Bush-Cheney-Bolton strategy, as I 
characterize it, of threaten and neglect--or the quote from 
Vice President Cheney says, ``We don't negotiate with evil. We 
defeat it'' are in. We can now look and see what results this 
produced. Kim Jong-Il: Eight additional nuclear bombs; Bush: 
Zero. This is a strong statement, but look at the facts. North 
Korea has eight plutonium nuclear bombs that it did not have in 
January 2001. I believe this is the largest and most dangerous 
failure in nonproliferation policy for the United States in 
recent decades. We basically sat by while North Korea withdrew 
from the NPT, ejected the IAEA inspectors, shut down the 24/7 
cameras that were watching six bombs worth of plutonium, 
trucked the plutonium over to a reprocessing plant and 
reprocessed it, turned the Yongbyon reactor back on, and 
started producing another bomb or two annually, and then 
conducted a nuclear test. All this has happened. These are 
brute facts.
    In the aftermath of that, in what John Bolton has rightly 
called ``a flip-flop'' from the prior approach, the Bush-Hill-
Rice current approach that has engaged the Six-Party talks and 
North Korea bilaterally has succeeded in at least closing down 
the Yongbyon reactor. The benefit of that is that North Korea 
is not producing more plutonium. Has it done all the things 
that we need to do about every other subject? Absolutely not. 
Will they do it? Absolutely not. But is it better not to have 
one or two more North Korean bombs every year? I would say it 
is unseemly, it is tawdry, but it is better than the 
alternative.
    Finally, are there relevant historical analogies that may 
offer some insight to this? I note in my testimony that the 
unfolding U.S.-Iranian confrontation is like the Cuban missile 
crisis in slow motion. That was the most dangerous moment in 
history, 1962, Soviets sneaking missiles into Cuba. Kennedy 
confronts them, demands that the missiles be withdrawn. There 
follow 13 very tense days. At the end of that crisis, Kennedy 
invented an option that he would not have considered at the 
beginning of the week, that many of his advisers actually would 
not have agreed to, but that succeeded in getting the missiles 
withdrawn without war. And I think it is only when we face up 
to the fact, as Mr. Ross was saying before, that the two 
options at the end of this road are acquiesce and attack, and 
as you analyze the consequences of each of those and see how 
unacceptable each is, that we will finally get real in looking 
at options that are unpalatable, tawdry, ugly, but better than 
either of those two alternatives. The danger is that as we 
postpone this moment of truth, we let Iran create new facts on 
the ground every day.
    For a long time, we said Iran would not be allowed to 
master the technology of enriching uranium, and I still hear 
that statement repeated today. The answer is, they have 75 
kilos of low enriched uranium that they have already enriched. 
So I would say their facts on the ground are moving all the 
time while we have been struggling trying to figure out what 
kind of option we would actually pursue. So I subscribe to Mr. 
Ross' proposition that we should at this stage be getting all 
of our carrots, all of our sticks, all of our allies into the 
discussion.
    Senator Carper. Dr. Allison, thank you very much for that 
statement.
    Dr. Walsh, you are recognized, please.

 TESTIMONY OF JIM WALSH,\1\ RESEARCH ASSOCIATE, MASSACHUSETTS 
                    INSTITUTE OF TECHNOLOGY

    Mr. Walsh. Thank you, Mr. Chairman. Thank you, Dr. Coburn, 
Senator Coleman, and Senator Collins. It is a privilege to be 
back before this Subcommittee and an honor to be with this 
distinguished panel.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Walsh appears in the Appendix on 
page 132.
---------------------------------------------------------------------------
    My focus is going to be on the nuclear issue. That is my 
background, as the Chairman alluded to. But I have also through 
the course of my work met over 100 Iranian officials from the 
Expediency Council, the Foreign Ministry, the Atomic Energy 
Organization of Iran, and I have spent 5 hours with President 
Ahmadinejad and with North Korean officials as well.
    After the hearing, I am more than happy to respond to 
questions in writing if you have additional questions, and I 
got up early this morning and wrote a brief memo on the recent 
revelations about the Syrian-North Korean connection and its 
implications for policy in Iran, and I am happy to share that 
if there is any interest in that. But let me get to the task at 
hand.
    First, current U.S. policy. You have heard this morning 
that U.S. policy is multifaceted, but as regards the nuclear 
issue, really the core strategy is based on sanctions. I think 
sanctions have enjoyed some success. For example, some people 
said the United States would never be able to get any sanctions 
resolution through the United Nations, but we were able to do 
that. I think the big picture here, as my colleagues have said, 
is that the sanctions strategy is failing.
    Now, when I appeared before you 2 years ago, there were 164 
centrifuges in Iran and no sanctions. Ten days after I 
testified, you had the first resolution authorizing sanctions. 
We have had three sanctions resolutions, and since that time 
that I testified, we now have 3,000 centrifuges. That is, I 
guess, about a thousand centrifuges per sanctions resolution. 
And Iran have announced that they are going to build 6,000 
more. I think on its face, the policy is clearly not working.
    In the race between centrifuges and sanctions, the 
centrifuges are winning, and even senior U.S. officials concede 
that point. I think the situation is unlikely to get better, 
and as the comments by the Chairman and Dr. Coburn I think 
implied, what we have here is a disconnect. Sanctions are a 
policy for the long term, to deal with long-term public policy 
problems. The nuclear issue, by contrast, is near to a 
intermediate term, and so I think even at its best--and there 
is a big debate whether sanctions are generally effective--we 
are dealing with a disconnect between policy instruments and 
policy problems.
    There are alternatives. In my testimony, I examine soft 
regime change and containment, but like sanctions, these do not 
work in a relevant time frame. It is a policy mismatch. By the 
time soft regime change or containment and reassurance work, 
Iran will have already built thousands and thousands of 
centrifuges. These are post-nuclear approaches. This is not 
true of military action, but I think that at best military 
action would simply delay and, at worst, would create a 
determined proliferator, and it would be prohibitively costly. 
Secretary Gates said just the other day, ``Another war in the 
Middle East is the last thing we need and would be disastrous 
on a number of levels.''
    So the final option that people talk about is direct talks 
without precondition. There are people who simply call for 
talks, and then you have others who also say they want a grand 
bargain. I think the first is too little and the second is more 
than is practically possible.
    We have to do more than simply have talks. We have to be 
able to have something to say when we talk to them. We have to 
have a proposal that will advance the process. I think the 
grand bargain is too much.
    You will remember that in 2003 the Iranians through the 
offices of the Swiss did propose at least a negotiation on what 
might be characterized as a grand bargain with the United 
States in which terrorism, the nuclear program, the Arab-
Israeli dispute were all on the table. That proposal, alas, was 
not responded to. I think under the current leadership and the 
current conditions, it is too much to ask for a grand bargain. 
We can achieve progress in important areas like the nuclear 
issue without having to achieve progress on everything.
    What do we say to the Iranians, is this proposal that my 
colleagues and I have put forth, the multilateralizing or 
multinationalizing of Iran's fuel cycle. And while I appreciate 
Mr. Rademaker's interest in the proposal, I think I have a 
slightly different characterization of it.
    I think the basic dilemma we face here is U.S. policy 
insists on no centrifuges, and Iranian policy is enrichment on 
Iranian territory. And there seems to be not much room in 
between those two positions.
    Multi-lateralization tries to do is square that circle by 
saying there will be enrichment on Iranian territory, but it 
will not be a national program solely owned and controlled by 
Iranians. It will be internationally owned and managed. There 
is a difference. The Iranians will participate, but the 
ownership, management, and operation of that facility, whatever 
its size and whatever its technology--which I do not prejudge--
would be done not by Iran alone, which is what we are looking 
at here, but by Iran with others, eyes and ears on the ground. 
I think that is better than the status quo. I think that is 
better than where we are headed. I believe in a reality-based 
policy, and right now we are not dealing with reality.
    This proposal would call for upgraded inspections, eyes on 
the ground, greater transparency. Yes, there are risks. I 
review some of those risks in my written testimony. But I think 
they can be minimized, and at the end of the day the question 
is compared to what? And the ``what'' looks pretty bad right 
now. So I think this proposal has a better chance of achieving 
our objectives in nonproliferation specifically than much of 
what is talked about.
    In terms of lessons from North Korea and Iran, I think 
there are some lessons. The general lesson is it is a mistake 
to assume inevitability, that it is destiny that a country will 
become a nuclear weapons state and will hold onto those weapons 
forever. I think these cases and the historical record more 
generally show that we can engage with countries we do not 
like, that allies are important but the United States has to 
engage in direct conversations with potential proliferators, 
and that the other guy has to get something out of a negotiated 
settlement. A proposal that is all restrictions and no 
benefits--that is not an agreement that is going to happen or 
going to be sustainable.
    As regards North Korea, I think the lesson is that it is 
not enough simply to talk. We have to have something to say. 
And when you reach an impasse, it is more for more. You get 
more but only if you do more--that is how you transform the 
negotiation.
    As regards Libya, as I say, I think it illustrates (1) how 
it shows how sanctions work, i.e., they are really a long-term 
proposition, (2) the importance of the United States following 
through on its promises and (3) the IAEA has an important role 
to play here.
    Let me conclude by saying that not only IAEA but Congress, 
all of you, have a critical role to play in your oversight, 
information collection--this hearing is a great example of what 
we need to have more of--and as a policy innovator. I think you 
can develop the legislative ties with Iran if that opportunity 
arises and promote smart engagement. Those concepts are 
described in the written testimony.
    Let me end here by again thanking you for the opportunity 
to reappear before your Subcommittee.
    Senator Carper. Dr. Walsh, thank you very much.
    We are going to start voting, I am told, about 12:15. 
Senator Coburn and I have probably about 20 minutes after that 
to get to the floor and actually start voting. We are going to 
have a series of votes. He and I have discussed it, and what we 
are going to do is ask some questions and look for your 
responses, and then we will probably be closing this down by 
12:30. And I understand, Dr. Allison, you have a plane to 
catch, and that works, I think, with your schedule.
    Thank you for an excellent presentations. This is an 
excellent panel. I want to go back to Ambassador Ross and just 
ask you again to outline your third way proposal for us. Then I 
am going to ask of our other three panelists to respond to that 
third way suggestion.
    Mr. Ross. The essence of the third way proposal is what I 
call engagement without conditions but with pressure. It is an 
amalgam of what I call those who say let's only tighten the 
noose and others who say let's engage without any conditions at 
all. And the essence of it is basically use your readiness to 
talk as a device to get others who have been holding back in 
terms of providing the real sanctions to do much more than they 
have been willing to do. It is premised on several different 
assumptions.
    Assumption No. 1 is that the Europeans believe there is a 
deal that can be struck, but only if the United States is at 
the table because what the Iranians want is not just the 
political and economic side of things, but they want certain 
things from us, especially as it relates to recognition, 
security, a place in the region.
    Assumption No. 2 is that you have to bring the Chinese in, 
but we have not been applying any leverage on the Chinese. Now, 
our leverage on the Chinese can be applied in one of several 
ways. One is argumentation. Don't put us in a position where 
the only option left to prevent the Iranians from going nuclear 
is the use of force. A second way to deal with them is, in 
fact, to focus on what seems to motivate them in a pretty 
consistent way. They have what I call a mercantile mind-set. 
There is enormous Saudi financial clout. Find a way to bring 
the Saudis into this. The Saudis will not do what we want if we 
just ask them to do it, because they will not want to expose 
themselves to some potential risk unless they know what is our 
overall strategy and where they fit into it. Use the Saudis as 
a way of affecting the Chinese.
    Third, I would also try to bring the Russians in. Now, 
there are multiple ways to try to bring the Russians in. I say 
it in the testimony. One is they do have an interest. I heard 
Dr. Coburn agreed with what Senator Coleman was saying about 
the issue of nuclear cooperation with them. They have enormous 
economic interest in this and use that as a potential lever; 
also the issue of missile defenses in Eastern Europe. The 
rationale for the missile defenses in Eastern Europe are 
protection against the Iranians. This is a very big issue that 
Putin has made. Say to them, look, if you really join us--and 
we have to be very specific in terms of what it means--in terms 
of preventing Iran from being such a threat, well, then, we do 
not actually have to proceed with the missile defenses in 
Europe. That is the essence of it.
    Senator Carper. Great. OK, thanks.
    With that outline, again, Mr. Rademaker, why don't you just 
weigh in. What do you like about it? What do you question about 
it?
    Mr. Rademaker. Well, to the degree that what Ambassador 
Ross is saying is that we should not begin direct negotiations 
with Iran today, I fully agree with him, and I think the 
rationale that he has is the same as mine, which is that our 
position today politically and diplomatically is too weak to 
successfully negotiate with the Iranians. So what this is is a 
suggestion about how we could strengthen our position in order 
to be able to hopefully negotiate successfully.
    I think it is a creative idea, and I think it would be 
worth pursuing, but I will flag two concerns I have. One, I 
think part of the idea is that the Europeans impose the 
sanctions before the negotiations, thereby strengthening the 
pressure on the Iranians before the talks begin. The Europeans 
may well say no to that idea, and then we are back to the 
situation we are in today.
    My second point is if we are going to enter a joint 
negotiation of this sort, we are going to have to have an 
understanding with the Europeans about what it is we are 
seeking to achieve. What is the outcome that we want? And, in 
particular, the issue that I flagged in my opening remarks: Is 
the final outcome we are seeking one in which there is no 
enrichment in Iran, full stop? Or is it one along the lines 
that Dr. Walsh has outlined where we say, OK, we are going to 
allow you to have enrichment under certain conditions? That is 
a critically important decision, but there has to be a meeting 
of the minds between us and the Europeans under this concept. 
And I have not heard Ambassador Ross' suggestion about what our 
bottom line should be.
    My view is clear, and I state it in my prepared remarks. I 
think our bottom line has to remain no enrichment in Iran, 
because allowing enrichment in Iran would just be too dangerous 
given the history and nature of their program. And so if the 
Europeans came to us and said we will undertake this with you, 
we will even impose sanctions up front, but you have to join us 
in agreeing that we will settle for some arrangement with Iran 
under which they are able to engage in enrichment in Iran, I 
would not think that is a bargain we would want to strike with 
them.
    Senator Carper. Thank you, sir.
    Dr. Allison, what do you like and what do you question 
about Ambassador Ross' proposal?
    Mr. Allison. Mr. Ross and I have talked about this before, 
and I like the general idea, but I think it is somewhat 
unrealistic in the short run. I think in the first instance, as 
Steve has said, rightly, the Bush Administration does not know 
its own mind. It does not have an agreement on what it would 
accept. If you do not have a notion of what is acceptable in 
the reality zone, that is one reason not to talk.
    Two, it does not have an agreement with the other parties 
with respect to what would be acceptable. That would be 
extremely difficult to do, and in any case, the Bush 
Administration cannot do it between now and then.
    Three, when is ``then''? A new Administration comes, 
Senator McCain or one of the other Senators. It takes 6 months 
or a year to get its act together. All the time, Iran is just 
there moving facts on the ground. The reality of this situation 
is the facts on the ground are worsening constantly as we have 
done whatever we have done. So there we are.
    I think with respect to where we want to get to is 
something like what Mr. Ross is proposing--a grand bargain 
negotiation. I outline that in the 2004 book, Nuclear 
Terrorism. Basically we take all of the carrots to the table, 
and that most importantly for the Iranians is some assurance 
that we are not going to attack them to change their regime by 
force, and that we are not going to support groups that are 
undermining them inside; and all the sticks.
    I am in favor of being able to threaten attack. I like very 
much the Israeli stick in the closet kind of looking out a 
little bit. So I think you need a lot, a lot of sticks and you 
need a lot, a lot of carrots, and you need a coherent position. 
You need to sit down with the other parties as part of the 
game, though the United States has to be the dealmaker because 
it is the threat to the regime that the Supreme Leader thinks 
he is responsible for keeping in place. It is the regime that 
we threaten, credibly, when first we announced there was an 
Axis of Evil and said that the solution to this problem is 
toppling the regimes, and then toppled this neighbor next door 
in 3 weeks, whom he had fought 8 years to a standstill war 
with. So that was May 2003 when our strength was at a maximum 
position. I think recovering a position of strength for such 
negotiations will be extremely difficult, but not impossible.
    Senator Carper. All right. Thank you.
    Last word. What do you like? What do you question about 
this, Dr. Walsh?
    Mr. Walsh. Well, I like the idea of using it as a device to 
get others to do more. You heard in the first panel one of the 
witnesses said, well, if you start talking to the Iranians, our 
allies will do less. I think the historical record shows that 
to be absolutely wrong. It was after Secretary Rice's 
announcement in May that we got the first sanctions resolution. 
So I do think it is a device to get people on board.
    I do agree with Mr. Rademaker in this regard, that you have 
to be clear about the goal. Is it zero enrichment? What is it 
you are actually going for? Again, I really doubt, for reasons 
of national pride and internal politics, and now bureaucratic 
politics, whether they are suddenly going to go from 3,000 or 
9,000 or 10,000 to zero. I have grave doubts about that.
    As for sanctions, I think that would be great. They are 
useful. But I think there is a tendency to overemphasize 
sanctions as if it is a be-all and end-all when actually the 
record is quite mixed. Iran is a big country. For all the Gulf 
states that fear it, a lot of those Gulf states are investing 
in Iran, even with the international sanctions right now. And 
you run the risk of repeating the North Korea syndrome, which 
is you are talking to Iran, then you impose sanctions, and then 
Iran pulls out because Tehran objects to the sanctions. And 
then it is only once you begin to address the sanctions that 
they come back to the table. But, in general--I know that 
sounds negative. In general, I am positive about it with just 
those observations.
    Senator Carper. Fine. Thank you very much. Dr. Coburn.
    Senator Coburn. How many of you all think that Iran desires 
to have a nuclear weapon?
    Mr. Walsh. Elements within Iran; I believe that the 
government has not made a final determination to seek nuclear 
weapons.
    Senator Coburn. Well, how many of you all realize--or would 
agree that who we are talking to indirectly now is not the 
people who are making the decisions? IDRC, we are not talking 
to them, right?
    Mr. Walsh. Supreme Leader. That is the person who calls the 
shots.
    Senator Coburn. Well, but they work for the Supreme Leader. 
They do not work for Ahmadinejad. Comment on sanctions. There 
are sanctions and then there are sanctions. We have not had 
real sanctions yet. Intriguing idea, Ambassador Ross. We are in 
a pickle, and the question is: How do we get out of the pickle?
    If we do what Ambassador Ross says, and it is related only 
to enrichment instead of killing our troops, denying human 
rights in Iran, and all the other consequences, what happens if 
we fail? What happens if you think they are going for a nuclear 
weapon and we say we will talk on the basis of the fact that we 
have got to enhance sanctions, and the talking does not work?
    Mr. Walsh. Well, I think, these policies move in sequence, 
and the one thing you do not want to do is prejudge and you 
miss an opportunity to resolve the problem. If we assume that 
they are bound and determined to get a nuclear weapon, which is 
not the finding of the NIE.
    Senator Coburn. But that is based on 2003 intelligence 
data. It is not based on the most recent revelations of what 
has been in the press about their accomplishment with Chinese 
drawings, molds.
    Mr. Walsh. Well, I have always thought when you look at the 
history of the Iranian nuclear weapons program that started in 
the mid-1980s--we will ignore the fact that the Shah wanted it 
as well. The curious thing here is that they did not make more 
progress than they did--this has been a program that has been 
up and down and up and down. And I think the key finding in the 
NIE, as I explained in my testimony, the key finding is not 
whether today they are working on weaponization or not. The key 
finding is whether they are a rational actor that under 
circumstances would be willing to give up their nuclear weapon 
or talk about it. And the answer on that is pretty clear.
    If we presume they are going to get nuclear weapons no 
matter what, then if there is actually an opportunity to stop 
it, we will completely blow past that on our way to other 
policy----
    Senator Coburn. Is it your assumption they are a rational 
actor?
    Mr. Walsh. Oh, definitely.
    Senator Coburn. Is it your assumption they are a rational 
actor?
    Mr. Allison. I would say more or less. If the NIE 
proposition that they respond to costs and benefits I think is 
essentially correct, then I think if you look at the behavior 
of the regime, it has been reasonably predictable.
    Senator Coburn. How about you, Mr. Rademaker?
    Mr. Rademaker. The premise of all the international 
diplomacy that has taken place since 2002--the imposition of 
carrots and sticks, incentives, disincentives--the premise is 
that they are a rational actor and if under enough pressure 
will do what we are asking them to do. I mean, it is hardly a 
revelation in the NIE to say that is our premise.
    Senator Coburn. Ambassador Ross.
    Mr. Ross. I think generally, they have elements in the 
leadership that are not, that believe fundamentally in 
something else. What is the balance of forces within that 
leadership? And how do you affect it so that those who are 
pragmatic--when you say rational, I say those who are pragmatic 
in terms of protecting their interests and the regime. So that 
you affect those who reflect that mind-set, and they hold 
greater power right now.
    Mr. Allison. If I could, on your sanction point earlier, I 
think that I agree very much with the proposition that it is 
bizarre, I say in my testimony ironic even, that many of the 
members of the sanctioning coalition seem readier to run the 
risk of a military attack on Iran than to impose sanctions that 
would be sufficiently harsh to have a chance of changing Iran's 
behavior.
    Senator Coburn. They behave like U.S. Senators. They are 
rational to the next general election, but not to the future of 
the country. There is a great correlation. It is like fixing 
Social Security or Medicare or Medicaid. Well, we know we have 
got to fix it, but we cannot do anything about it because it 
might affect the short term.
    Mr. Allison. As you said earlier, 40 percent of the 
gasoline that is used every day in Iran is imported. Is it 
possible to interrupt that? Yes, it is. Now, would it have an 
impact on gas prices? Yes, it would. Who is in favor of that? 
Not the Administration. I do not know how many Senators are.
    Senator Coburn. Well, the fact is we have a big problem, 
and there are a couple of coming consequences. Are we willing 
to pay some of the sacrifice to have that consequence? One is 
some military action at some point in time, or some cost and 
sacrifice on our part to avoid that from an economic 
standpoint. That is not always necessarily clear and out there 
among the choices that we get to make.
    I want to make one other point and see if you all agree 
with it, and we have seen this be true in the past. And I want 
to take issue a little bit. I think Libya came to the table 
because there was an invasion of Iraq, and it did not have 
anything to do with sanctions. I think they finally just said, 
``I give up. I do not want this happening to us.'' I think 
there was some pressure with sanctions, but the real truth of 
the matter is here is this bold move and we do not think we 
want to invite that. So, I think there was a big difference, 
and we had testimony earlier on the fact that at the time in 
2003, we did not have sanctions on Iran at the time we invaded. 
And the Secretary correctly pointed out that that was a big 
impact in 2003.
    Can you not have uranium enrichment and still have 
weaponization?
    Mr. Allison. Unless Iran were successful in buying enriched 
uranium from another state, no.
    Senator Coburn. Well, if they have enriched uranium, if 
they have that at some point in time, is it clear to you that 
they would have the capability to weaponize that?
    Does everybody agree with that?
    Mr. Allison. Yes, if they have enough enriched uranium, 
they can make a bomb, yes.
    Mr. Walsh. Not 3 to 5 percent enriched uranium, but yes, 
weapons grade enriched----
    Senator Coburn. Yes, weapons grade.
    Mr. Walsh. Over some time, yes.
    Mr. Ross. Can I answer the question you posed earlier?
    Senator Coburn. Yes, please do.
    Mr. Ross. You said if talking does not work, what are the 
choices? Well, then the choices are basically two: One is you 
come up with what is a very vigorous containment approach, 
which is quite visible within the region, or you act militarily 
to forestall what they are doing with the message that you will 
do it again if they proceed.
    Those are the kind of choices you have. I would say this: I 
think that the reason I prefer the third way is because I do 
not really like either of those outcomes, because I can see all 
sorts of consequences that are not so great. But you put your 
finger on something. There is no cost-free approach right now, 
and we have to decide which of the least costly or least bad 
options are the ones that are available to us.
    Senator Coburn. Ambassador Ross, would it behoove us to 
work on containment now given the fact that our other options 
are not great? In other words, plan for containment, signal 
containment, put that out there as another leg in the stool?
    Mr. Ross. For me the answer is yes, and for a particular 
reason. Deterrence is not just deterrence at the time. 
Deterrence can also be about dissuasion. And if you are trying 
to persuade, again, that part of the Iranian leadership that 
they are not going to gain anything, they have a lot to lose 
and they are not going to gain anything, and if they think that 
nuclear weapons capability is going to give them leverage in 
the region, they should think again.
    Senator Coburn. So that takes time, so you would agree that 
we should start that process now.
    Mr. Ross. I would.
    Senator Coburn. Mr. Rademaker.
    Mr. Rademaker. I guess I would just add one footnote to 
Ambassador Ross' comment, responding to your earlier point. The 
risk that diplomacy may not succeed certainly is something--it 
is not an outcome we want, but that risk is not an argument for 
making an offer to the Iranians that is so attractive that they 
have to say yes to it. In other words, a successful diplomatic 
outcome is not necessarily preferable to some of the other 
alternatives.
    Dr. Walsh has a statement in his prepared remarks, and I 
will just read it to you because I disagree with it. He said, 
``The worst possible outcome is a purely national program on 
Iranian soil, whether it is unsafeguarded . . . or under-
safeguarded . . . '' I think what he means by that is basically 
they continue deploying additional centrifuges, they stand up 
the enrichment capability they are seeking, and we do not have 
any additional international safeguards than exist today. That 
is the worst possible outcome, according to his testimony.
    I think that is not right, because at least today it is an 
illegitimate program. The U.N. Security Council has condemned 
it four times. Sanctions have been imposed. It is an 
illegitimate program. Certainly one consequence of any 
diplomatic settlement with the Iranians on this issue is going 
to be that illegitimacy, that stigma, will be removed. The U.N. 
sanctions will be lifted, the U.N. Security Council will back 
away, and whatever program we sign off on will be 
internationally legitimate. And if it is essentially the same 
program that they are going to achieve if they continue down 
the current path and diplomacy fails, but it is legitimate, I 
think that is a worse outcome than them continuing down the 
current path.
    I think the rejoinder to what I have just said is, well, 
international inspections are reliable, and if we can get as 
part of a diplomatic settlement enhanced international 
verification, inspections, then we can have a higher level of 
comfort about that kind of outcome.
    I just want to read you a quote, which I have always 
enjoyed, and this is on the issue of international inspections. 
``Every form of deception and every obstacle baffled the 
Commission. The work of evasion became thoroughly organized. 
Under civilian camouflage, an organization was set up to 
safeguard weapons and equipment. Even more ingenuity was used 
to create machinery for future production of war material.''
    Sounds like George Bush on Iraq. It is not. It is Winston 
Churchill on Weimar Germany and their evasion of the 
international inspection regime that was set up under the 
Treaty of Versailles. So the idea that international 
inspections will save us from a bad outcome is not new.
    Senator Coburn. It goes to whether or not we have rational 
behavior on the part of the Supreme Leader and the IDGC.
    Mr. Walsh. If I may respond, that would not have been my 
rejoinder. It seems to me if the choice is between a 
stigmatized on the one hand and a nuclear weapons capability on 
the other, I will take stopping the nuclear weapons capability 
every day of the week. An Iranian program that is nationally 
owned and is not transparent but opaque. How do you feel about 
minimum safeguards or Iran pulling out of the NPT, that is the 
quickest route to a bomb.
    Our proposal is about preventing an Iranian nuclear weapons 
capability, not enhancing it.
    Senator Coburn. There is nobody that I have asked in the 
leadership in this country and no expert that I have asked that 
does not believe that Iran is seeking a nuclear weapon. Nobody. 
What would make us think that anything other than cold, hard 
consequences to that is going to work?
    Mr. Walsh. Well, the nuclear age would be one. Look at the 
history of the nuclear age----
    Senator Coburn. But you have already answered the question 
about how rational they are. The reason we were very successful 
during the Cold War is, one, we talked; but two, is that there 
was a rational pattern of thought that was not based on 
martyrdom. It was based on survival. It was based on staying 
alive. That is a consequence that has to be figured in in terms 
of how we negotiate with these people and how we think about 
how they think.
    Senator Coleman raised that issue, and I think it is a 
great issue. That is something we have not ever dealt with 
before as a Nation. Ambassador Ross, you have in terms of the 
Middle East in certain areas, but that is not routinely what we 
see. And this assumption that survival is a guide to bring 
people to the table, when, in fact, there is tremendous human 
rights violations of the people who are not in the religious 
leadership in Iran today and what they claim about what they 
believe really mixes the common sense and logic that we could 
defer from having negotiations.
    Mr. Walsh. Senator Coburn, we heard the same thing about 
the Soviet Union, the same sort of cultural argument from Colin 
Gray and others who said the Soviets would accept unacceptable 
levels of deaths, they were not the same as Americans. It 
turned out not to be true.
    I am not saying that the Iranians are perfectly rational. 
Like Americans, they can be prideful. They can make mistakes. 
They can bear significant economic costs in the defense of 
things they think are important. But in the main, they have 
been a status quo power. Some had thought that they had 
chemical weapons after the Iran-Iraq war. Did they turn around 
and attack Israel? Have they picked a big war against Israel? 
No.
    And on this issue of the regime, What did Saddam do when 
inspectors were on the ground? He decided that he would shelve 
his weapons program. This is from the Iraqi Survey Group and 
from others. He would shut it down. He still had ambitions, but 
he gave up the program because he did not want to get caught 
when there were inspectors on the ground.
    I think there is a lesson to be learned there and a lesson 
that applies here.
    Senator Coburn. All right. Thank you. Thank you, Mr. 
Chairman.
    Senator Carper. You bet. This has been just an 
extraordinary panel. We have hearings every day of the week 
around here. Sometimes they are pretty good. This has just been 
extraordinary. And I thank you for thinking outside the box. I 
thank you for making us think outside the box and for very 
constructive testimony and going back and forth with one 
another, I think in a most constructive and respectful way.
    Is there something else?
    Senator Coburn. Yes, just unanimous consent. I have several 
questions that I would like to submit for the record and ask 
that you answer them, if you would. We cannot take the time 
here to get--I would like to spend 2 days with you all. Thank 
you.
    Senator Carper. The hearing record will stay open for 2 
weeks. I am going to have some questions, as well.
    But we thank you very much for being here with us today and 
for your thought and your responses.
    [Whereupon, at 12:30 p.m., the Subcommittee was adjourned.]


                            A P P E N D I X

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