[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 2010

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                              FIRST SESSION
                                ________
     SUBCOMMITTEE ON STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS
                   NITA M. LOWEY, New York, Chairwoman
 JESSE L. JACKSON, Jr., Illinois
 ADAM SCHIFF, California
 STEVE ISRAEL, New York
 BEN CHANDLER, Kentucky
 STEVEN R. ROTHMAN, New Jersey
 BARBARA LEE, California
 BETTY McCOLLUM, Minnesota          KAY GRANGER, Texas
                                    MARK STEVEN KIRK, Illinois
                                    ANDER CRENSHAW, Florida
                                    DENNIS R. REHBERG, Montana

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
    Nisha Desai, Craig Higgins, Steve Marchese, Michele Sumilas, and 
                            Clelia Alvarado,
                            Staff Assistants

                                ________

                                 PART 5
                                                                   Page
 United States Department of State................................    1
 U.S. Agency for International Development........................   57
 Supplemental Request for FY09....................................  163
 Office of the Global AIDS Coordinator............................  231
 Millennium Challenge Corporation.................................  285
 The Merida Initiative............................................  339
 Africa: Great Lakes, Sudan, and the Horn.........................  463
 The Role of Civilian and Military Agencies in the Advancement of 
America's Diplomatic and Development Objective....................  521
 Building a 21st Century Workforce................................  613

                                ________

         Printed for the use of the Committee on Appropriations
PART 5--STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS 
                                FOR 2010
                                                                      ?

STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 2010

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                              FIRST SESSION
                                ________
     SUBCOMMITTEE ON STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS
                   NITA M. LOWEY, New York, Chairwoman
 JESSE L. JACKSON, Jr., Illinois    KAY GRANGER, Texas
 ADAM SCHIFF, California            MARK STEVEN KIRK, Illinois
 STEVE ISRAEL, New York             ANDER CRENSHAW, Florida
 BEN CHANDLER, Kentucky             DENNIS R. REHBERG, Montana
 STEVEN R. ROTHMAN, New Jersey      
 BARBARA LEE, California            
 BETTY McCOLLUM, Minnesota          
                                    

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
    Nisha Desai, Craig Higgins, Steve Marchese, Michele Sumilas, and 
                            Clelia Alvarado,
                            Staff Assistants

                                ________

                                 PART 5
                                                                   Page
 United States Department of State................................    1
 U.S. Agency for International Development........................   57
 Supplemental Request for FY09....................................  163
 Office of the Global AIDS Coordinator............................  231
 Millennium Challenge Corporation.................................  285
 The Merida Initiative............................................  339
 Africa: Great Lakes, Sudan, and the Horn.........................  463
 The Role of Civilian and Military Agencies in the Advancement of 
America's Diplomatic and Development Objective....................  521
 Building a 21st Century Workforce................................  613

                                ________

         Printed for the use of the Committee on Appropriations
                                ________
                     U.S. GOVERNMENT PRINTING OFFICE
 55-951                     WASHINGTON : 2010

                                  COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman
 
 NORMAN D. DICKS, Washington        JERRY LEWIS, California
 ALAN B. MOLLOHAN, West Virginia    C. W. BILL YOUNG, Florida
 MARCY KAPTUR, Ohio                 HAROLD ROGERS, Kentucky
 PETER J. VISCLOSKY, Indiana        FRANK R. WOLF, Virginia
 NITA M. LOWEY, New York            JACK KINGSTON, Georgia
 JOSE E. SERRANO, New York          RODNEY P. FRELINGHUYSEN, New
 ROSA L. DeLAURO, Connecticut       Jersey
 JAMES P. MORAN, Virginia           TODD TIAHRT, Kansas
 JOHN W. OLVER, Massachusetts       ZACH WAMP, Tennessee
 ED PASTOR, Arizona                 TOM LATHAM, Iowa
 DAVID E. PRICE, North Carolina     ROBERT B. ADERHOLT, Alabama
 CHET EDWARDS, Texas                JO ANN EMERSON, Missouri
 PATRICK J. KENNEDY, Rhode Island   KAY GRANGER, Texas
 MAURICE D. HINCHEY, New York       MICHAEL K. SIMPSON, Idaho
 LUCILLE ROYBAL-ALLARD, California  JOHN ABNEY CULBERSON, Texas
 SAM FARR, California               MARK STEVEN KIRK, Illinois
 JESSE L. JACKSON, Jr., Illinois    ANDER CRENSHAW, Florida
 CAROLYN C. KILPATRICK, Michigan    DENNIS R. REHBERG, Montana
 ALLEN BOYD, Florida                JOHN R. CARTER, Texas
 CHAKA FATTAH, Pennsylvania         RODNEY ALEXANDER, Louisiana
 STEVEN R. ROTHMAN, New Jersey      KEN CALVERT, California
 SANFORD D. BISHOP, Jr., Georgia    JO BONNER, Alabama
 MARION BERRY, Arkansas             STEVEN C. LaTOURETTE, Ohio
 BARBARA LEE, California            TOM COLE, Oklahoma          
 ADAM SCHIFF, California            
 MICHAEL HONDA, California          
 BETTY McCOLLUM, Minnesota          
 STEVE ISRAEL, New York             
 TIM RYAN, Ohio                     
 C.A. ``DUTCH'' RUPPERSBERGER,      
Maryland                            
 BEN CHANDLER, Kentucky             
 DEBBIE WASSERMAN SCHULTZ, Florida  
 CIRO RODRIGUEZ, Texas              
 LINCOLN DAVIS, Tennessee           
 JOHN T. SALAZAR, Colorado
 ------ ------                      
                                    

                 Beverly Pheto, Clerk and Staff Director

                                  (ii)


STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 2010

                              ----------                              --
--------

                                          Thursday, April 23, 2009.

                        U.S. DEPARTMENT OF STATE

                                WITNESS

HON. HILLARY RODHAM CLINTON, SECRETARY OF STATE

                 Opening Statement of Chairwoman Lowey

    Mrs. Lowey. The Subcommittee on State, Foreign Operations, 
and Related Programs will come to order.
    I would like to welcome all guests to this hearing room. 
And I respect your right to be here and respect your views. But 
I would ask that you respect this very important hearing.
    You may certainly engage in a silent protest, but I ask 
that you be seated and not disrupt these proceedings.
    Thank you.
    Madam Secretary, I welcome you, my former Senator, my 
constituent, my friend, to your first hearing before the House 
Appropriations Committee as Secretary of State. We look forward 
to hearing the policy objectives and assumptions supporting 
your request for $7.1 billion in supplemental funds for State 
Department operations and foreign assistance.
    Failed fiscal policies have left our economy in shambles 
and the world on the precipice of a global financial crisis. 
The security challenges we face abroad demand our urgent and 
focused attention.
    You and the President and all of us have inherited a world 
in peril. A dangerous and power hungry Iran is aggressively 
pursuing nuclear energy and hegemonic ambitions. The insecurity 
and instability of Afghanistan and Pakistan have intensified, 
and the Taliban and al Qaeda have gained ground.
    From North Korea to Nangahar, from Somalia to Sri Lanka, to 
the Swat Valley, instability threatens the security of the 
United States and its allies. In Pakistan, policy decisions 
focused on short-term security interests, which neglected the 
long-term needs to build civil society, empower and educate 
women and girls, and develop democratic institutions, have 
advanced neither security nor stability.
    Today the escalating terrorist violence in Pakistan and 
that government's inability and unwillingness to confront the 
extremist threat undermine any progress we have made in 
Afghanistan and complicates future efforts there. I fear that 
we are losing the window of international consensus and 
commitment to help the region gain a strong foothold on its 
long climb out of conflict. After 8 years and billions of 
dollars, we are no closer to improving security, solving the 
poppy problem, empowering credible partners to eliminate 
corruption and stabilize the government, or enabling a more 
tolerant society that respects the rights of women.
    Recent actions by North Korea, including its missile 
launch, reflect flagrant defiance and lack of interest in 
engaging responsibly with the rest of the world. Given these 
developments, I hope that you will detail how your supplemental 
request for resources for continuation of Six-Party Talks for a 
yet-to-be-negotiated Phase 3 of an Action for Action plan are 
expected to improve the situation.
    And in the Middle East, where I met last week with Israeli, 
Palestinian, and Egyptian leaders, President Obama's election 
and your leadership have generated new optimism and hope that 
our country can pursue a new direction to address the global 
challenges that threaten national and international security. 
But as you know, optimism and hope must be accompanied by smart 
strategies and tough diplomacy.
    In meetings in the region and discussions yesterday with 
King Abdullah of Jordan, concern over Iran dominated our 
conversations. While there continues to be a wide gulf between 
Israelis and Palestinians on further progress on the Roadmap, 
and questions remain on the state of the so-called unity talks 
hosted by Egypt, I am convinced that there is still a strong 
commitment among Israelis, Palestinians, Egyptians, and the 
Jordanians to create the conditions required for peace and 
security to take root and a determination to deal with the 
destabilizing role of Iran and its proxies, Hamas and 
Hezbollah.
    Israelis and Palestinians stressed the importance of the 
economic and the security assistance that you have pledged to 
the Palestinians and were unanimous in their praise of General 
Dayton's security initiative. In-depth discussions with UNRWA 
provided some assurances of their commitment to transparency 
and accountability in the humanitarian assistance that they 
manage, but the State Department must continue to ensure that 
UNRWA lives up to its commitments.
    It is clear that Hamas will not accept the conditions 
defined in the Palestinian Antiterrorism Act or in the fiscal 
year 2009 State and Foreign Operations bill. Yet, you have 
requested language that I understand would provide a limited 
amount of flexibility for the President to support a PA 
government that might include individuals associated with Hamas 
if all the ministers in such a government accepted the 
conditions of PATA.
    Now, while I have great confidence in you, Senator 
Mitchell, and President Obama, concerns remain about this 
language. And I hope that you can clarify what type of 
government the administration would support and why.
    I also hope to get a better sense from you on the 
implications for the State Department of our plans to draw down 
U.S. military presence in Iraq by the end of 2010.
    And finally, let me express concern about new authorities 
for the Defense Department in the supplemental request. While I 
understand the need to train and equip the Pakistani military 
for counterinsurgency capability, such assistance should not be 
provided through Defense appropriations. We will continue to 
ensure appropriate coordination mechanisms and implementation 
agreements so that DOD can implement these programs effectively 
and efficiently. However, the overall policy responsibility 
rests with you, and so should the funds for the Pakistani 
Counterinsurgency Capability Fund.
    Similarly, this committee has appropriated $700 million for 
the Merida program to date, and frankly, I am baffled that an 
additional $350 million has been requested under the Defense 
appropriations.
    Madam Secretary, the United States is facing major 
challenges, and I look forward to your testimony.
    But first let me turn to the ranking member, Representative 
Kay Granger, for any comments she may make. And I should alert 
you to the fact that this is the only committee in Congress 
where there are two women in charge.
    And so I am delighted to turn to my ranking member, Kay 
Granger.

               Opening Remarks of Ranking Member Granger

    Ms. Granger. Thank you, Madam Chair.
    And I also want to thank and welcome Secretary of State 
Clinton to her first hearing before this subcommittee.
    I look forward to hearing your thoughts about the 
administration's $7.1 billion fiscal year 2009 supplemental 
request.
    At a time when our citizens are tightening their belts, the 
Congress must be certain that we are funding only the most 
essential and the most effective and the carefully examined 
foreign policy priorities.
    Let me begin by saying, there are several areas I applaud 
the administration's commitment. The Chair and I of this 
subcommittee just returned from a trip to the Middle East, 
where we traveled to Israel, the West Bank, and Egypt, and we 
welcome this administration's renewed focus on brokering peace 
and security for the countries in that region. I look forward 
to hearing your thoughts about how items in the supplemental 
request will support those efforts.
    I am also pleased with the attention given to Mexico and 
the problems there and the $66 million requested for 
procurement of helicopters. I hope that we can work together to 
make sure that the assets that Mexico needs in their fight get 
there as soon as possible.
    I am also reassured by the President's demonstration that 
continuing the global fight to stop terrorism in Iraq, 
Afghanistan, and Pakistan is a continued top priority. I 
believe additional oversight is especially needed in the 
military presence as it expands and foreign assistance programs 
are increased to make sure that we are using those funds 
effectively in that fight.
    I have concerns about the administration's efforts to blunt 
the effect of the global financial crisis in developing 
countries. It may have merit, but the request lacks adequate 
country specificity, economic justification, and explanation of 
the impact of such assistance.
    I look forward to your presentation and asking some 
questions as we go along.
    Thank you, Madam Chairwoman.
    Mrs. Lowey. Thank you.
    I would like to turn to Mr. Obey for any comments he may 
have.

                      Opening Remarks of Mr. Obey

    Mr. Obey. Thank you, Madam Chairwoman.
    Madam Secretary, you have a terrifically tough job. We all 
know that. And I am sure we all wish you well.
    But you have inherited some incredible messes. And 
Americans can be funny people. I mean, it seems to be in our 
nature that we think there is a solution for everything, for 
every problem. Sometimes we have got solutions for problems 
that do not even exist. But we also run into some problems 
that, at best, can simply be managed, not solved. And I think 
you have got more than your fair share of those.
    I, frankly, do not know what I am going to do on your 
supplemental request because I am very concerned that it is 
going to wind up with us stuck in a problem that nobody knows 
how to get out of. And here is my concern. We have been at war 
almost eight years in Iraq. It is a measure of how wild things 
have been in the past that we count it a great achievement that 
there are only about 100 attacks a week in Iraq. Over 52 weeks, 
that is a lot of attacks. You can imagine what would be 
happening in this country if we were experiencing the same 
thing.
    We are told that the situation in Afghanistan has gotten 
worse. And we are told that it is unlikely that we are going to 
be able to resolve that problem to our satisfaction unless we 
deal with the reality of Pakistan as well.
    And we are told that the administration has gone through an 
extensive review in order to try to focus its policy much more 
discretely and narrowly. And I think you have done that. I 
mean, I understand that the goal, rather than having some 
grandiose set of goals, the goal in Afghanistan is simply to 
demolish al Qaeda so they do not provide a threat to us. And I 
do not question your goals, and I do not question the rationale 
behind any of the decisions that underlie the policy that the 
administration intends to pursue.
    What I question is whether we in fact have the tools and 
the capacity to actually get anywhere near those goals. And I 
say that because, I have been around this place 40 years. My 
experience with Pakistan during all that time is that it has 
always been Pakistan, which means it is a country of 
dealmakers, but they do not keep the deals. And so, as a 
result, we have factions playing for their own interests, not 
focused on the real threats to that state.
    You have the insistence of the Pak Government that they 
continue to focus on India rather than focusing on the real 
threat. You have the central government give away a region of 
the country to the Taliban and accept the fact that the sharia 
is going to be the rule of the day there. And then you see 
calls to apply that across the entire country.
    I have absolutely no confidence in the ability of the 
existing Pakistani Government to do one blessed thing. And 
without a functioning government focused on the right issues in 
Pakistan, we cannot, we cannot achieve our goals in that 
region, in my view.
    And so what I would like to know, the Chairwoman has 
referred to the sense of optimism that has accompanied 
President Obama's election. And I share that optimism. I think 
the whole world does.
    But we also cannot approach problems as though we are 
permanent presidents of the Optimists' Club. We have got to 
look at realities. And I am concerned that when I see the so-
called realists in this town, such as Jackson Diehl, who is a 
perfectly fine reporter, but when he says, as so many others 
say, that this effort in Afghanistan is going to require the 
entire eight-year attention of this administration, to me that 
means we are stuck with a sixteen-year effort in that region. 
And I do not want to see all of the other goals of the 
administration, both foreign and domestic, in the end devoured 
by this insoluble problem.
    While it is nice to have goals, and it is nice to be 
optimistic, what I want to know, is whether or not the 
administration will have in its own head a defined timeline by 
which, if Pakistan does not perform, if that government does 
not get their act together, if they do not quit playing it 
every which way, if the intelligence service in Pakistan does 
not stop double-dealing, that they need to know that we are not 
going to be stuck there backing them up forever.
    No matter what you do, you are going to be criticized. No 
matter what you do, it is going to be the wrong decision in a 
lot of people's eyes. In my view, no matter what you do and no 
matter what you try to do, the likelihood of a successful 
outcome is extremely dim because of the nature of the 
territory.
    I am not convinced, let me put it this way, I am convinced 
that this is one of those problems that we cannot solve; we can 
at best manage. And I want to know that we have a strategy for 
managing it if we face the fact that we just do not have the 
tools in that area in order to achieve the goals that we are 
talking about now.
    And my other problem, since people are also talking about 
the possibility of an IMF replenishment, during the years I 
chaired this subcommittee, I put a lot of IMF money through the 
Congress, but I have to tell you, I have great reluctance to do 
so given the fact that the Western European governments, 
especially Germany, are declining to provide the kind of 
economic stimulus that the world seems to expect of us but 
which they do not seem to be willing to deliver themselves.
    And if they do not pull their fair share of the load in the 
wagon on that score, we are going to have a prolonged worldwide 
recession, and the United States is not going to be exempt from 
that.
    So those are my thoughts. And I hope that you can reassure 
me on those points today. But frankly, I doubt it. Not because 
of any lack of ability on your part, but because I just am 
concerned that virtually every initiative this administration 
wants to pursue domestically and internationally in the end can 
be devoured by this problem if we are not incredibly, 
incredibly careful and thoughtful about it.
    Thank you, Madam Chair.
    Mrs. Lowey. Mr. Lewis, do you have an opening statement?

                      Opening Remarks of Mr. Lewis

    Mr. Lewis. Thank you, Madam Chairman. Only to say that I am 
very anxious to hear the Secretary's statement.
    I welcome Secretary of State Clinton, and we appreciate 
your hard work. I am very anxious to ask questions. I hope we 
have time to get to them.
    Secretary Clinton. Yes.
    Mrs. Lowey. Madam Secretary, we will be happy to place your 
full statement in the record if you would care to summarize, 
but proceed as you wish.
    Thank you.

                 Opening Statement of Secretary Clinton

    Secretary Clinton. Thank you very much. Is this on?
    I want to get to your questions. I think it might help to 
do a quick overview of what we do have in the supplemental and 
the reasons behind it. We know that we are asking for a 
significant sum, but it represents only a fraction of what we 
spend each year on national security. And we think that 
diplomacy and development are ever more important to 
safeguarding the security and prosperity of our people and our 
Nation, because after all, if we are successful in either 
managing or solving problems, we save the money and the lives 
that would otherwise have to be spent in dealing with conflict.
    You know very well on this committee the range of difficult 
problems we have inherited and that we are attempting to cope 
with. We have launched a new diplomacy that we believe is 
powered by partnership and pragmatism and principle. And I am 
very proud of the men and women of the State Department and 
USAID who literally work around the clock and around the world.
    We have requested, with respect to Iraq, $482 million in 
the supplemental budget for civilian efforts to partner with 
our military efforts as the withdrawal continues. Already the 
Iraqi Government is exceeding our spending for reconstruction 
and in many areas matching or exceeding our efforts on 
individual projects. We want to help manage that transition. 
And this money will enable our civilian American employees and 
their local counterparts to help create an environment in which 
we assist the Iraqi Government to take more and more 
responsibility.
    Obviously, security is our paramount concern in 
Afghanistan. The supplemental request of $980 million for 
Afghanistan is targeted to specific areas essential for 
security and stability.
    As a result of our strategic review, we are not trying to 
be all things to all people. We are focusing on making 
government institutions more accountable and effective, 
promoting the rule of law, stimulating licit economic activity, 
especially in agriculture. Afghanistan used to be self-
sufficient in agriculture and even was an exporter beyond its 
borders.
    We are also going to be working with local communities at 
the provincial level and below to help stabilize the security 
situation through job creation. What we have determined through 
our analysis is that many in the Taliban are there not because 
of ideological commitment but, frankly, because they are paid 
better than you could be paid in the Afghan police force. So we 
are trying to unlock this puzzle about how to attract young men 
in particular into legitimate employment. Our commitment to 
train up the Afghan National Army and the police force will go 
hand in hand with that effort. And we are also focused on 
continuing to support women and girls. We think that is an 
essential part of our foreign policy.
    But progress in Afghanistan, we believe, depends upon 
progress in Pakistan. And we do seek supplemental funding of 
$497 million. I take very seriously Chairman Obey's comments 
and cautions.
    And Mr. Chairman, my view on this is that in order to 
manage, we have to make these commitments. We have to keep our 
pledge at the Tokyo Donors Conference. Other nations see 
Pakistan as we now do and therefore came forward with $5.5 
billion in commitments. We have to try to strengthen civilian 
law enforcement, particularly in the Federally Administered 
Tribal Areas and the Northwest Frontier Province.
    And there are humanitarian needs that we think serve our 
national security interests, which we have, in my view, never 
sufficiently built on. Following the earthquake in Pakistan, 
Pakistani public opinion toward America improved dramatically 
because we were there with both military and civilian assets to 
help the people who had been stricken by the earthquake.
    We never followed through. We never had a strategy to say, 
we have made some progress in these areas, what more do we need 
to do to consolidate that?
    Key to our new strategy for both Afghanistan and Pakistan 
is to hold ourselves and our partners accountable. And we are 
committed to doing that. We obviously are going to set 
performance measures. I remember very well for six years on the 
Armed Services Committee trying to get accountability measures 
for both Iraq and Afghanistan, trying to get what we then 
called benchmarks. We never got them.
    We are going to prepare them. We are going to share them 
with you. We are going to work with you to try to figure out 
what are the ways we can tell whether we are successfully 
managing and/or solving our challenges.
    We also are focused on the Middle East, as Chairwoman Lowey 
mentioned. Both she and Ranking Member Granger emphasized the 
importance of this region to our country. If we are genuinely 
interested in achieving a comprehensive and secure peace 
between Israel and its Arab neighbors, we have to remain 
steadfast in our commitment to Israel's security.
    At the same time, we believe we should continue to help the 
parties find a path to a two-state solution and support efforts 
initiated by the Palestinian Authority under the leadership of 
Prime Minister Fayad to end corruption, promote security, and 
build infrastructure to demonstrate tangible benefits of peace 
to the people of the West Bank. And we think, as part of that 
strategy, we have to address the humanitarian needs in Gaza by 
working directly with carefully vetted partners.
    We have made it clear we will only work a Palestinian 
Authority Government that unambiguously and explicitly accepts 
the Quartet's principles: a commitment to nonviolence; 
recognition of Israel; and acceptance of previous agreements 
and obligations, including the Roadmap.
    In the event of any Hamas participation of any sort in this 
coalition, this would apply if the government, representing all 
of its agencies and instrumentalities, accepts these 
principles. At Sharm el Sheikh last month, I announced a U.S. 
Government pledge of $900 million that includes humanitarian, 
economic, and security assistance for the Palestinian people, 
both Gaza and West Bank.
    And Madam Chairwoman, our supplemental request of $840 
million is included in that pledge. It is not in addition to 
it.
    And it will be implemented under the most stringent 
requirements we have ever put on aid going into that area. From 
the first days of this administration, we have also signaled 
our determination to create partnerships, partnerships with 
other governments, the private sector, nongovernmental 
organizations and institutions. This is not a moral or 
altruistic imperative. We believe that extreme poverty poses a 
grave threat to global security and certainly to prosperity.
    Development experts have predicted that 50 million more 
people could end up living in poverty this year. A sharp 
increase in global poverty has the potential to spark 
humanitarian crises, erode gains from a wide range of U.S. 
taxpayer investments in development, reverse progress toward 
achieving the Millennium Development goals, and destabilize 
countries that are partners and ours.
    Many responsible countries cannot raise funds to restore 
safety nets, restore financial markets, and serve the poor. And 
I care particularly about children and women, who are the most 
marginalized to begin with. And we think this is an important 
action that our government should take in our interests as well 
as to further our values.
    The $448 million requested for assistance to developing 
countries hardest hit by the global financial crisis is 
designed to provide a temporary safety net.
    And I appreciate Congresswoman Granger's question. At this 
moment, we are evaluating which ones of these countries will 
need our help and how best to deliver that.
    I think the United States has to remain a world leader in 
providing food aid and life-sustaining support for refugees and 
other victims of conflict. And these efforts will be 
complemented by investments in the supplemental budget for 
emergency food aid.
    The food security problem is especially acute, and I am 
pleased that the President has asked the State Department and 
USAID to lead our government's efforts in addressing this 
across the agency.
    We had the first meeting, Madam Chairman, ever held in our 
government to bring everybody together. So we are trying to 
rationalize, streamline and make more effective our efforts 
across the board.
    We also think it is important that we lead by our example 
when it comes to shared responsibility. That is why we have 
included $836 million for United Nations operations, some of 
which will be used to cover assessments in which we are already 
in arrears.
    Now, we are well aware that the United Nations needs reform 
and greater accountability. But I think it is fair to 
acknowledge that in many areas U.N. peacekeeping missions save 
lives and, frankly, expense for us. I was just in Haiti, where 
the U.N. blue helmets cost 75 percent less than if we had to 
send troops to Haiti, as we did, you know, 12 years or so ago. 
And when I was in Haiti, where we support those U.N. 
peacekeepers, I concluded, listening to the Brazilian general 
who led them, that they have made significant gains in security 
and stability that are still fragile. Our continuing support 
for peacekeeping missions like this I strongly believe are a 
low-cost way for us to achieve our own goals.
    We are asking for small investments targeted to specific 
concerns, international peacekeeping operations and 
stabilization in Africa; humanitarian needs in Burma; the 
dismantlement of North Korea's nuclear program, assuming they 
come back to the Six-Party Talks; assistance for Georgia that 
the prior administration promised that we believe we should 
fulfill; support for the Lebanese Government, which is facing 
serious challenges; funding for critical air mobility support 
in Mexico as part of the Merida Initiative.
    Let me end with one final point. In order for us to pursue 
an ambitious foreign policy to both solve and manage problems, 
to address our interests and advance our values, we have to 
reform both State and USAID. And to do so, we have to create a 
department and an agency that are funded the right way, where 
the people doing this work have the tools and authorities that 
they need.
    This is particularly important in dangerous regions like 
Iraq and Afghanistan. I want to just end with one statistic. I 
asked for a review about the dangers facing aid workers. In 
Afghanistan, the casualty rate for USAID employees, contract 
employees, locally engaged employees and other international 
aid workers, is 1 in 10 have been killed in the last 8 years. 
Our comparable percentage for military casualties in 
Afghanistan is 1 in 57.
    What we are asking people to do, which we believe is 
absolutely essential to our country's security, is assume 
responsibilities so that we can make diplomacy and development 
on a par with the military and defense functions of our foreign 
policy.
    But I want to underscore to this committee, which knows 
this very well, this is not easy. It is not safe, and it is 
extremely difficult to get right. But I pledge to you that we 
are going to do everything we can as we move forward, advancing 
President Obama's and our Nation's vital interests, to make 
sure that diplomacy and development are well prepared to take 
our place at the head of our Nation's foreign policy 
objectives.
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    Mrs. Lowey. Thank you, Madam Secretary.
    I will be calling on members based upon the seniority of 
those members that were present when the hearing was called to 
order. And I ask that each member please keep their questions 
to within 5 minutes per round. And I will alternate between 
majority and minority.
    Madam Secretary, I thank you again for your testimony. I 
know that there are many questions. Our time is limited. I 
would like to begin by repeating three concerns that I raised 
in my opening remarks and that you also addressed.
    Number one, I am concerned that the Pakistani Government is 
cutting deals with extremists without getting anything in 
return, as evidenced by the recent agreement in the Swat 
Valley. And certainly we know about the news today. As we now 
know, that agreement has only emboldened the Taliban to surge 
into the Buner district just an hour outside Islamabad. How do 
we succeed in Pakistan if the Pakistanis themselves are either 
unwilling or incapable of making the tough choices and taking 
the tough action needed to confront the insurgency?
    Two, as I noted, I know that we are all in agreement on a 
policy that prohibits any funding for Hamas or any Hamas-
controlled entity until Hamas is willing to agree to the 
Quartet principles. In my opinion, I must say, that day will 
never come. However, Madam Secretary, you have asked for the 
ability to engage with a power-sharing government if that 
government meets these principles. I would like you to 
elaborate on why you need this language. What type of 
government would you support?
    And when you say that the power-sharing government would 
have to meet the three principles, I believe it is not enough 
for Abu Mazen and Salaam Fayad to accept the principles; it 
must be all the ministers, including any minister appointed by 
Hamas, that comply with these principles. And I would like to 
know if you agree with that.
    And lastly, I would like you to elaborate on the 
administration's policy on Iran. While I support the 
President's policy of engagement, I do not think we should be 
taking any options off the table. In fact, I believe that any 
diplomatic initiatives have to be coupled with a tightening, a 
real tightening of the sanctions regime. I would like to know 
if you agree with that.
    I think we need to ensure that our European allies, the 
Russians, the Indians, and others are also enforcing these 
sanctions. As good as Stuart Levy is, I hope you can share your 
thoughts on this.
    Secretary Clinton. Thank you so much, my Congresswoman.
    Let me start with Pakistan. As I said yesterday, appearing 
before the House Foreign Affairs Committee, I and our 
administration are deeply concerned by the increasing 
insurgency that is destabilizing Pakistan. We have made those 
concerns abundantly clear to the Pakistani Government, both the 
civilian and the military leadership, and we have had a series 
of meetings with both the Pakistanis and the Afghans, going in 
depth about how to get the Pakistani Government to change their 
focus, as Chairman Obey referenced, from what they viewed as 
their existential threat, namely India, to what we view as 
their existential threat, namely this extremist insurgency.
    Changing paradigms and mind-sets is not easy. But I do 
believe that there is an increasing awareness on the part of 
not just the Pakistani Government but the Pakistani people that 
this insurgency, coming closer and closer to major cities, does 
pose such a threat.
    I was heartened to hear that leaders of opposing political 
parties, even Islamic-based political parties, have begun to 
express their concerns about the deal in Swat. Parliamentarians 
are beginning to speak out.
    Yesterday I called for the Pakistani diaspora to also speak 
out. And we believe that there is a growing awareness on the 
part of the Pakistani Government that their strategy, which 
historically, as you know, was to leave those areas basically 
alone. The British left them alone. The Pakistani Government 
from its very inception left them alone, and the mind-set was, 
well, that does not really affect us in Islamabad, Lahore, 
Karachi. And now they are seeing that indeed it could.
    So I believe, Congresswoman, that there is a significant 
opportunity here for us, working in collaboration with the 
Pakistani Government, to help them get the support they need to 
make that mind-set change and act more vigorously against this 
threat.
    Now, there are no promises. They have to do it. I mean, we 
can support them. We can encourage them. The leadership of 
Pakistan will be coming for our second trilateral meeting in 
about two weeks here to Washington. Our Special Representative, 
Richard Holbrooke, the Chairman of the Joint Chiefs, Admiral 
Mullen, have been spending countless hours in really painful, 
specific conversations, because I want to underscore the 
feeling we get, which is that if you have been locked in a 
mortal contest with someone you think is your principal, in 
fact only, real enemy, and all of a sudden circumstances 
change, but they do not change so much that you are still not 
worried about that other enemy, it just takes some time. And I 
think that there is a growing understanding of that within the 
Pakistani leadership.
    Secondly, with respect to Hamas, as I said yesterday, again 
before the House Foreign Affairs Committee, we will not deal 
with a Palestinian Authority unity government that includes 
Hamas, that does not meet the criteria of recognizing Israel, 
renouncing violence, and agreeing to all of the agreements that 
have already been entered into by the Palestinian Liberation 
Organization and then the Palestinian Authority.
    And I want to just, you know, reiterate that no aid will 
flow to Hamas or any entity controlled by Hamas. Under our 
supplemental provision, the unity government would have to be 
certified by the President as meeting the requirements that we 
have set forth. And the reason for this request is that, number 
one, the Palestinian Authority itself has not agreed to any 
such unity government. The discussions have focused on so-
called technocrats, people who might go into a unity government 
of some sort to fulfill certain specific functions.
    But this is a critically important time in the Middle East. 
And we do not know what will come from these ongoing talks in 
Cairo. But if what emerges from these talks is a unity 
government that abides by the Quartet principles, we do want to 
have the authority to deal with that government in the peace 
process or negotiations that might possibly develop.
    Before providing any such waiver, the Administration would 
consider all the relevant facts, including who these people 
were, what their role in the government was, to make sure this 
meets our standards and our national interests. And we would 
expect any unity government to meet the standards of 
transparency and accountability that have been set forth by 
Prime Minister Fayad.
    We doubt there will be such a unity agreement. There does 
not seem to be one in store. But we do not want to bind our 
hands in the event that such an agreement is reached and the 
government that they are part of agrees to our principles.
    Finally, with respect to Iran, as I also said yesterday, we 
have been working closely with our friends and partners and 
interested nations with respect to engaging with Iran. Just 
like you found when you traveled in the region, we hear about 
Iran from everyone. This unites Israel and the Arab neighbors 
in the region. Everyone is concerned, as we are, about Iran's 
activities. We are concerned both about their pursuit of 
nuclear weapons and about their interference in the internal 
affairs of their neighbors and their support for terrorism and 
organizations like Hamas and Hezbollah.
    But we have tried the policy of total isolation for eight 
years, and it did not deter Iran one bit. The nuclear program 
has continued unabated. They were not supporting Hamas before; 
they are supporting Hamas now.
    So our view is we have to proceed on two tracks 
simultaneously and completely linked. As the President has 
said, we have said to the Iranians, we are willing to discuss 
with you a range of matters. We have sent our representative to 
the P-5-Plus-1 to be a full participant because we think we 
need a better approach to try to deter and prevent them from 
acquiring nuclear weapons, and we continue to work on 
sanctions, which we intend to have available. We believe that 
pursuing this two-track approach, letting the world know we are 
willing to engage--we do not know whether they want to engage 
with us; there is no basis yet for concluding they do--will 
give us a stronger hand in getting leverage on them when it 
comes to tough, crippling sanctions.
    Mrs. Lowey. I am over our time.
    I just wanted to clarify one point. When you talked about 
the government that you intend for us to support if in fact 
there is a government, in my judgment, all the ministers should 
comply with the Quartet principles and the principles in PATA. 
Would you agree with that?
    Secretary Clinton. Our belief is that if the government 
complies with it, that is what we are looking for. And again, I 
mean, we are talking in such hypotheticals. We have no 
intention of dealing with Hamas unless they do what the PLO 
did. I mean, I was in Gaza when the PLO voted to recognize 
Israel, renounce violence.
    I was deeply involved in the peace process in Northern 
Ireland. Not everyone in Sinn Fein and not everyone in the IRA 
initially agreed to the principles. But the leadership of the 
government that was dealt with in both instances did. That is 
what we are looking for. And we think that is sufficient, given 
the assurances that we will be looking for to provide you.
    Mrs. Lowey. Ms. Granger.
    Ms. Granger. Thank you.
    In press reports this week, it appears that the new Israeli 
Government is not likely to move forward on peace talks with 
the Palestinians until it sees progress in stopping Iran's 
suspected pursuit of nuclear weapons and limiting the 
increasing influence of Iran on the region. I would like to 
know how this emerging position of the Netanyahu government 
affects the prospects for peace as we are moving forward, and 
is our government encouraging Arab states to take any specific 
actions against Iran? How are we doing that? And what countries 
do you believe can be most helpful to us?
    Secretary Clinton. Well, Congresswoman, we are not going to 
prejudge the Israeli position until we have had face-to-face 
talks.
    You know, Senator Mitchell was just in the region, had 
intensive talks with the Prime Minister and members of his 
government. The Prime Minister will be coming to Washington in 
May. And we think that it is important not to prejudge what 
their view is and how that can best be approached.
    And let me just give you an example of what I mean. As I 
said, Israel is in lockstep with their Arab neighbors vis-a-vis 
their concern about Iran. We could argue, and many Arab 
countries have, and I think some of you met with King Abdullah 
in the past several days, and he has made public statements to 
this effect; that for Israel to get the kind of strong support 
it is looking for vis-a-vis Iran, it cannot stay on the 
sidelines with respect to the Palestinians and the peace 
efforts, that they go hand in hand.
    And if we can work out such an approach, and this is 
obviously, you know, up to the Israeli Government, they have to 
make these decisions, but if there is such an approach, then a 
lot of the Arab countries are saying to us there will be a 
sequencing of supporting that will strengthen the region's 
response to Iran.
    But as I said, we have not had those in-depth conversations 
yet that we are looking forward to having with the Israeli 
Government.
    Ms. Granger. Have you had those conversations with Arab 
states specifically? And what kind of expectations do you have 
from them and which ones will be most helpful?
    Secretary Clinton. I must say we have had ongoing 
conversations with Arab states, literally across North Africa, 
Israel's immediate neighbors, and into the Gulf. The Arab Peace 
Initiative, which by the way has the same principles as the 
Quartet principles, which people, you know, should really give 
the Arab League, most particularly Saudi Arabia, credit for; 
every country with whom I have personally met, and that is most 
of them by now, wants very much to support the strongest 
possible posture toward Iran. They believe that Israel's 
willingness to reenter into discussions with the Palestinian 
Authority strengthens them in being able to deal with Iran. So 
I really believe that that is their strongly held view. And we 
have to sort of get everybody together in one place, which has 
not yet happened, to figure out how that can proceed.
    Ms. Granger. Thank you very much.
    Mrs. Lowey. Mr. Obey.
    Mr. Obey. Madam Secretary, two questions.
    There is a lot of talk about benchmarks with respect to 
Afghanistan and Pakistan. My problem with benchmarks is that I 
have always felt it is difficult, virtually impossible, to try 
to run a war from Capitol Hill. Sometimes if you have 
incredible obstreperousness on the part of the executive 
branch, that is your only choice, to try, but I do not have 
much faith in our ability to do so.
    The problem with benchmarks as I see them, if they are 
congressional benchmarks, is that if they are too tight, money 
does not flow, and it messes up your ability to carry out the 
policy. And if they are too loose, all they are is a cover-
your-fanny program for Congress. And what I would like is to 
have something more real.
    So I am not asking you now what they would be, but what I 
want to know, within a reasonable period of time, is what will 
the administration's own internal benchmarks be that they will 
use to determine whether or not this policy is succeeding or 
whether it is time to go in a different direction?
    Second point is this: When I came to Congress, it was 1969, 
middle of the war. I succeeded Mel Laird, who was then the 
Secretary of Defense. And I was against the war. But Mel 
convinced me that Nixon had inherited the war from Johnson and 
that he deserved some time to try his policies. And so I said, 
all right, I will keep my mouth shut for a year and see what 
happens. And that is what I did. And I held out for a year 
before I started voting for measures to try to shut that 
operation down.
    I do not want to try to shut down the administration's 
ability to deal with a problem they inherited. But my question 
is this: Would not a year be plenty of time for us to judge 
whether or not the Paks are really willing to do what is 
necessary to deal with this problem? Should not we be able to 
determine within a year whether they are serious, whether they 
are focusing on the right problems, whether they actually have 
control of their intelligence operations so that we do not have 
a deep suspicion that they are actually financing some of the 
actions taken by our enemies in Afghanistan?
    Secretary Clinton. Well, Mr. Chairman, I think your two 
questions are related.
    I agree with you completely that we need the internal 
benchmarks, measurements of performance that we are currently 
working to present. We would prefer they not be embodied in 
congressional legislation for the very reasons you just 
described, but we do think we owe you a set of measurements 
that we are going to try to judge whether we are making 
progress or not, and that you should be able to judge as well.
    So what we intend to do is to present these approaches that 
we are working on. And it is across the government. The 
intelligence community will have certain measurements; the 
Defense Department will; we will look as well. But we would 
prefer that they be how you hold us accountable without, you 
know, paralyzing our efforts to move forward. So I agree with 
that.
    But when we work those through and present them to you--
some of them will be classified; most of them will not be--they 
will give us the indicators that I think you are seeking as to 
whether we are making any progress in Pakistan.
    You know, on a simple measure, is the Pakistani military 
still amassing hundreds of thousands of troops on the Indian 
border, or have they begun to move those toward these insurgent 
areas? What kind of kinetic action are they taking? How much? 
Is there an increasing uptempo or not? Is it sporadic, so they 
start in and then they move back?
    Now, if someone representing the Pakistani military were 
here with me today, I am sure he would say, we have lost 6,000 
people in these efforts in the last I think two, three years. 
And that is a measurement. It is a tragic measurement. But if 
you lose soldiers trying to retake part of your own country, it 
seems to me that is the army's mission, you know, to see how 
they can get back the governing capacity.
    So we think that we will have an ability to lay out these 
markers. We welcome your advice about others that you think 
would be useful. And then we are going to measure it.
    Now, is it a year, 18 months? I am not prepared to say 
that. I do not know. But, obviously, we want to see progress on 
these measurements. And we want to see the progress, you know, 
beginning and continuing and not stopping and starting. And 
that is what we are going to look for.
    Mr. Obey. Thank you.
    Mrs. Lowey. Mr. Lewis.
    Mr. Lewis. Thank you very much, Madam Chair.
    Secretary Clinton, you come to this job at a very, very 
critical time in this shrinking and volatile world. And the 
focus upon Pakistan and Afghanistan is very much appropriate. 
But it seems to me that that which we experienced, the world 
experienced, in Mumbai has changed the level of intensity of 
these challenges like one cannot hardly imagine. Indeed, I want 
to support a progressive policy to help strengthen Pakistan. I 
am very concerned about the changes that have taken place just 
in these last few days. I do understand, on the other hand, why 
Pakistan has so many troops on the Indian border. If indeed 
just a little more militancy causes a spark that causes India 
to react, if something were to happen in Kashmir, we could have 
an explosion that involves two nuclear powers faced off against 
one another.
    General Petraeus was before us yesterday in the Defense 
Subcommittee, and in this discussion, the fact that the 
Pakistani military is totally incapable of dealing with the 
military of India, the comparison just is night and day; that 
reality could lead to the exercise of nuclear arms. I hope that 
the Defense Department, the agencies in other words, and your 
people are intensely involved in looking at this. Could you 
give me some commentary about your concerns about India versus 
Pakistan?
    Secretary Clinton. It is a very profound question, 
Congressman Lewis, because there have to be efforts to enhance 
confidence between India and Pakistan.
    Those are not likely to be undertaken until the Indian 
elections are over. And as you know, the Indian elections take 
a long time because they are the biggest democracy in the 
world, and they do a pretty good job, frankly, running their 
elections. But we are not going to have a government for weeks. 
There have been a number of high level discussions by members 
of our administration, including between the President and the 
Prime Minister on the sidelines of the G20 summit in London, 
raising the issue of how India can do more to tamp down any 
reaction on any front like Mumbai could have provoked.
    We worked very hard, and as did the prior administration, 
to prevent India from reacting. But we know that the 
insurgents, and al Qaeda, and their syndicate partners are 
pretty smart. They are not going to cease their attacks inside 
India because they are looking for exactly the kind of reaction 
that we all hope to prevent.
    So we do have a lot of work to do with the Indian 
Government to make sure that they continue to exercise the kind 
of restraint they showed after Mumbai, which was remarkable, 
especially given the fact it was the political season.
    We are also encouraging the Pakistani Government to reach 
out to the Indian Government and to continue some of those 
confidence-building measures that they were doing, like opening 
the bus routes in Kashmir and other things that did have some 
positive effects.
    So you have put your finger on the dilemma that I was 
answering Chairman Obey about. If Kashmir blows up, and 
insurgents come over that line of control every day or at least 
every week, then all bets are off. But if the Pakistani Army 
stays on the line of control and on the Indian border and 
doesn't turn their attention to dealing with the insurgents, we 
got a mess on our hands.
    Secretary Clinton. So, we do have to navigate through this. 
Now, that is part of what the highest levels of our 
Administration are doing from--Director Panetta has been in 
both New Delhi and Islamabad. Our military, we are in this 
funny situation because CENTCOM stops at Pakistan and PACOM 
stops at India, but there is a lot of coordination going on to 
kind of keep that relationship strong. It is very complex.
    And one final thing I would say is why are we so concerned 
about this? One of the reasons is nuclear weapons, we spend a 
lot of time worrying about Iran; Pakistan already has them. And 
they are widely dispersed in the country. There is not a 
central location, as you know. They have adopted a policy of 
dispersing their nuclear weapons and facilities. So it is 
imperative that we do everything we can to keep India and 
Pakistan on a good basis so that when something pops up and 
they make an accusation and they fall back on what are just 
natural impulses to blame the other, it doesn't escalate.
    Mr. Lewis. Thank you very much, Madam Secretary.
    Mrs. Lowey. Mr. Schiff.

                     Opening Remarks of Mr. Schiff

    Mr. Schiff. Thank you, Madam Chair. Madam Secretary, it is 
wonderful to see you, and I am so proud that my daughter can 
have a chance to watch some of your talent and capability to 
testify today. I want to make a couple of quick points and 
invite you to respond to as many as you can within my 5 
minutes.
    First, I want to follow up on the comments of our Chair of 
the full committee. I share the concern he has raised over 
Afghanistan and Pakistan and the magnitude of the mission, the 
doability of what we are trying to accomplish. In 2 years, we 
will be approaching the tenth year anniversary of military 
involvement in Afghanistan. We will have been there for a 
decade. And I think probably beyond any contemplation, we will 
be there in 2 years, so it will be a decade we have been in 
Afghanistan. And the questions the country has will intensify 
as they should. Where are we headed? Will we be in Afghanistan 
for a second decade? Do we have a military role here other than 
counterterrorism?
    And one of the flashpoints for me is we have provided a 
phenomenal amount of military support for Pakistan. They 
haven't changed the paradigm, as you have pointed out, and more 
pernicious there are elements within the Pakistani intelligence 
services that ISS director asked that they be working across 
purposes with us. I don't know how we can possibly be funding 
the Pakistani military if elements of the military or 
intelligence services are actually working against us and have 
the effect of killing our troops next door.
    So I wonder how can we structure or military support to 
Pakistan in a way that ensures they make the paradigm shift, 
which they have been telling us now for years they recognize, 
this is their work, Pakistani Prime Minister says, but have not 
acted yet like it is their war. So how do we structure our 
military support to force the paradigm shift and to ensure that 
the ISS not working at cross purposes.
    To follow up on our subcommittee Chair's question on the 
Palestinian authority, I am concerned, and I think your 
testimony leaves this open that you can have a situation where 
Hamas is permitted to appoint ministers to a unity government, 
provided those ministers agree to quartet principles even 
though Hamas does not. And it seems to me unworkable to have 
Hamas organizing terrorist attacks against Israel at the same 
time it has the power to appoint ministers to a collation 
government. And I wonder if your testimony is leaving open that 
possibility and how that could be workable, because I do not 
see how that could be workable.
    The final question I would like to ask is about Somalia, 
and to a lesser degree, perhaps Yemen, I am concerned 
particularly with Somalia that it may become the next 
Afghanistan, and that we have been adrift in terms of our 
policies in Somalia for 2 decades. And I don't want to see us 
forced to embark on an another decade-long military campaign in 
Somalia or Yemen. So what can we do now to prevent that from 
happening? Thank you, Madam Secretary.
    Secretary Clinton. You know, I think that each of your 
questions really poses a central challenge to our foreign 
policy and our security. We have had troops in Korea for 50 
years, we have had troops in Europe for 50 years. We have made 
long-term commitments that were in the beginning motivated by 
the threat of the Soviet Union and the potential of a nuclear 
war. And it was a very clear threat, you know, everybody could 
look on a map and you could see the Soviet Union and you could 
hear their leader say they were going to bury us, and you could 
see the crisis along the way with Khruschev banging his shoe, 
and President Kennedy dealing with the Cuban missile crisis and 
the rest of it.
    There was a framework in which we could really understand 
and deal with what was ironically a conventional threat, you 
know. And we deterred it and we basically contained it and we 
waited for the Soviet Union to collapse under its own weight. 
We face, in my view, a very serious threat, but it is of such a 
different nature that we are still trying to figure out the 
best way to contend with it. And so a lot of what we are 
talking about, your questions, my answers, our strategic 
reviews, you know, we are struggling with how on earth do we 
deal with people who are scattered around the world, 
concentrated in a few places, finding havens, using and 
perverting religion to motivate their followers, using modern 
tools like the Internet to wreak havoc. This is a very 
different challenge. And I think that we are still finding our 
way and so are the people we are working with who are trying to 
figure this out.
    Specifically Congressman, with respect to your question on 
Pakistan's military. The Pakistani military has actually used 
F-16s in the tribal areas. We have agreed to a mid-life upgrade 
because without that mid-life upgrade, they can not fly at 
night, which is a pretty good time to fly if you are going 
after insurgents. And so we are saying yes, we want to see a 
shift toward the enemies that we think are posing this threat 
to Pakistan, and by the way, posing a threat to us.
    We also have a history of kind of moving in and out of 
Pakistan. Let's remember here the people we are fighting today 
we funded 20 years ago. And we did it because we were locked in 
this struggle with the Soviet Union. They invaded Afghanistan 
and we did not want to see them control central Asia and we 
went to work. It was President Reagan in partnership with the 
Congress, lead by Democrats, who said, you know, it sounds like 
a pretty good idea, let's deal with the ISI and the Pakistani 
military, and let's go recruit these Mujahideen and let's get 
some to come from Saudi Arabia and other places, importing 
their Wahhabi brand of Islam so that we can go beat the Soviet 
Union. And guess what? They retreated, they lost billions of 
dollars and it led to the collapse of the Soviet Union.
    So there is a very strong argument, which is it wasn't a 
bad investment to end the Soviet Union, but let's be careful 
what we sow, because we will harvest.
    So we then left Pakistan. We said, okay, fine, you deal 
with the stingers that we left all over your country. You deal 
with the mines that are along the border. And by the way, we 
don't want to have anything to do with you, in fact we are 
sanctioning you. So we stopped dealing with the Pakistani 
military and with ISI and we now are making up for a lot of lot 
of time.
    So this is an incredibly difficult set of issues that are 
all interconnected. But we can point fingers at the Pakistanis 
which is--I did some yesterday quite frankly. And it is 
merited, because we are wondering why they don't just get out 
there and deal with these people. But the problems we face now 
to some extent we have to take responsibility for having 
contributed to.
    We are developing what we think to be very positive 
relationships with the civilian, the military and the ISI 
leadership. But I think any analyst will tell you that we can 
actually talk to and relate to the top leadership, but we have 
not had a continuing dialogue or training or contact with a lot 
of the middle leadership who have been influenced by the trends 
of increasing Islamitization that have swept the Muslim world.
    So I put that out there because I think we have to think of 
the context in which we are dealing here. And just quickly on 
Hamas, look, I understand the sensitivity about this. I believe 
that we have a proposed policy in the supplemental that is an 
important way of our being able to encourage a unity government 
that does accept the quartet principles. And I would just 
underscore what I said about northern Ireland. There were a lot 
of people who weren't enthusiastic about joining in peace talks 
and did so because they were pushed, but when they sat at the 
table they had to be part of an entity that said they were in 
favor of a peace. And not continuing the bombings in the UK and 
northern Ireland.
    And finally, I could not agree with you more on Somalia. We 
left Somalia for good reason. We said what are we doing in 
Somalia, you know? President Bush, the first President Bush had 
us go in on a humanitarian mission, we were never adequately 
resourced for that mission. We didn't have sufficient forces 
there. You all know what happened. We withdrew, we said fine. 
It has been basically a failed state and al Qaeda and their 
allies love failed states. They just love them because they can 
set up shop and nobody is there to do anything to them. So we 
are looking at not only the piracy challenge, but how do we 
support this new federal transitional government of Sheikh 
Sharif, who at least has said a lot of the right things about 
how he wants to deal with al-Shabab and the insurgency. But I 
totally respect these three questions because they illustrate 
the challenges that we are confronting.
    Mr. Schiff. Thank you.
    Mrs. Lowey. Thank you. Mr. Kirk.

                      Opening Remarks of Mr. Kirk

    Mr. Kirk. Thank you, Madam Secretary. I am the only member 
of this subcommittee I think that served in the State 
Department and the Defense Department and the World Bank, so it 
is with great admiration I have for your career team. And I 
have a note of bipartisanship. You made tough--two tough calls 
on foreign policy recently. One when China confronted the USNS 
Impeccable in international waters you could have surrendered 
that ocean. Instead the following week you put a U.S. destroyer 
next to her and I think sending the correct message.
    You, also in the face of Vice President Biden, saying that 
we should not authorize the Afghan surge, you said that we 
should, and the President ended up agreeing with you and 
against the Vice President. And I think that was exactly the 
right call in Afghanistan and applaud you and the President for 
making that decision. We here have your wartime supplemental 
up. I would say it is not an $83 billion bill. I understand we 
just got a request for $100 billion for the IMF, and so I hope 
that Secretary Geithner will appear before our subcommittee as 
well since we are going to double the cost of this bill given 
the letter that was just arrived from the Speaker's Office last 
week.
    One question I have for you is this committee has now 
approved $5.2 billion for Palestinian programs since 1992. That 
is more money than we provided to treat and cure cancer last 
year for the United States. It looks like much of that money 
was wasted and now we have got a request for $815 million more 
just in 1 year. Much of this money obviously borrowed from 
China to give to the Palestinians and I worry about the wisdom 
of that. There is a lot of authorization language that was 
attached and I don't know how we will work this out, whether 
the appropriators will write the authorization language or 
whether Chairman Berman will.
    But one key provision does appear that it would provide 
taxpayer subsidies to a coalition Hamas government. And you 
know that we have at least 26 American citizens that have been 
murdered by Hamas, including Tahilla Nathanson of New York, 3 
years old; Malka Roth of New York, Mordechai Reinitz of New 
York, Yitzhak Reinitz of New York, Leah Stern of New York, 
Goldie Taubenfeld of New York, Shmuel Taubenfeld of New York, 
also 3 years old, murdered by Hamas. The list is the people 
killed directly on Hamas' orders is clear.
    Now, the language I have it here for you to make it easy. 
This is the language provided that the chairman wrote, and I 
think this is very good language that prohibits assistance 
until Hamas has accepted and complies with the principals. This 
is actually an authorization of assistance to the government if 
the predecessor advises in writing or committees on 
appropriations that such government has accepted. Meaning that 
if we have 1 FATA president and 20 Hamas ministers, you would 
have the right to authorize taxpayer subsidies of this 
government.
    I am worried that I met with King Abdullah yesterday who 
said that Hamas ministers all directly follow the orders of 
Tehran. And so it is a worry that we would provide taxpayer 
subsidies to a government with Hamas ministers. That is sort of 
like saying we will provide taxpayer subsidies to a collusion 
government, it only has a few Nazis in it, but it is okay.
    And I worry that the law that this committee drafted by the 
chairman is exactly correct. And I don't think that this 
language should prevail. I would offer an amendment restoring 
the Chairman's language if it comes up this way, because I 
frankly think this dog will not hunt and it jeopardizes the 
entire bill. But I leave it up to you to comment.
    Secretary Clinton. Let me totally agree with the comments 
you made about Hamas and the terrorism and violence that they 
have wreaked, primarily on the Palestinian people, but then 
causing the deaths and injuries of Israelis and even Americans. 
I cannot stress strongly enough our Administration's rejection 
of dealing with them, or in any way, supporting them or those 
who espouse their rejectionist violent attitudes.
    But you know, Congressman, we are currently funding the 
Lebanese government which has Hezbollah in it. And we are doing 
that because we think on balance, it is in the interest of the 
United States to support a government that is working hard to 
prevent the further encouragement of extremism.
    Mr. Kirk. If I could interrupt. King Abdullah told us 
yesterday he is concerned that Hezbollah will coup that 
government in July.
    Secretary Clinton. We are all concerned about it, which is 
one of the reasons why it is important that the elections that 
are going to be held in Lebanon try to reinforce the leadership 
of the existing government, which has been standing in the way.
    Mr. Kirk. I would just urge that you are picking up some 
pretty strong bipartisan concern here, which means that an 
amendment is coming, I would urge to you beat a strategic 
retreat at this point. And use the Congress as the bad guy, 
saying look, I am not going to be able to get taxpayer subsidy 
for a Hamas government in which King Abdullah publicly is 
telling people on Capitol Hill that all these ministers 
directly receive orders from the MOIS Iranian intelligence 
service in Iran. And so you are just going to have to either go 
into coalition without our money, which isn't going to happen 
or--and use us as the bad guys.
    Secretary Clinton. Well, I appreciate that advice. I mean, 
obviously we see it in a slightly more complex set of 
circumstances. In fact, we think there is some divisions 
between the Hamas leadership in Gaza and in Damascus. There is 
no doubt that those in Damascus takes orders directly from 
Tehran, there is no doubt about that. But we do believe that 
there has been some efforts to try to get more authority and 
opportunity on the part of those in Gaza. But nevertheless 
Congressman, I take your point. I take it and I understand 
exactly the point you are making.
    Let me just----
    Mr. Kirk. Can I just end and applaud you again for the 
tough call in Afghanistan. You made the right call in 
Afghanistan. And as a Senator from New York and now as our 
Secretary of State, failure was not an option in this state. I 
really applaud you, because it was a hard one.
    Mrs. Lowey. Mr. Israel.
    Secretary Clinton. Let me just quickly add to the 
Congressman's point about the IMF. The EU and Germany as part 
of the EU will contribute to the IMF. I know that Chairman Obey 
had expressed some concern about what these countries that 
weren't doing stimulus would do vis-a-vis the IMF 
replenishment, and there is a commitment they will be part of 
the IMF replenishment.
    Mr. Kirk. Thank you.
    Mrs. Lowey. Mr. Israel.

                     Opening Remarks of Mr. Israel

    Mr. Israel. Thank you, Madam Chair. Madam Secretary, 
welcome, it is great to see you again. I have to apologize 
earlier, I had to step out to give a speech to a group of 
people who are interested in legislation that I proposed called 
Cash For Clunkers. And I explained to them that I couldn't stay 
very long because I had to rush back to the hearing where I 
said Senator Clinton was testifying. And someone in the 
audience said, no, she is Secretary Clinton. I said, I just 
can't let go.
    Secretary Clinton. Oh, Thank you.
    Mr. Israel. Madam Secretary, I am interested in having a 
conversation with you in the next several weeks about an idea 
that I have proposed called Solar Villages Initiative, and that 
is something I am anxious to engage you.
    Let me, in the next several minutes, focus on Afghanistan 
and the National Solidarity Program. Any history of Afghanistan 
proves that an attempt to impose order from top to bottom from 
external forces internally is doomed to failure. Alexander 
tried it, Genghis Khan tried it, the Brits tried it in the 
great game, the Soviets tried it, and now in many respects, I 
think we are trying it.
    There is one program that is homegrown, called the National 
Solidarity Program in Afghanistan that creates local solutions 
to local problems. It is managed by the Ministry of Rural 
Rehabilitation and Development, it is in 26,000 villages, 15\1/
2\ million Afghans have benefited by it, it has helped 500,000 
families, it has provided clean drinking water, built schools, 
led to the empowerment of women. In order to be eligible for an 
NSP project, you have to have a local governing council, and 
that local governing council must elect a woman as part of the 
women's empowerment initiative. And because it is entirely 
under local control and owned and operated by Afghans, the 
Taliban doesn't view it as an effective target. They would 
rather target ISAF projects than Afghan projects.
    The problem is that it appears that there is at least $140 
million shortfall in NSP for this year. There are 20,000 
village projects that, to coin a phrase, are shovel ready but 
can't get the funding. And it doesn't mention anything about 
the National Solidarity Program. So I am hoping that we can 
work together on a program that is one of the few examples of 
proven and demonstrable success, if not in the supplemental, 
then as we go forward. And I would appreciate your perspective 
on that.
    Secretary Clinton. Congressman, I agree with you 
completely. It is my information that in this supplemental, we 
are requesting 85 million in additional funding for the Afghan 
reconstruction trust fund, which, as you may know, is the 
vehicle through which we fund the National Solidarity Program. 
I think that we do agree with you that this has been very 
successful, it has gotten in to villages, it is actually 
producing results on the ground. And we don't fund it directly, 
because we don't want it to be seen as a tool of our policy 
because it is not, it is a policy of the Afghan government. So 
there is money going into the trust fund for replenishment of 
the solidarity plan. Is that right everybody behind me? Okay.
    Mr. Israel. Thank you.
    Secretary Clinton. That was so easy, Congressman, that was 
easy.
    Mrs. Lowey. And since your green light is still on, I just 
want to agree with you, in every meeting we have had, there is 
a focus on the National Solidarity Program and it is hard to 
even believe that it is in 26,000 villages, but I have heard 
continuous corroboration on that, and I really appreciate your 
bringing it up.
    Mr. Israel. And since my green light is still on.
    Mrs. Lowey. Oh.
    Mr. Israel. I would just take the opportunity, I am 
heartened about the 85 million. I will need to focus a little 
bit on that. The Afghan finance minister is due in and we are 
going to have a conversation about that soon. But still we need 
to keep in mind it is--at least $140 million shortfall this 
year, at least 140 million. If you ask some they say quite 
higher, and I am hopeful that that long-term deficiency can be 
addressed as we go forward.
    Mrs. Lowey. And since there is universal agreement we can 
work together----
    Mr. Kirk. Yes.
    Mrs. Lowey [continuing]. With the Secretary to see if we 
can find some more funding for that very successful program.
    Mr. Kirk. Will the gentleman yield? Especially the 
shortfall where U.S. troops are deployed. I think we can come 
to the idea that fully funding NSP in U.S. AORs would have huge 
support from this subcommittee.
    Secretary Clinton. What we are doing in total is providing 
145 million in fiscal year 2008, 2009 funds for the NSP. So I 
don't know if that takes into account the shortfall or not. We 
will find out----
    Mr. Israel. We will figure it out.
    Secretary Clinton [continuing]. Specifically for you and 
get back to you Congressman.
    Mr. Israel. Thank you, Madam Secretary.
    Mrs. Lowey. Thank you. Mr. Crenshaw.

                    Opening Remarks of Mr. Crenshaw

    Mr. Crenshaw. Thank you, Madam Chair. And thank you for 
being here today. You know, if anybody is listening to what 
goes on here, I think they would come to the conclusion that 
your plate is pretty full. We have touched on just about every 
hot spot in the world and so we appreciate the job that you are 
doing and the difficulties that you face. Since we talk about 
so many different things I want to just bring up U.S./Russia 
relations, because I think they are lurking in the background, 
particularly in terms of the Middle East. I think a week or two 
ago I read where the Vice President said we ought to punch the 
reset button with Russia. And it probably isn't that easy. We 
still have some underlying differences, but I would guess that 
the reason he said that is because in the last couple of 
decades the U.S.-Russian relations are pretty well with the war 
in Georgia reached a new low ebb and maybe the only way to go 
is up in that sense. But with Russia all the growth that took 
place with oil revenues and then the difficulties we faced, it 
had new parameters and yet now things have changed again.
    So maybe to start with, what do you think about that in 
terms of, can you really punch or a reset button, their 
relationship with Iran, things like that? Where do you think we 
are in that sense?
    Secretary Clinton. That is a great question. We have had a 
series of quite constructive meetings. I have met with their 
Foreign Minister Sergey Lavrov and we teed up some decisions 
for our President's meeting in London. And the meeting between 
President Obama and President Medvedev were quite positive. I 
think there are areas where we can cooperate and rebuild a 
constructive relationship. We are going to engage in 
negotiations leading up to new start agreement by the end of 
this year because the current one expires. We are cooperating 
on North Korea, the North Korea as well as the Chinese 
supported a very strong statement, making clear that North 
Korea contravened the Security Council's resolution about their 
missile launch.
    We are also beginning to cooperate in the Arctic Council 
about the Arctic, which I think I will highlight for you. I 
think it going to be a big issue in the years to come as we 
have more and more navigable water and Russia is the dominant 
presence in the Arctic.
    We are really looking for many areas where we can narrow 
the disagreements we have without sacrificing our principles. 
We are continuing our work with Georgia and Ukraine on an 
accession plan to NATO. We continue to press the Russians not 
to support Iran, which we think poses a greater threat to them 
than it does to us personally. So there is lot that we are 
working on and we have actually put together a work plan, an 
organized approach to going through all of the these issues 
between us. Secretary Lavrov will be here in Washington in 
early May.
    Having said that, we have to do a better job of 
understanding how we can interact with the Russians so that 
they don't engage in aggressive and threatening behavior to 
their neighbors. Their domination of energy in Europe is 
extremely intimidating. And I have appointed a special envoy 
for European, EuroAsian energy, because we have to get more 
pipeline roots and we have to help support countries to figure 
out how they can get our sources of energy besides depending 
upon Russia. So there is a lot that we are looking at and I 
think your question is really important because while we are 
dealing with all these hot spots we have long-term challenges.
    We have just decided in NATO to restart the NATO Russia 
council, which I supported. I thought that was the right 
decision. But it is complicated. You look at a map, there is 
such a huge land mass. They border all of these difficult areas 
that we are dealing with and we want to see whether we can 
partner with them to try to manage and solve some problems.
    Mr. Crenshaw. I can't see the light, if it is not on I just 
want to ask you about the encounter with the Czech Republic and 
Poland, that is a source of tension, can you comment on where 
we are?
    Secretary Clinton. Well, the proposed missile defense 
system in Poland and the Czech Republic is designed to address 
a threat from Iran. It is not designed to overwhelm the Russian 
arsenal. Even after a new start agreement, you are going to 
have a lot of nuclear weapons left. It never was intended to 
deter the Soviet Union for the Russians, we obviously don't 
think that that is in the cards at all. But that is what we 
have been telling the Russians over and over again, this is 
about Iran. We think Iran is a threat to Europe and to you.
    We have also offered to the Russians to do research 
together on missile defense and to share information to try to 
provide an umbrella of security for Europe and Russia against a 
system that Iran might acquire, which is why we think it is 
important they don't supply Iran with a defense system to guard 
against incoming missiles. So we have made this clear. I think 
the historic sensitivity of the Russians to their own borders, 
their effort to have a sphere of influence which we totally 
reject makes it a hard case, but I think that they are going to 
understand what we are trying to say and we will see what comes 
of it.
    Mr. Crenshaw. Thank you very much. Mr. Rothman.
    Mrs. Lowey. Thank you, Mr. Chandler is back.

                    Opening Remarks of Mr. Chandler

    Mr. Chandler. Madam Chair, thank you.
    Madam Secretary, first of all thank you for all of your 
hard work throughout your long public career. I think you are 
going to make a terrific Secretary of State and I am awfully 
glad you are there.
    I have several things that I am interested in, most or a 
lot of things about Pakistan and the Middle East I know have 
already been asked, but I would like to get your ideas about 
the support--continued support for the ongoing counternarcotics 
effort in Afghanistan. You know, there are some observers who 
are concerned that this program to date has only managed to 
alienate Afghan villagers from their government and from our 
forces. They argue that perhaps counternarcotic programs should 
be put off until the war is won. I would like to hear your 
views on that.
    I would also be curious to hear what you think about what I 
am afraid is a developing very difficult situation in Sudan 
between the north and the south in particular. We hear an 
enormous amount about Darfur. Darfur is extremely important to 
everybody, but Darfur may actually, if you can believe it, be a 
minor problem in comparison to where Sudan may be headed in the 
future. I am concerned about the volatility of the whole 
region, the viability of Sudan as a state. Can it maintain 
itself as a complete entity or will it break up and can that be 
tolerated by states in the region, the volatility of that 
situation?
    And also if you have time your views on the future of NATO 
generally. Is NATO a viable organization and what can it 
appropriately be used for in the future. Thank you.
    Secretary Clinton. Thank you very much, Congressman. To 
your point on counternarcotics in Afghanistan, we are certainly 
continuing with our counternarcotics efforts, but we are intent 
upon increasing the funding and support for alternative 
development programs.
    I was surprised when I learned some years ago that 
Afghanistan was called the garden of central Asia. It was 
filled with fruit trees and orchards and I have seen pictures 
from 40, 50 years ago and it is just unrecognizable. Anybody 
who has flown over Afghanistan now and seen the erosion and the 
dust and the lack of arable land, it was a surprising contrast.
    There are so many ways that we could support agriculture in 
Afghanistan and we intend upon doing that. That is one of our 
highest priorities. At the same time we understand the threat 
that counternarcotics or narcotic trafficking poses. It is not 
the main source of funding for the Taliban and al Qaeda but it 
is a source of funding. So we are going to emphasize 
agricultural and we are going to emphasize trying to expand 
programs to bring back the trees and the soil.
    When I was a Senator from New York I had a program between 
Cornell and one of our State universities to provide seedlings 
to Afghanistan. It was done on a small scale. I could never get 
the prior administration to really focus on it. And of course 
it does pose a conflict, because if you are going to aerial 
spray poppies, you will also kill fruit trees so it is 
complicated. So I think creating this alternative agricultural 
approach and then creating markets I will just end with this on 
this point because it is fascinating to me, you know 
pomegranates have now been proven, pomegranate juice to lower 
cholesterol. Afghanistan used to be and still is one of the 
principal growers of the pomegranates. And I think there is a 
lot we can do here, we need to be smart about.
    I also agree with you about your caution concerning the 
north, south conflict in Sudan. We are very focused on Darfur 
for obvious humanitarian reasons and the continuing harassment 
by the Khartoum government and their militias, but we have got 
to keep our eye on the north, south. The comprehensive peace 
agreement that was reached, if that blows up again it brings in 
the other neighboring countries. So we have a special envoy for 
the Sudan, a retired two-star Air Force general and part of his 
mission is not just to focus on Darfur but to focus on the 
Sudanese challenge overall.
    Mr. Chandler. NATO.
    Secretary Clinton. I am over my time. I took a gentle hint 
when they turned the time----
    Mr. Crenshaw. I think that was for me.
    Secretary Clinton [continuing]. Clock my way so I figured I 
was supposed to follow it.
    NATO obviously we have to focus on the future for NATO. We 
are in the midst of a strategic planning effort. I think NATO 
still has a very important purpose and I am a strong supporter 
of NATO but we have to rethink how we structure it, reform its 
management and its administrative functioning and figure out 
what its missions are going to be.
    Mr. Chandler. Thank you.
    Mrs. Lowey. Mr. Rehberg.

                     Opening Remarks of Mr. Rehberg

    Mr. Rehberg. Thank you, Madam Chair. And welcome, I can't 
think of anybody more highly qualified for this position than 
you. And thank you for taking the job having been First Lady 
and a Senator and now a cabinet official. By the end of this 4 
years, you might qualify to run for the House of 
Representatives.
    Secretary Clinton. John Quincy Adams did, remember.
    Mr. Rehberg. Just in a different district. Do take on Nita, 
we like her as well.
    I have a parochial issue, I will not waste time, I will 
like for the record if I could get unanimous consent to ask to 
submit some questions specifically about the directorate of 
defense trade controls and it is a defense issue where 
exporters of defense items are being charged a fee because they 
wanted to be 75 percent self funded and you have kind of 
wrapped up some of my small gun barrel exporters in Montana, it 
doesn't make any sense to have them up against defense 
contractors when it comes to a fee. So I have some specific 
questions that I am not getting answers from the State 
Department, and I would like to submit those for the record if 
I might please.
    Mrs. Lowey. I would be happy to enter it into the record.
    Mr. Rehberg. And then if I could ask two questions 
specifically. I want to get back to our role as appropriators 
and that is the Merida Initiative and the 400--and I believe it 
is 65 million that we appropriated in July 2008. Some of it is 
very slow in getting out, we had Assistant Secretary Johnson in 
talking about the various dates, but unfortunately some of 
those dates are being missed. I would like you to specifically 
speak about that. And it plays into Montana surprisingly 
because we have a huge meth problem. And Mr. Sebol out there 
has a Montana meth project sweeping the country. He is helping 
to finance a public private partnership, but a lot of that is 
coming from Mexico and other places. I would like you to speak 
to the additional money you are requesting in relation to how 
it is not going out as timely as it could.
    And my final question is the Millennium Challenge. I happen 
to be a large supporter. I didn't see anything specifically in 
your testimony about the Millennium Challenge. You do talk 
about 448 million for assistance to developing countries is 
that Millennium which wouldn't go very far based upon the 
financial obligations? I just want to hear from you a little 
bit about your philosophy and the direction you kind of intend 
to take under the Obama administration as far as Millennium, 
and not doing what we did in Somalia walking away, Pakistan and 
some of the other countries, because it plays right into it, 
promises made and then promises not kept.
    Secretary Clinton. Thank you very much, Congressman. And I 
do understand your concern about the DDTC program, and we 
described the current policy in a letter that we sent back to 
you on April 17, but I will also look into this and have our 
staff follow up with you. Obviously the goal is not to put 
anybody, any small business out of business, I mean that is not 
the goal here. It is to try to deal with the cost of running 
this program, which is obviously a facilitating program for 
American business.
    On the Merida Initiative, I share your frustration in how 
slow it has been getting the money out. Now, some of that 
reason I am sure David Johnson talked to you about this is we 
have to be sure we have in place the safeguard so the money 
goes where we intend it to go. But that doesn't explain it, it 
is just too slow. When I was in Mexico, that is what I heard 
from both the President and the foreign Secretary saying, look, 
you say this is urgent and a big deal, but we are not getting 
the help we need even after the money gets appropriated. And I 
would like to work with this committee, and in general, 
Chairman Obey, the entire Appropriations Committee, but 
obviously I have a parochial interest here in my appropriating 
partners here. We have to figure out why this takes so long.
    Now if we don't want to do it let's just say we don't want 
to do it, but if it is wending its way through the bureaucracy 
and it needs 900 sign-offs before a dollar is spent, we are 
just wasting time and losing ground. And because we aren't as 
agile as we need to be in a lot of these circumstances, I am 
seeing other countries, primarily China fill that gap.
    An article today about Jamaica right here in our own 
hemisphere facing a financial shortfall because of the G-20, it 
goes to Congresswoman Granger's question, came to the United 
States, we said well, we don't have the money and we are not 
prepared to be able to help you. They want to China and they 
just signed a memorandum of understanding with China giving 
them what would be not very much money, I don't remember 
exactly, maybe 150 million or something. And now they have a 
government to government relationship with China.
    So Mexico needs our help, we should deliver the help. In 
the supplemental we are providing funding for 3 Black Hawk 
helicopters for their public security secretariat to provide 
them urgently needed air transport. I went down and visited 
their new police academy, they are trying hard to end the 
corruption, build morale. They told me they asked for the 
helicopters because they had budgeted to use the money on some 
other thing they needed in the fight against the drug cartels, 
and just haven't gotten it and it has taken years.
    So let's try to get to the bottom of this, because you all 
do your work and you get it appropriated. I go around talking 
about what we need to do, and it is kind of hollow. And we are 
losing ground and we are seeing particularly China come in 
right behind us because countries get tired of talking to our 
bureaucracy and decide they are going to cut deals with 
somebody else.
    Millennium Challenge grants are a very important part of 
our foreign policy. It is a new approach and it is an approach 
that we think deserves support. We have to make sure that just 
like anything else, it is part of our overall review of foreign 
aid, how it is working and how it can be better. But I think it 
has had a positive effect in a number of settings where it has 
encouraged people to make changes that we wanted them to make. 
So we are going to be looking closely at how to make it even 
better.
    Mrs. Lowey. Before I turn to Mr. Rothman, I just want to 
thank you for your comments. This committee was in Mexico not 
too long ago. And we were so impressed with the President and 
the urgency of our assistance was repeated everywhere and yet 
it is just so slow. So we look forward to working with you and 
addressing that issue. Thank you.
    Mr. Rothman.

                     Opening Remarks of Mr. Rothman

    Mr. Rothman. Thank you Madam Chair and Madam Secretary. It 
is a great delight and honor to have you before us and to 
reiterate what my colleagues have said, what a great privilege 
and moment in U.S. American history to have such a qualified, 
intelligent, experienced person such as yourself with such an 
extraordinary grasp of these issues as our Secretary of State 
and we are delighted you took the job. We are very proud to 
have you in that position.
    We just came back from a trip to the Middle East with our 
chairwoman Mrs. Lowey and our ranking member, Ms. Granger, and 
I think it is fair to say as you indicated in your remarks that 
there appears to be a window of opportunity now for an 
agreement, a peace agreement between Israel and her neighbors 
that perhaps did not exist in the last several years. That 
opportunity is present and we want to make the most of it.
    The worst actors in the region all have one thing in 
common, they are connected with Iran, their Iranian proxies, 
whether it be Hezbollah or Hamas. And while we would very much 
enjoy a new relationship or a new beginning with the Iranian 
people given their present regime and its offensive policies 
and disruptive activity in the region, that is not going to 
happen soon.
    Here is my question: How do we balance the need to begin 
the engagement in terms of negotiations and discussions with 
Iran that I think are an important departure from the past and 
necessary to see if there is a chance to peacefully resolve our 
issues of conflict with Iran? How do we balance that need to 
want to talk with the need for greater sanctions? What is the 
order of priority? Do we proceed with sanctions before we 
proceed with the discussions? How are you going to handle or 
juggle that, number 1. I have to get any questions in quickly.
    The other is with regards to the funds that you requested 
for Gaza. I know of your commitment that none of this money 
according to U.S. law it cannot, but that your commitment that 
none of the money will go to Hamas, or any of the terrorist 
groups, what kind of new mechanisms do you plan to--do you and 
your magnificent staff intend to put into place to make certain 
that no Hamas member gets any of that humanitarian aid that we 
want to provide to the people of Gaza.
    And finally, Egypt, the border between Egypt and Gaza, we 
had a wonderful meeting with the authorities in Egypt and I 
believe not only Egypt, but most of the Arab world in the gulf, 
Jordan, Egypt and other places or the Saudis are committed to a 
new day with regards to living together in peace with Israel, 
resolving the Israeli Palestinian conflict. The number one 
sticking point, Iran. They are making trouble, they are 
destabilizing the region, and their efforts to take over the 
region are very, very serious. So how are you going to balance 
the discussions and sanctions, make sure Hamas doesn't get any 
piece of that humanitarian aid that we are giving in Gaza and 
how are we doing for helping the Egyptians secure that border 
with Gaza to prevent the rearming of Hamas with long range 
rockets?
    Secretary Clinton. Well, these are such important questions 
Congressman. We have sanctions and we continue those sanctions 
on Iran. We don't yet have any real engagement so we don't know 
how to gauge the seriousness of any effort the Iranians may 
agree to be a part of. The sanctions are a tool both for us to 
leverage pressure on the Iranian regime to change behaviors 
that we obviously consider serious threats. And so we are 
talking with our partners about additional sanctions as part of 
incentives, disincentives kind of approach to Iran. It is a 
delicate balancing act. It is hard to predict because so much 
of it depends in any negotiation whether you are getting 
something or not. You know one of the proposals that has been 
put forth by a number of people is the so-called freeze for 
freeze. We would freeze our sanctions and they would freeze 
their nuclear----
    Mr. Rothman. They have been known, the Iranians, to slow 
walk the negotiations. They did that with the EU, how do we 
prevent----
    Secretary Clinton. We know that, we know that. Right now we 
are testing their willingness to have any kind of engagement, 
there is no engagement. So we have to plan all of this, think 
it through. Ambassador Dennis Ross, who is handling our 
southwest Asia policy including Iran is, I am sure you know 
him, he is extremely thoughtful and smart about how to sequence 
this. So there is no easy answer to your question right now. We 
know what our objectives are and we know that if we are not 
successful in moving toward those objectives that we have to 
impose even tougher sanctions, so it is a back-and-forth kind 
of assessment.
    I would reiterate what we intend to do about any aid that 
went to the Palestinian authority assuming that it complied 
with the quartet principles. By saying that we intend to hold 
any entity that receives American aid to a very high standard 
we have made it clear to UNRWA, the United Nations Relief and 
Work Agency that we intend to carefully track any aid that they 
receive. They have taken additional steps, partly at our urging 
to make their process more transparent, consistent with both 
United Nations commitments and U.S. legislation.
    They conduct background checks on employees, they share 
staff lists with us and with Israel. They prohibit staff 
participation in political activities. They launch 
investigations upon receiving information from Israel, us or 
anyone else about any staff member engaging in inappropriate or 
illicit activities. They are actually investigating staff 
members right now who were elected in internal elections within 
Gaza. And we have pressed them very hard because they have to 
earn our confidence in this.
    We are also vetting any NGOs. We have been very clear that 
any group that is a vehicle for us to give money for 
humanitarian relief in Gaza will be held to the same standards. 
We have a set of requirements on the Palestinian authority that 
they have to pay certain bills like utility companies and 
others because we want the cash transfers to be trackable. So 
we are putting in place a lot of safeguards.
    In addition, and finally on Egypt, Egypt has been very 
cooperative and helpful. They are doing more on the tunnels. I 
think that the plot that they uncovered involved Hezbollah was 
a real wake up call in some ways. And they understand the 
increasing alliance between Hezbollah and Hamas and their 
connection to groups within Egypt that are aiming to 
destabilize the government. So I am seeing a greater level of 
understanding and cooperation Congressman.
    Mr. Rothman. Thank you, Madam Secretary.
    Mrs. Lowey. Thank you.
    Ms. Lee.

                       Opening Remarks of Ms. Lee

    Ms. Lee. Thank you. Madam Secretary, first let me just say 
you truly have the weight of world on your shoulders, but it is 
not weighing you down one bit. You are doing a wonderful job. 
And I am convinced, I really believe the world is going to be a 
safer place because of your leadership so thank you very much.
    Regarding the supplemental, I have quite naturally a 
serious concern that the military request is 75 billion and the 
diplomacy and diplomatic and development request is about 7 
billion. And many believe that there is no military solution in 
Afghanistan, but the supplemental in terms of its balance 
certainly doesn't reflect that reality. I was concerned when 
Congress authorized the use of force in Afghanistan in 2001 
that we were given a blank check that provided for an open-
ended military presence and the use of force in Afghanistan. 
And I couldn't support that and I still see this happening. I 
am not sure where this all ends. Having said that, let me ask 
you a couple questions, just first with regard to the status of 
forces agreement. I know when you were in the Senate and 
Senator Obama was in the Senate, you offered status of forces 
agreement. I have a bill here very similar. What is the status 
of this now, now that the Administration is looking at this, I 
believe under the previous status of forces agreement, does 
that still hold?
    Secretary Clinton. Are you referencing Iraq or Afghanistan?
    Ms. Lee. Iraq.
    Secretary Clinton. Iraq?
    Ms. Lee. Iraq. And then do you intend to look at one as it 
relates to Afghanistan, or have you really thought about that?
    Secretary Clinton. Congresswoman, the Status of Forces 
Agreement in Iraq has been agreed to by the Obama 
Administration. There is a definite deadline, as you know, for 
the removal of combat troops. That is under way. There is not a 
comparable agreement vis-a-vis Afghanistan.
    Ms. Lee. And you are not contemplating one?
    Secretary Clinton. That has not been part of any 
discussion.
    Ms. Lee. Okay.
    With regard to the global HIV/AIDS efforts, the Global 
Fund, as you know, and some of the numbers are really 
significant in terms of the results: We put over 2 million 
people on AIDS treatment; 5 million have been treated for TB; 
and 70 million bed nets distributed to prevent malaria. And I 
believe this year the anticipated contribution is about $900 
million. But I think it would have to be significantly 
increased if we expect to fully fund the anticipated grants and 
really meet the dramatic increase in anticipated demand.
    So I am not sure about the level of commitment that we 
can--or requests from the administration on this, and should it 
be or will you see a dramatic need to increase it for 2010?
    Finally, let me just mention this issue that, Congresswoman 
Lowey, I believe we were in Morocco, Ghana, Liberia, Kenya, and 
Uganda last year. During this trip, we went from location to 
location, and I pointed out then, and I am still concerned 
about this, the lack of minority personnel and minority 
contractors providing contractual work, services as it relates 
to USAID. And so I am still looking for some answers.
    Again, this goes back prior to this administration as to 
the policies with regard to the utilization of minority- and 
women-owned businesses. In my prior life, I actually was a 
business person, and I tried over and over and over again, 
probably for 11 years, to do business with the State 
Department, never could break through USAID as an AID 
contractor. So I am wondering, have you had a chance to look at 
that and diversity in the workforce and all of the issues 
around diversity?
    And again, thank you so much for your leadership.
    Secretary Clinton. Well, you are welcome. Let me just say 
on PEPFAR and the Global AIDS, Malaria, and TB Fund, our budget 
will come up, and I look forward to discussing the reasons 
behind our request. We believe that what we are asking for will 
be adequate given what is in the pipeline. And it kind of goes 
back to this problem of getting the money out and getting it 
where it needs.
    I mean, we just have to streamline this. We are really not 
doing ourselves or our taxpayers a service when we spend all 
this time, you know, working on our proposals to you, and then 
you spend so much time reviewing them and coming up with what 
the congressional response is, and then it just sits there. So 
we have got to kind of get on top of this.
    I take our commitment to diversity very, very seriously. 
And I will continue to emphasize the importance of us 
reflecting the country that we proudly represent. We have made 
some progress over the last several years. There is a wonderful 
program that is named for my friend Charlie Rangel that places 
young people in internships in the State Department.
    But, you know, we still have work to do. The whole 
contracting issue about USAID is one that we have got to 
explore together. I mean, it is estimated that $0.50 on the 
dollar never gets even into the program because it goes into 
contracting-related costs. And some have said, and I repeated 
it at my confirmation hearing, USAID has been turned into a 
contracting agency. So I would like to bring more of the 
services and the expertise inside USAID.
    But in any event, I will certainly assure you of my and the 
Department's, and of USAID's commitment to diversity in hiring 
and contracting find the very best people we can.
    Ms. Lee. Thank you.
    Mrs. Lowey. Thank you.
    Madam Secretary, as you can see, there is strong bipartisan 
support for your leadership. You have a huge plate. There are 
enormous challenges. But I know this committee is honored and 
privileged to have the opportunity to work with you to address 
these challenges.
    Ms. Lee mentioned HIV/AIDS. If Earl Blumenauer were here, 
he would be talking about water. If someone else were here, 
they would be talking about micro enterprise. So we know the 
tremendous challenges, and we know that you are addressing 
them.
    I just want to close with one issue which I addressed in my 
opening statement, and that is the Pakistan counterinsurgency 
fund. I will be having conversations with our distinguished 
Committee Chairman, Mr. Obey, and Mr. Murtha. I think this 
decision to place those funds within the Department of Defense 
is a tremendous error. I think it undermines your authority. 
You are the person who has the authority to carry out our 
foreign policy agenda. And I do not say this lightly. We have 
been talking about this as soon as it was brought to our 
attention.
    So I urge you, because of the position you have as 
Secretary of State, to continue to work with us to make it 
clear that it is you and the Department of State that has the 
authority to set policy. And we will be keeping in touch on 
this issue. And I look forward to a positive resolution.
    So let me again say thank you. I am glad that we have been 
able to close in a timely manner, because there is a 
commemoration of the Holocaust which is beginning as we speak.
    And again, I look forward to working closely with you. 
Thank you very much.
    Secretary Clinton. Thank you.
    Mrs. Lowey. This concludes today's hearing on the fiscal 
year 2009 supplemental appropriations request. The Subcommittee 
on State, Foreign Operations, and Related Programs stands 
adjourned.
    I just did not say, Madam Secretary, if members have 
additional questions, including myself, they will submit them 
for the record. Thank you so much.

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                                           Wednesday, May 20, 2009.

               U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT

                                WITNESS

ALONZO L. FULGHAM, ACTING ADMINISTRATOR, U.S. AGENCY FOR INTERNATIONAL 
    DEVELOPMENT

                 Opening Statement of Chairwoman Lowey

    Mrs. Lowey. The Subcommittee on State and Foreign 
Operations and Related Programs will come to order. Today we 
are delighted to welcome Alonzo Fulgham as at the Administrator 
of the U.S. Agency for International Development. Thank you for 
joining us today. While we really do appreciate your efforts to 
move the agency forward during this transition, we are 
anxiously awaiting, as I am sure you are, the appointment of a 
USAID administrator who can work closely with the Secretary of 
State and articulate the importance of long-term development 
within the administration.
    As I noted last week, the President's fiscal year 2010 
budget calls for a dramatic increase in USAID operating 
expenses and provides for a significant boost in humanitarian 
and development assistance. It totals $1.438 billion for 
operating expenses, a $384 million increase over the fiscal 
year 2009 level, including the funding requested in the fiscal 
year 2009 supplemental.
    This request would support an additional 350 foreign 
service officers to keep us on track to double the USAID 
foreign service workforce by 2012. In addition, it includes 
$245 million for additional spaces in embassies and missions 
around the world to accommodate increased personnel.
    I hope that you can provide insight into how USAID is 
ensuring that the new hires have technical skills that reflect 
the program priorities, including climate change, agriculture, 
gender sensitivity and basic education, what training programs 
are being put in place to ensure that the new foreign service 
officers are oriented toward local engagement with 
nongovernmental organizations and developing country 
governments with a focus on building local capacity and 
providing smaller grants with more targeted goals and outcomes.
    Finally, how is USAID coordinating its projected growth 
with the State Department, and do you have a joint operations 
plan that takes into account security, space needs of the new 
employees requested in both the USAID and state budgets. Among 
significant increases in critical development areas, I was 
pleased that $1 billion was requested for basic education. that 
is pretty amazing. As you know, providing an education opens 
doors for young men and women and benefits the individual, 
their community and the world.
    I look forward to working with the administration to ensure 
that U.S. government resources support quality education and 
that USAID supported schools serve as an anchor of stability 
and support in communities. Just last month I spoke with Queen 
Ranya of Jordan about the need to establish a new, multilateral 
global fund for education.
    During development of the 2010 budget request, did the 
administration consider the merits of such a fund? Can you 
provide me insight into those discussions? The $1.2 billion 
request for climate change initiatives includes $579 million 
for adaptations and clean energy programs, a $309 million 
increase over the fiscal year 2009 level. Mr. Israel's ears 
perked up with that.
    Clearly, the administration has structured its request to 
address the climate change crisis the world is facing, but 
USAID does not currently have extensive expertise in this area 
and the current staffing plan calls for only 21 new officers in 
the field. How, then, does USAID intend to provide proper 
oversight management of this new initiative? How will USAID 
programs be coordinated with efforts made through multilateral 
funds and with the State Department? Who is taking the lead on 
the post-Kyoto negotiations?
    As you know, I believe that successful programs have 
maximum impact when efforts are well-coordinated. The budget 
includes $1.3 billion for food security and agriculture. How 
will USAID coordinate with other efforts funded by private 
foundations, such as the Alliance for a Green Revolution and a 
multilateral organization such as the International Fund for 
Agriculture and the World Food Program? How will USAID programs 
build upon the agriculture investments made by the Millennium 
Challenge Corporation?
    I am also concerned that gender considerations must be 
factored into all aspects of development assistance, especially 
agriculture programs where women often make up a majority of 
laborers but receive little outside technical assistance. What 
steps are you taking to ensure that gender is taken into 
consideration during every phase of USAID's assistance 
programs? I noted last week my concern that health funding is 
not keeping pace with need.
    While I understand the President has announced his 
intention to provide $63 billion over six years, I am 
disappointed in the nominal increase for core maternal and 
child health, as well as family planning. I am looking forward 
to our discussion today and to working with you. Before we move 
to your testimony, let me turn to Ms. Granger, the Ranking 
Member, for her opening statement.

              Opening Statement of Ranking Member Granger

    Ms. Granger. Thank you, Madam Chair. I am glad to join you 
as we continue the hearings on the administration's fiscal year 
2010 budget request. I am pleased that Mr. Alonzo Fulgham is 
here and understand just recently that you had a common career 
interest in my hometown of Ft. Worth, Texas, and was glad to 
meet and talk to you about that. The administration's request 
for the state and foreign operations bill totals $52 billion, 
as you said, a large increase, 42 percent increase, over the 
fiscal year 2009 regular appropriations excluding emergency 
appropriation.
    Such a large increase in foreign assistance comes at a time 
when USAID is still working to hire the staff it needs to 
manage its existing workload. This Subcommittee appropriated 
the resources USAID is using toward this hiring effort begun by 
the previous administration. I look forward to an update on the 
progress made thus far to hire, to train and to deploy these 
new officers overseas. The administration's budget has been 
called a smart power budget. I have long supported the concept 
of smart power as a national security strategy, and I 
understand that USAID will play a key role. Thank you for being 
here with us today. I look forward to your testimony.
    Mrs. Lowey. Acting Administrator Fulgham, please proceed. 
Your entire statement will be placed in the record.

                     Opening Remarks of Mr. Fulgham

    Mr. Fulgham. Madam Chair, Ranking Member Granger, and 
Members of the Subcommittee, thank you for this opportunity to 
appear before the Committee today in support of the President's 
Fiscal Year (FY) 2010 Foreign Operations Budget Request and to 
discuss the important role the United States Agency for 
International Development (USAID) will play in advancing our 
nation's foreign assistance priorities.
    I would like to begin my testimony by thanking you for the 
help and support you have given USAID during the past few 
years. Your support has been critical to our Agency's efforts 
to begin to rebuild and regain development leadership in the 
global arena.
    I am a career public servant, and a senior foreign service 
officer with over 20 years of experience serving my country at 
home and abroad. I am honored and humbled to testify in support 
of the President's fiscal year 2010 foreign operations budget 
request. I look forward to discussing the important role the 
United States Agency for International Development will play in 
undertaking critical missions and sustainable development 
programs in support of our nation's foreign policy and national 
security interests.
    As the acting Administrator, I proudly represent more than 
7,000 USAID employees who serve the Agency with honor, often 
under very trying circumstances, throughout the developing 
world. I also want to take this opportunity to recognize 
Secretary Clinton and her leadership team for their engagement 
with and dedication to development issues and USAID.
    Since her second day on the job, when she came to USAID 
headquarters to address our staff, Secretary Clinton had made 
clear her commitment to see development properly established as 
the third pillar of U.S. foreign policy alongside diplomacy and 
defense, a commitment that is reflected in the budget request 
before you. The President's fiscal year 2010 budget request for 
USAID-managed accounts equals $36.7 billion, including food 
aid.
    This funding will put the U.S. government on the path to 
double U.S. foreign assistance by 2015 and to double the number 
of USAID foreign service officers over the next several years. 
Thanks to the critical support that we have received from the 
Congress, and from your Subcommittee in particular, USAID has 
already begun the process of rebuilding and regaining 
development leadership in the global arena.
    With fiscal year 2009 resources, USAID will add an 
additional 300 foreign service officers to its total workforce 
under the Development Leadership Initiative. In addition, the 
President's fiscal year 2010 request also includes funding for 
350 new foreign service officers. As members of this committee 
well understand, diversity is central to the strength of any 
organization and is a high priority for USAID.
    I am proud to report that minorities represent 32 percent 
of the first five classes of our DLI.
    Madam Chair, let me assure you that you will begin to see 
positive change at USAID. We will improve our business 
processes--performing more functions in-house and using 
contracted technical services more appropriately. Overseas, 
USAID officers will spend more time with their projects in 
schools, and health clinics and small businesses in poor 
communities.
    A centerpiece of the fiscal year 2010 budget request is a 
significant increase in funding for civilian assistance 
programs in Afghanistan and Pakistan. USAID is staffing up to 
serve these critical missions and participating fully in the 
whole of government approach to achieving positive results.
    It is USAID's work to address the many complex threats 
confronting the world we live in: global poverty, food 
insecurity, pandemic disease, climate change, post-conflict 
instability and both man-made and natural disasters.
    As such, USAID will take the lead in implementing a number 
of Presidential priorities. First, basic education. The 
President's request, a 60 percent increase over the fiscal year 
2009 request, will ensure that the United States remains in the 
forefront of programs for all girls and boys in developing 
countries to increase access to basic education.
    Next, global health. The fiscal year 2010 request is $7.6 
billion, part of a total effort of $63 billion over six years, 
to undertake a new integrated approach to global health. The 
President's Global Health Initiative will build upon ongoing 
success in reducing deaths from HIV/AIDS, malaria, and 
tuberculosis. It will increase investment in safe motherhood 
and reduce infant mortality. The initiative will target for 
elimination certain tropical diseases afflicting millions and 
support improved healthcare services delivery.
    Moving to food security, President Obama announced at the 
recent G-20 summit his intention to request a doubling of U.S. 
funding for agriculture development in developing countries. 
USAID will support poverty reduction by boosting poor farmers' 
access to seed, fertilizer, credit, linking small producers to 
markets, strengthening farmers' cooperatives, working with U.S. 
land grant universities and encouraging private investment in 
agribusiness.
    Another key priority will be climate change. The fiscal 
year 2010 budget requests $581 million for this critical issue. 
USAID programs will help those developing countries most 
vulnerable to the impact of climate change become more adaptive 
and resilient. Finally, I would like to mention the Rapid 
Response Fund, a $76 million initiative that will provide our 
government with the flexibility to respond quickly to 
unforeseen opportunities and to help shore up fragile 
democracies.
    This fund will enhance our ability to respond to unbudgeted 
but critical windows of opportunity and demonstrate meaningful 
peace dividends to local populations. Madam Chair, with that I 
will conclude. Again, I thank you for your support to USAID and 
for this opportunity to brief the committee. I welcome your 
questions.
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    Mrs. Lowey. Thank you, and thank you again for your 
leadership. We will proceed with questions, five minutes each 
of us, and we will go side to side depending upon the order in 
which we can do it in.

                             USAID STAFFING

    In a recent hearing, Secretary Clinton lamented that lack 
of USAID capacity and adequate staffing has turned USAID into a 
``manufactured agency''. Her statement reflects the concerns 
that we have heard from nongovernmental organizations that 
USAID is moving away from indirect grants to large directed 
grants due to the lack of adequate staff to be innovative and 
creative in programming.
    In the past few years, as you know, the committee has 
worked with USAID to increase staffing, and as of today, 
Congress has provided funding to support the hiring of an 
additional 420 officers, and the fiscal year 2010 request will 
bring it to a total of 770 new foreign service officers. These 
young officers will all be sent to the field where they will be 
able to address some of the concerns raised by Secretary 
Clinton and the NGO community.
    A couple of questions following-up. What has USAID done to 
ensure that the expertise of the new officers reflects the 
priorities of the administration as outlined in the fiscal year 
2010 budget? Where will these new employees be assigned? I 
understand that USAID has worked with the State Department to 
develop a construction and rehabilitation plan to ensure that 
these new employees have office space. Are you satisfied with 
the outcome of these discussions? Will these facilities be 
completed prior to the deployment of the new officers?
    Lastly, if additional staff is onboard in the field, how do 
you envision this impacting the operating model for USAID 
programs? Do you expect that USAID will begin to award smaller 
grants to local nongovernment organizations?
    Mr. Fulgham. Madam Chair, thank you. I think that through 
your leadership and this committee's leadership USAID has 
clearly recognized that the situation that we are in did not 
just happen overnight. It has been an erosion of our abilities 
over the last 15 years. Thanks to the generous support of this 
committee we have started to rebuild this agency.
    The key for us right now is people. We need to get back to 
basics. Working side by side with communities, as I stated in 
my opening statement, providing assistance at the grass roots 
level and identifying ways to find more contracting 
opportunities that allow for smaller contracts or grants. What 
we are doing as an agency is hiring about 170 new project 
development officers, and 111 contracting officers.
    We have a significant number of compliance and development 
officers who will be able to manage these smaller grants and 
also implement those grants. That is going to be the key. We 
have got to get the workforce up to a level where we can get 
away from these large omnibus contracts. Those contracts were 
put in place because of a necessity, lack of management talent, 
so you had to bundle them. So now we are in the process of 
changing a lot of those processes and creating opportunities at 
the smaller level.
    The key to being able to do smaller contracts is getting 
more officers in the field, such as compliance officers, 
contracting officers and lawyers. With respect to space 
overseas, we have been working very closely with the Department 
of State.
    Last week Deputy Secretary Lew issued an ALDAC, which is a 
cable worldwide to all U.S. missions, asking them to prepare 
for major staffing increases, and the doubling of USAID over 
the next three years. There is a task force that has been put 
together with USAID and State Department colleagues who are 
working through these issues to ensure that there are enough 
desks and training opportunities once these new officers arrive 
in the field.
    Mrs. Lowey. Yellow light. Okay. I will ask just one other 
quick question that I have been concerned about. I am puzzled 
by the presence of two separate requests for flexible funding, 
$76 million for a rapid response fund through the USAID's 
Office of Transition Initiatives, and $40 million for a 
Stabilization Bridge Fund to support the deployment of civilian 
stabilization initiative staff. These mandates seem very 
similar. I am not sure why they are both needed. How are they 
distinct from the existing OTI mandate that has been 
successful?
    Mr. Fulgham. Our staffs have been working very closely to 
try and refine this process, but I think it is very clear, and 
you have been a strong voice in the argument that we need to 
get the military out of doing these quick or CERP type 
projects. This fund will allow for us on the ground when we are 
in crisis to be able to address issues in the short-term until 
we can request funding for these programs in the regular budget 
process.
    The OTI fund is a much smaller fund similar to what we used 
in Serbia, particularly in southern Serbia, to address conflict 
and instability in local communities. We had small grants that 
were put into those communities to try to bridge differences 
and bring those communities back together. What we are looking 
at with this Rapid Response Fund is a much larger capacity to 
be able to address critical needs on the democracy side, on the 
health side and on the economic growth side.
    Mrs. Lowey. To be continued.
    Mr. Fulgham. Yes, ma'am.
    Mrs. Lowey. Ms. Granger.
    Ms. Granger. Thank you. I am going to continue because on 
the rapid response fund I do not see a clear purpose or plan, 
so I want to go back to that and ask you very specifically why 
cannot the administration not used its existing programming 
authorities to meet these emerging needs? What criteria will be 
used to determine which countries qualify for the rapid 
response assistance? Give me a country or regional example of 
where such a fund would be needed.
    Mr. Fulgham. A case in point would be, let us say, Kenya. 
We are already in the 2009 budget cycle. Things spiral out of 
control, and a new government comes into place. Our current 
programs might not address some of the issues that the new 
government may need to put into place. Maybe they are having a 
significant amount of problems on the health side or economic 
growth side. How could we immediately put in place programs 
until the regular budget cycle could catch up in order to fund 
those programs? It is an emergency bridge to help countries 
that are in need.
    It is flexible. I know that that term ``flexible'' makes 
folks a little nervous, but in the world that we live in and 
the fact that we are trying to create space and help 
governments who are trying to move forward, we have to have the 
flexibility and the money available to help these countries in 
need on an emergency basis. The key here is that it is on an 
emergency basis and with the advice and consent of Congress. 
This fund will not be used every year. It is a set aside in 
case of emergencies.
    You have seen over the last few months the number of 
emergencies that we have been dealing with. Having access to a 
fund like this will allow us to have bridge funding until the 
regular budget appropriations can catch up. It also will help 
alleviate the need for additional supplementals.
    Ms. Granger. All right. I am going to come back to that in 
a few minutes but the other thing I want to ask you about, the 
Congress appropriated $245 million to support microenterprise 
and microfinance efforts. The administration's requesting $167 
million for 2010. That is a $77 million decrease. In my 
experience, those funds have been very successful financing 
successful businesses and developing economies.
    Just like we have to educate people, we also have to give 
them a chance in those countries. You highlighted microfinance 
in your testimony but could you explain why the administration 
cut funds for the microenterprise by $77 million from its 
fiscal year 2009 level?
    Mr. Fulgham. In FY 2009, the previous Administration 
requested $103 million in funding for microenterprise. The FY 
2010 request of $167 million represents a substantial increase 
over the previous request and reflects missions' estimates of 
the programming needs in the field.
    Some of our most successful programs have now spun off into 
banks. What we are trying to do is refine, improve the product 
and change some of the implementation mechanisms in some of the 
countries that we are working in, and at this point, we felt as 
though the pipeline that we had for 2010 was adequate to get us 
through that cycle. It may spike again in 2011 and go back up 
again, but the administration felt at this point in time that 
we have sufficient funding.
    Ms. Granger. Okay. Can you get me more information and keep 
me involved in that?
    Mr. Fulgham. I would love to brief you again.
    Ms. Granger. I am going to go back to what we were talking 
about before with the rapid response fund. I have many of the 
same questions about the Civilian Stabilization Initiative. It 
has been billed as the civilian counterpart to military 
response, as you were talking about, but the details are pretty 
sketchy. Is there an adequate consultation between state and 
USAID on the development of CSI? When will the committee 
receive a joint spending plan that is required for the fiscal 
year 2009 fund? What part of the fiscal year 2010 request will 
USAID implement? Can you give us some more details on that?
    Mr. Fulgham. Yes. As you know, we have been trying to put 
together a civilian response corps for the U.S. government to 
respond to reconstruction and stabilization crises over the 
last four years. There has been significant consultation under 
CSI. The State Department, and I cannot speak for their portion 
completely, is set up as a unit that is the belly button for 
the civilian government so that the Defense Department will 
have someone to relate to when there is a crisis related to 
reconstruction and stabilization. They are responsible for 
coordinating the rest of the interagency.
    The fund that they have set up is basically used for 
deployment only when they deploy their forces, whereas with 
ours, it is set up specifically for operational purposes. So I 
see the State Department as the policy and coordination unit 
and then USAID as the implementation arm of our civilian 
response corps. As for the joint spend plan, thank you, it is 
currently with OMB and they are going through the numbers right 
now. We hope to have that in the next week or so.
    Ms. Granger. Thank you.
    Mrs. Lowey. Ms. Lee.

                      Opening Statement of Ms. Lee

    Ms. Lee. Thank you very much, and good morning. Let me ask 
you just a couple of things. You talked a little bit about the 
debundling of the larger contracts. I asked this question and 
the former administrator, Fore was it? Fore?
    Mr. Fulgham. Henrietta Fore.
    Ms. Lee. Fore. I asked about this issue when it came to 
minority contracting and minority hiring and one of the 
responses that I received was that due to the particular nature 
of USAID's operation in developing countries, most small firms 
did not have specialized and technical experience to compete 
for USAID grants or contracts. That was the response, you know, 
as a result of my inquiry.
    What I wanted to find out is do you all have goals and 
targets for minority and women-owned businesses? If you do, 
what are they? How does this debungling now of contracts fit 
into--I understand the small business piece, but in addition, 
you know, we have the AID eight program and all of the other 
minority business requirements.
    Mr. Fulgham. Ms. Lee, very good question. I have to admit, 
in the past our numbers have been woeful. Last year, after Ms. 
Fore had her meeting with you, we hired a true professional who 
really understands small business and minority businesses and 
what effect they could have on our business. In one year we 
went from 2.6 percent up to 4.8 percent. The goal for SBA is 
five percent, so we missed it last year by .2 percentage 
points.
    Ms. Lee. Is this for minority, small, or what?
    Mr. Fulgham. Yes. That is minority, small, disadvantaged 
businesses.
    Ms. Lee. Total.
    Mr. Fulgham. Total. The goal is five percent. So we came 
pretty close to meeting that. I am not proud of that. I think 
we could do much better. One of the things that we are doing 
now is providing more workshops on a quarterly basis for new 
contractors to come in and get a better understanding of how 
USAID works and how you get a contract with USAID. I think also 
one of the keys that we have been able to do is to start 
identifying any contract over $100,000 that is here in the 
Washington area that can actually go to a small business and 
get away from these larger contract contingencies.
    Ms. Lee. But you know what, there is a difference, though, 
between small businesses and then small and economically 
disadvantaged businesses.
    Mr. Fulgham. That is correct. Yes.
    Ms. Lee. And so the 4.8 percent, is that small, minority, 
women-owned?
    Mr. Fulgham. That is small and minority-owned disadvantaged 
businesses.
    Ms. Lee. Okay.
    Mr. Fulgham. That is the SBA definition.
    Ms. Lee. Okay.
    Mr. Fulgham. So, as I said, we have moved significantly 
further, we have got more work to do, but it is something that 
has gone on for a long period of time and we are slowly but 
surely making progress. I think that your senior staffer met 
with Mauricio Verra who has really moved the agency forward in 
this regard.
    To get back to my point, we are now putting rules and 
regulations in place that provide a level playing field, and 
that is the key, to provide a level playing field that will 
allow for small and disadvantaged businesses to compete 
adequately at the levels that they can compete at. I am very 
proud of what we have been able to do over the last year in 
that regard.
    Ms. Lee. Are you providing any technical expertise or any 
type of support for companies to really get into this?
    Mr. Fulgham. Yes, ma'am. There is a maintenance program 
that we have set up. In fact, we would like to invite you. I am 
going to publicly embarrass you a little bit and ask you to 
come on August 6 for a monthly vendor outreach session to give 
a keynote address for our small and disadvantaged partnering 
program that we are putting together. There are a lot of things 
being put in place right now that are going to allow us to do a 
better job.
    Ms. Lee. Thank you very much. Madam Chair, I think it is 
really important because remember when we were in Ghana on a 
CODEL and we saw many U.S. companies, part of the Millennium 
Challenge Account compact efforts, other USAID project 
personnel, and many Americans there, but we saw very few 
minority companies and minority Americans.
    Mr. Fulgham. One of the numbers I am really proud of is 
that of our task orders, which is our request for business 
opportunities. Out of $95 million in task orders awarded by 
USAID's Chief Information Office, 93 percent, or $88 million, 
went to small businesses.
    Ms. Lee. Good.
    Mr. Fulgham. We are also doing very well on the global 
health side. Anything over $100,000, we are trying to find 
opportunities for minorities and small and disadvantaged 
businesses.
    Ms. Lee. Okay, and if it is appropriate, if you could give 
us a list of the minority-owned companies that you do business 
with, I would like to see that list, and the type of contracts 
that they are doing.
    Mr. Fulgham. We would be pleased to do so.
    Ms. Lee. Okay. And then the other piece that I am hearing, 
rumor, is this the reorganization of the EEO office. What is 
going on?
    Mr. Fulgham. I want to be very clear on this. We are an 
agency that is growing by 100 percent over the next three 
years. We have the same infrastructure in place that we had 30, 
40 years ago. To me, from a logical perspective, anything we 
can do to provide better support to our employees, we should be 
doing. By expanding and creating an Office of Civil Rights 
similar to what the State Department has, we are not decreasing 
our ability to help our employees, we are increasing our 
ability to help them.
    So the change has come about because we recognize that we 
have this tremendous growth spurt and we have got to be able to 
better support our employees. Right now we have a diversity 
council, we have an EOP office. They are all spread out in 
different places. I decided to bring them all together and 
create an Office of Civil Rights. It is similar to the State 
Department. We are trying to do more for our employees versus 
less.
    Ms. Lee. Thank you very much. Good to meet you. Thank you, 
Madam Chair, very much.
    Mrs. Lowey. Thank you. I think you raised this point and we 
had some in-depth discussions about it, and when you are 
talking about contracting, you are not just talking about 
contracting here, you are talking about abroad.
    Ms. Lee. Abroad.
    Mrs. Lowey. Because that is where it was very evident.
    Ms. Lee. Right.
    Mrs. Lowey. Thank you. Mr. Rehberg.
    Mr. Rehberg. Thank you, Madam Chair, and welcome.
    Mr. Fulgham. Thank you, sir.
    Mr. Rehberg. For local and regional food purchase purposes, 
is there a difference between rapid response and emergency when 
it comes to your either pilot project or your $300 million 
request for emergency assistance?
    Mr. Fulgham. Sir, the rapid response program is a program 
that has been put together after the last couple of years. We 
have been dealing with so many different emergencies. We 
recognize there are two things that have to happen when you 
have an emergency. You have got to respond quickly, and you 
have to look at the cost. Purchasing goods reasonably provides 
for the rapid deployment of the food to the people who are most 
desperately in need.
    Mr. Rehberg. So are you suggesting there is no difference 
between your definition of an emergency and the rapid response?
    Mr. Fulgham. No, there is a difference.
    Mr. Rehberg. There is a difference.
    Mr. Fulgham. There is a difference.
    Mr. Rehberg. In looking at the list of where regional and 
local purchases have occurred I see countries like Somalia, 
Ethiopia, Kenya, Zimbabwe, Tajikistan, Kyrzykstan, Nepal and 
Pakistan. How many of those countries have had more than one 
year of emergency food purchases at the local or the regional 
level?
    Mr. Rehberg. Would you, please.
    Mr. Fulgham. Over the past five years, none of the 
emergency USAID local and regional procurements, food vouchers 
or cash transfers for food has extended for a period of more 
than one year.
    Mr. Rehberg. My point is I am looking at the justification 
of your budget and your budget increases and I am starting to 
see a trend of moving away from the definition of emergency or 
rapid response. For all intents and purposes, to one of a 
decision to purchase locally in an attempt to perhaps, from my 
perspective, I have to justify to my taxpayers why we are 
taking money out of a farmer's pocket in Montana paying taxes 
to send over to USAID to purchase food products from somebody 
other than America and it is not a buy America. I have to have 
a justification.
    I can understand the flexibility, and I can understand an 
emergency, but if we start seeing a developing trend towards 
purchasing overseas, then we are going to put the red flag up. 
It is not just local agricultural producers; the unions are 
particularly upset from the maritime industries because all of 
a sudden they are not seeing their ships going overseas 
delivering the food in the areas, and so we are starting to get 
nervous about a trend developing.
    Mr. Fulgham. Congressman, as a loyal American, the last 
thing I want to do is put our farmers out of business. I think 
when you look at this program, it really is for rapid response 
in regards to real emergencies where people could potentially 
die if we use the standard approach in responding to their 
crisis. When you look at the amount that we are requesting, I 
believe it is $300 million; it is a comparatively small amount.
    Mr. Rehberg. Well, it is quite an increase over the past 
budget bill and so it throws up a red flag as to why are we--
and again, do not get me wrong. I am not suggesting we want to 
put any individual at risk when it comes to starvation, hunger, 
famine and such. What I am going to be looking particularly 
closely at is are we seeing that Somalia shows up one, two, 
three, four years in a row for emergency aid for local 
purchases when with a little planning on USAID's part, or the 
Department of Agriculture's, we just know it is going to occur 
and we get it in the pipeline and we do not use as an excuse 
rapid response or emergency.
    Mr. Fulgham. Point well taken, Congressman.
    Mr. Rehberg. Could you tell me the coordination between the 
Department of Agriculture and USAID? In the farm bill there was 
an additional authorization. I still have not gotten an answer, 
and I did ask this question earlier from the State Department, 
just exactly, is the authorization a $300 million authorization 
for the life of the farm bill and how you are going to 
coordinate or is it anticipated it is going to be a $300 
million per year authorization?
    Mr. Fulgham. The new Farm Bill authorizes the Secretary of 
Agriculture to implement a Local and Regional Procurement (LRP) 
Pilot program (including a study and final evaluation) over 
five years at a total cost of $60 million. As part of our 
regular coordination with the U.S. Department of Agriculture 
(USDA), USAID shared and discussed the program criteria and 
implementation guidelines we developed for LRP this year. 
Moreover, USAID communicates regularly with USDA when providing 
assistance in the same country or region (e.g., Pakistan).
    The $300 million you are referring to is found in the 
Administration's FY 2010 budget request for State and Foreign 
Operations. As you know, International Disaster Assistance has 
typically been used to fund non-food emergency assistance, and 
provides the flexibility required to cover the local and 
regional procurement of food as well as the implementation of 
voucher programs when food is available, but not affordable for 
the vulnerable, at a community level.
    On the coordination between USAID, the State Department and 
USDA, it has never been better. I think we have a real team 
effort, especially looking at food security issues throughout 
the world. We have been working very close on a task force to 
deal with some of the issues regarding food security in some of 
the most troubled nations in the world right now.
    Mr. Rehberg. I appreciate that. If you could get back to me 
with the countries. Going back five fiscal years.
    Mr. Fulgham. That is a fair request, sir. I would be happy 
to get back to you.
    Mr. Rehberg. Do you also have the data on other 
humanitarian food assistance by other countries? We cannot be 
the only ones shipping food. Or vouchers to Somalia, Ethiopia?
    Mr. Fulgham. I could not agree more but that is a 
discussion with the Secretary at the diplomatic level on what 
we are doing to try to encourage our donor colleagues to be 
more supportive of some of these crises that we continue to 
address, sometimes on our own.
    Mr. Rehberg. You just do not have that information?
    Mr. Fulgham. No, sir. I do not have it right now.
    [Information inserted for the record follows:]

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    Mr. Rehberg. Thank you, Madam Chairman.
    Mrs. Lowey. Thank you. Mr. Israel.

                     Opening Remarks of Mr. Israel

    Mr. Israel. Thank you, Madam Chair. Mr. Fulgham, welcome. 
You have heard the Subcommittee's concern and interest in 
microfinance. I believe that there is a special nexus between 
microfinance and renewable energy programs throughout the 
world. There are sustainable business models where microfinance 
is assisting in the deployment of solar lanterns, solar 
flashlights, solar cookers and other renewable technology. Can 
you give me a sense of exactly what USAID is doing, the extent 
to which USAID is supporting microfinance programs on renewable 
energy?
    Mr. Fulgham. I think you are absolutely correct. In looking 
at our climate change strategy we are going to have to use 
innovation similar to this to get countries, especially where 
we have large economic issues, and with forestation, and 
farming and things of that nature, we have got to be able to 
bring the countryside into the game and get them to better 
understand why this is important for the longevity of their 
country.
    The overall climate change strategy is going to try to get 
at some of those things as we work closely with countries to 
come up with a strategy on adaptation and implementation of 
these programs. We have not been as creative as we could be.
    As you know, the Obama Administration is placing renewed 
emphasis on climate change, so now we have got to reconfigure 
and regear our operations to better address those issues. As we 
start to put together the strategies for the country, this will 
be an integral part of bringing especially the countryside into 
play and addressing this issue.
    As for the work we are undertaking in this area, USAID 
funds a number of programs linking microfinance and renewable 
energy. The Agency has given a $196,000 grant to ACCION 
International in Uganda to expand solar home lighting. USAID 
has also provided $205,000 to FINCA, a microfinance 
institution, to assess the market in Uganda and Afghanistan for 
renewable energy services, particularly in low-density rural 
areas that lack access to the national electrical grid. In 
November 2008, the Agency hosted a workshop on microfinance 
programs on renewable energy, which involved Grameen Bank and 
other PVOs. USAID has also funded the ``Energy Links PodCast'' 
series, an online resource containing interviews and 
information from industry leaders.
    The Agency is currently supporting two activities that 
focus on small and medium enterprises and microfinance 
institutions in the renewable energy sector. USAID is 
developing a toolkit and distance learning program to enable 
clean energy entrepreneurs to acquire business planning and 
technical knowledge to help them to develop bankable business 
plans. This program will support training classes in Senegal 
and Tanzania. In addition to the $600,000 contribution from 
USAID, USAID's implementing partner has raised investment funds 
from a socially responsible investor. The primary technology 
focus of this activity is improved cooking stoves.
    USAID also plans to work with Global Village Energy 
Partnership International to support rural and peri-urban clean 
energy Small and Medium Enterprises in Kenya, Uganda, and 
Tanzania. USAID anticipates spending $200,000 on this project, 
which will also leverage funding from the Developing Energy 
Enterprise Project in East Africa program. The primary focus of 
this activity will be working with microfinance institutions to 
increase lending to borrowers in the clean energy technologies 
sector.
    Mr. Israel. Well, that is pleasing to hear. I know that you 
are seeking an increase of $309 million to fight global climate 
change in developing countries. In your testimony you talk 
about funding being used for deployment of tools for Earth 
observation, geospacial information hubs and early warning 
systems. I understand that. That is pretty sophisticated and 
somewhat scientific. Let me share with you a more basic model 
that I am hopeful that USAID will pursue. I have met with some 
of your folks before on this.
    This is a solar flashlight. You can buy one of these in the 
gift shop in the visitor's center. This solar flashlight is 
being deployed throughout the developing world. There is a 
model that the Subcommittee has heard me talk about repeatedly, 
and I will not torture them anymore by repeating it again, but 
there is a model in the Sunderbans in India where you have a 
small, sustainable microfinance program. Six women have a solar 
panel. They are using that to charge solar lanterns, they are 
renting the solar lanterns, they are lighting the village.
    The Department of Defense would argue that to have 
stability, and security and prosperity you need a $550 billion 
defense budget. In the Sunderbans we are doing it for $35,000 
with technologies like this. So I am very hopeful. This is my 
number one priority on this Subcommittee is working with you 
and other agencies to accelerate the deployment of simple 
technologies like this which light an entire village.
    I am hopeful that we can work together on that. I have not 
had the opportunity to speak with you personally about it, but 
at first blush at least, do you think that this is consistent 
with USAID's mission, particularly with this ramp up in funding 
for climate change activities?
    Mr. Fulgham. As I said before, the status is evolving. We 
are looking at innovative ways to address these issues. We are 
clearly going to continue to look at the ecosystems and the 
forest land usage within these countries and we have got to 
look at appropriate technology as well, so it is a package. I 
think that once the new political leadership is onboard, these 
are going to be some of the things that we focus on as we look 
to increase the climate change budget, I hope, in the future to 
address a lot of these issues.
    Mr. Israel. My last question, one of the frustrations that 
I have, and I have shared this with Chairwoman Lowey, is USAID 
has its mission, we also have a Department of Energy that has 
an international assistance program that is meant to deploy 
technologies like this. To what extent do you actually 
coordinate with the Department of Energy to make sure that you 
are not duplicating, in fact, coordinating efforts to deploy 
technologies like this in the developing world?
    Mr. Fulgham. As you know, there is an interagency working 
group right now that is looking at these issues and there is 
more of a whole of government approach; there is more 
inclusion. As we begin to develop our new strategies and move 
forward in these particular areas, we are ensuring that there 
is not duplication in these areas. In these times of tight 
budgets we have to be very careful not to duplicate what we are 
doing with other agencies.
    Mr. Israel. My time has expired. As the new, as you say, 
political leadership shapes up, I look forward to working with 
them to advance the goal. Thank you very much.
    Mr. Fulgham. Look forward to working with you as well.
    Mrs. Lowey. I just want to emphasize that I have had many 
conversations with the Secretary about the issue of 
coordination because wherever we go we call it stovepipes of 
excellence. We are not complaining that people are not doing 
excellent work, but very often, in fact, Ms. Lee mentioned 
Ghana and we asked the Ambassador to bring together everybody, 
whether it was the foundations, other countries, World Bank, 
everybody who is doing work in that area, and they were 
delighted because they had an opportunity to meet each other.
    They really did not even know each other. So I know this is 
a key priority of the Secretary----
    Mr. Fulgham. And deputy Secreatry Lew.
    Mrs. Lowey [continuing]. It has been a key priority of 
mine, and the deputy for sure because it is essential, 
especially at a time with tough resources and for more 
effectiveness, that we coordinate the standard procedure. Mr. 
Crenshaw. Thank you.

                    Opening Remarks of Mr. Crenshaw

    Mr. Crenshaw. Thank you, Madam Chairman. Welcome to you. I 
want to ask you a couple of questions about human trafficking. 
It is kind of a dirty little secret that goes on around the 
world, it even happens in our own country as well, and people 
do not talk about it very much because, frankly, it is pretty 
disgusting. It is just hard to believe in the 21st Century that 
people are being bought and sold for different activities. 
People just find it outrageous, but I guess it is something 
people do not want to talk about.
    You see it on the TV, every now and then you read a report, 
but then it goes back. As you know, I think it was in 2000 when 
President Clinton was in office before I came to Congress they 
passed a law to try to confront all this, and part of that law, 
every year the Secretary of State has to file a report, the so-
called Tip Report, that looks at human trafficking as it goes 
around the world, as well as our own country.
    I understand the law allows us to sanction countries that 
we provide assistance to when they are not complying with the 
law. Do you know, what is being done at USAID to monitor that 
each year when that Tip Report comes out? Do we ever withhold 
assistance? Do we monitor that? Do we inform the countries that 
they are not meeting the standards? It seems to me when we will 
travel and I ask some leader, they will just say well, we are 
working on it. Can you give me some of your views on that?
    Mr. Fulgham. Yes. Sir, as the father of two daughters, this 
is probably one of the most reprehensible things that is 
happening in the world. I think that we recognize that this is 
happening mostly to people from vulnerable populations. It is 
all about political will. You have got to have countries and 
leadership in those countries who are willing to take the tough 
stance. I think our country has put in a tier process. If you 
reach Tier 3 then you are put on the list of no go, that your 
funding will stop, and that has happened to some countries.
    I think we have been very vigilant with the TIP program and 
with the State Department in ensuring that if a country is not 
living up to the tier process that we are willing to intervene 
and make a case that they should not receive any more funding 
from the United States Government. Overall, you know, we are 
continuing to increase and monitor these programs, we are doing 
more outreach, we are providing housing, we are trying to do 
more from a counseling and sheltering perspective, and also, 
one of the things we have to do from a development perspective 
is get at the root cause of the poverty in these communities.
    The more you can educate girls, the better off they are in 
understanding that there are economic opportunities out there 
and there is a better way forward for them. I think those are 
some of the basic things that we continue to do. We have worked 
very closely with international programs, the MTV program, 
which is a foundation, and doing lots of messaging, especially 
in southeast Asia and some of the problematic areas from 
transit to departure points. We are also trying to do a better 
job of forcing governments to recognize that they should not be 
involved in these processes.
    When I was in Serbia, this was a major transit point and we 
put a tremendous amount of pressure on the government to shut 
down the transit point between Serbia and Montenegro. There 
were some really good efforts done by the Serbian government, 
but then we had trafficking in another way from Italy, so there 
is always a constant pressure on these governments to try and 
change their ways but you have to continue to be vigilant at 
all times. It is not going to go away easily because it is such 
a profitable industry.
    Mr. Crenshaw. So you do monitor the progress they are 
making and you actually sit down, and you do not necessarily 
condition the aid but you----
    Mr. Fulgham. If you go to Tier 3, your aid is cut off. Tier 
2, you get a warning, you get a demarche, the USAID director in 
the foreign minister's office saying that if you go to Tier 3, 
then your aid will potentially be cut off.
    Mr. Crenshaw. Great. Well, that is very encouraging 
because, you know, if we have made this effort to really try to 
confront that. It is really encouraging to hear that you are 
making those kind of efforts. Thank you very much.
    Mrs. Lowey. Thank you. Mr. Chandler.

                    Opening Remarks of Mr. Chandler

    Mr. Chandler. Thank you, Madam Chairman. Mr. Fulgham, good 
to see you. I apologize for having to step out of the room. I 
missed some of the questions, and I hope I will not duplicate 
some of the things that have been asked of you. First of all, I 
want to applaud you and your fellows in the foreign service and 
with USAID for everything that you do. It is utterly critical 
to the future of our country, I believe. Of course, I think you 
will get general agreement on this committee as to that notion.
    Our national defense, in my view, absolutely depends on 
what you all do. I am very pleased to see more emphasis placed 
on this area, on the whole idea of development and smart power, 
soft power, whatever you want to call it. I have a couple of 
questions that I think maybe have not been asked. One, I am 
curious about what USAID is doing in the way of developing 
markets. The Chair led us on a trip earlier this year to 
Central and South America and we were in Peru.
    I think we were all very impressed by some activities in 
rural Peru to of course work on finding alternatives for people 
who had been producing coca in the past. One of the new 
developments, I understood, was before we would just help them 
with crops but nobody helped them find a market. There was not 
any way to get monetary reward for the efforts that they had 
made.
    So if you could illuminate us a little bit on where that 
effort is going, how you are expanding it and so forth. And 
then the second question is a little bit different. USAID in 
the past has had a significant focus on preserving forests. 
This seems to have been broadened significantly in the fiscal 
year 2010 budget to include new landscapes. Can you give us a 
rationale behind the change in strategy there? Thank you.
    Mr. Fulgham. Okay. On the first question, I am happy to say 
that USAID has been involved in creating markets for the last 
30, 35 years, especially on the agriculture side. I think your 
question is more specific in Latin America and the coca region.
    Mr. Chandler. There seems to be a little bit of an increase 
in emphasis on it, it would seem to me.
    Mr. Fulgham. Yes. I think that if we are going to address 
unemployment and increase economic growth in these countries, 
we have to do a better job of creating the foundation and the 
infrastructure that is needed in order to promote economic 
growth in these particular areas. That means you need a market-
based program that goes from soup to nuts basically.
    You have from the time the crop goes into the ground, it 
comes out of the ground, it is packaged, it is marketed and 
then there is a market that it is going to in a particular 
region. That takes infrastructure from the government; it takes 
private sector involvement and it takes donor involvement, and 
you need all three of those working together. That does not 
come together in a year or two. As you notice, we have had 
significant amounts of funding going into that region and we 
are really just now starting to show fruit from those 
investments.
    Now, the government is now taking over some of these 
activities and funding them themselves. That is when you know 
the development is really working in those communities. We are 
going to try to replicate that in Afghanistan, and in Africa, 
and other continents and other parts of the world as well 
because we see agriculture as the way to creating economic 
growth and job opportunities in these rural communities.
    In regards to your question on preserving forests and 
broadening our efforts significantly, we recognize under 
climate change that we have to look at all avenues to diversify 
our programs to address the key issues that are affecting these 
communities that we are working in. Forestry is a huge issue 
for us. As you know, a lot of the countries we are working in, 
they are slashing, and burning and cutting down a lot of their 
forests, and so we are trying to provide additional advice and 
assistance.
    We are bringing in additional officers on the science side, 
environmental officers. We are going to hire 40 over the next 
three years. Also, one of the great things that we have right 
now is that quite a few environmental officers who have gone 
off to do other things, now want to come back to the 
environment sector because there is additional funding. We are 
just looking at expanding our horizons and our ability to 
affect change in these communities, and we are going to bring 
science and technology to a lot of the thinking that we are 
doing in this regard.
    Mrs. Lowey. Thank you. Ms. McCollum.

                    Opening Remarks of Ms. McCollum

    Ms. McCollum. Thank you. It is good to see you again.
    Mr. Fulgham. Nice to see you again as well.
    Ms. McCollum. I would like to take a second to thank all 
the employees of USAID and recognize the bravery of those 
Americans, those unarmed service men and women, who represent 
our country so valiantly. You put yourself in harm's way to 
perform your missions of mercy that are vital to our national 
security. USAID employees take serious risks and all too often 
have given their lives for their country with little attention 
paid to the public sacrifice. So on behalf of myself, and I 
know other members of this committee, we thank you for your 
service.
    Now, turning to the budget request here for fiscal year 
2010, I applaud the administration for making a strong and long 
overdue commitment to fight hunger around the world through 
agricultural development. You, Mr. Rehberg, had a good 
conversation about relief, but this is about development focus 
that the President is working on. We know that agriculture is a 
proven strategy to reduce hunger, it raises income and it 
builds broad-based economic growth. It is development that 
works.
    America has tried fighting chronic hunger with emergency 
assistance, as Mr. Rehberg was pointing out, and it is a flawed 
strategy and it has fallen short, so new President, new 
strategy. It is a smart investment, and I know it is going to 
pay huge dividends. I have another question, but part of what I 
would like you to talk about is how USAID plans to program the 
significant increases requested in the budget, and how USAID is 
going to fit in this whole role with the State Department on a 
new strategy.
    Then I have another issue I would like to bring up, and 
this is an issue in the budget where I have to admit I am 
frankly very disappointed, and that is the budget with this 
administration, their request for the area of child survival. I 
believe we are missing a tremendous opportunity. As we are all 
aware, more than six million children under the age of five die 
needlessly every year from preventable, treatable diseases. 
Over nine million under five deaths per year. So, you know, 
nine million children under age five per year.
    During my eight years in Congress that would mean 50 
million children have needlessly died from conditions like 
diarrhea, measles and pneumonia, which USAID and other partners 
have the experience, and you have the expertise to prevent it 
today if we choose to do so, if we choose to give you the tools 
you need to do that. Now, the impact of the global economic 
crisis on developing countries is expected to result in an 
additional--an additional--400,000 children in poor countries 
dying this year.
    Now, we can do something if we choose to do something about 
it. The report released in April said the U.S. saved 1.2 
million lives with PEPFAR since 2003 with billions of dollars. 
I want to save 1.2 million children's lives every single year. 
I know it is not in the President's budget, but I know he is 
concerned about maternal child health, so I would like you to 
tell us how we can work together to achieve this goal and start 
making a smart investment in the opportunity that we are 
missing in saving children's lives for literally, as the Chair 
and members of this committee know, for pennies. Thank you.
    Mr. Fulgham. Thank you. Those are two big questions.
    Ms. McCollum. It is a big world.
    Mr. Fulgham. Let me just try to tackle the food security 
question. Right now we have a billion people living in poverty 
and hunger in the world. This number continues to rise, and we 
recognize that. I think the President's request to double the 
amount of assistance for agriculture provides the lead in 
trying to address that issue. When you look at agriculture as a 
productivity issue we have got to provide more seeds, more 
fertilizer and improved irrigation.
    We have got to link the producers to the markets and 
improve infrastructure in the rural areas, provide better 
storage and removal of the trade barriers, as I discussed 
previously. The other part of the strategy, which is equally 
important, is that we are coordinating for the first time as a 
government. There is a task force that is being led by Cheryl 
Mills, counselor to the Secretary of State, where all the key 
players in the interagency, USDA, USAID, the State Department, 
are all coming together in order to plan out how to move 
forward with our new strategy.
    One of the things that we have left out are the land grant 
institutions. We have got to get them back involved in this 
process. They were part of the green revolution 15, 20 years 
ago. We have got to get them back into the game. Also, it is 
private investment that is going to make a huge difference. We 
cannot solve this problem by government to government and 
funding alone.
    It is going to take involvement from the private and public 
sectors in order for this to move forward and work. Then, I 
agree, we have to continue to focus on nutrition for children 
under two. I think by creating a larger agricultural base in 
these countries we can get at that, but we have to work at that 
from a regional perspective. Then, we need to focus greater 
attention on the role of women. I could not agree more. We have 
got to do more to support women and create opportunities for 
them for finance and credit, and also a role in the 
agricultural sector within the country.
    On the child survival issue, I think the administration is 
looking at this from a macro perspective. We want to get at a 
lot of other things that are important to the overall sector. 
We believe that the amount of money that has been requested by 
the administration adequately allows us in fiscal year 2010 to 
maintain the momentum that has been created over the last few 
years.
    I do not think one year makes a story. I would like to 
really look at this again two years from now, or three years 
from now and see where our numbers are. There is nobody in this 
room more committed to this issue than the Chair, and we have 
heard from her diligently about the fact that we want to see 
those numbers up. I really look at this budget from a holistic 
perspective. In the out years I think we will be able to 
provide more, but right now there are a lot of things crowding 
out some of these issues, and I think that in the out years we 
will be able to make up for it.
    Ms. McCollum. Madam Chair.
    Mrs. Lowey. Thank you.
    Ms. McCollum. Madam Chair, if I could, if the gentleman 
from Illinois will indulge me just for a second to talk to the 
committee. I think we need to look, I have been a strong 
supporter of PEPFAR, but I think we need to look at the outlays 
and what is going on with PEPFAR and the billions of dollars 
being spent versus the millions of dollars that could be spent 
to save more lives and have more children being able to enter 
school successful and healthy with all the school programs that 
the administration is working on.
    So I think that this committee should really take a look at 
it. I know you are going to be driving for efficiencies, and I 
think we will be able to do that. For the record, I would like 
to enter a couple of pages from a report from Save the Children 
talking about many of the things that the acting director spoke 
to. Thank you, Madam Chair.
    Mrs. Lowey. Thank you. Mr. Jackson, we are delighted to 
accept the report for the record.

                     Opening Remarks of Mr. Jackson

    Mr. Jackson. Thank you, Madam Chair. Let me first begin by 
offering an apology to the Chair and to Members of the 
Committee for my tardiness, and certainly to Mr. Fulgham. This 
morning at my son's school was a unit of discovery where he had 
to have his parents there to kind of share with his classmates 
and with his parents a little bit about himself and I just 
could not miss it.
    I want to follow up very quickly on Ms. McCollum's question 
about agriculture and be a little bit more poignant. Given the 
President's ambitious agricultural agenda globally, does USAID 
have the capacity and the agricultural experts to ramp up so 
dramatically across so many regions in just one year? And I 
wanted to hear your answer, Mr. Fulgham, to that question, and 
I also want to raise the question, I think I am going to get 
them out of the way at one time, about global health.
    Last week the President announced his commitment that his 
budget will provide a total of $63 billion between fiscal year 
2009 and 2014 for global health programs. In the announcement 
the fiscal year 2010 budget is highlighted as a down payment on 
this commitment, yet the budget only requests an increase of 
$406 million for global health and HIV and AIDS programs, and 
only $106 million if the Committee approved $300 million is 
ultimately approved. This represents only a 1.4 percent 
increase over fiscal year '09.
    A major obstacle to reducing maternal mortality is the 
shortage of doctors, nurses, midwives, and mid-level health 
workers who are skilled birth attendants. In Sub-Saharan Africa 
and large parts of Asia, fewer than half of births are attended 
by a skilled birth attendant. USAID's maternal and child health 
strategy includes an increase of at least 100,000 in the number 
of community health workers and volunteers. What is USAID's 
strategy to reach this goal? And further, there is a broad 
recognition that a volunteer model for community health workers 
is unsustainable and leads to high levels of attrition. What 
measures will USAID take to ensure that these 100,000 community 
health workers are fairly compensated?
    Mr. Fulgham. On your first question, Mr. Jackson, earlier I 
talked about the rebuilding of the agency. We have depleted our 
agricultural staff over the last 15 years and we are now in the 
process of replenishing that staff. We are looking at hiring 
about 93 agricultural officers over the next three years. We 
have got about 20 in the system right now.
    In our major programs we have adequate attention, but we 
cannot expand rapidly in various parts of the world because of 
our inability to get the officers in the right places at the 
right time. I think clearly over the next couple years you will 
see a significant ramp up in this area that will allow us to do 
more on the agricultural side. We will continue, however, to 
have contractors in place in countries that are in desperate 
need of this technical support, but eventually moving those 
contractors out with direct hire assistance.
    Mr. Jackson. Global health.
    Mr. Fulgham. On the global health issue, USAID will carry 
out its strategy to reach the goal of 100,000 additional 
community health workers across the 30 ``MCH Priority 
Countries'' during 2009-2013. The initial approach will be to 
work with the approximately 15 countries that have policies and 
programs that include community workers as part of their 
national health strategy. In these countries, USAID will help 
upgrade and expand these community-based programs through the 
in-service training of workers, improving supervision systems, 
providing workers with educational and other technical 
materials, and, in some cases, with commodities to distribute 
to their communities. Senegal, Nepal, Bangladesh, Ethiopia, 
Madagascar, Malawi, Mozambique, Uganda and the Democratic 
Republic of Congo, for example, have recognized that extending 
high-impact interventions to greater numbers of families will 
require community-based service delivery.
    Once this approach is underway in countries with existing 
community-based programs, USAID will identify additional 
countries among the MCH Priority Countries that do not have 
such programs, but where need and readiness for them exists. In 
these countries, USAID will help governments examine the 
options and best practices for community-based programs, and 
will provide assistance in the development and roll-out of the 
programs, including the training of new community health 
workers and the supervisory and logistic systems needed to 
support them.
    With respect to compensation USAID supports fair 
compensation and incentives for Community Health Workers by 
helping introduce and scale up successful experiences and 
approaches for health worker compensation. Community Health 
Workers receive compensation or other meaningful incentives 
that result in sustainability of community-based programming in 
a variety of ways. Ethiopia's Health Extension Workers, for 
example, are directly paid by the government. In other 
countries, these workers receive remuneration by being allowed 
to keep a small mark-up on drugs and commodities they are 
permitted to dispense. This is the case with workers who 
provide community-based distribution of contraceptives in many 
countries. In some cases, CHWs receive support or special 
privileges from communities themselves. In other cases, non-
financial benefits, such as free health services for themselves 
and family members, provide apparently adequate compensation.
    Even pure volunteer models have been successful at scale in 
some cases: For example, Nepal's Female Community Health 
Volunteers--who are a key element of that country's success in 
being on track to both Millennium Development Goals (MDG 4 and 
MDG 5)--are not paid, but many have been in their positions for 
a decade or longer. Their compensation comes from the 
effectiveness of their actions and the regard they receive from 
their communities, along with the strong commitment and 
systematic support of the health system at all levels.
    USAID systematically analyzes and documents these 
approaches and their results, shares them with governments of 
countries that might apply them in their own community-based 
programs, and helps those countries to implement, evaluate and 
assure success of their chosen approach.
    Mr. Jackson. I appreciate that. Let me, I wanted to raise 
one last question, I think I just have another minute or so. 
The lack of access to safe drinking water and sanitation has a 
significant impact on the lives of millions of people every 
day. Providing safe drinking water not only improves health 
outcomes, but it also has an economic benefit for families and 
communities.
    Over the past few years Congress has requested that USAID 
fund water programs in a sustainable way. Can you give us some 
sense of what USAID's water strategy is? And in fiscal year 
2010 the MCC has requested significant funding for water and 
sanitation oriented compact with Jordan. Can you give us some 
sense of the role in the water sector of Jordan and tell us how 
the MCC compacts build on USAID's prior commitment in that 
country?
    Mr. Fulgham. Yes, actually I can give you a little bit on 
that. I led the delegation to the World Water Conference in 
Istanbul about six weeks ago. Clearly we recognize that water 
is going to be one of the biggest issues we face over the next 
ten years. There are going to be countries that will probably 
run out of water before we run out of oil. And we are talking 
about massive populations potentially having to move to try to 
find that water.
    I believe that there are over 260 water ways that more than 
two countries share in the world. So clearly this is a huge 
issue for us. We are ramping up our water program at USAID, and 
Jordan as the example that you just gave is probably one of the 
more exemplary programs, but we still have problems there. It 
is about governance, it is about cost, it is about technology. 
We have been working very closely with the Jordanians.
    Right now out of their twelve aquifers, ten are in trouble. 
We have been working with Jordan over the last 20 years on 
water and conservation and costing. This new compact that 
Jordan is putting together with the MCC will be built on USAID 
programming.
    We are maximizing our investment which will allow us to 
create an environment where in Jordan they are doing the things 
they need to do to make the critical decisions to ensure that 
they have water in the future. But this is just not Jordan. We 
have, as I said, significant problems in the continent of 
Africa with water, and we have got to get back to basic 
programs that are identifying ways for governments to plan and 
strategize and come together with public-private partnerships. 
Once again it is not going to be just development dollars that 
make a difference in these countries, it is going to be the 
public and private sector and also donors coming together to 
come up with resources and strategies to affect the water in 
these countries.
    Mrs. Lowey. Thank you. And thank you for your time. This 
concludes today's hearing on the U.S. Agency's International 
Development Fiscal Year 2007 Budget Request. The Subcommittee 
on State and Foreign Operations and Related Programs stands 
adjourned.

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                                           Wednesday, May 13, 2009.

                        U.S. DEPARTMENT OF STATE

                                WITNESS

JACOB LEW, DEPUTY SECRETARY OF STATE

                 Opening Statement of Chairwoman Lowey

    Mrs. Lowey. The Subcommittee on State, Foreign Operations 
and Related Programs will come to order. Today's hearing will 
examine the President's fiscal year 2010 budget request for 
international affairs. And I am pleased to welcome Deputy 
Secretary of State Jack Lew, who is well known to us from his 
previous work as the Director of OMB during the Clinton 
administration. And in light of the foreign policy challenges 
facing our country, many of which require tremendous resources, 
Secretary Clinton was quite wise in selecting you as one of her 
deputies. And looking at the fiscal year 2010 request for the 
150 account, I can see that you are already having a 
significant impact. Because we recently had a hearing with 
Secretary Clinton on Iraq, Afghanistan, Pakistan and the Middle 
East, I would like to focus on the details of the 2010 budget 
request for this hearing and take advantage of the expertise we 
have in today's witness.
    Mr. Secretary, the President's budget seeks an 
unprecedented $53.9 billion for the 150 account, including $52 
billion within this subcommittee's jurisdiction. And before 
anyone complains about the size of the increase I want to make 
it clear, let me note, that most of it simply is to regularize 
the supplemental funding for Iraq, Afghanistan, Pakistan, the 
West Bank, Gaza and humanitarian assistance. Total supplemental 
funding combined with the fiscal year 2009 appropriations 
reflect an increase in 2010 of about $4 billion or 8 percent 
which is consistent with increases sought by former President 
Bush.
    President Obama, through honest and transparent budgeting, 
has declared up front the true costs and importance of our 
foreign policy. He is investing in diplomacy and development as 
our first line of defense by providing resources to create a 
21st century State Department and USAID instead of relying on 
our overstretched military to run our foreign policy and 
implementing foreign aid programs. Our investments today in 
this approach will yield great dividends over time, and because 
as we all know, diplomacy and development generally are less 
expensive and more effective methods than military operations 
to achieve sustainable peace and security. In fact, the major 
increases in the international affairs budget are not for 
program expenses, they are for what I would call people 
expenses. With adjustments for supplemental funding, the 
President's request seeks a 30 percent increase for both the 
diplomatic and consular programs account and USAID operating 
expenses--which funds the operations of the State Department, 
including personnel, security and training at our embassies and 
USAID development personnel and security costs.
    I applaud you, Secretary Clinton and the President for 
following through on your pledges to rebuild State and USAID. 
However, we do need a comprehensive strategy for spending these 
resources to achieve specific goals. I hope you can provide 
insight on why the majority of the proposed new positions will 
be domestic deployments instead of overseas given our 
understanding that the greatest needs lie in our embassies and 
missions abroad.
    For example, how have you integrated the new hires for 
which you seek funding into your global staffing plans, how 
will you accommodate these new State Department and USAID 
employees and already crowded embassies, and how long will it 
take you to recruit, hire and train these new employees for 
deployment? Are appropriate human resource policies in place to 
ensure the best people for the job are hired? I am particularly 
concerned that you are seeking significant and much needed 
increases for USAID which does not have a management team in 
place.
    I fear that if nominations for USAID administrators and 
assistant administrator positions are not forthcoming, 
Congress' willingness and ability to provide the resources you 
seek will be compromised. Additionally, the administration 
needs to clarify the role of the civilian stabilization 
initiative and how it will interface with the operations of the 
rest of the State Department and USAID programs and personnel. 
Do you envision any differences in the concept than what was 
developed by the previous administration?
    Mr. Secretary, turning to the assistance programs there are 
relatively few major programmatic increases in the President's 
budget. The key increases on development assistance are to 
scale up basic education, expand agriculture and food security 
assistance and grow climate change initiatives. I continue to 
believe that access to a quality education is one of our most 
important tools for channelling young people in conflict-prone 
regions toward a more productive path. And I am very pleased 
that Secretary Clinton has continued her commitment to basic 
education. And I look forward to our continued partnership on 
this issue. Additionally, in light of the economic crisis and 
the impact on food security, I understand your emphasis on 
agriculture. And while the grim news on global warming 
certainly warrants a more focused approach to stem carbon 
emissions and facilitate eco-friendly solutions to the world's 
energy needs, I hope you can provide greater detail on the 
mechanisms and modalities for programming these increased 
resources.
    I am particularly concerned that there seems to be no 
budget detail on the $500 million requested for the Clean 
Technology Fund. I would note to my colleagues that the 
increases in the ESF account are largely to fund the programs 
in Afghanistan, Pakistan, Iraq, West Bank, Gaza. There is also 
a nominal increase in global health with the exception of 
malaria programs which are increased by $200 million. And while 
global HIV/AIDS funds have steadily increased over the past 
decade when many other aspects of the international affairs 
budget were cut or flat lined as we have seen with the H1N1 
outbreak, health needs cannot be deferred.
    Mr. Lew, you, the Secretary, your colleagues of the State 
Department, face a daunting set of challenges. But you have 
inherited a committed and skilled workforce, you have a 
Secretary and a President that have inspired millions around 
the world. You have my personal commitment and the commitment, 
I hope of all of us in Congress, to help you succeed.
    Mrs. Lowey. Before I turn to you for your remarks, I would 
like to turn to Ms. Granger for any comments she may have. Ms. 
Granger.

              Opening Statement of Ranking Member Granger

    Ms. Granger. Thank you, Madam Chair. I want to thank Deputy 
Secretary Lew for appearing today to explain the 
administration's fiscal year 2010 priorities. The subcommittee 
has only begun to receive the details of this budget request. 
And I hope the Deputy Secretary and his staff will work quickly 
to provide the full budget justification so that we can better 
understand the items requested prior to us marking up the bill. 
We received some high level descriptions of the request. We 
note the accounts in the State foreign operations bill total 
$52 billion, a 42 percent increase over the fiscal year 2009 
regular appropriation, excluding emergency appropriations. This 
large increase will bolster staffing, as the Chair has 
mentioned, for the State Department and USAID, support 
administration priorities like food security, climate change 
and global health, and continue support for civilian efforts to 
fight the war against terrorism, particularly in Iraq, 
Afghanistan and Pakistan. The administration has described this 
international affairs budget request as a smart power budget, 
one that balances diplomacy, development and defense in the 
advance of our national security objectives. I have long 
supported the concept of smart power, and I hope the Deputy 
Secretary will explain how the State Department and USAID plan 
to implement the amounts requested to support the diplomatic 
and development goals of this administration.
    Maintaining an appropriate level of highly trained staff is 
critical. It demonstrates smart power. And this committee has 
supported hiring efforts begun by the previous administration. 
I look forward to an update from the Deputy Secretary on the 
progress that has been made thus far to hire and deploy new 
foreign service officers. And I look forward to hearing about 
the new hiring expected for fiscal year 2010 and beyond.
    In closing, I should note that I am pleased the 
administration is following through with support for the Merida 
initiative. The $450 million request is an important investment 
in Mexico's war against drug cartels on our southern border. 
The Deputy Secretary and I spoke about how essential it is that 
the funds are provided quickly to the Mexican government. I 
thank him for the work he has done to expedite the funds 
already appropriated. I look forward to working with you and 
hearing from you. Thank you.
    Mrs. Lowey. Deputy Secretary Lew, your full written 
statement will be placed in the record. Feel free to summarize 
your oral statement so we can leave enough time to get 
everyone's questions. Proceed as you wish.

                      Opening Statement of Mr. Lew

    Mr. Lew. Thank you very much, Madam Chair, Ranking Member. 
I appreciate the warm welcome and look forward to working with 
you and the members of this committee both today and as we go 
forward. It is my honor to be here to present President Obama's 
international affairs budget request for 2010. And I will take 
advantage of putting my statement in the record to summarize 
the major principles and priorities in the budget so that we 
can leave most of the time for questions. At a top line level 
of $53.9 billion, the request represents a 9 percent increase 
over the 2009 funding levels. This budget provides the detail 
of what we mean when we talk about smart power, and it provides 
the resources for the administration to pursue its foreign 
policy goals. The United States faces diffuse and complex 
threats, including terrorism, climate change, pandemic disease, 
extreme poverty and global criminal networks.
    Key to our security and prosperity is a stable and secure 
world, and we cannot achieve that through military means alone. 
It requires American leadership that promotes our values, 
builds strong partnerships and improves the lives of others. 
That is what President Obama and Secretary Clinton call smart 
power; harnessing the tools of diplomacy development and 
defense to help build a more peaceful and prosperous world. By 
reducing the risk that global poverty and instability will 
ultimately lead to conflict. Smart power will save us both 
dollars and lives in the long-run. We understand the economic 
conditions at home make this a very difficult moment to ask the 
American people to support even a modest increase in spending 
overseas. At the same time the American people understand that 
our future security depends on resolving current conflicts and 
avoiding future ones. When Secretaries Gates and Clinton 
testified together recently, they made a powerful case that 
investments in diplomacy and development, two of the pillars of 
our smart power strategy, are as vital to our national security 
as investments in defense, the third pillar. Smart power starts 
with people. That is why our budget puts an emphasis on 
increasing the size of the foreign service, ultimately 
achieving a 25 percent increase in state foreign service 
officers over the next four years.
    But I want to address special attention to the urgent need 
to rebuild the U.S. Agency for International Development. We 
are looking to USAID to take on some of the most difficult 
tasks in some of the world's most challenging environments. But 
with its ranks thinned to just over 1,000 foreign service 
officers worldwide, USAID does not have the manpower it needs, 
which is why this budget includes a 45 percent increase in 
USAID operations and puts USAID on a path to doubling its 
foreign service officers by 2012. All of our goals; conflict 
prevention, poverty reduction, food security, global health, 
climate change, come back to having the right people with the 
right training and the skills to get the job done.
    This budget also provides the resources to pursue critical 
missions in conflict areas that occupy much of our attention 
these days; Afghanistan, Pakistan and Iraq. Our fiscal year 
2010 request seeks $2.79 billion in nonmilitary assistance for 
Afghanistan and $1.3 billion in nonmilitary assistance for 
Pakistan, substantial resources that must be coordinated and 
deployed effectively. Following the administration's strategic 
review, State and USAID are implementing a comprehensive 
civilian program which is fully coordinated with our military 
and other key agencies, such as the Department of Agriculture 
and the Department of Justice, to bolster both security and 
development.
    At the same time, it is important to step back from these 
conflict areas to see clearly our broader objectives. We make 
investments to promote long-term development and human security 
both from the top down and bottom up strengthening the ability 
of governments to meet the basic needs of their populations, 
and at the same time, partnering with citizens and civic groups 
to build human capacity and reduce extreme poverty. Children 
need a basic education that provides skills to pursue 
opportunities rather than hatred.
    Parents need jobs to reject the appeal of extremists who 
too often offer the only way to support a family, and for many 
survival requires minimal access to basic health care. Overall 
56 percent of our assistance request is targeted to development 
programs with special emphasis on economic development, good 
governance, global health, food security, education and global 
climate change.
    For example, our budget request includes $7.6 billion for a 
global health initiative, which continues the fight against 
HIV/AIDS, malaria and tuberculosis and expands it to address 
maternal and child health, neglected diseases, family planning 
and basic health infrastructure. It commits $3.4 billion to a 
food security initiative aimed at addressing the root causes of 
food shortages by more than doubling the resources devoted to 
agricultural production and productivity.
    And on the climate front it seeks $581 million to help 
developing countries most vulnerable to the impacts of climate 
change adapt by becoming more climate resilient and developing 
clean energy alternatives. Our budget also invests in the 
strategic, bilateral and multilateral partnerships that are 
critical to global security, stability and prosperity. We focus 
on states that can or must be partners in regional peace and 
prosperity. And tipping point states where the potential for 
conflict and instability present regional and global threats. 
And we leverage our multilateral partners who represent both a 
force multiplier and a cost effective means for addressing 
global challenges.
    We are strengthening global security capabilities knowing 
that when our allies and partners can defend their territory 
and borders against external and internal threats we are more 
secure. Our strategy seeks to forge partnerships among states 
to help build global security and capacity in a number of 
areas, including peacekeeping, police training, 
counternarcotics, nonproliferation and combating nuclear 
terrorism.
    Finally, we provide the resources, over $4.1 billion to 
respond to humanitarian needs. Our humanitarian assistance 
programs that provide relief when we see human suffering are a 
fundamental expression of our values. At the same time leading 
with our values often strengthens our ties with other people. 
Our humanitarian efforts in the aftermath of the earthquake in 
Pakistan actually began to turn the sentiment amongst many 
Pakistani citizens away from extremists and led them to see the 
United States as a political force for good in their lives. At 
this very moment we are taking steps to make sure that the 
United States is in the forefront of efforts to address the 
needs of people who are seeking safe haven as the government of 
Pakistan takes military action against extremists. There is a 
real possibility that in addition to the 500,000 already 
internally displaced another 1 million persons could need 
assistance.
    The challenge, in part, is providing funding and we are 
taking steps to make certain that we are able to help there. 
But even more challenging will be gaining access. And our very 
capable ambassador to Islamabad is coordinating with 
international organizations, NGOs and the government of 
Pakistan to determine how we can assist more effectively. 
Securing the resources to promote our goals is an important 
first step towards restoring American global leadership, but 
resources alone are not enough. We know we have to be better 
managers of our resources as well, especially in these 
difficult economic times.
    I hope my appearance before you today signals the 
Secretary's seriousness and determination that the Department 
be a responsible steward of taxpayer dollars. It is the first 
time the position of Deputy Secretary of State for Management 
and Resources has been filled, and in only a few short months, 
our reform agenda is already robust. Even as we undertake the 
reviews and seek the necessary input to define our new 
approach, you have already seen signs of how we are going to 
work differently. In Afghanistan and Pakistan, we are bringing 
all agencies together under a shared set of objectives allowing 
us to benefit from the range of expertise available across the 
U.S. Government, maximizing resources through greater 
coordination and integration and recruiting rapidly to meet a 
critical and time sensitive mission.
    In food security and global health, the State Department is 
leading whole of government efforts creating inventories of 
programs, identifying gaps in our current programming and 
coordinating among agencies to develop a shared strategy. All 
of these examples highlight the need to develop broader 
mechanisms to manage by country and by function so that all 
foreign assistance programs are coordinated and resources can 
be allocated to achieve objectives most effectively and so that 
programs can be operated most efficiently. Accountability for 
results is another principle that will guide our reform 
efforts. We are keenly aware that with increased resources 
comes the obligation to demonstrate that we are making an 
important difference.
    Finally, we know that we need to be a more effective donor. 
Our people in the field must have the means to leverage 
opportunities, to build strong partnerships with responsible 
governments, and to support development progress by empowering 
partners to have more of a say in how aid resources are 
targeted in their countries. We look forward to consulting 
closely with you and other stakeholders as we consider these 
questions and others in the coming weeks and months ahead. I 
thank you for the opportunity to appear today and look forward 
to answering your questions. The President and Secretary's 
agenda is an ambitious one, yet with the right resources and 
good counsel, we are confident that we can meet these 
challenges. We look forward to working closely, and I welcome 
the opportunity to answer your questions.
    Mrs. Lowey. Thank you very much.
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    Mrs. Lowey. We appreciate your wisdom and we appreciate 
your coming before this committee. And I will begin by asking 
some questions and then I will proceed from side to side giving 
each member 5 minutes. As you know, this subcommittee has 
supported efforts to strengthen USAID's capacity over the past 
2 years. In my judgment, USAID is the key agency with the 
responsibility for implementing most of our foreign assistance 
programs, and I agree with the Secretary's objective of 
strengthening the agency. And I also agree wholeheartedly with, 
and we have had many discussions about, her focus on 
coordination, accountability. I have had this experience 
wherever we have been that people from one program don't know 
what the other is doing.
    And so to go there and coordinate and to demand 
coordination will really bring about greater effectiveness. 
However, I find it difficult to comprehend that 5 months into 
the administration we still do not have any political 
leadership at USAID. There is no AID administrator, there are 
no political appointments for any of the assistant 
administrative positions. And as I noted, I think there is 
really a danger that unless a management team is in place to 
administer these resources, not that you are not very capable, 
that Congress may be reluctant to provide such significant 
resources. Can you tell us where the process is in terms of 
appointing a USAID administrator and why this is taking so 
long?
    Mr. Lew. Madam Chairwoman, the process of selecting cabinet 
and subcabinet level officials in the government is, as you 
know, a very difficult one and a very time consuming one. The 
administration began a bit ahead of other administrations. We 
have now found ourselves in the same situation that other 
administrations have found themselves in at this point. I don't 
think we are particularly behind the past trends, but it is 
frustrating that we are not able to have our full team on the 
field. The process of selecting names, clearing names, bringing 
them forward for confirmation, has been very time consuming. I 
think the State Department is actually ahead of most other 
agencies at this point. Unfortunately, we have not been 
successful in moving as quickly on filling the key positions at 
USAID. There are a number of very good names that are in the 
process of review. And no one will be happier than the 
Secretary and myself when we reach the point where names are 
put forward for these positions.
    But I don't want to leave the impression that in the 
absence of leadership at the Agency itself that there has not 
been a good deal of attention paid to USAID. I can say that I 
personally have been putting an awful lot of my time and 
attention into paying attention to the kinds of management 
issues that when we have an USAID administrator I won't need to 
pay as much attention to. The Secretary has been involved as 
well. As we have planned for the Afghanistan effort USAID is at 
the core of it, and we have drawn on USAID at every level to be 
part of the strategic planning process and to implement 
effectively. As we review the priority areas, like food 
assistance and health care, USAID is at the center of it. So 
USAID is very much a part of the administration's efforts. We 
will all be happy when we have fully confirmed leadership in 
place.
    Mrs. Lowey. Well, I guess I expected that answer. However, 
I think it is important to note for the record that we eagerly 
await leadership at USAID because I know that your 
responsibilities are widespread. And we both agree that having 
that leadership in place will be very helpful.
    Mr. Lew. I could not agree more.
    Mrs. Lowey. And perhaps you can comment on the MCC. How 
close are we to having a CEO at the MCC?
    Mr. Lew. It is really largely the same answer. There are 
very good names in the review process. But again, I want to 
emphasize that Secretary Clinton is chairman of the MCC board 
and is engaged actively with the MCC as the person responsible 
for coordinating the foreign assistance programs. I have 
engaged actively with the MCC. And I think that contrary to the 
expectations that many had that we would not treat the MCC as a 
core program, we have very much been treating it as a core 
program and want very much to be able to help move it forward.
    Mrs. Lowey. Good luck in that appointment as well. Lastly, 
the fiscal year 2010 request includes funding to hire an 
additional 350 foreign service officers at USAID, 1,181 foreign 
service and civil service positions at the Department of State. 
This is in addition to the substantial increases this committee 
provided for staffing in the fiscal year 2008 emergency 
supplemental and in the regular bill for fiscal year 2009. Of 
the over 1,500 new positions in the fiscal year 2010 request, 
how many do you project will be posted overseas, how many 
domestically, can you explain the increased staffing, 
particularly for security related positions.
    Mr. Lew. Let me answer the question first in principle and 
then with some numbers. Our goal is to assign as many foreign 
service officers overseas as we can. There are domestic 
postings that support the efforts of foreign service officers 
overseas, so we will never be all overseas. There will be some 
balance. In the initial year of appointment, there are language 
training activities that have to be a domestic posting before 
someone is assigned overseas. So looking ahead, we see that 
there are roughly 180 positions that will be in hard language 
and other training at the Foreign Service Institute. We have a 
number of positions that are going to be coordinating with the 
Department of Defense, so there are about 20 positions that are 
detailed to DOD. And we have over 500 positions that are 
intended to be overseas right away. So the mix of domestic and 
overseas will be much more heavily weighted towards overseas as 
we get deeper into the training and deployment process.
    Mrs. Lowey. My red light is on. Ms. Granger.
    Ms. Granger. I understand that the President's budget 
proposes removing language prohibiting or restricting funds for 
the Palestinians. These provisions are intended to prevent U.S. 
dollars from falling into the hands of terrorists. In the 
hearing with Secretary Clinton we had a great deal of 
discussion about the prohibition on funds going to Hamas which 
the administration included in its supplemental request. Now 
the administration seems to be reversing course. Is there a 
reason why the administration has requested that safeguards on 
funds going to Palestinians should be removed in the fiscal 
year 2010 bill.
    Mr. Lew. I am not aware of any provision that reverses the 
restrictions in this area. There has been some evolution of the 
proposal, for the provision that was in the supplemental 
appropriation amended something that was put on in the Omnibus, 
and there may be something that is out of synchronization in 
terms of time. But I am not aware of any policy difference. And 
if there is something that hasn't caught up in time we will 
work with you to reconcile that. Our position is very clear 
that we want to be in a position to support a responsible 
Palestinian Authority that is working to build stability, both 
in financial and security areas. We want there to be room for a 
government to form so that it can draw as broadly as possible 
to create stronger support for moderate leadership and drive a 
wedge in the support that extremists have. And we are very 
comfortable with the resolution in the supplemental which we 
frankly thought clarified the original intent.
    Ms. Granger. Okay. We will follow up on that and see if 
there is a conflict. I also want to ask you about Merida. We 
have visited and we understand the problem with Mexico. I want 
to make sure that we are on track to provide Mexico with the 
helicopters funded in 2009 by the end of this calendar year.
    Mr. Lew. We are on track. I actually just checked the other 
day to make sure that we are on track. And in general, the 
Merida money to Mexico has not moved as quickly as we would 
like, and we have been paying quite a lot of attention to why 
things are stuck in the pipeline. Some of the issues have to do 
with the fact that Mexico had not previously been a recipient 
of military assistance, and there was a fair amount of process 
they had to go through. That is finished now. There are now 
agreements in many areas to provide equipment where they are 
locked into place with deadlines, including for the 
helicopters.
    Ms. Granger. Good. Let's make sure that happens also with 
the Black Hawks that are coming up. And then your fiscal year 
2010 request includes $450 million. We have not seen full 
details on what is in that request. Can you explain a little 
bit about the equipment and the programming that is being 
requested?
    Mr. Lew. The intention in the Merida funding was to 
continue with the program. And frankly, the addition that we 
made that stood out the most was adding the Black Hawk 
helicopters back in. That was in the supplemental. But that was 
the major addition. So I think that the approach on Merida is 
to give the Mexican police and military the equipment they need 
to mount an effective effort to stop the drug trafficking and 
crime. We want to work with the government of Mexico as we go 
along, and if their needs evolve, to work with them to evolve 
with them. So the precise details for the equipment that will 
be provided in the $450 million I would like to get back to you 
on.
    Ms. Granger. I understand. Thank you. Thank you Madam 
Chair.
    Mrs. Lowey. I just want to note that the President's 
request does delete all the policy language, I believe, that is 
carried in our bill, not just the one that you referenced. So 
all of that language is in there. And I think we are in 
agreement with the administration, as you mentioned, that the 
additional language which we added, plus the other policy 
language that we have included, does define our positions, our 
mutual positions, very clearly.
    Mr. Lew. Going back to my former life at OMB, if I recall 
quickly, White House budgets always remove the language that is 
added, and that doesn't represent a changed policy, but it is 
an executive privilege issue. On the policy here, there has 
been no change and we remain anxious to work with the committee 
to make sure that there is no ambiguity about that.
    Mrs. Lowey. Thank you. Mr. Jackson.
    Mr. Jackson. Thank you, Chairwoman Lowey. I want to begin 
by welcoming Deputy Secretary Lew to our subcommittee and thank 
him for his testimony. Deputy Secretary, I read with great 
interest your testimony, at least the version I received last 
night. The version I have been presented today is several pages 
short.
    Mr. Lew. I didn't think you would want me to read the whole 
thing.

                     Opening Remarks of Mr. Jackson

    Mr. Jackson. It is actually not even here. It stops on page 
4, and I think there are more pages that should be added. But 
during my tenure on the subcommittee, I have championed the 
countries in Sub-Saharan Africa and the larger African 
Diaspora. I fought not only to provide these fragile countries 
with emergency humanitarian assistance, but also with the 
resources for long-term sustainable growth. I noticed and 
appreciate the administration's effort in its fiscal year 2010 
request for migration and refugee assistance in that account to 
incorporate recent supplemental funding into the core budget 
requests. Aside from funding a much more accurate reflection of 
the ongoing needs of the program, I think this will help 
mitigate the operational challenges that arise from relying on 
supplementals to fund regular programming. However I noticed 
that if the President's pending fiscal year 2009 supplemental 
request for MRA is approved by Congress, the fiscal year 2010 
request would be slightly below the fiscal year 2009 
appropriations.
    In view of the unmet humanitarian needs of many refugees 
and internally displaced persons--our ongoing special 
responsibility to displaced Iraqis and new humanitarian 
concerns in places like Sri Lanka and Pakistan--I am wondering 
how can the U.S. meet our current fiscal needs at the fiscal 
year 2010 request level. I would like to hear your thoughts on 
that.
    And in the interest of time, let me state also my next 
question. I noticed that our voluntary contributions to 
peacekeeping operations were decreased by around 25 percent. I 
know that the funds that were requested in fiscal year 2010 
will support several missions in Sub-Saharan Africa, including 
Somalia, South Sudan, the DRC and Liberia. Since most of these 
missions have been ongoing for some time and will probably 
continue, why do we reduce our voluntary contributions to 
peacekeeping operations by 25 percent since we also decreased 
our assessed contributions to peacekeeping? Are there any 
missions that we might be neglecting? Thank you, Secretary Lew, 
and thank you, Madam Chair.
    Mr. Lew. Mr. Jackson, on the question of the funding level 
for refugee assistance, we very much have tried to take a look 
at the full year and include the resources that are likely to 
be needed. I should make the point here as in other areas that 
contingency planning is always subject to risk so you never 
have full knowledge of what will actually occur. So we would 
reserve the right if there are emergencies, even though we have 
planned ahead, to come back and work with you. In terms of the 
number that we put in here, there are several areas that in 
2009 were quite intensive in terms of demands for resources in 
Gaza and Georgia and Lebanon. And the change of the reduced 
needs in those areas we think provides a sufficient cushion 
that we are now funding at an historical level that will enable 
us to meet the expected needs around the world. As the year 
develops if that turns out to be an underestimate, we would 
work with you on it.
    But it is our best estimate that given the reduction in 
needs in some parts of the world, there is a cushion to meet 
the needs in other parts of the world. On the peacekeeping 
numbers, an overview that I would like to give is that we both, 
in the supplemental and this budget, have taken very seriously 
the need for the United States to fully meet its commitments to 
all peacekeeping accounts. The supplemental clears up arrears--
this budget keeps us current and even takes a first step 
towards helping to deal with the problem that our fiscal year 
doesn't match up with the fiscal year of international 
institutions--and will synchronize our payments a little bit 
more closely to the needs of the international institutions' 
fiscal years.
    In terms of the specific numbers that you asked about, we 
are assuming that in the case of Somalia, that there will be a 
switch at least for the logistical support to be handled 
through assessed peacekeeping. We sent the notification to the 
committee last week on that. We know there is a variety of 
views on that issue and look forward to discussing that with 
you. We also note that the Liberia mission is scheduled to be 
completed and that will result in a lower level. So we think 
that the numbers that we have put in the budget will cover both 
the assessed and the voluntary requirements.
    Mr. Jackson. Just a very quick follow-up if I might. The 
Liberian operation, for example, is scheduled to be completed, 
but the request from the Liberians themselves and the request 
of neighboring countries and other countries that have 
participated in the operations are also making the case that 
they would like to expand the mission to keep the stability in 
Liberia. And so it just appears, from my perspective, that 
reducing the voluntary contribution and the assessed 
contribution, that we are making some assumptions based upon 
dates that we think are approaching, but they may not 
necessarily be mission worthy or what the reality is on the 
ground. I thank the Chair for yielding me the time.
    Mr. Lew. Madam Chair, can I just add one further response. 
The supplemental level was actually kind of a high water mark 
level because we were kind of clearing out some arrearages. And 
we would not need to maintain funding at the 2009 level, 
including the supplemental level in order to maintain our 
activities. So I think it may exaggerate the difference. And we 
would be delighted to work with you, Mr. Jackson, to kind of go 
through the numbers and make sure that we are fully 
accommodating what is likely to be the requirement in Liberia.
    Mr. Jackson. Thank you.
    Mrs. Lowey. Thank you. Mr. Crenshaw.
    Mr. Crenshaw. Thank you Madam Chair. Welcome. The Chair 
mentioned MCC. I was encouraged to hear what you had to say. I 
have been a big supporter of that. You talked about smart 
power. I think it is smart aid where we require folks to talk 
about economic freedom and human rights and things like that. I 
was encouraged to see the request of $1.4 billion a sizable 
increase from last year. But since there is no CEO yet, I am a 
little concerned, and I think I heard you correctly say that 
you are trying to make that happen. Because my question is, do 
you see the MCC continuing to be an independent agency or right 
now you mentioned the Secretary is overseeing things, and I 
think that is good, but you don't plan to move toward, away 
from the independent agency aspect and have it thrown in with 
all the foreign assistance, do you?
    Mr. Lew. I think that we view all of the different 
assistance programs as having important attributes that make 
them distinct from one another. But we also see there being a 
critical need to coordinate amongst them in a way that, 
frankly, they haven't been in the past. There are far too few 
countries where all of the different streams of U.S. aid are 
fully coordinated. And that leads to duplication of effort, 
redundancy of capacity and not necessarily putting the U.S. 
Government forward in the best possible light. So I think in 
general, while we very much appreciate that there are 
differences in MCC with its five-year compacts, its very clear 
benchmarks, and its very unique characteristics. But on the 
ground, MCC has to draw on USAID for much of the work that it 
does, just as PEPFAR draws on USAID for much of the work that 
it does. We would like for that collaboration to be much more 
thoughtful and organic than it is.
    Right now, we are in a situation where it could work in one 
place, it might not work in another place. And when I ask for 
examples of where everything is coordinated, I am pointed to 
precious few countries where everything is coordinated. I don't 
know that it requires a change in the law to accomplish what I 
am talking about. But if you think about the role of the 
ambassador and the DCM, if you think of them as a CEO with a 
range of programs that they oversee, there ought to be full 
knowledge by the ambassador and the DCM of all of the programs 
going on.
    And if one of the programs is undertaking an activity in an 
area where another is already present, a flag ought to go up 
and say let's do this together, let's not build two separate 
facilities that do the same thing, let's not duplicate effort, 
let's not send a confused message as to what the program of the 
Government of the United States is.
    I also think it is important that in all respects we think 
of our foreign assistance programs as being part of our foreign 
policy, an expression of our foreign policy. As we have gone 
through the very difficult discussions regarding the MCC 
compacts with certain countries where there are frankly 
problems, it has been very important to coordinate what is done 
through the MCC and what is done through our diplomatic 
channels so that we are supporting each other as opposed to 
working at cross-purposes. And I think that in that kind of 
nuanced way of managing, one can respect that each program has 
some very important characteristics that make them different 
from one another, but that doesn't stop us from coordinating 
them to run an effective cross-governmental program.
    Mr. Crenshaw. But you don't see any changes in the way--I 
mean, this is the fifth year they can have 5-year compacts. It 
is a pivotal year.
    Mr. Lew. I think that we do have some changes in mind. The 
MCC has proposed that the single compact versus a multiple 
compact issue is a serious concern that they have. And we 
support the notion of having multiple compacts. I think the 
whole question of 5-year funding is something that we need to 
work with the Congress on. If somebody had asked me 10 years 
ago would Congress lock up money for 5 years for a program like 
MCC, I wouldn't have believed it possible. But in fact, the 
commitment was made and there was the patience to stick with 
MCC long enough to give the program a chance to get the 
pipeline out into the field. I think we are now at the point 
where we all together have to evaluate the results, we are very 
pleased with the way MCC has been working and embrace the 
mission of MCC wholeheartedly.
    Mr. Crenshaw. One thing, the time is almost up, but it is 
unique in the way the funding is planned out over several 
years. Most of the foreign assistance gets appropriately spent. 
And so the MCC money is always a target for folks to say, well, 
I know that is committed, but it is really not spent so why 
don't we take that money and put it somewhere else. Do you have 
any ideas about how we can do a better job of making sure that 
when we enter in a compact and say this is what we are going to 
spend over a 3 to 5-year period that people don't grab the 
money each year.
    Mr. Lew. I think the risk of multi-year money is one that 
is perennial. I think it is the right way to think about an 
awful lot of issues and we would love to work on multi-year 
programs and other areas as well. It is not always in the best 
interest of achieving long-term objectives to have year-to-year 
decisions. At the same time, I fully understand that the 
appropriations process is an annual process. I think MCC has 
survived through its kind of early years with the tolerance 
that it takes time to get the pipeline fully flowing. I think 
that the challenge will be for MCC to show results, and if it 
can show results, we can work together on multi-year funding.
    Mr. Crenshaw. Thank you. Thank you, Madam Chairman.
    Mrs. Lowey. Thank you. Mr. Schiff.

                     Opening Remarks of Mr. Schiff

    Mr. Schiff. Thank you, Madam Chair. Mr. Deputy, good to see 
you. I know we did not reach a meeting of the minds last week 
on the issue of coalition government. And I want to reiterate 
my concerns about that. In the event there is a coalition 
government that is formed, I think we will need to revisit many 
of the issues that we discussed, and I am just going to leave 
it at that. I do want to ask you about three countries this 
morning: Egypt, Yemen and Somalia. Last week you may have seen 
a pretty powerful editorial in the Washington Post taking issue 
with unrestricted FMF, financing or other financial assistance 
to Egypt without any discussion of the promotion of democracy 
in Egypt.
    And while I don't agree with the incompetent and 
condescending way that the previous administration sought to 
promote democracy in Egypt or elsewhere in the Arab world, the 
failure to impose democracy by diktat should not lead to total 
abandonment of a policy that seeks to bring more democratic 
rule to hundreds of millions of people through a process of 
candid engagement with current regimes, support for growth of 
independent civil society in the Arab world, support for media 
and unwillingness to continue turning a blind eye to gross 
violations of human rights.
    Poll after poll of Arabs taken in the last decade have 
shown that American support for authoritarian regimes is often 
at the heart of anti-American attitudes in the region. So my 
question, with respect to Egypt, is what will we be doing to 
promote democratic reforms in Egypt, notwithstanding the 
statements of the Secretary of Defense. And with respect to 
Somalia and Yemen over the weekend, General Petraeus told Chris 
Wallace we see tentacles of al Qaeda that connect to al Qaeda 
in the Arabian Peninsula in Yemen, the elements of al Shabaab 
in Somalia, elements in North Central Africa, and that strive 
to reach all the way, of course, into Europe and the U.S. My 
principal concern is over Somalia and Yemen. And is there 
anything in the State Department's budget or plans to try to 
create institutions in Somalia in particular, but also in 
Yemen, that will prevent either place from becoming the next 
Afghanistan?
    Mr. Lew. Thank you, Mr. Schiff. Let me start, if I could, 
on your first observation because I actually think we may have 
not reached agreement on words, but we have a meeting of the 
minds. We agree with you wholeheartedly in the case of U.S. 
support for the Palestinian Authority that we should not be 
supporting organizations or individuals who have ties to 
terrorist organizations. And we want to make sure that as we 
implement any appropriation bill that is enacted that we make 
sure that there is no ambiguity about that. Sometimes it is 
hard to draft the words, but I think there is actually an 
agreement on the principle.
    On Egypt, the U.S. funding for Egypt has been a source of 
some tension in the relationship with Egypt over the last few 
years. And the combination of the reduced level coming down and 
the earmark that went from $50 million to $20 million for 
democracy was I don't think contributing to our ability to 
actually move Egypt forward on a democracy agenda. That doesn't 
mean that we don't want to support democracy activities. We do 
very much remain committed to promoting democracy in Egypt, and 
we understand the shortcomings that exist there. I think that 
in the conversations that the Secretary had when she was in 
Egypt, and the conversations that I have had with 
representatives of the government of Egypt, there has been an 
enormous appreciation that what we have said is we want to work 
together on identifying funding objectives which meet with our 
kind of bilateral approval.
    It is kind of not saying--we are not saying we won't be 
promoting democracy activities, we are saying we want to have a 
conversation with them and engage with them in a somewhat 
different way. Egypt is an important ally. They have important 
challenges in this area. We know that we need to work with 
them. I think that they know they need to work with us. And we 
have tried to use the very small change in the way the aid is 
structured to create a relationship where you can have more 
influence and make more progress.
    Mr. Schiff. If I can just say, if there is time for you to 
respond on Yemen and Somalia, I agree with that approach, and I 
think that we haven't been very effective in our democracy 
assistance funding in Egypt, and that there may very well be 
room for us to work with the Egyptians on supporting 
organizations and democracy, promoting institutions that aren't 
flash points in our relationship with Egypt. So I don't think 
we have gone about it necessarily the best way. And I think 
there is room to work with Egyptians on a better approach. But 
I want to make sure we are not abandoning an approach, because 
I think it is fundamental to the concern that many in the Arab 
world have about the United States.
    Mr. Lew. If I might briefly just address the question you 
raised on Somalia and Yemen. In Somalia, we have a significant 
effort in the peacekeeping area. And we have put some $28 
million into economic support funds that can be used for 
precisely the purposes that you inquired about: Reconciliation 
efforts, training government civic leaders and supporting 
initiatives that facilitate dialogue in civil society.
    I don't think we disagree about the risk that is present in 
Yemen or Somalia. And we are very attentive to the fact that we 
have to keep our eye on areas of instability which could become 
the next challenge. Yet Yemen requires our attention as well 
and I'm happy to continue the conversation about Yemen.
    Mr. Schiff. Thank you Madam Chair.
    Mrs. Lowey. Mr, Kirk.

                      Opening Remarks of Mr. Kirk

    Mr. Kirk. Thank you, Madam Chairwoman. I would note that 
when you left OMB, our assistance to the West Bank totaled $211 
million. And this year will be four times that at $865 million. 
So I share my colleague from California's very deep concerns 
about the direction you are going. And I want to ask a very 
specific question. In November of 2007, the AID inspector 
general released a report entitled the Audit and Adequacy of 
USAID's Anti-Terrorism Vetting Procedures. The inspector 
general concluded the following: AID's procedures, policies and 
controls are not adequate to reasonably ensure against 
providing assistance to terrorists. These policies or 
procedures do not require the vetting of potential or current 
AID partners.
    Further, the sufficient management controls have not been 
developed to reasonably prevent aid from being inadvertently 
provided to terrorists. To decrease the risks of inadvertently 
providing funding and material support to terrorist entities 
AID should issue guidance on a worldwide anti-terrorist vetting 
program. In June 2008, the inspector general released its own 
report viewing the State Department's counterterrorism vetting 
procedures. They concluded procedures for counterterrorism 
vetting and whether vetting is conducted at all vary widely 
through the department.
    Different lists are consulted by different offices and few 
offices have negotiated special arrangements to conduct vetting 
at the terrorist screening center. The inefficiencies and 
potential vulnerabilities in these arrangements have been 
apparent both at the interagency and department level, but the 
interagency efforts so far fail to establish governmentwide 
sets of standards and procedures for counterterrorism vetting 
prior to awarding government assistance.
    In response to the 2007 report, AID developed a partner 
vetting system. I personally visited that office in Crystal 
City at the terrorist screening center. The final rule for the 
partner vetting system was published January 2, but left 
implementation to the new administration.
    Mr. Kirk [continuing]. Given the conclusions and 
recommendations reached by two IG reports and the very large 
provision of assistance now proposed for Pakistan, Afghanistan, 
Lebanon, Egypt, and especially the West Bank and Gaza, will you 
commit to implementing the partner vetting system for the State 
Department and USAID assistance.
    Mr. Lew. Mr. Kirk, in terms of current practices on vetting 
of NGOs, you know there is a vetting process in place where 
NGOs are checked against multiple terrorist lists.
    Mr. Kirk. Can I just tell you the current system is one 
that the IGs decry? The new system that I am asking.
    Mr. Lew. And I am going to answer your question. The rules 
that you are asking about were presented for our review soon 
after we arrived and we asked a number of questions about them. 
Most prominently was why did it apply to NGOs exclusively, why 
did it not apply to contractors. And frankly I couldn't be 
satisfied that there was a good rationale for saying that there 
was a difference that made a difference, and I asked USAID to 
go back and redraft a regulation that would be applied across 
the board.
    That has been sent to OMB. It is in the rulemaking process 
now, and it is on a template to become final.
    Mr. Kirk. Good. I support that you are actually going to 
expand----
    Mr. Lew. I thought it was a mistake to issue a rule that 
went halfway and create confusion, when in just a few weeks we 
would be able to implement a rule that starts out in an even-
handed way.
    Mr. Kirk. Great. I hope that there are no exceptions.
    Mr. Lew. I am not aware of exceptions. There obviously are 
many safeguards----
    Mr. Kirk. The international NGO system hates this program, 
and so I would hope that you would not provide any out, given 
the very large increase and the fact that we may be, under 
language proposed by the administration, providing a taxpayer 
subsidy to Hamas-controlled ministries, the PA, this actually 
will protect the administration more than if there were----
    Mr. Lew. Since all of my interventions have been to expand, 
not narrow the coverage, I know that it was broader than it was 
in January because it covers contractors. I will go back and 
check on that question as to whether any exceptions were in 
there.
    Mrs. Lowey. I just want say that I appreciate--you will get 
an additional minute--but I just want to say I appreciate the 
gentleman bringing up this issue because, as you said, it 
certainly is applicable in Pakistan and Afghanistan, and the 
administration has been extremely cooperative and 
understanding. We have to strengthen the requirements. There 
are chances that someone could get through a hole, but I think 
if we are all in agreement that this is critical, we can 
certainly perfect the system. And I wanted to thank the 
administration, and now you can go back.
    Mr. Kirk. I take what you said as very good news.
    We have not received the formal budget justification for 
the Department. Our budgeting brief says that you will be 
requesting $62 million for public diplomacy, including 20 new 
positions. I am concerned that we haven't identified the 
Chinese speakers in that list of where we will be going.
    Also, last year we funded six new American presence posts 
for public diplomacy in China that cost about $1.5 million each 
in China. And Secretary Rice outlined a vision for 10 of these 
posts throughout China in the largest cities where we don't 
have a consulate.
    In the budgeting brief we have no mention of American 
presence posts. For example, here is a list of cities with no 
American presence whatsoever: In Xinxiang, 8.5 million people; 
Tianjin, 8.2; Chongqing, 7.5; Nanjing, 7; Dandong, 6.5; 
Hengshui, 6.3. So these are all plus five million metropolitan 
jurisdictions.
    Are we going to fund the American presence posts plans of 
the Department or are we going to let these cities go.
    Mr. Lew. Well, first in terms of when the details are going 
to be forthcoming, our plan is to get the detailed budget 
justification up in about 2 weeks, which I am told is actually 
ahead of past schedules, which given that it is a transition 
year is something that we feel pretty good about. So I 
apologize it is not here yet, but we are trying to get it to 
you as soon as possible.
    In terms of the American presence posts we are looking at 
the issue, and, you know, understand that it will require some 
engagement with the government of China to work through what 
would be acceptable posts. We are aware that they have a desire 
to have some additional offices in the United States and look 
forward to engaging in a conversation with them where their 
interests and our interests can all be worked through.
    Mr. Kirk. I just say that these cities alone, which would 
be six cities, is over 40 million people where there is no U.S. 
Diplomatic presence.
    Mr. Lew. I understand the issue, and I think that as we 
work through these issues with the Chinese there will be some 
places where presence is more likely to be possible than 
others, and we will get back to you as we proceed.
    Mr. Kirk. Thank you. I see. Thank you, Madam Chair.
    Mrs. Lowey. Thank you. In terms of the resources I would 
just say that your input is helpful, and if we could justify 
positions in every place where we would like positions, I am 
not sure where that would take us, Mr. Kirk. So I look forward 
to working with you and certainly the State Department in 
evaluating your requests and see what we can do to be helpful.
    Ms. Lee.

                       Opening Remarks of Ms. Lee

    Ms. Lee. Thank you, Madam Chair. Thank you very much, Mr. 
Secretary. Thank you for being here and congratulations. We 
certainly have a lot of work to do.
    Mr. Lew. Yes, we do.
    Ms. Lee. War, poverty, genocide, disease, climate change, 
but I am very pleased to see that President Obama has pledged 
to double foreign assistance by 2015. It really begins to put 
us on the right track toward reaching some of our goals. So 
congratulations to you for being in the position to make sure 
that much of this happens.
    Before I ask you a couple of questions on the budget, let 
me just mention, and I mentioned this to the Secretary in terms 
of an inquiry with regard to a constituent of mine, Tristan 
Anderson, who was seriously injured when he was struck in the 
head by a tear gas canister in Israel and by Israeli soldiers 
while he was engaging in a nonviolent demonstration. So we will 
be following up, writing a more detailed letter because I am 
hoping the State Department is monitoring the full 
investigation of this very, very terrible incident.
    On the budget, let me ask about the Global Fund first of 
all. It has always been a key component in our response to the 
HIV/AIDS pandemic, TB and malaria, and in a very short period 
of time we really achieved significant results putting over 2 
million people on AIDS treatment, 5 million are being treated 
for TB, and 70 million bed nets have been distributed to 
prevent malaria, and of course we have been a generous donor to 
the fund, but the anticipated contribution I think it is $900 
million in the fiscal year 2009 budget. That will have to be 
significantly increased if we expect to fully fund all of the 
grants and meet the dramatically increased needs anticipated 
for 2010.
    And so I am not sure in terms of this budget, it looks like 
we are flat lining our contribution to the Global Fund, and I 
am wondering could you clarify that, especially given the need 
to actually increase it.
    Next, let me just congratulate you and our administration 
for the new Global Health Initiative. I think that it is a 
major step in the right direction in terms of looking at how we 
address our smart power agenda. I am concerned, though, that 
the $51 billion allocated to PEPFAR and malaria over the next 6 
years could fall short, if I am reading this right, at the 
funding pace which we authorized, and that was about $48 
billion over the next 5 years.
    So I would like to get some clarification on how we are 
addressing the Global Fund and PEPFAR and I want to make sure 
that we are not--or we shouldn't--anticipate a decline in 
resources for these very important and productive and noble 
efforts that we are engaged in.
    Mr. Lew. Thank you for those questions. I think that by any 
estimation you know PEPFAR and the Global Fund have just done 
an enormous amount in a very short period of time to tackle a 
terrible disease--three terrible diseases with extraordinary 
impact. The President and the administration continue to 
support very strongly the funding of those programs, and as you 
noted, we have expanded the concept to have a broader global 
health focus.
    In terms of the Global Fund itself, we actually requested a 
higher funding level than has been requested previously, and 
overall we think we have funded both the U.S. and the Global 
Fund programs so that they can meet the need. There is 
obviously some interplay between the two, and we know that in 
the past there has been back and forth between Congress and the 
administration on this and we look forward to continuing that 
conversation as we go through the year.
    On the global health program more broadly, the focus on the 
three diseases in PEPFAR, HIV/AIDS, tuberculosis and malaria, 
has been enormously valuable in terms of just tackling a 
problem that 8 years ago had no solution and now giving 2 
million people treatment that is life saving. You know, we need 
to find the means to extend that kind of focus to a number of 
other areas where we know very well how to improve health and 
life extending outcomes, actually more easily and less 
expensively than in those other areas.
    Our focus is on basic health issues, things like maternal 
and child health and the neglected tropical diseases, diarrheal 
illness which takes the lives of so many children, things that 
are very easy when you have a health presence to treat them and 
can be done in a coordinated way.
    In terms of the funding level overall, the President 
committed to funding the PEPFAR program at $50 billion over 5 
years. He has actually increased it to 51 in his budget and it 
is over 6 years. We think that that is a funding level that 
will enable us to keep pace. There are many issues about the 
projected requirements to keep pace with the current program 
and, as I think you know, there is a statutorily required 
strategic review of the program which our new administrator, 
who is going to be running the PEPFAR program when he is 
confirmed, will take on as a first order of business.
    Ms. Lee. Madam Chair, may I just quickly follow up? With 
regard to PEPFAR, I want to make sure that we are talking about 
a minimum of at least $4.8 billion a year for PEPFAR. The 
numbers, I am not sure, I know you have $51 billion over the 
next 6 years, which falls short for the funding pace for PEPFAR 
alone.
    And then secondly, yes, the administration has requested 
more than previous administrations for the Global Fund, but 
that is part of the reason we are behind and there are grants 
now that are pending that won't be funded if, in fact, we don't 
significantly increase that $900 million.
    Mr. Lew. We believe the funding level that the 
administration put in meets the needs of the program. If there 
are shortfalls that you see, we would be happy to discuss those 
with you.
    Ms. Lee. Thank you very much, Madam Chair. I would like to 
follow up with you on that.
    Mrs. Lowey. Thank you, Ms. Lee, and I just want to thank 
Mr. Lew as well for suggesting that there has been a 
conversation and that there will continue to be a conversation. 
As you know, in the supplemental we put an additional $100 
million for the Global Fund, and as for the question of 
balancing all the tremendous needs we have, certainly we want 
to continue to see aggressive action with HIV/AIDS and the 
Global Fund and PEPFAR, et cetera, and how that balances with 
food security and agriculture and education. It is worthy of 
additional conversation, as you said. So I thank you for your 
input.
    Mr. Rehberg.
    Mr. Rehberg. Thank you, Madam Chair. Being new to the 
subcommittee, I am trying to create a timeline on food security 
and the definition of emergency purchases of local and regional 
commodities. I notice in your presentation you have an 
appropriation request of an additional $300 million. Could you 
work through with me what you mean by famine prevention? Is 
that an emergency in the minds of those within the State 
Department? And the authority was originally granted in the 
pilot project and in the farm bill of 2008, and I see a study 
is going to be published after 4 years.
    Work through with me a little bit, and the reason I come 
from this direction is that I fear a little bit of a shifting 
of intent or responsibility on the part of those of us from 
agricultural States. I have to defend my votes on foreign 
assistance, and let me make a statement then. You refute it if 
you should or can or wish to, and that is we are taking 
taxpayer dollars from agricultural producers in Montana to send 
over to Africa to buy food product, commodities from the 
European Union.
    Mr. Lew. Congressman, the thrust of our Food Security 
Initiative is to be able to develop in the long term 
sustainable food production systems so that the need for 
emergency assistance in the long run will be reduced. It is 
ultimately not a solution to the problems in those poorest 
countries of the world for us to either export commodities or 
for them to be purchased locally. Ultimately, they need to 
develop sustainable agricultural systems that can meet their 
own needs.
    Mr. Rehberg. And I clearly understand that, and you know, 
there is no way I could justify as a fiscal conservative the 
expense of the transportation of commodities from America over 
to a famine area, except that it is the taxpayer dollar that is 
being used to purchase the commodities in America to send to 
the area as opposed to taking the taxpayers' dollar and sending 
it over to a competitor to buy the product somewhere else to 
give for the food security.
    Mr. Lew. Over the past number of years there has been an 
evolution of the commodity program from a U.S. Export program 
to a mix of U.S. Exports and local purchases. It has actually 
had beneficial effects in terms of being able to stabilize 
markets around the world and provide the commodities that are 
actually needed in the recipient countries.
    When I was in my last tour of duty at the Office of 
Management and Budget, there were more than a few circumstances 
when commodity exports that we were proposing didn't meet the 
needs of the country we were sending them to, and there was 
food that they didn't eat and didn't know what to do with.
    Mr. Rehberg. Is that because we don't produce that food 
product in America or it was a purchasing problem?
    Mr. Lew. I think that the challenge we have is to make sure 
that we are providing commodities that are needed at levels 
that meet the demand, get delivered to the people when they 
need it, and that as much as possible don't cause instability 
in the markets that we are seeking to help.
    Mr. Rehberg. I can understand that in the emergency 
standpoint, but in an ongoing food security program it seems 
like somebody ought to be smart enough to get the product in 
the hands of people that they want purchasing from us so that 
we are not only teaching them to farm, which we all support, 
but also undercutting ourselves financially locally because it 
is our economic development in the farm States. It definitely 
is a shift that I see. I recognize it from----
    Mr. Lew. Well, I think that it is a mistake to characterize 
these as emergency and nonemergency programs because these are 
really all emergency programs, and the need that we have is to 
meet the timeliness requirements, the appropriateness of the 
commodities, and as much as possible support the local 
production markets so we don't end up providing assistance but 
destroying the local agricultural market.
    There is a place for U.S. products in there. I don't mean 
to be suggesting that it is all or nothing, but I think that 
the fact that the program has become a mix, that is not a new 
policy.
    Mr. Rehberg. Could your agency provide information to me of 
the changing mix?
    Mr. Lew. Sure, I would be happy to.
    Mr. Rehberg. Whether it was 90/10 and now it is 60/40 or 
50/50 or 30/70.
    Mr. Lew. Yes, I will. I want to underscore that the really 
important focus of the Food Security Initiative that we are 
undertaking is really in the area of promoting self-
sufficiency, and the big increase in the budget here is in the 
area of promoting education and extension of technologies and 
farming practices, which is kind of neutral in the sense that 
it is not exporting or providing goods but helping to create a 
sustainable----
    Mr. Rehberg. Real quickly then. Do you read the authorizing 
legislation in the farm bill that you are taking the $300 
million figure for your appropriation request as $300 million 
per year in authorization or $300 million total over the course 
of the farm bill's authorization?
    Mr. Lew. I will have to get back to you on that, 
Congressman.
    Mr. Rehberg. Okay. Thank you.
    Mr. Lew. Thank you.
    Mrs. Lowey. Thank you.
    Ms. McCollum.

                    Opening Remarks of Ms. McCollum

    Ms. McCollum. Thank you. Mr. Lew, I would like to 
congratulate the administration on its budget request. I 
support the smart power strategy that you described in your 
testimony. I look forward to working with the administration on 
our shared priorities, global health, climate change and 
agricultural development. Congratulations.
    Mr. Lew. Thank you.
    Ms. McCollum. I was also encouraged to hear the strong 
statement from you in support of Middle East peace, a two-state 
solution to the Israeli-Palestinian conflict. Resolving the 
Israeli-Palestinian conflict is an urgent national security 
priority of the United States, but I have serious concerns 
about the new Israeli Government's failure to embrace the 
creation of an independent Palestinian state.
    This budget commits billions of taxpayer dollars to Israel 
and hundreds of millions to the Palestinians in pursuit of 
mutual peace and security. The American people are making a 
serious investment in peace. However, U.S. support must be 
matched by accountability, and it is time for both the 
Palestinians and Israelis to be accountable for removing 
obstacles to peace.
    One of those obstacles to peace and security is the 
government of Israel's continued support for the expansion of 
settlements and the failure to prevent the establishment of 
illegal outposts on Palestinian land. This land must one day be 
included as part of a future Palestinian state.
    Since 1967, homes have been built for 470,000 Israelis in 
the West Bank and East Jerusalem. In the past 3 years Israel 
has built over 5,000 homes in the West Bank settlements and 
another 500 bids for houses were issued.
    Continued settlement expansion will only lead to one 
conclusion, a one-state solution, and this is an unacceptable 
solution. The continued expansion of settlements not only 
undermines the peace process but it undermines U.S. national 
security. In fact, the settlement expansion also undermines 
Israeli security and America's investment in Israeli security, 
and I would like to quote Vice President Biden in his speech to 
AIPAC recently.
    Quote, Israel has to work for a two-state solution, not 
build more settlements, dismantle existing outposts, and allow 
Palestinians freedom of movement, end of quote.
    Now, I strongly support the Vice President's statement. So 
I would like to ask you to help me to understand clearly where 
the administration's position is. Does the U.S. Government 
oppose Israeli Government policy of settlement expansion in the 
West Bank and East Jerusalem? Can you assure me that none of 
the $2.8 billion in funds provided to Israel through the 
foreign military financing would be used to enable or 
facilitate the expansion or maintenance of settlements? And 
since settlement expansion is contrary to U.S. policy and 
undermines national security interests, what is our government 
doing to hold our partner Israel accountable if they choose to 
continue their policy of settlement expansion? And as you can 
tell I feel a sense of urgency to push for peace.
    Mr. Lew. Congresswoman, the administration and the 
President have, I think, taken a very clear position that we 
strongly support a two-state solution and that we feel that it 
is urgent for the United States to engage actively in the 
process. The President and Secretary Clinton have appointed 
Senator Mitchell as a Special Envoy and he has been traveling 
in the region, meeting with the parties. He has been working 
closely with the President and Secretary as they plan and 
prepare for meetings with heads of state from the region which 
are going to be held in the coming weeks.
    I think that the time is now for all the parties in the 
region to come forward and engage in this conversation 
constructively, and we have made clear that we want to be 
active and supportive of the process both diplomatically and 
through our financial support.
    I think that it is not the appropriate moment for me to be 
putting forward new administration statements on this issue. It 
is obviously a set of policies that are critically important in 
the coming weeks, months, and years ahead, and we very much 
hope that we reach a level of engagement that can break a 
logjam here.
    We are at a moment in history where in some ways there is 
remarkable commonality of interest among so many of the 
parties. There is a shared concern about the threat posed by 
Iran in the region and the world. There is a shared concern 
about the spread of extremism around the region and the world.
    I think we have to move into these conversations so that 
the President and Secretary are able to pursue in each of their 
conversations, as effectively and aggressively as possible, the 
efforts to bring the parties to be able to have a constructive 
dialogue.
    Ms. McCollum. Well, I thank you for your really diplomatic 
answer, and Madam Chair, I strongly support what this committee 
has been focusing on to make sure that we support Senator 
Mitchell in a unity government and that we remove obstacles for 
people who want peace to be part of that government, but at the 
same time guarantee that we are not funding Hamas. But along 
with the dollars that we are providing in that area, we need to 
be having a frank discussion with a great ally in Israel, a 
country which shines brightly with democracy in that area, that 
we also have taxpayers who are very concerned about illegal 
outposts and expansion, and we as representatives of the people 
are starting to hear very loudly and clearly from people that 
we represent from all faiths, from all walks of life who 
support peace that the settlements are an obstacle and that we 
have to stand strongly for a two-state solution, and they are 
very concerned about lack of support that they are hearing from 
the new Israeli Government.
    Thank you.
    Mrs. Lowey. Just briefly let me say that in addition to 
being a diplomatic response, I thought that Secretary Lew did 
reflect the observations of this delegation when we were in 
Israel, the West Bank, and Egypt just recently. And it was 
clear to all of us that there was a commonality of interests 
that was new. There was concern on the part of Egypt, Saudi 
Arabia, UAE, and others about the danger, the threat of Iran to 
the region, and it was also clear to me that Bibi Netanyahu was 
in the process of evaluating the position of Israel before he 
came.
    In our meeting, which was very cordial, very pleasant, 
there was no clear answer to any of the questions that were 
posed and it was fairly clear to us that they were having and 
he was very specific about saying in the next few weeks that he 
and his cabinet were going to reevaluate their positions before 
they come to the United States.
    So I would hope that the conversations between Israel, 
between Bibi Netanyahu and others who may be part of it, 
between, I am not sure, I assume Abu Mazen will be coming and 
Salam Fayyad will be coming, and I hope that all the parties 
can work together.
    I think there is a real commitment on the part of the 
majority of the Israelis and certainly on the part of the 
Palestinians to a two-state solution. I am less optimistic in a 
unity government and a power sharing government, although we 
have placed many conditions in the legislation in response to 
Senator Mitchell's request for flexibility, I think Senator 
Mitchell, Abu Mazen, and the Israelis and most of us who were 
there have real questions about the reality of a unity 
government or power sharing government. But, however, that is 
certainly on the table. It is certainly going to be discussed, 
but I think there is agreement that this is a hypothetical.
    So let me say this. In my lifetime, having worked on this 
issue and been to the region many times, I hope that the 
administration, the President, the Secretary of State, Senator 
Mitchell, can bring the parties together and we can have two-
state solution and seek peace.
    So I personally want to thank you and the administration 
for the commitment to this goal and hopefully again we can see 
it in our lifetime. And I thank you.
    Ms. McCollum. Well, Madam Chair, being Irish and having 
traveled to Northern Ireland when the peace process was 
started, I am very confident in Mr. Mitchell, but what he does 
is he holds everybody accountable. Thank you.
    Mrs. Lowey. Thank you, and I told Senator Mitchell that 
compared to the issues in Afghanistan and Pakistan, I think he 
has a much easier job. So we all wish him good luck.
    Mr. Lew. No shortage of hard problems.
    Mrs. Lowey. Thank you very much. I think we have votes in, 
what, about 10 minutes or so. So perhaps we can continue this 
discussion until the bells go off, and again I thank you for 
appearing before us.
    I want to focus for a few minutes on the Civilian 
Stabilization Initiative because the fiscal year 2010 budget 
requests $323.3 million for the Civilian Stabilization 
Initiative, or CSI, and in fiscal years 2008, 2009, this 
committee appropriated a total of $150 million in support of 
CSI, $95 million to the Department of State, $55 million to 
USAID. Your request reverses this pattern of joint funding to 
State and USAID by requesting all CSI operations funding under 
the Department of State. Furthermore, the budget recommends the 
lead in language that was carried in the last 2 years requiring 
that there be coordination between State and USAID.
    Let me just say I don't understand this at all, and so I 
would like to know, number one, what is the justification for 
the decision to request all CSI funding through the Department 
of State? I will give you a couple of questions and then you 
can just respond. I know you will remember them all.
    Mr. Lew. I am jotting them down.
    Mrs. Lowey. Why does the request delete language carried 
the last 2 years in the bill requiring consultation between the 
Department and USAID and the elimination of direct funding and 
the deletion of the consultation requirement? I would like to 
know what role will USAID have in the decision making process. 
And your budget request more than doubles the funding for this 
initiative. What evidence is there that this capability is 
effective and is being utilized, especially without USAID being 
involved, and are there examples of successful deployments and, 
if so, what are they?
    Let me just say in addition, the request includes $76 
million to USAID's Office of Transition Initiatives for a rapid 
response fund. So I would like to know how these resources 
would be used, and how would the Department and USAID determine 
whether OTI will be deployed to a post-conflict situation or 
whether the CSI would be deployed?
    So as you can see, I think the coordination between State 
and USAID is absolutely essential. So I don't understand this 
request at all.
    Mr. Lew. Well, let me start by maybe taking a step back and 
saying that while efforts have been made to date to build a 
civilian stabilization program, they are so early in 
implementation that we do not have a capacity that is large 
enough to deal with the very enormous demands that we see in 
the world today and expect to see in the years ahead. So we 
start out with a deep commitment that for the State Department 
to take back the responsibilities that have over the past 
number of years kind of moved over to the Defense Department, 
it is absolutely critical that the State Department have the 
capacity to quickly deploy people with the right skills to 
areas of either crisis or where there are stabilization needs, 
and the concept behind this initiative is that there need to be 
three components.
    There need to be full-time employees who work on this all 
the time. There need to be ready reserve government employees 
who can be redeployed when needed, and ultimately, there need 
to be nongovernmental outside reservists, much like the 
military reserve, and just to put into context----
    Mrs. Lowey. Before you go further, because I did ask you a 
lot of questions at once, I agree with you, but how do you do 
this? Together we want to build up USAID and you want to build 
up the State Department. So now you are saying it should all be 
in State Department. We are building up USAID with that 
expertise that I hope some day they can be transported swiftly 
and appropriately where they are needed, but now you want to 
move it all into State.
    Mr. Lew. Well, first, the deletion of the language I think 
is the same answer to the question before, that I think most, 
if not all of the language that was included in the 
appropriations bill was not included in the request just 
because that is the tradition of budget requests. So I think we 
need to separate the transmittal from the policy that we aim to 
work together on.
    I must say that I have had questions on this in my own mind 
since coming to the State Department. You know, the question of 
how to coordinate USAID and the State Department and other 
agencies of government is much more basic than C/SRS, and I 
think we need to get to the point where the dividing line that 
money was appropriated for one but not for the other, therefore 
they don't operate as one program is something that is right at 
the top of my list of things that we have to overcome. That may 
make me perhaps not sufficiently sensitive to how important it 
is to people here or perhaps in the agency that when the 
appropriation is made to one place or another it matters deeply 
to them.
    I think the goal here is to build a capacity that is 
sufficiently robust that it can serve the mission. The decision 
to put it in State versus USAID is something that we are 
continuing to review in the sense that it is not obvious to me 
why the decision was made to build an expeditionary capacity in 
a second part of the foreign policy establishment. We do have a 
S/CRS. It is working at its size very effectively. We just 
deployed the resources of the civilian response team to go to 
Afghanistan to work on the elections in August, and it was the 
one resource that we could send over immediately. It 
demonstrates the need to have this capacity.
    Frankly, I would like to engage in a conversation within 
the Department and between the Department and USAID and with 
the committee because I think that this is in some ways a 
cross-government effort. It is not just State and USAID. I mean 
when we need people who are experts in governance or rule of 
law or agriculture, they may or may not come from the confines 
of the foreign policy agencies and we need to have the ability 
to draw on the right people with the right skills to meet the 
tasks, and those are going to change over time.
    So I guess my view on this is that we have some something 
that is nascent that we want to build up. We want to work with 
you and the other committees of concern here to make sure we 
build up something that is not duplicative but that harmonizes 
the different parts of the foreign policy community, and the 
nonforeign policy community has a role to play here and that 
ultimately makes it less consequential where the appropriation 
is and more consequential what we are asking the people to do, 
and that is going to be how we try to manage across these 
boundaries.
    Mrs. Lowey. Clearly, I appreciate your response and I know 
that we have to have further discussion, but again my concerns 
have been if you don't have the civilian expertise at USAID and 
you are not totally focused on building up USAID, and I know 
you care very much about it, as does the Secretary, and 
understand the importance of it, then it is very hard to focus 
on the Civilian Stabilization Initiative without the investment 
in that expertise. We can certainly continue this discussion, 
and I also agree with you that there are people at the 
Department of Agriculture, for example, that may be called on. 
But I feel and I believe you share the commitment to building 
up expertise at USAID. Frankly, in my visiting, was it 
Ambassador Newman, I think former Ambassador Newman in 
Afghanistan, a place where we need staff, putting aside the 
Civilian Stabilization Initiative--you compare the strength 
that USAID had in Afghanistan when he was ambassador to what it 
has now and suddenly we are just trying to recreate everything.
    So I just want to be sure we have the basic strength before 
we try and build on other capacities elsewhere.
    Mr. Lew. We agree totally about the need to rebuild the 
USAID core base. But one point I guess I would like to add is 
that there is a disproportionate number of positions that we 
would like to be able to call on that will not be full time 
either State or USAID positions. In this 2010 budget we would 
end up with thousands of reserve civilians that we could call 
on and hundreds of full-time State and USAID employees. So it 
is like 10 to 1 in terms of the ratio of full-time versus 
standby reserve.
    I think the challenge we have is to design and implement a 
reserve system where those people are truly available to us, 
that they are pretrained, that they stay up to the standards 
that are required to be deployed quickly, and that to me is a 
huge undertaking, something the State Department has never 
done. USAID has never done. And it is something we have models 
of how military reserves work, but we need to develop the model 
for how to do that on the civilian side.
    I don't believe we are going to ever be able to have enough 
full-time civilians who are sitting in Washington offices 
waiting to be deployed, just as the military doesn't have 
enough full-time soldiers waiting to be deployed. They need a 
reserve capacity to meet these peaks and valleys of demand. I 
think that is a huge undertaking and one that we are very 
focused on, and we very much look forward to getting the 
appropriations for that so that we can build our capacity.
    Mrs. Lowey. The discussion should continue. Just before I 
turn it over to Ms. Granger, I want to make it clear. I don't 
foresee any capacity composed of people who are just sitting 
there with expertise waiting----
    Mr. Lew. No, no, I understand.
    Mrs. Lowey [continuing]. To be deployed. Now they may be in 
another country. They may have the capacity totally focused 
someplace else and you'll be able to call on them. But to be 
continued. Thank you.
    Ms. Granger.
    Ms. Granger. The administration has included another 
request for $98 million in economic support funds for North 
Korea. That is for fiscal year 2010. Tell me exactly what those 
funds will support. I know the news that we see is grim. Do you 
see a potential to restart the six-party talks?
    Mr. Lew. The funds that are requested for North Korea are 
all contingent on progress being made in the six-party talks 
and progress being made in terms of compliance with the removal 
of the nuclear capacities. The specific funding would be for 
the area of fuel oil, keeping the commitment that we have to 
replace fuel oil when nuclear capacity is taken down for energy 
production, but it only would kick in in the event that North 
Korea complies. So there is absolutely nothing that we would 
provide here to North Korea absent North Korea's compliance.
    Ms. Granger. I understand. Thank you.
    Mr. Lew. And we hope that there is a return to six-party 
talks and that North Korea goes back into compliance because 
that is a hugely important policy objective that we and most of 
the world share right now.
    Ms. Granger. Certainly.
    Mrs. Lowey. Ms. Lee.
    Ms. Lee. Thank you very much. I was very happy to see that 
the President's budget does take significant steps towards 
rebuilding our civilian foreign assistance and diplomatic 
capacity. I also strongly believe that the State Department 
should really accurately reflect the diversity of the United 
States in order to accurately represent our country. So I hope 
that this process and what you are about to do will include the 
whole issue of diversity, people of color, women, individuals 
with disabilities in terms of advancing opportunities for these 
populations of people.
    Also, for a couple of years now I have been asking 
questions with regard to the minority women-owned business 
participation and utilization as it relates to contracting 
within USAID and the State Department. I guess, Madam Chair, I 
don't know if I need to request a report from the Department 
because I still don't have a good handle on how the Department 
is doing as it relates to minorities and women and individuals 
with disabilities in terms of total contracting dollars and 
what the percentages are to these companies. Would that be 
under your jurisdiction or how could I get that information 
because--and I mentioned this before previously--in my last 
life I owned a small business and I tried to do business like 
other African American companies with the Department of State, 
USAID, and there were roadblocks after roadblocks after 
roadblocks, and I mean I did it the way that it should have 
been done, the proper way in terms of contracting procedures 
and not one, not one instance, and I don't know many people of 
color who have been able to do business with the State 
Department. So I am trying to get a good handle on that and 
still haven't been able to figure it out.
    Mr. Lew. We would be happy to work with you and pull 
together an analysis to explore both of those issues. Let me 
just underscore the Secretary's commitment and my commitment 
that in the area of recruitment it is very important that the 
State Department broaden its base for all kinds of reasons. We 
can only do our job effectively in the 21st century if we go 
around the world reflecting the diversity of the United States 
and the world that we are dealing in. And historically, the 
diversity has not been that great. There has been a lack of 
diversity at many levels historically in the State Department. 
I think we are doing better than in the past, but that doesn't 
mean we don't need to go out more aggressively and recruit at 
schools and through organizations and that help us to build the 
diverse base we need.
    Frankly, we have an opportunity now with the first 
significant expansion of Foreign Service officers in a 
generation to go about doing it in what we would consider the 
right way and to expand the opportunities for individuals to 
come in and get information, to expand the opportunities for 
them to be interviewed, and to make sure that as the selection 
process moves forward it is fair and open.
    So we agree wholeheartedly with that and would be happy to 
work with you to go through in more detail what our recruiting 
policies are and what the record is.
    In the area of contracting, at the risk of sounding too 
critical of my own department, we are kind of nondiscriminatory 
in making the contracting process difficult. We have to fix it. 
We have to get away from these giant contracts. It is not just 
minority businesses that have a hard time doing business with 
the State Department. I hear it from NGOs. I hear it from 
medium size organizations, large organizations. There are good 
reasons why things evolved the way they have over the years, 
but one of the things that we need to do is look at it, and as 
we look at it, to keep in mind that one of the benefits of 
opening up contracting to smaller, more competitive contracts 
is that it naturally helps to ease some of the barriers that 
have kept minority firms from competing.
    I don't have an easy answer for this, but I know that at an 
administration-wide level this is a goal that the President 
has, and it is certainly something we take seriously at the 
State Department.
    Ms. Lee. Well, thank you very much, and let me just say we 
would like to work with you. As Chair of the Congressional 
Black Caucus, we have some ideas on how we could make this 
happen in a way that would work, and so I hope that you would 
consult with not only us but those of us in the Tri-Caucus who 
would like to see this happen.
    Mr. Lew. Thank you.
    Ms. Lee. Thank you.
    Mrs. Lowey. Thank you.
    Mr. Rehberg.
    Mr. Rehberg. Thank you.
    As we enter into a world of identity and Real ID and the 
next generation passport, I guess as you know you have a lot of 
secure information, birth cities, passport numbers, and the 
like. I guess, could you talk to me a little bit about what you 
are doing within the Department to protect the privacy of 
citizens. And does this budget--I was going through your 
testimony. I see you talk a little bit about cyber security, 
but I guess I want you to expand a little bit beyond your 
testimony of what you are doing internally. And does this 
budget reflect the kinds of things that you need to occur in 
the short term, whether we are talking about immigration 
policy, Real ID, and protection of that information.
    Mr. Lew. Congressman, there is a natural tension between 
raising the bar on how we scrutinize the comings and goings of 
individuals and personal privacy.
    Mr. Rehberg. I am from Montana. I clearly understand that 
concept.
    Mr. Lew. And we are very, very attentive to the importance 
that both sides of the equation are very important.
    I think that, you know, there have been some incidents in 
recent history at the State Department that show that there was 
perhaps not a high enough level of protection of individual 
files, even before our arrival. I know that there were actions 
taken to try and tighten that up.
    As we go forward and look at the different systems that we 
put in place, the challenge is to make sure that the law 
enforcement agencies that have appropriate needs and reasons 
for access get access but that nobody else does, and you know, 
it is not a problem that one can just say, well, we fixed it, 
we move on. You constantly need to pay attention to it. Systems 
change.
    Mr. Rehberg. Does this budget then reflect----
    Mr. Lew. I think it is part of our ongoing program, and it 
is more a question of focus than it is budget. I am not aware 
of the need for any specific resources in this area, and I am 
told that there is $2.7 million in our privacy office which is 
for the programs.
    Mr. Rehberg. In new money? And is that going to be part of 
the next generation passports similar to Europass or have you 
not begun that process of changing the passport?
    Mr. Lew. Well, we have a new passport. I mean, the new 
passport that we have has in it a substantial amount of 
information that is electronically encoded. So that is in place 
already. The challenge is how to make sure that the access to 
the information is controlled and, as I said, available for 
proper purposes but not for improper purposes.
    Mr. Rehberg. So there is no additional money in this 
budget----
    Mr. Lew. I will get back to you in more detail. I must 
confess that in the many details of the budget, I have 
discussed this with people at a policy level, but I am not 
deeply familiar with the funding issues behind it. So why don't 
I get back to you?
    Mr. Rehberg. I perhaps didn't know it as well when I voted 
for Real ID, and Montana is one of those States where I have 
got Ted Kaczynski on the left and the Freemen on the right and 
everything in between. So I am perhaps more sensitive to 
privacy and the identity crisis that we have going on with some 
of that information getting out.
    So if you could get back to me, I would appreciate it.
    Mr. Lew. I would just say more broadly there are a number 
of issues related to the bar having been raised very high on 
security that we need to reevaluate, and it is always difficult 
to put any interest over security. No one wants to be 
responsible for changing a protocol and then having somebody 
slip through who shouldn't have slipped through.
    On the other hand, we have to be careful that we don't 
create problems that are as important as the solution, and I 
understand the direction of your question, and I look forward 
to working with you.
    Mr. Rehberg. Appreciate it. Thank you.
    Mrs. Lowey. Deputy Secretary Lew, thank you again for your 
time. I certainly look forward to working with you, as I know 
does the committee, and this concludes today's hearing on the 
President's fiscal year 2010 request for the international 
affairs budget.
    The Subcommittee on State Foreign Operations and Related 
Programs stands adjourned.
    Mr. Lew. Thank you, Madam Chairman.
    Mrs. Lowey. Thank you.

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                                           Wednesday, May 20, 2009.

                 OFFICE OF THE GLOBAL AIDS COORDINATOR

                                WITNESS

THOMAS J. WALSH, DEPUTY U.S. GLOBAL AIDS COORDINATOR (ACTING), U.S. 
    DEPARTMENT OF STATE

                 Opening Statement of Chairwoman Lowey

    Mrs. Lowey. The Subcommittee on State, Foreign Operations 
and Related Programs will come to order. I would like to 
welcome Tom Walsh, Acting Deputy U.S. Global AIDS Coordinator 
and Chief of Staff, to discuss the President's Fiscal Year 2010 
request for global HIV/AIDS programs.
    This Committee has made global HIV/AIDS a key priority, 
providing $18.8 billion over the past five years, nearly $4 
billion more than President Bush's initial commitment of $15 
billion over five years, to address the global AIDS pandemic. 
These resources have had impressive results, with 2.1 million 
people receiving antiretroviral treatment; 9.7 million people 
receiving care through PEPFAR, including 4 million orphans, 
58.3 million people benefitting from HIV/AIDS prevention and 
related programs. I applaud the tenacity with which your office 
and the U.S. government as a whole has pursued treating and 
preventing this horrible disease. Your efforts and the 
complementary efforts of allies such as the Global Fund to 
Fight AIDS, Tuberculosis and Malaria have added years of 
productive life to millions living with HIV/AIDS and have 
provided time and space for other critical development to take 
place.
    However, we have seen new challenges emerge, as life saving 
drugs have had the unintended consequence of increasing risk 
behavior, have increased risk behavior. As we enter the second 
phase of PEPFAR, we must evaluate our successes, examine new 
challenges, adjust accordingly. While new infections among 
children have dropped and younger people in some parts of the 
world are waiting longer to become sexually active, having 
fewer sexual partners or using condoms, we must do more to 
ensure that our prevention efforts reach those most at risk. I 
look forward to hearing how PEPFAR will expand prevention 
programs in the coming years.
    The pandemic continues to have a disproportionate impact on 
women. As you know, among young people in Subsaharan Africa, 
the HIV prevalence rate for young women is almost three times 
higher than the rate among young men. This is not a new 
statistic, and I am concerned that PEPFAR has not taken steps 
to address this challenge. The fiscal year 2010 budget includes 
a renewed focus on the needs of women and children, and I hope 
that PEPFAR will reach out to USAID which has extensive 
experience providing accessible community based services that 
meet the needs of women and their families.
    I would also like to see PEPFAR coordinate better with 
country programs and strategies developed by state and USAID. 
What efforts are you making to integrate PEPFAR programs into 
these country strategies? PEPFAR is entering its sixth year and 
sustainability is becoming a higher priority. Through 
partnership framework agreements, PEPFAR is building long term 
reciprocal relationships with developing countries.
    In addition, recent discussions with the Global Fund and 
developing country partners have begun the dialogue related to 
integrating U.S. government programs into future Global Fund 
grants. Can you provide an update on implementation of the 
partnership framework program? Also can you outline the steps 
PEPFAR is taking to empower developing countries to assume 
greater responsibility for fighting the pandemic?
    In order to create greater capacity in host countries, the 
next phase of PEPFAR should expand programs that build capacity 
and help infrastructure so that nations can better meet their 
own health challenges. Although the fiscal year 2009 investment 
of $734 million for health systems was significant, how will 
funding for these programs be expanded in the coming years? If 
these interventions are to be sustainable in the long term, 
developing countries must be able to shoulder more of the 
responsibility for the health of their populations. Please 
update your plans to invest in health infrastructure and the 
training of healthcare professionals.
    Mr. Walsh, I look forward to hearing your remarks and 
working with you on these and other issues, but first I will 
turn to Ranking Member, Ms. Granger, for her opening statement.

              Opening Statement of Ranking Member Granger

    Ms. Granger. Thank you, Chairwoman Lowey.
    I welcome you today, Mr. Walsh. I will keep my opening 
remarks very short because we have votes coming up and I want 
to hear what you have to say. Now that the PEPFAR program is 
authorized for an additional five years, this Committee wants 
to ensure the funds, no matter which agency implements the 
programs, are being properly managed and coordinated. Also we 
want to make sure that our multilateral contributions are 
subjected to high levels of scrutiny and oversight and would be 
expected as such from the American taxpayer of course. I thank 
you for appearing today, and I look forward to what you have to 
say.
    Mrs. Lowey. Thank you. I understand that there are three 
votes that may be coming up at 11:35. So we will put your 
statement in the record, and summarize, please proceed as you 
wish.

                     Opening Statement of Mr. Walsh

    Mr. Walsh. Thank you, Madam Chair, and Ranking Member 
Granger, and other Members here and staff. I will try to 
summarize very quickly under the circumstances.
    We really have appreciated the strong support and 
partnership with the Subcommittee in the years to date. We feel 
the bipartisan support here has been an important element in 
the success of PEPFAR to date. As you see the President has put 
forward a request that is very significant in terms of the 
level of funding, and we do feel strongly about the need to be 
accountable for how that is spent.
    It includes both the bilateral programs which have been 
very successful and also our contribution to the Global Fund 
which is a critical piece of the overall U.S. government 
approach to HIV/AIDS as well as malaria and tuberculosis, the 
other issues. So rather than say anything more, because you do 
have my statement, I will just throw it open for questions.
    [The information follows:]

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    Mrs. Lowey. I will save my question if I have time at the 
end. And I will turn to Ms. Granger for questions.
    Ms. Granger. My question has to do with the confusion 
surrounding whether or not the Global Fund is experiencing a 
$265 million shortfall. Can you comment on that? It is often 
unfair the Global Fund does manage demand, it is a first come 
first served organization. As long as the proposals are 
technically sound, 10 countries consume 50 percent of the 
Global Fund's resources. Is this sustainable?
    Mr. Walsh. Thank you. Let me take your questions in reverse 
order because the first one is more of a big picture question. 
Demand management at the Global Fund is something that the Fund 
has as of two weeks ago begun to turn its attention to with the 
participation of the United States. As you know, we sit on the 
board of the Fund and participate in some of the committees of 
that board.
    Two weeks ago at its most recent meeting, the Fund board 
set up a working group to focus on this question. You are 
exactly right that historically the Fund's approach has been 
basically to fund any proposal that meets technical muster 
without any attempt to prioritize the different proposals. And 
there are questions in an environment of tightening resources 
over whether that is really sustainable anymore.
    And so we were pleased to join the other members of the 
Fund in putting together this working group to focus on this 
and come up with solutions by the time of the next board 
meeting in November, because you are exactly right that there 
is an inherent conflict there. With respect to its current 
financial position, it is true that there are approximately 
$265 million worth of grants that were approved for Round Aid, 
or approved at the board's meeting I believe last November, for 
which they do not yet have cash in hand. And thus under the 
rules of the Fund they cannot yet pay out those grants.
    That situation strikes us as quite analogous to that of our 
U.S. government PEPFAR bilateral programs which have to wait 
for funding during the course of a year. As we do different CNs 
during the year, we commit funds and they go out to the field 
and then are put into practice. At the time the Fund approved 
those applications, it knew that it was going to be a rolling 
process with several different tranches of approvals during the 
coming year, and that is progressing.
    On the one hand it is the case that right now they do not 
have all the money to fund all the proposals that were approved 
last year. We do anticipate that they will have that money by 
later in the year, and we see that situation is again as 
analogous to what we experience in PEPFAR on a fairly routine 
basis. We are working to make sure that our programs are 
ensuring that there is not going to be any gap in services or 
anything like that because that would be of concern, but right 
now we feel comfortable with where things are.
    Ms. Granger. Let me just ask one more question. The U.S. 
contribution is a third of the total contribution, right?
    Mr. Walsh. That is the statutory maximum.
    Ms. Granger. Tell me what the voting structure is on the 
Global Fund. Does the U.S. have veto power like it does at the 
World Bank?
    Mr. Walsh. Not at all. In fact I am not sure I can tell you 
in its entirety the voting structure. We can get back to you on 
it. It is rather complex, but one thing I do know is, we do not 
have veto power. We are one board member among many. They have 
a rather complex structure in which the donor block and the 
recipient so to speak, blocks are kind of set up into two 
different blocks. We recently experienced some of the 
governance challenges in the attempt to elect a new Chair of 
the Global Fund board at the recent meeting. It did not work 
because under the rules you needed a two third vote of the 
donor block and the recipient block, and the recipient block 
could not within itself agree on a single candidate. So it is a 
rather complex structure and I would be happy to get back to 
you with additional details on that.
    Ms. Granger. Thank you.
    Mrs. Lowey. Thank you.
    Mr. Israel.
    Mr. Israel. Thank you, Madam Chair. Mr. Walsh, I want to 
talk to you about pediatric treatment. Today, 1,000 children 
around the world will acquire HIV. Without proper care and 
treatment, 500 of them will die before they reach age 2, 750 of 
those 1,000 will die before they reach age 5. Seventeen percent 
of all new HIV infections are children, but I am told that only 
9 percent of those children are on antiretroviral treatment 
under PEPFAR. What are your plans to reach the pediatric 
treatment targets that are contained in the reauthorization for 
PEPFAR?
    Mr. Walsh. Thank you, Congressman. Our goal, as you know, 
the reauthorization target was basically to have the proportion 
of children who are on treatment correspond to the proportion 
of children as a subset of all who are infected in programs 
where we work. This is a very challenging situation mainly 
because of the difficulty of diagnosing children at very young 
ages. This has been a long lasting problem. We believe that in 
the last five years we have begun to make some progress on a 
couple of the things and indeed are progressing in terms of 
rolling out pediatric treatment.
    Just to give you a sense of what some of those best 
practices are that we have learned, the lessons we have learned 
and that we intend to apply in the years to come. The first one 
is, in terms of early infant diagnosis, the new innovation in 
recent years has been the use of what they call dried blood 
spot testing, where you can take the blood from the infant and 
then transport it somewhere else for testing rather than have 
to have it in sort of a cold preserved chain.
    We are really supporting, I think we are working through 
the CDC which is one of our implementing agencies, to focus on 
getting dried blood spot testing rolled out. We are also in a 
number of countries trying to update these health cards that 
mothers and children typically have to include HIV information. 
In some places they have not included that, and that has been a 
gap or a place where people can fall through the cracks that we 
have been trying to address.
    Another one is promoting universal provider initiated 
counseling and testing in pediatric wards. When somebody is in 
a health facility that is really the best time to catch anyone 
to test them for HIV. And so ensuring that pediatric wards make 
this a routine part of their pediatric care is another 
important thing. And then family centered care is another 
important innovation for scaling up pediatric services. Where 
possible we really like to co-locate pediatric and adult 
treatment so that we can get the whole family at once. Those 
are some of the things we are trying to do, but we are very 
much a learning organization. We have learned a lot, we have 
more to learn and more to do to apply what we have learned.
    Mr. Israel. I actually have some additional questions but I 
know we are trying to move briskly because of votes. I will 
yield back and follow up with you. Thank you.
    Mrs. Lowey. Thank you.
    I will turn to Ms. McCollum.
    Ms. McCollum. Thank you, and I will cut down quite a bit of 
what I wanted to ask because I will submit it for the record.
    But let me focus on one part of your written testimony 
which I read, and that has to do with nutrition. As you are 
well aware, the developing world was hit with a huge food 
crisis in the past year, and it affects the same people PEPFAR 
is intended to serve. So most people have an immediate concern 
right now with food. And you know that without proper nutrition 
and calories, the drugs do not work as effectively or as 
efficiently. So I am wondering what the picture is for how you 
are coordinating with what is part of the mandate for 
nutrition, and it should be part of the mandate because without 
nutrition the drugs do not work properly.
    I have another question and I am going to put in, Madam 
Chair, for the record about how PEPFAR is going to integrate to 
meet all of its commitments that the Administration is making 
on maternal child health and other issues. Thank you.
    Mr. Walsh. Thank you, Congresswoman. Let me address the 
food issue. We are really addressing the food and nutrition 
needs that are related to HIV in two ways. One is directly 
through our PEPFAR programs, the second is by attempting to 
partner with other programs of the U.S. government and others 
such as the World Food Program, for whom food and nutrition is 
really what they mainly do. So we refer to that as wrap-around 
programs. And so we really do see a need to strengthen our 
linkages with these other programs where food is mainly what 
they do.
    With respect to our PEPFAR funding, we support food and 
nutrition for three populations. One is pregnant and expecting 
nursing mothers, a second is orphans and vulnerable children, 
whether HIV infected or not, and the third is people who are on 
treatment but meet certain clinical criteria for malnutrition. 
Certainly one of the reasons PEPFAR has been successful is 
because we have focused on HIV/AIDS. And so we do feel strongly 
about the need to maintain that focus.
    But as you say, if people are malnourished beyond a certain 
point then the treatment really will not work. And so we have 
some criteria that I think have been widely commended, at least 
I have not heard a lot of criticism over them, for determining 
when somebody meets that threshold and thus needs nutritional 
support through our HIV/AIDS programs.
    Ms. McCollum. Tell us in more detail, thank you.
    Mr. Walsh. Thank you.
    Ms. McCollum. I wanted to make sure Mr. Jackson had an 
opportunity.
    Mr. Jackson. That is very kind of you, Ms. McCollum, thank 
you. I was prepared to submit my questions for the record. But 
thank you, Ms. McCollum, and thank you, Madam Chair.
    Mr. Walsh, during my tenure on this Subcommittee--first, 
welcome to the Committee.
    Mr. Walsh. Thank you.
    Mr. Jackson. I have tried to increase the capacity of 
developing countries to provide basic services like healthcare 
and education. Our bill carries from year to year two 
provisions that I think do just that. One addresses access to 
healthcare and education by eliminating----
    Mrs. Lowey. I just want to say the speed with which you are 
asking this question reflects the urgency of the issue.
    [Laughter.]
    Mr. Jackson. One addresses access to healthcare and 
education by eliminating user fees. And the second addresses 
government staffing levels of healthcare providers and 
teachers. Congress set a target of training and supporting the 
retention of at least 140,000 new health professionals and 
paraprofessionals to help PEPFAR partner countries to develop 
the health work forces required to meet PEPFAR goals and to 
support long term sustainability.
    Congress intended that these be additional health workers, 
increasing the total number of health workers in these 
countries beyond the number that would otherwise have been 
trained, deployed, or retained. What is PEPFAR's strategy for 
meeting this target and for ensuring that these are new, truly 
additional health workers that add to a country's capacities 
and are not health workers who have been added to the workforce 
even without PEPFAR? Secondly, what level of funding does 
PEPFAR expect to dedicate towards achieving this goal in fiscal 
year 2010, and what are PEPFAR's estimates for the funding 
required to achieve this target by 2013? And lastly, can you 
report on how these funding estimates are derived?
    Thank you, Madam Chair, and thank you, Mr. Walsh.
    Mr. Walsh. Thank you, Congressman. I will do my best to 
answer your questions but I am afraid we are going to have to 
follow up with you with some more detailed information because 
some of your questions are a little more detailed than I am in 
a position to answer. In terms of the new health workers, yes, 
it is certainly our intention that these be 140,000 new health 
workers, ones who would not otherwise have been trained without 
PEPFAR efforts.
    We have come up with some guidance for the field. This is 
really going to be a challenging goal to meet. The initial 
proposals we got back from our countries in the field for this 
first year FY '09 really did not show us on as steep a 
trajectory as we need to be on in order to meet that goal. 
Therefore we are working with them intensively as part of this 
larger effort at health system strengthening. That is really 
the context. Health workforce is part of this larger issue of 
health systems, because, for example, if you train healthcare 
workers but there are not clinics for them to work in or there 
are not supportive systems for them, then they will not have 
the impact they need.
    So I am really going to have to get back to you on some of 
your specific budget questions about the amount we are devoting 
to training this year, but all I can say is we do agree that 
this is necessary not just as a goal unto itself, but it is 
instrumental to achieving the prevention, treatment, and care 
goals. A lot of the success we have had to date has been due to 
building health workforce and structures, and we need to do 
even more if we are to succeed at all across the whole range of 
issues we face.
    Mr. Jackson. Thank you, Mr. Walsh. Thank you, Madam Chair.
    Mrs. Lowey. I know Ms. Lee is on her way, and we have a 
couple more minutes. So I will ask a few questions.
    I want to follow up though on Mr. Israel's comments, 
because to me that is so urgent and I am trying to understand 
it. We know that more than one child is infected with HIV every 
minute of every day, with newborns representing the vast 
majority of the estimated 1,000 infected each day. And even 
with progress, global coverage of prevention and mother to 
child transmission services is still unacceptably low. And 
looking at numbers in low to middle income countries, HIV 
positive pregnant women do not receive the medicines they need 
to prevent transmission of HIV to their babies.
    This is totally unacceptable. If we reached all pregnant 
women who are HIV positive, we could prevent hundreds of 
thousands of infections per year in children. So I would like 
you to explain, I have heard some of the explanations, but I 
would like you to explain what have been the values to scaling 
up PMTCT services, what can PEPFAR do to overcome these 
barriers? A majority of mothers we know deliver in their homes 
while most PEPFAR funded PMTCT programs target medical 
facilities. What are you doing to change this? Are you visiting 
communities? Why are you not reaching out in communities where 
most of the mothers deliver the babies?
    Mr. Walsh. Well thank you. We could not agree more about 
this, the severity of this issue, and share your frustration 
that something which we know how to do, and indeed the world 
really has developed very successful PMTCT programs, that they 
have not been scaled up to the degree we need to. The 
authorizers put into our reauthorization a requirement for an 
expert panel to come back to us with recommendations on this, 
and that panel is now writing its report because we prioritized 
it and told them we needed it fast. So we are expecting that to 
be sent to you and Congress in July which will set the agenda.
    But I can tell you a few of the things that we do know, and 
that we do need to do more on and plan to do more on in the 
days to come. Building on the success of a country like 
Botswana, where there is now mother to child transmission which 
is almost as rare as it is in the United States because their 
programs are so successful, and then you can contrast it with a 
country like Malawi where there is very little.
    Mrs. Lowey. And has not Botswana's incidents gone up?
    Mr. Walsh. They have an extraordinarily high rate of 
infection, but the rate of transmission from the mothers to the 
children is very low because, I mean as you see with many of 
these countries they have succeeded greatly in one area, not so 
much in others. And that is a pretty extreme case.
    Mrs. Lowey. I would like you to finish this, but also 
address the issue of Botswana, which is in a pretty good 
economic condition, and why their rates have gone up.
    Mr. Walsh. Right.
    Mrs. Lowey. But let us finish the first.
    Mr. Walsh. Yes. Some of the practices that have been 
particularly successful are, first of all strong political 
commitment from the governments. That is something we have seen 
on mother to child transmission in places like Botswana, not 
only Botswana but also in Namibia, Rwanda, Kenya or some of the 
other ones. They have also decentralized services from the 
capitals out to the district and local levels.
    They have really worked successfully, and we have tried to 
work with them, to coordinate the activities of all the 
different donors rather than have one donor off doing a project 
in one place, another one in another place, they have really 
tried to get us all to work together. Identifying HIV positive 
pregnant women in the first place is critical. And so I 
mentioned before the importance of provider initiated 
counseling and testing, where it is really an increasingly 
routine part of healthcare, and in this case antenatal care, 
for women to be tested and to learn their status, because if 
they do not know their status then there is no way that the 
PMTCT interventions are going to be given to them.
    And that policy change in Botswana, by the way, is credited 
with increasing the coverage of PMTCT interventions from 75 to 
95 percent. That is something we are really trying to work with 
other countries to show, you know, if you want that same kind 
of success you need to get some of these policy things lined up 
in the right way. And then it is really critical to link the 
mother to child transmission interventions with HIV treatment 
and care, and then with other maternal and child health.
    We really do accept that it has been an issue for the whole 
global response that there can be a tendency to silo programs, 
and we have tried to resist that and we need to do even more to 
break down the barriers between the different services because 
a pregnant woman in a developing country faces a whole range of 
issues of which HIV is an important one. So in addressing that 
one, we also want to link with the programs that focus on the 
others. What was your other question?
    Mrs. Lowey. I will turn to Ms. McCollum and then we will 
continue.
    Ms. McCollum. Madam Chair, I think we are tracking so close 
to the same wavelength that we could ask each other's questions 
at this point.
    I want to go back, the President announced the new global 
health initiative, and it is going to increase substantially 
the U.S. commitment to fighting HIV/AIDS through PEPFAR. But it 
also calls for more comprehensive, to your point where you were 
just talking about a better integrated U.S. global health 
strategy that pays more attention to building health systems. 
And in fact in April PEPFAR had an assessment done in the 
Annals of Medicine, and the assessment found that in important 
respects PEPFAR has been extraordinarily effective.
    According to the study PEPFAR had prevented 1.2 million 
deaths, which I used in earlier testimony, in the focused 
countries, and it has reduced things by almost 10 percent. But 
it also found out that prevention efforts had largely failed, 
which is what the Chairwoman had asked earlier. It also asked 
questions about the long term cost effectiveness of the effort. 
So when you talk about building platforms, how is PEPFAR going 
to be integrated, or is PEPFAR going to look a little different 
as we go through and you are doing global healthcare reform as 
part of the way we deliver things, and not worry so much about 
labels now but outcomes.
    Mr. Jackson's question about nurses and midwives and 
encouraging testing and being able to do testing out in 
communities, to the Chairwoman's question, this needs to feel 
seamless. And so, are there discussions taking place? Because I 
think it is okay if PEPFAR grows and develops and looks a 
little different in the years to come because we have learned 
lessons.
    Mr. Walsh. Thank you. I think that is likely to be the 
case. As I said, we try to be a learning organization. The 
Institute of Medicine said we are, and we can do better. And 
clearly one of the areas where we need to do more is linkages 
and integration with other programs. I think that is really one 
thing that is behind this global health initiative that the 
administration announced, this idea that just as we have really 
focused intently on HIV/AIDS and malaria, we need to bring that 
same kind of intense focus to these other issues and to bring 
them all into a single integrated approach.
    I will say with regards to planning, and how we are going 
to do that, is still at an early stage. And so for PEPFAR's 
purposes, our incoming coordinator if he is confirmed by the 
Senate, Dr. Goosby is certainly going to lead a strategic 
review of our programs and ask I think some of these questions 
that you are focusing on about integration. And then that 
strategic review of PEPFAR is going to feed into this larger 
strategic review that will inform this global health initiative 
and really focus on what are these points of intersection, what 
are ones that we can strengthen between PEPFAR and maternal 
child health for example, family planning, malaria, TB, 
neglected tropical diseases. I think what you are alluding to 
is definitely the coming wave, one of integration and an 
increasingly holistic approach.
    Ms. McCollum. Thank you, Madam Chair.
    Mrs. Lowey. Votes have not gone off. We might as well 
proceed some more. I would like to follow up on the Botswana 
question, and frankly it is the same in Uganda, we used to brag 
about ABC in Uganda, and was it in Uganda where the rates went 
dramatically down after a famous singer in that country 
contracted HIV/AIDS and then died, and that it frightened the 
population so it went down. I think it was Uganda, was it not?
    Can you explain what we are doing about that, obviously in 
most of the places that we have visited there is an urgency to 
focus on treatment because people are dying, they are lined up 
around the clinics, and many of the clinic directors frankly 
were very open and honest and said, okay prevention is fine but 
we have to take care of people who are dying. But given the 
upsurge of cases in Botswana and in Uganda and other areas, 
Botswana in particular because the economy has been fairly 
strong, I wish you would address those issues.
    Mr. Walsh. Right, I think you are really putting your 
finger on one of the toughest challenges we have to face. AIDS 
is in many ways a uniquely terrible disease, and with 
treatment, somebody who would otherwise die stays alive. It is 
very apparent, there is no missing the impact, it is very easy 
to count, and it is a great thing. But prevention is so much 
more difficult to quantify. We never really know who would have 
been infected, who is now not infected because of a program.
    We really understand the natural tendencies of the host 
governments we work with to really want to focus on treatment, 
and we want to focus on treatment too, but prevention has to be 
first, that has to be the highest priority. We are in some 
cases finding a little resistance to that message, and we are 
trying to work with countries to say, even as we address these 
treatment needs which are so great and unfortunately rather 
costly to address, because once somebody is on treatment they 
are never going to be cured. Right now there is no cure for 
HIV/AIDS, so we are taking on a lifelong commitment.
    So the best way to address that is to prevent people from 
becoming infected in the first place. Every country has a 
different story, but Botswana and the other countries in far 
southern Africa have the highest rates of infection in the 
world, and there is a whole range of reasons. I think one thing 
we have learned is that prevention really needs to be, we take 
what we call a combination prevention approach, a multifocal 
approach where you address the many different drivers of 
behavior. You know, just because you are meeting a youth 
population in one place where it goes, if you are not meeting 
them in the other places where they go, then you are only 
providing partial protection.
    We really need to scale up our programs, build on what the 
evidence supports, do it in a way that is tailored, and then 
frankly hit the population with multiple different 
interventions at once. Botswana is certainly one of the places 
where we and everybody else who is working there needs to do 
more and better because they have got a big prevention problem 
on their hands.
    Mrs. Lowey. I am pleased to turn to Ms. Lee because she 
certainly has been a leader, not only on this Committee, but on 
the authorizing Committee, and I am delighted that she was able 
to get here.
    Ms. Lee. Thank you, Madam Chair.
    And I apologize, there have been five things at one time 
this morning, but I am so delighted to be able to meet you and 
congratulate you and look forward to working with you and also 
Dr. Goosby, and I hope the Senate confirms him very quickly. It 
has been quite a job to get to this point with regard to our 
global HIV/AIDS initiatives, but it has been worth the 
bipartisan cooperation, and I think this effort probably more 
than most really highlights how we can work together to try to 
really address big big humanitarian, security and public health 
crisis.
    Of course I am always going to be concerned about funding, 
and I never have thought we have put forth enough funding for 
the Global Fund given the need. Also the integration with 
PEPFAR and the Global Fund, the programs and how we do that, 
and I apologize that I am being redundant, and if I am I will 
just talk to you privately about that. But on the funding 
request, it does not seem like that is much of a request, it 
seems very meager, and I am wondering if that is all you really 
think we need to fund the needs that are out there and the 
proposals that are pending?
    Mr. Walsh. Thank you, Congresswoman, and thank you for all 
your leadership. I read Deputy Secretary Lew's testimony last 
week, and one point he made was, this is a conversation and 
this will be a conversation in terms of the right balances of 
funding among on the one hand multilateral approaches like the 
Global Fund, bilateral approaches that are run by the U.S. 
government, HIV/AIDS versus malaria versus tuberculosis versus 
all of the other areas that are now addressed in this global 
health initiative such as maternal and child health.
    We look forward to working with you on it. The Global Fund 
request is a very significant request, $900 million. Compared 
to the last request of the last Administration, which was $500 
million, it is a large increase. But all I can say about 
whether it is the right number is that we will look forward to 
working with you to determine whether it is or not.
    Ms. Lee. And may I ask one more question, not a final 
question, but just the whole effort with regard to commercial 
sex workers. How are we addressing programs and strategies to 
help first of all make sure they understand prevention, but 
also making the transition from commercial sex work to, you 
know, 40-hour a week job that they all told me when I was there 
they wanted but the resources just were not there to get a job. 
And so how are we helping them at this point with our programs?
    Mr. Walsh. Thank you. Our programs reflect both of the 
pieces that you describe and recognize that we really have to 
do both things. In an urgent way we need to help them stay safe 
from HIV, and so we need to get them the whole range of 
intervention including condoms and other prevention, 
interventions. If they become HIV positive we certainly need to 
get them in care and treatment as well. But we also do support 
income generation programs to try to offer people a way out of 
that way of life if they are willing.
    We have many many programs, we will be happy to send you 
examples of some and get you more information on it. But we 
certainly recognize we need both approaches for those 
populations. A big part of our emphasis under the 
reauthorization as you know is really tailoring prevention 
strategies to the epidemiology of particular countries. Every 
country is different, but in many countries we do have these 
populations you are describing who face very elevated risks. 
Our teams are very focused on those, and that is part of what 
is positive about PEPFAR being a largely country-driven program 
where we have people on the ground working for the U.S. 
government to assess the needs and to tailor our programs.
    Ms. Lee. But you do not see any barriers to our funding now 
given the history of the conscience clause and all of the 
policies that had been established?
    Mr. Walsh. Right, well no I do not, not through the 
conscience clause nor through the prostitution policy 
requirement. That is one that people sometimes say, does that 
mean that the U.S. government cannot work with these 
populations in prostitution? It definitely does not. In fact 
the authorizing language specifically says that this provision 
is not to be read to prevent the U.S. from working with people 
in those populations. And so we definitely do and see a need to 
do even more of it.
    Ms. Lee. Good. Thank you very much, Madam Chair.
    Mrs. Lowey. Thank you.
    I want to thank you and all the many people in the field 
around the world for the important work that you do. And 
certainly we understand that even though the Administration's 
request has been very generous, the urgency of the situation 
certainly demands a large response, and this is why this 
Committee and the Secretary of State is focusing like a laser 
beam on coordination, working with the multilateral 
organizations, hopefully working with all the foundations that 
you do so that we can use every resource as effectively as we 
can. And I just wanted to express our appreciation to you 
again.
    And this concludes today's hearing on the fiscal year 2010 
Budget Request for Global HIV/AIDS Programs. Subcommittee on 
State and Foreign Operations and Related Programs stands 
adjourned.

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                                           Wednesday, May 20, 2009.

                    MILLENNIUM CHALLENGE CORPORATION

                                WITNESS

RODNEY G. BENT, ACTING CHIEF EXECUTIVE OFFICER, MILLENNIUM CHALLENGE 
    CORPORATION

                 Opening Statement of Chairwoman Lowey

    Mrs. Lowey. Today, we welcome Rodney Bent, the Acting Chief 
Executive Officer of the Millennium Challenge Corporation, to 
discuss the President's Fiscal Year 2010 request for the 
Millennium Challenge Account. As you may know, Mr. Bent 
formerly served as a staff member of this Subcommittee, and it 
is a pleasure to have him back today.
    The President's budget requests $1.425 billion for the 
Millennium Challenge Corporation, a 63 percent increase under 
the Fiscal Year 2009 enacted law. The request includes funding 
for three new country compacts in Jordan, the Philippines and 
Malawi, as well as funding for two additional baseline 
programs. As the MCC enters its fifth year of operation, this 
is an appropriate time to take stock of achievements and 
challenges, and I believe the MCC holds tremendous potential to 
bring transformative change to countries in the developing 
world and to support sustainable long term development. 
    Since its inception, the MCC has signed 18 compacts 
totaling $6.4 billion, 21 threshold programs totaling $470 
million. The challenge to the MCC in the coming year is to 
demonstrate that its model is not only innovative but that it 
brings actual results in poverty reduction and sustainable 
economic growth to the poorest of the poor. I hope you will 
share quantifiable examples of progress today. The past year 
has brought fresh challenges to the MCC due to political 
instability. Compact implementation has been disrupted in 
Armenia, Nicaragua, Madagascar.
    At this time last year we discussed the impact of fuel 
costs which led to the scaling back of several country 
compacts. Today we face a global financial crisis, and I would 
appreciate it if you would provide insight into how economic 
and political circumstances have impacted MCC programs. Has the 
global financial crisis led the MCC to alter its country 
programs? Are participating countries expressing increased or 
decreased interest?
    MCC projections show that disbursements will at least 
double in all 18 of the country compacts compared to the 
previous year. In Morocco disbursements are projected to be 
eight times higher, rising from $21 million to $194 million. In 
Mozambique disbursements are projected to be 14 times higher, 
rising from $12 million to $173 million. How realistic is the 
projected disbursement data you have provided to Congress? What 
project outcomes are associated with the increase in 
disbursements?
    Last year the MCC undertook a reorganization to focus on 
MCC implementation, which seemed to have made a difference in 
the programs. What lessons learned can you share with us in how 
you are increasing the pace of implementation? Turning to the 
specifics of the fiscal year 2010 request, it includes funding 
for three new country compacts, including one in Jordan to 
improve its water and sanitation systems, a critical need in 
Jordan. Can you tell us where you are in the compact process? 
And, Mr. Bent, I appreciate your testimony today, look forward 
to discussing the fiscal year 2010 budget request for the 
Millennium Challenge Corporation.
    And before we hear from you, let me turn to Ms. Granger, 
the Ranking Member, for her opening statement.
    Ms. Granger. Thank you, Chairman Lowey. Thank you for 
holding this very important hearing today.
    And good morning, Mr. Bent, thank you for appearing before 
our Subcommittee. I will make a very short statement this 
morning because we have time constraints. Chairman Lowey talked 
about the amount of this request. I realize that the MCC was 
created to be unlike any other entity or account in the U.S. 
Foreign Assistance Budget. Primarily, the MCC was designed to 
be implemented in a way that elevates good governance as a 
prerequisite to funding.
    I especially appreciate the MCC's focus on accountability 
and country-generated solutions. But it has been five years now 
since the MCC's inception, therefore it is a good point in time 
to examine the interim results and some ongoing and arising 
policy challenges that will set the MCC's course for the 
future. I have my concerns about the projects that are ongoing 
and the increase in cost that Chairman Lowey brought up, and I 
hope you will address these issues and answer our questions. 
Thank you very much.
    I yield back my time.
    Mrs. Lowey. Mr. Bent, as you know, your full statement can 
be placed in the record, and if you wish, you may summarize. 
Please proceed, thank you.

                     Opening Statement of Mr. Bent

    Mr. Bent. Thank you, Chairman Lowey, Ranking Member 
Granger, and other Members of the Subcommittee for the 
opportunity to discuss President Obama's request for the MCC. I 
will definitely summarize my statement. I will try and be 
brief. On a personal note, it is a little unusual for me to be 
on this side, but nonetheless it is an honor to be here.
    Let me start with two truisms. First, the planet is a small 
place. The more countries that practice democracy, good 
governance, investment in people, and promote economic growth, 
the better for them and for us. Second, U.S. foreign aid will 
never, can never be a substitute for the income that households 
in poor countries want to and can produce for themselves. 
Helping poor households earn greater incomes will allow them to 
purchase food, buy better housing, spend more on healthcare and 
education, and pursue other opportunities for a better life.
    The key issue is how to make development assistance work 
more effectively. Some key lessons from the MCC experience. 
Select good partners who share our goals, enable those partners 
to select and implement their homegrown projects but using 
world class standards for project success, and by that I mean 
economic, environmental, gender, engineering. Use incentives 
which change behavior, frankly and do so more effectively than 
rhetoric or sanctions. Be rigorous in using specific and 
measurable outputs and outcomes. And be up front and candid 
about what you are trying to do.
    The MCC has signed commitment as you noted for $6.4 billion 
in 18 countries. We estimate that brings $11 to $12 billion 
worth of benefits to 22 million beneficiaries. So it is 
definitely a program that works and does have metrics. We 
anticipate as you noted three compacts. You have all the detail 
in the budget justification, so I will spare you that, and let 
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                           THRESHOLD PROGRAMS

    Mrs. Lowey. Okay, and we will proceed from side to side, 
which is our usual procedure. The MCC's threshold program has 
become a topic of much debate over the past year. At its 
inception, threshold programming was designed to assist 
countries to meet the specific indicators. In practice, 
threshold programs have had varied results. In some cases 
countries have become compact eligible prior to the end of 
their threshold programs, others have received a second 
threshold program, others frankly received a threshold grant 
but are not likely to ever become compact eligible.
    The initial goal of the threshold program continues to have 
merit, but I am concerned that this program has truly lost its 
way. I understand that MCC is undertaking an internal review. 
Could share some of the preliminary observations or 
recommendations of that review, and while this review is going 
on, what steps will MCC take to put this program back on track, 
and what mechanisms do you have in place to ensure that there 
is appropriate coordination between the MCC and USAID and there 
is no duplication of effort on threshold programs?
    For example, in Peru the MCC threshold program includes a 
significant child health component while USAID already has a 
$12 million health program in that country. And as you know 
there is considerable discussion about the need to develop 
whole-of-government development strategies in countries where 
the U.S. government is providing assistance. If this strategy 
was developed through a collaborative process that included all 
of the relevant agencies, do you believe that the threshold 
program would need to continue to be a component of the MCC 
portfolio? So what is happening with the threshold program?
    Mr. Bent. I did not count all the questions nested in 
there, but there were quite a few. Let me see if I can broadly 
explain the history and where we are going, how we are thinking 
about at the 5-year mark what the threshold program should do. 
The program was originally designed to help countries cross 
that threshold to become a compact. So in that sense there was 
I think an element of more risk taking. We were going to be 
working with partners who are a little further away than the 
compact eligible countries.
    The notion was that it would be a 2-year program, it would 
be largely administered but not entirely administered by USAID, 
and it would be the kind of program that would deal largely 
with issues like corruption that, frankly, are pretty tough to 
deal with. You are quite correct. Several of the countries have 
not done as well on the threshold program as I would have 
liked. I would point to the Ukraine as an example, but in some 
measure that is a good way of finding out whether the country 
is really ready to work on a compact.
    Other threshold programs have in fact been just brilliantly 
successful. I would cite the Burkina Faso Girls' Education 
Program in which we built 130 girl friendly schools, and that 
is frankly covering not only the schools but drilling wells, 
building teacher housing, working with the government of 
Burkina Faso to pay for teachers and textbooks. It was such a 
good program in fact that Burkina Faso wanted to include a 
second stage of that program in their compact.
    So I would highlight the purpose of the threshold program 
is to help countries, it is to give us some experience. But I 
think your question is really directed at, what is the future 
about. I think what we are trying to do, and it is a new board 
so they will have their own thoughts on this, we are going to 
present a series of questions: Does it make sense to have a 
second threshold program? If we have not been able to do 
something in two years, can we do it in four? What should the 
failure rate be like?
    Frankly, having spent a long time in government, if you are 
going to do something risky you ought to expect failures every 
once in a while. So I have no illusions that somehow the 
threshold program will produce 100 percent of success. But the 
goal is to make sure that the programs are well designed, that 
they get the beneficiaries in and of themselves, but that they 
do in fact lead to a compact.
    Having said that, I do not think every threshold program, 
every threshold country should be a compact country. It is not, 
and we make this clear when we talk about the threshold 
program, getting a threshold program just means you have an 
opportunity to compete. Whether you get a compact is going to 
depend on whether or not you meet the criteria and frankly how 
good the proposals are. How many beneficiaries, what is the 
government doing, what are the kinds of needs that the country 
has?
    Mrs. Lowey. In Peru, why did you need an MCC child health 
program when there was already a USAID $12 million health 
program in the country?
    Mr. Bent. What I have seen in a lot of cases, is that the 
threshold program is a little more directive in the sense that 
we are looking at indicators. And in a lot of cases, probably 
90 percent of the time, USAID does administer the threshold 
program. I think sometimes we have had a good segue, in which 
people will look at a program, whether it is child 
immunizations or girls' education or governance, and then AID 
will in fact say, well look let us continue that program, it 
builds on some things that we have tried to do. I am afraid I 
cannot quite speak directly to Peru because I have not been 
there, but I would be happy to try and answer that question for 
the record.
    Mrs. Lowey. That is another way to get them additional 
money. Ms. Granger.

              Opening Statement of Ranking Member Granger

    Ms. Granger. Thank you very much. It is my understanding 
that most of these infrastructure projects, in both poor and 
rich countries, such as road projects, are often fertile ground 
for corruption ranging from petty theft to perhaps large scale 
collusion. As you know, corruption can lead to rising costs as 
well as decreased development and economic returns. In 2010 you 
are planning a compact with the Philippines, a country in the 
middle of a corruption scandal in which the World Bank canceled 
a $33 million road improvement project and black listed several 
firms they said had colluded in the business process.
    First, will the Philippines pass the corruption indicator 
and if so how will the MCC compact combat the corruption 
challenge that the Philippines infrastructure sector poses? 
Two, please give specific anticorruption measures that MCC will 
include in procurement, oversight, and auditing. And how do you 
think the MCC is distinct from the World Bank in its effort to 
prevent and counter corruption?
    Mr. Bent. Great series of questions. Let me deal first with 
the corruption and then with the Philippines. On corruption you 
are quite right about infrastructure, because the large 
contracts could be lucrative opportunities for people to scam. 
What we have tried to do, because corruption for us is a key 
indicator, and I will come back to that in talking about the 
Philippines, is we have tried to take every measure that we can 
to worry about, okay how do you identify it, how do you prevent 
it, how do you build into place the systems that are going to 
deal with corruption, and then how do you have that continuous 
monitoring to make sure that if you see it you can stop it.
    What I would say is that in the case of corruption, we have 
a corruption policy that has been blessed by Transparency 
International. Fighting corruption has been our hallmark and so 
we pay a huge amount of attention to it. What we do in specific 
infrastructure projects, it is in our interest, it is in the 
U.S. taxpayers' interest to have the most efficient, most 
capable companies do it. We hire procurement agents, we hire 
fiscal agents, we have twice a year audits.
    We try to make sure that when we look at the norms for 
procurement whether it is a road or a port or an airport, or, 
industrial park or building schools, what are the metrics? What 
are other companies doing? What are other donors doing? What 
has been the experience? We obviously do the checks in terms of 
companies and black lists, but that can only take you so far. 
What I have seen is that because we have engineers supervising 
engineers, we are really big believers in belts and suspenders 
in terms of looking at corruption.
    So far we have not had a major instance of corruption in an 
MCC funded project, but I will say we have had a couple of 
procurements where we looked at them, we did not feel that they 
smelled right, and we said, okay they are going back, you are 
going to have to rebid, you are going to have to resubmit. I 
think that kind of attention to detail is what marks us a 
little bit as being different. We spend a huge amount of time 
worrying about that issue and trying to ferret it out.
    In the case of the Philippines, they are probably the 
biggest program that we are likely to fund in 2010. For several 
years they did pass the corruption indicator. They are at the 
47th percentile, which is within the margin of error, but 
enough to make us nervous and for us to in fact have a series 
of discussions with the Philippine government, with President 
Arroyo, with the Finance Minister Gary Teves. We have made 
clear to them we are concerned, that they must, according to 
the previous board policy, pass the corruption indicator before 
we will sign.
    They are well aware of that, I cannot think of any more 
blunt and direct conversations that we could possibly have had 
with them. The new numbers will come out in August and 
September, and we will see at that point. It will also be a new 
board, they will have to decide what they want to do. What is a 
little bit different about how we operate than the World Bank 
is that, and if there were somebody from Treasury here I would 
probably have given them equal time to offer some commentary on 
it, but several of our staff came out of the World Bank.
    There is in the World Bank cultural context the desire to 
get stuff done. You get promoted by doing projects. There is a 
government to government relationship. We do not have that same 
cultural context. We look at projects and they either work and 
the beneficiaries are there, or they do not, in which case we 
stop. We do not want to have that continuing 5-, 20-year 
relationship with a country. We are willing to pull the plug. 
In fact in several cases where we saw projects that did not 
work, we stopped them.
    Ms. Granger. Thank you.
    Thank you.
    Mrs. Lowey. Mr. Jackson.

                    Opening Statement of Mr. Jackson

    Mr. Jackson. Thank you, Madam Chair.
    First of all, welcome to the Committee.
    Mr. Bent. Thank you.
    Mr. Jackson. Let me comment on at least what I understand 
the reformation of foreign aid to have been over the last 
decade. We created the MCC and the threshold program to move 
away from direct grants to countries who were not following 
certain indicators to help reduce poverty, to get away from the 
tyrants, the despots, the unaccountable foreign aid, really in 
reaction to what the American people were saying about foreign 
aid, but also we wanted greater accountability in areas like 
poverty reduction.
    I find it a little bit disconcerting, and maybe you could 
help clarify it, when we would coax a country into the 
threshold process and then after they have met the indicators, 
including reformation of their civil society and other elements 
that would provide greater transparency, to then say that once 
they have met the thresholds, made these adjustments, they may 
not be eligible for a compact. It just seems a little 
disingenuous from my perspective. The whole point of the 
threshold program is to make them eligible so that they can 
have the resources to do that.
    This is a thought I would like you to comment on, but 
before you do, two years ago I accompanied the Chairwoman on a 
CODEL to Subsaharan Africa, and one of our stops was to visit 
the Kibera slum in Kenya, which was quite eye-opening. The 
number of people living in poverty and slums in the developing 
world is about a billion, and it is expected to grow rapidly 
unless actions are taken to address the challenges and the 
opportunities of urbanization and the growth of slums.
    The International Housing Coalition in a study conducted 
last year found that only about a quarter of MCC funds were 
going to urban areas, and none to improve housing. The flexible 
funding of MCC creates the real opportunity to provide multi-
sectoral assistance and fund strategic approaches to slum 
improvement. How can the MCC constraint analysis process and 
MCC funding better focus on critical interrelated issues of 
slums, poor housing, and urban poverty alleviation?
    I would not want a country, let us say like Kenya, to meet 
the threshold, but after they meet the threshold there is no 
compact possibility. This is maybe a far-fetched example, but 
for a similarly situated country, there is no compact at the 
end of the threshold to address what the Chairwoman and Members 
of this Committee saw in that slum.
    Mr. Bent. Right. There were a couple of questions there. 
Let me see if I can parse them in the following way. For the 
threshold program, we do regard it as a way of getting 
countries to eligibility. But whether or not the country 
becomes eligible is in some measure, okay have they met the 
criteria? There are a couple of countries, I will use Guyana as 
an example, that had a threshold program, that did meet the 
criteria, but the previous board did not select for a compact 
eligibility.
    In part that is because Guyana is roughly a million people. 
I have been to the country and you could throw a stone and 
probably find 50 things that need going there, and so in some 
measure it is a good place to do development kind of work. But 
we have scarce resources. We have to look at both in terms of 
our staff and in terms of our budget what makes sense. It is a 
new board. Even though several of the private members are going 
to continue, it is a new Secretary of State, a new Aid 
Administrator, hopefully there will be one, a new VSTR, and 
there is a new Treasury Secretary.
    In some measure, what we are trying to tee up for the board 
are exactly those kinds of questions as part of the threshold 
review. Does it make sense if we have had a successful 
threshold program and the country now passes the criteria to 
make them eligible? And those are the kinds of decisions that I 
think the board needs to look at. In the case of Guyana, they 
essentially said, you have got scarce resources, is this a good 
place to put your money? On housing and the urban question, 
which is, we spend a lot of time on this, most of the poor in 
Africa and elsewhere are out in the countryside. So in some 
sense looking at those programs makes a lot of sense.
    Mr. Jackson. I know you are going to get to the urban 
question and I know my time is up, but I want to go back to 
just part of that answer that you raised about the threshold, 
and that is, in these countries that undertake the effort to 
apply for the compact, to go through the threshold process, 
they reform their governments, they reform civil society, they 
try to create greater transparency, they shift resources in 
order to comply so that they might be part of some kind of 
systematic approach to addressing poverty.
    Mr. Bent. Right.
    Mr. Jackson. Now at the end of that threshold, after they 
have made these reforms, what we are saying or the board is 
saying, and maybe we need greater clarity, is that there is a 
strong possibility that after all the reforms you have gone 
through there is going to be some back treading here because 
you may not get the compact?
    Mr. Bent. Well let me be clear, if you gave us the money we 
would be happy to do it. But, we do have to make choices. It is 
really the board that needs to decide where do you get the 
biggest bang for the buck, where are you going to get the most 
beneficiaries, where are you going to have a good program. I 
frankly do not like to be in the position of having to explain 
to a country that has made the kind of commitments, made the 
resources available, done the tough policy reforms, met the 
threshold program criteria, and then have to go back and 
explain as I did to the President of Guyana, I am sorry not 
this year.
    My hope frankly is that I can make a much more positive and 
constructive phone call to say, yes, you know, we would like to 
do it. But it is a function of the resources, and I probably 
more than anybody else appreciate what this Subcommittee has to 
go through in terms of making those kinds of choices.
    Mrs. Lowey. I think Mr. Jackson asked some really important 
questions. Maybe we can have a followup meeting on it, and I 
thank you.
    Mr. Bent. Could I just answer the one question about 
urbanization? Because it seems to me we really do try to pay 
attention to that. The Jordan program is hugely about urban 
waste water and use of water. So we are cognizant of it. What 
we are doing at airports and road and port infrastructure are 
really about urbanization kinds of projects.
    Mrs. Lowey. Mr. Rehberg.
    Mr. Rehberg. Thank you, Madam Chair.
    And, Rodney, nice to see you again.
    Mr. Bent. Thank you, sir.
    Mr. Rehberg. It is always with some interest I look at the 
Members and staff that had survived a Kolbe death march.
    Ms. McCollum. I was there.
    Mr. Rehberg. Yes, some of us have won the t-shirt or 
deserve that. Some of us have two death marches. I want to talk 
specifically about some of the things Mr. Jackson brought up 
because as you can tell we are very supportive and we want to 
make this work. And we are particularly interested in why some 
of the countries do not make it. One of our trips with Mr. 
Kolbe was to Senegal and Benin. Having been on the ground and 
seen their project and the enthusiasm of not only the public 
but the government at the time, the one thing we did notice, 
and I brought it up at prior meetings, the separation of the 
judiciary always seemed to be a problem, but more specifically 
I noticed in those two particular countries kind of two-term-
itis. They wanted to change the constitution so that as 
president they could be president for life. Is that one of the 
things that kind of knocks a country out, when they start 
changing their constitution? Because we want to see them moving 
more towards an open democratic or whatever government they 
choose for themselves. And talk a little bit specifically about 
those two countries. What happened, is there a chance to come 
back in once they have been dropped off or are they too far 
gone?
    Mr. Bent. No. Let me talk about Senegal as an example. I 
think we certainly had some startup difficulties there. Part of 
the difficulty is explaining to the Senegalese government and 
the Senegalese people how we operate. A lot of time governments 
will come in and they will say, we have got these wonderful 
projects, we want you to fund them. And we have to say, well 
let us talk about the economic rates of return, let us talk 
about the gender, let us talk about the engineering, let us 
talk about the environment. Do these make sense? What are you 
willing to put into these compacts?
    In the case of Senegal, I went there about 3 years ago, and 
frankly I was disappointed at the quality of the engagement we 
had. It was pretty clear to me the President just wanted to 
hand us over and say, you know, write the check, give us the 
money. And we said, no we are not going to do that, we are 
going to go through the full consultative process, it really 
has to make sense, you have to make a contribution. We had some 
back and forth on this, and for about 2 years I would have said 
that Senegal was on the do not resuscitate list.
    But in fact what happened was that I think the government, 
when they saw that Mali and Burkina Faso had compacts, 
countries that they regarded as less sophisticated, and 
speaking colloquially here, they were a little stunned. And 
they suddenly came back and they said, well what is it that 
these countries have done that allow them to go forward? In 
fact one of the key advantages of the MCC is that peer to peer 
pressure.
    When we see a compact that is in trouble, where things are 
not going well, we can send people, or frankly they send 
themselves, they will go to a country and say, okay you had 
this similar kind of road project, what did you do that made it 
work? That kind of peer to peer sharing is not something that 
shows up in our advantages, but it is major, it is real. So in 
the case of Senegal, they got wise, they came back, they put 
together a very good core team, they have now got a whole 
series of road projects that, depending on other events and 
funding, we are going to go forward with.
    Mr. Rehberg. Did their program or project change?
    Mr. Bent. Yes, very much.
    Mr. Rehberg. Not moving the town?
    Mr. Bent. No, the town is off our radar screen. We are 
working with roads and irrigation in Senegal. We have had 
several countries that have gone through peaceful transitions. 
El Salvador, I was just there a couple of weeks ago, were going 
from President Saca to President Funes, I think that will be a 
great success story. Ghana, President Kufuor handed over power 
peacefully.
    Mr. Rehberg. How about the changing of the constitution?
    Mr. Bent. That is, there is always a question, you know, 
one of the things that the board takes into account is what we 
call supplementary information. We have the indicators which, 
you know, we bore everybody with, but we have put together a 
huge amount of additional information. What is the governance 
like, what is the judiciary like, what is civil society like, 
what are people saying? What do businessmen say about them 
really, not just as measured by our indicators but much more 
texturally? Is the rate of taxation too high, is it stifling, 
what is going on?
    Those are all questions that we put to the board, and among 
them are going to be, okay is there likely to be a peaceful 
transition? Will there be an extra-constitutional effort? The 
case of Madagascar, I do not know if I want to save that as a 
question for later.
    Mrs. Lowey. Done.
    Mr. Bent. Well essentially, but it is a good example of, 
frankly Madagascar had one of our better programs. I was really 
looking to it as a huge success story. We were going at great 
guns, and then we have an extra-constitutional coup. That 
violates our sense of good policy. We sort of looked at it and 
we said, we have got to stop, you know, we are going to wind 
this program up. But I have to say it tears my heart out 
because that was one of our better performing programs.
    Mrs. Lowey. Thank you.
    Ms. McCollum.
    Ms. McCollum. Thank you.
    Following up on this, and I know Mr. Berman is working on 
looking at the way that we put our State Department and foreign 
aid together, my problem with this is not that there should not 
be specialized programs within the way that we do aid, it is 
the fact that they start standing alone separate, they start 
competing for the same funds, or they use funds from other 
programs that we fund. For example a lot of USAID money has 
gone into PEPFAR, a lot of USAID money has gone into MCC to 
make the thresholds work.
    So as we think we are plussing up USAID to work on child 
survival, the child survival money gets kind of intermixed in 
with funding for threshold. I am going to make more comments 
and then I would like you to. I was always skeptical of having 
this be a standalone program, and my skepticism has not changed 
even though I have seen some good things happen. When you talk 
about threshold countries and you make it really clear, let me 
tell you it is not real clear to me that you have made it real 
clear with the number of ambassadors that line up outside of my 
door, literally.
    Mr. Bent. American or foreign ambassadors?
    Ms. McCollum. Foreign ambassadors who line up outside of my 
door saying, we have done this, we have done that, we are a 
threshold country, we are ready to go and we expect you to fund 
it. That is the wrong way that it should work. It should be, 
you make those tough decisions early on about what the 
threshold countries are going to be based on your budget, not 
the other way around setting up expectations. It is cruel, it 
is wrong, and then it forces this Committee to make the tough 
choices that we had nothing to do with as to whether or not we 
want to plus up child survival across the board, or put in a 
sustainable health care platform.
    I do not disagree that you do good things, but I do 
disagree with the way that it has been structured moving up. 
And let me give you another example just even from the 
conversation today. I think it is great that we did more for 
education in Burkina Faso, I think that that is marvelous. I 
think USAID has a clear mission to do that and that they should 
be given the funds to fulfill that mission. Now where I can see 
MCC working is to plus up the higher education, for technical 
support for doing all those things that you are doing, not K 
through 12 schools.
    So I say this because I want to have an honest 
conversation. I want to see you be successful, but I want to 
also see us be successful in many of the other endeavors this 
Committee works on and not be in conflict and not be in 
competition. And I want to make it very clear from this Member 
of Congress, I am fighting back as an appropriator when the 
ambassadors from other countries are coming into my office 
saying, you know what, they should not have done it that way. 
They should not have put you on the track for threshold with an 
expectation that you were going to get a compact when they had 
not consulted Congress about the money that was going to be 
available.
    Mr. Bent. Let me give brief responses if I can. On 
education, I think one of the advantages of the MCC is in some 
measure, because we require countries to also put in their 
contributions, so in the case of Burkina Faso it is looking at 
the teacher salaries and other things, that is I think above 
and beyond. There is no question that U.S. foreign aid needs a 
complete rethink. I would give a shout out to the MFAN folks 
and I would say, look everybody knows the status quo is not 
good, so what is the future going to bring?
    One of the advantages of the MCC is that we have a board 
that has AID, it has the Secretary of State as Chairman. So if 
you want to look at how to integrate programs, I think that is 
a great place to start. Everything you said about the 
competition for resources, I accept and I would be happy to 
talk with you at greater length about how we can together make 
sure these ambassadors have got the right approach to the 
threshold program.
    Mrs. Lowey. Thank you.
    Mr. Crenshaw.

                   Opening Statement of Mr. Crenshaw

    Mr. Crenshaw. Thank you, Madam Chairman.
    And welcome to the Committee. Earlier I asked the acting 
head of USAID some questions about human trafficking, and I was 
really encouraged to hear him say that when they decide in 
terms of where that USAID assistance is going to go they 
monitor the way the countries are complying with our TIP 
reports that come out every year and they take it pretty 
seriously, so that was very encouraging. I wanted to ask you 
about that because sometimes when I look through, I guess one 
of the things I like about the compact and the corporation is 
you sign an agreement, and we have got those criteria that you 
set out. And there is not really a criteria on human 
trafficking but I imagine it falls in kind of the Ruling Justly 
category.
    Mr. Bent. Absolutely.
    Mr. Crenshaw. But when I look at the chart we have 14 
compacts, 12 of those 14 countries are ranked tier 2 or tier 2 
watch list. Number 1 is minimum requirements, number 3 is not 
very good, 2 is kind of, we are working on it.
    Mr. Bent. Right.
    Mr. Crenshaw. But here is what is interesting, 6 of the 12 
that are on the tier 2 or tier 2 watch list, they passed 6 out 
of 6 of the criteria under the Ruling Justly criteria, which 
makes me wonder, how seriously do you take when you are grading 
those compacts the compliance with the TIP report? Because if 
they are still, in fact six of those, they were on tier 2 for 
three straight years so they did not really move, and we are 
pretty serious about trying to deal with this as you know. And 
so, help me understand how that plays, and when you look at 
those criteria, what kind of efforts do you make to say to 
those countries, we have got a deal here and you are not really 
meeting part of those requirements?
    Mr. Bent. We take it very seriously. In the case of Moldova 
I think they were on the tier 3 and we essentially went and had 
a conversation saying, that will not be acceptable, you need to 
deal with that. Again it is part of the information that the 
board takes into account, it is certainly something we take 
very seriously just as I think Mr. Wolf last year asked about 
U.N. votes and we went back and we made sure that we went 
through that and we looked at it. These are all important 
factors. I cannot give you a mathematical weight because what 
we are also looking at is, okay what can the country do, how 
serious are they, is it a question of resources, is it a 
question of enforcement? But we do spend a huge amount of time 
on that.
    Mr. Crenshaw. If you take these six countries that have 
been on tier 2 for three straight years, it is almost $3 
billion that we are spending. So I just hope that somehow we 
can sit down with those folks and, you know, not year after 
year after year have them not make any progress at all. So I 
appreciate that, but I do think we can probably maybe send that 
message, because I will from time to time ask the leaders of 
these countries when we are visiting, and it never seems to be 
high on their priority. It is always something they are 
concerned about, in fact if you ask anybody in this world, they 
are just outraged that this goes on in the 21st century. But 
they do not seem to be making as much progress as they could if 
they were really serious about it.
    Mr. Bent. It is a question of using incentives as opposed 
to withholding or using sanctions. We try to say, look we are 
all about positive incentives, you know, speak softly and carry 
a big carrot. But, you have got to do the right things and 
trafficking in persons is really important to us.
    Mr. Crenshaw. Let me ask you, do I have a minute, Madam 
Chairwoman?
    You know, when we were talking earlier about some of the 
contracts where our money is being used to say build a road or 
whatever, is there any kind of consideration given to U.S. 
companies if we have got a compact with somebody, Honduras or 
another country, part of that money is going to go to build 
some sort of facility, the road or some sort of equipment et 
cetera, is there consideration given to U.S. companies that are 
bidding on that? I do not think they should necessarily be 
favored, but do they get the same consideration?
    Mr. Bent. We actually bend over backwards to make sure that 
U.S. companies have every opportunity to bid. We make sure that 
the documents are in English, we make sure we go out and visit. 
It is in our interest to have a domestic constituency that 
thinks we are a good program. When I was in El Salvador two 
weeks ago and we just inaugurated a major road project to the 
north, I was delighted to see it was Caterpillar equipment 
there, and so I sent my friends at Caterpillar a picture 
saying, hey look I am doing my bit for you now you have got to 
do your bit for this country.
    Mr. Crenshaw. Well thank you, Madam Chairwoman.
    Mrs. Lowey. Thank you.
    Mr. Schiff.
    Mr. Schiff. Thank you, Madam Chair.
    Mr. Bent, I wanted to ask you about two countries, Jordan 
and Armenia. I was very happy to see that the Jordan compact 
will be ramped up in 2010, and especially pleased that we and 
the Jordanians will be working to address Jordan's incredibly 
scarce access to water. I think the late King Hussein said the 
only reason he could see going to war with Israel in the future 
would be over water.
    In your testimony you referred to a framework for 
benchmarks that the MCC will use. Can you elaborate on what 
those benchmarks may be? And I would like to be kept apprised 
of the Jordan compact's progress, so I would like to arrange to 
be briefed as developments warrant. And let me just get the 
other question out there in the interest of time. On Armenia, 
according to Armenian press reports last week, Armenia will 
request the MCC provide $1.6 million to rehabilitate railroad 
infrastructure.
    The press reports indicate that they are awaiting approval 
from the Millennium Challenge fund before the matter is 
forwarded on to the MCC. MCC already has in place a $67 million 
road rehab program, but MCC froze about 30 percent of the aid 
package in 2006 following that year's problematic elections. 
And I understand that MCC said in March that the Armenian 
government had still not addressed U.S. concerns about the 
status of democratic governance in the country.
    Last week Secretary Clinton wrote to President Sargsyan to 
ask him to ensure that the upcoming municipal elections in 
Yerevan are democratic. Are we awaiting the type of process 
that takes place in those elections to determine whether 
democratic governance has been restored sufficiently to release 
MCC funds? If not, are there other factors you are looking to 
in terms of the status of the funds?
    Mr. Bent. Let me take them in order. On Jordan we would be 
happy to brief you in more detail. We reckon that there will be 
about a million and a half beneficiaries to the project. It 
affects, I think, 90,000 households. But we would be happy to 
go through the metrics in terms of the types of pipe that we 
are putting in, the amount of water that will be saved not 
wasted, and what this will mean for frankly a very poor portion 
of Jordan.
    On Armenia, we had major difficulties with the election as 
you know. You are very well versed on events in Armenia. We had 
some concerns about it. With the new board, we presented those 
concerns and with a couple of other countries as well. The 
Secretary of State I think is directly personally interested in 
what is going on. We are going to have a board meeting in June 
in which we will again raise the issue of Armenia, as well as 
Nicaragua, as well as a briefing on Madagascar. So let me not 
jump ahead of where the board is because this is one of those 
cases where that tight coordination between the State 
Department, AID, and other government programs is hugely 
important to us.
    Mr. Schiff. I remember at the time the MCC suspended the 
funds that there were several issues, there was the problematic 
elections, there were the continued detention of political 
opponents, there were some potential media laws cracking down 
on free speech, and some concerns I think about curbing the 
rights of assembly as well as the opportunity for NGOs to work 
in the country. Are you able to tell me if any, some, all of 
those problems have been sorted out or whether they are 
continuing to be problems?
    Mr. Bent. I cannot tell you how they have been sorted out. 
Let me back up one step.
    Mr. Schiff. I do remember also that the Armenian government 
decided to put their own money into the rural road 
infrastructure to get it done before the rainy season, and so 
that was good, that was a positive step, but I would love to 
hear what you could tell me.
    Mr. Bent. Well in both Armenia and Nicaragua the projects 
are great, there is no question that, a little bit like 
Madagascar, they are some of our best performing projects as 
projects. I was at pains when I was in Nicaragua to talk with 
the Minister of Finance and say, look these projects are going 
great. The Armenian Foreign Minister came two weeks ago and I 
had to say pretty much the same thing. The issue is not the 
projects, it is the good governance questions.
    Every point you just listed is in fact an issue of some 
concern for us. The Secretary of State has taken a personal 
interest in this--and as the Armenian Foreign Minister and I 
think the Nicaraguan Foreign Minister said,--she has written 
letters to both. I cannot tell you what the response has been. 
I figured I would get phone calls from both ambassadors saying 
how well the meetings had gone and then when we will be talking 
about this at the June board meeting as well.
    Mr. Schiff. My time is up, but if you could let me know 
maybe after the hearing, of the issues that were raised earlier 
that concern the MCC, on which issues has Armenia made progress 
and which issues are you waiting to see progress.
    Mr. Bent. Absolutely, and I would like to come in with the 
State Department on that because we really do try to work 
through our ambassadors. We are part of the country team and we 
make sure that there is no daylight between the two of us.
    Mr. Schiff. Thank you, Madam Chair.
    Mrs. Lowey. Ms. Granger.
    Ms. Granger. Talk about the conflict in Mongolia.
    Mr. Bent. That was, every once in a while you want to try 
and do something that has not been done before. And so in the 
case of Mongolia it was frankly a pretty innovative idea to 
help the railroad, which is 50-50 owned by the Mongolian 
government and a Russian company, because, really, the 
heartbeat of Mongolia is going to be minerals and 
transportation. So we thought this is a great way of moving 
forward. But we insist on standards on accountability and 
transparency, and one of our conditions precedent for the rail 
project funding was that we be able to audit the company. If we 
are going to do an innovative lease, we want to make sure that 
we have got the financials there to back it up.
    There was a fair amount of stalling, and I can tell you 
more privately some of the other things that went on, but at 
the end of the day, we were not able to satisfy ourselves that 
that accountability would be there. The Mongolian government 
basically said, well we are not sure we can therefore proceed, 
and we said, fine. They are very interested in finding other 
projects. We are frankly in the mode of, well if they are good 
projects we will look at them but it is going to have to be 
done within our framework of beneficiaries of good projects and 
economic growth.
    Ms. Granger. Thank you very much.
    Mrs. Lowey. Thank you again for your time, and I look 
forward to continuing our discussion on several issues that 
were raised. This concludes today's hearing on the Millennium 
Challenge Fiscal Year 2010 Budget Request. The Subcommittee on 
State and Foreign Operations and Related Programs stands 
adjourned.
    Mr. Bent. Thank you.

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                                           Tuesday, March 10, 2009.

                         THE MERIDA INITIATIVE

                               WITNESSES

THOMAS SHANNON, ASSISTANT SECRETARY OF STATE FOR WESTERN HEMISPHERE 
    AFFAIRS (WHA)
DAVID JOHNSON, ASSISTANT SECRETARY OF STATE FOR INTERNATIONAL NARCOTICS 
    CONTROL AND LAW ENFORCEMENT AFFAIRS (INL)
RODGER GARNER, MISSION DIRECTOR FOR MEXICO, UNITED STATES AGENCY FOR 
    INTERNATIONAL DEVELOPMENT (USAID)

                 Opening Statement of Chairwoman Lowey

    Mrs. Lowey. Good morning. The Subcommittee on State, 
Foreign Operations, and Related Programs will come to order.
    Today we have two distinguished panels to review 
implementation of the funding Congress has provided for the 
Merida program in Mexico and the countries of Central America.
    I want to welcome our first panel: Mr. Thomas Shannon, 
Assistant Secretary of State for Western Hemisphere Affairs; 
Mr. David Johnson, Assistant Secretary of State for 
International Narcotics Control and Law Enforcement Affairs; 
Mr. Rodger Garner, USAID Mission Director for Mexico. And we 
also look forward to hearing our private witness panel who I 
will introduce later.
    Over the past decade drug trafficking and other criminal 
enterprises have grown in size and strength, aggressively 
intimidating and overwhelming government institutions in Mexico 
and Central America and threatening security and the rule of 
law.
    Recent news reports as recently as this morning have 
highlighted the surge in violence in Mexico related to drug 
cartels and organized crime, while homicide rates and other 
violent drug-related crimes have sharply increased in El 
Salvador, Honduras and Guatemala. This trend continues to raise 
questions about the most effective way to confront those 
powerful and well organized criminal enterprises.
    An estimated 90 percent of the cocaine shipped from the 
Andes flows through Central America up through Mexico and into 
the United States. In fact, in 2007 approximately 563 metric 
tons of cocaine transited into the United States via Mexico. 
And the drug cartels have expanded into other types of drug 
production, with Mexico now a leading supplier of 
methamphetamines, heroin, and marijuana to the United States.
    This subcommittee just returned from a trip to Mexico, 
Colombia, and Peru where we examined these challenges. We met 
with government leaders, law enforcement, military leaders, got 
a firsthand look at counternarcotics and alternate development 
programs the United States is funding. We were impressed by the 
political commitment of Presidents Calderon, Uribe and Garcia, 
all of whom understand the level of threat posed by the narco 
industry and are marshaling the resources to fight it.
    However, this problem cannot be solved through police and 
military actions alone. More must be done to invest in society 
and to provide alternate livelihoods, education, and 
opportunities for youth. While enforcement by police and 
military is important, security forces must institutionalize 
mechanisms to ensure transparency and accountability as well as 
respect for the rights of citizens.
    I know that we will continue to work together to insist 
that United States counternarcotics funding emphasizes these 
principles; in addition, domestically more attention on 
reducing demand in our own society and also on curbing the 
traffic of guns from our country into Mexico. This is required 
to win this war.
    Since I became the chairwoman I have been pushing for more 
comprehensive border security strategy that encompasses 
counterterrorism, anti-gang, and drug interdiction in the 
Western Hemisphere. Because counternarcotics efforts have a 
higher chance of success when implemented in the context of 
strong security and judicial institutions, we must also 
strengthen these programs.
    Finally, we must work with the governments in the region to 
address the underlying poverty and lack of opportunity upon 
which the drug cartels prey to gain power and influence.
    Including funding in the fiscal year 2009 omnibus 
appropriations, Congress has provided 700 million for 
assistance for Mexico and 170 million for Central America under 
the Merida program. I would like the panels to assess what 
effect the funding is having on the flow of illegal drugs to 
the United States, the type of coordination between the United 
States, Mexico, and the countries of Central America, and what 
additional steps are necessary to make this joint effort work.
    Additionally, I hope the witnesses will address the 
following key issues: First, how do we break the power and 
impunity of criminal organizations and assist the governments 
in Central America and Mexico and strengthen border, air and 
maritime security from our southwest border to Panama? How do 
we improve the capacity of justice systems in the region to 
protect the rights of its citizens by conducting fair and just 
investigations and prosecutions? How can we implement rule of 
law programs as well as protect civil and human rights while 
curtailing gang activity in Mexico and Central America?
    And again, I want to thank Secretaries Shannon and Johnson 
and Mission Director Garner for testifying today, but before I 
turn to our witnesses let me turn to my distinguished ranking 
member for her opening statement.

              Opening Statement of Ranking Member Granger

    Ms. Granger. Thank you, Madam Chair. Thank you for having 
this hearing today. Even before our recent trip to Mexico I was 
certainly concerned about the violence that we are reading 
about literally daily in Mexico. But as a result of our trip I 
have grown increasingly aware that if the U.S. Government fails 
to act quickly to help Mexico in its war against the drug 
cartels, there may be grave consequences. For this reason, 
bringing our subcommittee together today for this important 
hearing is very much needed and very much appreciated.
    We are all becoming painfully aware that drug-related 
violence is rampant in Mexico and places in Mexico, with almost 
6,000 people killed last year, twice as many as in 2007. The 
rising death toll is in fact a sign that the Mexican Government 
is serious about cracking down on the drug trade.
    The instability that has shaken Mexico is on our doorstep. 
I represent Texas, where we see criminals and drugs flow into 
this country while cash and weapons that support the drug trade 
move south across the border.
    The State Department estimates that some 90 percent of the 
cocaine imported to the United States comes from our southern 
neighbor. In exchange, up to $23 billion a year crosses the 
border and winds up in the hands of the Mexican drug cartels.
    Fortunately, Mexican President Calderon and former 
President Bush took an unprecedented step to enhance 
cooperation between our countries to stop the scourge by 
announcing the Merida Initiative. The Congress supported this 
plan to provide Mexico with $1.4 billion to help control drug 
trafficking, and as a result the U.S. Government is about 
halfway through its commitment with $400 million appropriated 
last summer in the supplemental, another $300 million that will 
flow from the 2009 omnibus bill.
    From helicopters and surveillance planes to nonintrusive 
inspection equipment, the U.S. investment is intended to 
provide the hardware necessary for the Mexican Government to 
extend its authority to those remote and hard to access parts 
of the country ravaged by the drug trade. The funding for 
judicial reform will also help Mexico's law enforcement 
community root out corruption and work more effectively.
    Mexico has taken its own steps forward on this front with 
the establishment in January of the national public safety 
system, which will increase coordination between Mexico's three 
levels of government and enhance their ability to fight crime.
    I think these are very important investments to jump start 
the Mexican Government effort, yet the struggle could be long 
and painful.
    In closing, I applaud the efforts of the Calderon 
government to eliminate those powerful drug cartels. I want to 
acknowledge the leadership of the previous administration and 
the subcommittee in recognizing that the U.S. must partner with 
Mexico, as well as Central American Governments in this battle. 
And I encourage the Obama administration to continue this 
Merida Initiative and make it a top priority for the upcoming 
budget request to the Congress.
    I look forward to hearing from you, and thank you for being 
here.
    Mrs. Lowey. Members of our distinguished panel, we thank 
you again for being here. Your entire written statement will be 
placed in the record. We are hoping to have a lively question 
and answer session and we are limiting each of us to 5 minutes.
    So if you can summarize your statement. We will make sure 
we read it very carefully if we haven't read it already. And 
the order of recognition will be Assistant Secretary Shannon, 
Assistant Secretary Johnson, Mission Director Garner.
    Secretary Shannon, thank you.

                    Opening Statement of Mr. Shannon

    Mr. Shannon. Madam Chairwoman, Ranking Member Granger, and 
distinguished members of the subcommittee, thank you very much 
for the opportunity to be here today. I am very happy to be 
joined by Assistant Secretary Johnson and Mr. Garner. This is a 
great opportunity for us, and we also want to thank you for 
your trip, as you mentioned, to Mexico and other countries. It 
is so important to gain firsthand knowledge of what is 
happening on the ground, and we deeply appreciate the effort 
you and your committee made.
    As you know, Mexico and the countries of Central America 
and the Caribbean are passing through a very critical period, 
which you highlighted in your opening statements. The fight 
among organized crime groups and drug cartels to control 
lucrative trafficking operations has unleashed appalling 
violence in Mexico, Guatemala, Honduras, and other countries in 
the region. And the effort by our Merida partner governments to 
attack and dismantle these criminal organizations has provoked 
a harsh response.
    The cartels are targeting police, military, and other 
security service personnel and using graphic displays of public 
violence to intimidate communities. This three-corner battle in 
which cartels fight each other while attacking state 
authorities represents a significant threat to our nearest 
neighbors and to our own national interests.
    The Merida Initiative recognizes the transnational nature 
of the challenge we face and provides us with a framework to 
collaborate with our neighbors to confront the criminal 
organizations whose activities, violence and intimidation, 
threaten the welfare, prosperity, and security of our citizens.
    I would like to briefly discuss the strategic importance of 
the Merida Initiative, what it means for the future of security 
cooperation in the Americas, and its potential to transform our 
relationships with our Merida partners. As I do so, I want to 
highlight that the urgency of our Merida assistance is 
heightened by the current financial and economic crisis.
    With public sector budgets at risk, remittances declining, 
and job loss throughout the region, the attraction that 
organized crime and cartels present is obvious. In regard to 
Mexico, as noted, the administration of President Calderon has 
expanded cooperation with the United States and offered to work 
with us in an unprecedented, collaborative, and coordinated 
fashion. We have accepted that offer through the Merida 
Initiative, but the nature of the challenge is daunting. As 
noted, authorities estimate that in 2008 alone over 6,200 
persons were killed in drug-related violence, including 522 
civilian law enforcement and military personnel, and we believe 
that the transnational nature of this threat is indicated by 
Federal law enforcement estimates that elements of Mexican 
based criminal organizations are present in 230 American 
cities.
    The important steps that Mexico has taken in this fight 
have included deploying the military in large numbers in 
operations against organized crime, professionalizing Mexico's 
police forces, and prosecutors, extraditing top drug bosses 
wanted by U.S. authorities, instituting long-term reforms to 
improve the effectiveness of the Mexican judicial institutions, 
and removing Mexican officials linked to crime syndicates and 
corruption.
    Working together with the Mexicans, we can address this 
threat, and our ability to cooperate with the Mexicans is going 
to be critical to our collaboration and our success.
    As noted, the Merida is on one hand a robust assistance 
package where we work directly with the countries of Mexico, 
Central America, and the Caribbean to address immediate needs 
they have, both institutional and with regard to their 
equipment. But it is premised on a partnership between our 
countries and our recognition that multifaceted problems 
associated with criminal organizations represent a shared 
responsibility whose solutions require a coordinated response, 
and this coordinated response is really at the heart of the 
Merida Initiative and at the heart of how our intra agency 
operates.
    In regard to Central America, in our conversations with 
Central American leaders and public security ministers we are 
convinced that the leaders of Central America have the 
political will that you found in Mexico, Colombia, and Peru. 
They are dedicated to eliminating violence and crime that 
plague our nations, but they are challenged by sophisticated 
traffickers, gangs and organized crimes who utilize widespread 
bribery, intimidation, and corruption to undermine the efforts 
of national law enforcement and judicial authorities.
    We have engaged with the Central Americans in unprecedented 
levels of discussion, and built I believe an initial framework 
in Merida that is going to pay big dividends, especially as we 
move forward. But we also recognize there is real concern about 
the Caribbean. In that sense the decision by the Congress to 
put funding in the 2008 supplemental for the Dominican Republic 
and Haiti was an important effort to understand the importance 
of the Caribbean and to require us to take a closer look at the 
Caribbean. We have done that. Admiral Stavridis and I have 
traveled in the region to meet with Caribbean leaders. Last 
September in 2008, Secretary Rice issued a statement committing 
the United States to working with the Caribbean to develop a 
security cooperation dialogue. And we will be meeting with 
Caribbean security personnel in May after the Summit of the 
Americas to begin a larger discussion about what that kind of 
security cooperation dialogue should look like.
    In concluding, I want to underscore that we appreciate the 
funding that the Congress has given us through the 2008 
supplemental and the funding that is being considered at this 
point in time. Continued funding is essential for the well-
being of Merida. Our ability to sustain resources over time is 
going to be key to the ability of these governments to meet the 
challenges they face.
    In closing, the Merida Initiative was born out of crisis. 
This crisis also provides us with a strategic opportunity to 
reshape our security cooperation relationship and expand 
dialogue with our partners on critical security and law 
enforcement issues.
    Thank you very much.

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    Mrs. Lowey. Thank you. Secretary Johnson.

                    Opening Statement of Mr. Johnson

    Mr. Johnson. Thank you, Madam Chairwoman, Ranking Member 
Granger, and other members of the committee. We appreciate the 
opportunity you are giving us this morning to discuss the 
Merida Initiative, our security cooperation partnership to 
combat transnational narcotics trafficking and organized crime 
in Mexico Central America and the Caribbean.
    Our partner nations are already working hard to fight 
transnational criminals. They are demonstrating unprecedented 
courage and real determination. We believe with our help they 
can do much more.
    Since his inauguration in December 2006, Mexican President 
Calderon has taken decisive action against transnational 
criminal organizations. Under his leadership counternarcotics 
and law enforcement operations have expanded throughout Mexico 
and he has begun the arduous task of large scale police and 
rule of law reform.
    His efforts to combat corruption, confront powerful 
criminal syndicates, improve coordination among security 
agencies, modernize law enforcement agencies and 
professionalize their staff are indeed without precedent.
    But as President Calderon confronts the transnational drug 
trafficking organizations that threaten his country and the 
region, violence has climbed markedly.
    In Central America overwhelmed police face extraordinary 
challenges as criminals step up their murder, kidnapping, 
extortion and robbery. Gang members migrating both within 
Central America and from the United States take advantage of 
the breakdown in law and order and expand the neighborhoods 
they exploit. Failure to act now could mean that crime becomes 
more entrenched and the consequences of dealing with these 
problems later will be greater for all of us. With a long-term 
effort, they can emerge stronger, with more resilient, 
democratic and law enforcement institutions and with greater 
capacity to respond to the needs of their citizens.
    Madam Chairwoman, while the situation in present day Mexico 
and indeed Central America is unique, lessons we have learned 
elsewhere in other programs are still instructive. One of those 
lessons is the vital role of partners political will plays in 
meeting the crisis at hand. We truly have a partner of 
extraordinary political will in President Calderon.
    Another lesson is the importance of law enforcement and 
judicial institution reform. This is the kind of reform that 
lies at the hard of the Merida Initiative.
    Finally, we have learned that law enforcement needs the 
mobility to extend the state's authority rapidly to remote and 
inaccessible places. It is crucial that we extend credible 
deterrence across and ensure that law enforcement can reach 
high value targets and eliminate their threat to the rule of 
law. That is the reason helicopters play such a key role in the 
program for Mexico.
    Madam Chairwoman, the countries of the Caribbean, Central 
America, and Mexico face an extraordinary challenge from drug 
fueled organized crime. Merida in and of itself will not solve 
the problems this crime wave inflicts, but it will give us and 
our partners crucial tools to address the challenge effectively 
and restore the rule of law in our own neighborhood.
    Thank you for your time. I would be happy to answer any 
questions when the time comes.
    [The statement of Mr. Johnson follows:]

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    Mrs. Lowey. Thank you. Mr. Garner.

                    Opening Statement of Mr. Garner

    Mr. Garner. Madam Chairwoman, Ranking Member Granger, and 
other distinguished members of the subcommittee, thank you for 
inviting me here to appear before you today. I appreciate the 
opportunity to testify on the U.S.'s role in the Merida 
Initiative.
    Madam Chairwoman, I also wish to thank you for your recent 
visit down to Mexico, for the opportunity we had to discuss 
different parts of our programs, and I especially want to thank 
you for visiting the Trafficking in Persons Center. The young 
victims were enormously encouraged by your words of support, so 
thank you for that.
    Mrs. Lowey. Thank you for organizing it.
    Mr. Garner. My pleasure.
    Criminal organizations prosper when public institutions are 
weakened by insufficient budgets, inadequate equipment, and 
poor training. Mexican civil society estimates that only 2 
percent of criminal cases actually reach conviction. Poor 
coordination between law enforcement officials and efforts 
across the region also contribute to criminal success.
    The narcotraffickers have exploited our differences, they 
do not respect our borders, our laws, nor human life. USAID 
supports President Felipe Calderon's efforts to strengthen law 
enforcement and justice sector institutions that are key in 
addressing crime and violence. One way we do this is by 
fostering greater collaboration between U.S. and Mexican 
states. For example, New Mexico provided technical assistance 
and training to the forensics labs of Chihuahua. Colorado 
recently trained state police investigators from Baja, 
California.
    Drawing upon the best practices of the state experiments in 
justice reform, the Mexican Congress last year passed historic 
constitutional amendments to overhaul the entire justice system 
of Mexico. USAID's Merida programs will support the Mexican 
institutions as they now begin to train an estimated 1 million 
people in new, transparent, and more accountable ways of 
administering justice.
    Our Merida programs also promote greater respect for human 
rights. Mexico's old justice system relied heavily on 
confessions to prove the guilt, leading to many charges of 
human rights violations by police and prosecutors as they 
sought those confessions. The new justice system is founded on 
a presumption of innocence and evidence is required to prove 
guilt.
    In addition to providing scholarships to the rural 
indigenous groups that you met while you were down in Mexico, 
we also sponsor cross-border, university-to-university 
programs. Three of the 64 partnerships which we have fostered 
so far have assisted in law schools and helping law students 
retrain into the new system. Southwestern University Law School 
in Los Angeles, American University, and the Illinois Institute 
of Technology Kent College of Law are participating in these 
programs.
    We are grateful also to the U.S. Western Attorneys General 
of the States who have been very active in the program. 
Arizona's Attorney General Terry Goddard hosted a meeting a 
year ago in Phoenix between U.S. and Mexican state attorneys 
general. Increased interactions have fostered greater trust, 
cooperation, and identified simple practical solutions. For 
example, Arizona shares with Sonora now their database on 
stolen cars, which allows Sonora's law enforcement officials to 
better trace the origin of those abandoned cars that may have 
been used to smuggle guns and money from Arizona into Sonora.
    Merida funds are allowing us to expand these kind of 
programs. Of course the challenges we confront in Mexico are 
shared and in fact extend into Central America. Geographic 
isolation and the lack of economic opportunities makes some 
communities especially vulnerable to criminal activity, to 
gangs, and to drugs.
    In these locations USAID will support vocational education, 
computer literacy, and bring together businesses to increase 
employment opportunities. USAID will expand community crime, 
and gang prevention programs to strengthen the role of local 
government officials and citizen groups in leading, organizing, 
and mobilizing resources to improve security.
    USAID will also expand policing initiatives that bring 
together community leaders, civil society, and police to 
increase the cooperation, mutual understanding and results.
    In conclusion, I would like to add my thanks for the strong 
bipartisan support in this committee and in the entire Congress 
as we implement this very important program. Mexico has laid 
out a very ambitious reform program for their police forces and 
for their entire justice system. By participating in these 
programs, our Federal, State and local officials will gain a 
broader understanding and build a trust that will increase 
regional cooperation to defeat international criminal 
syndicate.
    Thank you.
    [The statement of Mr. Garner follows:]

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    Mrs. Lowey. Thank you very much. I am going to be calling 
on members based on seniority, the members that were present 
when the hearing was called to order, and I will alternate 
between majority and minority and we are going to try to keep 
our questions to 5 minutes. Thank you all for your testimony.
    Some of you may have seen this article from the Los Angeles 
Times today about the raid Sunday, reporting from Tijuana. 
Mexican authorities on Monday announced the capture of an 
alleged lieutenant of a top crime boss along with 21 other 
organized crime suspects at a weekend party. The raid by 
Mexican soldiers also led to the arrest of 8 state police 
agents. And then it goes on.
    It was explained to us, as you know, Mr. Garner, about the 
complexity of the military, the issues that they have and that 
the police departments have, and they often rotate to be sure 
they don't have infiltration. But on the other hand, how do you 
keep an experienced force if you can't compete with the 
salaries of the gangs? So this was a challenge that certainly 
was presented to us.
    Secondly, as we know, Plan Colombia started as a three-year 
commitment when it was announced by the Clinton administration. 
Ten years later we are funding counterdrug programs in 
Colombia.
    Now my question is, and we all mentioned this, we are very 
impressed with President Calderon's leadership and the 
political will he has shown in fighting the cartels. But I 
asked myself after I left what happens after President Calderon 
leaves office? How do we institutionalize the political 
commitment and capacity so that the progress that is being made 
today remains after any changes in political leadership?
    And I wonder if someone or all of you can comment, is 
President Calderon reaching out to his political opposition to 
create a national consensus on the war on drugs? Are we 
reaching out to opposition groups in civil society and to 
subnational governments to ensure that there is political 
commitment beyond President Calderon's term? And related to 
that, I mentioned that Plan Colombia was originally designed as 
a 3-year program, here we are 10 years later. I know it is 
difficult to commit, but I would be interested in what you 
foresee as the length of this program, any changes that you see 
coming from the Obama administration, and what would you 
recommend to the Obama administration.
    In other words, it was clear to all of us that we have a 
real major problem there, and I wouldn't expect you to say 
well, on January 1, 2010, everything is going to be hunky-dory.
    So if you could respond. Maybe we should begin with you, 
Secretary Shannon.
    Mr. Shannon. Thank you very much. I am sure my colleagues 
will have other things they can add in response to your 
question. It is a very important question and it is an 
essential question. I would respond in a couple of ways.
    First, what President Calderon and the government of Mexico 
are trying to do now is effect deep institutional change in the 
national police, in the judiciary, but also driving that change 
through State and local police. They are responding at the 
moment in an emergency fashion to an urgent crisis, but they 
understand that in order to get beyond the emergency they need 
to build national capabilities and institutional capabilities. 
That is their focus, and it is the primary focus of the Merida 
Initiative. So institutional change will help ensure continuity 
over time.
    Secondly, the fact that President Calderon was able to 
launch his initiative shows that there has been a sea change in 
how Mexicans understand the relationship with the United States 
and has created a political space for President Calderon to 
build a new type of relationship with the United States that 
can be sustainable over time. But for that relationship, that 
kind of cooperative relationship, to be sustained over time, 
first he needs to show success on the ground, he needs to show 
that the kinds of steps he is taking now will allow Mexicans to 
recapture their communities. And this is why it is so important 
for us to engage as quickly and decisively as we can.
    Also, aside from early success, the transparency of the 
this initiative, hearings like this, the hearings that were 
held in 2008, the hearings that the Mexican Congress has held 
have really created a broader public understanding of the 
challenges that Mexico faces and of what the Merida Initiative 
is, and this will allow accountability over time and will allow 
Mexicans to understand that their political leaders are 
attempting to address a problem in working with us in the 
course of that.
    Mrs. Lowey. My time is up. Perhaps we can get back to some 
other responses later. Just one question about the political 
opposition. I understood and we understood when we were there 
that Lopez Obrador was traveling around the country speaking to 
large groups. Has he taken a position on the work that the 
President is doing?
    Mr. Shannon. He recognizes the problem. He has been 
critical of the President on a variety of issues. I can't give 
you a precise answer in terms of how critical he has been in 
terms of the Merida Initiative, but we can get back to you on 
that.
    [The information follows:]

    Mr. Shannon. All major political parties in Mexico recognize that 
their country faces a security crisis. Political parties have expressed 
differing views of how best to confront this threat. All have been 
appreciative of the U.S. willingness to recognize our shared 
responsibility, to do our part on our side of the border to reduce 
demand for drugs, trafficking in arms, and repatriation of drug 
trafficking proceeds. However, many (including Andres Manuel Lopez 
Obrador) have expressed concern that U.S. assistance could pose a 
violation of Mexican sovereignty.
    Early on, senators and deputies of all parties in the Mexican 
legislature expressed a similar frustration to that of U.S. law makers 
that the executive branches of both governments had not sought early 
congressional input for the joint effort. As the Mexican legislature 
has become more knowledgeable about the Merida Initiative, this concern 
has subsided.

    Mrs. Lowey. I think that is essential, because if we are 
looking at the long run, it is really important to have some 
cooperation from the opposition.
    Mr. Shannon. I am not sure I would describe him as the 
opposition at this point.
    Mrs. Lowey. Okay, well, that is----
    Mr. Shannon. I think the primary political opposition 
remains the old PRI.
    Mrs. Lowey. PRI.
    Mr. Shannon. And Lopez Obrador's political party is 
actually split along these lines. I think there is a broad 
recognition of the national crisis and the urgency of it and 
the need for a better relationship with the United States to 
affect that crisis in a positive way.
    Mrs. Lowey. Ms. Granger. Or Mr. Lewis.
    Mr. Lewis. Hello.
    Mrs. Lowey. Would you like to say something before Ms. 
Granger proceeds?
    Mr. Lewis. I think it has already been said.
    Mrs. Lowey. Okay, Ms. Granger.
    Ms. Granger. Thank you. I have two questions, and we may 
not get to both of them. One is sort of long term. When we took 
our trip to Colombia and Mexico, I was struck with the 
similarities of where Mexico is today and Colombia was 10 years 
ago or when I traveled there the first time. And Assistant 
Secretary Johnson, you talked a bit about lessons learned. So I 
would like to know, what do you think is transferable or 
helpful for Colombia to the Mexico situation or some 
comparisons we might make that are that are wrong or different 
in those two countries and the situations they are on.
    Mr. Johnson. I think we can learn some lessons, although 
the situations are not by any means exactly the same. I think 
one of the lessons that we are trying to implement through this 
program is that what you need is not just addressing a specific 
problem, but you need to introduce systemic reform. And 
Colombia did introduce an adversarial justice system where oral 
arguments take place as Mexico is doing now, which is important 
both because of what Rodger was mentioning about the human 
rights issue, but also I think because it gives the public an 
opportunity to see justice being done. It is not done by closed 
doors with someone signing a document; it is done in an open 
courtroom setting. I think that is an important part of that.
    The change in the institutional reform in law enforcement 
is also an important element of this, and that is part of 
Merida as well, although I must hasten to add it is going to be 
a bigger challenge in Mexico because it is a federal state, as 
Ms. Lowey was mentioning just a moment ago about the various 
levels and the complexities of the law enforcement system. 
Colombia was able to have a national police service and that 
made it simpler, if you will, or more direct to make those 
changes.
    Merida does have elements of change that will have an 
impact on state and local, but it is not focused there. It is 
focused at the federal level. Among the things that will have a 
state level impact is an ID system for police officers 
throughout, up and down, all the way up and down to the beat 
cop so that they have a better grasp of who the police officers 
are and if there is a bad apple that they don't move from point 
A to point B and get rehired.
    It also provides for a polygraph training program that 
gives at the Federal level the opportunity for a complete 
polygraph and complete vetting of their entire police service. 
So there is a greater opportunity there to limit the 
opportunities for corruption. It won't ensure against it, but 
it will make it harder.
    And finally, I would say one of the things we are grappling 
with here is how to define our strategic objective. I think 
that is going to be more and more important.
    In Colombia I think when we defined it in terms of 
hectarage of coca, with due respect to my predecessors who were 
trying to figure out how to deal with this, I think if they had 
to do it over again they would look at establishing the rule of 
law throughout Colombia and taking control of Colombian 
territory. And that has been successful in Colombia, and I 
think the GAO report and others have recognized that and we 
have as well.
    I think we need to look for some sort of strategic 
objective in Mexico that we and the Mexicans define together 
that is really the measure of merit for this program as well.
    Ms. Granger. Thank you. I am on yellow. Let me ask one very 
quick question. You were talking sort of like you have a house 
and you have a foundation problem and you have to fix the 
foundation but the kitchen is on fire. Right now one of the 
things that has been mentioned, and we saw there, is the need 
for equipment and helicopters. I am very disappointed to say 
that my report this morning is that DOD said it will be 18 to 
24 months before the Bell 412s are there, the Blackhawks even 
longer.
    Chairman Lowey said we have this President who is 
absolutely determined to do something about this and we want to 
help, and we can't get the equipment that we funded. What can 
we do about that?
    Mr. Johnson. I think the helicopters are the odd man out 
here in the equipment. We are moving rapidly to bring forth the 
nonintrusive inspection equipment that I understand President 
Calderon personally asked you or other members of the 
Congressional delegation about when you were there. We have 
agreed with the specifications with the Mexicans on about 60 
percent of that. The remaining 40 percent we are working on now 
and anticipate will be agreed within the next several days.
    We anticipate the bulk of this equipment will be delivered 
about September. It is highly technical things and they have to 
be built to spec.
    The helicopters are harder, the FMF process has procedural 
issues that are associated with it that we are moving through 
it as rapidly as we can. We are in constant contact with our 
colleagues at the Department of Defense trying to figure out 
where the seams are there and push that together as much as we 
can. We are aiming at reducing that number that you just cited, 
but I can't tell you what we will achieve.
    Ms. Granger. Thank you.
    Mrs. Lowey. Excuse me. Before I turn to Ms. Lee, we would 
like to work with you on it. If there are FMF problems, perhaps 
we can be helpful. We will certainly put language in the bill 
if that is helpful, but it is absurd when you have a President 
who is really working so hard with a target not to provide the 
most obvious assistance immediately.
    I would also like to address what you said about the rule 
of law, because as you probably recall, when we adjusted the 
monies to Colombia we put additional funding in support of the 
Fiscalia and we are pleased that it made a difference. And as 
we approach next year's bill any advice you can give us 
certainly will be accepted with graciousness and appreciation.
    Mr. Johnson. One thing, whether we are talking about 
Colombia or Mexico or any large country which has an 
undeveloped transportation infrastructure or hard to reach 
places, it is this helicopter lift that really makes the rule 
of law work, moving the security services to where they need to 
be so that they can create the umbrella under which rule of law 
can take place. So these are not competing objectives, they are 
things that work together.
    Mrs. Lowey. No, I understand that. But it is pretty 
disappointing to me that we just came back, you have been there 
many times, and you see the urgency, bodies are being 
decapitated, people are being killed and we will get the 
helicopters to you, but you'll get them 24 months from now. I 
don't understand this at all.
    So I think we would like to have a follow-up discussion on 
this. If we are really helping them and pouring in all this 
money, then where is the product?
    Pardon me. Ms. Lee.

                       Opening Remarks of Ms. Lee

    Ms. Lee. Thank you very much, Madam Chair, and thank you 
for this very important hearing. I want to welcome all of our 
witnesses. And I want to say to you, Mr. Garner, it is good to 
see you. And thank you again for all of the support you 
provided for our U.S. delegation to the International AIDS 
Conference last August. Glad you are still there.
    Let me just say, first of all, I have been skeptical on 
this for years, and I am still not hearing any response in 
terms of progress that would make me more optimistic that this 
is working.
    I was born in El Paso, Texas, and have many friends who 
constantly call me about what is taking place in Juarez and El 
Paso. So I often think about what is going on with the Merida 
Initiative in that area. So I would like to hear some feedback, 
if you have any details on that border area.
    Secondly, let me just say I recognize that strengthening 
the security forces to combat drug cartels is an important 
component, but it is only one component of what must be a 
comprehensive strategy to combat drug trafficking, drug use, 
violence, and lawlessness. I don't see this as making a lot of 
sense yet, it doesn't include any meaningful prevention 
initiatives such as programs that deal with domestic violence, 
that address young people at risk, criminally involved youth. 
It doesn't really address job training and job creation, nor 
does it address economic alternatives. And I am trying to 
figure out how we move forward if in fact this is going to 
continue the way it has in the past.
    I believe with this kind of money that we are putting into 
this initiative it should be more comprehensive and we should 
look at it in a totally different perspective. And so I would 
like to hear some feedback on why it is not as comprehensive as 
it should be and do you believe that it should be. Because from 
everything that I have learned about what is taking place 
there, it is just not working the way it is structured at this 
point.
    Mr. Garner. Thank you very much. I enjoyed your visit down 
there last summer when you attended the global AIDS conference. 
Thank you for coming down.
    You are absolutely right, we do have a lot of concerns. 
When the Mexican Government and President Bush and President 
Calderon got together, actually it was 2 years ago now, in 
Merida, there was a lot of focus on the military hardware. 
Remember the administration had just taken office, there was a 
lot of fear for them to ask the U.S. Government for anything. 
And of course there is always the issue of sovereignty. So the 
Mexican Government asked primarily for hardware.
    I think that the situation has evolved greatly in Mexico 
since then, where we have worked together side by side for the 
last 2 years. There is a greater comfort level that sovereignty 
is not threatened by us working together as two great nations, 
the U.S. and Mexico both making investments on both sides of 
the border themselves and then the Merida program bringing us 
together.
    But you are correct, as the economy has deteriorated in 
both countries, I think President Calderon initially felt that 
his own social programs could address the problems in Mexico, 
but he did not anticipate the economic downturn. So certainly 
as we look at this program, more and more communities that are 
unemployed, the narcos are advertising on the Internet, they 
are advertising with slogans and banners across the streets, 
good jobs, good benefits, great packages.
    So they are really going after those people that are under 
employed or unemployed. So certainly the economic opportunities 
are a major concern.
    Ms. Lee. What do we do? How do we do this right if that is 
a component?
    Mr. Garner. It has not been a component in the original 
request. I think this is an evolving process where each year as 
we get a new appropriation the Mexican Government and we will 
sit down together, discuss our priorities and look at the 
situation as it currently exists.
    Ms. Lee. My concern is, is this one of our priorities, 
Madam Chair?
    Mrs. Lowey. Yes. In fact the language was changed because 
of your input and my input, and we will continue to move in 
that direction. But I know we made that position very, very 
clear. I have felt not just in this last trip, but in other 
trips you talk to young girls or boys at a hotel and where do 
they learn their English? Not in school. If you have money, you 
can go to private school. If you don't have money, you are in 
public school and you are not learning English until you get 
that job in the hotel.
    So because of your input and I know the concern of this 
committee, there has been language in the bill since we had the 
opportunity to draft the bill and we will continue to work in 
that direction, because unless you are going to provide 
alternatives, and we did see some alternative development when 
we were there, and unless the government is going to really 
focus in its schools, and frankly President Calderon talks 
about it, but I do think, again repeating myself, if people 
have money they are going to private schools, they are not 
going to the public schools and that has to change to give 
people opportunity.
    But one of the key concerns is in the interim it is very 
hard for the police forces and others to compete with the kind 
of money that the narcotraffickers are spreading around. So 
this combination of giving people opportunity, investing in the 
schools, investing in economic development, being tough and 
strengthening the police and making sure you have a rotation 
system so you are not having the corruption is a balance.
    Ms. Lee. Also Madam Chair, that raises the question about 
the police who are notoriously, as we know, corrupt. So what is 
being done to make sure the police forces are cleaned up, in 
essence, if in fact we are going to continue to rely on them?
    Mr. Johnson. One of the things is what I mentioned a few 
minutes ago, the efforts that we have underway through this 
initiative to provide the basics of identification for the 
police and at the federal level a full vetting and polygraphing 
of the police.
    My first foreign service assignment, you mentioned you were 
born in El Paso, my first foreign service assignment was in 
Ciudad Juarez, and I think that is a special place. And I think 
it is pretty amazing that given the level of violence in Ciudad 
Juarez is how safe El Paso has maintained itself. And that is 
hats off to the police and federal agencies there. I think that 
is a difficult task.
    I have a team on the ground right now who are talking with 
the people in the area about what sort of things that we may be 
able to do to be of assistance, to be more focused on the 
border region, because I think that is an area that we need to 
give further thought to, but it is a work in progress at this 
point.
    Mrs. Lowey. Thank you. Just one other point and then we are 
going to turn to Mr. Lewis because I understand he has to 
leave. We have 73 million for civil society, 5 million for 
education as part of the program, and I would hope as a result 
of the reality on the ground when we get your request for 
additional monies that we can look at the whole picture and see 
if the proportions are appropriate.
    Mr. Lewis.

                      Opening Remarks of Mr. Lewis

    Mr. Lewis. Thank you, Madam Chairman. I really have just 
come to listen, but your comments regarding growing concern 
about the availability of equipment, a new kind of circumstance 
in relation to and along the border are to me a reflection of 
this long history of Mexico being very concerned about its 
sovereignty. It didn't receive foreign assistance from us 
forever until the positive side of the drug challenge is that 
suddenly we have a new kind of contact, and maximizing or 
taking advantage of those relations and helping them with their 
problem with corruption, et cetera, is a very, very important 
part of the role we can play here.
    Having said that, I would like to, Madam Chairman, work 
very closely with you and Ms. Granger relative to this 
equipment question, dealing with Bill Young, et cetera. If we 
can't get the Department of Defense to recognize that this is 
an American security challenge, then there is something wrong.
    So could I yield my time to Mr. Kirk? Sure.

                      Opening Remarks of Mr. Kirk

    Mr. Kirk. Thank you. I am very happy to be here and thank 
the Chair for this hearing, because I think I am the only 
graduate of La Universidad Nacional in Mexico here and came 
from State, WHA, Secretary Shannon's operation. I think about 
all that we have heard and remember the old Mexican phrase, 
``Poor Mexico, so far from God, so close to the United 
States.''
    We have seen now a real uptick in violence of Mexican drug 
gangs brought to the United States. AP just reported a spike in 
killings and kidnappings and home invasions in Atlanta and also 
some beheadings in Alabama, that they conducted and an uptick 
in murder for hire and kidnappings in Phoenix.
    I wonder if I could submit for the record, this is DEA's 
list of Mexican major drug operations in U.S. Cities. There are 
199 of them. I will just pick some random cities, Albany, 
Buffalo, New York, Chicago, Miami, Orlando, Tampa, San 
Francisco, Dallas, Houston and Helena and Billings, just for 
the record.
    This is also a map, if I could give that, of all the major 
operations, so it is covering all the large population centers.
    Also if I could submit for the record, we are seeing a 
tremendous increase in the weaponry brought in by these groups. 
So for example, there were average 9-millimeter hand guns, but 
this model 700P LTR, light tactical rifle, 30 caliber machine 
gun, Fabrique Nationale submachine gun, Barrett sniper rifles 
brought in by the cartels to the United States. AK-47 assault 
rifles, AR-15s, 66 millimeter light antitank weapons, and 40-
millimeter automatic grenade launchers, all brought by the 
cartels into the United States.
    Mrs. Lowey. Do you have the manufacturer?
    Mr. Kirk. Well, for example, the 9 millimeters is an 
Italian pistol, the machine gun looks like an American one, the 
Fabrique Nationale is a Belgian rifle, the Barrett is made in 
the USA, AK-47 is made in Czechoslovakia and Russia, the AR-15 
is made in the USA. The antitank weapon looks like a LAW, that 
is an American weapon, and the 40-millimeter grenade launcher 
also looks American.
    Mrs. Lowey. Does that report detail where they were 
purchased? I think that would be helpful information.
    Mr. Kirk. No.
    Mrs. Lowey. The information that I have received from this 
committee is that they were purchased in the United States and 
the gun law is so weak that the weapons are coming over the 
border.
    Mr. Kirk. Yes, it could be from a variety of sources. And 
so the point that I would like to ask you is where do we go----
    Where do we go absent a helicopter end game, because it 
looks like now things are going to be quite some time but for 
action of this committee. If we are rolling in on cartels in 
trucks and cars, what does that operation look like as compared 
to rolling in on the leaders in helicopters?
    Mr. Johnson. First of all, I think that it helps to bear in 
mind that this program is a partnership and the reason the 
airframes that were proposed in part were proposed is because 
they are fleets that we are adding to what Mexico already has. 
So Mexico already has some capability in rotary lift in both 
the Bell airframe and the UH-60, and they are using those to 
operate now against these cartels.
    So they are using trucks where trucks are more appropriate, 
but in their outward planning they wish to establish a greater 
range and a quicker reaction and the airframes that we would be 
providing under this initiative would enable them to do that. 
And so I think while they certainly don't have the capability 
that they think they need and we think they need to have 
success, they do have some capability and they are using it.
    Mr. Shannon. Mr. Kirk, you raised a very important point 
about the transnational nature of the organized crime in North 
America today and the role Mexican cartels are playing in the 
United States and their linkage with organized crime in the 
U.S. And other illicit activities. And this is going to become 
I think a larger focus of this administration as they try to 
link up what we are doing in our foreign assistance authority 
through Merida and what needs to be done with domestic law 
authority in the United States as we are trying to make sure 
there are no seams that can be exploited by these cartels.
    Although this is a current problem for us and Mexico, it is 
not a new problem historically. We faced a similar problem in 
the 1920s and 1930s and 1940s when organized crime in the 
United States was exploiting seams between municipal 
governments and between State governments, and before we had 
the kind of judicial tools necessary to attack organized crime 
structures. What we are trying to do to a certain extent is 
take the lessons we learned when we were fighting organized 
crime in the United States and apply them on an international 
basis for the first time with a country with whom we have a 
border.
    Mr. Kirk. Madam Chair, may I just conclude to say we have 
seen tremendous violence in Mexico, but even in Iraq we do not 
see routine beheadings. We have now seen that in northern 
Mexico. That practice has come to the United States. It would 
appear that this is a clear and present danger to the security 
of major and medium sized U.S. cities, of which the list has 
been submitted. And so I think this initiative directly relates 
to the security of the people that we represent. And seeing 
this kind of practice come across the border is a real call to 
action for this committee.
    Mrs. Lowey. Mr. Jackson.

                     Opening Remarks of Mr. Jackson

    Mr. Jackson. Thank you, Madam Chair. Let me begin by 
associating myself with the gentleman from Illinois, his 
comments, and his thoughts about interrelatedness of the 
weapons trafficking and the cartels. We thank the witnesses for 
coming today and thank the chairlady for hosting today's 
hearings.
    The Merida program has always been a very ambitious program 
trying to break the impunity of criminal organizations, and I 
am sure you all can appreciate that those of us who are 
responsible for appropriating taxpayer dollars to fight these 
kinds of illicit and criminal organizations, obviously a number 
of questions that the American people want answered given the 
nature of what Congressman Kirk indicated, are problems that 
are now clearly creeping, if you will, across the border.
    We have read reports of gun shops on the border States 
selling weapons and organizations taking advantage of very 
sophisticated weapons that could ultimately be used against our 
allies in these countries, but also used against U.S. forces.
    So my question at least initially and, Mr. Johnson, Mr. 
Shannon, it is probably more appropriately directed at you, is 
how can members of this committee be convinced that they are 
not providing assistance to individuals or units that have been 
previously implicated in corruption? Explain to this committee 
how your confidence and the confidence that we have in 
appropriating monies for this initiative will not be used and 
accepted or somehow diverted or somehow end up in the hands of 
these illicit organizations.
    Mr. Johnson. I think first of all we have to talk about the 
nature of what we are providing. The services and equipment we 
are providing are not attractive to be diverted to the hands of 
criminals for the most part. It is not intrusive inspection 
equipment, it is not something that a cartel will be interested 
in using. It is the type of things that a border service agency 
working either in a land border or airport or seaport would use 
to determine whether goods that are coming into the country in 
containers, and so forth, contain illicit traffic. So that is 
part of it.
    The helicopters as well, while I suppose one could 
speculate about helicopters being stolen for a particular 
purpose, they are unlikely to fall into the hands of an illicit 
trafficker.
    The services that we are providing to help in the rule of 
law reform and to help in police service reform likewise are 
not the kind of divertable goods and services.
    In addition to that, we have an extensive program in place 
that we have had for some time, because we have had an ongoing 
relationship with Mexico in terms of law enforcement support so 
that we can vet individuals and units that they work with in 
order to comply with the laws that you and your colleagues have 
passed that require us to do so, and that program is quite 
robust in Mexico.
    Tom may want to speak to it a little more. Those are the 
procedures and safeguards that we have in place in order to 
seek to avoid just what you just described.
    Mr. Shannon. More broadly your question I think also refers 
to the problem of corruption and institutional mismanagement, 
and one of the things we are trying to do through the Merida 
Initiative is work with the Mexicans to help them transform 
their law enforcement institutions, their public security 
institutions, through a variety of mechanisms, including 
creating vetting procedures, helping them develop polygraphing 
skills, creating inspector generals offices, creating a regular 
consultation mechanism between the Mexican state and civil 
society organizations in order to get feedback on how law 
enforcement institutions and the military are behaving in the 
pursuit of their fight against cartels.
    This is part of a broader effort by the Mexicans to unify 
their national police structure and then use regulatory 
mechanisms in law to build benchmarks and standards of practice 
at the national level and then translate to the state and local 
level.
    Mr. Jackson. Mr. Shannon, let me ask the question because I 
think you are touching upon it when you raise this question of 
corruption, is there any concern that the cartels and these 
illicit organizations are also engaged in democratic politics 
within some of these countries, that their destabilizing 
efforts aren't just in weapons trafficking or drug trafficking 
or other illicit activities, but they themselves have 
candidates running for office who could very well end up in 
charge of U.S. equipment, who could very well turn the other 
eye, if you will. That is the nature of corruption, that you 
get elected or participate in legitimate processes. But then 
you end up being covered for illicit and criminal activity. Any 
concern about that at all?
    Mr. Shannon. At the national level we have not seen 
candidates that we have been able to identify as linked to 
cartels.
    Mr. Jackson. At the local levels?
    Mr. Shannon. At the local levels. We don't track local 
elections throughout the region closely, but I think especially 
in some of the Central American countries there probably are 
local officials who have received funding of one sort of 
another from drug trafficking organizations. I would assume 
that in areas where the traffickers have attempted to establish 
themselves that this is a reality that we are attempting to 
deal with.
    This is one of the reasons why journalists have been 
targeted in Mexico and in Central America. What journalists 
have been doing is talking about relationships between cartels 
and public figures, and the effort to kill and intimidate 
journalists is designed to shut that down and not bring that 
kind of transparency to relationships.
    We are working with all the countries in the region to 
build political financing laws and political financing 
transparency requirements that allow us some insight into who 
is financing operations or political activities. What organized 
crime wants to do is not so much control the state, but to 
weaken it to the point that they can go about their daily 
business. Unlike political insurgencies, their goal is not to 
capture the state and then use the state for a purpose. So the 
degree to which they attempt to corrupt or intimidate political 
leaders, it is to prevent whatever the entity is, municipality, 
state or national government, from functioning in a way that 
hurts the business interest of the cartels.
    Mr. Jackson. Thank you, Madam Chair.
    Mrs. Lowey. Mr. Rehberg.

                     Opening Remarks of Mr. Rehberg

    Mr. Rehberg. Mr. Kirk was speaking specifically to the 
involvement of the Mexicans coming across the border and 
getting within the communities. My question is do you see an 
interrelationship with organized crime in America helping in 
Mexico and Central America as well? You used a Los Angeles 
family as an example. Are they selling the weapons to the 
Mexican cartels, are they selling drugs in America that they 
get from the Mexican cartels, are they using their own 
organization as a friction between the organized crime in 
America and the Mexican cartels?
    Mr. Johnson. I think in the case of the Mexican cartels I 
can't cite you an example of what you describe. What I would 
say though is that the Central American gangs are an example of 
a criminal organization in the United States which has at the 
very least a cooperative relationship, if it is not the same 
organization as the ones operating in Central America itself. 
And so there is a movement of people, as well as activities 
back and forth across the borders.
    Mr. Rehberg. And organized crime in America doesn't have a 
problem with that, they are just allowing a free flow of 
movement across the borders?
    Mr. Johnson. Well, I think these Central American gangs, in 
at least one case, are alleged to have actually started in the 
United States and shipped themselves south, rather than the 
other way around. So there is a----
    Mr. Rehberg. But there was already organized crime 
established in America, and they are either displacing or 
supplementing or creating friction.
    Mr. Johnson. As far as I am aware, it is a supplement, 
rather than a displacement.
    Mr. Rehberg. Okay. The second question I have is for Mr. 
Shannon and Johnson. And that is, does the Merida Initiative 
allow for the opportunity for the Mexican government to use 
their military; and do you endorse their use of the military, 
as opposed to a domestic police force?
    I know we would rather have the public involved. We would 
rather have domestic police involved and domestic judges 
involved. But there is a constant pressure on us to place 
National Guard on our border. We know that they are using their 
military in Mexico. Does the Merida Initiative address the 
military, how much they can use it, and is that something our 
government endorses or encourages or would oppose?
    Mr. Shannon. The Merida Initiative is primarily focused on 
enhancing the capability of civilian public security 
institutions. There is a component of equipment that will go to 
the military, both helicopters and some interdiction equipment.
    Mr. Rehberg. This is individuals, people that they are 
using in Mexico.
    Mr. Shannon. Well, I mean, for instance, there will be 
helicopters and some interdiction equipment that the military 
will use in the pursuit of its relationship with the police 
force. But the use of the military at this point in Mexico is 
an emergency measure, which highlights the urgency of the 
crisis that Mexico is in.
    Mr. Rehberg. How many then are they using in this emergency 
category? How many infantry?
    Mr. Shannon. Well, I believe--for instance, I believe there 
is in the area of 9,000 troops in and around Ciudad Juarez now. 
The Mexican military has, I think, 45,000.
    Mr. Rehberg. Okay. Then the question is, does the American 
government endorse that?
    Mr. Shannon. This is a sovereign decision of Mexico. We 
have not expressed a position on what we consider to be a 
sovereign decision and probably a necessary decision at this 
point in time.
    Mr. Rehberg. Mr. Johnson.
    Mr. Johnson. I would just concur with that, that we are 
working with Mexico in a very challenging environment. The 
military was an organization that had the capability and the 
integrity believed to be by the Mexicans to be the most 
effective instrument that they had at their disposal now. But, 
as Tom was mentioning, the aim they have and we have is to 
build sufficient capacity in their civilian police force so 
that they will not have to rely on this too long.
    Mr. Rehberg. Okay. Thank you.
    Mrs. Lowey. Mr. Crenshaw.

                    Opening Remarks of Mr. Crenshaw

    Mr. Crenshaw. Thank you, Madam Chairwoman; and thank you 
all for being here today.
    Having just met with the President of Mexico and then the 
President of Colombia, you get the impression that Mexico is 
just beginning this, you know, to kind of stand up and say 
enough is enough, kind of what they did in Colombia 10 years 
ago. And I guess that is step one. Once you say we are not 
going to tolerate it anymore, then things kind of blow up, and 
that is why we saw 6,000 people get killed and more and more.
    So my question really is about the money that we are going 
to spend. Because if you look at Colombia, as somebody pointed 
out, we started out with a 3-year program. It has been 10 
years. It has been $7 billion. And so the money we are spending 
now in Mexico--how significant is that in light of this huge 
problem? Number one. Is it being spent the way you anticipated 
that it was going to be spent? Do we have some accountability 
measures there?
    And the long-run question is, as it relates to how 
significant it is, what is your view of the long-range aspect? 
Are we looking at another Colombia? Is $400 million--is that a 
drop in the bucket? Is that a one-time shot? Or is that the 
beginning of a long involvement together that we may spend a 
whole lot more down the road?
    Could you touch on that just in terms of the money aspect?
    Mr. Shannon. Let me start and Assistant Secretary Johnson 
can address some of the accountability issues.
    But the Mexicans are making the major investment here. In 
2009, President Calderon's government will spend upwards of $5 
billion on security-related issues. And their investment is not 
only in money, it is also in blood.
    But I would say that the money we are providing is of 
catalytic importance. In other words, it is focused on 
providing the Mexicans some key training and equipment that 
they don't have right now and that they need in short order and 
that this is going to allow them to accomplish their goal at a 
much more rapid pace than they would have been able to do 
previously.
    But I also think that it is a symbol of partnership that 
also will allow us to transform our relationship with Mexico, 
and we are seeing this already in terms of security 
cooperation. And, in that regard, what we are going to get out 
of the money we are spending in the short- to mid-term is a 
greater degree of security cooperation with Mexico as we 
address a transnational problem, which is already affecting us 
here in the United States. And so we will not only be helping 
Mexico with this funding, but we will also be helping ourselves 
in a significant way and laying a foundation of cooperation 
that is going to pay large dividends in the future.
    The Merida Initiative, as initially envisioned, was a 3-
year program. We are going to work hard with all of you to meet 
our commitment to make this 3-year program what we thought it 
was and make sure it is successful. But then, we are going to 
have to sit down with the Mexicans and determine what comes 
next. Because 3 years, I think, will be a good start and a good 
way to get the Mexicans along over a critical security hump, 
but after that it is really going to be up to the Mexicans to 
come back and indicate to us what else they might need in terms 
of help from the United States.
    Mr. Crenshaw. Do you have an example of an early success? 
As you talk about this, is there anything you can point to that 
this is what we set out to do? Is it too early to tell, or this 
is something that's really working?
    Mr. Johnson. The things that we have done so far are 
describing things of inputs, if you will, rather than outputs 
or outcomes. We put in a server farm, which is not a visible 
police thing, but it is entirely necessary so that their new 
program to track evidence and police operations all the way 
from the scene of the crime through the Court system can 
actually work. That was done in December.
    We are working now finalizing--we finalized one set of 
specifications. We are finalizing a second set over the next 
couple of weeks for this nonintrusive inspection equipment. 
Then the contracting process will take place.
    We anticipate this equipment will be on the ground around 
September. It is highly technical gadgetry. You have to build 
it from scratch. Those sort of the step-by-step things are 
happening.
    And we have put in place--in terms of accountability, what 
we have concentrated on are the kinds of thing related to 
internal controls and decision making: Accountability for 
equipment, on-site inspection to make sure that it is being 
used for the purpose for which it was provided. Those sorts of 
things are what we are working on now.
    We are working with the Mexicans to try to describe, if you 
will, a strategic outcome; and we haven't really come up with 
what I am comfortable with yet to come to you and say if we do 
this we will have succeeded. And I think that's where we need 
to concentrate our efforts right now in terms of defending what 
we are requesting the American people to provide here.
    But we think it is very much in their interest to be 
supportive of Mexico. Exactly what we want to have at the end 
of the program I think we are still struggling to define 
clearly.
    Mr. Shannon. But in terms of collaboration and the powerful 
symbol that Merida is in Mexico, we are seeing the Mexicans 
start to take apart some key drug trafficking organizations; 
and we are also seeing in their willingness to extradite people 
to the United States, a very important measure of success for 
us. And I think that this is going to become more evident with 
time.
    In fact, if we had our colleagues from DEA or FBI or ATF 
here, I think they would describe a relationship with Mexican 
law enforcement officials that is unprecedented in terms of its 
openness, the fluidity of flow of information, and the degree 
to which they work together.
    Mrs. Lowey. Thank you.
    Before I turn to the next panel, I have one additional 
closing question; and I know Ms. Granger did as well.
    For clarification, in 1997, the United States signed but 
never ratified the InterAmerican Convention Against Illicit 
Manufacturing of and Trafficking in Firearms, Ammunition, 
Explosives, and Other Related Materials, CIFTA.
    In 2005, the Bureau of Alcohol, Tobacco, Firearms, and 
Explosives, ATF, launched its Southwest Border Initiative to 
attack the firearm trafficking infrastructure of cross-border 
criminal organizations.
    Congressional Quarterly's cover story for this week relates 
that Mexican cartels have taken advantage of openings in U.S. 
gun control laws to stock up on military grade assault rifles, 
grenade launchers, bazookas, and even heavy machine guns, 
smuggling them back into Mexico. And when we met with President 
Calderon he spoke of the flow of weapons coming from the United 
States into Mexico. I told him I agree with him about the 
problem of illegal movement of weapons from the United States 
to Mexico and have written to President Obama that the ban on 
assault weapons must be enforced.
    So, whoever wants to respond, to what extent are arms 
trafficked from the United States into Mexico and then further 
trafficked to Central America? What cooperation exists between 
Central American, Mexican, and the United States officials to 
address this problem? How is the Merida program addressing this 
issue?
    Is the United States in compliance with all parts of the 
convention against the illicit manufacturing of and trafficking 
in firearms, ammunition, explosives and other related 
materials? What are we doing to fully comply with CIFTA? Will 
the President press the Senate to ratify this treaty? And what 
is the President's time line for ratification of CIFTA?
    You can answer part or all of those questions.
    Mr. Shannon. I will talk about CIFTA. I will leave arms 
trafficking and our e-trace activities to Assistant Secretary 
Johnson.
    But, in regard to CIFTA, we believe we are in compliance 
with CIFTA. We have signed CIFTA. CIFTA has been sent to the 
Hill. It has not been placed on a priority list yet for 
ratification. We understand the importance of CIFTA. We have 
heard the Congress loud and clear. The administration is in the 
process of reviewing CIFTA with an eye to being able to say 
clearly to the Senate that it is time to ratify.
    Mrs. Lowey. Secretary Johnson.
    Mr. Johnson. On the arms trafficking issue, it is clear 
that a significant portion of the arms that are used by the 
cartels and other criminal organizations in Mexico originate in 
the United States. I think that the indictment about a week ago 
of an arms trafficker who was seemingly operating legitimately 
but clearly not, based on the affidavit that was issued, is a 
significant move; and it illustrates what can be done within 
our legal system in order to deter activities by individuals 
who would assist these organizations and use legitimate 
commerce to do so.
    In terms of the work that we are doing within Merida and 
its companion, one of them is in Mexico last year we were able 
to establish e-trace facilities at all of our consulates, as 
well as a long-standing one at the embassy, giving Mexican law 
enforcement an opportunity to use those facilities in order to 
trace weapons.
    We also have a program which is outside of Merida, because 
it is a domestic program that is changing, or is providing 
programming so that this system can be used with Spanish name 
conventions. That program should be in place before the end of 
this calendar year.
    As part of that, and within Merida, we are providing that 
opportunity for all of the states of Central America to have 
access to this program as well so that they can trace weapons; 
and I think the combination of our police agencies working 
together holds the best promise for actually doing something 
about this problem and addressing the criminals that are 
abusing the system.
    Mrs. Lowey. Thank you.
    Ms. Granger.
    Ms. Granger. Just briefly--and thank you, Madam Chairwoman, 
for this.
    President Calderon has asked for our help, and he is--as we 
know in this room, this is an all-out war on the drug cartels. 
He has got 2\1/2\ years. He is through in January of 2012. The 
question was asked, you know, what--after 3 years, what--kind 
of give us a long term. This is Mexico, our neighbor. And there 
is no doubt of what Mr. Kirk was saying, the threat to our 
cities and where we are. So I just have great concern about the 
urgency, for instance, you know, when there's that length of 
time.
    When we were on the trip, what we heard over and over is 
equipment. I am just going to use that as the example. That is 
not the whole answer, of course. But whatever we need to give 
that helps, we need to have an urgency, too, that you can't 
deny when you just turn on the television every day or read the 
newspaper. So I would encourage you to let us help on that. But 
understand that 3 years is certainly not the end of this.
    Mrs. Lowey. I want to thank Ms. Granger for her final 
comments and thank the panel for appearing before us.
    It was clear, as you know, in our activities in Mexico, 
meeting with the President, seeing some of the programs, the 
urgency was palpable. I mean, this is really a problem not just 
for Mexico but the United States of America.
    Frankly, I grew up in government hearing about hydroponic 
lettuce being grown. And when we had a meeting, the cartels are 
obviously having some trouble at the border, and so they're 
moving in and even growing products like marijuana, 
hydroponically, forgetting about the border. They are just 
moving right in. So we share the sense of urgency.
    It is a bipartisan commitment, and we hope that this new 
administration will be evaluating the programs and presenting 
proposals to improve the program, change the program, if, in 
fact, that is what you conclude, sooner rather than later so we 
can move on it.
    And, again, I thank the panel for your presentations. We 
look forward to continuing the dialog.
    Thank you. We will stand in recess for a moment while the 
next panel comes up.
    [Recess.]
                                           Tuesday, March 10, 2009.

                         THE MERIDA INITIATIVE

                               WITNESSES

LISA HAUGAARD, EXECUTIVE DIRECTOR OF THE LATIN AMERICAN WORKING GROUP
JOY OLSON, DIRECTOR OF THE WASHINGTON OFFICE OF LATIN AMERICA
ANA PAULA HERNANDEZ, GENERAL DIRECTOR OF THE COLECTIVO POR UNA POLITICA 
    INTEGRAL HACIA LAS DROGAS (CUPIHD)
    Mrs. Lowey. The subcommittee will come to order, and I 
thank you for being here today.
    I would like to welcome our second panel: Ms. Lisa 
Haugaard, Executive Director of the Latin American Working 
Group; Ms. Ana Paula Hernandez, who is a consultant on human 
rights and drug policy; and Ms. Joy Olson, Executive Director 
of the Washington office on Latin America.
    I want to alert you to the fact that your written statement 
will be placed in the record; and if you would like to 
summarize, we certainly look forward to having a good dialogue 
with you. Thank you very much.
    Why don't we begin with Ms. Lisa Haugaard.

                   Opening Statement of Ms. Haugaard

    Ms. Haugaard. Thank you so much, Chairwoman Lowey and 
Ranking Member Granger and other members of the subcommittee, 
for the opportunity to share perspective on this important 
issue.
    As all of you have said this morning, it is very important 
for the United States to respond to the explosion of drug-
related violence in Mexico. But it must happen in a strategic 
and careful way that addresses the underlying causes. I am 
going to outline some ways in which the United States should 
shoulder its own burden of responsibilities for the violence 
and then talk about ways in which the United States can make 
sure as it goes forward that its aid and policies protect human 
rights.
    The subcommittee is tasked with responding to damage in 
Latin America caused by the illicit drug trade, but the main 
solutions aren't in foreign policy but in domestic policy. Each 
year, barely one-fifth of the Americans in need of treatment 
for drug abuse receive it. Expanding access to high-quality 
treatment would be the best single contribution the United 
States could make to this problem of drug-related violence in 
Latin America. Any aid package, however perfectly designed, 
will not solve the problem without that; and we are going to be 
back in this hearing room in another 5 years talking about the 
shift to another area of Latin America. So we need to really do 
something more about the problem of finding an effective and 
humane public health solution to this problem of drugs and 
drug-related violence.
    I was very pleased to hear all of the talk this morning 
about the problem about arms and the contribution of the arms 
flow from the United States to Mexico. That is the piece of the 
problem that we can deal with. The solution to these problems 
are not easy, but they are pretty well defined in terms of 
enforcing the ban on importing assault weapons and 
strengthening the ATF's inspection capabilities in the border 
region in particular, for example.
    The second point I would like to make is that, as the 
United States goes forward, it should not support and encourage 
a Mexican military role in domestic law enforcement, 
particularly an open-ended one, and should encourage the 
Mexican government to define its plan to withdraw the military 
eventually from public security and including its plans for 
forming strength in the civilian police force. And USAID should 
really be conceived of as helping to support this transition, 
rather than reinforcing this role.
    We are seeing that the growing role of the Mexican military 
in public security is resulting in increased human rights 
complaints against the civilian population. Complaints rose, 
for example, from 182 in 2006 to 631 in 2008. If you look at 
the State Department's recent human rights report you can see 
that there are no less than five incidents listed where 
soldiers killed civilians at checkpoints just in 2008, and 
these crimes are generally not effectively prosecuted.
    We know the subcommittee has been very sensitive to this 
issue, and we will really appreciate that. We are concerned 
still that there may be assistance through Defense Department 
authorities that don't take this adequately into consideration.
    Finally, I would like to talk a little bit about some 
lessons. You had mentioned the question of the Colombia 
experience, and I just want to say some lessons from the 
Colombia experience for Mexico. And this is not to say that the 
two situations are comparable but, rather, there are some ways 
in which the U.S. government responds to these kinds of major 
aid packages and major aid relationships that could help us as 
we go forward.
    The first lesson is that human rights training is good but 
not enough. And U.S. government tends to have the concept that 
if you add human rights training for security forces, that will 
solve the problem. And that--we saw that going forward with 
Plan Colombia; and yet rights groups have documented growing 
violations by the Colombian Army, particularly killings of 
civilians, in which soldiers were seen taking civilians dressed 
in civilian clothing, they would later show up dead dressed in 
guerrilla outfits, and they were claimed by the army as killed 
in combat. And these really spiraled up.
    Why did this happen with all of this human rights training 
and all of these good intentions? There is nothing wrong with 
the training. The training is good. But it failed to address 
certain structural issues.
    For example, there is a body count mentality where officers 
were--soldiers were rewarded for the number of people killed. 
And that, as well as the lack of investigation and prosecution 
of such crimes, resulted in this increase. Basically, no amount 
of human rights training can work when a justice system fails 
to investigate and prosecute crimes committed by security 
forces.
    Second lesson, very briefly, is just that judicial 
assistance is very good. We are very, very pleased to see the 
attention to judicial assistance and training in this package. 
But, as you move forward, there is kind of a standard package 
that DOJ provides, the transition to the adversarial justice 
system, all very good. And prosecutorial training. But unless 
you have an analysis of why there's still impunity in each 
judicial agency, you still can give all this training and it 
won't result in what you want. So you need to pay attention to 
that.
    And the final lesson is that, for human rights to improve, 
diplomacy and not just aid and training is the answer. With 
these kinds of major aid packages, what we have seen is that 
there is this natural human tendency to just--for our officials 
to really think of the aid recipients, the country, not just as 
a partner but as we are now kind of one entity; and that can 
result in not pushing on some important human rights issues.
    As this major aid package moves forward, it is really 
important for the U.S. government to maintain a little daylight 
between itself and its partner. And this is just--a healthy 
relationship is, you know, sometimes you have to say to each 
other, you know, well, you have a little flaw. It is important 
to maintain that kind of relationship.
    And what we found in the Colombia experience, what was very 
important was the existence of human rights language in the 
package and the willingness of Members of Congress, 
particularly of this subcommittee and its Senate counterparts, 
to look at that language and encourage the State Department to 
take that seriously. Without that, frankly, I don't think we 
would have had access as human rights groups to the State 
Department to encourage them to talk to their Colombian 
counterparts and to try to address this issue, for example, of 
civilian killings by the army.
    So, as you move forward, it is very important to really 
think about maintaining that little bit of distance. That is 
helpful in order to encourage the partner, in this case, 
particularly, the Mexican government, to really overcome 
problems of impunity.
    And, finally, just as the United States needs to preserve a 
little objectivity in relationship to recipient governments in 
these large-scale aid programs, it is also important for the 
Mexican government, in particular, to continue to raise its 
concerns with us about our failure, if it still is, to reduce 
demand for illicit drugs, to deal with the flow of arms, and to 
achieve immigration reform and neighborly border solutions, 
which brings me back to the first point, which is that, in this 
relationship going forward between the United States and 
Mexico, if the two countries are to resolve their joint 
problems, there needs to be an objective dialogue that is this 
two-way street.
    Thank you.
    Mrs. Lowey. Thank you.
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    Mrs. Lowey. Ms. Hernandez.

                   Opening Statement of Ms. Hernandez

    Ms. Hernandez. Thank you very much for the opportunity, 
Madam Chairwoman, Ranking Member Granger and other 
distinguished members of the committee.
    I have been working in the promotion and defense of human 
rights in Mexico for over 12 years, and I want to focus my 
testimony on speaking about the current situation in Mexico as 
a result of the war on drugs but from the perspective of civil 
society.
    I want to talk about militarization, and militarization of 
public security and the use of the army as a means to fight the 
war against drugs has been a policy of the Mexican government 
since the 1980s. Yet, clearly, the use of the military has 
never been as evident or as intense as with President 
Calderon's administration.
    Direct participation of the military in public security is 
increasing on all levels of government, and military presence 
has become more and more common in principal cities in Mexico. 
In states like Guerrero, where I lived for 4 years, the 
presence of the military is not only in the cities but also in 
the rural and indigenous communities where poppy and marijuana 
are cultivated. This is a problem that is rarely talked about 
in Mexico, where the growers of illicit crops are forgotten in 
the drug war and there is not even talk of alternative 
development as occurs in other countries like Colombia or 
Bolivia.
    Instead of fighting the structural causes of the situation, 
recognizing its social and economic implications and 
formulating an integral development plan for the community, the 
government has continued to use the military as a way to 
manually eradicate illicit crops. The situation with drug 
cultivation in Mexico exemplifies, for me, the way the Mexican 
government has decided to tackle the entire war on drugs: above 
all, short-term, often dramatic actions with immediate but very 
limited impact and not sufficient long-term strategic actions 
that truly combat the structural causes of the situation Mexico 
faces today: poverty, corruption, impunity, and weak 
institutions.
    The use of the military has been presented by the 
government as a temporary measure that is needed due to the 
uncontrollable violence related to organized crime and that 
civilian institutions have proven incapable of dealing with the 
problem in an effective manner. With this we turn once more to 
the structural causes: clearly, a police force on all levels 
that is extremely corrupt and that has been profoundly 
infiltrated by organized crime, with almost no levels of 
confidence on behalf of citizens.
    To illustrate this, I want to refer to a civil society 
organization operating in municipalities in the mountain region 
of Guerrero, one of the poorest in all of Mexico, called the 
Civil Police Monitor that promotes transparency through rule of 
law and human rights within regional police forces.
    In its first year, in 2008, the Civil Police Monitor 
documented 117 cases of abuse committed by municipal police 
forces and judicial police, particularly arbitrary detention 
and extortion. At the same time, it received complaints by 
police recording the fact that they didn't have the most basic 
equipment, such as boots and ammunition, that they worked 
shifts of over 24 hours, they didn't have life insurance, that 
they were often not paid their salaries, which is less than 
$300 a month in this region. With these conditions, can we be 
surprised that the municipal police forces are so easily 
corruptible and infiltrated by organized crime?
    Lack of accountability, transparency, internal and external 
controls, and human rights abuses characterize the vast 
majority of police forces in the country. Lack of adequate 
training in crucial matters such as the use of force, few 
material and human resources, poor incentives, and low salaries 
are the police force's other characteristics. The police 
reforms in Mexico that have taken place and that have been very 
positive have been focused almost all on the Federal level, 
leaving the state and municipal police forces almost untouched, 
in spite of the fact that these are the ones that are directly 
in contact with the majority of the population.
    If the use of the army is a temporary measure, the only 
answer is a profound democratic reform of the police force 
which is the civil institution in charge of public security. 
Yet this reform on all levels, particularly the state and 
municipal level, is not occurring sufficiently.
    There are concrete reasons why numerous international human 
rights protection mechanisms have clearly stated that the 
military should not be in charge of public security tasks. They 
are trained in the doctrine of war and confrontation, not of 
collaboration and work with the community. For this reason, as 
Lisa just pointed out, the risk for abuse of power and human 
rights violations is extremely high; and that is precisely what 
has occurred.
    When military personnel are accused of human rights 
violations, the military courts apply article 57 of the 
Military Justice Code in order to keep cases involving their 
members within their jurisdiction. Although the Mexican Army 
may not be legally immune, military jurisdiction in practice is 
a de facto amnesty law that guarantees impunity for military 
personnel who violate the fundamental rights of the population.
    It is imperative that Mexico abolish its military 
jurisdiction and puts an end to impunity in cases of human 
rights violations committed by members of the army. This is 
even more urgent if the army will continue to be on the streets 
and within communities in many states as part of this temporary 
or urgent measure in fighting the drug war.
    The Merida Initiative contemplates that 15 percent of the 
funds are conditioned to the progress shown by the Mexican 
government in certain key areas of human rights: transparency 
and accountability within the police force, consultations with 
civil society, investigations and prosecutions of security 
forces accused of abuse, and enforcement of Mexican law 
prohibiting the use of testimony obtained through torture. 
These are, in my opinion, the minimal things that Mexico should 
be held accountable for; and it is of extreme importance that 
the mechanism to monitor their fulfillment is clear and 
effective.
    Many of the things contemplated in the Merida Initiative, 
such as equipment and technology we have talked about a lot 
this morning are very important. Yet, as has also been very 
much talked about, they contribute to short-term immediate 
actions but not to long-term structural reform. It is important 
to emphasize that this war on drugs, fight against organized 
crime, or however we choose to call it, is destined for failure 
unless it considers these long-term actions to strengthen 
Mexican civilian institutions on all levels, not just the 
Federal level.
    And it must be insured that this long-term reform agenda is 
not lost in the response to immediate crisis. This is not a 
battle that will be won in 4, 2, 6 years and clearly not within 
one Presidential administration; and it is important that clear 
benchmarks for short, medium, and long-term change be 
established in order to know if we are moving forward or 
backward.
    Mrs. Lowey. Thank you.
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    Mrs. Lowey. Ms. Olson.

                     Opening Statement of Ms. Olson

    Ms. Olson. Thank you, Chairwoman Lowey. It is a pleasure to 
be here. And thank you, Ms. Granger, as well. We appreciate the 
opportunity to present this morning, but we also appreciate 
your work and work with your staff.
    And I wanted to say to Representative Kirk that I thought I 
was going to be the only graduate of the UNAM here. I am so 
glad to hear that there is another.
    WOLA has followed the development of the Merida Initiative 
and consulted extensively with colleagues in Mexico with a 
variety of expertise, including human rights, constitutional 
law, judicial reform, policing and the military.
    We believe that the U.S. can most effectively address drug 
trafficking and violence in Mexico in three ways: First, by 
launching an ambitious effort to reduce drug demand at home, 
particularly by providing access to high-quality drug 
treatment; second, by combating the flow of arms and illicit 
drug profits from the U.S. back into Mexico; and, third, by 
supporting institutional reforms in Mexico's police and 
judicial systems.
    My testimony will focus on this last point, where we think 
that the resources that are appropriated by this subcommittee 
might have the most impact.
    Since the first tranche of the money was just released, it 
is too soon to assess impact. However, WOLA is concerned about 
imbalances in the assistance package, which we believe focuses 
too heavily on hardware and equipment and not enough on support 
for judicial and police reform.
    Other witnesses have talked about the serious violence 
taking place in Mexico. Suffice it for me to say that President 
Calderon has enacted a series of initiatives to strengthen 
public safety institutions by professionalizing and purging the 
police and by providing financial support to over 150 
municipalities most affected by crime and violence. 
Nevertheless, the predominant element of Mexico's security 
strategy continues to be large-scale counterdrug operations.
    The military dominates these operations with the 
participation of approximately 45,000 troops. That is the 
number of troops that are involved in the drug war, not the 
total number of troops in the Mexican Army. And the military is 
increasingly involved in other public security tasks.
    Mexico's counterdrug efforts are hampered by abuse, 
corruption, lack of transparency, all to varying degrees in 
police, judiciary and the military, and torture is still a 
problem. But Mexico didn't get to this place overnight; and the 
tactics being used to confront the drug trade--purging the 
police, bringing in the military--are not new either. Efforts 
to purge the police go back at least to the 1980s. And June of 
2005 saw the start of something called Operation Safe Mexico, 
which included the deployment of large number of troops to 
Mexican cities, as well as--much similar to what we are seeing 
today.
    History is important here because past efforts to purge 
Mexico's police and create new security agencies have all 
failed to put in place the structural reforms needed to insure 
police accountability and the continual ferreting out of 
corruption. Follow-through is everything. They have also 
generated a serious lack of faith in the police and attempts at 
police reform.
    Military deployments have not provided lasting solutions 
either and have produced more human rights abuses. The military 
can occupy a city, but after a few months they go back to the 
barracks, and the fundamental dynamics have not changed.
    U.S. policymakers should explore ways for the United States 
to support and strengthen Mexico's effort to evaluate police 
performance at the federal, state and local levels. One such 
mechanism, the National Police Registry, which I understand is 
still not fully functional--one is the police registry. Without 
a complete registry, there is no way to do thorough background 
checks and keep corrupt officials and human rights abusers out 
of the police. A functioning registry would be a minimal 
benchmark for assessing institutional reform.
    There is a real opportunity for the U.S. to contribute to 
lasting reforms in the justice system. Historic constitutional 
reforms were just approved in 2008. These represent a 
procedural revolution in Mexico, including oral trials and 
reducing the likelihood of testimony obtained through torture 
of being used. This reform, however, is not a quick fix. The 
government estimates that it will take 8 years to fully 
implement. But history tells us that quick fixes don't work and 
that the U.S. needs to invest long term.
    I know that the human rights language in the Merida 
Initiative has been controversial, but it is important and 
appropriate. Mexico's police and justice institutions are known 
for corruption, and the majority of human rights violations are 
committed by state and local police. There has also been a 
dramatic rise in the report of cases against the military. 
Because most of the human rights abuses committed by the 
military and against civilians are remitted to military 
jurisdiction, those responsible are seldom punished.
    Merida engages these institutions, policing and justice 
institutions--the police and the military, excuse me--so, Ojo, 
as they say in Spanish, or watch out, because you are giving 
assistance to unreformed and untransparent security forces. The 
U.S., especially in Latin America, has a bad track record of 
providing assistance to unreformed security forces that in turn 
commit human rights abuses in which the U.S. is implicated.
    The 15 percent withholding that Congress has required until 
the State Department reports that Mexico is taking action on 
human rights issues is completely appropriate and important.
    There is another problem with the structure of the Merida 
Initiative that should be addressed. It is one-sided. Although 
the initiative was pitched as cooperation between the two 
countries, it contains no additional commitments or funds for 
the U.S. side of the border. Many studies have shown that 
treatment for heavy drug users is by far the most cost-
effective way to reduce problem drug use, and yet these 
programs are chronically underfunded. Any next stage for the 
Merida Initiative should contain a truly binational plan.
    One last concern. While the foreign ops process is funding 
the Merida Initiative, the Defense Department also has the 
authority to provide foreign military training for counterdrug 
purposes; and, last year, Mexico was added to the Defense 
Department's authority to provide equipment as well. Congress 
needs to consider and monitor all sides of the U.S. counterdrug 
effort, not just the Merida Initiative funded through this 
committee.
    In conclusion, success in Mexico's counterdrug effort will 
not hinge upon helicopters or ion scanners. What the U.S. 
decides to fund through the Merida Initiative signals what we 
think is important. Strong, effective rights respecting 
institutions and rule of law have the best chance of making a 
difference; and that is where the limited U.S. dollars should 
be spent.
    Thank you.
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    Mrs. Lowey. Well, thank you very much for your testimony, 
and I hope this will be the beginning of a dialogue, because 
the information you have shared has been invaluable. The key 
here is how do you provide a balance between security and 
accountability, and this is what we have tried to do in our 
bill, and I appreciate your comments.
    I have found, especially after our visiting there, that it 
is very difficult to achieve that balance. Of course, it is 
early, as you mentioned. But achieving the balance between 
trying to address the security objectives of breaking the 
cartels, simultaneously ensuring that security forces do not 
overstep and abuse the very population that they are trying to 
protect is difficult; and it is clear that all three of you 
don't think that Mexico has achieved that balance.
    You have mentioned various areas where you think they can 
do better, so I am not going to ask you that again. And you 
have also made suggestions about how we can do better to help 
Mexico.
    We know that the Merida Initiative intended to break the 
power and impunity of criminal organizations; assist the 
governments of Mexico and Central America in strengthening 
border, air, and maritime controls from the Southwest border of 
the United States to Panama; improve the capacity of the 
justice systems in the region to conduct investigations and 
prosecutions; implement the rule of law; protect human rights; 
curtail gang activity in Mexico and Central America; diminish 
the demand for drugs in the region.
    These are laudable goals. I think the other panel and you 
could all agree on those goals. It is difficult and probably 
too early to evaluate what has actually been accomplished by 
the Merida program, whether it is having the desired impact.
    I have been in the Congress for 20 years. Drug use in the 
United States is not a new challenge, exactly. I also serve on 
the committee that funds labor, health, human services, and 
education. We have been talking about increasing money to stop 
the demand for a very long time. We know, whether it is that 
committee or this initiative, we are not putting enough money 
into it; and so I certainly respect that suggestion. Hopefully, 
we will be more successful.
    In terms of judicial and police reform, we have addressed 
that in the bill; and I think you mentioned that. And you also 
mentioned that efforts to purge the police go way back. We know 
we need structural reform in the police.
    We know we have to address poverty. What I find difficult--
and perhaps you can comment--to deal with now, when we were 
there and talking to President Calderon and others, because of 
the tremendous differences in salaries between the police and 
the narcotraffickers, they have even tried to keep a rotation 
in the police. But then it is hard to develop professionalism 
if they come in, and then they go out and they join a cartel.
    I appreciate your testimony. You have addressed so many of 
the issues. But keeping the corrupt officials out of the police 
has been going on in Mexico for as far back as I have been 
going to Mexico, and this issue of competing with the 
narcotraffickers on salary is really very difficult. So on all 
the other issues I think we just have to do more of the same, 
but on that issue we are never going to match their salaries.
    And I wonder if you have any suggestions. Do you agree with 
the rotation policy? Then you don't get the professionalism. If 
they are there too long, the President is concerned that 
corruption is certainly alive and well. How do you deal with 
that? Now. I mean, you are not going to solve the poverty issue 
overnight. We all know we have to do that. We have to reform 
the judicial system. We know that. How do you deal with those 
things now while you are dealing with all the other goals, 
protecting the population?
    Ms. Olson. I start with the fact that this has been going 
on for a long time, the fundamental problem of corruption and 
the fact that clearly the narcos have more money than the cop 
on the street, but that is true of almost any place in the drug 
chain. So there are other problems. I mean, salaries are one 
thing. Salaries need to be raised definitely. But that is not 
the only component.
    I think what Mexico has failed to do in past police reforms 
is follow through. There is an initial reform. There is an 
initial vetting. People are pulled out. Sometimes the military 
are brought in to temporarily take on roles while the police 
are supposed to be built up again. Often the military will come 
in, but that second stage of building up the local police 
capacity actually doesn't happen before the military leaves 
again.
    So, for me, the big thing on police reform is that it is 
continual, that it is consistent, and that there is follow-
through.
    Mrs. Lowey. Does the polygraph work?
    Ms. Olson. Well, you know polygraphs are controversial.
    Mrs. Lowey. I know.
    Ms. Olson. They are controversial there. They are 
controversial here. I think polygraphs are a component. It is 
one thing that can be used, and it shouldn't be the only thing.
    So as you go about vetting police forces there are other 
things you can do, you know, continual review of taxes and 
financing of local cops. There are strategies that are being 
put in place and being put in place much more at the federal 
level than at the state and local level, and where you see the 
biggest problems with corruption are at the state and local 
level. So I think that part of the challenge for Calderon right 
now is that he has made some, I think, really good steps on the 
federal level with police reform. How that filters down to the 
state and local level is really one of the main challenges.
    Ms. Hernandez. I would agree clearly with everything that 
Joy has said; and I think it is about also having reforms on 
this level, particularly the municipal level which is so, you 
know, where is the greatest contact with both the population 
but also with the drug traffickers in certain degrees. And I 
think there are minimal things that can start to be done. It is 
such a huge problem. It is not something that is going to be 
tackled in one year or in one administration.
    But I think if at least there are better conditions for the 
police, I mean, if their rights are also respected--and this is 
a little bit of the example that I referred to. You know, they 
have violation of their labor rights if they are also within a 
very corrupt system. If they are also extorted by their own 
bosses within that chain, then if you don't start combating 
those things then there is no possibility to combat the big 
things.
    So it is about raising salaries, but it is also taking into 
consideration what they have to say.
    You know, we talk a lot about police reform, but I think it 
is a democratic police reform with the police themselves taking 
into account their needs and at least starting to improve those 
things on those levels, a very local level, I think, which is 
something that is almost forgotten many times. And you have got 
many, many very poor municipalities that were still working 
with dirt floors, with thin-sheet ceilings, you know, where the 
police don't have life insurance. I mean, these are basic 
things that I think you can start changing and that are going 
to make a difference. They are not going to solve the full 
problem, but they are going to start building up, I think, 
progressive solutions.
    Mrs. Lowey. Well, you probably know that we added $5 
million for a police literacy program. It is probably too early 
to make them literate at this point, but, hopefully, it will 
help.
    Why don't we just take another short comment--my red light 
is on--if you have one. Otherwise, I will turn to Ms. Granger.
    Ms. Haugaard. Well, just one reform that is important is 
this establishing of a police registry so that if someone is 
fired by the municipal police, they don't get rehired by the 
federal or whatever.
    Mrs. Lowey. You know, that is in the bill as well.
    Ms. Haugaard. That is in the bill, and it is very important 
to monitor that and make sure that that moves forward. Because 
that is an agreed-upon reform that is already going forward 
that could make a difference. But you really need to keep your 
eye on that.
    Mrs. Lowey. Thank you.
    Ms. Granger.
    Ms. Granger. Thank you.
    Mine is a fairly short question, I think, but you talked 
just briefly about human rights training. Is there human rights 
training for the Mexican police as well as the Mexican 
military? And give me an idea of what it is like.
    Ms. Haugaard. Perhaps Ana Paula can talk more about what is 
actually taking place.
    In the case of how the United States has done it in other 
countries, there is a standardized human rights training about, 
you know, the laws of war and the laws of military and a 
democratic society; and it is a very standardized training. It 
is good. There are no problems with it. It can be helpful. But 
if you don't couple it with making sure that if you actually 
have a police or a military official who violates human rights 
and if they never get caught, it doesn't matter how many good, 
wonderful courses they go to. So the point is really that it 
has to be coupled but not that this isn't useful in and of 
itself.
    Do you want to go into a little bit more about the kind of 
training?
    Ms. Hernandez. I wouldn't have an answer of exactly the 
kinds of training. For example, there is a recent Secretariat 
created within the Secretariat of Defense of Human Rights. And 
I mean those are important things. But, clearly, if you have 
got this contribution where military personnel that commit 
violations cannot be held accountable, you have got the 
military jurisdiction, I mean, how can you have--I mean, what 
is the point of the training if they know that if they commit 
violations they won't be held accountable?
    And these were recent recommendations made to the Mexican 
state before the Human Rights Council. They just went through 
the universal periodic review, and all the recommendations that 
they have not accepted yet have to do with military 
jurisdiction. And I think that is a key--that would be a key 
political, you know, sign of political will of really taking 
serious human rights issue within the military if this started 
to change.
    Ms. Granger. Thank you.
    Mrs. Lowey. Mr. Rothman.
    Mr. Rothman. Thank you, Madam Chairman.
    I have appreciated the testimony today, and I just want to 
put it in context perhaps for myself. I thought I heard someone 
say most human rights violations are occurring by the police 
and the army. Is that including the drug cartels?
    Ms. Olson. The understanding of human rights in the context 
of international law is that human rights are crimes against 
individuals committed by the state and that the horrendous 
things the drug traffickers are doing are crimes. So they are 
not defined as human rights violations because of, you know, 
the legal framework.
    Mr. Rothman. Okay, so the comment in no way minimized the 
horror and the magnitude of the violence and slaughter and 
torture and maiming, decapitation, all those things that are 
being conducted by the drug cartels.
    Again, I appreciated your testimony; and I think that the 
chairwoman and other members of the committee have struggled 
and are trying to incorporate in our bill ways to address your 
concerns.
    I read a statistic that 90 to 95 percent of the guns used 
in Mexico's drug violence come from the United States and a 
very large number of high-caliber automatic weapons, assault 
weapons.
    Any thoughts on how the U.S.'s efforts to stop that flow 
are going?
    Ms. Haugaard. That figure comes from the ATF, I believe; 
and it isn't going very well, right now. One of the issues has 
been that the import or the ban on importing assault weapons in 
the United States has not been enforced, and that coincides a 
bit with the period of really expansion of the violence in 
Mexico. So that is an issue.
    Mr. Rothman. Is it your belief then that there are 
sufficient laws on the U.S. books to prevent the export of 
assault weapons across the border into Mexico?
    Ms. Haugaard. Enforcing that existing ban would be helpful. 
That doesn't solve all the problems, however. It would also be 
important to deal with the question of the sale of assault 
weapons within the United States, and it would be very 
important to strengthen ATF resources.
    Again, this is a question more of enforcing existing laws. 
So that basically what is happening is that the drug cartels 
are recruiting Americans to go and buy weapons.
    Mr. Rothman. Straw purchases.
    Ms. Haugaard. Yeah, just a few at a time at gun shows or 
wherever, and the regulations are not sufficiently enforced. 
There also aren't adequate regulations on ammunition, on sale 
of ammunition, which is another issue, simply enforcing what is 
already on the books.
    But I think you would also have to look at what more could 
be done in order to really put a stop to this. But it is a very 
serious issue, and I don't think enough is being done right 
now, yet.
    Mr. Rothman. And how would you judge, if you have an 
opinion, the coordination amongst Department of Homeland 
Security, Department of Defense, and all the other U.S. 
agencies that are now involved, DEA and national intelligence 
services? Do you have an opinion on how that coordination is 
going in terms of this Merida Initiative?
    Ms. Haugaard. I don't think I could speak to that.
    Ms. Olson. I don't think I can answer that.
    The one aspect of the Merida Initiative that I have looked 
at the interagency process on has been related to youth gang 
violence. And, to be honest, the interagency process is not 
very effective; and it needs work.
    Mr. Rothman. How is it falling down?
    Ms. Olson. Turf disputes and who is going to do what and 
who is responsible for what, and I think it ended up with the 
overall program not being as effective as it could be.
    Mr. Rothman. Thank you, Madam Chair.
    Mrs. Lowey. Thank you very much.
    I just wanted to follow up with one last question. What 
type of support should we be providing to civil watchdog 
groups, and what sort of protection does Mexico make available 
to citizens who claim they have been abused or mistreated by 
law enforcement and security forces? And what more should 
Mexico be doing?
    Ms. Olson. I am going to let Ana Paula address the issue of 
what kind of protection is provided, because I am not sure on 
that.
    What I do know is that, as we have looked at witness 
protection issues in Mexico, the system is really weak and 
needs strengthening; and I think that the farther we get into 
really going after organized crime the more important the 
witness protection program becomes. I think that is one 
important place where the committee could focus.
    Mrs. Lowey. And perhaps you can give us some information, 
who in the Mexican government works well with you? We have made 
many changes in the bill, as you know, based upon the input you 
have given us and others. Who else should we be empowering?
    Ms. Olson. In terms of parts of the Mexican government?
    Mrs. Lowey. Well, or in the country, there are civilian 
watchdog groups that come to talk with us. How can we make this 
package of aid, Merida package more effective?
    Ms. Olson. That is a very good question.
    Mrs. Lowey. You don't have to answer it today. You can 
think about it. Because I believe you had said, Ms. Olson, that 
it is early and we can't really evaluate. So if I am putting 
you on the spot, you don't have to answer it.
    Let me just say to the panel, we really appreciate your 
input, your work; and, as we prepare for 2010, I do hope that 
you can stay in touch with the committee. We constantly try to 
fine-tune the package. The balance, as I said many times during 
this hearing, is very difficult to achieve.
    Demand, for example, we have been worried about for more 
than 20 years. That is as long as I have been in the Congress. 
So we really do appreciate your testimony, and I thank you 
again, and I look forward to continuing the dialogue.
    Ms. Olson. Can I make one last comment?
    Mrs. Lowey. You certainly can.
    Ms. Olson. One last comment, because I think--Mr. Rothman, 
partly in response to your question, I think that when we talk 
about justice and police reform, what we are talking about is 
how you capture and prosecute criminals. I very much see the 
issues that we are talking about, police and justice reform, 
human rights, and catching and holding criminals accountable, 
they all go hand in hand. And I think that when the process 
starts working that way is when we will see the most impact.
    Lastly, because I think it is important to encourage the 
administration on this, is this idea of balance that you talked 
about, but balance between what the U.S. is going to do on our 
side of the border and what we think needs to happen on the 
Mexican side of the border. I know it runs completely counter 
to the budget system, because we budget in the different--the 
150 account, and domestic demand treatment is not there. But I 
think, as it is conceptualized and presented, the different 
aspects of what the U.S. is going to do on its side of the 
border, it is very important that those be articulated to 
Mexico.
    Mrs. Lowey. Well, I would hope that it would be. As these 
agreements are negotiated, I would expect that it's not just 
our committee that is changing the balance but that Secretary 
Shannon and others are making their case as forcefully as they 
can for improvements in the balance.
    Why don't I just give Ms. Hernandez and Ms. Haugaard--if 
you have any last comments, we would welcome them.
    Ms. Hernandez. Well, I think, just touching on the last 
thing that Joy said, I think that is very important in terms of 
access to justice. As you were asking, Madam Chairwoman, what 
could we do and what could be most effective I think, as Ms. 
Olson was saying, if access to justice starts working in 
regards to how citizens denounce crimes, how they are 
protected--I think there is such a lack of confidence by the 
citizens, both of police institutions, of the justice system, 
that as those reforms that are currently hopefully being 
implemented, as they start working, I think that will improve 
and that will advance an overall thing.
    As I was just saying in my testimony, I think it is very 
important that these things, the minimal things that are 
established within the initiative in terms of things that 
Mexico has to report progress on, I think that is very 
important that that is effectively measured. Otherwise, those 
just fall as kind of empty words that are not----
    Those are very important. They are the minimal things I 
think that need to be taken into account. In that sense, the 
possibility to dialogue with civil society organizations, the 
role that civil society can also play in that I think is also 
very important.
    Mrs. Lowey. Thank you.
    Ms. Haugaard.
    Ms. Haugaard. Well, along the same lines, this is a really 
complicated package; and the reforms we are talking about in 
terms of the justice sector and police are really complicated 
issues. The more that you can, obviously, both as we can see 
from this hearing and listen to perspectives of civil society, 
Mexican civil society, the more that you can encourage the 
administration and embassy to meet regularly with both human 
rights and justice reform and police reform kinds of groups 
monitoring groups in Mexico.
    I think the better the analysis, the broader the analysis 
the U.S. Government will have and the better you can watch as 
this develops. Because I have always found if you are trying to 
improve a justice system or trying to make police or military 
more accountable, you will move forward in one way and then all 
of a sudden it kind of goes off in the wrong direction. And you 
need that good analysis to be able to be on top of that and to 
be encouraging in the right direction.
    So the more there is that flow of information with civil 
society experts in Mexico in particular, the sort of better the 
U.S. Government's analysis will be and the more we will see 
this going in the right direction.
    Mrs. Lowey. Thank you again for your testimony and your 
time. This concludes today's hearing, examining the 
implementation of counternarcotics funding associated with the 
Merida program.
    The Subcommittee on State, Foreign Operations, and Related 
Programs stands adjourned. Thank you.

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                                          Thursday, March 12, 2009.

                AFRICA: GREAT LAKES, SUDAN AND THE HORN

                               WITNESSES

JOHN PRENDERGAST, CO-FOUNDER, ENOUGH PROJECT
DAVID SHINN, FORMER AMBASSADOR, AND ADJUNCT PROFESSOR OF INTERNATIONAL 
    AFFAIRS, GEORGE WASHINGTON UNIVERSITY
SULIMAN BALDO, AFRICA DIRECTOR, INTERNATIONAL CENTER FOR TRANSITIONAL 
    JUSTICE

                 Opening Statement of Chairwoman Lowey

    Mrs. Lowey. The Subcommittee on State, Foreign Operations 
and Related Programs will come to order. Today this 
subcommittee will examine programs and policies in Africa, 
specifically in the Great Lakes, Horn of Africa and the Sudan.
    I welcome our distinguished panel, Mr. John Prendergast, 
Co-Founder of the ENOUGH Project; Ambassador David Shinn, 
Professor at George Washington University and former U.S. 
Ambassador to Ethiopia and Burkina Faso; and Mr. Suliman Baldo, 
Africa Director of the International Center for Transitional 
Justice. Their diverse experience will provide valuable insight 
to United States policy in these troubled regions of Africa.
    As our nation grapples with global security imperatives, 
including in the Middle East, Afghanistan and Pakistan, we must 
not neglect the myriad of challenges and opportunities in 
Africa.
    Over the last 40 years, nearly 20 African countries or 
about 40 percent of subsaharan Africa have experienced at least 
one civil war. It is estimated that 20 percent of subsaharan 
Africans now live in countries which are formally at war. 
Despite this grim statistic, there are glimmers of hope that 
some countries are emerging from conflicts and consolidating 
peace.
    Optimism--cautious optimism--is spreading from the center 
of the continent as the Democratic Republic of the Congo and 
Rwanda join together to face down two rebel factions in eastern 
DRC. This joint action, which was followed by the retreat of 
Rwandan forces from the area, has weakened the rebel forces, 
and the people of the Kivus can look forward to a reduction in 
violence and a return to peace.
    I hope that the witnesses today can provide some direction 
on how the United States and the international community can 
help sustain this progress. What should the United States and 
other donors do to help consolidate the peace in DRC? What 
efforts can help overcome the destruction of communities as a 
result of the war and the gender-based violence used 
systematically as a weapon of war?
    Unfortunately, the news out of Sudan has not been positive. 
The actions of the Khartoum government last week demonstrate 
that they continue to thwart every effort to resolve the 
conflict in western Sudan and continue to oppress the people of 
Darfur.
    The expulsion of 13 international NGOs, the kidnapping of 
five aid workers which you just saw on the news, the apparent 
disregard for the health and well being of 1.5 million people 
living in Darfur is simply genocide by another means.
    Some Members of Congress and many in the NGO community have 
called for a Presidential special envoy to marshal 
international attention and put pressure on the Khartoum 
government. Perhaps our witnesses can give us examples of other 
steps that the Administration must take in the next 30 days to 
demonstrate that the United States remains committed to a long-
term solution in Sudan and Darfur.
    I am also deeply concerned about Somalia's decades long 
descent into chaos. Since the 1990s, the country has been in 
the state of crisis. Recent actions by the people of Somalia to 
begin to form a consensus government offers some hope. However, 
how to deal with al-Shabab is a major challenge, and 
instability has led to increased piracy off Somalia's coast.
    Joint international action seems to be addressing some of 
these concerns. Could a similar joint effort to reestablish 
governance in Somalia and collaboration with the new government 
offer a chance for peace in the country?
    Finally, let me note that my colleagues and I have long 
criticized the narrow focus that provides only health and 
humanitarian dollars to Africa. While these challenges 
certainly are great, Africa needs trade, agriculture, economic 
development to prosper and grow. Additionally, more security 
assistance in the region would help counter the growth and 
influence of al-Qaeda and the other terrorist cells.
    Perhaps frustrated by the lack of State Department 
resources, we have seen the Department of Defense deploy 
greater resources and personnel through Africa, yet we cannot 
delegate responsibility to the military, nor allow them to be 
the dominant interface for the nations of Africa.
    I hope that the Obama Administration will reverse the years 
of a one-dimensional Africa assistance policy and put forward a 
more comprehensive diplomatic and development strategy for the 
African continent. I look forward to working with Secretary 
Clinton and all of the officials in the Obama Administration 
who share my commitment to this goal and expect that we can 
build on the goodwill and successes we have had in Africa over 
the past few years.
    Now before I return to more impressive witnesses, let me 
turn to our distinguished Ranking Member for her statement.

              Opening Statement of Ranking Member Granger

    Ms. Granger. Thank you, Madam Chairwoman, for convening 
today's panel on Africa, a region increasingly vital to the 
national interest of the United States. The panelists before us 
have extensive experience on the African continent and share 
our goal of bringing peace and stability to the region, and I 
appreciate your being here today.
    The political, economic, security and humanitarian 
challenges the United States faces in the Great Lakes, Sudan 
and the Horn are considerable. The spread of terrorism, 
regional instability and food insecurity are real threats to 
U.S. interests.
    The Congress has appropriated over $6.5 billion in fiscal 
year 2008 for this region to provide humanitarian aid, 
establish and sustain multiple peacekeeping missions, combat 
disease and develop and reconstruct nations emerging from 
conflict.
    The picture of this region, as the Chairwoman said, 
unfortunately is still mixed. In Sudan, over two million people 
remain displaced in the Darfur region, a conflict that is 
affecting neighboring Chad and the Central African Republic. At 
the same time, a fragile peace agreement brokered by the last 
Administration between North and South Sudan struggles to 
succeed.
    The announcement last week of the Sudanese Government to 
expel 12 nongovernmental organizations that are delivering life 
saving humanitarian assistance is unacceptable.
    The United Nations African Union Peacekeeping Mission in 
Darfur authorized at over 26,000 personnel only had 12,359 
troops deployed by the end of January 2009, nearly 19 months 
after its authorization. Maritime piracy based in Somalia is an 
increasing threat to international trade.
    Conversely, the President's emergency plan for AIDS relief, 
PEPFAR, and the Malaria and Neglected Diseases Initiative have 
made great strides in improving health care on the continent.
    The Millennium Challenge Corporation has become an 
innovative tool to combat poverty, grow economies and 
strengthen African democracies. To date, there have been 11 
compacts signed with African nations totaling about $4.5 
billion. The Congress has invested billions and demonstrated 
its concern for Africa, but these resources need to be coupled 
with an effective and concerted strategy for achieving peace 
and stability in this region.
    I look forward to hearing from each panelist on the 
approach needed to address these chronic challenges and your 
expert views on the resources Congress might be asked to 
provide.
    I thank you, Madam Chair.
    Mrs. Lowey. Thank you.
    Ambassador Shinn, why not begin with you? We are happy to 
place your full statement in the record. If you would be kind 
enough to summarize your oral statement, we want to get to the 
questions and have a real dialogue. Thank you.

                 Opening Statement of Ambassador Shinn

    Mr. Shinn. Thank you very much, Madam Chairwoman, and 
Members of the committee. I will define for the purposes of 
this session the Horn of Africa as constituting Ethiopia, 
Eritrea, Somalia, Djibouti and Sudan. I would make the point 
that a problem or a conflict in any one of these countries has 
relevance for one or more of its neighbors. It is very 
important to treat this area as a region, not on a bilateral 
country-by-country basis.
    The only serious U.S. policy effort that tried to deal with 
the countries as an integrated region occurred in the mid 
1990s. It was known as the Greater Horn of Africa Initiative. 
The initiative was a good one. Unfortunately, it did not have a 
lot of success for reasons spelled out in my paper, but I think 
it would be useful at some point to review the lessons learned 
as to why it did not have more success.
    The major crises in the Horn today are the failed state of 
Somalia, the civil war between Southern and Northern Sudan and 
the crisis in Darfur, the war between Ethiopia and Eritrea and 
periodic famines in several of the countries. There is also a 
second tier list of problems that I will not get into and even 
a third group of localized conflicts that deserve more 
attention that I will not mention now.
    It is also key to work with other players in the region 
rather than trying to carry out any policy on a bilateral 
basis. The United States cannot and should not be expected to 
solve the problems of the Horn on its own.
    In addition to working with traditional donors, it needs to 
work with countries like Egypt, the Arab countries and China. 
Russia is a little more problematic because of its arms sales, 
but even Russia needs to be included, also India and even 
Turkey, which is becoming increasingly active in the area.
    Having said that, a new or relatively new arrival to the 
area is Iran. I am not suggesting we work with Iran. I think 
Iran has to be monitored very carefully in terms of what it is 
doing there.
    Let me turn first to Ethiopia. U.S. policy towards Ethiopia 
since the current government took power in 1991 has been a 
delicate balancing act, and this will continue to be the case. 
On the one hand, Ethiopia is a strong supporter of U.S. 
counterterrorism policy in the region. It has been consistently 
responsive to U.S. concerns about stability and peacekeeping 
operations in the region.
    The United States must weigh very carefully these positive 
factors against the need for significant improvement in human 
rights issues and the democratization process. There have been 
the arrests of political dissidents, harassment of the private 
press, and unwillingness to allow civil society to engage in 
advocacy work.
    The next general elections occur in 2010, and the outlook 
for serious competition in these elections is frankly not very 
good.
    Eritrea. Relations with Eritrea have reached the lowest 
point since Eritrea became independent in 1993. There is a lot 
standing in the way of improving relations with Eritrea. Any 
U.S. attempt to improve relations with Eritrea faces huge 
challenges.
    A new Administration has the advantage, however, in that it 
can look at old problems in new ways. It may not be possible to 
improve relations with Eritrea, but I think the effort still 
needs to be made.
    On Djibouti, it hosts the only American military base in 
Africa. Its purpose is mainly to counter terrorist activity in 
the region. I think it is time, frankly, to have an independent 
assessment of the CJTF-HOA operation to find out whether it 
really is doing what it costs. Because Djibouti hosts CJTF-HOA 
and Ethiopia is dependent on the port, Djibouti becomes an 
important part of the regional policy for the Horn of Africa.
    Somalia has been much in the news of late. The situation is 
particularly fluid in Somalia today. The first priority is 
reestablishing security. An enlarged African Union peacekeeping 
force is not the answer, although it can help play a useful 
role by keeping open the port and the airport.
    Somalia needs to train in the first instance a community-
based police force, and the international community has started 
that, but it needs to put more effort into it. The United 
States should also continue to support this new government in 
spite of its imperfections, while remaining in the political 
background.
    This is not the time for the U.S. to be up front and 
center. Let Somalis work through their differences in their own 
way. We should eschew military activity in Somalia and provide 
humanitarian assistance and be willing to step in as quickly as 
possibly with development assistance when the security 
situation permits.
    Turning to Sudan, the United States has four principal 
goals in Sudan: Ensuring implementation of the comprehensive 
peace agreement, or at least avoiding a return to civil war 
between the north and the south; ending the crisis in Darfur; 
improving the overall human rights situation; and continuing to 
receive the support of Sudan on counterterrorism.
    Achieving these goals requires a combination of pressure, 
frank talk and acceptance of some unpleasant truths, which some 
of you will disagree on. The government in Khartoum is highly 
flawed--that is unquestioned--but I think there are two 
positions that need to be reconsidered.
    The first is that I do not think U.S. policy is being well 
served today by continuing in the present tense to refer to 
what is happening there as a genocide. It is terrible, yes. 
Genocide? I do not think so.
    And the second position is that the United States 
appropriately put Sudan on the list of state sponsors of 
terrorism in 1993. In my view, the situation has changed and I 
think the State Department's annual terrorism report 
substantiates that.
    I think a combination of discontinuing references to 
genocide in Darfur in the present tense and taking steps to 
remove Sudan from the list of state sponsors of terrorism just 
might jolt the situation and create some opportunities. Most, 
if not all, sanctions against Sudan would remain in place even 
after it is removed from the list.
    I will stop there, Madam Chairwoman. I have some comments 
on operational issues, but they are in the written record and 
members can review them.
    Thank you.
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    Mrs. Lowey. Mr. Baldo.

                     Opening Statement of Mr. Baldo

    Mr. Baldo. Thank you, Madam Chairwoman, other Members of 
the subcommittee, for inviting me to this hearing. I will focus 
my comments on the Great Lakes region and particularly the 
situation in the Eastern Democratic Republic of Congo.
    The update from that is grim. There are opposing rebel 
groups, militias and the Congolese army, plus foreign armies 
from Uganda and Rwanda to be specific, that are waging wars 
there against different parcels of the eastern providences of 
Congo.
    The clashes are becoming increasingly violent from 2007 
through late 2008, triggering the displacement of tens of 
thousands who are fleeing killings, mass atrocities and 
horrendous rapes and mutilations.
    In western Congo, the Kabila government demonstrates its 
use of abusive force, fronting concerns about narrowing space 
for democratic governance and political opinion. The mediation 
efforts in the Great Lakes region has caught only limited 
successes in containing the violence, and international 
pressure on President Kabila and his government to create a 
space for meaningful democratic exchange has not progressed.
    Therefore, a lot remains to be done if you want to reverse 
the cycles of killings and human suffering. Congo has been 
bleeding for the last two decades because of a lack of decisive 
policy to really address the root causes of the violence there.
    We believe that in the short term a policy intervention 
could be the appointment of an independent human rights and 
military observer mechanism, the purpose of which and in light 
of these ongoing atrocities by all sides in the conflicts to 
support the mechanisms of accountability and lead a major 
effort to end impunity, which is responsible for the repeated 
cycles of violence there.
    We believe that a push for a meaningful security system 
reform is essential. The international community must change 
its current approach, characterized by piecemeal and 
uncoordinated bilateral and multilateral initiatives to reform 
various sectors of the security system such as the army, the 
police and justice in isolation from each other.
    The security sector reform requires a long-term commitment. 
Further financial and technical assistance on security sector 
reform must be accompanied by political pressure and benchmarks 
to promote national ownership of the long-term security sector 
reform process in the country.
    Continued support for civil society in the DRC is key. The 
country for decades has had an implosion of central power, and 
in the vacuum alternative power sources have developed.
    These are the churches, civil society organizations, 
community groups that are providing for the needs of the 
populations at all levels, including local governments, 
protection of rights, and monitoring of abuses as they happen 
in civil society in Congo is a major actor in all these areas, 
and the struggle for accountability there could build on its 
tremendous efforts in this area.
    Now, traditional justice measures are needed. There is 
little political will in the Congo to really uphold members of 
the military, for example, accountable for their role in 
committing abuses. It is the documented fact by, among others, 
the United Nations peacekeeping mission that most of the 
violations that occurred in the country are committed by 
members of the National Army and the police, and the mechanisms 
are simply not there.
    We are encouraging local actors such as civil society 
organizations and others to really lead in terms of advocacy. 
Foreign assistance programs should really make sure that this 
happens. Recent security developments in Congo demonstrate the 
influence that the donor community and the international 
community could help bring about in a positive direction.
    As you recall, in January 2009 Uganda and Rwanda agreed to 
send their forces in a joint campaign into the DRC, in eastern 
DRC, with the purpose of fighting the rebel predominantly 
Rwandan Hutu group, the FDLR, the Forces Democratiques pour la 
Liberation du Rwanda.
    That campaign was very much triggered by international 
pressures both from Rwanda and the DRC due to the revelation in 
the United Nations report of November 2008 that Rwanda was 
supporting a very abusive rebel group in Congo led by Laurent 
Nkunda of particular notoriety and that Congo was also using 
the FDLR in its effort to contain the forces of Nkunda and to 
repel attempts.
    Therefore, the establishment of the responsibility of this 
steps in backing abusive rebels has forced them to move towards 
some reconsideration of their previous negative relationships, 
and this is what allowed progress in terms of establishing 
peace. As a result of the reports some European countries 
suspended their military assistance to the Rwandan Government, 
as you recall, and this was a triggering factor on this.
    Therefore, any progress towards peace in the Great Lakes 
region and in Eastern Congo would require really making of this 
alliance between the government of Kinshasa and the government 
of Kigali a strategic thing with cooperation and collaboration 
in addressing the security threats in the region and trying to 
find solutions for them.
    The political and humanitarian costs for conflict in the 
region are otherwise too terrible. We know that Congo is having 
by default of its own army and the lack of political will to 
make of it a dependable force to defend national security for 
all the rebel groups from the region. Lord's Resistance Army of 
Northern Uganda is settled there.
    A joint military campaign between the Congolese army and 
the Ugandan army that started in November and which is still 
ongoing has shown the costs of unprepared military campaigns in 
this case assisted by the United States military at the 
planning level, you know, that such planning for military 
operation, if it does not take the dimension of civilian 
protection into account, could have disastrous effects.
    That is exactly what happened. The campaign did not make 
any provisions for protecting local civilians, and the LRA 
vanished from the camps that were attacked by the Congolese and 
Ugandan army, but then retaliated against civilians, committing 
massacres, including the famous one on Christmas attacking 
several villages in Dungu District, Northeastern Congo, as 
people were celebrating Christmas. Hundreds were killed, and 
LRA remains at large.
    Unfortunately, the current campaign which ended between the 
Ugandan and the Rwanda army again is the FDLR. We are expecting 
in the humanitarian community--the United Nations peacekeeping 
mission in Congo are actually planning--for a backlash with 
FDLR fighters again taking revenge on defenseless Congolese 
civilians.
    The cycles of violence continue. A key trigger for that is 
the dysfunctionality of the Congolese army, its corruption, its 
total absence of capability of providing protection for the 
population, and in fact it is the perpetration of violence 
against the population.
    Our reading of this is that no matter what effort is put in 
extending development assistance to a place like Congo such as 
in the areas of fighting HIV or malaria and development of 
building the micro and macro national economy, as long as there 
is no genuine reform at the level of the institutions of 
governments, the security and the judiciary, all this aid will 
be jeopardized by the dysfunctionality of the systems in the 
Congo.
    I will stop here and end the discussion. We may address 
some of these points in more detail.
    Thank you.
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    Mrs. Lowey. Thank you.
    Mr. Prendergast.

                  Opening Statement of Mr. Prendergast

    Mr. Prendergast. Thank you, Madam Chair, and to all of 
those on the committee who have turned up today for this with 
all the competing priorities. By the way, for us in the 
independent sector it is refreshing not to get buried behind 
the Administration witnesses. It is nice to get a chance to go 
first.
    What are the stakes here, just to put it in very clear and 
sharp focus. The region of East and Central Africa is the 
deadliest war zone in the world since the Holocaust. There is 
nowhere in the world that is even close, a close second, to 
this region.
    Ten million lives have been extinguished in the context of 
conflicts over the last 20 years, so the stakes simply could 
not be higher for what we are deliberating this morning and 
what the Administration is going to be facing in the coming 
months.
    I would say that our aid and our policy, going back 
Administrations, has mostly focused on managing the symptoms of 
these conflicts rather than committing to ending the conflicts. 
It is a paradigm shift that is needed for U.S. policy. We need 
that shift in order for us to begin to see an end to some of 
these cycles of violence and impunity that Suliman just so ably 
described.
    Congress should demand that the Administration that we look 
to ending these conflicts rather than managing their symptoms 
as a basic strategy of our government policy. In the strictest 
sort of U.S. taxpayer term, given the committee we are in front 
of today, what is a more efficient use of our resources?
    Let us just take an example. Was it to spend billions and 
billions of dollars for 20 years in Southern Sudan on 
humanitarian assistance or $100,000 over the space of two or 
three years to invest in the diplomatic effort that ended that 
war? I think the answer is obvious and the answer then has 
incredible implications for today and tomorrow.
    Why is there no peace process right now for Darfur? Why are 
we not engaged in building the peace process for Darfur 6 years 
into what many of us believe is a genocide still ongoing? Why 
is it that we do not have, nor are we even deliberating over, a 
special envoy for Congo and the Great Lakes, which is by itself 
the deadliest war in the world since the Holocaust?
    These are urgent priorities. They are almost cost free in 
terms of our budgetary implications, and they would save 
literally billions of dollars over the course of the decade. It 
is not an exaggeration. We are squandering, in my view, U.S. 
taxpayers' money with this approach that manages symptoms 
rather than ends crises and ends conflict.
    This is a business model for our foreign policy. If we just 
keep bailing it out with additional money for more symptom 
management we will see the continuing cycle of failure that we 
have. Let us put the resources and money into prevention and 
cure.
    Now, I was asked to focus on the two deadliest conflicts, 
Congo and Sudan. Starting very quickly with Sudan, and I am 
just going to make some recommendations about specific U.S. 
actions, particularly with respect to the appropriations 
process, hopefully that will have some relevance to your direct 
jurisdiction.
    President Obama's first major African crisis has officially 
begun with the expulsion of these humanitarian agencies from 
Sudan. We are already getting reports from some of the agencies 
left behind of children who simply have no food.
    So we are going to see now I think a dramatic spike, if 
nothing changes, in severe malnutrition and the diseases 
related to it that will see a death toll increase fairly 
rapidly. Directly responsible is the regime that has now been 
implicated in crimes against humanity through the arrest 
warrant of the ICC.
    I think it is imperative that the President confronts 
Khartoum's intransigence much more directly with a forceful and 
coordinated diplomatic response. We have to work with our 
allies and other countries that have leverage, but to maximize, 
and here comes the issues related to the Appropriations 
Committee. To maximize the effectiveness of such a response, it 
requires an adroit use of all of the elements of the foreign 
policy tool kit.
    The Appropriations Committee and its resources have a 
crucial role to play in this effort. Let me give you just a few 
recommendations specifically:
    Number one, funding for the Sudan special envoy and not 
just a person to go running around. A team should be in place 
under that envoy so that we have a fully developed squad that 
can be talking to Beijing, talking to the Saudis, talking to 
the Egyptians and the countries who have leverage--who if we 
were to work closely with them behind the scenes we could have 
an influence directly on the situation on the ground now.
    We need to be doing that. We need to be 24/7. That is what 
we do on Iran. That is what we do on Iraq and in North Korea 
and the issues that matter. We can do it on Sudan on the cheap 
with a special envoy and a small team with that person.
    Second, we need peace dividends for the people of Sudan. 
They need to see in Southern Sudan after the incredible 
investment of the United States Government in brokering that 
peace deal in Southern Sudan, maybe one of the signature 
accomplishments of the first term of the Bush Administration. 
The people of Southern Sudan need to see some measure of a 
peace dividend and so investing more clearly.
    We have put a lot of money in there, but not a lot is being 
shown for it. I go there fairly frequently, and you do not see 
it. So we need to put it in more visible spending on 
infrastructure, roads, education, health care, the kind of 
things that people can say okay, there is a benefit in peace. 
There is an incentive for peace, which will have an impact in 
continuing implementation in the south of that deal that we 
helped broker and in encouraging the Darfurians.
    Third is the issue of security sector reform. I think we 
have to again engage with the Southern Sudanese Government that 
we have helped in the birthing of with some very specific 
things with respect to: the preparation for election, the 
preparation for the referendum, and particularly with the 
development of military capacities, including the 
professionalization of their military capacities with respect 
to air defense and training, and moving from a rebel movement 
to a professional military.
    Finally, we need support for the election. This is one of 
these make or break issues. If it goes wrong, it could go 
really wrong. It could break really badly. We could see a 
resumption of war in Southern Sudan, which makes Darfur look 
like a footnote in Sudan's history, the death toll in Southern 
Sudan seven times as high as the estimates for Darfur.
    So we have to put some significant assistance into the 
logistics of making those elections work and the diplomatic 
muscle to work with the parties to ensure that there is some 
measure of fairness to the process.
    That is a very rapid shorthand of a lot of things that have 
to happen with respect to bringing about some positive 
direction on Sudan, but in the interest of time let us move on 
to the Congo and the surrounding region.
    As we have already heard from Suliman, the U.S. helped 
provide the diplomatic muscle to bring the parties together in 
Central Africa--the Ugandans, the Congolese and the Rwandans, 
countries that were just a few years ago at each other's 
throats. That diplomatic rapprochement to some degree has 
helped them facilitate the military operations that have 
allowed for joint operations against the Lord's Resistance Army 
and the Rwandan militia led by the former genocidaire, the 
FDLR.
    These are encouraging opportunities, but, as Suliman has 
said, they have resulted again in terrible human rights abuses. 
We own it because we were part of the conceptualization of the 
military strategy and military advisors are out there. We need 
to redouble our efforts to make sure.
    If we just walk away from that the repercussions for 
civilian populations are going to be dramatic in terms of the 
response by the Lord's Resistance Army and the FDLR and other 
militias who will see that they are not really serious about 
this stuff.
    So what do we have to do? I will do just the same as I did 
on Sudan. Just a few quick things that I think some measure of 
appropriations might make a difference in unlocking the cycle 
that the Congo and the Great Lakes region are locked in.
    Number one, and just as important as it is for Sudan, we 
need a special envoy and a team for Congo and the Great Lakes 
to deal with both the issue of Eastern Congo, the deadliest war 
in the world, and the scourge of the Lord's Resistance Army, 
which has gone on for 20 years with no resolution. I think a 
team working with their task being to end these twin crises 
could actually make a difference.
    Second, funding for the DDR account, the Disarmament, 
Demobilization and Reintegration, providing an incentive for 
particularly the child soldiers who have been abducted, the 
younger people who do not want to stay in the Lord's Resistance 
Army, providing incentives to bring them out that are not just 
military, that are not just the stick. We need the carrot as 
well.
    Programs where they can see there is a place that they can 
go back to. Many of them are afraid to go home because of the 
crimes that they were forced to commit against their own 
families, so we want to create that opportunity.
    Security sector reform. Just like with the Southern Sudan 
Government, the Congo Government, as Suliman was telling us, is 
one of the worst abusers not just in Congo, but in the entire 
continent of Africa. That requires professionalization of the 
military, and that requires human rights training.
    Finally, there is the issue of funding. The Senate is now 
working on a bill to deal with the conflict minerals that are 
fueling the Congo conflict. The tantalum, the tungsten and the 
tin and the gold are four minerals that are produced in Congo 
which end up in all of our electronics products, our cell 
phones and our laptops and our iPods and all the rest of it.
    We are directly, as consumers, fueling the war in eastern 
Congo, the deadliest war in the world. So the Senate is working 
on that and are going to work with the House on this measure. 
We need a bill that goes right to the mine of origin to ensure 
that these companies do not purchase the minerals that actually 
fuel wars.
    This is the same concept as the blood diamond movement. If 
you can change the logic of the producers from war to peace you 
can have an impact on the overall stability in the country.
    Conclusion. I think Africa's remaining wars require some 
thinking outside the box, which means that we have to have 24/7 
diplomatic effort in this era of diminishing resources.
    The cheapest and most effective instrument we have is the 
vast experience of American peacemaking. I got a little glimpse 
of it when I worked for President Clinton for four years in his 
Administration. We have incredibly talented foreign service 
officers who ought to be deployed in small teams in both of 
these places, in the Great Lakes and Sudan, and could have an 
enormous impact.
    The cost effectiveness of ending these wars rather than 
continuing to manage the symptoms would be undeniable. So it is 
not an exaggeration I think in East and Central Africa to say 
that literally millions of lives are at stake with what we 
actually end up doing over these next four years.
    The committee's interest in this is extremely, extremely 
encouraging. Thank you very much to all of you for coming 
today.
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    Mrs. Lowey. Thank you.
    I want to thank the witnesses for your outstanding 
testimony, and I personally appreciate your focus on next 
steps. What do we do now? All three of the witnesses certainly 
presented your observations and your suggestions.

                                  DRC

    I would like to focus on DRC, and I know my colleagues will 
pursue many different lines of questioning, because in DRC you 
really see multiple challenges. Last month the DRC Government 
joined with two bordering countries to undertake joint 
operations to dismantle rebel groups.
    Do you think, whoever would like to answer that, that the 
joint operations represent a strengthened central government 
willing and able to collaborate with partners? Do you think 
that these operations represent a desperate government 
struggling to reclaim control of its own borders?
    The joint action in eastern DRC has brought some peace to 
the area, but you all had several suggestions. What needs to be 
done to maintain the peace? The United Nations has developed a 
redevelopment plan for the region. Do you believe that these 
efforts will make a difference? Then you can talk about MONUC, 
the U.N. force in DRC.
    Perhaps I will stop with my question at that point. Who 
would like to respond first? Mr. Baldo. Thank you.
    Mr. Baldo. It is just totally inconceivable how much the 
Congolese army is dysfunctional. It is not a dependable 
fighting force. It is an army where privates and officers are 
of the same proportion, 53 percent, and the others in the 
millions are noncommissioned and warrant officers.
    There are people from defeated previous armies, you know, 
the ex Force d'Armee of Mobutu, defeated armies of Laurent 
Kabila and so on. What Congo is doing, because it does not have 
any capability to do anything on its own as an army, is it is 
outsourcing its military needs to armies of the neighborhood 
that are much more professional.
    But these armies have a long history in Congo, including 
during the deadly war from 1998 to 2002. All the eastern half 
of Congo was under occupation by the Rwandan army and the 
Ugandan army in northeastern Congo, and that was a military 
occupation which was driven by pillaging of natural resources 
in Congo.
    So Rwanda and Uganda are both very much obliged to assist 
because this interest has not disappeared. In fact, the flow of 
resources from Congo to the global economy passes traditionally 
through these two capitals, and there are mechanisms that are 
now ongoing whereby the two states are drawing a lot of 
resources from Congo even during this time.
    Therefore, there are no good guys in this operation. The 
international community and the U.S. Administration really have 
to keep a very close watch over Congo and its neighbors because 
of the history involved here.
    The key issue is to cut the most damaging driver and fueler 
of conflict in that part of the world, which is the illicit 
exploitation of resources. There have to be put in place 
mechanisms to really make sure that these resources do not feed 
conflict.
    The second important component is that the Congolese army 
really needs to be reformed at a large scale, and this is a 
political decision. Pressure has to be put on the Congolese 
Government to assume the responsibility and protect its own 
territory and its own population.
    No one can do that for them. Therefore, there must be a 
serious security sector reform in Congo happening if we are to 
have lasting peace in that part of the world.
    Thank you, Madam.

                                 MONUC

    Mrs. Lowey. What role should the MONUC, the U.N. force play 
in this effort? They have been there for I believe ten years.
    Mr. Baldo. Yes. The United Nations mission has a mandate to 
assist the Congolese National Army in campaigning. Again, it is 
these abusive rebel groups and militias like Laurent Nkunda's 
group, the LRA for that matter, the FDLR for that matter and so 
on.
    But MONUC is basically assisting an army that does not even 
know how to be assisted. It cannot fight in place of the 
Congolese army and it cannot fight, for example, along side the 
Congolese army when it invites armies of the neighborhood 
because the agenda is decidedly to keep the international 
community out of this bilateral arrangement.
    You know, it was a secret deal between President Kabila and 
Kagami that allowed the joint operation in Eastern Congo. So 
for the moment MONUC, and rightly so, are staying out of this 
campaign and are not assisting it. Why? Because none of these 
belligerents, state armies, militias, armed groups, care about 
the humanitarian cost of conflict to the local population.
    Therefore, campaigning, when it happens, is accompanied by 
massive killings, massive rapes, pillaging by all parties and 
no accountability for any of this. Therefore, we cannot expect 
the United Nations mission to be a party to a campaign which 
does not really aim to conduct war according to the Laws of 
Four. Thanks.
    Mrs. Lowey. I am going to turn to Kay Granger and then 
alternate according to the order of attendance.
    We are going to try to keep to the red light because 
obviously because of the complexity of the issue we could all 
go on and on. I am going to turn to Ms. Granger, our Ranking 
Member.
    Ms. Granger. Thank you.
    Mr. Prendergast. I am sorry. I apologize for mispronouncing 
your name.
    Mr. Prendergast. It is not the first time.

                                 DARFUR

    Ms. Granger. Okay. President Obama and Vice President Biden 
and U.N. Permanent Representative Susan Rice all called for a 
no-fly zone for Darfur prior to assuming their current duties, 
but there are many nongovernmental organizations on the ground 
that said they do not agree with that, including the ones that 
were ordered to leave. They oppose a no-fly zone, fearing its 
impact on their ability to deliver vital humanitarian 
assistance.
    My question to you is what is your position on a no-fly 
zone in Darfur?
    Mr. Prendergast. A very complicated issue. Thank you for 
raising it.
    First, we have to figure out our policy objectives. If our 
policy objective, for example, is to protect civilian 
populations from attacks, particularly aerial attacks, the 
principal advantage that the Sudanese Government has is its air 
force. On the ground they are largely neutralized, but when 
they add air support that is when you see some of the more 
significant damage done by ground attacks by the Sudanese 
Government. It makes sense.
    So the United Nations Security Council passed resolutions 
over and over again banning offensive military flights by the 
Government of Sudan, but then they have not created an 
enforcement mechanism for that, so that is why we saw Senator 
Biden and Senator Clinton, when they were senators, and Susan 
speaking on behalf of these things.
    Now, the question then for the purpose of the no-fly zone 
is will it work, or would it actually make things worse? I 
think it is not a given that it will work. If we are only 
prepared, for example, to go in, and let us just say we are not 
going to patrol the skies like this is Kurdistan.
    What we would do, though, is once they conduct one of their 
offensive flights we would send a plane from the Gulf or from 
Djibouti and shoot an airplane on the ground and destroy--
disable or destroy--one of their planes on the ground, just 
sort of a quid pro quo, tit for tat.
    If the Sudanese Government said well, do you know what? 
Maybe that is all they are prepared to do and then they shut 
down all airspace to humanitarian operations for three months 
let us say, what will we have accomplished? Well, potentially 
we will accomplish the starvation of hundreds of thousands of 
people.
    So we have to be very careful that if we are going to go 
down the military road, which I think at some point may be 
required, we better be darn sure that we are going to back it 
up with a series of escalating measures perhaps, further 
targeted bombings, if we are going down that road.
    I am just worried that this sort of spurious kind of one-
liner--let us start and try a no-fly zone--without thinking 
through the implications that we have to have a backup plan if 
Khartoum escalates like they escalated in response to the ICC, 
I think we ought to go down that road of significant planning 
with NATO now.
    And I think just doing that, by the way, just sending the 
signal that we go and we start consulting with our NATO allies 
about the possible enforcement of a no-fly zone, will I 
guarantee you have a very significant effect on the 
calculations of this regime in Khartoum. If they think we are 
finally getting serious about imposing a cost for the kind of 
things that they are doing, I think they will change their 
behavior.
    More accommodation, more statements without any meat behind 
them, is going to lead them down a further road of 
intransigence, and we are just going to see more people die in 
Darfur.
    Ms. Granger. Thank you very much.
    Mrs. Lowey. Mr. Jackson.

                     Opening Remarks of Mr. Jackson

    Mr. Jackson. Thank you, Madam Chair. I have been on this 
subcommittee for 10 years, and we have never had a hearing on 
Africa, much less the three regions we are discussing today, 
and so I want to applaud you and the subcommittee staff for 
holding this hearing, and I want to thank the witnesses for 
their testimony and for the work they have done in subsaharan 
Africa.
    Over the last several years I have raised concerns with 
Secretary Powell and Rice about the need for a comprehensive 
strategy to deal with failed or failing states so that they 
will not become havens for terrorists. Programs like the MCC 
that can make a huge difference with its infusion of capital do 
not address failed or failing states. What can we do? What 
resources do we have to mitigate the situation in some of these 
countries?
    Also during the last few years I have served in the 
Minority on this subcommittee. I was successful in securing 
funding for humanitarian assistance in a supplemental 
appropriations bill for Sudan and Liberia, and although I was 
pleased that the assistance we were providing was going to save 
lives, I wondered if it was sustainable. Could we year after 
year solve the fundamental problems that plague some of the 
poorest countries in the world in an ad hoc and a piecemeal 
fashion?
    I have introduced legislation that specifically deals with 
Liberia. My legislation does not attempt to provide 
humanitarian assistance. Instead, it identifies the root causes 
of Liberia's problems and tries to address those problems, 
providing Liberia with a foundation upon which to grow and 
develop and lift itself out of conflict and poverty.
    I am not saying this is the Tao or the way to solve the 
myriad of problems affecting subsaharan African countries, but 
I think we need to think about new ways to solve these problems 
that are comprehensive and sustainable.
    Now, this is really not a question, but I am interested in 
the panel's thoughts on this. In his book, The Bottom Billion: 
Why the Poorest Countries are Failing and What Can Be Done 
About It, Paul Collier posits the circumstances of the world's 
population is gradually improving as their countries develop 
economically, but that there are about a billion people that 
live in the most dysfunctional, conflict prone and stagnant 
countries that have experienced little growth since the 1980s 
and that they are most likely to remain stuck in poverty for 
the long term.
    Collier argues that this bottom billion are susceptible to 
radicalism, to terrorism, disease and many transnational 
afflictions that impact our global security. He attributes 
their lack of growth to several traps, including conflict, poor 
governance, being landlocked with bad neighbors and excessive 
dependence on natural resources. The populations of the DRC, 
Sudan and Somalia are clearly members of that bottom billion.
    For the panelists, should the donor community be taking 
Collier's advice and reorient itself toward focusing primarily 
on lifting these bottom billion countries out of their 
development traps? In whatever order you would like to address 
it.
    Thank you, Madam Chair.
    Mr. Shinn. Congressman Jackson, I am very sympathetic to 
the approach that you take, and I am also a fan of Paul 
Collier.
    I am not sure that it is feasible to deal with all of those 
who are at the bottom of the pecking order, but I think an 
effort certainly has to be made, if I could just bring it back 
to the Horn of Africa since that is the area I specialize in.
    I would reiterate a point that I made in my written 
testimony on something that was a little bit like what you are 
suggesting today that was tried in the mid 1990s in the Clinton 
Administration. That is the Greater Horn of Africa Initiative, 
which had its faults, which did not achieve a great deal for a 
number of reasons.
    The focus of that effort was to deal with, one, improving 
food security through the Greater Horn of Africa, which 
consisted of 10 countries and included Rwanda, Burundi, 
Tanzania, Kenya and Uganda, but did not include the Congo, and 
two, preventing conflict and mitigating conflict.
    We found that two things happened. One, new conflicts kept 
piling on the existing conflicts to the point that we never got 
ahead of the game. That was a pity because it just wore 
everyone down. As a result there was not the success that we 
had hoped to see in it.
    The other problem, quite frankly, was a bureaucratic one. 
The embassies in the field, some of them, were not really 
enthusiastic about this effort. They did not fully support it. 
They wanted to do their old bilateral thing. What is the United 
States Government going to do for Tanzania or going to do for 
Kenya? They did not want to look at it in terms of the 10 
country concept, so it ultimately died a slow death. There was 
some very modest progress made, but it was exceedingly limited.
    I think what you say makes a lot of sense. It is the way to 
go. It requires an enormous amount of resources, which may or 
may not be available in this economic climate today. It also 
requires an approach that involves all the other major donors 
or interested parties outside of Africa to be supportive of it.
    The U.S. cannot do it alone. It has to be with the 
involvement of others, and if that is not going to be 
forthcoming then it probably is not going to work.
    Mr. Prendergast. Thanks, Congressman Jackson. I think the 
MCC has been for a while the flavor of the month and so it is a 
bit sacrilegious to critique it, but I think it set itself up 
for eventual failure.
    Not initially, but if you are going to just promote islands 
of stability in the seas of instability without addressing some 
of the issues of sometimes failed states, sometimes eroded 
states, and we have no resources left to deal with those 
countries then what is going to happen to the few jewels that 
people put billions of dollars into when nothing is going to 
some of the other ones who are not performing as well? I think 
it is structurally a problem.
    And so the response then, and to almost echo David's issues 
with regard to the Greater Horn of Africa Initiative, in your 
legislative proposals with respect to Liberia we need to invest 
in a strategy that deals with the root causes.
    You know, looking at how you reform the security sector 
sounds so boring. My God, it is so fundamental to state 
construction. You know, it is so you do not have an abusive 
military, which is the source of so many problems. Not just the 
human rights abuses that that military commits, but then the 
rebellions that are sparked because of it that end up being the 
wars that we then spend billions of dollars to take care of the 
victims of.
    We have to focus our support for opportunities for young 
people. If there are not those opportunities, if there is not 
the educational and employment opportunities in places like 
Somalia today--we do not have a development assistance program 
there--so who do we leave the education to?
    Everybody knows what is going on. We are losing the game in 
the long run because we are trying to nickel and dime it right 
now and spending most of our resources on humanitarian 
assistance because we are not investing a little bit in 
prevention. This is why diplomacy, and I think President 
Obama's campaign and what his Administration stands for, focus 
on the United States' leadership, diplomatic leadership.
    You know, dealing with the fault lines in society that 
cause conflict and addressing those fault lines, getting at the 
root causes. It sounds like a mantra, but we do not do it. So, 
I mean, that is really what we have to do is focus--refocus--
our considerable diplomatic and developmental capacities on the 
root causes of what then causes us to have to spend way too 
much money in cleaning up messes that could be prevented or 
addressed in the first place.
    Mrs. Lowey. Mr. Kirk.

                      Opening Remarks of Mr. Kirk

    Mr. Kirk. Thank you. Madam Chairman, thank you for holding 
this hearing.
    John, you are uniquely positioned, as the Secretary of 
State is, to answer my questions, which require some 
remembering of critical decisions President Clinton made in the 
1990s with regard to the United Nations. Let me just review the 
record that we see in Sudan.
    According to Save Darfur, of which you are a director, 
UNAMID, the peacekeeping force in Sudan, has never fired a shot 
in self-defense. It has never initiated any offensive action 
inside its Darfur AOR. The U.N. Secretary General reported 12 
Janjaweed or government attacks in December and January, and 
there is no documented UNAMID response.
    UNAMID has a formal mission statement which requires it to 
confirm bombings, investigate attacks and monitor those 
attacks. In the UNAMID AOR it cannot enforce no-fly days 
imposed by the Government of Sudan to restrict humanitarian 
assistance.
    Now, UNAMID deployed in 2007, and from its deployment to 
date vehicle hijackings have gone from 137 to 277, a 102 
percent increase. Since UNAMID's deployment, abductions have 
gone from 142 to 218, a 53 percent increase, and attacks have 
gone from 53 prior to deployment to 192 today, a 106 percent 
increase.
    This committee has provided $718 million of taxpayer money 
to UNAMID. We are approaching the $773 million this committee 
provided to UNPROFOR, the United Nations Protection Force, in 
Bosnia.
    I read the UNAMID mandate. The direct words in the UNAMID 
mandate are to deter violence, robust patrolling, establish 
disarmament, create security conditions--here is my favorite--
ensure security of humanitarian workers, ensure, protect 
civilians and proactive patrolling. On Monday, four UNAMID 
soldiers were wounded. There was no response from the force.
    I recall, as you can, President Clinton's experience with 
UNPROFOR. Many times when I talk to people who are fairly 
knowledgeable of foreign policy I say you know, we really 
should have solved Iraq like the way President Clinton did, by 
going to the United Nations and getting a mandate before we 
went into Bosnia. Everybody shakes their head yes, that is 
right. That is what President Clinton did.
    Actually President Clinton got no mandate from the U.N. for 
Bosnia in the Kosovo war. A lot of people say well, we relied 
heavily on the U.N. peacekeeping force in Bosnia, and that is 
what helped solve the problem. It was President Clinton's 
decision to move the United Nations out of the way and move a 
NATO force into Bosnia that actually ended that conflict.
    I think a number of people in the Congress have completely 
forgotten the central lesson that President Clinton learned. We 
used to talk about UNPROFOR as the United Nations Protection 
Force for Bosnia. It was really the United Nations. It was 
neither very united, nor had very many nations, did not offer 
much protection and was not a force.
    And so I would ask you. Do you think that UNAMID is really 
the United Nations Accountants for Mass Internal Destruction 
and really is not adding very much value added as UNPROFOR did 
not, but at tremendous expense to the taxpayers through this 
subcommittee?
    Mr. Prendergast. Thank you. Well, on the surface every 
critique of UNAMID imaginable is probably justifiable, but I 
think we need to look at the context, the political context of 
the United Nations Security Council and the larger 
international community that doomed it to failure. Just a 
minute is all I need on this.
    Number one, we sent a peacekeeping mission, first an AU 
peacekeeping. We did not have the guts to even authorize a U.N. 
We sort of sent an AU peacekeeping mission out there without a 
peace deal, so we have sent an apple to deal with an orange in 
a crazy analogy.
    Secondly, we have sent this force out there to observe a 
peace deal that does not exist, but without even the requisite, 
the basic equipment necessary to allow us to have a chance of 
success.
    We made promises, going back three Administrations, to 
African forces all over the continent, along with our British 
and French allies. We said to them, and I saw it during the 
Bush I, saw it during Clinton, saw it during Bush II, that if 
you, Africa, will provide the troops, the human fodder, cannon 
fodder for these missions, we will give you the equipment and 
we will train you.
    We train them because it is cheap, but when it came time to 
provide helicopters and air support and the kind of grounds 
that----
    Mr. Kirk. If I could just interrupt you, because I do not 
agree with you.
    I have dealt with peacekeeping troops from other countries, 
and except for guard duty they are really not that capable. You 
need western military forces to execute a mission. The 
Government of Sudan knew that and so they directly forbid that 
to be, Part A.
    When you look at the TOE, the table of equipment, for 
UNAMID it is basically a World War I military just trucked into 
a place, and it is sitting on bases administering it itself. 
When I look at the key factor in operations in an AOR like 
this, it is helicopter support. I think UNAMID can rent two.
    The Government of Sudan has 43 helicopters, including 
Heinz, which are basically highly capable flying tanks. The 
danger here is that we claim to be doing something, and when we 
claimed to be doing something in Bosnia 300,000 people got 
killed.
    This committee felt very good. You know, I watched this 
committee as it felt very good in providing money for UNPROFOR, 
but it was a complete distraction and it was not until 
President Clinton and Madeleine Albright made the critical 
decision to push the U.N. out of the way that we actually 
stopped the slaughter.
    Mr. Prendergast. A brief, brief, brief response would be 
indeed the response of just giving a little bit more to UNAMID 
is not the answer. It means that we are just continuing to 
treat symptoms rather than causes.
    We need to do what we did in Southern Sudan, which is to 
work assiduously, the U.S. leadership, in brokering a peace 
deal in Darfur, and if it does not work or if the situation 
continues to deteriorate in Darfur we need to look at some 
other options that do not involve the United Nations that would 
involve some use of military force as Senator Biden, Senator 
Clinton and Susan Rice talked about in the run up to the 
election.
    So I actually think there are solutions. We just need to 
utilize the resources that we have.
    Mr. Kirk. Thank you, Madam Chair.
    Mrs. Lowey. Ms. Lee.

                       Opening Remarks of Ms. Lee

    Ms. Lee. Thank you, Madam Chairman. Also thank you for this 
hearing, and thank all of you for being here. This region of 
the world has been, quite frankly, totally neglected. I think 
all three of you have absolutely laid that out once again for 
us. I want to go back to Darfur, John, since you have been on 
this from day one. It does not seem to be getting any better.
    We declared genocide, but what it took in terms of enacting 
the mechanism to make sure that our declaration of genocide was 
real, that just, quite frankly, did not happen. Now we are 
looking at President Bashir being brought before the 
International Criminal Court. I think that is long overdue.
    Wanted to ask you, what is the implication, though, of him 
being brought before the Courts as it relates to the United 
States not being a part of the ICC? So what kind of influence 
do we have to help bring this criminal to justice? Secondly, 
let me ask you about the issue of the humanitarian workers 
because now, as a result of the arrest warrant, it is my 
understanding that Bashir has asked the humanitarian workers to 
leave and the humanitarian crisis is growing, so how do we 
address that?
    I am wondering if the White Paper we submitted, and you 
were part of this--Madam Chair, we worked with Majority Leader 
Hoyer and Mr. Payne and came up with a series of 
recommendations and a White Paper to submit to the new 
administration. We are still waiting to hear their response to 
the White Paper, but I believe many of the strategies that you 
laid out were incorporated in that White Paper, so I want to 
see if you are hearing anything from the administration in 
terms of what their overall strategy should be.
    Finally, let me just ask you about the numbers now in 
Darfur. What are the realistic numbers in terms of the people 
who have been killed? How are they going to survive through 
this next phase? Do we anticipate more people being killed, 
more refugees being run from their villages? You know, we have 
heard many suggestions but we cannot seem to figure out, you 
know, just exactly what to do.
    Personally, I think we need to use our chips with China. 
You know, I do not think the previous administration was ready 
to call China on the carpet, nor the Arab nations. We have 
talked with President Mubarak about this, and I know personally 
I have talked to the President of Algeria about this several 
years ago, but we cannot seem to get the world community to 
come down hard on what is taking place in Darfur. So I want to 
get your response and see what you think what else we can do.
    Mr. Prendergast. Okay. Great. Great questions, Congressman 
Lee. First, on the influence we have at the ICC, I think even 
though we are not a signatory, we have actually more leverage 
because of the ICC action than any other country because on the 
security council we are the one country that has been stood up 
and said we are not going to provide prematurely this Article 
16, which is the deferral of the case that the ICC charter 
allows in the interest of peace, we are not going to allow that 
prematurely.
    So we are standing in the way of President Bashir skating 
away for free. So he knows that in order for him to have to 
remove this sword of Damocles over his head, the United States 
has to be involved. I say it is a sword of Damocles. Look, 
there is no world police force. We are not going to go in and 
arrest this guy tomorrow. There is no capacity to do that.
    However, remember how Milosevic responded after he got 
indicted by the International Criminal Tribunal for Yugoslavia. 
He laughed. What tribunal? Eighteen months later, he is in 
prison. You know, Charles Taylor laughed. That was even funnier 
to him. You mean a tribunal based in Sierra Leone, this little 
country I have been dominating for the last 10 years and 
exploiting and taking all their diamonds, they have indicated 
me and I am supposed to somehow take this seriously?
    Eighteen months, 20 months later after he went to Nigeria 
he was captured by the Nigerians and sent to the Hague. I would 
not be dancing in the street if I was President Bashir for much 
longer. I think he ought to be looking over his back, not only 
externally at some of his allies, but internally within the 
National Congress Party. Who wants this millstone around their 
neck. They are going to have elections.
    The National Congress Party is going to run for president 
an indicted war criminal? I do not think so. I do not think it 
is the Taliban. We need to play this one very, very smartly. 
What that means is just like you are suggesting, we have got to 
go to Beijing which has an interest not in condemning, they are 
not going to vote for security council resolutions that condemn 
their commercial allies, but what they will do is they will 
support us in working towards a solution because their 
interests, their $8.5 billion investment in southern Sudan is 
at risk if the war resumes again in southern Sudan.
    The Egyptians are sick and tired of Bashir's support for 
Hamas, and Mubarak has said in no uncertain terms he is done 
with this guy, and the Saudis even are starting to have enough. 
You see these little articles popping up in the Middle Eastern 
press comparing Bashir to Saddam, which is very, very 
interesting. The wheels are starting to grind in the Middle 
East about this guy, and so if we play our cards right, I do 
believe we will see some progress.
    We cannot give this Article 16 up prematurely. We cannot do 
megaphone diplomacy without responses. We have to get in there 
and on a daily basis be discussing with the key countries that 
have a real leverage in Sudan. Just a note about what the U.S. 
Congress has done. Congress has been a battering ram against 
the last three administrations for them to do something about 
Sudan.
    They would not have done this comprehensive peace agreement 
that ended the war between the north and the south if it was 
not for years and years of activism on the part of people like 
yourself and many other congresspersons on both sides of the 
aisle. We would not have had the kind of extraordinary 
humanitarian assistance program led by the United States.
    By the way, no other country in the world combined gives as 
much as we do. What is that? That is a symptom, but it is 
actually to make sure that millions of people have not died 
like they did in southern Sudan. So the Congress has to again, 
I think. Even though we want to give the new administration a 
chance, it is seven weeks in or whatever it is, they have got 
to hear in no uncertain terms that we need action now.
    You know, President Obama was able to name George Mitchell, 
he was able to name Dennis Ross, he was able to name Dick 
Holbrooke as envoys. Where is the Sudan envoy? Where is the 
Great Lakes envoy? It does not take that much energy. You get a 
person, you put them out there and say it is your job, and put 
a little team together and go to work. In terms of number dead, 
I mean, the estimates are 350,000 to 400,000. It is a wild 
goose chase to find the numbers.
    We know, what, about 2.75 million people, maybe three, have 
been displaced, so that is a more firm number, but in terms of 
the number of dead, I think the evidence has been sort of 
whisked away by the sands of the Sahara Desert. We are never 
going to know.
    Mrs. Lowey. Mr. Chandler.

                    Opening Remarks of Mr. Chandler

    Mr. Chandler. Thank you, Madam Chair. Thank you for having 
this hearing. This is an area that so many of us know too 
little about, and it is very important for us to get this on 
our agenda as best we can. With that being said, I find myself 
mortified by what I hear. The information that you give leads 
me to believe that we have got a situation here that is as 
close to being insoluble as anything that I have heard about 
anywhere in the world given the history of it, the depth of the 
problems, the intricacy of the problems.
    I know that you put out some suggestions, but frankly, I 
would love for you all to give me an honest assessment of the 
need for or lack of need--I guess the best way to ask this is 
how can this be dealt with short of some kind of significant 
military intervention? I just do not know how you can get the 
security situation and deal with the governmental corruption, 
with these roving armed bands, I do not know how you can deal 
with all of these problems and then get back, get into a phase 
of humanitarian aid and nation building without some kind of 
military intervention from somewhere.
    Now, I am not about to suggest that we need to have a 
military intervention. Goodness knows we know what our 
situation is, and we know where we are in different places in 
the world, but if you could give me some assessment of how you 
get these regions in a situation where anything really 
ultimately can be done that can be lasting and meaningful 
without military intervention. Thank you.
    Mr. Shinn. Congressman Chandler, I think first my starting 
point is that there is no one out there who is going to engage 
in the kind of military intervention that you are suggesting 
which would be necessary to solve any one of these problems, 
not to mention the collectivity of them. Certainly the United 
States, in my view, is not prepared to do that. The United 
States has 43 peacekeepers in all of Africa today.
    Mr. Chandler. Well, can it really be solved, though, short 
of that? Do you really think it can be? I am not suggesting 
that it be done. I do not mean to say that. I am just wondering 
if you can solve it short of that.
    Mr. Shinn. If you look at history and the efforts that have 
tried to solve it up to this point one gets rather discouraged 
because there frankly have not been a lot of solutions in this 
part of the world. If you look at Liberia, Sierra Leone, or 
some other parts of Africa, there have been some solutions. The 
Horn is clearly the most conflicted corner of the world, and I 
agree with John on this, since the end of World War II.
    There is just one conflict after the other, and they are 
all interlinked and intermingled. That is why it is imperative 
to have a regional approach rather than a country-by-country 
approach. I must confess, I was very taken aback when Darfur 
developed as a serious crisis. Then there was very little 
attention to the north/south peace agreement in Sudan which, in 
my view, is potentially a much bigger problem than Darfur has 
been, although Darfur is pretty enormous.
    So you do have to look at it from the perspective of what 
is going on throughout the region. You do have to engage all of 
the partners who have some interest in this area. You cannot 
ignore anyone, and that includes China and that includes Russia 
because it is actually the largest provider of arms to the 
region. Whether you are going to get cooperation from some of 
these countries, who knows, but I think one has to try.
    That does mean you have to give high level diplomatic 
attention to it, and I agree with John on this. We may disagree 
on how to deal specifically with what is going on in Darfur, 
but I agree with the overall approach that that is the only way 
to do it short of major military intervention, which simply is 
not going to happen because no one is willing to do it.
    You look at the failed efforts to set up a peacekeeping 
effort in Somalia, for example. The Africa Union operation 
there is pathetic. You look at the UNAMID operation, and I 
would agree it has been highly unsuccessful, and I do not see 
it building up to the point where it is going to be very 
successful. All the United States has been prepared to do is 
write checks and provide logistical support and fly people in. 
They are not prepared to put troops on the ground, and it is 
not going to happen. So the best you can do, and it may not be 
enough, is to make an all out diplomatic effort.
    Mr. Prendergast. And the diplomatic effort would--you know, 
we said the same thing, people said the same thing about 
southern Sudan. It is insoluble, it is hopeless, blah, blah, 
blah. When the United States government invested in the peace 
process we went to the core issues and the core interests of 
these parties, we addressed them and within the 2-year process 
of those negotiations, the peace deal, which was an enormous 
accomplishment of the United States' foreign policy, was done.
    In Darfur, the issues are negotiable. Individual 
compensation, dismantling of this Janjaweed militia, power and 
wealth sharing, these are all issues that at the table they can 
be resolved. There is no table. Where is the United States? 
Where is the international community to do what we have 
actually proved can be done in southern Sudan, the same country 
with the same genocidal regime? It is remarkable that we have 
not done anything.
    This is the investment we need to make. Congo, the fuel for 
war is not there, it is here. We have got to start taking some 
responsibility, and that is going to be a huge role for 
Congress, I think, is to come up with that legislation that can 
verify that we are not purchasing minerals for our electronics 
industry that is actually fueling the deadliest war in the 
world.
    So there are many, many things that we can do in these 
places that can help. There is no magic bullet. We would have 
fired it a long time ago. There are things that we can do 
within our power as consumers, as a Congress, and as an 
administration and as a civil society like us that we can do 
that can actually make a difference. Sorry. Did not mean to 
interrupt.
    Mrs. Lowey. I was going to say, before we get to Mr. 
Israel, let us go to Mr. Baldo.
    Mr. Baldo. Many of the solutions that are needed and not 
military. On the contrary. These problems are just not soluble 
through military action. If we limit ourselves to the Great 
Lakes region, first I agree with Mr. Shinn that these are all 
interlinked conflicts of a regional nature.
    The Lord's Resistance Army is a Uganda rebel group that is 
now causing a lot of damage in four countries, in eastern 
Congo, in southern Sudan and in southern Central African 
Republic and potentially with the possibility of going back 
home into northern Uganda and disrupting the progress that has 
been made. Therefore, there is no way of dealing with these 
problems country by country. It has to be a regional approach.
    Second, the United States is a major actor. There are other 
major actors out there. What is needed is the multilateralism. 
You know, regional approach is multilateralism, just to say. 
Coordinate policy with the other international players with 
influence in the region, mainly European Union, leading 
European Union member states and share the layer of regional 
actors with a lot of influence.
    Eritrea qualifies, Libya does. You know, some of them are 
not traditional diplomatic partners but we have to face the 
reality that if you want to prevent this cycle of violence 
either in the horn of Africa or in Central Africa, we must take 
into consideration the influence that regional powers have. 
South Africa is very influential in the region of southern 
Africa and in the horn and so on, and then the African Union is 
subregional organization, the EGAD and so on.
    Third, the issues could be resolved through leverage. All 
the countries in the region, whether Rwanda or Congo, depend on 
the international donor community to supplement, you know, 
their functioning budgets. There is direct budgetary support 
for the governments of Uganda, Rwanda and DRC, and some 
liberties, you know, some little pressure could help achieve a 
lot of development at the level of peacemaking, peacebuilding 
and addressing security risk.
    This is exactly what had happened in the joint campaign 
between Rwanda and the DRC because Netherlands, Sweden, just to 
stop their budgetary supports for the Rwandan government and 
the next day Kizani agreed with Kabila that we need to address 
the issue of these abusive rebel groups from our country who 
are there. Therefore, solutions have to come from the region 
but the international community can apply pressure and get 
things done.
    This is diplomacy, this is policy and it does not need 
military responses. The military response is actually not wise 
to resolve these issues. Thank you.
    Mrs. Lowey. I would like to continue that. Thank you. I am 
going to turn to Mr. Israel, but at some point, I know for 
those of us who have interacted with Mbeki and even Mandela, 
people are dying, starving in Zimbabwe, Sudan. We have gotten 
no assistance through the years. Let me turn to Mr. Israel and 
perhaps we can pursue that some more, I think.

                     Opening Remarks of Mr. Israel

    Mr. Israel. Thank you, Madam Chair. I would like to follow-
up on this line of thought. I believe in muscular diplomacy and 
robust multilateralism, but I think you have got to have 
something to back that up, for as long as we delay, delay and 
delay, Bashir and others will defy, defy and defy. Let me 
suggest one asset that has been largely overlooked with respect 
to Darfur that some in Congress have given some attention to 
but I think it needs to be explored more fully.
    Near the border of Sudan and Chad is the Abiche airfield 
which is currently operated by, actually, the French. In 2007, 
I offered an amendment, which passed, to the Defense 
Authorization Bill, and I did this with my colleague, Ms. Lee, 
that asked the Department of Defense to do a feasibility study 
as to whether the Abiche airfield is feasible for humanitarian 
operations.
    And, in fact, once an airfield is feasible for humanitarian 
operation, it is feasible for other operations as well. The 
Department of Defense did a classified study, reported to 
Congress, and without going into the details of that classified 
study, obviously, the next step would be to actually fund some 
upgrades to the runways at Abiche.
    The government of Chad supports this, the government of 
Chad has indicated that it would cooperate with this, the 
government of Chad believes that that would be a very strong 
signal to send to Bashir that the world is taking this 
seriously, so seriously that it is putting money in to expand 
an airfield for humanitarian operations.
    We are going to pursue that in the current fiscal year 
Defense Authorization Bill, seeing if we can provide language 
stating that it is a priority of the United States Congress to 
see Abiche upgraded and provide those funds. My sense is you 
may not agree with this, but I would like your opinion as to 
whether if in a multilateral setting if France, and the United 
States, and Chad and other countries began to upgrade the 
capacity of an airfield that is within 200 miles of Darfur, 
what the consequences of that would be with the regime in 
Sudan.
    Mr. Shinn. I think it would require knowing a little bit 
more about what the potential use of that field is going to be. 
If it were announced as strictly a humanitarian operation, 
Sudan may or may not accept that. It may assume it has a more 
nefarious purpose behind it. That would probably give the 
Bashir government some pause for concern. I do not think there 
is any question about that.
    Pressure does have a role in this part of the world and 
with this government. I spent three years in Sudan, not when 
Bashir was in power but with other governments in Sudan, and I 
have some feel for how they think. It would leave a question 
mark in his mind. Let me put it that way. That might be good. 
If it were in the meantime carrying out legitimate, useful, 
humanitarian operations, that is for the good.
    I have been to Chad but not to Abiche. I have been to 
Darfur, but I do not know the Abiche airfield, so I do not know 
from a logistical point of view exactly what it would add to 
the humanitarian operation to that which is already going on. I 
am just not in a position to judge that. But if it would add in 
a quantitative sense to improving the humanitarian operation 
there, that is positive.
    Activating the airfield would leave a question mark in 
Bashir's mind as to what is this airfield really for. But at 
some point Bashir is going to come to the conclusion that it is 
just for humanitarian assistance and I do not have to worry too 
much unless it is, in fact, used for something more than that, 
at which point I might start being troubled by what we were 
trying to accomplish with it. I am just not sure that military 
action in this part of the world, particularly by western 
forces, gets us very far. I have seen too many cases where it 
did not.
    Mr. Baldo. Just to add here. What are the worst-case 
scenarios today in Darfur? With the rising tensions around the 
involvement of the International Criminal Court and the events 
there, we do have a population of victims of 2.5 million in the 
internally displaced camps, we do have multiple totally 
unaccountable militias that are roaming around these camps, and 
in the event of a worst-case scenario I could imagine, you 
know, militias attacking camps for the displaced because of 
some retaliation for the suspected support, for example, of the 
indictment of the president or because of, you know, there is a 
policy to dismantle the camps or disburse the displaced so that 
they are not so visible.
    If that happens it will be an immediate major humanitarian 
disaster. It is necessary to have that capability for 
humanitarian purposes on the Chadian end of the border to 
address precisely, you know, that kind of major humanitarian 
disaster. I see the likely scenario given that there are no 
viable peace efforts to resolve the conflict peacefully, and 
now the trend is actually on the contrary, rising tensions and 
rising confrontations with the international community.
    Mrs. Lowey. Thank you. Mr. Rothman.

                     Opening Remarks of Mr. Rothman

    Mr. Rothman. Thank you, Madam Chairman. Thank you, 
gentlemen, for your distinguished service. I read your 
respective written testimonies. Ambassador Shinn, you make an 
argument that I have not heard before, your section about the 
Sudan, where you say U.S. policy is not well-served when it 
says that genocide is continuing today in Darfur.
    You then cite a report that says from an expert, as you 
describe him, that violent deaths in 2008 in Darfur were only 
relative to the charge of genocide of 1,550 violent deaths in 
Darfur, presumably not meeting the threshold definition for 
genocide. You say it is time to acknowledge that the situation 
has changed and that this label of continuing genocide is 
inaccurate and counterproductive. Have I summarized your view 
on that?
    Mr. Shinn. Yes, sir.
    Mr. Rothman. Can you elaborate on that?
    Mr. Shinn. Yes. I think that it is important when we are 
making policy to be making that policy on the basis of the 
facts that we have at the time they are being made. I am not 
talking about 2003, 2004, or 2005 in Darfur. I am talking about 
today, I am talking about through 2008. You get into all kinds 
of definitional problems when you start talking about genocide, 
but genocide is very emotionally laden.
    Whenever that term is used, as awful as things have been in 
Darfur, and I would be the first to acknowledge that, I do not 
think it crosses the threshold of the definition of genocide. I 
would agree that I am one of the very few people who is willing 
to stand up publicly and make that statement. I think there are 
a lot of others out there who may agree with me, who have 
looked at it from an academic point of view or who know the 
region, people like Alex deWaal, who has said it publicly.
    Mr. Rothman. But, Mr. Ambassador, what would be the 
diplomatic or public policy benefit in no longer using the term 
genocide to describe what is going on in Darfur?
    Mr. Shinn. Simply a degree of honesty. That is all. Just 
acknowledging the situation for what it is.
    Mr. Rothman. So it would not have any practical benefit to 
the people of the Sudan.
    Mr. Shinn. No. That we do not know. If one is to approach 
the problem of Sudan with a greater degree of honesty--and I 
made two points that are very controversial, one was this one 
and one was the list of state sponsors of terrorism--I think 
you will have a better response from the people in the region. 
We do not know what the response would be from the Sudanese.
    Mr. Rothman. Are the other nations in the region offended 
by labeling what is going on in Darfur genocide?
    Mr. Shinn. Let me put it this way. Offended, probably not, 
but the United States is the only nation in the world that has 
ever declared what is going on in Darfur as genocide. The only 
nation in the world. Does that not raise some issues? Why is 
the United States the only country to call this genocide?
    Mr. Rothman. Well, if we called it mass slaughter, would 
that be better?
    Mr. Shinn. Other nations call it crimes against humanity. I 
am not even judging what it was back in the 2003 to 2005 
period, but I just point that out by way of fact we have to be 
more honest when we deal with these issues. That is the only 
point I am trying to make.
    Mr. Rothman. Okay. I accept the academic notion of proper 
use of terms. I am just wondering what the practical benefit 
would be beyond that accuracy in the use of verbiage. On the 
Congo, do either of you two gentlemen have any notions--I know 
Mr. Prendergast talked about using consumer power in some way, 
the west consumer power to in some way better the situation in 
the Congo, but as I read it, this is a conflict primarily 
between two major militias, and so how would efforts as 
consumers address their conflict for power and domination?
    Mr. Baldo. Well, there are a multitude of militias very 
often operating at the very local level in resource-rich areas 
in the DRC, in the Congo. The land is so rich in many areas you 
just have to do some digging to find diamonds, or gold, or 
cassiterite which is a material for tin, and so on. Timber, 
coffee are also other forms of riches in that country.
    To in a way address the issue of the link between illicit 
resource exploitation and violence, because it is in the 
fighting at the local level between these militias over control 
of mining areas and between corrupt army officers, whether of 
the Congolese Army or during the war of occupying armies of 
Rwanda and Uganda, that most of the killing occurs and most of 
the violence and the sexual violence occur because all the 
fighting men have one thing in common, they all prey on 
civilians and they are all perpetrators of mass violence 
against civilians. Just what you do when you have the gun and 
the civilians----
    Mr. Rothman. So forgive me. Would you make the connection 
then between the consumer efforts and improving the situation 
there?
    Mr. Baldo. Exactly. These resources enter into global 
economies through Kigali and Kampala. For gold, for instance, 
Kampala, Uganda, has a production of only a few kilograms of 
gold, but the Central Bank of Uganda in its official statistics 
gives a number in the tons. Similarly, it is known that Rwanda 
is not a producer of many of these special minerals that go 
into information technology gadgets, and, you know, advanced 
industries.
    The international community could simply mandate that no 
minerals are imported from countries that do not produce it. 
That would immediately have the effect of really creating a 
clogging of the system.
    Mr. Rothman. So the Ugandan and Rwandan forces in the 
Democratic Republic of Congo would then, you believe, withdraw?
    Mr. Baldo. Now they are not present there. They are only 
present when they go by invitation of the Congolese government 
as has happened of late.
    Mr. Rothman. And how would that address the local militias? 
The native militias?
    Mr. Baldo. Well, you know, if you do proper investigation, 
as the United Nations has done through its materials, you could 
find links between these militias and state access, including 
the Congolese government itself and influential people in the 
army financing militias, buying these resources from them, 
exporting them through contacts, you know, in the regional 
markets for these minerals.
    Interestingly, because of this economic interest, in the 
conflict, you know, you will find that there are business 
interests between the Congolese Army and the militia of the 
democratic forces for the liberation of Rwanda which the 
Congolese Army is supposed to be fighting. Together there have 
been linkages of an economic nature that were documented by UN 
investigators.
    Mr. Rothman. Thank you, doctor. Thank you, Madam Chairman.
    Mrs. Lowey. Before I want to turn to Mr. Schiff, Mr. Baldo 
you know that the U.S. Ambassador to Congo and the U.K. 
Ambassador are trying to put together a task force just to deal 
with the issue that Mr. Rothman referenced. They are working on 
it to deal with this issue that you referenced. So we can 
follow-up on it. You are probably aware of that.
    Mr. Baldo. Yes.
    Mr. Rothman. I am just going to another panel.
    Mrs. Lowey. That is quite all right. Send them my best. I 
should be there, but I am not going there. Mr. Schiff.
    Mr. Schiff. Thank you, Madam Chair. Thank you, gentlemen, 
for being here. I wanted to turn the topic in a different 
direction to Somalia. Ambassador, you mentioned in your 
testimony that the U.S. had essentially abandoned Somalia after 
1994. I think that is largely true. To the degree that we have 
been focused on Somalia, it has been intermittent, largely 
unsuccessful, uncoordinated and lacking in any really 
comprehensive policy direction.
    The question is what should our policy be now? We have a 
new president there, we have a supposedly moderate Islamic 
government, we have al-Shabab in the wings, we have a limited 
ability to intervene or act there because of the dangerous 
situation. I am not suggesting that we have some kind of 
military action there, but I am asking what role can we play 
constructively?
    Should we try to find ways to support this new government 
based on what we know about it or would our support for a 
government therefore damn the government in the eyes of the 
people there? Some have suggested it is so hard to get 
international aid into Somalia that we should establish through 
the international community a form of green zone in Mogadishu.
    I know you have recommended us focusing on trying to help 
them build a police force, but given the difficulty we have had 
in Afghanistan developing a police force, we found there it is 
much easier to build an army than a police force. I think you 
have, you know, some of the same clan dynamic in Somalia that 
it would be very difficult to build a police force potentially, 
a national police force in any event. What do we do? What can 
we do constructively in Somalia?
    Mr. Shinn. Thank you very much for the question, 
Congressman Schiff. I wish there were more interest in Somalia 
generally. On the Hill there are a number of people who do have 
an interest in it but it is not a very large group. The 
immediate problem in Somalia today is the issue of security.
    There is a window of opportunity right now, and that is the 
current new government of national unity. It is a combination 
of the former Transitional Federal Government (TFG) that the 
United States supported very strongly, which has been joined by 
the so-called moderate group of Islamists, actually, former 
members of the Islamic Courts Union in Somalia, the people that 
the United States was once opposing.
    That grouping has divided into various factions and the 
more moderate part of it, the Sheikh Sharif portion, is now 
working with the TFG. It is not clear whether this government 
is going to be widely accepted by the Somali people. We simply 
do not know. It is clearly being given somewhat more of a 
chance by Somalis generally in the country than the previous 
Transitional Federal Government, which was not doing the right 
kinds of things in order to ingratiate itself with the people 
generally.
    This government may trip and fall, too, but in the 
meantime, I think there really is no good option to doing 
anything other than trying to support it. By doing so, I am not 
suggesting that the United States should be out front and 
center at this point. I think this is frankly a time for the 
United States to quietly step back, let the Somalis do what 
they do best, which is to talk to each other. Let them engage 
in their own dialogue in their own way and work things out.
    Sometimes they do not work out, and in recent years they 
have not worked them out, but give them an opportunity to see 
what they can manage by bringing into the fold some of these 
dissident elements, the most difficult one being the al-Shabab 
group, the militantly religious organization that is opposed to 
this government. I am not convinced that all of that al-Shabab 
group is that committed to a radical ideology.
    I think there are some who are opportunists, some who can 
be eventually brought along to the moderate side, and I think 
that is the way to go. In the meantime, I think it is important 
for the United States to have in mind some kind of support for 
a development program once security becomes appropriate. You 
cannot do that now. There is no way to do a development program 
in Somalia today, but you have to be able to step in quickly 
when that is possible.
    The police force idea, I agree it is a gamble. There is 
absolutely no guarantee a police force would work, but Somalia 
has one interesting thing going for it. It has a very long 
history of a proud and professional police force. It is 
something that Somalis have always felt very strongly about. So 
it may not be the same situation you had in Iraq, for example. 
I am not saying it will work, but I am saying it is worth a 
chance.
    That is a medium term solution. You cannot have police go 
in and try to combat heavily armed al-Shabab right now. That is 
not going to work. So I see the police force as more of a 
medium term solution, and in the meantime, one has to muddle 
through on the security side by leaving the very weak Africa 
Union force there to keep the port and the airport open. That 
is important to keep them out of the hands of al-Shabab.
    The focus now should be on the political side and 
supporting the current government and helping it behind the 
scenes, whatever one can do, perhaps bringing the Arab League 
more into it, to peel away those opponents that still do oppose 
that government, with the hope that eventually it can stand on 
its own two feet.
    Mr. Schiff. Thank you. I do not know if you would like to 
add on to that as well?
    Mr. Baldo. Well, I am in agreement with this line 
definitely. It is the time for perhaps the new president to 
widen the support base of his government, and he is working 
very hard on this, coming from the background of, you know, 
because they were not on the same side, they were actually the 
opposition force to the previous government as the Islamic 
Courts, and to build a region of support base within Africa and 
in the Arab League region.
    I believe the potential is good. The outlook is that, you 
know, there is some expectation that this time Somalia may 
finally have a working government. So we are in this 
expectation and we will see where things will be heading.
    Mr. Schiff. Thank you, Madam Chair.
    Mrs. Lowey. Thank you both. Before we close the hearing I 
have one additional question, and if you do, you are certainly 
welcome to ask it, Mr. Schiff. This subcommittee was in 
northern Uganda about a year and a half ago when there was 
still hope that Kony was going to sign a peace agreement. We 
met with some of the rescued girls and rescued boys, and there 
was a feeling of optimism that perhaps in spite of all the 
challenges there would be some movement towards a future in 
Uganda.
    Now, we know that the U.S. military was helpful as an 
advisor, we understand, in the recent military action which 
led--we saw in its wake murder, decapitation, rape, the ugliest 
scene. Over 150 people were either killed, or maimed, or 
destroyed by this recent action. I have a question for both of 
you. Do you have any comments on what, if anything, should be 
done now? How do you take action, if that is what you would 
recommend, to minimize or reduce the impact on civilians?
    Mr. Baldo. The prospects for peace have really helped 
create a real momentum in northern Uganda. Even before the 
conclusion of the UBA process there was a movement of people 
out of the camps going to their own areas and trying to revive 
their shattered lives and so on. Suspicion from Kony, in 
particular, was a key obstacle for concluding that peace 
process.
    He never believed the commitment of the government that 
once he had signed, then they would apply the other 
accountability mechanisms and will request the International 
Criminal Court to withdraw its arrest warrants against him. The 
government is committed to applying these mechanisms regardless 
of the fact that the peace has not been formally concluded.
    Therefore, they are forging ahead with the establishment of 
a special chamber in the high Court to try, you know, some of 
the war crimes out of Kenya and northern Uganda, they are 
preparing alternate mechanisms for the use of traditional 
justice as agreed, and some mechanisms for reparations for 
victims and to extend the benefit of the amnesty law to those 
willing to come out from the rebellion.
    One of the top people, deputy of Kony, who is also indicted 
by the ICC, has actually asked to be given amnesty and is 
negotiating his, you know, hand-over by an intermediary 
humanitarian actor to the government for amnesty. The 
government has had also as part of that package adopted a very 
ambitious reconstruction program because the problem of 
northern Uganda is economic and social marginalization and the 
lack of investment of the national wealth in infrastructure and 
development effort in north Uganda.
    The government of Uganda really has to do a lot of effort 
to bridge that gap. It has developed a program which receives a 
lot of international donor support, but the government is not 
doing much at this time to implement that program. It is a 
key--a key--prerequisite, I believe, for returning northern 
Uganda to stability, and to peace and to a sense of some 
belonging to their country.
    Once the people see that there is an effort to try and 
introduce, you know, a measure of compensation for many, many 
years of neglect from the government and many years of 
marginalization. I believe without that commitment from the 
government of Uganda, you know, the chances of lasting peace 
will be minimal. This is an area where again diplomacy and 
policy could play a major role by really pushing the government 
of Uganda to stay committed to this approach. Thank you.
    Mr. Shinn. Madam Chairwoman, it is an awfully good question 
and you raise yet another horrific problem in this part of the 
world of which there are far too many. I agree with what 
Suliman said. I cannot add a great deal to his comments except 
that my own personal view is that I do not think Kony has any 
intention of ever signing a peace agreement and abiding by it.
    We have gone through these charades so many times. How many 
times do you have that football pulled away before you decide 
to stop kicking at it? The one thing that I would add, though, 
that I think needs to be looked at more is the degree to which 
you can use traditional methods of conflict resolution among 
the Acholi people.
    They have their own systems for dealing with conflict. Many 
in the West would find these systems very disagreeable because 
they do not accord with western systems of justice at all, but 
there has been some history in using them and they have 
actually had some success, at least at local levels, in the 
Acholi area. I think that there has to be some more attention 
given to that because I sure do not see anything else working 
out there.
    I do not think that the International Criminal Court action 
achieved anything either, quite frankly. Arguably, it worsened 
the situation in the case of the Lords Resistance Army (LRA). I 
think it is time to look at some traditional mechanisms of 
conflict resolution. It probably is not going to solve the Kony 
problem, but it might solve some of the issues underlying the 
Kony problem.
    Mrs. Lowey. Would that include military action?
    Mr. Shinn. The traditional mechanisms are very much based 
on local systems of justice, and, in some cases, letting some 
people off with a lot less than we would ever accept in a 
western system of justice. That is why we find them so 
disagreeable. In the context of the Acholi people, they have 
been shown on occasion to work. I am just arguing that there 
has to be more attention given to that.
    I do not want to suggest that this is going to resolve the 
problem of Kony. It will not, but if it can at least reduce the 
amount of violence in that region, that is a starting point.
    Mr. Schiff. Just one last question, Madam Chair. I wonder 
if you would mind giving us any thoughts in terms of Yemen, the 
status of any issues in Yemen that we should be concerned 
about, and whether you have any policy recommendations.
    Mr. Shinn. We are probably not the best people to be 
addressing Yemen. I have been there, though that does not make 
me an expert. I am concerned about the willingness of the 
Yemeni government recent many years to carry through with what 
it says it is going to do in terms of being supportive on 
counterterrorism and related issues. There have been too many 
occasions when they have not followed through, and, in some 
cases, have done the opposite of what the United States 
expected from them.
    This is very troubling. I was just reading a report the 
other day where it appears that some of these Somali pirates 
are being aided and abetted from: Yemeni territory. These may 
be private activities not those by the government, but if this 
is true, it is very disturbing because it is up to the 
government to stop that sort of thing. The government of Yemen, 
in theory, should be in a position to stop it.
    I think we are dealing with a government that is very torn 
between its continuing in power because of the views of the 
people that it represents, on the one hand, and wanting to 
maintain a decent relationship with the United States, on the 
other, and other western governments. As a result, you are 
getting a very ambivalent response out of that government. I am 
really not an expert on Yemen. I wish I did have a list of 
things that ought to be done, but I really do not.
    Mr. Schiff. Thank you, Madam Chair.
    Mrs. Lowey. I would like to thank you again for your time. 
This concludes today's hearing on Africa. The Subcommittee on 
State Foreign Operations and Related Programs stands adjourned. 
Thank you.
                                           Thursday, March 5, 2009.

   THE ROLE OF CIVILIAN AND MILITARY AGENCIES IN THE ADVANCEMENT OF 
            AMERICA'S DIPLOMATIC AND DEVELOPMENT OBJECTIVES

                               WITNESSES

DR. JOHN J. HAMRE, PRESIDENT AND CEO, CENTER FOR STRATEGIC AND 
    INTERNATIONAL STUDIES
NANCY LINDBORG, PRESIDENT, MERCY CORPS
AMBASSADOR GEORGE MOOSE, VICE CHAIRMAN OF THE BOARD, UNITED STATES 
    INSTITUTE OF PEACE
DR. GORDON ADAMS, PROFESSOR OF INTERNATIONAL RELATIONS, AMERICAN 
    UNIVERSITY SCHOOL OF INTERNATIONAL SERVICE

                 Opening Statement of Chairwoman Lowey

    Mrs. Lowey. The Subcommittee on State, foreign operations, 
and Related Programs will come to order.
    My ranking member I gather will be here any minute.
    Good morning. I welcome our distinguished panel, Dr. John 
J. Hamre, President and CEO of the Center for Strategic and 
International Studies; Ms. Nancy Lindborg, President of Mercy 
Corps and a recognized leader in the NGO community; Ambassador 
George Moose, Vice Chairman of the Board of the United States 
Institute of Peace; Dr. Gordon Adams, Professor of 
International Relations at American University School of 
International Service.
    We really look forward to hearing from you today on this 
very important topic.
    As you probably know, I strongly believe that foreign 
policy decisions rest with the Secretary of State as the 
principal adviser to the President, and this authority should 
neither be delegated by the Department of State nor superseded 
by any other department or agency in the executive branch.
    With this in mind, today's hearing will examine the 
relationship between the civilian agencies and the military in 
the formulation and execution of foreign policy.
    Last month, the Chairman of the Joint Chiefs of Staff, 
Admiral Michael Mullen, told an audience at Princeton 
University that United States foreign policy has become too 
militarized, end quote. I could not agree more. I have a 
growing concern with how the lines of responsibility between 
civilian agencies and the military are increasingly blurring, 
with the Department of Defense playing a larger role in 
diplomacy and development. I believe in the long run this will 
have a detrimental effect not only on the civilian agencies and 
America's reputation, but also on our military and ultimately 
our national security.
    Now, let me state clearly that I believe the United States 
military is the very best in the world, and they prove every 
day that they are adaptive, creative, innovative and serve our 
country with distinction. Yet the fact remains that if the 
civilian agencies are not stepping up to the plate, this does 
not mean that the job should fall to our overburdened military. 
It means that policy makers in Washington must provide support 
for and demand more from the civilian agencies.
    Today's panel of outside experts will explore with us the 
militarization of foreign policy and the toll being placed on 
the Department of State and the Department of Defense as well 
as on USAID.
    I would like this hearing to address several key issues. 
First, we have all witnessed the increased role that the 
military has recently played, often by necessity, in diplomacy 
and development, especially in insecure areas like Iraq and 
Afghanistan. Operationally what are the unintended consequences 
of this increased role to both diplomats, foreign assistance 
professionals, and the efforts of the NGO community, and what 
is the unintended consequence to United States foreign policy 
and how it is viewed by our friends and adversaries? On a 
practical level, what type of coordination and division of 
labor is necessary between the civilian agencies and the 
military to make any joint effort work, and is there confusion 
about who speaks for the United States?
    Additionally, there is growing consensus that the resources 
of the military and civilian elements of our national security 
apparatus are grossly out of balance. What will it take to get 
the civilian agencies in a position to fulfill their roles, 
particularly in nonpermissive environments? On a related note, 
what are the consequences of dueling security assistance 
authorities between the Department of State and Defense?
    As I said in our hearing last week on growing the 
diplomatic and development workforce, I cannot remember any 
other time during my service in Congress when diplomacy and 
development assistance were viewed as coequal components of 
defense in relation to our Nation's national security. 
Secretary of Defense Robert Gates in July said our diplomatic 
leaders, be they in Ambassadors' suites or on the State 
Department's 7th floor, must have the resources and political 
support needed to fully exercise their statutory 
responsibilities in leading American foreign policy.
    I wholeheartedly agree and welcome the growing support for 
strengthening civilian capacity and believe that it is critical 
that we take advantage of this pivotal moment of consensus on 
this issue. This subcommittee has already begun to expand the 
capacity of USAID and the State Department because we all know 
that soft power is a more cost effective alternative to 
military interventions. Yet increased capacity will not 
materialize overnight.
    So then in the interim how do we move forward? Civilian 
agencies and our military have vastly different missions, and 
although they are not mutually exclusive, they cannot be 
substituted for or replace one another. So now is the time for 
Congress and the Obama administration to aggressively increase 
support for civilian agencies, strengthen our development and 
diplomatic capabilities, relieve an overburdened military, and 
provide the political support for the civilian agencies to 
exercise the responsibility Secretary Gates called for in July 
2008.
    No one would dispute that a failure to act rapidly 
increases the risk to vital United States security interests. 
But the Congress and the administration must stop taking the 
easy and quick-fix route of providing duplicative authorities 
and overburdening our military while demanding results of 
civilian agencies without equipping them with the tools or 
resources needed.
    So I look forward to working with Secretaries Clinton and 
Gates and the Chairman of the joint Chiefs of Staff, Admiral 
Mullen, to create the framework for the United States 
Government so that they can execute their mandated areas of 
responsibility in a coherent and coordinated pursuit of the 
United States foreign policy objective.
    I look forward to hearing from this impressive panel of 
witnesses today as we explore this critical issue. But first I 
look forward to hearing from our ranking member, Ms. Granger, 
for any comments she may have. Ms. Granger.
    Ms. Granger. Thank you, Madam Chair. And thank you for 
holding this hearing on the role of civilian and military 
agencies in advancing U.S. diplomatic and development 
objectives. Last week the subcommittee held a hearing on the 
21st century workforce needs for the Department of State and 
USAID, and today we continue that discussion by examining the 
future of the civilian-military relationship.
    I want to thank the distinguished witnesses for coming and 
for sharing their insights on this important topic. You are the 
people we need to hear from.
    It has become clear that future threats to U.S. national 
security will require an approach that incorporates all three 
Ds, defense, diplomacy and development. It is also important 
that military and civilian agencies increase the level of 
cooperation in Washington and in the field in order to succeed. 
But over the last few years, civilian agencies have experienced 
difficulty carrying out their core functions, forcing the 
military to take up traditional civilian roles. That has 
created imbalance in the 3 Ds and strained areas of cooperation 
between the military and civilian agencies.
    Secretary Gates, as well as other military leaders, have 
acknowledged that future success in preventing conflict and 
stabilizing post-conflict situations requires a civilian 
component that can work effectively in partnership with the 
military. Recognizing the value of strengthened civilian-
military cooperation, the Congress has provided resources to 
build the civilian agencies so they can more effectively 
advance U.S. interests. In addition to funding the Department 
of State and USAID staffing initiatives, the Congress 
appropriated $75 million in the fiscal year 2008-2009 
supplemental and another $75 million is included in the fiscal 
year 2009 omnibus bill to support the standup of a civilian 
reserve capacity.
    Now that funding is in place and the civilian agencies are 
establishing civilian-military policies and programs, the 
Congress is monitoring closely whether the 3 Ds are returning 
to the appropriate balance. I look forward to hearing your 
views, the views of the witnesses on our progress and the 
prospects you see for achieving this goal.
    And I thank you for being here, Madam Chairman.
    Mrs. Lowey. Thank you. And members of our panel, of course 
we would be appreciative if you could summarize your statement 
for the record. Your total statement will be entered in the 
record, and I want to make sure that we have plenty of time for 
questions. So the order of recognition will be Dr. Hamre, Ms. 
Lindborg, Ambassador Moose, and Dr. Adams. We will begin with 
Dr. Hamre.

                     Opening Statement of Mr. Hamre

    Mr. Hamre. Chairwoman Lowey, Ranking Member, all of the 
colleagues on this committee, thank you for inviting me to 
participate. This is the first time I have had a chance to 
appear before this subcommittee. I have been in front of the 
Defense Appropriations Subcommittee about 100 times, but I have 
never been invited here before. So I think it took 8 years of 
exile from the Department before I was invited and I do want to 
thank you for including me and thank you for taking the 
testimony. I am going to depart a little bit from it because I 
think the nature of the way you framed the discussion this 
morning differs a bit from my testimony, so if I might react to 
your statements and then open up for just a few observations.
    I think, Chairwoman, you highlighted the central problem 
when you talked about nonpermissive environments. I don't think 
there is a big dispute, I know there is no dispute from a 
Defense Department standpoint about the leadership we expect 
the State Department to give us in peaceful environments, and I 
know that the State Department doesn't have any quarrels about 
us being in charge when we are shooting. I think the question 
that is awkward is when you have difficult, compromised, 
insecure environments and we need to work together. That tends 
to be the problem.
    Now, unfortunately, when we are in insurgency warfare, this 
tends to be a very long and prolonged period. It is not the 
case for conventional war. You know the first Iraq war was 35 
days, you know, it was over, and then it was a very different 
environment. We are involved in insurgencies in the last years 
and we are up against an opponent who intentionally blends into 
civil society, making it dramatically more complicated. We know 
we can't win insurgency warfares with violence. Those are won 
through political gestures. And political gestures in a, as you 
say, in a nonpermissive environment blend use of force and the 
use of soft power means. And so how do we construct that in a 
smart strategy in a very complex and difficult environment?
    Now these last 6 years have not gone well. We went into 
Iraq with probably an inappropriate model for what we 
anticipated we would confront. We didn't manage dynamically an 
evolving environment very effectively, and in honesty, our 
partners, I say ``our,'' I am speaking from a DOD standpoint, 
our partners in the civilian agencies didn't have resources 
that they could bring to the fight. So the Defense Department 
stepped in. It isn't a role that they seek. They would much 
prefer, frankly, they would much prefer not to have to do the 
economic engagement. But when you just didn't have the 
resources, many years of underfunding of the State Department 
and candidly not an operational culture in the field where you 
have an insecure environment, where it just created a highly 
unique circumstance that the military would prefer not to be 
in.
    Now, 7 years ago when I first went, actually, 8 years ago I 
first went to CSIS, I had just lived through the experience, I 
had been Deputy Secretary of Defense and I had lived through 
the challenges of Bosnia. And we knew how to get in a war. We 
didn't know how to rebuild civil society. So we launched a 
project to try to identify what does it take to succeed in 
post-conflict reconstruction? And Nancy was one of our 
commissioners. Congressman Wolf was one of our commissioners. 
And one of our early projects we did was to draft a template of 
all the things that have to be done in a post-conflict, in this 
kind of an environment, during the initial response when they 
are still shooting, in the transition phase to a stable 
environment, and then in the sustainability phase, in four 
different dimensions.
    Probably only 10 percent of these tasks belong to the 
military. You know, most of them belong to the civilian 
agencies. But they don't have the capacity to deal with it, and 
I would have to honestly say today they don't really have the 
capacity.
    So to sum up, you need to give resources to the civilian 
agencies to do their job.
    Number two, you have got to hold them accountable for 
producing capability that can go into the field with the 
military, otherwise the military will have to do this.
    Three, we need to start developing a framework where we can 
work and regulate the business of contractors on the 
battlefield. That framework has not been in place. We are now 
overreacting in the wrong way, and we are making it more 
compromised and more difficult. We have to get this right.
    And finally, we need to work out in insurgency situations 
the working relationship between government and nongovernmental 
organizations. I think we have especially in insurgent 
situations highly compromised circumstances that we have NGO 
people involved with and their relationship with us. This has 
to get worked out and it doesn't exist now.
    I would be happy to amplify during the question period. 
Thank you very much for inviting me.
    [The statement of Mr. Hamre follows:]

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    Mrs. Lowey. Thank you. Ms. Lindborg.

                   Opening Statement of Ms. Lindborg

    Ms. Lindborg. Thank you very much, Chairwoman Lowey and 
Congresswoman Granger, and members on the committee. I echo the 
appreciation for tackling this very critical topic, and there 
is an extraordinary consensus I think emerging on the need for 
smart power and for rebalancing our three Ds and the capacity 
to address these very critical challenges, and so we do have 
this amazing opportunity right now.
    I speak as the head of an operational NGO, Mercy Corps. We 
work in 35 conflict affected and transitional countries around 
the world. So I really speak from that experience of being on 
the ground where often it is the NGOs, the journalists, and the 
military who are there. And we see firsthand the need to work 
out these systems and these approaches that enable all of our 
capacities to be fully harnessed.
    These are challenging and deeply critical environments 
where you have got countries burdened by a very potent brew of 
poverty, weak governance, and conflict, and it is imperative 
for our national security interests that we determine the best 
way to address that.
    My greatest fear against the backdrop of what we said in 
terms of the lack of resourcing for our civilian capacities is 
that as the military has stepped into this void and we all 
appreciate that they have in fact shouldered burdens that were 
not otherwise able to be addressed, that we may be learning the 
wrong lessons. As we have equipped our military with additional 
capacities and additional authorities, created mechanisms like 
AFRICOM and the PRT, that we risk confusing short-term 
insurgency fighting methods, short-term security goals and 
approaches with our longer term development needs and 
objectives. And we need to understand that there is value in 
both and that they will require different approaches to enable 
both to fully go forward.
    We frequently have had to figure out how to work in these 
very tough environments. I would flag that in the last decade 
we talked quite a bit about complex humanitarian emergencies. 
The greater challenge for this decade is complex development. 
As John mentioned, we have many environments where what the 
military is calling counterinsurgency, we are seeing insecure 
environments that are plagued by poverty and poor governance 
and insecurity, and the challenge is how do you adapt the 
fundamentals of good development to these complex development 
environments? But first and foremost among those is the need 
for a community-led approach, and at a recent event hosted by 
USIP, World Bank President Robert Zoellick in fact noticed that 
community-led and community ownership of development is 
critical for legitimacy and authority of development processes. 
We need that process to be able to move forward, even as we are 
looking at the shorter term security objectives.
    Mercy Corps and other colleague agencies have had that 
experience in places like Iraq where we have interrupted 
uninterruptedly since 2003 with support and funding from USAID, 
where we were one of five NGOs working nationwide on a 
community action program. And I think it shows some of the 
models of how we might be able to construct community-based 
development programs even in the midst of a very insecure 
environment, where we use mechanisms such as community 
acceptance, where communities buy into these projects, they are 
their projects, and they vote on what projects will go forward. 
They vote on where our offices will be located. We have had no 
security incidents with any of the programs that we have 
conducted during our time there. Communities have invested 
significantly their own resources into these programs as well, 
and all of this has been done by unarmed civilians, the 
majority of whom are Iraqis. And they know full well that this 
is a gesture and a program funded by the U.S. Government. To 
the extent that when Katrina hit, a group of Iraqis joined 
voluntarily together to donate money to the victims of Katrina, 
recognizing the hand that the U.S. had extended to them.
    I would just sum up by saying that as we look forward to 
what we might do to help redress the balance, I would start by 
rethinking the PRTs. We need to create structures that allow 
both the short-term and the long-term development objectives to 
be pursued by both the military and the civilian.
    We should look at civilianizing 1207. This is an authority 
that was an inefficient workaround that is serving now to have 
the Pentagon fund projects through USAID. It is more efficient 
if USAID just does that for the post, the conflict prevention 
objectives that it is meant to serve. We need longer term 
funding that is more flexible, that enables the kind of 
flexibility that the military has with the CERP funds that can 
be deployed on the ground to move us quickly as these conflict 
environments move but through civilian structures.
    As has been noted, we must rebuild USAID which operates 
with less than half the staff that it had a decade ago, and I 
think there is a good start with the Obama administration's 
fiscal year 2010 international affairs budget and its request 
for $51.7 billion, especially with the emphasis of increasing 
personnel for State and AID.
    I look forward to the conversation. Thank you.
    [The statement of Ms. Lindborg follows:]

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    Mrs. Lowey. Thank you. Ambassador.

                 Opening Statement of Ambassador Moose

    Mr. Moose. Thank you, Madam Chair, Ranking Member Granger, 
and members of the committee. I too am grateful for the 
opportunity to appear before you and for the committee's 
interest, the subcommittee's interest in this particular 
subject, which I think is critical to the conduct of our 
foreign policy as we go forward.
    I mentioned in my prepared remarks that I have benefited 
from my affiliations with several organizations that have taken 
a profound interest in this subject, among them USIP, Search 
for Common Ground, and LMI Government Consulting, but that my 
remarks will reflect strictly my own personal views. I thought 
that essentially my prepared remarks focused on what I believe 
is required to restore some semblance of balance between the 
military and civilian dimensions of our machinery for 
conducting U.S. and international security policy, and I won't 
rehearse those views here.
    I do think it is important to note, partly in response to 
previous comments, that I think this rebalancing is important 
across the full spectrum of our foreign relations, not only in 
hot, nonpermissive environments or even in environments which 
are partially secure and partially insecure, but the fact of 
the matter is our military is present everywhere in the world 
and they are increasingly active across the board, and so the 
question becomes how do we ensure some effective integration of 
those activities with the rest of the foreign policy activities 
of our government.
    I have tried in my prepared remarks to reinforce the 
testimony of colleagues from last week; namely, the case for a 
major increase in the capacities of the Department of State and 
other civilian international agencies. But as I looked at my 
testimony last night I thought it might be helpful to try to 
situate my remarks, perhaps that of others, in a somewhat 
larger context that is insofar as I can discern that larger 
context from where I sit down here in the trenches.
    As members of the subcommittee are aware, there has been a 
rich discourse going on around this town for the last several 
months, all of it turning on the question of how to reform and 
restructure our national security architecture. Those 
conversations certainly have been driven by the events of 9/11 
and how we might better organize our foreign policy national 
security resources to address the threats that 9/11 exposed.
    They have also been driven by our experiences in Iraq and 
Afghanistan of trying to bring to bear the full capabilities of 
our government in order to accomplish our goals of 
reconstruction and stabilization.
    Starting with Iraq, in particular, that conversation has 
prompted precisely the question of how we better integrate the 
tools in the field, and that conversation has led to at least 
one construct, the PRT, which is an effort to try to bring 
together the elements of our military, diplomatic and 
development capabilities at the operational level. There have 
been similar kinds of conversations taking place at various 
levels of the Defense Department, both here in Washington but 
also in the field, and I would note notably at AFRICOM and 
SOUTHCOM.
    At a more strategic level, there is the project of our 
national security reform which was funded by the Congress which 
has undertaken an examination of what might be done to achieve 
integration across Federal agencies, both military and 
civilian, and that study too starts with the assumption that 
the security challenges that we face are of such complexity 
that they require us to draw upon all the capabilities of 
government and to bring them together in whole of government 
approaches.
    That discussion at the Center for the Study of the 
Presidency has had a parallel at what John Hamre's organization 
has been doing over at CSIS under the rubric of smart power, 
and I believe that those two conversations, the one on national 
security forum, the one on smart power, are very much informing 
the conversations that are taking place at the NSC these days 
about what the future organization structure authorities of the 
new National Security Council ought to look like.
    Very much related to this is the conversation that my 
colleague, Gordon Adams, has been involved in over the question 
of reorganizing and restructuring foreign assistance, and Nancy 
as well. And that conversation certainly got a boost from 
Secretary Rice when she arrived at the State Department and 
quickly discovered how difficult it was to array the resources 
of our foreign assistance portfolio and to align them behind 
what she and President Bush determined were their national 
security priorities. And I would say that that is a problem 
that faces any administration given the fragmentation and the 
way that we do our foreign assistance and foreign policy 
budgeting.
    And closely connected to that has been another conversation 
about the role of public diplomacy, how we conduct the need for 
new structures within government, but beyond that how we 
leverage the capabilities, the resources, the contributions of 
nongovernmental actors in order to achieve that.
    Now, last but not least, there is a discussion that has 
been taking place in some parts of town about how what we do 
here in the United States somehow gets linked to what is 
happening overseas. And that conversation stems from a 
recognition that at the end of the day these problems, national 
security threats, foreign policy issues that we address, are 
simply too large for us to be able to deal with on our own. We 
need to figure out how we leverage of resources of others. 
Carlos Pasqual, over at Brookings, has been very much a part of 
that conversation.
    Now, returning to my remarks, the central point I want to 
make in this hearing is that the role of the State Department 
is, in my view, central to all of those conversations, and it 
is because that is where traditionally these issues get 
integrated, and it is quite true that in cases like Afghanistan 
and Iraq, which are major challenges to security, the fact at 
that level that requires a major role of the NSC. But there are 
simply too many problems out there for the NSC to be able to 
take them all on unless one envisages moving the entire 
apparatus of the foreign policy of the United States into the 
West Wing of the White House. We need therefore to rebuild the 
State Department as the centerpiece of a model, of a paradigm, 
of a structure that allows for the effective coordination of 
all aspects of our foreign and international security policy, 
which includes not only again the hot situations, the 
nonpermissive environments, but how we integrate those things 
across the board. And my experience is in Africa, and I can 
tell you that the security challenges in Africa require 
contributions from diplomats, development experts, and the 
military if we are to solve, help Africans solve the challenges 
that pose threats to their security, but which if unaddressed 
also pose long-term threats to our security. That begins with 
rebuilding the State Department, but I also think it goes to 
the question of the authorities and the mandates which have 
been eroded over time and which need to reviewed and restored.
    Thank you, Madam Chair.
    [The statement of Mr. Moose follows:]

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    Mrs. Lowey. Thank you.
    Dr. Adams.

                     Opening Statement of Mr. Adams

    Mr. Adams. Thank you, Madam Chair, Congresswoman Granger, 
and committee members, for having this hearing. I think it is 
critically important and quite unusual, I think a very unique 
precedent to have this subcommittee hold a hearing on this wide 
a topic, which is of course in the end structure and process 
and institutions are all going to be central to the decisions 
you have to make in this subcommittee. So I congratulate you 
for having the hearing, and I am happy to join the rest of my 
panelists in saying well done and a good start.
    What I am going to say will be very brief because we have a 
lengthy statement. I am not going to try to lumber you with the 
whole thing, but I wanted particularly to point out that much 
of what I say is based at least on two pieces of work with 
which I have been associated with other people both here at the 
table and on the dais. Congressman Kirk, who had to leave, was 
a member, a co-chair of a task force at CSIS which I sat on, on 
nontraditional security assistance which informed my thinking 
in this area greatly. And we have, as you know, and I have made 
copies available, done a report with the American Academy of 
Diplomacy at the Stimson Center on what we need to do to 
strengthen the tool kit of statecraft on the civilian side for 
the United States Government. So those two experiences plus my 
own experience at OMB and in the research world have influenced 
what I have to say.
    I am not a doctor and I don't play one on television but I 
thought I might cast my oral statement somewhat in the 
framework of diagnosis, prognosis and cure, to see if that at 
least lays some steps toward discussion in the question and 
answer.
    Diagnosis, I think quite simply we have, as you stated, a 
growing imbalance between our military and civilian tools of 
statecraft. And I would argue that is not healthy, hence the 
medical metaphor. It is not healthy for our military, it is not 
healthy for our civilian instruments, and it is not healthy for 
the American role in the world. And I will come back in terms 
of prognosis to what I mean by that.
    But the diagnosis I see in such areas as five new spigots 
and programs for security and foreign assistance in the Defense 
Department under DOD authorities over the last 8 years, which 
have cost us now as taxpayers a total of $50 billion in 
expenditure directly through the Department of Defense. And I 
see it in the seven spigots and programs that we have for 
stabilization and reconstruction operations across the 
government, many of them new and many of those in the 
Department of Defense.
    I see the diagnosis in the increasing tendency to develop 
civilian engagement capacities in military commands, AFRICOM, 
SOUTHCOM, whose commander is a fine man, basically describe 
SOUTHCOM as a giant velcro cube to which other parts of the 
government could attach itself. And increasingly I was quite 
struck, for example, that General Petraeus was leading an 
across-the-board, governmentwide review of our CENTCOM policy, 
particularly with respect to Afghanistan and Pakistan. And my 
question, coming back to George's question, was why is that 
review not being led in the State Department? Why is it being 
led by a military command? And that results in a yawning 
imbalance.
    We see other areas of activity that you are not less 
concerned with today, but public diplomacy, which George 
mentioned, is another one of them where there is a growing area 
of activity at DOD that is not well understood or even well 
studied.
    Prognosis. I think there are three consequences of this 
that do not bode us well for the future of American national 
security and foreign policy. Consequence number one is in fact 
an overstressed military, that we are asking an institution in 
uniform to perform an increasing number of functions which are 
not central to their core capacities, but we are asking them to 
do them nonetheless. Occupations, the civilian side, as Dr. 
Hamre mentioned, of counterinsurgency warfare, public diplomacy 
activities, economic development, building health clinics, 
schools and the like, all of which are wonderful things in high 
stress combat environments to have the military try to do, but 
have real severe consequences for the overall capability of our 
military in combat terms.
    Second consequence, a weaker civilian tool kit because to 
the extent that we rely on the military as the default 
position, we are increasingly saying to the civilian side let's 
not bother because we now have the military assuming the role.
    And third consequence, a message to the world, and this to 
me is perhaps the most serious, that to the rest of the world 
the American international engagement increasingly wears a 
uniform and however much we may respect our uniformsists and 
the jobs that they do, that is not always welcome in other 
parts of the world.
    In addition to that, we are sending to some parts of the 
world, Latin America, for example, a message that says we have 
spent decades asking you to keep your military in its barracks 
and out of politics and governance; meanwhile, we are inserting 
our military more and more into politics, governance, economic 
development and other activities in your countries. It is a 
mixed message that we are sending.
    Cure. I think it is important, and I think it was Nancy 
Lindborg who suggested it, that we not learn the lessons of the 
last post war. We often learn the lessons of the last war. 
Well, we are learning some lessons of the last post war. And 
there are real dangers in learning those lessons or taking Iraq 
or Afghanistan as the template for the capacities and 
structures that we need to build.
    Issue number one, strategy, what is it we intend to do? And 
Nancy raised that question. If what we are looking at is how we 
deploy civilian forces alongside a major U.S. military 
deployment, that is going to give you one kind of capacity. If 
what we are looking for is smaller scale international 
interventions where the primary responsibilities are civilians 
and the military is there as a security force, that is a 
different kind of capability. If what we are concerned about is 
strengthening governance in fragile and failing states or 
helping restore it in recovering states, that may be a third 
kind of capability.
    And in my testimony, and I am happy to discuss it more in Q 
and A, I talk about how we need to strengthen State, how we 
need to strengthen USAID, much of it drawn from the report that 
we did with the Academy, and particularly, and that is part of 
the focus of my testimony, is what we need to do to move 
transition, some of these authorities that have been created in 
the Defense Department over to the State Department as we build 
capacity in the State Department to take them on and perform 
them.
    And I will take questions happily. Thank you very much for 
the hearing.
    [The statement of Mr. Adams follows:]

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    Mrs. Lowey. Thank you very much for your praise. As you can 
see, this committee is very interested in this topic, and in 
fact so is every think tank in town, as Ambassador Moose 
mentioned.
    I am just going to try to keep us all to 5 minutes, 
including myself, so that we can talk quickly and then perhaps 
have several rounds. Before I begin a line of questioning, Dr. 
Hamre, you said something and I wondered if I heard it 
correctly, and the White House has been talking about it, you 
said we need a framework to regulate contractors.
    To hear that from you as a military person is really 
shocking to me. We know what Stuart Bowen did as the SIGIR. Now 
are you saying there is no system? Or we need people at the 
Defense Department who are going to do what they should be 
doing? You can answer that quickly if you would like. It is 
shocking to me there isn't a system in place.
    Mr. Hamre. I think the system has become quite confused----
    Mrs. Lowey. Is it the people who are confused or the system 
is?
    Mr. Hamre. I think the system is, and let me give you an 
example. How can we acquire technical services to support the 
government? This is a fundamental question. And we could 
acquire it, but we have decided that we can't afford that. And 
so we have chosen to go into the private sector to buy it. 
Should that be in the profit seeking side of the private sector 
or the nonprofit seeking side? It is very unclear. We have 
profit seeking organizations that are operating policy 
positions inside the government. We have nonprofit 
organizations that are running profit making operations. It is 
completely confused.
    It has become confused in recent years for several reasons. 
One is our personnel system for civil servants is obsolete. We 
do not hire the right people to manage contractors. It is a 
very profound problem.
    I would like to come back to you on another day. It is a 
much bigger issue than people realize. And it is not 
superficially the question we have evil people doing wicked 
things in the government. That is not the case. They are 
struggling with obsolete systems, obsolete policies, and we 
have been trying to make it work under very changing and 
dynamic circumstances.
    So I would be pleased to come and talk with the committee 
at another time.
    Mrs. Lowey. I would be interested in that and certainly our 
ranking member, Mr. Rothman, currently serves on the Defense 
Subcommittee. We do have expertise here on this committee. But 
it is shocking to me. You make some very good points but, boy, 
we could use some of those billion dollars here, and I would 
hope we would be able to figure out what to do with them at 
State and USAID. So we will get back to that issue.
    Ms. Lindborg, I just would like to follow up on a couple of 
things you had said. Will the NGOs first of all accept 
assistance from military sources? Is humanitarian space still a 
concept that the United States should try to ensure? Or is it 
your observation that insurgencies are deliberately targeting 
aid workers regardless of who provides the funding and 
therefore makes the concept irrelevant?
    Ms. Lindborg. Those are all the critical questions that our 
community is facing and struggling with. The majority of NGOs 
as a matter of policy do not accept funding directly from the 
Department of Defense. There are exceptions, but most of the 
interaction----
    Mrs. Lowey. I didn't necessarily mean funding, assistance. 
For example, in Afghanistan the military met with us and they 
are building schools. And AID was saying by the time--that is a 
matter of staff, too--by the time they contract the military 
already built the schools. But then there are those who will 
tell us that they, as you mentioned with the CAP program in 
Iraq, that they can operate perfectly well without the military 
assistance. I mean assistance from, work with.
    Ms. Lindborg. The greatest value that the military can 
provide in complex development environments is everything 
possible to increase security, ambient security, security that 
enables both the people to invest in their own future who are 
living there and development actors, including NGOs, to assist 
them to do that. And the challenge in insecure environments is 
that, especially when you have got U.S. troops playing both a 
combat role and a counterinsurgency role, is that it can 
actually undermine our ability to work by being associated with 
military troops.
    There is an example recently in Afghanistan with a 
colleague agency where they built a clinic and, despite efforts 
to stop it from happening, the PRTs built a clinic a kilometer 
or so away. And those are not about development needs. Those 
are about hearts and mind needs. But by not having better 
coordination and by not having the primacy of the development 
objective, you undercut the ability to move towards longer term 
development objectives, and you make more likely that the 
targeting will happen.
    Your question is that will you be targeted anyway whether 
you are associated with the troops or not? We think that, you 
know, we have to go into these situations eyes wide open. But 
increasingly there are methods, remote management approaches, 
ensuring that you----
    Mrs. Lowey. What does that mean, remote management 
approaches?
    Ms. Lindborg. In places like Somalia and Iraq and 
Afghanistan, you can still provide development assistance where 
you are using primarily the local communities to drive their 
own development forward, which is the most important aspect of 
actually accomplishing those longer term development goals. 
There are numerous studies that show that it is this deep 
poverty, the deep illiteracy that is connected to conflict and 
keeps a lot of these countries from being able to advance more 
quickly, combined with many of the other factors.
    Mrs. Lowey. So are there ever any benefits of military-NGO 
coordination?
    Ms. Lindborg. The benefits are if you are able to stop that 
clinic from being built in a way that undercut the clinic that 
was just built by an NGO, communication, yes, for them to come 
visit our sites can be terribly undermining if we are then 
associated with the military. Our greatest value as NGOs is to 
be able to communicate that people-to-people support for 
communities to develop based on their vision, so that they own 
the development process. The military is inherently constrained 
from doing that by virtue of being associated with their own 
objectives. That doesn't translate into a community looking 
forward to its own future.
    Mrs. Lowey. Last year, I know that DOD in cooperation with 
USIP published a set of guidelines for relations between U.S. 
Armed Forces and NGOs in nonpermissive environments. And I have 
heard that a similar project to establish clear guidelines for 
relations between the military and NGOs in permissive 
environments may be forthcoming.
    So in just a couple of minutes, if you can just clarify for 
us again what is the role of the military in your judgment, if 
any, in providing foreign assistance in permissive or friendly 
environments, now that I have less than a few seconds.
    Ms. Lindborg. The guidelines which were produced, which 
were extraordinarily helpful and I think advanced the 
understanding and mutual respect and knowledge of the military 
and the NGO communities, were specifically in nonpermissive 
environments. The challenge that we have is they were 
addressing humanitarian action, lifesaving action. As we look 
at this complex development environments, that is yet a 
different set of goals. The third is the permissive 
environments, the kinds of activities that go on in AFRICOM 
that Gordon mentioned, where it is 100 percent hearts and minds 
approaches, there is no--there are plenty of civilian capacity 
in places like Uganda and parts of the Horn of Africa where you 
at the same time have AFRICOM actors digging wells and building 
schools.
    I would argue that we need to rethink the role of the 
military doing any kind of development assistance in permissive 
environments because it fundamentally undercuts the long-term 
objectives that are an important goal for supporting fragile 
countries.
    Mrs. Lowey. I am going to turn to Ms. Granger. But I think 
the question still is the nonpermissive environments and how do 
you coordinate effectively, and what are the guidelines. So we 
can get back to that.
    Ms. Granger.
    Ms. Granger. There are so many questions. But I think that 
everyone up here and I think you all agree that there needs to 
be a rebalancing, that we would all agree with that. In that 
rebalancing, what priorities do we begin with? In other words, 
we could start arguing over, that the military should do this 
or not, but what are the priorities? And Dr. Hamre, I will 
start with you but anyone can answer that.
    Mr. Hamre. Well, forgive me for taking people back to this 
framework that we developed, but would you put this in the 
record, please? I think you should, and the reason why, have 
somebody go through and say who does these various boxes? I 
mean they all need to be done.
    Mrs. Lowey. So ordered.
    Mr. Hamre. There are several hundred tasks that need to be 
done in the transition from a nonpermissive environment to a 
permissive environment. And who should be doing these things? 
Department of Defense shouldn't be doing these things. 
Department of Defense doesn't want to do these things. And the 
problem is this very long extended nonpermissive environment 
that has evolved with insurgency wars. Nancy and I are very 
good friends, and I respect what she said. I do want to say one 
thing.
    The military has a very valid role to play in using 
construction things during a nonpermissive environment to start 
establishing working relationships with local leaders. It is 
part of what they have to do. It is getting out of this kinetic 
world into a nonkinetic solution. And there is a role for that. 
That is why the commander's response funds are so important. 
And so the priority would be, ask people to sit down, ranking 
member, and look through all the tasks and say, who is doing 
these things? And I think what you are going to find is too 
many people arguing about authorities and not enough people 
saying what do we do? Let's try to figure out what do we have 
to get done and who is really doing these things? I think you 
will be surprised to find we have got gaping holes in the 
government.
    Mr. Moose. Thank you. I have a slightly different take on 
this, but it begins with I think the core of the problem is one 
of lack of capacity in the civilian agencies to manage the 
kinds of tasks that we would like them to perform. What we have 
seen in consequence is kind of a downward spiral; that is to 
say, in recognition of the lack of capacity in the State 
Department, USAID, political leaders eager, desperate sometimes 
to find solutions to problems, have looked to the places where 
there are resources and what better place but the Defense 
Department, which has billions of dollars. And that has become 
a downward kind of a spiral in terms of the response of the 
political leadership.
    It has to begin, I think as our colleagues last week said, 
with the effort to rebuild the capacity of the State 
Department. As one of Gordon's colleagues from the Stimson 
Center said yesterday, the construct is a three-legged stool. 
We have one leg on that stool that is like 4 feet tall and the 
others are like nubs. And so we have to begin to rebuild those 
capacities.
    If you were to turn to the State Department today and say, 
assume responsibility for the management of the $50 billion in 
programs that have been developed under the Defense Department 
over the last decade or so, they could not do it. They don't 
have the personnel resources. They don't have the staff.
    I will give you a particular example, which is AFRICOM. In 
my conversations with my colleagues at State as well as with 
General Ward and his colleagues out in the field, one of the 
things that is absent in that construct is somewhere, some 
place back here in Washington that actually brings together 
these various capabilities that AFRICOM has said it wants to 
incorporate into its structure. Now I happen to think that is 
probably not a bad idea for them to do that, but I also happen 
to believe that absent some mechanism back here in Washington 
that ensures that the activities of the command are indeed 
fully integrated and fully consistent with our overall policy 
goals, that is not going to happen. But the State Department 
currently has no means, no capacity, no staff, no structure to 
undertake that important coordination function. It is not a 
function the NSC realistically should be asked to assume. It is 
a function that I believe belongs in the State Department, but 
until and unless there is the staffing, and frankly going into 
the report that Gordon referred to, you know, I strongly 
endorse the recommendations in that report but I frankly think 
it understates the actual capacity needs and staffing needs and 
training needs of the Department if indeed the Department is to 
resume its responsibility, reassume its responsibility for the 
central coordinating and integrating function.
    Mr. Adams. I have my little checklist here, what to start 
with and where to go, because and I agree very much with what 
George has just said. Number one priority, oddly enough, is a 
relatively small one, and this is a congressional 
responsibility in part as well, as well as an executive branch 
responsibility, and that is to act now to ensure that whatever 
authorities are in place do not become part of permanent law, 
an absolutely critical, near term step because if the 
Department of Defense comes up in this administration, I have 
no idea whether they will or not, and seeks, as they have for 
the past 3 years, permanent law status for things like CERP and 
section 1206, then you have institutionalized the problem that 
we are focused on in your hearing today.
    So it is a relatively small step but a very important 
signal that says we understand that there is a problem of 
capacity in State, in USAID. We understand that we have 
military deployed forward in the field and cooperating NPRTs. 
What we want to do though is figure out what the right 
rebalanced relationship needs to be, not institutionalize those 
authorities. So that would be my number one near-term, 
relatively small but important to buying the time for figuring 
out two other things.
    Second, what are we doing? As I suggested earlier, if the 
question is an operational one, and I put John Hamre's 
statement in the operational category, how do we associate 
civilians with U.S. military operations in combat environments, 
that is a particular type of dilemma. It may not be of the size 
of Iraq or Afghanistan, but it may be a real problem that we 
need to solve in which Department of Defense needs permanent 
authorities to do very specific kinds of things, but very 
specific in very specific environment, not very broad, with a 
lot of funding and a lot of people doing things they probably 
shouldn't be doing.
    So we need to answer the strategic question in order to 
know what it is we are trying to solve. If the problem is, as 
an alternative, what goes within the range of what Nancy 
Lindborg does for a living to problems of government, failed 
states, fragile states, and development, then what we really 
need to focus on is the civilian capacity, to upgrade that 
capacity. So that is a second priority.
    Third priority is human resources at State. George has been 
eloquent on this subject. But both State and USAID need human 
resources. John's contracting problem is rampant at USAID where 
many of the staffers are now contract managers because most of 
the actual in-the-field work has been handed to contractors 
given the weakness of the institution. That is a trend that we 
argue in the report that George referred to needs to be 
reversed in the State Department.
    Fourth, the highest priority needs--I think this is longer 
term I would say, I don't know if George would agree with me on 
that, but revamping and reforming the Foreign Service of the 
United States. Our civilian engagement needs to be populated, 
in my view, with people who know more than report, negotiate 
and represent. Those are very important skills. They also need 
to know about program development, program management, program 
implementation. They also need to know about strategic 
planning, about budgets. So there is a training and recruitment 
issue, and there is a question of ensuring that the career path 
for those people takes them to Department of Defense, takes 
them to Justice, takes them to the NSC so that they have 
actually populated different experiences, takes them to AID as 
a development officer so they learn those skills and can walk 
and chew gum at the same time.
    And finally, I think the appointment of a second Deputy 
Secretary of State here is a critical first step on this one, 
is integrating strategic planning and budgetary planning 
professionally at the senior level in the State Department so 
you can build the kind of capacity that George is calling for 
but you can do it right at the top of the building with 
somebody responsible for it. The absence of strategic and 
budget planning capacity at the top of the State Department is 
one of the biggest weaknesses that undergirds some of these 
other institutional problems.
    Mrs. Lowey. Thank you.
    Mr. Schiff.
    Mr. Schiff. Thank you, Madam Chair, and thank you all for 
being here. I wanted to just share some thoughts and get your 
reaction because, Dr. Adams, I might put the order of what you 
suggested in a different form, and that is I would think the 
first thing that we have to do is build State Department's 
capacity. Because right now the capacity to do a lot of things 
in terms of our government only inhabits the Defense Department 
because we have allowed State to atrophy and we are not going 
to be able to turn responsibilities over to State if they don't 
have the capacity. So I would think the first thing we need to 
do is build up the State Department's capacity, Foreign 
Service, USAID.
    Then I think we need to redefine Department of Defense's 
mission. I think you are right. Department of Defense doesn't 
want to do a lot of things we are asking them to do, and I 
don't think it is good for the DOD to do them because it 
overstresses and strains the military. They do some things 
extraordinarily well, and I think we have some tough questions 
to answer about whether we want to try to develop a parallel 
capacity at State for some things that the military does really 
well. The immediate relief in the face of the tsunami, for 
example, in Indonesia. They have the logistical capability to 
move in quickly to remote areas and provide aid in a way that 
may be prohibitively expensive to develop at State, but you may 
not need to develop it at State as long as you define the 
military's mission in the initial stages of disaster relief and 
figure out what is most appropriately done, what is most cost 
effectively done. And I think we need to look at all these 
things.
    Authorities that you mentioned, 1206, I am a little 
concerned by the DOD Directive 1404, which is as of last month, 
and that seems to be continuing potentially down the wrong 
direction.
    And I think we have an opportunity to do that in the 
context of the budget for the Defense Department. The President 
has indicated, you know, nothing is going to be sacrosanct 
anymore. We have some hard fiscal choices to make, and maybe 
the best way to approach redefining DOD's mission is to do it 
in the budget context when they need to find money to do the 
things that are more part of the core military mission and 
can't afford to be doing the State Department's job as well.
    The other aspect that was brought to my attention when I 
had a meeting at the State Department last year is that while 
we need to expand State Department's capacity, there are other 
departments that need to be deeply involved also. And we don't 
necessarily want to replicate at the State Department what the 
Department of Agriculture does. But right now there isn't a 
career path for people at the Department of Agriculture to go 
and spend a couple of years in Afghanistan and come back to ag 
and know that their job is still not only there but has been 
advanced by being in Afghanistan.
    Other departments have that tradition. Department of 
Agriculture may not, and the Department of the Treasury may not 
and Department of Commerce may not and other people that we may 
need to pull into this. So it may not just be rotating State 
Department through other agencies as in tapping the expertise 
of other agencies.
    Probably the hardest part of this I think, Madam Chair, is 
going to be our own responsibility and trying to wrestle with 
our friends at the Defense Subcommittee and so we have our own 
jurisdictional difficulties. But anyway I would love to get 
your reaction in the remaining time I have left.
    Mr. Adams. I will take the first cut and others will 
certainly respond.
    Since you suggested that our order of priorities is 
different, the only reason I put the authorities first is that 
I think it is right now timely to stop the trend in order to 
buy the time for what was my second order of priority, and I 
fully agree with you on that, which is building the capacity at 
State and USAID because it takes time to build the capacity. 
You have to recruit, you have to change the recruitment 
process, you have to recruit the right people. We have to do 
more with mid career accessions which is not always favored by 
the career people who are currently in the Foreign Service. We 
have to look at how we assign people on rotations that 
incentivize them to gain a wider range of experience. We have 
to look at the Foreign Service human resources process to 
ensure that that is right. We have to look carefully, and this 
I would definitely emphasize, we have to look carefully at what 
capacity we are building.
    I think you are right at State. I have my own doubts that 
building the capacity we are now building through SCRS is the 
right capacity in the right place at State and USAID. And as I 
say in my testimony, I would urge very strongly a step back and 
a relook at the balance between NSC, SCRS, regional bureaus and 
USAID with putting a reinvigorated USAID much more in the role 
of being the recruiters, trainers, deployers and operators of 
the civilian capacity, properly sized for the kinds of 
strategic decisions we made.
    I think you are quite right. There are a lot of things that 
need to happen.
    I also agree with you that the military very clearly has a 
role. The military has done remarkably effective work in 
disasters, as you underlined, and should because they have the 
lift and supply capacity. There is no reason to build an 
airlift capacity at State and USAID to do what the Department 
of Defense does.
    What begins to concerns me is when we look at the 
humanitarian and disaster relief authorities in the Department 
of Defense and note that as part of its legislative package, 
the Defense Department seeks to expand that humanitarian and 
disaster relief authority to cover stabilization.
    That is an issue that I think the committee, both the 
authorizers and appropriators, need to take a close look at, 
because that is a further extension of mission in that capacity 
that they do so well, adding to burdens, detracting from 
responsibilities on the civilian side, and with implications on 
how we engage overseas, as I said in my statement.
    Mrs. Lowey. Thank you. Mr. Israel.
    Mr. Israel. Thank you, Madam Chairwoman. Like the ranking 
member, I don't know where to begin.
    Let me first commend to the subcommittee's attention a 
statement that Ms. Lindborg made in her testimony that really 
stood out for me, and that is there are more service members in 
military bands than there are Foreign Service officers at the 
Department of State and USAID. That is a pretty compelling 
indicator of where we are.
    I served for 4 years on the House Armed Services Committee, 
and I had to give that up to come to the State Foreign Ops 
Appropriations Subcommittee. So I have my own perspective on 
this, having been a defense authorizer and now a State 
Department appropriator.
    I just want to share one of the more insightful experiences 
that I had as a lead-in to my question. Congressman Jim 
Marshall from Georgia and I when we were on the HASC visited 
two very remote fire bases in Afghanistan in the Helmand 
Province, fire base Ties and fire base Robinson. These fire 
bases were near a small village called Musikalia. Musikalia had 
changed hands between the Taliban and Coalition Forces three or 
four times. While we were there, Special Forces was planning 
yet another operation to take Musikalia back.
    So I was meeting with a small group of special forces 
personnel. I asked is Musikalia supportive of the Taliban, are 
they supportive of us? How come it keeps switching hands?
    The answer was, sir, they are not supportive of the 
Taliban, they are not supportive of us, they are good betters. 
They hedge their bets. Here is the problem, Congressman. The 
problem is we are going to go into Musikalia tomorrow, and we 
are going to go in shooting. We are either going to kill the 
enemy or send him into the mountains. We are going to build a 
bridge and a health clinic. We are going to help construct a 
local governing council, and then we will leave. And then the 
bad guys are going to come back in and blow up the bridge and 
the health clinic, and kill the people on the governing council 
that we helped elect.
    Then somebody said we talk a lot about hearts and minds. 
That is something that I heard in your testimony. We hear a lot 
about hearts and minds as a strategic doctrine of the United 
States, and I say this as a good friend and strong supporter of 
General Petraeus. But one of the actual fighters said, sir, 
people's hearts harden and their minds change. And until we can 
get used to the notion of permanence, give people an 
alternative and then protect the alternative through NGOs and 
security, we are never going to get where we want to be.
    Here is my question. In the 1960s and 1970s and 1980s there 
was a lot of talk about joint rivalries in the service 
departments, and we finally had something called Goldwater and 
Nichols, and the byword was jointness, jointness, jointness.
    This hearing has focused on the details of what we need to 
do in order to promote coordination and whether the military 
has the right mission or the NGOs have the right mission or the 
State Department has the right mission. But those are details. 
In terms of permanence, do we need a new Goldwater II that sets 
a new architecture of interagency coordination between the 
military and the NGOs and the Department of State? Jump ball 
for anybody who wants to take it.
    Mr. Moose. With all due respect to Nancy, I think the first 
time I heard the anecdote used about the military bands and the 
size of the State Department was actually from my boss, Ron 
Spiers back in 1986 when he had been charged with George 
Schultz to do exactly what the committee is trying to do today, 
which is make the argument for a substantial reinforcement of 
the capabilities of the State Department. So one of his 
anecdotes was 7,000 members in the band outnumbering the number 
of State Department people, and the other was the cost of two 
B-2 bombers was roughly the equivalent of the operational 
budget of the State Department.
    I think we do need perhaps not a Goldwater Nichols II, but 
clearly it seems to me even if you say that Iraq and 
Afghanistan are the exceptions to the kinds of operations that 
we are going to be dealing with in the world in the future, I 
think there is clear recognition that the kinds of security 
threats and foreign policy challenges that we face require us 
to have a better way of integrating our military, our 
diplomatic and our development capabilities. That is going to 
require some thought how you structure that. I think that is 
what general Jones is trying to do as he is thinking through 
right now how he structures the national Security Council.
    And one of the challenges is how do you ensure a model that 
not only draws on the traditional security and foreign affairs 
agencies, but admits to the need to involve other agencies of 
our government so that they can, in fact, contribute to the 
solution to these challenges.
    Now I have not a clue as to what that solution might be. 
That is something ultimately that this committee and others in 
Congress are going to have to address. But I do think within 
that construct if one does not focus on the role, the central 
role in my view of the State Department handling the 
traditional responsibility that it has had for serving as that 
focal point for coordination with the military and other 
agencies of government, building their capacity to do that, and 
I absolutely agree with Gordon, it is going to require not only 
more people, it is going to require different kinds of people 
with different kinds of skillsets and different kinds of 
mindsets about how you do that. But that to me is key to the 
whole problem.
    Mrs. Lowey. I am now going to turn to Mr. Kirk and then Mr. 
Jackson and Mr. Rothman to see if we can get the first round in 
before the vote. I think the problem with this hearing is we 
can all talk about it for 6 hours.
    Mr. Kirk, I have been trying to keep everyone to the 5 
minutes.
    Mr. Kirk. Thank you.
    I really want to echo my friend Mr. Israel's comments that 
I think we do need a Goldwater Nichols for the State 
Department. I think I have a unique perspective since I am one 
of the only Members of Congress that was in the State 
Department, in the World Bank, in the military, and in the 
Congress, sometimes all at the same time.
    The Assistant Secretary of State should be basically the de 
facto pollad for the combatant commander, that their empires 
should be aligned exactly alike so these two people have to get 
along. We have reoriented things. We finally moved AID into the 
State Department. That was from our experience from El Salvador 
when one of the factions of the rebel movement, the RN, came 
out the bush and said we are going to bag this war, just bring 
in some electrification into the village of Santa Marta. And so 
our ambassador went to the AID mission director and said I need 
an electrical line into Santa Marta, and the AID mission 
director told him to go to hell, it wasn't in his budget, it 
wasn't in his program to end a war.
    So it was off that experience that we rolled AID into 
State. I think AID should work for Secretary Clinton, but the 
AOR lines are not properly aligned, and should.
    I have a lot of friends in here. We have 150 billion years 
of experience in foreign aid in this room because I see 
everyone that I have worked with in the past. We have a lot of 
expertise.
    Secretary Hamre and I coauthored this report taking on 
this, and I know how difficult the environment is. Nancy at 
Mercy Corps, we lost Dr. Kastani just the other day in 
Afghanistan, showing just how difficult this environment is.
    And I just finished an active duty tour in Afghanistan in 
December in which I was in Kandahar and Lash Kagar. And I think 
southern Afghanistan is the center of gravity for the Obama 
administration on conflict. It is the war the President has 
signed up to. He has committed 17,000 troops, and every 
national media organization is going to send reporters there, 
so this is the key focal point.
    I think it was in 2004 the Taliban as it reconstituted saw 
a weakness and attempted to whack an employee of Kamonics who 
was leading the counternarcotics effort for Helmand, Helmand 
being the end all to be all to narcotics in Afghanistan. Half 
of the entire crop is produced in that one river valley. When 
Kamonics saw the threat, they bugged out.
    Under the old organization of the State Department, U.S. 
Foreign Assistance Agency, the moment the contractor bugged 
out, the mission stopped for a year. So obviously the U.S. 
military had to step in because AID couldn't deploy its 
contractors in the area. But having just come out of the big 
green machine, we do things in a pretty dumb way. We roll 
people in there for an 11-month deployment, and then lobotomize 
the command as everyone rotates out. It is better than what AID 
wanted to do which is not be there at all. I think there is a 
crying need, one, to realign the AORs exactly along DOD lines, 
and that would actually increase the authority of the State 
Department; and, two, to develop a civilian corps that brings 
technical expertise that is there a lot longer than a combat 
tour and most importantly doesn't bug out. People are going to 
get hurt and some people are going to get killed. But if you 
let that collapse the mission, then that is the first person 
that the Taliban is going to whack, is the contractors to 
collapse the program, and that can't happen.
    John, I remember in Kosovo when we had this problem under 
your watch.
    Mr. Hamre. If I may just say one thing. The great problem 
that we have and the reason DOD gets a lot of these missions is 
it has mobilizable capacity. The civilian organizations have no 
mobilizable capacity.
    Mr. Kirk. And they also bug out.
    Mr. Hamre. It is a tough situation, and a lot of the people 
in the civilian agencies don't feel that they have signed up to 
for an insecure situation. I agree that we need to provide the 
security for an environment like that, but we need to have 
partners that will stay with us, too. But we need mobilizable 
capacity.
    Mr. Kirk. If we look at the Fatwa in north and south 
Yurgistan right now, and I believe the hunt for Osama bin Laden 
is a theological mission of the United States, but if you talk 
to the mission director in Islamabad right now and say tell me 
your assets and your programs going on right now, he can't 
deploy anything in that AOR.
    Mrs. Lowey. Can you answer in 30 seconds?
    Ms. Lindborg. I think that greater coordination between the 
civilian and military sides of the house is critical 
particularly in those kinds of area. Mercy Corps has worked in 
Helmand and Lash Kagar and Kandahar for 15 years. Who doesn't 
bug out are the local communities. The degree to which you can 
build local community capacity to continue their development as 
a part of the solution is critical, and better focus the 
military capacities to do what we need them to do, the security 
sector reform, to do a better job of the interdiction of the 
poppy crops.
    Early on there was an abdication of any role of the 
military in helping on that. And not to focus your civilian 
capacities on the poppy trade, but rather on the development of 
alternatives. It is a long term goal to get the poppy 
eradicated and to provide alternatives. So you need to have 
mechanisms that can stay, can continue past a shorter term 
mission or past the possible threat of instability.
    Mrs. Lowey. Mr. Jackson.
    Mr. Jackson. Thank you, Madam Chairman for holding this 
hearing. I also want to build upon the very thoughtful analogy 
of my colleague Mr. Israel, who I think touched upon the crux 
of the problem, at least in the field. That is the analogy of 
the tug of war between our military power in a specific village 
pushing the Taliban back and building the infrastructure, 
withdrawing the military power, the Taliban or some force 
regaining control and undermining the infrastructure that was 
put in place, and this kind of tug of war that actually takes 
place in the battlefield.
    It appears to me that some of this discussion, Madam 
Chairman, is the appropriate balance between our hard power and 
soft power, and that soft power almost can't exist unless it is 
surrounded by the bubble of hard power. The civilian agencies 
can't enter to engage in the kind of civilian reconstruction 
that needs to occur unless it is occurring in a secure 
environment, and then how do you maintain that secure 
environment so that State Department and other agencies under 
its auspices can secure sustainable development in a country or 
in a region so that the efforts are not undermined and we find 
ourselves engaged in this tug of war.
    With that said, I wanted to raise a question about AFRICOM. 
The White House's stated mission for AFRICOM is that it ``will 
strength our security cooperation with Africa, and create new 
opportunities to bolster the capabilities of our partners in 
Africa. AFRICOM will enhance our efforts to bring peace and 
security to the people of Africa and promote our common goals 
of development, health, education, democracy and economic 
growth in Africa.''
    More narrowly, AFRICOM's own mission statement states that 
``it will conduct sustained security engagement through a range 
of military-to-military programs and military activities and in 
concert with interagency and international partners in support 
of U.S. policy and a stable and secure Africa.''
    I certainly think that it makes sense to have AFRICOM 
conduct and manage security assistance, but do you have a sense 
of the rationale behind AFRICOM's support to humanitarian and 
development assistance? And do you believe that this is an 
example of something more rationally implemented through USAID 
and does this exhibit a lack of clarity about the command's 
mandate?
    Secondly, in your observation of AFRICOM to date, do any of 
you have any sense that it fits into a broader strategy for 
foreign policy in Africa? And lastly, AFRICOM has a 1,300 
person command in Stuttgart, Germany, while USAID has just 
under 279 technical experts employed across the entire 
continent of Africa. What is your assessment of this balance?
    Mr. Moose. If I might begin, I have spent a fair amount of 
time thinking about, talking about and engaging with people at 
AFRICOM.
    I do think that the original statement of AFRICOM's mission 
which actually took place a year and a half before it got its 
new commander, was an extraordinarily ambitious mandate for the 
command. I don't think there was any ill-intention about it, 
but I think that statement of AFRICOM's mission was informed by 
a desire to better integrate the capabilities of our diplomacy 
and our development and our military.
    Unfortunately, however, and this goes to something that 
Gordon said earlier, the impression that was left here in the 
United States and I would say particularly abroad was that 
somehow AFRICOM was going to become the new face and the new 
voice and the new center for the formulation of U.S. policy 
towards Africa, and I think that has enormous negative 
consequences.
    To his credit, I think General Ward has tried to if you 
will reframe the nature of AFRICOM's mission and in particular 
to recognize that in those areas where the military clearly 
lacks competency and capability, that the intent is to put 
AFRICOM's capabilities in the service of our broader foreign 
policy and development goals. That, I think, in terms of a 
philosophical orientation is the right formulation. The further 
issue, however, is how you actually achieve that.
    And how given, and I know that Jim Kunder mentioned this 
last week, this imbalance in resources. I have been to 
Stuttgart, and I have seen the resources there and you do have 
this large establishment, and an establishment relative to 
State Department and AID resources is huge and cannot help but 
impress people when the general gets on his plane and flies 
off, and it does give a distorted perception of who is in 
charge of American foreign policy and who is in charge of 
achieving this sort of balance and coordination and integration 
of the instruments of our policy. That is the challenge that I 
think remains.
    I believe AFRICOM, and that the military generally, has 
important capabilities and capacities that they need to be 
contributing to the solutions of the problems that we face in 
places, many places across Africa. There was the mention of the 
military's potential contribution to security sector reform. If 
you look across Africa, there are many opportunities for that 
to happen. So there is a role, but that role needs to be 
carefully defined, carefully targeted, and it needs to be done 
in a way that it is at the service of our larger foreign policy 
and development agendas.
    Mrs. Lowey. Mr. Rothman.
    Mr. Rothman. Thank you, Madam Chairwoman. This is a very 
important hearing.
    Mrs. Lowey. I apologize in advance for cutting everyone 
off, including myself.
    Mr. Rothman. I have read everybody's testimony and I agree 
with your conclusions about rebalancing, focus and resources, 
et cetera. But let me make you a little uncomfortable. I 
haven't read all of the studies that were cited in the 
footnotes to some of the remarks, but with that in mind, you 
say that the military does not have the core competency to 
carry out some of these missions that State and NGOs can do 
better, that there is an inherent negative in having a 
``military face'' on reconstruction efforts and other things.
    Now I do get my friend and colleague's story about the 
failure of the military, building the infrastructure but not 
having sufficient local population ownership to survive and 
defend the infrastructure reconstruction from the insurgents. 
But the main argument was this is different than the past when 
State and NGOs had responsibilities, that there is an inherent 
negative quality to a military face on things. And I agree with 
a rebalance, but here is the uncomfortable part.
    Was there any problem that was a source of legitimate 
motivation to the Defense Department and past administrations 
in terms of the reliability of the State Department in 
cooperating and identifying with the goals and mission 
established by the respective administrations and the 
Department of Defense? Or was it simply an accidental reduction 
in resources to the State Department that then had to be made 
up by the Defense Department? Do you follow my question? Was 
there any ``there'' there? Was there any good reason why the 
Defense Department decided to crowd out the State Department?
    Mr. Adams. My view on that is yes, indeed. We have a lack 
of capacity, and we have had a lack of capacity and declining 
capacity for some time at State and at USAID. See, the Cold War 
was different than the hot war.
    Mr. Rothman. Let me make it more pointed. Some of my 
colleagues to the right of me would say that there was 
resistance on the part of the State Department to following the 
goals that they, when they were in power, wanted to pursue. 
Therefore, they reduced the funding.
    Mr. Adams. I would rather let George address that 
specifically, but when you are dealing with deployment of a 
kind of Iraq and Afghanistan, you are not working in the Cold 
War environment and the fold the gap. You are working where 
insurgencies are real, and response time requirements are real. 
And, frankly, in Iraq, we ended up going in with no plan and 
no-built capacity.
    Mr. Rothman. I get all that. So you are saying these 
preconceptions were out of date by the time we got to Iraq and 
Afghanistan?
    Mr. Adams. Yes. What I am saying is this is the danger of 
fighting last post war. The risk in fighting last post war is 
to say okay, what we are going to do throughout the future is 
deploy at the speed and with the mission that we are doing in 
Iraq and Afghanistan, and so what we need to build on the 
civilian side is the capacity to do that. That is what I am 
raising the question about.
    Mr. Moose. I wanted to say that I addressed this briefly in 
my testimony, but there has been an assault, a rather sustained 
assault on the State Department and Foreign Service alleging 
that the department and its members were not reliable partners 
in the administration in the execution of the President's 
foreign policy. I defy anybody to come up with any kind of 
objective analysis that would demonstrate that. I think it has 
been a canard. I think it has done a tremendous disservice to 
the people at the State Department.
    If anything, I find that my colleagues in the State 
Department are too malleable, too eager to serve, and too eager 
to carry out the instructions and the guidance from the White 
House. That is what they exist for. They like nothing better 
than to be used.
    Mr. Hamre. There was a decision made before the war that 
DOD would have the soul responsibility for the after action, 
assuming it was going to be a sweet and short.
    I don't think DOD properly understood what they were 
getting in for, and I think State Department was offended and 
frankly sat back. And I think both of those things happened at 
the same time.
    That sentiment was then, I think, distorted when the 
security environment deteriorated. And DOD, you know, didn't 
really have the capacity to do all of the things that it was 
trying to do and didn't really have a viable and up to date 
security model about what they were facing. And State, at that 
stage, was overwhelmed and couldn't get into a much less secure 
environment than existed for the first 3 months.
    So I think there were unique historical circumstances that 
made this worse. Now are people in the State Department 
cowards? No, not at all. The implications some people would 
like to give that is the case, that is wrong.
    Mr. Rothman. Clearly that was not mine.
    Mr. Hamre. I know, sir. But I have heard it from other 
people. I think that is absolutely wrong.
    Does State have an operational culture and do a plan in the 
kind of cycle, no, it doesn't. I think this is one of the 
problems.
    We need to have in that kind of a tough environment the 
same kind of operational dynamic as a partner in the field, and 
they don't currently have it. They do not have the resources to 
do the kind of training for this kind of operation.
    There is only a half of one percent overhead float of 
personnel in the State Department. We have 10 percent in the 
officer corps. So a lot of this is resources.
    But we need to step past this anger of the last 6 years 
that is distorting clear thinking about this problem that we 
are facing, and you brought that up very appropriately.
    Mr. Rothman. I was going to what the ambassador hit on the 
nose, and there was no there there. It was a canard, as you 
say.
    Mr. Moose. The State Department does have some pedigree 
here in dealing with difficult situations. I started my career 
in Vietnam. I spent 3 years in Vietnam. Some of us think that 
we were doing transformational diplomacy for a very long time, 
and doing it in some very hard places.
    Some of the places where I have served in Africa are as 
difficult, not as dangerous as Iraq and Afghanistan, but it is 
not as if there is not a tradition, but there is a need to 
bolster the capacity to do that and to train the people in the 
Department to assume that responsibility.
    Mr. Rothman. Thank you.
    Mrs. Lowey. Thank you. I just want to follow up before we 
have to go on a similar line of questioning. You said there is 
the expertise at the State Department. Let's talk about the 
field for a minute. Now the ambassador has overall 
responsibility for the programs. The military follow their own 
chain of command, so I guess my question would be now is it 
that the chief of mission ambassador provides the overall 
strategic leadership in a host country, and is this really the 
case?
    As things currently stand, the ambassador is the final 
decider on issues of U.S. Government policy in a host country; 
is that really the case?
    And how does the mix of roles between the military and the 
civilian leadership and development of diplomacy translate to 
the application of United States foreign policy? What should 
the chain of command be? Is there a chain of command right now, 
or is the military doing their thing and the ambassador and the 
chief of mission doing their thing? What comes down from 
Washington? Perhaps you can comment on that.
    Mr. Moose. I think this again illustrates one of the core 
problems we have at the moment because I think the reality is 
that the chief of mission authority in both its concept but 
also in its operation has been eroded significantly over the 
past decade.
    Mrs. Lowey. Comment on the work around, too. I guess that 
is the lingo that the people are using at the embassy.
    Mr. Moose. I don't know that I can do that directly, but 
let me say what I can say. We certainly saw in the aftermath of 
9/11 a situation where the perceived nature of the threat, and 
I am again speaking mainly from my knowledge and experience of 
Africa, the perceived nature of the threat, and in that 
situation political leadership called for extraordinary 
solutions and responses. Part of that was to give 
authorization, whether legally or not, in writing or not, to 
our military commands to expand their activities and their 
operations in order to identify, root out, perceived terrorist 
threats in Africa.
    That was done in a way that had little coordination and 
little cognizance of chief of mission authority, and one of the 
battles that the State Department waged in 2003 and 2004 was to 
reestablish the primacy of the chief of mission in knowing 
about and then having some authority over activities that were 
taking place in his or her country.
    I would argue that in the best of circumstances that still 
is inadequate because if you look at our missions in Africa, 
they are small missions. They have very few people. They have 
limited capacity really to appreciate not only what is 
happening in their country, but many of these activities are 
regional. And they have no say nor authority about what is 
going on next door; although what is happening next door may 
have tremendous affects on what they are doing.
    That is why I think it requires a different kind of 
paradigm construct back in Washington to ensure that the 
Department, and particularly the regional affairs bureaus, have 
some visibility as to what these activities are. Under the 
current circumstances, I don't have any reliable assurance that 
is taking place.
    Mr. Hamre. Just briefly, the legal situation is this: The 
State Department and the ambassador is the authoritative 
representative of the President in every country unless there 
is a deployment order signed by the President that puts the 
chain of command through the military. And we have that in 
certain circumstances.
    In the days after 9/11 there was kind of a global war on 
terrorism deployment order that created this ambiguous 
situation. The Defense Department is not trying to take over 
control from the State Department. It does want to have chain 
of command when it has a deployment order, when it has a task 
that is assigned to it. I think this is a very easy problem to 
fix, and I think the historic model is valid.
    Mrs. Lowey. Do you have any closing comments?
    Ms. Granger. I have just one. I want to thank Nancy 
Lindborg for appearing today. With the expulsion in Sudan, I 
know there is great concern about your staff and their safety, 
and I want you to know that we understand that also. Thank you 
very much.
    Mrs. Lowey. In closing, I had the former head of the F 
process before our subcommittee, and I had just opened the Wall 
Street Journal that day and none of us on the committee nor the 
staff that knows everything was aware of what General Abizaid 
was doing throughout Africa, and it was upwards of $700 
billion. I remember turning to the gentleman and I said what is 
the coordination because he was just doing development work, 
typical USAID work, upwards of $700 billion throughout Africa. 
That's not my responsibility, we were told.
    Mr. Moose. I would like to make it mine.
    Mrs. Lowey. Let me say that on behalf of all of us we truly 
appreciate your input, and we know that we just scratched the 
surface so we hope that the dialogue will continue between this 
committee and all of you. I know the dialogue is continuing in 
the community and in the White House. We really appreciate your 
appearing here before us today.
    This concludes today's hearing on the Role of Civilian and 
Military Agencies in the Advancement of America's Diplomatic 
and Development Objectives. The subcommittee on State foreign 
operations and related operations stands adjourned.

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                                      Wednesday, February 25, 2009.

                   BUILDING A 21ST CENTURY WORKFORCE

                               WITNESSES

HON. THOMAS PICKERING, PRESIDENT, AMERICAN FOREIGN SERVICE ASSOCIATION
PRUDENCE BUSHNELL, FORMER AMBASSADOR TO THE REPUBLICS OF KENYA AND 
    GUATEMALA, RETIRED FOREIGN SERVICE OFFICER, AND MEMBER OF THE 2006 
    COMMISSION ON ``THE EMBASSY OF THE FUTURE''
JAMES KUNDER, ACTING DEPUTY ADMINISTRATOR, U.S. AGENCY FOR 
    INTERNATIONAL DEVELOPMENT

                 Opening Statement of Chairwoman Lowey

    Mrs. Lowey. The Subcommittee on State, Foreign Operations, 
and Related Programs will come to order.
    Before we begin, I would like to welcome my colleague Kay 
Granger as the Ranking Member of this committee, and I do 
believe it is the first time not just on Appropriations but in 
the Congress where there are two women as Chair and Ranking 
Member of a subcommittee. So I am delighted to welcome Ms. 
Granger. We look forward to all working together on the many 
challenges that we have ahead.
    Good morning, ladies and gentlemen. The subcommittee on 
State, Foreign Operations, and Related Programs has come to 
order for our first hearing of the session. I am pleased to 
open our first hearing of the year on a subject that is very 
much on everyone's mind: the need to strengthen the capacity of 
our diplomatic and development personnel of the Department of 
State and the U.S. Agency for International Development.
    Strong leadership and expertise are necessary to confront 
the extensive global challenges facing our Nation and the 
world, and we have much to be concerned about. As Admiral 
Dennis Blair, Director of National Intelligence recently noted, 
``The primary near-term security concern of the United States 
is the global economic crisis and its geopolitical 
implications,'' which include growing instability and 
extremism.
    For the first time in my 20 years in the Congress, 
diplomacy and development are considered key components of our 
national security. In a November 2007 speech at Kansas State 
University, Secretary of Defense Robert Gates said, ``What is 
clear to me is that there is a need for a dramatic increase in 
spending on the civilian instruments of national security, 
diplomacy, strategic communications, foreign assistance, civic 
action, and economic reconstruction and development.''
    I wholeheartedly agree, and I welcome the growing support 
for civilian capacity. However, we need to do more than just 
add diplomats, development staff and foreign aid dollars to 
truly transfer our foreign policy institutions to meet the 
challenges of the 21st century. We must increase and enhance 
the skills and knowledge of our diplomatic and development 
staffs to effectively interact with the communities in which 
they serve. They must get outside the embassy walls, engage in 
people-to-people diplomacy, work hand-in-hand with partner 
governments and civilian society as part of a comprehensive, 
integrated U.S. Government strategy to meet the diplomatic and 
development needs of the host nations.
    This committee has already begun to expand and strengthen 
the Foreign Service, and with the resources provided in the 
2008 Supplemental Appropriations Act and in the Omnibus 
Appropriations Act for 2009, USAID and the Department of State 
will be able to hire approximately--I am going to interrupt 
myself to welcome Ambassador Pickering, and I apologize for 
keeping you waiting on those long lines.
    Mr. Pickering. I apologize to you.
    Mrs. Lowey. Next time, call and one of us will come and get 
you. I thought you were so important they would understand 
immediately they needed to let you through.
    The committee has already begun to expand and strengthen 
the Foreign Service and with the resources provided in the 2008 
Supplemental Appropriations Act and the Omnibus Appropriations 
Act for 2009, USAID and the Department of State will be able to 
hire approximately 450 new core development workers and 638 
diplomatic personnel.
    However, as our witnesses--and again I thank you for being 
here--will testify today, there is still much more to be done 
and we must ensure that both agencies have the capacity to 
effectively and rapidly absorb, deploy, and manage this 
expanded workforce. This need to rebuild our diplomatic and 
development capabilities has been recognized and embraced by 
the Obama administration, and Secretary Clinton reiterated this 
message during her confirmation hearing earlier this year when 
she stated, ``I don't think there is any substitute for having 
seasoned, experienced professionals and experts leading our 
efforts on diplomacy and development and working, where 
possible, in partnership and coordination with the private 
sector and the not-for-profit sector.''
    A quick review of the facts clearly demonstrates the 
weaknesses that have developed in our civilian agencies since 
the end of the Cold War. And as the October 2008 American 
Academy of Diplomacy report entitled ``A Foreign Affairs Budget 
for the Future'' observed: Since the fall of the Berlin Wall, 
the diplomatic capacity of the United States has been hollowed 
out. A combination of reduced personnel, program cuts, and 
sharply increased responsibilities has put maximum pressure on 
the capacity of those U.S. agencies that are responsible for 
the missions of core diplomacy, public diplomacy, foreign 
assistance, reconstruction and stabilization under the 150, the 
international affairs account.
    By September 11, 2001, the overseas staffing shortfall in 
the State Department had approached 20 percent, with a larger 
gap at USAID. USAID currently has 8,000 employees, half the 
number the agencies had at its peak in the 1970s. Only 1,000 
are Foreign Service officers, the technical experts and voice 
of the U.S. Government in missions around the world.
    While USAID has experienced staffing ups and downs over the 
past 20 years, foreign assistance funding has increased 
dramatically. In 1998, USAID conducted approximately 2,990 
transactions, obligating a total of $2.5 billion. And in 2007, 
USAID conducted 10,613 transactions obligating a total of $10.3 
billion, a fivefold increase. And to manage this workload, 
USAID has turned to new funding mechanisms--as we know, 
contractors--often transferring oversight responsibility, 
vetting and implementation to its contractors. It is clear we 
need to expand the number of qualified Foreign Service officers 
at USAID.
    Today, we are fortunate to have with us several individuals 
who have examined and led reform efforts to address the lack of 
core development and diplomatic personnel. A report entitled 
``A Foreign Affairs Budget for the Future: Fixing the Crisis in 
Diplomatic Readiness'' was released by the the American Academy 
of Diplomacy in October 2008, and we are pleased to have with 
us the chairman of the advisory group, former Ambassador Thomas 
Pickering.
    A year earlier, the Center for Strategic and International 
Studies began the dialogue on the need to strengthen civilian 
agencies, with the publication of the findings of the Embassy 
of the Future Commission, and today we are also joined by 
former Ambassador Prudence Bushnell who served on that 
Commission following a distinguished career in the Foreign 
Service.
    Finally, USAID began efforts to strengthen its internal 
capacity with the launch of the Development Leadership 
Initiative in 2008, and former USAID Deputy Administrator Jim 
Kunder, who supported this important effort, will provide 
perspective on this important initiative, as well as 
recommendations for future staffing growth at USAID.
    All of these reports call for increased support and focus 
on the civilian agencies that champion our foreign policy 
priorities. Now is the time for Congress and the Obama 
administration to respond to these calls. We must strengthen 
our development and diplomatic capability in order to relieve 
the stress on an overused and overburdened military. My efforts 
to halt the erosion of the Department of State and USAID's 
diplomatic and development capacity, to build up a robust 
reconstruction and stabilization capability, and to expand 
USAID and Department of State's staffing are just the first 
steps in what must be a multiyear effort to rebuild the 
civilian instruments of national security that Secretary Gates 
called for in November 2007.
    So I look forward to hearing from the witnesses today as we 
explore this critical issue, and to working with Secretary 
Clinton to rebuild our foreign policy infrastructure with a 
workforce prepared and equipped to address the global 
challenges of the new century.
    But before I turn to our witnesses, I would like us to hear 
from our new Ranking Member of the committee, Congresswoman Kay 
Granger.

                     Opening Remarks of Ms. Granger

    Ms. Granger. Thank you, Madam Chair, for your warm welcome 
and also for holding this hearing today, the first in our 
subcommittee of the 111th Congress, and it is a topic that is 
so important in building the USAID and State Department's 
workforce of the future. This is critically important for our 
U.S. diplomacy. This is my first hearing as the Ranking Member 
of the subcommittee, so I want to thank the Chair for convening 
this panel and look forward to working closely with her.
    We just returned from a very productive visit to Mexico, 
Colombia and Peru. I applaud that wonderful trip and the 
information that we got as we move forward. I also want to 
thank Ranking Member Jerry Lewis for putting me in this 
position, and I look forward certainly to hearing from a very 
distinguished panel this morning.
    There is a growing recognition that emerging threats to 
U.S. interests around the world must be confronted with smart 
power, a combination of military strength and civilian 
engagement. I have been serving on the Defense Appropriations 
Subcommittee and so I look forward to seeing how that works and 
how we arrive at what is the right balance in our military 
strength and civilian engagement and smart power.
    The conflicts in Iraq and Afghanistan certainly have 
demonstrated the importance of building a civilian capacity to 
quickly respond to post conflict situations. Developing a 
civilian response capacity to rapidly bring stability to these 
very volatile situations is a topic that we will be examining 
in upcoming hearings.
    Our civilian agencies, the Department of State and USAID, 
are experiencing difficulties carrying out their functions, let 
alone emerging challenges such as Iraq and Afghanistan, and we 
will have to work on this together, and that is how we will be 
successful. As a result, some of the traditional roles of 
development and diplomacy have been taken up by the military, 
placing a burden on our armed services and Armed Forces that 
may undermine their ability to focus on their primary security 
responsibilities, and Chairman Lowey talked about the numbers. 
They speak for themselves.
    In 1990, USAID had 3,500 personnel to administer 
approximately $5 billion in development assistance. Today that 
number is over $8 billion, but they only have 2,200 staff.
    The State Department and the Congress recognize the need 
for additional staff, and in 2001 we supported the Diplomatic 
Readiness Initiative launched by Secretary Powell by adding 
more than a thousand new personnel. Additional staff increases 
were provided for critical diplomatic security and consular 
affairs initiatives. And we supported Secretary Rice's 
transformation diplomacy effort, which further bolstered the 
Department's ability to shift personnel resources to the most 
complex and highest-priority regions and issues.
    All of these State Department staffing initiatives were 
made in the context of heightened security risks and the 
increased costs of placing more American staff overseas.
    As we move forward and as we listen, I say to this very 
distinguished and experienced panel, I look for guidance as a 
new member on this subcommittee as to how we can arrive at the 
right numbers so that we can be most effective.
    Thank you, Madam Chair.
    Mrs. Lowey. Thank you, Congresswoman Granger.
     Ambassador Pickering, we are delighted you are here and we 
are happy to place your full testimony into the record. And if 
you would like to summarize your statement, I am sure many of 
my colleagues have questions and we would like to have time to 
put the questions forth and get as much information from you as 
possible. Please proceed.

                   Opening Statement of Mr. Pickering

    Mr. Pickering. Thank you, Madam Chair.
    It is a pleasure to be here and I will attempt to provide a 
summary. Thank you, Congresswoman Granger, as well, for your 
statement and members of the subcommittee, thank you for the 
opportunity to testify today.
    I am pleased and honored to join Ambassador Prudence 
Bushnell and former Deputy Administrator James Kunder on this 
panel to provide you our views on this critical and important 
issue which both of you have so well outlined.
    I come before you at a time when funding for the conduct of 
diplomacy is obviously something less than the only budget 
priority we face as a country. I also come before you, I 
realize, against the background of relatively recent 
jurisdiction of this subcommittee in some of this territory and 
the competing demands with supportive U.S. constituencies 
across the board.
    Indeed, I apologize for being late here today. I had an 
opportunity to meet with the Foreign Minister and Defense 
Minister of Colombia, and the Congress has become so popular 
that the lines outside, while not rivaling the Super Bowl, do 
make it harder to get in than I normally expected. My deep 
apologies to all of you.
    I also come before you as a committed internationalist with 
what I believe is a very clear message. We urgently need to 
begin rebuilding our diplomatic capacity, and we can either pay 
the financial price of doing that now, or pay a much higher 
price later in the likely costs of humanitarian, reconstruction 
and perhaps even military responses.
    Events of the past decade have produced obvious shifts in 
U.S. national security posture. One of these in particular now 
merits urgent reconsideration. Our post Cold War equation of 
military deterrence, diplomatic activism, foreign aid and human 
intelligence work has become seriously and, I think, 
counterproductively distorted. Rebalancing this formula rates a 
place among the early action items for the new administration 
and the 111th Congress, and that is why we are here.
    In fact, the period since the fall of the Berlin Wall has 
seen U.S. diplomatic staffing constraints in most countries 
abroad, as the chart over here clearly illustrates. You too 
have recognized in your opening statements this particular 
point. But these findings were a key output of the recent 
report to which you all referred, ``A Foreign Affairs Budget 
for the Future,'' and which I believe you are familiar with, in 
which the American Academy of Diplomacy cooperated with the 
Henry L. Stimson Center in producing. I was very privileged to 
chair the advisory group for this report, and we would request 
that a copy of the report be placed in the record.
     The report's principal findings include the fact that 
during the 1990s, overseas diplomatic staffing has been 
consistently constrained.
    Second, more than 1,000 new State Department diplomatic 
positions were established between 2001 and 2004 by Secretary 
Powell. These increases, however, were quickly absorbed by the 
diplomatic surges in Iraq, Afghanistan, and neighboring 
countries.
    Third, since 2004, core diplomatic staffing deficits have 
in effect returned to pre-2000 levels.
    There will be an increasing need for pre- and post-conflict 
stabilization efforts in many parts of the world, which we 
believe should be managed by civilian leadership, and that puts 
again an additional burden on current staffing.
    Finally, effective implementation of U.S. foreign policy 
will require, in the words of the report, 4,735 direct hire 
American staff increases by 2014, and the increased funding for 
function 150, totaling $2 billion above the fiscal year 2014 
CBO current services estimate by the end of the 5 years to 
support that increase.
    As the subcommittee considers its priorities for the 111th 
Congress, I would strongly recommend support for the more 
field-first staffing orientation that has been developed in the 
report and was begun under Secretary Rice's tenure.
    In compiling the report referred to, we believe its 
conceptual owners saw that the following principles ought to be 
central to the end of our diplomacy and, indeed, to the 
staffing requirements for the future.
    First, what we call universality. Simply that the U.S. 
should have resident presence in every country with which it 
maintains a national government-to-government relationship and 
at every multilateral organization of which it is a member.
    Second, expanded engagement. That the State Department will 
need significantly to expand interaction with nongovernmental 
actors, requiring concomitant staffing increases across the 
board. This includes academia, the NGO community, and the 
private sector.
    Third, location and configuration. To this end, the 
Department will need to extend the U.S. presence in capitals 
and outside of capitals. We have to get out of the compound. To 
quote the report of the Embassy of the Future Commission, of 
which Ambassador Bushnell was a member, this extension would be 
manifested by, among other things, the establishment of branch 
offices, American presence posts, American centers and by the 
use of traveling circuit riders, among other techniques.
    Fourth, security. To speak plainly, it can be anticipated 
as we proceed that physical threats to U.S. Government 
personnel abroad will continue. They will likely grow with 
dispersal, and they may grow in any event. In our opinion, this 
is a risk which now comes with the territory. It is part of the 
job, unfortunately. The alternative is starkly inadequate 
management of U.S. global policy demands, and the report makes 
some important recommendations on moving to be able to find 
ways to deal with risk rather than totally submit ourselves to 
compoundization as a way to deal with the problem.
    Specific to core diplomacy, State Department staffing 
remained static during the 1990s at a time when workload 
demands were growing significantly. My next chart illustrates 
these trends.
    Again, specific to core diplomacy, the report we referred 
to recommended staffing increases in the core area totaling 
1,099. In other words, staffing growth averaging 4 percent a 
year for the next 5 years, and a total underlying budget growth 
of $510.5 million by fiscal year 2014 to sustain this effort.
    One uplifting thing I can say about core diplomatic 
capacity is that it has fared marginally better than its public 
diplomacy counterpart. A number of significant analyses have 
documented public diplomacy's declining fortune in the post-
Cold War era, notably the report of the Smart Power Commission 
of the CSIS, of which I had an honor to be a member, which 
cited a 30 percent real dollar decline in spending between 1994 
and 2008, illustrated in the chart again to your left. It is 
interesting that this chart shows a real decline in real money 
terms between 1994 and 2008 as depicted on the chart by the 
yellow line.
    At the admitted risk of stating the obvious, we noted the 
not uncommon 1990s' assumption that a strong public diplomacy 
effort was no longer needed after the fall of communism and, in 
fact, the end of the division of the world. To some, public 
diplomacy in those days looked like an easy kill during a time 
of overall U.S. Government fiscal constraint.
    At the risk of stating something that is obvious, I think 
it is safe to say that this represented a really bad job of 
looking around corners. The plain fact was that there was a new 
generation of hearts and minds in the world to win, a new 
competition for them in a technologically exploding new 
Information Age with new technologies, new techniques and new 
opportunities.
    At the same time, our reaction to physical security threats 
and budget constraints has included closing on a serious bases 
of facilities abroad, many of which were important to public 
diplomacy efforts, and the concentration of personnel in 
compounds which I just talked about sometimes really distant 
from the centers of our interest and the centers of population.
    Whatever one's views are regarding the validity of the U.S. 
policy message in recent years, I would argue that shooting the 
public diplomacy messenger served no one's interest. The fact 
remains that more than in any other nation, the U.S. is looked 
to for ideas, innovation and opportunity. In most of the world, 
the U.S. is viewed as the society that recognizes individual 
initiative and rewards talent. We need to do a far better job 
of capitalizing on that outlook.
    Our report for public diplomacy staffing shows an increase 
of 487,000 U.S. citizen direct hires, and 369 locally employed 
staff, with an underlying budget growth of $155.2 million over 
the 5 year period.
    We further propose expansion of public diplomacy programs, 
something that was beyond the initial scope of our report but 
considered so important in our minds that we had to include it 
in the document. This includes doubling of international 
exchange programs, a 50-percent increase in international 
visitor grants, and a 25 percent plus-up for youth exchanges at 
a further cost of $455.2 million over the baseline during the 
same time frame.
    Significantly, our public diplomacy recommendations also 
comprise the proposed opening or reopening of 40 freestanding 
American cultural centers and three new media hubs abroad. This 
is of course something that returns us to the question again of 
physical security which I touched on earlier.
    The past year has seen an unusual set of milestone 
anniversaries in the ongoing evolution of international 
terrorism, some largely unmarked, but all of them significant. 
Among these were the 30th anniversary of the onset of the 
Iranian revolution in 1978 and 1979; the 25th anniversary of 
the bombings of the U.S. embassies in Beirut and Kuwait; the 
10th anniversaries of the attempted bombings of the U.S. 
Embassies in Kenya and Tanzania, in which Ambassador Bushnell 
played a major role.
    The terrorist activity of which these events are emblematic 
has produced, obviously and continuingly, shifts in U.S. 
diplomatic deployment. Secretary Rice some time ago recognized 
the downside impact of these changes, committing to move our 
diplomatic presence out of foreign capitals and to spread it 
more widely across countries to work on the front lines of 
domestic reform.
    Reinforcing this 2 weeks ago, Senator Lugar introduced a 
bill specifically citing the budgetary and security pressures 
which have resulted in the drastic downsizing or closure of 
most American cultural centers and endorsing the goal of their 
reestablishment.
    Former Secretary Albright in my view had it right 10 years 
ago when she said that job one is to ensure effective promotion 
of U.S. interests and values around the world.
    Expanding diplomatic activity is imperative to this work, 
and entails a greater risk to diplomatic personnel which I, and 
I believe most of us will say, is worth the return as long as 
we take the necessary steps to ensure that our people are well 
prepared, well trained, knowledgeable and understand not only 
the risks but the adequate steps that have to be taken in every 
way to avoid those risks and to identify them.
    Madam Chairwoman, as I mentioned earlier, our report also 
comprised significant findings and recommendations in areas 
relevant to training and assistance diplomacies, issues which 
my co-panelists are with me here today to address but which our 
report strongly supports.
    It is my understanding that an upcoming hearing will 
examine issues relevant to security assistance authorities and 
staffing, at which our report's principal contributor in this 
particular area, Gordon Adams, will testify. But simply stated, 
we believe that some $780 million worth of security assistance, 
currently supervised and allocated by the Department of 
Defense, should be reallocated to the traditional pattern of 
behavior; that is, that the Secretary of State would be 
responsible for defining the amounts in the budget and 
signifying the countries to which it is devoted, while the 
Secretary of Defense, as always, carries out those programs.
    I realize, of course, that some of our recommendations, 
specifically in the area of expanded training, will likely be 
partially addressed in fiscal year 2009 appropriations as the 
cycle is now concluded, and I am heartened by your 
signification of the fact that it does include some significant 
personnel for the State Department. I am also aware that the 
outline of the President's budget for the 2010 fiscal year is 
expected to be before you in a day or two. It is my hope, based 
on what the administration has been saying publicly, that the 
President's request for overall State Department operations 
will be ambitious and we hope in line with the recommendations 
we are making.
    I also realize that prioritizing among request components 
has never been what one would call the strong point of the 
State Department. What our report has put forth is a collection 
of what we consider to be the top operational priorities for 
consideration by your subcommittee. We do so humbly, but we do 
so on the basis of lots of experience and knowledge and we 
strongly urge their favorable consideration by your committee.
    Thank you, Madam Chairwoman. I, along with the others, look 
forward to your questions.
    Mrs. Lowey. Thank you, Ambassador Pickering.
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    Mrs. Lowey. I am going to turn to Ambassador Bushnell, but 
I just want to say when we get to the questions, you talked 
about hope and optimism, and I would like to know, and, if you 
don't have the figure, get the information as to what all of 
your hopes and dreams reflected in your statement will cost.
    Mr. Pickering. It is $3.286 billion.
    Mrs. Lowey. Everything?
    Mr. Pickering. Yes. Chump change.
    Mrs. Lowey. Thank you.
    Now we will turn to Ambassador Bushnell and we will place 
your statement into the record. Welcome.

                Opening Statement of Ambassador Bushnell

    Ms. Bushnell. Good morning, Madam Chairwoman, and 
Congresswoman Granger. I appreciate the opportunity to be here 
and to follow up on Ambassador Pickering's testimony.
    My name is Prudence Bushnell. I am a retired Foreign 
Service officer and former Ambassador to the Republics of Kenya 
and Guatemala, and member of the 2006 Commission on the Embassy 
of the Future. My remarks will reflect those experiences, and I 
hope that the Commission's report can be placed in the record.
    The Foreign Service attracts people who are fiercely 
patriotic and deeply committed to making a difference. While 
their capacity to perform remains outstanding, their jobs have 
become increasingly complex and dangerous. According to a 2004 
survey, over 87 percent of those with 15 years of service had 
confronted significant crises, and that number is probably much 
higher today.
    Having experienced the impact of the Rwanda genocide, 
suffered the wounds of the al Qaeda attack in Kenya, and 
witnessed the violent legacy of the 35-year conflict in 
Guatemala, I understand the difficulties in balancing security 
concerns and policy objectives.
    Over the past few years, the former has trumped the latter 
in our efforts to keep people safe. I applaud the impulse, but 
I also believe that it is possible to accomplish both: the work 
of our Nation overseas and manage risk sensibly. It requires 
more staff, better technology, innovative strategies, and 
training, and a greater emphasis on taking care of people.
    We could, for example, staff and operate embassies 
according to strategic interests instead of past tradition, 
limiting the presence to agencies and Americans who really need 
to be at a post. Foreign Service nationals and locally employed 
staff could be trained, delegated and rewarded to assume more 
professional roles. Everyone, including family members, could 
be prepared through training, crisis exercises, and vigilant 
leadership to confront danger.
    As Ambassador Pickering suggested, we could put a virtual 
American presence, without risk to people, in all kinds of new 
places through American corners, resource centers operating in 
libraries and other venues. We already know that with adequate 
resources these centers work very well. We could also increase 
our influence and outreach through more American presence 
posts, operations staffed by a single Foreign Service officer 
and local employees to accomplish specific and limited 
objectives in cities other than the capital.
    With the capabilities to produce video conferences, pod 
casts, blogs and other virtual links, Foreign Service personnel 
could reach people, NGOs, and businesses across time, distance, 
and danger. Program management and greater language skills 
could bolster these opportunities even further. With 
appropriate, secure, hand-held communications equipment, 
written work could be accomplished outside the confines of our 
embassy fortresses.
    Imagine the possibilities were our embassies to have the 
backup of department-run centers to implement innovations, 
state-of-the-art technology, and modern business practices. 
Think of the new ideas employees could conceive if they had 
access to more sophisticated information and research links, 
formal communities of practice, and interagency blogs. Consider 
how much better embassy decisions regarding security would be 
if ambassadors and emergency action committees were privy to 
intelligence analyses still too often confined to Washington 
and the few considered in the need to know.
    Should the worst happen, think of what we could learn if 
our accountability review boards sought lessons and not just 
blame. And suppose we considered post-traumatic stress and 
other psychological wounds to be just that, wounds to be healed 
instead of weaknesses to be suppressed or stigmatized. What a 
more healthy and better-prepared workforce we would have.
    A recent Foreign Service Association poll noted employees' 
willingness to work in dangerous and difficult places. In 
return, they would like greater attention to family concerns 
and single sex partners, equitable assignments and salaries, 
and improved leadership. By that they mean bosses who care 
about people as well as policy, with the courage to stand up 
for them to secure the necessary resources and programs they 
need to do their jobs effectively.
    I witnessed the extraordinary performance of which they are 
capable during the difficult months following the al Qaeda 
attack on our Embassy in 1998. A thousand pounds of explosives 
detonated in a small, confined area, left half of the occupants 
of our chancery dead or severely wounded. Outside, hundreds 
more were killed and thousands were injured. With no 911, or 
any of the services we take for granted in the United States, 
Kenyan and American employees had no choice but to move from 
victim to rescue force. In later weeks and months, 
notwithstanding the deaths, destruction and trauma, this 
community stayed in place, overcoming one challenge after 
another to reconstruct their organization, assist Kenyan 
victims and businesses, and help one another to heal. Despite 
the toll on themselves and their families, they put the U.S. 
Government back in business within hours of the bombing and 
never lost sight of its interests. Not for one day were we 
closed, and it showed in the policy objectives we achieved 
against great odds.
    Now, imagine what people of this caliber could achieve if 
they were given the kinds of resources, technology, training, 
innovations and leadership we discussed today.
    Thank you for listening.
    Mrs. Lowey. Thank you. Aren't we fortunate to have people 
of your caliber here, and we thank you again.
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    Mrs. Lowey. Mr. Kunder, we will be happy to place your full 
testimony into the record.

                    Opening Statement of Mr. Kunder

    Mr. Kunder. Thank you, Madam Chair.
    I made four basic points in the testimony, and I would like 
to summarize them briefly. Just to put some meat on the bones 
of this personnel issue for the committee, the committee asked 
me to draw a little bit on my field experience, and I would 
like to make a couple of comments.
    Why is it important to have these folks? Why is it so 
critically important to our national security? I would like to 
give you a quick example at the tactical level and at the 
strategic level.
    When I was in Afghanistan in 2002, immediately we started 
creating these provincial reconstruction teams to reach out and 
assist with the reconstruction of Afghanistan. We followed on 
in Iraq with the same approach.
    Our military colleagues learned very quickly that when they 
were out in the hinterlands in Afghanistan and Iraq, they 
needed exactly this kind of diplomatic personnel that the 
ambassadors have been talking about, or the development 
specialists at AID. You needed health officers and agricultural 
officers, and you needed folks who knew how to rebuild a 
government that had been torn apart. And we simply ran out of 
bodies.
    As one report pointed out, there are shortages in filling 
these provincial reconstruction teams even today in Iraq and 
Afghanistan, not because folks don't want to serve or because 
they lack courage, but simply, practically, we have run out of 
bodies to meet our country's national security interests.
    If you move to the strategic level, it is more of an 
invisible effect but equally critical to our national security. 
All of you know about the so-called ``Green Revolution'' where 
American technology during the 1960s and 1970s allowed--through 
the application of technology and new agricultural techniques, 
we had agricultural production around the world growing at 3 or 
4 percent a year. So we were able to stay ahead of population 
growth around the world.
    During the 1980s and 1990s, we cut back on American 
investment in teaching people how to grow food abroad. We cut 
back on the number of technical experts at USAID, as both the 
Chairman and Ranking Member have said. And what happened? 
Agricultural growth, agriculture productivity growth in the 
developing world, in the poor countries of Africa, Asia and 
Latin America, stopped growing at 3 or 4 percent a year and 
started growing at 1 percent a year, which doesn't keep up with 
population growth in those countries.
    So what do you have over 20 years? You have less and less 
food, prices going up. And for the so-called ``bottom 
billion,'' the bottom billion of our fellow citizens in the 
world who live on less than a dollar a day and who spend almost 
all of their money on food, all of a sudden they can't afford 
food. And also, I might add, they are not very good customers 
for American exports when they can't afford a basic livelihood.
    So what happens, you have a billion potential recruits. A 
billion hungry people who no longer have faith in the future.
    I think both at the tactical level and at the strategic 
long-term level, it is not just some abstract question of 
``State needs more people'' or ``USAID needs more people;'' our 
country really needs these kinds of strategic effects in our 
national security interest.
     I make four points in my statement, and you all have a 
copy of this PowerPoint called ``USAID in 2012'' that 
summarizes USAID's staffing needs and its plans. I would just 
call your attention to slide number 7, which is the one that 
shows the growth in our nation's foreign aid dollars over the 
last 20 years, the blue vertical bars, and then the little 
yellow triangles are the decline in our nation's technical 
experts overseas.
    So, one, we are not getting the kind of bang for the buck 
that we should be getting with our foreign aid dollars and the 
taxpayers are not getting the kind of oversight that they 
deserve when we spend this kind of money overseas without 
enough staff.
    I do want to thank the committee very much for the support 
that it has given to USAID for this ``Development Leadership 
Initiative,'' and we are starting to rebuild that technical 
capacity that served America well over the decades. We hope 
that the committee will sustain that effort in the coming 
years.
    Second, reinforcing what Ambassador Pickering's and 
Ambassador Bushnell's studies have said, it is not just a 
question of hiring more people. These numbers for our diplomats 
and our development experts abroad are so small compared to our 
military forces that we ought to look at these folks as 
``Special Forces troops'' that need to be maximally equipped 
with the best technology America has to offer.
    I like to give the example that our nation recently 
reemphasized the importance of instability and possible 
terrorism in Africa. We created AFRICOM at the Department of 
Defense. I have served in uniform and I have nothing against 
the U.S. military, and I have the greatest respect for our 
uniformed services. We have 1,300 people at AFRICOM 
headquarters in Stuttgart, Germany. We have 279 technical 
experts working for USAID, scattered across all of Africa. 
Something is wrong with these numbers. We need to rebuild the 
numbers and we need to equip these folks with the best 
technical capacity and communications capacity that they could 
possibly have.
    I say this as a former military officer. By the time folks 
reach the ambassadorial level that Ambassador Pickering and 
Ambassador Bushnell received, if you were a military-equivalent 
general officer, you would have achieved, as I know Mrs. 
Granger knows, you would have had 2\1/2\ years of training 
provided by the U.S. military, cohort training at the 
lieutenant colonel level, at the Army War College or Navy War 
College level, 2\1/2\ years of training. A similar State or AID 
officer would be lucky if over a 20-year career they had 2\1/2\ 
weeks of organized training.
    We have got to carve out the training ``float'' for State 
Department and USAID so people are going off to school to learn 
Arabic and Urdu and Farsi and the critical languages. And I 
have to tell you that our senior State and AID officers are not 
being given the computer skills and the management skills that 
our military officers are being given. And it is not because 
they are not smart. They are smart and highly educated. But we 
are not carving out the training, because as these numbers show 
you, there is no training float. If I have a warm, sentient, 
competent body, I send that person to Anbar Province.
    I point out in my testimony, there are some hidden assets 
in this system. At USAID, we have about 8,000 employees. About 
5,500 of those are Foreign Service Nationals. Ms. Granger was 
just in Peru and probably saw this. If you go to a place like 
Lima, we probably have 10 American AID employees and about a 
hundred Peruvian experts who speak Spanish and know the 
culture. We don't allow those folks to be transferred 
internationally and we don't really give them the kind of 
compensation needed in terms of the value they provide to the 
United States of America.
    So I suggest one of the things that this committee might 
look at in terms of the title of this hearing, ``Creating the 
Workforce of the 21st Century,'' we need to hire more folks who 
are Americans and give them technical skills, but we also need 
to look at maximizing our Foreign Service National workforce at 
State and USAID and see if we can't get more productivity out 
of these folks as well.
    Third, I address security. I cannot rival what Ambassador 
Bushnell said, but I believe we are on a collision course. By 
law we are still compacting our platforms abroad. We say we 
want to grow our diplomatic presence and our development 
presence, but I don't believe the lines cross. We are 
continuing to solidify, compact our diplomatic platforms, and 
we are continuing to shut down USAID offices and bring them 
within the embassy compounds. And then we are trying to figure 
out, as Ambassador Pickering said, how to do better public 
diplomacy.
    It is very hard if you are a farm cooperative leader in 
some Third World country, or a women's group or a lawyer's 
group leader, it is very hard to get into a U.S. embassy. You 
used to be able to walk over to the AID office and talk to your 
American colleagues. But today it is very hard to get through 
security.
    I would request that the committee take a hard look at this 
area because, driven by these horrible events that Ambassador 
Bushnell experienced firsthand in Nairobi and Dar es Salaam 10 
years ago, our platforms are shrinking. Instead, we have to 
grow and meet and reach out to more people, and the lines are 
just not crossing. We have all of these wonderful projections 
of more people and I don't know where we are to put them. It is 
a great idea, but it doesn't comport with the law in terms of 
embassy security.
    My fourth point is somewhat abstract but I think is the 
single most critical one.
    All of us on State and USAID have worked on what kind of 
formula do we need to build our staff. And there has been some 
good work done. But I argue here that we are nowhere near where 
we should be in creating a mechanism something like the 
Department of Defense Quadrennial Defense Review. We need a 
``quadrennial diplomatic review'' and a ``quadrennial 
development review.'' We need to link our staff explicitly with 
the threat we are trying to address.
    The Quadrennial Defense Review is not a perfect document, 
but at least it attempts to lay out our nation's strategic 
threat and then build a force that will meet that threat. This 
is hard stuff to do. It is similarly hard to do this in the 
diplomatic or development work, but it can and must be done. 
And I believe the Congress should mandate that State and USAID 
develop such quadrennial reviews that identify clearly our 
development objectives over the next 4 years, and then force 
the personnel planners at State and USAID to present you with 
these kinds of numbers to accomplish the mission that we have 
been assigned.
    Those are the four points I have made. I appreciate the 
committee taking on this difficult task. And again, as 
Ambassador Pickering said, we are all American citizens and 
taxpayers, and we understand that a lot of our fellow citizens 
are hurting in the current economic crisis, and we very much 
appreciate the courage of the committee in recognizing that 
reforming foreign aid is also an important part of meeting the 
taxpayers' priorities.
    Thank you.
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    Mrs. Lowey. First of all, let me thank you all for your 
incredibly valuable testimony. We really are so appreciative 
and we certainly know that the Secretary of State and her staff 
is focused on thinking through many of these issues. I am 
hoping that you all have input and you have certainly made some 
recommendations because we appreciate it on this committee.
    Before we proceed to questions, I just want to say that I 
have received written testimony from the American Foreign 
Service Association. The Association represents the members of 
the U.S. Foreign Service, an important voice as we examine 
workforce issues at the Department of State and USAID, and I 
ask unanimous consent that their written statement be made part 
of the record.
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    Mrs. Lowey. I would also like to make it clear that I will 
be calling on members based on seniority of the members present 
when the hearing was called to order, and I will alternate 
between majority and minority. Each member is requested to keep 
questions to 5 minutes per round.
    I would like to follow up, and again I want to thank you on 
your expert testimony. I would like to follow up with 
Ambassador Bushnell. I can't believe it. I was not aware of it, 
that the intelligence analysis is confined to Washington, so 
you as an ambassador in the field do not have access to the 
whole picture. Is that what I heard you say?
    Ms. Bushnell. At the time I was Ambassador, that was 
correct. We had an al Qaeda cell in Nairobi. I was aware of 
that fact. I was also aware of the fact that our Intelligence 
Community was intercepting telephone calls both in Nairobi and 
with Osama bin Laden. We took, that is to say the FBI and CIA, 
took the computers of the head of the cell in Nairobi, and I 
never received any information as to what was on the computer 
because--and this gets back to what my colleagues have been 
saying, is we continue to follow the tradition of the Cold War 
which is ``You will know if you need to know it.''
    But if it is about Osama bin Laden and we think his 
activities are in the Near East, you, Ambassador in Kenya, 
don't need to have that information.
    I think things have gotten somewhat better, but I don't 
believe that ambassadors are in the information chain because 
the Intelligence Community and the State Department still see 
Washington as the client, not overseas chiefs of mission.
    Mrs. Lowey. That is extraordinary. This is a basic 
question, that the ambassadors have the highest clearance but 
the intelligence officers just choose not to provide you the 
information. So it is not that you don't have the highest 
clearance, they are just choosing not to give you the 
information?
    Ms. Bushnell. I don't want to leave you with the impression 
that chiefs of station or others are choosing not to give 
ambassadors information. The fact of the matter is that 
ambassadors are not privy to the information that goes from a 
station chief back to Washington because of issues of methods 
and sources. So yes----
    Mrs. Lowey. So yes, you do not have access?
    Ms. Bushnell. Correct. But it is not because anyone is 
saying I don't think I am going to give my ambassador the 
information; it is because they are not allowed to give the 
ambassadors the information.
    Mrs. Lowey. By whose law are they not allowed?
    Ms. Bushnell. You know, I don't know.
    Do you know, is it a law or a regulation?
    Mr. Pickering. I think we are getting into a sensitive 
subject, but the Intelligence Community's internal directives 
are such that they are required to protect sources and methods 
in situations where individuals either have a need to know 
because they are directly engaged in the case; that is, how and 
in what way and from whom they collected information, and 
individuals who don't in the view have a direct role in the 
collection need to know.
    Now I, as Ambassador, was briefed by my station chief very 
frequently on activities and operations that they were 
conducting because when they blew up, they inevitably knew I 
would be on the hot seat. And so they gave me prior warning. 
And the best of them did that for me.
    I think in Prudence Bushnell's case, the failure to provide 
information on the operation of the cell as opposed to just the 
presence--and she is in a better position to judge this--was a 
huge error because it didn't permit her to take the active 
steps she would have to in defense of the embassy to deal with 
the issue at hand.
    I am not sure that is generalized, but it happened; and it 
shouldn't happen again, in my view.
    Mrs. Lowey. Let me just say as a member of the Intelligence 
Committee, I am very aware of the need to know. If you don't 
ask the question, you are not going to get the information, and 
you need the information often to ask the question.
    But I will follow up. I think it is important that we have 
a classified briefing on this very essential issue.
    Ms. Bushnell. Thank you very much.
    Mrs. Lowey. I have 15 seconds left.
    I just wanted to follow up on the technology issue as well. 
Do you currently--whoever wants to answer--do you currently 
have the technology to support your work outside the embassy? 
Is it a money issue or you don't have the technology? Do you 
need the technology? Can you comment on that as well?
    Ms. Bushnell. Very briefly, we have some technology. We do 
not have adequate technology, particularly compared to the 
private sector. And yes, we need it; and yes, it requires 
resources.
    Mrs. Lowey. Thank you very much, and I will turn to Ms. 
Granger.
    Ms. Granger. Thank you. I am intrigued by the suggestion of 
a quadrennial review type of program because I think it could 
help guide us as we look at these personnel, equipment, and 
other issues. Doubling the number of Foreign Service officers 
by 2012 can't be a goal itself. What do they do? What do we 
accomplish? What are our goals? So I would ask you as a panel 
what specific goals do you think that State and USAID should 
establish that would more clearly justify the request that we 
are getting?
    Mr. Pickering. Perhaps I could take the first shot at that, 
and I know the others will have it. With respect to the point 
that Mr. Kunder made, I would recommend that you look at this 
report called ``Forging a New Shield'' done by the Project on 
National Security Reform. The central piece of this report, but 
it covers the wide inadequacies of our Washington-based 
national security system, is precisely the points he made. And 
in fact, a fairly elaborate system of preparing both guidelines 
and budgets for the longer term in the national security area, 
and it makes recommendations with respect to those, as well as 
a lot of other recommendations which I think would be important 
for the committee to know about in terms of the future 
organization of national security.
    Two of the current new appointees, General Jones, the 
National Security Adviser, and Admiral Blair, were on the 
report staff that did this. It was not exclusively an ex-
military staff. There were a lot of the rest of us who worked 
on it.
    I think in addition, let me if I can, cover what the people 
in the core diplomatic area will be doing. The others we have 
to--Mr. Kunder recommended doubling AIDS Foreign Service 
officers. We are not recommending doubling across the board, 
but we are recommending the increases I had in my statement.
    But some examples are, for example, to deal with 
multilateral diplomacy, an additional 100 staff. To deal with 
international law, which we see as a major asset to the United 
States, that the international rules can be made in an open and 
fair basis, which is obviously very much in harmony, in tune 
with our system; the creation of an additional staff of 20.
    Economics, where we have very few people, 8 percent of our 
people are expert in economics. And I don't have to tell you 
the number one crisis today is economics; an additional 80 
officers to deal with economics.
    Science and technology, something we have left behind. We 
currently have 35 people around the world dealing with science 
and technology. We recommend an additional 70 staff, public-
private partnerships that outreach, that I talked to you all 
about, in terms of one of the principles that we have adopted 
as guidance for this report. We think an additional 100 people 
are needed to deal with those.
    Interagency coordination, again back to Mr. Kunder's very, 
I think, salient point. Planning, developing and executing 
policies and budgets in Washington and across the board and 
staffing regional planning hubs overseas, we recommend 175 
additional staff.
    In addition, there is, as you all know, no allocation of 
people to do training, certainly not in the core diplomatic 
area, so that everyone we train is pulled out of the front 
line. We don't have any units at rest. We don't have one up and 
two back. Everybody is in a full-time job. In order to train, 
we have to take people out of a full time job. That means other 
people have to cover that person's full-time job. So we are 
recommending a significant number, up to 1,000 training spots 
and spots for people who are in movement, so in the end we 
don't leave critical positions in the front line of diplomacy 
uncovered.
    And that basically constitutes the bulk of the 1,099 core 
people I recommended, and some of the 4,735 that the report 
recommends as a total in public diplomacy, in aid, in 
stabilization and reconstruction, in addition to core 
diplomacy.
    Ms. Granger. Thank you, Madam Chair.
    Mr. Kunder. May I point out briefly this gets into--I 
reread the CRS, latest CRS report on foreign aid reform, and 
your question gets into I think the fundamental question that 
all of us are grappling with, which is, what do we want our 
foreign aid program to accomplish? We are spending $25 billion 
across all agencies. What do we hope to get for that?
    And this requires a much larger hearing, and I don't want 
to take a lot of your time now, but the question of whether we 
are essentially doing this because America is good-hearted and 
we want to keep starving people alive, or whether we are doing 
this for national security interest or whether we are doing it 
for commercial interest. The short answer is, for those of us 
who read the Foreign Assistance Act and try to follow the law, 
we are told to do all of the above. And hence, when you layer 
in additional earmarks--I am not here to insult the committee, 
I'm here at your request, but obviously we are told to do a lot 
of very specific things in malaria, in AIDS, and a whole bunch 
of other topics. And at the end of the day, the very bright 
officers we send off to carry out our nation's foreign policy 
are torn in 100 different directions in terms of what they are 
supposed to accomplish in Malawi or Peru or Bangladesh. And so, 
this is a fundamental question. If we were a corporation we 
would have gone out of business a long time ago because we are 
in every line of business known to mankind.
    And so this question of should we do something similar to 
what DOD does every 4 years, and refresh the system and say 
what we really want to do the next 4 years out there in these 
85 developing countries is focus on democracy or agriculture or 
women's rights, whatever it is, and give them some honest 
guidance. They will do the job you tell them to do. But right 
now they are just pulled all over the place by trying to read a 
45-year-old law that is now very thick.
    Mrs. Lowey. Before I turn to Mr. Israel, I just have to 
follow up, if I may, because your comments are puzzling. And I 
wonder, with my great respect for you, whether it is a matter 
of who is the leader at the top. Is it really working so that 
the country team puts together a plan?
    Look, we all work. I work on food allergies and then I work 
on asthma and then I am chair of this committee and then I do 
homeland security. Life is complicated. And it is more 
complicated when you have to deal with a whole range of issues 
in a country. But that is what you are supposed to do in 
establishing a country team plan.
    And it is frankly it would seem to me any new leader is 
going to put together a plan and give some directives. And if 
the procedure works with the country team putting together a 
plan with an ambassador, and staff knows what they are going to 
do, they are going to send a plan up. And then, obviously, the 
Secretary of State and the President have the responsibility to 
say, Well, I think you should do it this way or I think you 
should do it that way.
    But it is hard for me to believe--I don't want to say there 
hasn't been really strong leadership--but it is hard to believe 
that you need a Foreign Assistance Act to determine goals and 
priorities and get the job done. So if I can take the liberty 
and give you a minute or two to answer and then turn to my 
colleague, Mr. Israel, because your comment was just confusing 
to me.
    Mr. Kunder. The world is a complex place. And I am not 
going to suggest there are only three things we ought to do or 
we ought to use. As we don't need what the military calls a 
6,000 mile screwdriver from Washington, and tell our staff in 
Malawi precisely what they should do. But I think the system 
suffers, honestly Madam Chair, from the lack of an overall 
conceptual framework globally that says ``our goal is to do the 
following.'' If you told us our goal was to meet the Millennium 
Development Goals, eliminate illiteracy in the next 20 years, 
and AID was told I don't care if you give the money to Pakistan 
or Cameroon; there is not going to be any pressure to put more 
money in Pakistan; and I don't care if you put the money in the 
Ministry of Education or build schools with it, I don't care if 
you help the poorest people or get the technical experts paid, 
you eliminate illiteracy in the next 20 years, I believe that 
the State Department and USAID working with our international 
partners would eliminate illiteracy in the next 20 years. But 
as soon as somebody comes in with a plan to eliminate 
illiteracy, we say I am sorry, we don't have money in that 
category; would you like some AIDS money or malaria money, 
because that is what he have.
    Mrs. Lowey. This is a long discussion and I don't want to 
deprive my colleagues of asking questions, but I think we 
should have more discussion on this issue. Mr. Israel.
    Mr. Israel. Thank you Madam Chair.
    Mr. Kunder, I was actually going to ask the panel about the 
Civilian Response Corps, but you triggered something and so I 
am going to address something that you said and ask for your 
comments. You talked about the Green Revolution of the sixties 
and seventies and how that was an effective promotion of 
American strategic policy through agriculture. I want to ask 
you about a different kind of diplomatic Green Revolution. I 
will tell you about a model I heard of and ask you whether you 
believe it should be integrated more fully into the State 
Department and USAID.
    I spend most of my time on energy issues and was in India 
several years ago and met with Dr. Pachauri who runs the Energy 
Research Institute of Delhi and received the Nobel Peace Prize, 
and shared it with Vice President Gore for his work on climate 
change. And he was showing me, he was torturing me with an 
abundance of PowerPoint slides on energy resources. And I was 
with our colleague, Congressman Tim Ryan, and just as we were 
on the verge of falling asleep, I respectfully asked Dr. 
Pachauri if he could put the PowerPoints aside and give me one 
game changer in U.S. foreign policy on green energy, something 
that was really changing the game.
    And he said to me, ``Well that would be the six women of 
the Sunderbans.'' I said, ``What is that?'' He said, Well, the 
Sunderbans is a delta in a delta region, no connectivity, no 
infrastructure, but there are six women who have a solar panel 
and they use the solar panel to charge solar lanterns and they 
rent the solar lanterns to the population. And that in the 
global war on terror, we have everything we need, we have the 
empowerment of women, we have the development of a sustainable 
small business, we have light. And I said, ``Well what State 
Department program funds that? Is that a USAID program?'' He 
said, ``Oh no, that is a $35,000 grant from the National 
Renewable Energy Laboratory in Boulder, Colorado.''
    Do you believe that that kind of program would be more 
suitable as a USAID function or somewhere in the State 
Department? Do you believe that the State Department, in order 
to effectuate good national security policy and foreign policy, 
are to be embracing more of those clean energy micro-financing 
programs? Is that the modern day Green Revolution?
    Mr. Kunder. I am sure Ambassador Pickering and Ambassador 
Bushnell will want to comment on this as well. The point you 
make is an example of what is happening, the transformation of 
the development field. Fifty years ago, the only people really 
who cared about what was happening in the small villages of the 
developing world were a few folks at State and AID. But now we 
have a large NGO community, we have large private sector 
investment, we have many parts of the U.S. Government, as you 
just suggested, that are involved. And part of what is behind 
these PowerPoints in the training recommendations I am making 
is the notion that our diplomats and our aid professionals have 
got to be less operators and more ``symphony directors'' of the 
many, many players who are out there. Private sector 
investments from America and remittances from America, American 
immigrants, exceed our foreign aid account in most countries of 
the developing world.
    So the answer is yes, it is more than just micro-
enterprise, I would argue. It is mobilizing all of these 
private sectors, for-profit and not-for-profit resources, 
because there is a lot going on out there, more than just our 
technical experts. But they have got to be trained to think 
that way and to be seen as synergistic players in the broader 
arena. I hope that is helpful.
    Mr. Pickering. Mr. Israel, it is nice to see you again and 
thank you for asking what I think is a very trenchant question, 
and I certainly would echo the ``yes.'' I think Mr. Kunder has 
pointed out that he is engulfed in a sea of legislative 
restrictions. And, indeed, the history of the aid program is 
that we have passed 20 restrictions to stop every mistake we 
ever made. And when we do that, of course, we end up with no 
aid program. And he has shown you some of the frustration in 
his comments that the legislative boundaries or the legislative 
bindings are very difficult.
    We do need I think new foreign assistance legislation. We 
need to find a way for you to tell us, in general terms, go and 
do something that is innovative that will help people lift 
themselves out of the mire and the morass of poverty and get 
engaged in growth. Use technology, which is something I think 
we are very weak on. Aid over the years has generally shied 
away from technology or contracted it out. But technology is 
very important because it is the wave of the future and we do 
see how things like technology in your example, the six women 
of the Sunderban, or indeed how we see innovative ideas, micro-
lending, can provide empowerment and innovation.
    Now, we don't have to do it all. I agree with Mr. Kunder 
entirely. There is a huge community out there. But one of the 
things that has happened in our own government is we now have 
22 or 26, whoever counts, different centers of aid activity. 
And one of the problems is that they all might be simply 
splendid, but who is coordinating and where are the priorities? 
And so in some sense we need to find a way to pull this 
together.
    I would be strongly in favor, if it looks like aid and 
involves aid, pull it in; but keep the mission agencies with 
their innovative skills and with their technology linked to the 
process so we don't end up finding a kind of single solution 
that eliminates the innovation. And we have to find ways to 
think about that.
    I will just make one other point because I could go on 
forever.
    Mrs. Lowey. We all could.
    Mr. Pickering. One of the ideas in this report is that we 
do not use what I would call empowered network task force 
activities in our national security ideas, writ broad, to pull 
together and develop the kind of ideas, whether they are policy 
ideas or development ideas or public diplomacy ideas, that we 
could. We have a very rigid structure, and the same people 
consider everything, and we are not well linked up and we have 
lots of bureaucratic stovepipes that don't work well together.
    And so moving in a cross-cutting whole-of-government 
approach to some of these problems is, in my view, something 
that is very important in the wave of the future. And I think 
it fits with what we are talking about now. And it certainly 
fits with AID and its focus and where we are going.
    And for goodness' sake, let's adopt, adapt, and use and 
empower people outside who have all these wonderful ideas, who 
could make these happen, and we need new ways to do that. So we 
are on the cusp, I think, of discovering that we have a 
striking series of very interesting capabilities out there from 
all over. And our job together is how do we empower this and 
get it working in our common interest to do the kinds of things 
that obviously you and the Congress tell us are high priorities 
for you as we move ahead.
    And on one final point, don't change the priorities every 5 
years.
    Mr. Israel. Thank you.
    Mrs. Lowey. I am tying to figure out, how many minutes?
    In the meantime, Mr. Crenshaw, do you want to begin while 
we are figuring out? I see there is a vote--how many more 
minutes?
    I just have to say, Mr. Ambassador, you haven't convinced 
me, and I support the rewrite of the act, and Howard Berman is 
aggressively working on it, and we consult. But I still believe 
with strong leadership and direction you can get the message 
out. But I don't want to take Mr. Crenshaw's time.
    Let me ask my distinguished witnesses--I am willing to come 
back. We still have a question from Mr. Chandler and Mr. 
Crenshaw. What is your time like? We have three votes. Mr. 
Chandler, do you want to come back or submit a question for the 
record.
    Mr. Chandler. I hate to make them wait just for my 
questions.
    Mr. Crenshaw. Same.
    Mr. Chandler. I have a lot of questions but I hate to make 
them wait for them.
    Mrs. Lowey. Why don't we do this, then, because I think 
your input is so valuable. Perhaps we can orchestrate an 
additional--not an additional hearing, but additional 
discussions so that we can pursue this, because I hate to keep 
you waiting a half hour, I guess, while we go and vote.
    So I am going to, instead of recess--this is very difficult 
for me because I would like to hear more of your outstanding 
advice and testimony--I am going to adjourn the hearing so we 
don't keep you waiting a half hour. And I do hope--I know you 
have all been in to see many of us--we have the opportunity to 
continue this discussion.
    So thank you so much. The hearing is adjourned.

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                           W I T N E S S E S

                              ----------                              
                                                                   Page
Adams, Dr. Gordon................................................   521
Baldo, Suliman...................................................   463
Bent, R. G.......................................................   285
Bushnell, Prudence...............................................   613
Clinton, Hon. H. R...............................................     1
Fulgham, A. L....................................................    57
Garner, Rodger...................................................   339
Hamre, Dr. J. J..................................................   521
Haugaard, Lisa...................................................   387
Hernandez, A. P..................................................   387
Johnson, David...................................................   339
Kunder, James....................................................   613
Lew, Jacob.......................................................   163
Lindborg, Nancy..................................................   521
Moose, Ambassador George.........................................   521
Naland, J. K.....................................................   650
Olson, Joy.......................................................   387
Pickering, Thomas................................................   613
Prendergast, John................................................   463
Shannon, Thomas..................................................   339
Shinn, David.....................................................   463
Walsh, T. J......................................................   231

                                  
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