[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]





       PROGRESS OF THE OBAMA ADMINISTRATION'S POLICY TOWARD IRAN

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

                                HEARING

                               before the

                   SUBCOMMITTEE ON NATIONAL SECURITY,
                HOMELAND DEFENSE AND FOREIGN OPERATIONS

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 15, 2011

                               __________

                           Serial No. 112-99

                               __________

Printed for the use of the Committee on Oversight and Government Reform








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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

    Subcommittee on National Security, Homeland Defense and Foreign 
                               Operations

                     JASON CHAFFETZ, Utah, Chairman
RAUL R. LABRADOR, Idaho, Vice        JOHN F. TIERNEY, Massachusetts, 
    Chairman                             Ranking Minority Member
DAN BURTON, Indiana                  BRUCE L. BRALEY, Iowa
JOHN L. MICA, Florida                PETER WELCH, Vermont
TODD RUSSELL PLATTS, Pennsylvania    JOHN A. YARMUTH, Kentucky
MICHAEL R. TURNER, Ohio              STEPHEN F. LYNCH, Massachusetts
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
BLAKE FARENTHOLD, Texas













                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on November 15, 2011................................     1
Statement of:
    Dubowitz, Mark, esq., executive director, Foundation for 
      Defense of Democracies; Kenneth M. Pollack, Ph.D., 
      director, Saban Center for Middle East Policy, Brookings 
      Institution; and Suzanne Maloney, Ph.D., senior fellow, 
      Saban Center for Middle East Policy, Brookings Institution.     6
        Dubowitz, Mark, esq......................................     6
        Maloney, Suzanne, Ph.D...................................    44
        Pollack, Kenneth M., Ph.D................................    23
    Szubin, Adam J., Director, Office of Foreign Assets Control, 
      U.S. Department of the Treasury; Henry T. Wooster, Acting 
      Deputy Assistant Secretary, Bureau of Near Eastern Affairs, 
      U.S. Department of State; and Colin H. Kahl, Ph.D., Deputy 
      Assistant Secretary of Defense for the Middle East, U.S. 
      Department of Defense......................................    66
        Kahl, Colin H., Ph.D.....................................    86
        Szubin, Adam J...........................................    66
        Wooster, Henry T.........................................    77
Letters, statements, etc., submitted for the record by:
    Dubowitz, Mark, esq., executive director, Foundation for 
      Defense of Democracies, prepared statement of..............     9
    Kahl, Colin H., Ph.D., Deputy Assistant Secretary of Defense 
      for the Middle East, U.S. Department of Defense, prepared 
      statement of...............................................    89
    Maloney, Suzanne, Ph.D., senior fellow, Saban Center for 
      Middle East Policy, Brookings Institution, prepared 
      statement of...............................................    46
    Pollack, Kenneth M., Ph.D., director, Saban Center for Middle 
      East Policy, Brookings Institution, prepared statement of..    25
    Szubin, Adam J., Director, Office of Foreign Assets Control, 
      U.S. Department of the Treasury, prepared statement of.....    69
    Wooster, Henry T., Acting Deputy Assistant Secretary, Bureau 
      of Near Eastern Affairs, U.S. Department of State, prepared 
      statement of...............................................    79

 
       PROGRESS OF THE OBAMA ADMINISTRATION'S POLICY TOWARD IRAN

                              ----------                              


                       TUESDAY, NOVEMBER 15, 2011

                  House of Representatives,
Subcommittee on National Security, Homeland Defense 
                            and Foreign Operations,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:03 a.m., in 
room 2247, Rayburn House Office Building, Hon. Jason Chaffetz 
(chairman of the subcommittee) presiding.
    Present: Representatives Chaffetz, Issa, Tierney, Cummings, 
Welch, and Quigley.
    Staff present: Thomas A. Alexander, senior counsel; Brien 
A. Beattie, professional staff member; Molly Boyl, 
parliamentarian; Mark D. Marin, director of oversight; Rafael 
Maryahin, counsel; Nadia A. Zahran, staff assistant; Jaron 
Bourke, minority director of administration; Ashley Etienne, 
minority director of communications; Paul Kincaid, minority 
press secretary; Adam Koshkin, minority staff assistant; and 
Scott Lindsay and Carlos Uriarte, minority counsels.
    Mr. Chaffetz. Good morning. The committee will come to 
order.
    I would like to begin this hearing by stating the Oversight 
Committee's mission statement.
    We exist to secure two fundamental principles: First, 
Americans have the right to know that the money Washington 
takes from them is well spent; and, second, Americans deserve 
an efficient, effective government that works for them. Our 
duty on the Oversight and Government Reform Committee is to 
protect these rights.
    Our solemn responsibility is to hold government accountable 
to taxpayers because taxpayers have a right to know what they 
get from their government. We will work tirelessly in 
partnership with citizen watchdogs to deliver the facts to the 
American people and bring genuine reform to the Federal 
bureaucracy.
    This is the mission statement of the Oversight and 
Government Reform Committee.
    Appreciate everyone being here this morning. And I would 
like to welcome Ranking Member Tierney and members of the 
subcommittee and the people joining us in the audience and on 
television.
    The hearing today is ``Progress of the Obama 
Administration's Policy Toward Iran.'' Today's proceedings will 
examine whether the President's strategy is effectively 
deterring Iran's nuclear program and bringing an end to human-
rights abuses there.
    During his campaign for the Presidency, President Obama 
promised that his administration would pursue an aggressive 
strategy to end Iran's nuclear program. In his ``Blueprint for 
Change,'' he stated that the Obama administration would, ``use 
aggressive and direct diplomacy to prevent an Iranian regime 
from developing a nuclear program. It will put an end to the 
failed policy that has let Iran develop its nuclear program and 
strengthen its position in the region, and present the Iranian 
regime with a clear choice: end your nuclear program, support 
for terror, and threats toward Israel or face increased U.S. 
and multilateral pressure.''
    In his inaugural address, President Obama reiterated his 
preference for open diplomacy and the use of soft power by 
saying, ``To those who cling to power through corruption and 
deceit and the silencing of dissent, know that you are on the 
wrong side of history but that we will extend a hand if you are 
willing to unclench your fist.''
    After a year and a half in office, the administration began 
applying new pressure to Iran's leadership. In July 2010, 
President Obama signed into law the Comprehensive Iran 
Sanctions Accountability and Divestment Act [CISADA]. It 
expanded the U.S. Government's authority to target Iran's 
energy and financial sectors. It targeted those who commit 
human-rights abuses. To date, the U.S. Government has imposed 
sanctions on 10 companies for violations of this act.
    Through the sanctions and other frameworks, has the United 
States inflicted economic hardship on Iran? Is this enough? Is 
that pressure being applied in the right way? If the goal is to 
prevent Iran from obtaining a nuclear weapon, then apparently 
not.
    Just last week, the IAEA released their report indicating 
that Iran has taken actions consistent with the manufacturing 
of a nuclear weapon. The IAEA report stated the following: 
``The agency has serious concerns regarding possible military 
dimensions to Iran's nuclear program. After assessing carefully 
and critically the extensive information available to it, the 
Agency finds the information to be, overall, credible. The 
information indicates that Iran has carried out activities 
relevant to the development of a nuclear explosive device.''
    Iran remains undeterred despite the various sanctions and 
U.N. Security Council resolutions imposed against it. In fact, 
Iran's rhetoric is more reckless than ever, especially toward 
Israel. In sum, the aggressive and direct diplomacy against 
Iran's nuclear program doesn't seem to be working very well.
    What is the new plan? Is the administration pursuing 
another strategy, or is it standing behind the current failed 
approach? I look forward to hearing from our government 
witnesses about whether the administration is revising its 
approach.
    A nuclear-armed Iran is an unacceptable outcome for the 
United States and its allies. Unfortunately, Iran's destructive 
behavior is not limited to its nuclear program. Over the years, 
they have been known to provide material support to militias in 
Iraq. Its covert war against the United States is designed to 
bring instability to Iraq and the region. Fortunately, our 
military has been a protective force and has been a significant 
deterrent. It remains to be seen how that may change after 
military withdrawal on December 31st of this year.
    Will the State Department be prepared to defeat direct or 
indirect military action by Iran? Will Secretary Clinton's army 
of private contractors be able to protect the 16,500 personnel 
under her care? I look forward to hearing from our witnesses 
about the extent of the threat and how the administration plans 
to confront it.
    Before I recognize the ranking member, I would like to note 
the absence of senior policymakers from the State Department, 
Defense Department, and the Treasury Department. I extended 
invitations to Deputy Secretaries of those agencies, but they 
declined to make time in their schedule and appear today. The 
Under Secretaries of those agencies were invited, but they are 
either busy or away from the office.
    I find it inexcusable that we continue to be rebuffed by 
the administration for providing the witnesses most pertinent 
to these types of hearings. It is imperative that they show up 
before these hearings, and yet there is a continued pattern 
here that is just unacceptable to the American people and to 
this committee. I find it inexcusable.
    The issues surrounding Iran are complex. The solutions are 
difficult and dynamic. There is no excuse to hide from 
oversight. Senior policymakers should be here to answer 
questions about the President's strategy, and taxpayers deserve 
nothing less than a full accounting for their investment in 
these programs. I look forward to hearing from our witnesses.
    I will also add, it was our initial request to have the 
Members all appear on one panel so we could have a candid 
discussion and it would be a better use of Members' time and, I 
think, a better discussion for the American people. The 
administration refused to sit next to people who weren't in the 
government, and so, consequently, they have elected to be on a 
separate panel. We will hear from them after, on panel number 
two.
    I would now like to recognize the distinguished ranking 
member, the gentleman from Massachusetts, Mr. Tierney, for his 
opening statement.
    Mr. Tierney. Thank you, Mr. Chairman.
    And thank all of our witnesses for being here today. We 
appreciate the advice and insight that you will provide for the 
committee.
    You know, the United States obviously has a difficult 
relationship with Iran, and it has faced some significant new 
strains in that relationship just in the past month. On October 
11, 2011, the Department of Justice indicted an Iranian-
American for allegedly attempting to orchestrate the 
assassination of the Saudi Ambassador to the United States on 
American soil. Just last week, the International Atomic Energy 
Agency [IAEA], released a report making the case that, over the 
past 10 years, ``Iran has carried out activities relevant to 
the development of a nuclear explosive device.''
    How we respond to such threats to our national interest, 
the security of Israel, and the stability of the Middle East is 
a major question. Some have called on the United States to 
punish Iran through harsher sanctions.
    I do want to point out that President Obama made comments 
during his election that he would make efforts to reach out to 
the Iranian people and their government to try to work out some 
solution to the problems that existed there. He made 
extraordinary efforts to reach out. They were rebuffed. And I 
think the only good thing that came of that, obviously, was 
that the rest of the international community understood that 
this President was at least making a good-faith effort and this 
country was making a good-faith effort. And that international 
community, and with our allies, have worked with the President 
to put in more effective sanctions since that point in time 
than any previous administration has put in place.
    So I agree that we have to continue the pressure on Iran's 
leaders, and we have to get them to comply with their treaty 
obligations, and we also have to be sure to weigh all the 
consequences of those sanctions. These are serious matters.
    International sanctions should be narrowly focused to 
inflict maximum pain on the ruling regime in Tehran while 
minimizing the impact of the people of Iran and on global 
markets. For example, many have suggested increased sanctions 
on Iran's oil industry. Although this is an obvious target 
given that oil accounts for 80 percent of Iran's exports and 70 
percent of the government's revenue, any sanctions would likely 
lead to a significant increase in global oil prices.
    We have to weigh that and determine whether or not that 
means we should move forward with those sanctions or take some 
other course. Given our current economic conditions, any 
significant increase in oil prices is likely to harm any 
fragile recovery in the world and increase living expenses for 
families both in Europe and Asia as well as the United States.
    I have also been concerned by recent attempts by Congress 
to tie the hands of the administration by mandating sanctions 
of a particular nature without leaving suitable flexibility. 
Although I believe Congress has an important role to play in 
authorizing executive action and determining the scope of 
potential sanctions, I think the Congress must also provide the 
President with the authority to exercise sanctions and the 
flexibility to determine when and how to use them in 
conjunction with international partners. Only with this 
flexibility will the President be able to continue to ensure 
the support of the international community and ultimately 
facilitate a change in Iranian policies, we hope.
    I look forward to hearing from all of our witnesses today. 
I hope they can help us explore our options at this critical 
point in American-Iranian relations. As we discuss these 
options, we must carefully evaluate all of the risks and all of 
the potential benefits of each policy option and ensure an 
effective approach.
    I want to thank you again, all of our witnesses. I look 
forward to hearing your testimony.
    Mr. Chaffetz. Thank you.
    I would now like to recognize the chairman of the Oversight 
and Government Reform Committee, the distinguished Member from 
California, Mr. Issa.
    Mr. Issa. Thank you, Mr. Chairman. And I will be brief.
    I came here to show solidarity over your concern that the 
administration continues to rebuff any attempt at real 
oversight by this and other committees of the Congress.
    I could not fail to note the gentleman from Massachusetts' 
opening statement that somehow there is a price of oil linked 
to whether or not we have effective enforcement against Iran.
    Mr. Tierney. If the gentleman will yield?
    Mr. Issa. Of course.
    Mr. Tierney. That was a question about whether or not there 
ought to be and whether or not we ought to consider it.
    Mr. Issa. Right.
    Mr. Tierney. So I don't mind you quoting me; just please do 
it accurately.
    Mr. Issa. And in light of that full disclosure, I think it 
is only fair that we understand that this committee has, and 
other subcommittees, worked very hard to recognize what the 
potential for replacement of Saudi Arabia, Iranian, and other 
oil and natural gas. We are now becoming a net exporter of 
natural gas, and Pennsylvania alone has more proven known 
reserves of oil than Iran could possibly export. The fact is, 
we can, in fact, become oil and natural gas self-sufficient and 
even become an exporter, as we are, of natural gas.
    So I do believe that we should go to the basic question. 
The basic question before us today is not, ``What is Iran's 
intentions?'' I was a first lieutenant in 1979. I have lived 
through Iran's intentions for longer than most people in this 
room have been alive. It is very, very clear that Iran's 
intentions are to continue being a disruptive force to peace 
and security in a region in which they live and extended well 
beyond.
    The only exception that I would make is for those who say 
that what they might do miss the point that, every day, Lebanon 
is held captive by a Hezbollah financed by Iran. Every day, the 
Palestinian people find themselves having those who do not 
support peace and coexistence with Israel financed by Iran. 
Every day, the Syrian regime is kept together by money from 
Iran. And that is only the tip of the iceberg. As the chairman 
noted and the ranking member noted, the attempt to assassinate 
a seated Ambassador from Saudi Arabia on U.S. soil is another 
example of an Iranian connection that is ongoing.
    So as we look today at what Iran will do with a nuclear 
weapon, I would suggest strongly that this committee recognize 
that Iran will do with a nuclear weapon, even if it never uses 
it, everything it has done for more than three decades and 
more. A nuclear weapon gives impunity to a government to be 
taken by force--something that Iran has not had to face. Iran 
has had to look at the existential threat of going to war with 
one or more other nations.
    Once they have a nuclear weapon, they simply will do more 
of what they have been doing. They will fund terrorism around 
the world. They will be, in fact, a greater threat to Israel 
than they are today. I find that sometimes hard to believe, but 
I believe that they simply will look and say, ``Now we can arm 
in a higher way Hezbollah and Hamas.''
    So the attempts to limit the economic capability of Iran to 
fund that are woefully inadequate. I do reserve the right and 
the authority of Congress to dictate to the President what he 
or she can do with taxpayer dollars. And I think it is 
extremely important that the American people understand that as 
long as we allow $1 to be exported to Hamas or Hezbollah or 
other terrorist organizations by Iran, we have not done all we 
can do to limit the scope of their terrorism around the world.
    I yield back.
    Mr. Chaffetz. Thank you.
    Members will have 7 days to submit opening statements for 
the record.
    I would now like to recognize our first panel. Mr. Mark 
Dubowitz is the executive director of the Foundation for 
Defense of Democracies. Dr. Kenneth Pollack is the director of 
the Saban Center for Middle East Policy at the Brookings 
Institution. And Dr. Suzanne Maloney is a senior fellow at the 
Saban Center for Middle East Policy at the Brookings 
Institution.
    We appreciate you all being here and taking time in 
preparation for this hearing.
    Pursuant to committee rules, all witnesses will be sworn 
before they testify. If you will please rise and raise your 
right hands.
    [Witnesses sworn.]
    Mr. Chaffetz. Thank you. You may be seated.
    Let the record reflect that the witnesses all answered in 
the affirmative.
    In order to allow us time for discussion, please limit your 
testimony to 5 minutes. Your entire written statement will be 
part of the record, and we will move to questioning.
    We will now recognize Mr. Dubowitz for 5 minutes.

    STATEMENTS OF MARK DUBOWITZ, ESQ., EXECUTIVE DIRECTOR, 
  FOUNDATION FOR DEFENSE OF DEMOCRACIES; KENNETH M. POLLACK, 
PH.D., DIRECTOR, SABAN CENTER FOR MIDDLE EAST POLICY, BROOKINGS 
 INSTITUTION; AND SUZANNE MALONEY, PH.D., SENIOR FELLOW, SABAN 
      CENTER FOR MIDDLE EAST POLICY, BROOKINGS INSTITUTION

                STATEMENT OF MARK DUBOWITZ, ESQ.

    Mr. Dubowitz. Well, thank you, Chairman Chaffetz, Ranking 
Member Tierney, and Chairman Issa, for the honor of testifying 
before you today.
    Now, many rightly question the effectiveness of economic 
sanctions as the primary tool to frustrate or even thwart 
Tehran's nuclear plans. Sanctions, indeed, have led to the 
slow-motion demise of the Iranian energy industry as Iranian 
oil production continues to materially decline. However, their 
medium- to long-term impact is insufficient because Iran will 
likely cross the nuclear threshold before these sanctions have 
time to work. There is also no evidence yet to suggest that 
economic pressure has made the Iranian regime rethink its 
decisions to develop nuclear weapons.
    U.S. sanctions policy has been crafted in a way that 
reduces Iranian oil investment while giving the market time to 
adjust to a reduction in Iranian production. The downside of 
this medium-term sanctions strategy is continued near-term 
annual export revenue of approximately $80 billion. These funds 
provide sufficient resources to buttress the regime against 
sanctions and its economic and political challenges and to fund 
its nuclear and other nefarious activities.
    To have any chance of success, sanctions need to target 
Iran's oil sales, which account for up to 75 percent of the 
government budget, 80 percent of export earnings. And they need 
to do this without causing a significant increase in petroleum 
prices. Otherwise, Tehran can sell less and make more money.
    But effective energy sanctions don't have to raise oil 
prices. They actually can do the opposite if Washington learns 
how to leverage the self-interest of companies that won't 
adhere to U.S. sanctions. The objective of sanctions targeting 
Iran's oil sales ought to be to discourage white-hatted 
companies--European and some Asian companies that have no 
desire to risk their access to the American market--from 
dealing in Iranian oil while allowing black-hatted companies--
mainly Chinese firms and some others--to continue to buy 
Iranian crude in whatever quantity they desire. We should want 
to reduce the number of potential buyers of Iranian petroleum 
without reducing the quantity of oil on the market. With enough 
white-hatted companies out of the market, black-hatted 
companies can drive ruthlessly for price discounts from Tehran. 
The Chinese, in particular, are aggressive businessmen with an 
interest in securing cheap oil.
    I recommend the following three policies to accomplish this 
goal:
    Number one, sanction companies buying oil from the Iranian 
Revolutionary Guard Corps. The Obama administration can greatly 
intensify the hassle factor in buying Iranian crude by 
designating IRGC entities in the crude oil supply chain, 
including the National Iranian Oil Co.
    Number two, establishing the United States as an Iranian-
oil-free zone. Right now, there is a loophole in U.S. law. 
American consumers are filling up their gasoline tanks with 
refined petroleum made from Iranian crude oil. The Iranian-oil-
free zone would close this loophole by requiring that all 
European refineries exporting refined petroleum to the United 
States must certify that those products do not contain Iranian 
oil and be subject to penalties for false certification.
    We have done detailed economic modeling that indicates an 
Iranian-oil-free zone would have a negligible impact on the 
price of oil and gasoline but deny the regime between $2.8 
billion and $39 billion in annual oil revenues. Even at the 
lowest end of this range, this adds an additional 20 percent to 
Treasury Department estimates that all sanctions will cost Iran 
$14 billion in annual oil revenues over the next 5 years.
    Number three, targeting the Central Bank of Iran. The 
administration should designate the CBI in its entirety but 
provide at least 6 months before implementation begins in order 
to give oil companies time to find alternative suppliers and 
calm oil markets.
    This will be a critical 6-month period, however. In order 
to take advantage of this period, Washington should immediately 
and selectively prohibit certain oil transactions where the CBI 
plays a role involving IRGC-affiliated companies and oil 
buyers. Sanctions need not be enforced against Chinese energy 
firms buying Iranian oil. Treasury will have more flexibility 
to selectively enforce against some buyers and not others based 
on evidence of IRGC involvement.
    Energy traders will quickly sense that the quantity of oil 
on the market remains unchanged while Iran watches its oil 
revenues decline. This avoids price spikes as oil trades will 
continue; only the number of buyers for Iranian oil will be 
reduced.
    This approach will be very costly for the CBI. It would 
reinforce an important message, as well. The CBI is a critical 
link in the IRGC-dominated oil supply chain and a key enabler 
of IRGC activities. This will help Washington build 
international support for a blanket designation of CBI, give 
markets more time to adjust to the possibility of more severe 
sanctions, and persuade oil purchasers and financial 
institutions to assess carefully the risks of doing business 
with the Central Bank.
    These three approaches are mutually reinforcing and 
designed to achieve one goal: shrink the pool of buyers for 
Iranian crude and give the remaining buyers enough negotiating 
power to extract significant discounts from Tehran. If oil 
sanctions fail, no one could argue that countries threatened by 
Iran did not exhaust all peaceful alternatives.
    Thank you.
    [The prepared statement of Mr. Dubowitz follows:]



    
    Mr. Chaffetz. Thank you. And an impressive 2 seconds left 
on the clock.
    Dr. Pollack, my challenge to you is to--we appreciate your 
testimony. We will now recognize you for 5 minutes.

             STATEMENT OF KENNETH M. POLLACK, PH.D.

    Dr. Pollack. Thank you very much, Mr. Chairman, Congressman 
Tierney, Congressman Cummings. It's a great pleasure to address 
the subcommittee on this incredibly important topic.
    Although I'm ready and willing to discuss the totality of 
U.S. policy toward Iran and Iranian policy toward the United 
States as we understand it, I would like to focus my remarks on 
Iran's role in Iraq, especially in the wake of the mutual 
decision by the United States and the Government of Iraq to end 
the American military mission to Iraq at the end of this year.
    For now, I would simply like to make three main points 
about this extremely important topic--a topic that will have 
profound influence on Iraq itself, on American policy toward 
Iraq, and on the wider U.S.-Iranian competition throughout the 
Middle East.
    The first point is that Iranian influence in Iraq is 
largely determined by how confident and strong the Iraqis feel, 
principally with regard to their own internal politics.
    Ambassador Ryan Crocker, when he was Ambassador to Iraq, 
used to remark that there is a natural limit on Iran's 
influence in Iraq. This is a true statement, but it is also a 
relative statement; it is not an absolute. The ability of the 
Iraqis to resist Iran is heavily dependent on their own sense 
of self-confidence, the strength that they feel in themselves, 
and the strength of their own political process moving forward.
    To use an analogy from the cold war, I think that it is 
safe to say that there was a natural limit on Russian influence 
in Finland that was no less great than the limit on Iranian 
influence in Iraq. But when the Finns felt that there was no 
one who could come to their defense after the Second World War, 
they unfortunately allowed the Soviets to dictate their foreign 
policy. Again, this was simply a function of the inability of 
the Finns to push back, of their sense that there was no one 
who could help them do so.
    We've seen the same thing in Iraq. When Iraqis have been 
strong, when they have been confident, in 2003 and 2004, 
Iranian influence has been extremely limited. This was perhaps 
no greater than in 2008 to 2010, the period after the American 
surge and Iraq's own Operation Charge of the Knights, in which 
Iranian forces were largely routed from Iraq. Jaish al-Mahdi 
and other Iranian-backed insurgencies and militias in Iraq were 
driven from the country in a series of operations. From Basra 
to Sadr City, the Iraqi people stepped out, demonstrated they 
wanted nothing to do with Iran, and, as a result, Iranian 
influence was greatly limited.
    In contrast, Iran's influence was greatest in the period 
2005-2006, when Iraq was descending into civil war and was able 
to pry apart the many divisions within Iraq to play different 
Iraqi groups off against one another and use the influence that 
it has most of: weapons, intelligence, violence, money--all of 
the things that Iraqis needed in that period of time.
    My second point is that Iran is now, unfortunately, 
stronger than it has ever been in Iraq before. And its 
influence, unfortunately, is likely to increase, rather than 
decrease, after the American withdrawal.
    Iraq's 2010 elections were in and of themselves very good 
elections, but the aftermath was very poor. They have led to 
the formation of a national unity government in Iraq that is 
deeply paralyzed, that is riven by its own divisions. And this 
has allowed the Iranians to once again pry apart Iraq, isolate 
different groups, make inroads with a variety. Ultimately, it 
was Iran that put together this government in Iraq, not the 
United States.
    In speaking to senior Iraqi leaders in recent months, I am 
struck by how many of them have said, mostly in resignation, 
never with any sense of joy, that today no Iraqi can become 
Prime Minister without Iranian approval.
    Ultimately, Iran is the chief backer of violent extremist 
groups like Asaib Ahl al-Haqq, Khataib Hezbollah, who are 
running rampant in southern Iraq, who are recreating the 
violence there. They are the patrons of the Sadrists. They have 
exerted tremendous influence on a variety of Kurdish groups and 
others in Iraq. And, ultimately, Iran is now becoming the 
dominant external force in Iraqi politics.
    My third and final point is that the best way that the 
United States can help remedy this current situation is--and it 
should follow from my previous two--by strengthening Iraqi 
domestic politics. Unfortunately, our ability to do so has been 
greatly limited. The withdrawal of American troops from Iraq 
will be a tremendous limitation on American influence moving 
forward. Ideally, the United States would massively ramp up its 
aid to Iraq in the wake of the withdrawal of American forces, 
but in the current budgetary climate this seems unlikely. 
Moreover, the White House has signaled a desire to pull back 
from the Middle East, not to move forward. This certainly is 
the perception in the region.
    Ultimately, the most useful thing that the United States 
could do would be to find it in its heart to provide some 
assistance to Iraq. The more that Iraqis feel that the United 
States is helping them, guiding their politics, the stronger 
they will feel, they will push back on Iraq--excuse me, on 
Iran. And what we have seen is that they are far more able to 
push back on Iran and to prevent Iran from exerting influence 
in Iraqi affairs than we ever are.
    Thank you very much.
    [The prepared statement of Dr. Pollack follows:]



    Mr. Chaffetz. Thank you.
    Dr. Maloney, you are now recognized for 5 minutes.

              STATEMENT OF SUZANNE MALONEY, PH.D.

    Dr. Maloney. Thank you very much, Chairman Chaffetz, 
Representative Tierney, and the entire subcommittee, for the 
opportunity to discuss this very important issue of U.S. policy 
toward Iran.
    I'm going to focus my remarks on the central question of 
today's hearing, and that is the track record of the current 
administration in addressing the challenges posed by Tehran. I 
will tell you that I see a sort of a good-news/bad-news story. 
And so I will talk a little bit about both the elements of 
success and the elements where we need tremendous improvement 
and talk about a few principles that one might consider in 
moving forward in terms of looking at policy toward Tehran.
    It's notable that the Obama administration has come full 
circle, from a tentative embrace of diplomacy and engagement to 
a much more robust and effective international effort to 
pressure Tehran than has ever existed. This transformation is, 
in fact, quite typical. Every administration since that of 
President Carter, since the 1979 Islamic Revolution in Iran, 
has used a variety of tactics and implements at its disposal, 
everything from diplomacy to sanctions, under every single 
administration from both parties.
    The good news is that the Obama administration has really 
achieved unprecedented success. We have seen the assembling of 
the widest and deepest international coalition of countries to 
deal with the threat of Iran. And I think what we have seen, 
particularly since 2010, is a real sense of momentum, that the 
international community has come together, that there is a real 
partnership, not simply between the United States and Europe 
but also between the United States and Russia and other 
countries as well, with China playing effectively a sort of 
nonconfrontational, more passive role with respect to 
sanctions.
    I think that it's important to recognize, despite the fact 
that we have not yet achieved our objectives with respect to 
changing Iranian policy, that assembling this kind of a 
coalition is no small achievement. Never before in the history 
of the Islamic Republic, despite 32 years of egregious policies 
and offenses against both its own people and its neighbors as 
well as U.S. interests in the region, never before have we seen 
the willingness of the international community to jeopardize 
its economic relationships with the Islamic Republic in 
anywhere near the degree that we have today.
    And we know that these sanctions are having an impact on 
Iran. The Iranians themselves, from the supreme leader on down, 
are saying so in a very public fashion. And they're taking 
actions to deal with it.
    That, of course is the bad news, that the sanctions have 
imposed a financial--heavy financial and political cost, but 
they haven't yet convinced Iranian leaders to change their 
policies, to relinquish their nuclear ambition, and abandon 
their other reckless policies, or to engage in a really serious 
dialog with Washington.
    There are a variety of reasons why this is the case: the 
political climate within Tehran, where we have seen the 
elevation of a group of policymakers who, in fact, see 
sanctions as part of an international conspiracy and who 
believe, in fact, there is an existential demand on the regime 
to resist these sanctions. They are less prone than ever to 
bending under economic pressure or accepting the cost-benefit 
logic of sanctions.
    And the Iranians also have tremendous capacity and a long 
history of working to mitigate and subvert sanctions. They are 
also quite adept at encouraging sanctions busting. And they 
have done quite a bit to exploit the disparity that exists in 
the international sanctions regime, whereby companies from 
countries such as China, which adhere to the bare minimum of 
U.N. Security Council sanctions but have yet to enact their own 
individual unilateral sanctions on energy investment in Iran, 
effectively have free rein to continue to invest in Iran today.
    So, as a result, I think that the difficulty that we face 
is, sanctions are not going to have the impact that we want, 
that the kind of dual-track, carrot-and-stick effort to bring 
Iran to the negotiating table is less likely to work today than 
ever before.
    For that reason, let me lay out five principles very 
quickly that I think are essential to moving forward, as we 
reassess U.S. policy at a time where it is, I think, a very 
opportune moment for doing so.
    First, we must have multilateral cooperation. That is what 
has made such an important psychological and economic impact 
over the past 2 years since the latest U.N. sanctions, U.N. 
Security Council sanctions, and unilateral measures by a 
variety of countries. It's incredibly important in doing so 
that we bring and keep China on board in a much more robust way 
than we have to date. China plays the indispensable role in 
terms of shaping the Iranian future.
    Second, we have to acknowledge and we have to articulate 
publicly, both to the American public and to our allies and 
partners abroad, that tough measures will entail tough 
tradeoffs. There is a lot of talk about crippling sanctions, 
but there is too often, I think, an optimistic presumption that 
we can--that those sanctions would have negligible impact on 
the very economic parameters of the U.S. market or of the 
international market. Oil markets are worldwide; oil supply is 
fungible. As a result, anything we do to impact Iran's ability 
to export its crude will have an impact on the price of oil 
here at home.
    Third, we should never unilaterally take diplomacy off the 
table. Every administration has used diplomacy, and every 
future administration will. Measures that tie any 
administration's hand are irresponsible and counterproductive.
    Fourth, the invocation of threats does little to advance 
our interests with respect to Iran. It, in fact, empowers the 
very people who we are looking to disempower in Iran.
    Finally, we need to rethink the universe of possibilities 
for advancing political change within Iran. And to do so, we 
need to have a conversation that goes beyond the standard 
discussion around the discredited terrorist organization, the 
Mujahedin-e Khalq.
    With that, I cede the floor. Thank you.
    [The prepared statement of Dr. Maloney follows:]



    Mr. Chaffetz. Thank you.
    I know you all had much more to say, but I appreciate the 
concise nature. And 5 minutes is difficult with such a broad 
and complex issue such as this.
    I'm now going to recognize myself for 5 minutes, and then 
we will have other Members proceed with the questioning.
    And, Dr. Maloney, I really appreciate the comments you 
made. I think I agreed with a lot of your points.
    To suggest that there has been, in your words, 
unprecedented success, I just--I beg to understand or I just 
don't understand where you think there has been unprecedented 
success, other than, you know, maybe getting some European 
countries to say, hey, we support you.
    Even when we list the five key points, one of the critical 
nature--you mentioned China. China is not coming along. China 
has not been helpful and persuasive in this. Do you see any 
sense that China, being such a pivotal role in close proximity, 
obviously, to Iran, that they are in any way, shape, or form 
helping us in any way?
    Dr. Maloney. I think, first, that the U.N. sanctions 
Resolution 1929, which was approved in June 2010 was, in fact, 
much more robust and much more meaningful. It includes a 
conventional arms ban. It included measures that facilitated 
European Union sanctions that effectively preclude any European 
investment in the Iranian energy sector. That is unprecedented. 
It's important. It has a real impact, both economically and 
psychologically. The Iranians would much prefer to deal with 
European companies, ultimately.
    In terms of Chinese cooperation, I think, in fact, we have 
seen quite a bit. They were cooperative during the process of 
the negotiation of U.N. Security Council Resolution 1929. They 
have gone slow with their investment. They have refused to sign 
new deals with Iran. But they do continue to do business; 
they're not legally prohibited from doing so.
    And that is, I think, where all the upside potential is in 
dealing with Iran, in making the point that the international 
community is united. It's very, very important that we persuade 
the Chinese to go beyond the current U.N. Security Council 
sanctions measures.
    Mr. Chaffetz. Thank you. And I guess my concern is, I don't 
think that we've been doing that.
    Mr. Dubowitz, let me go to you. In your testimony, you list 
18 firms connected to the Islamic Revolutionary Guard Corps 
[IRGC], which form part of the crude oil supply chain.
    These firms' activities were detailed in a report from the 
Foundation for Defense of Democracies to the administration 
back in February. To the best of your knowledge, has the 
administration taken any action against the 18 firms noted in 
that report?
    Mr. Dubowitz. You're starting to see some action. They 
sanctioned Tidewater, which is the largest ports operator in 
Iran. I think that's important, it's consequential.
    But there are literally hundreds of IRGC firms that are 
dominant players in the oil supply chain, including the largest 
Iranian energy front company in the world, the National Iranian 
Oil Co. [NIOC], which is presented as a state-owned institution 
and is usually the counterparty on an oil trade, but the IRGC 
is a dominant player in the Iranian energy industry, including 
in NIOC.
    And so I think that the administration should move ahead 
and sanction NIOC and other IRGC players in the oil supply 
chain and send a message to what I call white-hatted 
companies--those who have U.S. interests, who care about their 
reputation, who don't want a front-page story in the Financial 
Times that they're doing business with the Revolutionary Guard 
Corps--and send a message that if you're buying oil from Iran, 
you're buying it from the Revolutionary Guard Corps. And that's 
bad for business, it's bad for your exposure, it's bad for your 
reputation.
    We could rapidly accelerate the pace of designations. The 
administration could do much more and do it very quickly and, 
in doing so, send a message that we will not impact supply of 
oil, but we will go after price. We will put the remaining 
buyers, including the Chinese buyers, in a position where they 
will have stronger negotiating leverage to force a discount on 
the price of oil without taking one barrel of Iranian oil off 
the market.
    I agree with Dr. Maloney, we shouldn't be going after 
physical supply, we shouldn't be spooking oil markets, we 
shouldn't be doing anything that sends a message that we'll be 
taking 2.3 million barrels of Iranian oil off the market, but 
put the remaining buyers in a stronger negotiating position. I 
have a lot of confidence in Chinese oil traders that they will 
drive ruthlessly for price discounts if they have the Iranians, 
figuratively and literally, over a barrel.
    Mr. Chaffetz. Thank you.
    Dr. Pollack, let's talk about what is going to happen at 
the end of the year and the concerns that the Iranians will 
redirect many of their attacks. You know, we got 16,500 people 
that will be left there starting January 1st, many of these 
contractors. Let's talk a little bit more, if you will, about 
the ramifications of what you see Iran doing now.
    Dr. Pollack. Thank you, Mr. Chairman. I think this is a 
critical question moving forward.
    Having spent quite a bit of time in Iraq and been rocketed, 
been mortared, this is not something to take lightly. Muqtada 
al-Sadr has already announced that the American Embassy should 
be considered a residual occupying force and should be resisted 
as staunchly as the American troop presence was.
    What we have seen is a growth in Iranian-backed 
capabilities among groups like Asaib Ahl al-Haqq, Khataib 
Hezbollah, the Promised Day Brigades. And what we have seen is 
very little willingness on the part of the Iraqi Government to 
actually crack down on these because of its own complicated 
internal politics.
    I don't see any of that changing moving forward except that 
our ability both to influence the Iraqi Government to get the 
things they need to do is going to be dramatically diminished. 
It took intervention by the administration and, in particular, 
General Austin to get the Iraqis to do anything over the 
summer, and even that has tapered off since then. And what's 
more, our ability to respond directly is going to be 
dramatically undermined. No matter how many Black Hawk 
helicopters Triple Canopy may have, they are not going to have 
the same capability that the Apaches, that our current forces 
have.
    Mr. Chaffetz. Okay. Thank you. My time has expired.
    I will now recognize the gentleman from Massachusetts, Mr. 
Tierney, for 5 minutes.
    Mr. Tierney. And with your deference, Mr. Chairman, I am 
going to defer to the ranking member of the full committee. I 
think his schedule----
    Mr. Chaffetz. Absolutely. Rather than do that, we will 
recognize the ranking member, Mr. Cummings, for 5 minutes.
    Mr. Cummings. Thank you very much for yielding.
    Dr. Maloney, in your written statement, you say that there 
is simply no mechanism for exerting game-changing pressure on 
Iran without imposing unpredictable and probably unpleasant 
consequences for the global energy balance and the worldwide 
economic recovery.
    Dr. Maloney, what do you think of Mr. Dubowitz's claim that 
his approach to tougher sanctions on Iran's oil sales does not 
risk driving up the price of oil?
    Dr. Maloney. I haven't investigated the modeling that he 
has compiled, but what I have seen and read of the mechanism 
that he proposes is that many experts on oil markets suggest 
that it would have an escalatory impact on the price of oil 
both here and around the world.
    Mr. Cummings. And, Dr. Maloney, do you think that 
significant new sanctions on Iran's oil sales are worth the 
risks of endangering the global economic recovery?
    Dr. Maloney. I think we have yet to see that this regime in 
Tehran is susceptible to economic pressure in terms of changing 
its foreign policy.
    I was testifying before this subcommittee 2 years ago, and 
people said that refined petroleum products, cutting off supply 
of gasoline to Tehran would be an Achilles' heel and change its 
posture. We did not see that, in fact, occur.
    I am not optimistic that incremental measures, even if they 
make Iran's fiscal conditions more difficult, will alter their 
approach to their security policy.
    Mr. Cummings. So you just think they are hard-nosed?
    Dr. Maloney. I think that this regime and this current 
leadership in Tehran is tied to--its approach to the world is 
deeply paranoid and defensive. Looking at the regional 
environment, looking at what's happened in Libya, they are 
unlikely to bargain away their nuclear advantage or any of 
their other policies. They see these as existential defense 
mechanisms against a world which is aligned against them.
    Mr. Cummings. Now, the Obama administration can make a 
persuasive claim to unprecedented successes in dealing with 
Iran, and yet the ultimate objective of U.S. policy--
eliminating threats posed by the regime's pursuit of nuclear 
capability, support for terrorism, and abuse of its own 
citizenry--remains as distant as ever.
    Dr. Maloney, do you believe that further economic sanctions 
are necessary for the United States to make progress in 
achieving this goal?
    Dr. Maloney. I think sanctions which bring the entire world 
together to send a message to Tehran will have an impact over 
time, but I think we also have to recognize that they also have 
an impact on our own economy. Iran is capable of change, but 
the level of impact that we need to have is one that will 
involve the entire international community coming together in a 
united fashion.
    Mr. Cummings. Speaking of that international community, I 
think you said that the fact that all of these nations have 
come together with regard to this effort is unprecedented. Do 
you see any threat to that cohesion?
    Dr. Maloney. I think as sanctions endure and the fact that 
the Chinese can continue to do business in Iran, even if they 
have been relatively cooperative to date in terms of not 
expanding their posture in Iran since the 2010 U.N. Security 
Council resolution, that will encourage other countries and 
companies to sanctions-bust.
    In particular, I would look toward Russia, which is also 
not susceptible to other sanctions at the moment. The 
leadership is not inclined to accept them, and they have no 
unilateral sanctions which preclude their energy companies from 
investing in Iran's energy sector. I would suspect that over 
time, as China continues to do business in Iran, the Russians 
will look to expand their own position there.
    Mr. Cummings. Well, would unilateral sanctions by the 
United States undermine the progress that was made in 
convincing the international community to participate in a 
comprehensive sanctions regime?
    Dr. Maloney. Sanctions that make the price of oil more 
expensive for customers of Iranian crude will alienate those 
customers, in particular China and India.
    Mr. Cummings. Uh-huh. And therefore?
    Dr. Maloney. And, therefore, they will make it much more 
difficult for us to attain the level of international 
cooperation that's necessary to drive a decisive message to 
Tehran.
    Mr. Cummings. Well, in the wake of the assassination of the 
Saudi Ambassador to the United States and the recent report by 
the International Atomic Energy Agency, some have called on 
Congress to pass strict sanctions against and to limit 
diplomatic communications with Iran.
    Mr. Dubowitz, do you believe Congress should pass strict 
sanctions legislation that eliminates the administration's 
ability to apply sanctions when needed and prevents further 
attempts at diplomacy?
    Mr. Dubowitz. Well, Ranking Member Cummings, I'm very much 
focused on whether sanctions can actually work. Whether the 
United States should be talking to the Iranians and what they 
should be talking about is up to the administration. What I 
want to do is respond to the point about sanctions.
    I ultimately do not think sanctions will force the Iranian 
regime to change its risk-reward calculus with respect to a 
nuclear weapon. Let me be clear and on the record on that. I do 
think that we have a moral and strategic responsibility to try 
and to exhaust all peaceful alternatives. Otherwise, perhaps 
everybody on this panel will agree, we may have to move to more 
coercive methods.
    What I want to suggest with respect to oil sales is that 
there is a way to do this. Instead of only punishing greed--our 
sanctions regime is always designed to punish greed, to punish 
the self-interest of companies that want to continue to do 
business with Iran--what I am suggesting is that there may be 
an opportunity to leverage greed; in other words, to shrink the 
number of buyers for Iranian oil using a variety of methods, 
both unilateral and multilateral, designed to actually put the 
Chinese and others in a position where they can buy all the oil 
they want from Iran, but they have stronger negotiating 
leverage because the pool of potential buyers of Iranian oil is 
shrunk.
    And we can do that through a variety of ways that have 
already been used multilaterally. For example, the Iranian 
Revolutionary Guard Corps. The idea of designating IRGC 
companies that are active in the Iranian economy is something 
that has received overwhelming international support, from the 
United Nations, from the EU, the United States, Canada, Japan, 
South Korea.
    In fact, former Under Secretary Stuart Levey, his 
successor, Under Secretary David Cohen, are using exactly this 
method to persuade international financial institutions to stop 
doing business with IRGC banks. I'm suggesting we do the same 
thing in the crude oil supply chain: Designate IRGC entities 
and then threaten sanctions against companies that do business 
with the IRGC.
    The reality is white-hatted companies--Europeans, Japanese, 
some South Korean refineries--will respond to that pressure. 
The Chinese and others will not. But that's fine. Let them 
continue buying Iranian oil, let them drive for price 
discounts, let them not impact physical supply. If the Congress 
and the administration is too aggressive in calling for 
sanctions against physical supply, then I agree with Dr. 
Maloney, what you're going to see is a spike in oil prices. But 
if we make the case that this is about price, not about supply, 
I think we can have a much better alternative. And if it 
doesn't work, no one could argue that countries threatened by 
Iran have not exhausted all peaceful alternatives.
    Mr. Cummings. Thank you very much.
    Mr. Chaffetz. Thank you.
    I now recognize the gentleman from Massachusetts, Mr. 
Tierney, for 5 minutes.
    Mr. Tierney. Thank you.
    Dr. Pollack, President Bush entered a deal or arrangement, 
contract with the Iraq Government that we would have our troops 
out at the end of 2011, and President Obama has been trying to 
fulfill that commitment, I believe.
    So, given that background, you know, the President Bush 
agreement to get the troops out by that point and the Iraqis' 
apparent unwillingness to amend that in any sense of the way, 
am I hearing that your response to this is that, at this point, 
the best that we can do in terms of that is to try and give 
some useful and robust assistance from the United States to 
Iraq to try to help them resolve their internal problems and 
strengthen their government and their ability to withstand 
pressures from Iran?
    Dr. Pollack. First, Congressman, I would certainly agree 
that there have been a long, painful litany of mistakes made in 
American policy toward Iraq, and they begin from the very early 
days of the Bush administration's focus on Iraq. It is 
certainly the case that the hand left to the Obama 
administration was a weak one. Nevertheless, I think that we 
have made--we have created additional problems for ourselves 
since then.
    There's no question that we are where we are. There is no 
question that Iran's influence in Iraq has increased and will 
likely increase as our troops withdraw. The best that we can 
hope for is to help moderate Iranian behavior, and the best way 
to do that is to strengthen Iraq's own internal politics.
    That is going to be difficult in an era of declining 
American resource commitments to Iraq. And, therefore, we have 
to act as creatively as we possibly can. Much of what I have 
proposed, much of what is in my written testimony is about how 
we find creative ways to do that, to do things by giving things 
other than just money: know-how, diplomatic assistance. But one 
that's also worth thinking about, the position the Iraqis will 
likely have the ability to buy it at some point in time, is 
military assistance, which the Iraqis need and, as we have seen 
in Egypt, can play an extremely important role in helping shape 
Iraq's political development, which, as I have stressed, is the 
key to keeping Iran out.
    Mr. Tierney. Thank you for that.
    Mr. Dubowitz, now I am going to call on your integrity to 
help us out here. We don't have a witness up here who can 
apparently counteract your theory. You know from having put 
your position out there that other people have rebutted it in 
some sense. I am sure you are fully aware of that.
    Do us the favor, if you would, of presenting what those 
rebuttals are, you know, what issues do people raise with your 
argument. And then again I will offer you the chance to rebut 
them back and give your position again. But I am curious to 
know what people say. When you say this is the way to do it, 
how do they couch the way that they think it is going to drive 
up international prices and why? Is it because oil is fungible 
on the market? Is it because they just think that China will 
come in and buy up the 2.3 billion and it won't be any big 
deal?
    If you would.
    Mr. Dubowitz. Yeah, no, there are certainly some weaknesses 
to the argument. I think the first is that the assumption is 
that the Chinese will actually use their trade and negotiating 
leverage to force a discount. The Chinese may have other 
strategic objectives, and they decide they're going to pay a 
premium for oil in order to support the Iranian regime and 
undermine American security. I think that's perhaps one 
weakness.
    I think a second weakness of the argument is that it 
presupposes that our short-term sanctions policy is to stop 
this Iranian nuclear weapon. If you believe that our sanctions 
policy should be designed as a containment strategy, then a 
medium- to long-term sanctions strategy is sufficient. And I 
think that the administration has done a good job of putting in 
place a medium- to long-term sanctions regime. And I think Dr. 
Maloney articulated what that looks like.
    Unfortunately, I think we should stop the nuclear bomb. I 
think President Obama has made it very clear that an Iranian 
nuclear weapon is unacceptable.
    And I fear that we are in a bit of a sanctions sleepwalk, 
where we have done a very good job--or the administration has 
done a very good job of designing a regime that has decreased 
foreign investment in the Iranian energy sector, that has 
shrunk gasoline imports by about 90 percent, that has led to 
many companies terminating their business ties, including 
providing technology to Iran's massive natural gas industry. 
And so the medium- to long-term sanctions strategy is working. 
It's gone after investment, it's shrinking oil production. And 
I think, in that respect, it's giving energy markets time to 
adjust so that there isn't a reactionary or alarmist response 
to the sanctions.
    Part of the weakness of the argument is, if you're pursuing 
a short-term strategy, it is not 100 percent clear how energy 
markets will respond. And I think it is up to the 
administration and Congress, when speaking about this, to speak 
about oil sanctions responsibly and to make it very clear to 
energy markets that the goal is not to go after physical supply 
but, in fact, to keep every barrel of Iranian oil on the market 
but at a discounted price.
    So it's really a question of short-term to long-term 
strategy. I fear, again, that we're in a bit of a sanctions 
sleepwalk, where we all recite positive talking points about 
how sanctions are working, but I think we're all beginning to 
acknowledge that sanctions have not worked.
    Mr. Tierney. So it appears that, once again, under your 
proposal, China would hold the key again, depending on whether 
or not we could convince China to not pay a premium, whether or 
not they would find out that their goal was to, sort of, give 
it to us by just paying the premium and watch the prices go up 
and watch the West countries sort of figure out how they are 
going to deal with that in the middle of an economic problem, 
or they are going to just have their own self-interest in mind 
on economics.It is both self-interest, I guess----
    Mr. Dubowitz. Right.
    Mr. Tierney [continuing]. But pick one over the other. Is 
that fair to say?
    Mr. Dubowitz. Well, I think it's fair to say. I mean, it 
may be that the Chinese actually don't want to see a nuclear-
armed Iran. It may not be good for Chinese energy and national 
security. So it may be an opportunity for them to actually 
support both their economic self-interest and their political 
self-interest. But I think that is an open question.
    Mr. Tierney. So it would be useful for us to get some 
Chinese experts in here to explore that further about what 
their reaction may be?
    Mr. Dubowitz. I think, certainly, from a political economy 
perspective, in terms of their strategic objectives, I think it 
is very useful to have Chinese experts who can elucidate that.
    Mr. Tierney. Thank you very much.
    Mr. Chaffetz. Thank you.
    We will now recognize the gentleman from Illinois, Mr. 
Quigley, for 5 minutes.
    Mr. Quigley. Thank you, Mr. Chairman.
    Sorry, I was in another committee meeting. I understand you 
touched on the issue of the Central Bank of Iran. I would just 
reference the letter from the 92 Senators to President Obama 
urging him to sanction the Central Bank and Mr. Geithner's 
response, which was, ``All options to increase the financial 
pressure on Iran are on the table, including the possibility of 
imposing additional sanctions against the CBI.''
    Is there a timetable for doing this? And have we discussed 
this possibility with our allies?
    Mr. Dubowitz. I believe those discussions are taking place 
right now. There are amendments that have been offered in both 
the House and the Senate to include a CBI designation in the 
current legislation. I think there is certainly a lot of 
discussion about how to do this.
    I absolutely support a blanket designation of the CBI. I 
think it needs to be done in a way, however, that's targeted, 
incremental, and implemented rapidly.
    In other words, if you today call for a blanket designation 
with the view that you're going to strictly enforce that 
designation, thereby essentially cutting off the possibility 
that people buying Iranian oil can use the CBI to settle those 
oil transactions, you may be sending a message to the markets 
that there is no way to financially settle an oil trade. On the 
other hand, if today the administration were to target the CBI 
to make this very case, ``If you are buying Iranian oil, you 
are buying it from the Revolutionary Guard Corps, and if you're 
settling that transaction with the CBI, then we will sanction 
that transaction,'' that's the selective, targeted way of doing 
it.
    And, again, it builds into this theory that there will be 
some oil buyers who will respond to that pressure and will look 
for alternative suppliers. There will be other oil buyers who 
will believe the administration will never sanction them and 
will continue settling those transactions through the CBI.
    I think if we did that, number one, we could move today 
targeting the CBI, instead of waiting for a blanket 
designation; number two, we could lay the predicate for a much 
tougher CBI designation down the road; and, number three, I do 
think we need to give time to markets for markets to adjust to 
a CBI designation. Again, there are major buyers of Iranian oil 
using the CBI because the U.S. Treasury Department has done 
such an effective job of shutting down other financial avenues 
to settle an oil transaction.
    Again, incremental steps, implemented rapidly, with a view 
to minimize the opportunity or the risk of a reactionary or 
alarmist response from oil markets.
    Mr. Quigley. The reaction from the other doctors?
    Dr. Maloney. I think it's simply just a fallacy that you 
can begin to reduce the opportunities for companies to purchase 
crude coming out of Iran and it will have no impact on the 
price of oil anywhere else. You know, if it increases the 
leverage of Chinese companies to drive other competitors from 
the market for purchasing Iranian crude, then it will thereby 
decrease the leverage of those other companies which are no 
longer then available as purchasers of Iranian crude as they 
deal with other countries and companies.
    Right now, in fact, what we see is that the Iranians are, 
in fact, gaining advantage. When the Greeks have had difficulty 
making purchases elsewhere, they have turned to the Iranians. 
This sort of idea that somehow the Iranians can become a kind 
of niche market for only bad countries and bad companies to 
purchase crude oil from simply doesn't reflect the realities of 
the international marketplace.
    And the idea that somehow we can inspect every barrel of 
crude that comes into this country to ensure that not a drop of 
oil was produced in Iran is, you know, simply inconsistent with 
the way the international oil market works.
    Mr. Quigley. Doctor.
    Dr. Pollack. Thank you, Congressman.
    I would like to take this to a slightly higher level and 
say, you know, what I think we have all been saying is that it 
is a mistake to believe that sanctions alone are going to 
achieve our goals with Iran. I completely agree with my 
colleague Dr. Maloney's statement. The sanctions have had an 
unprecedented impact, and yet they are not achieving our goal, 
and we should not assume that they will.
    By the same token, it would be a mistake to scale back the 
sanctions. That would send absolutely the wrong message to 
Iran, to the Iranian people, to the rest of the international 
community, to other would-be proliferators.
    I think the real question is, first, can we in some way 
find ways to help do a little bit more with sanctions, because 
we do want to keep the pressure on, but, in particular, how do 
we find other ways to bring pressure against Iran on issues 
that this regime actually believes are important to it. The 
sanctions have not been able to accomplish that. And I would 
urge this subcommittee to hold additional hearings on other 
ways that the United States might bring pressure on Iran on 
other areas beyond its economy--which, again, are not 
unimportant; they are important, but they clearly are not going 
to get us to where we want to be.
    Mr. Quigley. Mr. Dubowitz.
    Mr. Dubowitz. If I could follow on what Dr. Pollack said, I 
think that's absolutely right. I mean, we talk about sanctions, 
we talk about economic sanctions. I think human-rights 
sanctions have actually played a very important and 
consequential role, particularly in focusing world attention on 
the vast system of oppression that the Iranian regime has set 
up and the egregious human-rights abuses that it has 
perpetrated.
    I think human-rights sanctions are also important because, 
under U.S. law today, we should be sanctioning companies that 
are providing tools of oppression to the Iranian regime. That 
authority exists under CISADA. We have not sanctioned any 
companies for doing so. They are providing technology and parts 
and components for the Iranian nuclear industry.
    So it's counterproliferation sanctions, it's human-rights 
sanctions. We have the ability to be much more rigorous in 
enforcing existing law. And I think let's start with cutting 
the tools of oppression that are being sold to the regime, the 
United States and international companies that are selling 
multimillion-dollar hardware units and software that help the 
regime target Iranian dissidents, roll them up, torture them, 
and kill them. And that would be a good place to start in 
expanding our view of sanctions beyond energy and economic 
sanctions.
    Mr. Quigley. Thank you, Mr. Chairman.
    Mr. Chaffetz. Thank you.
    With the concurrence of the rest of the Members, I think 
what we will do now is we will move to the second panel, unless 
Members had any additional questions.
    We want to thank you for your expertise, for your 
participation here today. Again, if you have any additional 
comments you care to share with the committee, we would 
certainly welcome those. Thank you again.
    We will stand in recess for just a few minutes while we 
change to the second panel.
    [Recess.]
    Mr. Chaffetz. The committee will now come back into session 
and come to order.
    We are going to move to our second panel. And we are going 
to recognize Mr. Adam Szubin, who is the Director of the Office 
of Foreign Assets Control at the Department of Treasury; Mr. 
Henry Wooster, who is the Deputy Assistant Secretary with the 
Department of State; and Mr. Colin Kahl is the Deputy Assistant 
Secretary with the Department of Defense.
    Pursuant to committee rules, all witnesses will be sworn in 
before they testify. If the witnesses will please rise and 
raise their right hands.
    [Witnesses sworn.]
    Mr. Chaffetz. Thank you. You may be seated.
    Let the record reflect that all the witnesses answered in 
the affirmative.
    In order to allow time for discussion, we would appreciate 
it if you would limit your verbal testimony to 5 minutes. We 
will certainly submit your full testimony into the record.
    We will now start with recognizing Mr. Szubin for 5 
minutes.

   STATEMENTS OF ADAM J. SZUBIN, DIRECTOR, OFFICE OF FOREIGN 
   ASSETS CONTROL, U.S. DEPARTMENT OF THE TREASURY; HENRY T. 
  WOOSTER, ACTING DEPUTY ASSISTANT SECRETARY, BUREAU OF NEAR 
 EASTERN AFFAIRS, U.S. DEPARTMENT OF STATE; AND COLIN H. KAHL, 
  PH.D., DEPUTY ASSISTANT SECRETARY OF DEFENSE FOR THE MIDDLE 
                EAST, U.S. DEPARTMENT OF DEFENSE

                  STATEMENT OF ADAM J. SZUBIN

    Mr. Szubin. Thank you very much, Chairman.
    Chairman Chaffetz, Ranking Member Tierney, distinguished 
members of the subcommittee, thank you very much for the 
opportunity to appear before you today to discuss the Treasury 
Department's contributions to the Obama administration's 
strategy to address Iran and the threat posed by Iran's nuclear 
program and its extensive support for terrorism.
    I am pleased to be here with Deputy Assistant Secretary 
Wooster and Deputy Assistant Secretary Kahl because the 
progress that we have made has been due to a strong interagency 
collaboration to confront the threats that we face from Iran. 
And those threats are very real.
    The administration is pressing Iran hard across multiple 
fronts. Since just the fall of last year, the Treasury 
Department has imposed sanctions against over 230 individuals 
and companies tied to Iranian human rights violations, WMD 
proliferation, and terrorist facilitation; and we have extended 
the impact of these actions with concerted outreach to our 
allies in the jurisdictions where Iran has operated 
historically.
    We have focused particular pressure on key actors and 
commercial sectors that advance Iran's illicit activities 
internationally and therefore represent real vulnerabilities 
for Iran: the IRGC, Islamic Revolutionary Guard Corps, and its 
expanding network of companies within and outside of Iran; 
those Iranian banks that have served as agents for Iran's 
proliferation and terrorist activities; and Iran's 
international transportation arms, including its national 
maritime carrier, IRISL, and its two largest airlines, which 
have facilitated the movement of weapons, funds, and personnel 
for the IRGC and its external operations arm, the IRGC Qods 
Force.
    Our efforts were powerfully advanced by Congress with the 
enactment last year of the Comprehensive Iran Sanctions 
Accountability and Divestment Act [CISADA]. CISADA presented a 
stark choice to foreign financial institutions that were still 
willing to do business with designated Iranian banks or the 
IRGC. You can do business with these rogue actors or you can do 
business in the United States. You cannot do both.
    We have taken this message to over 45 countries now and 
pressed this choice with over 80 foreign financial 
institutions, making the successful point that these actors 
should have no access to the formal financial system. The 
message has been heard. Whereas a few years ago the United 
States was the only jurisdiction in the world to restrict 
dealings with Iranian banks, today Iran's largest banks are 
struggling to maintain accounts and access in any bank in any 
country.
    The European Union, Japan, South Korea, Canada, Australia, 
Norway, and Switzerland have all imposed sanctions with real 
bite against Iranian financial institutions above and beyond 
the four successive U.N. Security Council resolutions; and 
banks across the rest of the world have severed their ties with 
Iranian blacklisted entities to protect themselves and their 
reputations.
    In the meantime, we at OFAC have intensified our 
enforcement efforts at home to ensure that our sanctions are 
being fully implemented by U.S. persons and by companies doing 
business here. In August, OFAC concluded the largest sanctions 
settlement in our history with a U.S. financial institution in 
which J.P. Morgan Chase agreed to pay over $88 million to 
settle alleged violations of Iran and other OFAC sanctions 
programs. And, increasingly, OFAC is acting in concert with 
other U.S. Government and law enforcement agencies to penalize 
and deter sanctions violators.
    In February, we joined in a public announcement with the 
Justice Department, the Commerce Department, the FBI, and other 
agencies in the criminal indictment and designation of Milad 
Jafari and his network for their illegal supply of specialized 
metals from the United States to entities involved in Iran's 
ballistic missile program.
    In another coordinated action, we took public action with 
the Department of Commerce and the Justice Department against 
Balli Aviation and the Balli Group for its illegal export of a 
Boeing 747 aircraft from the United States to Iran and obtained 
a $15 million settlement with that company.
    Finally, this past month we announced a joint civil and 
criminal resolution with Commerce's Bureau of Industry and 
Security and the Justice Department against Sunrise 
Technologies, which had exported computer-related goods from 
the United States to Iran via Dubai.
    These coordinated multi-agency enforcement actions 
demonstrate the concerted impact that we can have when we 
harness our authorities across the government.
    Overall, our strategy is yielding significant results. Iran 
has never before been as isolated, and its leaders are worried. 
I would be glad to expand further on these impacts if the 
committee so desires.
    But, of course, there is still much to be done. We have yet 
to see the needed action by Iran to comply with its 
international obligations. In the weeks ahead then, working 
with our colleagues across the administration and with 
Congress, we will seek to further deepen Iran's isolation and 
increase the pressure on its leadership to alter their course.
    We thank you for your continued support in seeking to apply 
the most effective pressure possible. Thank you.
    [The prepared statement of Mr. Szubin follows:]



    Mr. Chaffetz. Thank you.
    Mr. Wooster, you are recognized for 5 minutes.

                 STATEMENT OF HENRY T. WOOSTER

    Mr. Wooster. Chairman Chaffetz, Ranking Member Tierney, 
distinguished members of the subcommittee, thank you for 
inviting me here to discuss the administration's policy toward 
Iran and the progress we have made since January 2009.
    The key objectives of this administration's Iran policy 
remain to prevent it from acquiring nuclear weapons, our 
foremost priority; from supporting terrorism; from committing 
human rights abuses; and from destabilizing the region. We have 
enacted the toughest sanctions Iran has faced. Our policy is 
making Iran's current course unsustainable, reducing its 
options and deepening its isolation. Indeed, Iran is an outcast 
among nations.
    The U.S. Comprehensive Iran Sanctions Accountability and 
Divestment Act [CISADA] as we all know it, has been vital to 
ratcheting up pressure on Iran. With CISADA as a tool, we have 
shut down important sources of funding to Iran's nuclear 
program and related illicit activities. Investment in technical 
assistance in Iran's upstream oil and gas sector have dropped 
dramatically. We have sanctioned 10 foreign companies involved 
in Iran's energy sector and dissuaded energy firms like Shell, 
ENI, Total, and INPEX from continuing or undertaking 
sanctionable activities in Iran. Major energy traders from 
Russia, India, Switzerland, Kuwait, Turkey, France, and the 
Netherlands have stopped sales of refined petroleum products to 
Iran.
    As my OFAC colleague has described, we have used executive 
orders to designate entities that support or facilitate 
terrorist or proliferation activity, including Mahan Air, Iran 
Air, and Tidewater Middle East Co.
    Last month, we designated five individuals for their 
involvement in Iran's plot to assassinate the Saudi Ambassador 
in the United States. Others, including the European Union and 
Canada, have already taken or will take similar actions against 
these individuals.
    Our policies have been effective in sharpening the choices 
before the regime. As Iranian President Ahmadinejad recently 
admitted in a speech to the Majlis, the Iranian parliament, 
``Which government can work under so much pressure? This is the 
heaviest economic onslaught on a nation in history.''
    We are committed to the P5+1 framework to engage with Iran, 
provided it is prepared to discuss seriously its nuclear 
program. Until then, we will work with other nations on new 
sanctions measures.
    The latest IAEA Director General's report on Iran's nuclear 
program deepens our concerns, and we are consulting with allies 
on how to respond at this week's board of Governors meeting in 
Vienna.
    The Iranian regime's unacceptable behavior extends to its 
human rights abuses. In response to the regime's systematic 
campaign of violence and intimidation against protesters in 
2009, we designated eleven individuals and three entities for 
egregious human rights violations, and we continue to compile 
evidence to designate the worst abusers. For the past 8 years, 
we have co-sponsored a U.N. resolution calling Iran to account 
for its human rights abuses. Last year, this resolution passed 
with the largest margin to date. In March, we helped create the 
position of the Special Rapporteur on Iran, whose recent 
reporting has shone a spotlight on the regime's repression of 
its own citizens.
    We also equip Iranian civil society with capacity building 
programs, training, media access, counter-censorship tools, and 
exchanges to help Iranians defend their fundamental rights and 
freedoms.
    Turning to the broader region, we acknowledge the concerns 
that our military withdrawal from Iraq will allow Iran to 
expand its influence. However, we also know most Iraqis reject 
Iran's interference. Iraqi leaders have rebuffed Iranian 
political pressure, and Prime Minister Maliki has said he will 
not tolerate the violent activities of Iran-backed militant 
groups.
    Iraq is diversifying its foreign relations and developing 
relationships with EU countries and regional players. In 
October, Iraqi Foreign Minister Zebari stressed in a press 
conference with his Iranian counterpart, ``No other party can 
fill the vacuum in Iraq except the people of Iraq and the 
Government of Iraq.''
    We are working with Iraqi Security Forces to strengthen 
their capabilities beyond 2011, an aspect that Colin can speak 
to more directly. We are helping Iraq establish credible public 
institutions to protect its sovereignty and independence.
    In closing, this administration has expanded the varieties 
of tools and partners to deter Iran from developing nuclear 
weapons, continuing its human rights abuses, and destabilizing 
the regime--excuse me, the region. Sanctions are having an 
effect. With the aim of compelling the Iranian regime to change 
its strategic calculus, we will work with Congress and our 
allies to increase pressure. It is Iran's responsibility and 
its self-interest to join the international community of 
nations. Until then, it only faces growing isolation and 
condemnation.
    Thank you once again. I look forward to your questions.
    [The prepared statement of Mr. Wooster follows:]



    
    Mr. Chaffetz. Thank you, Mr. Wooster.
    We will now recognize Dr. Kahl for 5 minutes.

               STATEMENT OF COLIN H. KAHL, PH.D.

    Dr. Kahl. Chairman Chaffetz, Ranking Member Tierney, 
distinguished committee members, I appreciate the opportunity 
to appear before you today to discuss the Department of 
Defense's role in the administration's policy toward Iran.
    As you know, the President has made Iran one of his very 
top national security priorities. The Defense Department plays 
a supporting role in our whole-of-government dual track 
approach of engagement on the one hand and pressure on the 
other, which is led by the State Department and the Treasury 
Departments.
    However, a supporting role for DOD should not be 
interpreted by anyone as a minor role. In support of 
interagency efforts to prevent Iran from acquiring nuclear 
weapons and to counter its destabilizing efforts and activities 
in the region, the Defense Department focuses on four main 
lines of effort: first, ensuring Israel's security; second, 
building partnership capacity in the region; third, developing 
a regional security architecture, especially in the Gulf; and 
four, prudent defense planning.
    Let me begin with the first one, Israel. Iran's nuclear and 
missile programs and its sponsorship for terrorism represent a 
significant threat to Israel. In the face of this threat, we, 
the United States, are working closely with the Israelis to 
develop multi-layered ballistic missile defenses, and we 
continue our efforts to ensure Israel's qualitative military 
edge.
    The U.S.-Israel defense relationship is strong and 
enduring. Indeed, based on joint military exercises like 
JUNIPER COBRA, and continued cooperation, both Secretaries 
Panetta and Secretary Gates before him have called the 
relationship with Israel, ``stronger than ever.'' We regularly 
consult with Israel and maintain a close, extensive, and very 
frank defense dialog.
    We also continue unprecedented cooperation with the Israeli 
Defense Forces to ensure that the qualitative military edge 
extends to all present and future threats. As you know, Israel 
is the only nation in the region that will receive fifth-
generation aircraft in the form of the Joint Strike Fighter. 
Another example is your support for President Obama's request 
to provide an additional $205 million to Israel for the Iron 
Dome short range rocket and mortar defense system. As you are 
probably aware, Iron Dome has already proved effective in the 
field, successfully striking down rockets that would have 
otherwise landed on Israeli civilian targets.
    These efforts to buttress Israel's security help underline 
our general message to Iran, which is pursuing nuclear weapons 
offers Iran no true benefits and efforts to destabilize the 
region through proxies and support through terrorism ultimately 
will not succeed.
    We also continue to work with our partners elsewhere in the 
region to build capacity to defend them against Iran's 
destabilizing activities. By the end of next month in Iraq, we 
will complete the drawdown of U.S. forces in accordance with 
the U.S.-Iraq Security Agreement. Some have expressed concerns 
that we are leaving behind a vacuum for Iran to fill. However, 
we are not disengaging from Iraq, and there is no vacuum for 
Iran to fill.
    Due to the extraordinary sacrifices of U.S. Armed Forces, 
civilians, and Iraqis, Iraq has emerged as an increasingly 
stable, sovereign, and self-reliant nation. Iraq has no desire 
to be dominated by Iran or anyone else. Iraqi nationalism is 
strong, and the Iraqis have consistently shown their 
willingness to resist the Iranians when they have overreached. 
Moreover, as Iraq's economy continues to grow, particularly its 
oil industry, we expect that Iraqi self-confidence will grow as 
well.
    The Iraqis have also made clear that they have a strong 
desire for an enduring relationship and strategic partnership 
with the United States, including robust security cooperation, 
as we will pursue this partnership under the 2008 U.S.-Iraq 
Strategic Framework Agreement.
    The recent decision, for example, for the Iraqis to 
purchase U.S. F-16 aircraft is just one example of Iraq's 
interest in a long-term defense relationship with us. Iraq is 
now our ninth largest customer in terms of foreign military 
sales and the fourth largest in the region. Continued security 
ties through our Office of Security Cooperation in Baghdad and 
security assistance activities such as Foreign Military Sales 
[FMS], and theater engagement activities that U.S. Central 
Command will engage in, will deepen this partnership in the 
years ahead.
    Similarly, in Lebanon we are working to strengthen 
Lebanon's national institutions and its ability to exercise its 
sovereignty and authority over all of its territory. Central to 
this work is the development of the Lebanese Armed Forces 
through our continued training, assistance, and military 
efforts. Since 2008, the United States has been committed to 
helping the Lebanese Armed Forces effectively counter the 
operations of terrorists within Lebanon, secure Lebanon's 
borders, and work alongside the U.N. to implement all Lebanon-
related U.N. Security Council resolutions.
    DOD is also working closely with its Gulf partners to 
develop a common regional security architecture, one that 
includes both bilateral and multilateral elements. These 
initiatives include a regional network of air and ballistic 
missile defense, shared early warning systems, counterterrorism 
and counterpiracy efforts, programs to build partner capacity, 
and projects to harden and protect our partners' critical 
infrastructure.
    We currently have substantial missile defense assets in a 
number of Gulf partner nations to protect U.S. forces and 
partners from the threat of Iranian missiles, and U.S. Central 
Command maintains robust theater engagement and exercise 
schedules to buttress these partnerships.
    As we improve our bilateral and multilateral cooperation, 
we are also working to build the defense capabilities of our 
partners. Indeed, the Middle East accounts for a large portion 
of U.S. military worldwide FMS activity, particularly with 
Saudi Arabia, UAE, Egypt, Israel, and Iraq. Indeed, in the past 
10 years these five countries account for more than $66 billion 
in active FMS cases.
    Last, let me turn to DOD planning. When it comes to Iran, 
we know that there are no overnight solutions; and we also know 
that many of our diplomatic, economic, and security cooperation 
efforts are just now beginning to bear fruit, as evidenced by 
the Iranian President Ahmadinejad's recent statements that 
Henry mentioned.
    At the same time, we know that Iran has not ceased its 
proliferation activities, nuclear activities, or support for 
terrorism. For that reason, the Department continues to prepare 
for all contingencies.
    On this point, let me be clear. It is the Department of 
Defense's responsibility to plan for all contingencies and to 
provide the President with a wide range of military options 
should they become necessary. That's a responsibility we take 
very seriously; and when it comes to the threat posed by Iran, 
the President has not taken any options off the table. But I 
also want to emphasize our continued belief that, at this time, 
diplomacy and pressure remain the most effective tools for 
changing Iran's behavior.
    With that, I thank you once again, and I look forward to 
answering your questions.
    [The prepared statement of Dr. Kahl follows:]



    Mr. Chaffetz. Thank you.
    I know this is a very complicated and deep subject. To try 
to summarize in 5 minutes is difficult, but we do appreciate 
it.
    I would now like to recognize myself for 5 minutes.
    Mr. Szubin, you are the Director of the Office of Foreign 
Assets Control [OFAC] as it is often referred to. How many 
people do you have in your group or your department?
    Mr. Szubin. It is about 165.
    Mr. Chaffetz. And how many of them actually work on this 
particular issue?
    Mr. Szubin. Iran has been the number one priority for us. 
It is difficult for me to give you an FTE number because we 
divide up our functions by the operations. So we have licensing 
officers, enforcement officers, people who prepare the 
designation----
    Mr. Chaffetz. If you had to guess, how many people would 
you guess are actually working on this?
    Mr. Szubin. It would be hard to put a number on it. I can 
go back and try to come back to you with an estimate. But it is 
our number one priority and has been for as long as I have been 
at OFAC, which is 5 years.
    Mr. Chaffetz. According to Mr. Dubowitz, who testified on 
the panel just before us, China is the largest importer of 
Iranian oil behind the European Union. Companies owned by the 
Chinese Government are also suppliers of illicit materials in 
support of Iran's nuclear weapons program. Is the United States 
enforcing sanctions against the Chinese Government or any 
Chinese entity?
    Mr. Szubin. Absolutely. And I will defer in a moment to Mr. 
Wooster, who can speak to the State Department sanctions, but 
we at Treasury have imposed sanctions against Chinese 
companies, including some state-owned firms that were providing 
parts and equipment to Iran's missile procurement efforts.
    Mr. Chaffetz. And how many companies are you investigating 
at the current time? What does the universe of that look like?
    Mr. Szubin. Chinese companies?
    Mr. Chaffetz. Uh-huh.
    Mr. Szubin. I am not at liberty to disclose that.
    Mr. Chaffetz. Let me go to another part here.
    Following the exposure of the Iranian plot to potentially 
assassinate Saudi Arabia's Ambassador to the United States, the 
Obama administration actually floated the idea of sanctioning 
the Iranian Central Bank. In fact, 92 U.S. Senators out of a 
hundred signed a letter suggesting in support of that. Where is 
that in its progress? What would be the effect of that? Is that 
something that the Obama administration has abandoned?
    Mr. Szubin. As Under Secretary Cohen has mentioned, 
including in testimony recently, the point is that proposal or 
idea has not been abandoned. It is very much on the table, as 
are all options that we could take that would credibly and 
meaningfully impact Iran and deter its efforts.
    Mr. Chaffetz. But why not do it? Why not do it?
    Mr. Szubin. The issues are several. We need to analyze any 
prospective option in terms of the evidence that is available 
to us, of course, the impact that it would have on Iran, and 
the impact that it----
    Mr. Chaffetz. But we want to have the maximum effect on 
Iran, right? So are we just--I mean, is there a spectrum here 
that says, well, we don't want to be too hard?
    Mr. Szubin. No, no, no.
    Mr. Chaffetz. Okay. So why--I mean, you listed that as your 
second consideration. Why is----
    Mr. Szubin. Well, I think it needs to be measured against 
my third consideration, which is what would the impact be on 
the United States and our allies and other countries around the 
world. If we are considering an action----
    Mr. Chaffetz. So give me an example of how that would 
impact the United States.
    Mr. Szubin. I am happy to. If we are considering an option 
that would have a low-to-moderate impact on Iran and would have 
a serious negative impact on the United States or our allies, 
then that is a way----
    Mr. Chaffetz. What would be this serious? Can you give me 
an example of where that would be a serious impact to the 
United States?
    Mr. Szubin. I am happy to. I would just apologize in 
advance. I am not an economic analyst, and so my familiarity 
with economic modeling may not be up to your satisfaction. But 
in the oil discussions in particular, there are very real 
scenarios in which an oil price spike might hit that could 
result in somewhat of a decrease----
    Mr. Chaffetz. So we are not willing--this is what is 
mystifying. It came out in the first panel, too. But this is 
the concern, that you are somehow gauging--the Treasury 
Department is somehow gauging the price of oil--and I am trying 
to figure out what price per gallon are we not willing to pay? 
I mean, why is the price of a gallon of gas the primary driver 
in the Obama administration's quest to supposedly make sure 
that they don't get a nuclear bomb, for goodness sake? Why is 
the price of gas one of those? Twice you have listed it off 
right near the top of the list. Is that really the concern?
    Mr. Szubin. The price of oil is not the primary driver. It 
is certainly a consideration, because it is a primary driver of 
the recovery that is going on worldwide and the strength of our 
economy and that of many of our allies.
    Mr. Chaffetz. When will you make a decision about whether 
or not to pursue this Iranian Central Bank sanction? What is 
the timeline here? When are we going to have a decision?
    Mr. Szubin. I can't answer that.
    Mr. Chaffetz. Why not? Who makes that decision?
    Mr. Szubin. The decision will be made by the administration 
as a whole.
    But I do want to challenge the notion that it is a question 
of how much of a price uptick are we willing to take on 
ourselves in exchange for a profound impact on Iran. If there 
is a hike in the price of oil, Iran gains. If there is a spike 
in the price of oil, Iran could be facing a windfall. And so 
there are scenarios in which--and they are plausible 
scenarios--in which there could be profound harm to the global 
economic recovery and a windfall to Iran. I don't think that is 
what any of us are looking for. It is a scenario we need to 
proceed I think with----
    Mr. Chaffetz. My time has expired. We need to get to the 
other Members.
    But the fact you have 92 U.S. Senators, in a very 
bipartisan way--and this is something, an idea that was floated 
out there by the Obama administration, and now we are pulling 
back on it, is really quite stunning.
    I will yield now 5 minutes to the gentleman from 
Massachusetts, Mr. Tierney.
    Mr. Tierney. Thank you.
    Mr. Szubin, I didn't hear you say that you were pulling 
back on it. Are you pulling back on it?
    Mr. Szubin. No. As I said, the option remains on the table.
    Mr. Tierney. That is what I thought I heard you say. And I 
suspect you are considering whether or not doing it would have 
an adverse effect of causing Iran to get enriched by that 
action, therefore totally disregarding the effect on it and 
making it useless, in effect.
    Mr. Szubin. That is correct. And potentially worse than 
useless, potentially resulting in a boon to Iran.
    Mr. Tierney. Emboldening them even more on that. So that 
would seem to me a useful thing to consider before you went and 
did that. But others might feel differently on that.
    So it seems to me that people that want to be critical 
first on the one hand say what a great job this administration 
has done on sanctions and internationalizing them and having it 
move forward and then they qualify that by saying in the medium 
and the long-range, but they don't think it is a going to be 
immediate enough to actually reach the goal, which is to 
somehow impede the development of nuclear power capacity on 
that. So are we doing all that should be done to impede that in 
time so that one doesn't always outstrip the other? And what 
else ought we be doing?
    I want to ask each of you that.
    Mr. Szubin. First, I do think that experts across the 
spectrum have acknowledged that the pressure on Iran, 
especially in recent months, has grown to an unprecedented 
level. Iran is more isolated than ever financially in terms of 
trade, in terms of investment in its oil sector, and 
politically. And the IAEA Board of Governors report and the 
revelation of the Arbabsiar plot to assassinate the Saudi 
Ambassador to the United States have greatly compounded Iran's 
isolation and its problems.
    In terms of are we doing everything? We are certainly 
trying. This is my number one priority. And we are trying to 
identify every possible option we can take. Whether it is a 
U.S. unilateral action in the form of an OFAC or a State 
Department designation, whether it is a multilateral concerted 
effort we can take with allies, or whether it is action in New 
York pursuant to a U.N. Security Council resolution, we are 
trying to identify every possible lever that we can push that 
would exert additional impact; and I commit to you that we will 
continue to be relentless about that.
    Mr. Tierney. Thank you.
    Mr. Wooster.
    Mr. Wooster. Congressman Tierney, in response to your 
question about what we are doing, as Adam has rightly said, it 
certainly occupies the bulk of my life and that of my team. And 
we have 39 people in the Office of Iranian Affairs, 17 of them 
overseas, 22 domestically. We are engaged on this all the time. 
We are engaged on it in Washington. We are engaged on it in 
terms of contributions that reporting officers are making in 
the field well beyond the ones I named in terms of the office's 
own assets. This is a whole-of-government approach. I believe 
Under Secretary Sherman has been emphatic in declaring that 
aspect of it.
    Yesterday, I know Adam and I spent probably more time with 
than we would care to with one another at the White House going 
over the particular details of this issue with a host of other 
actors as well.
    On the diplomatic front in terms of the Department of 
State, what we keep a particularly close eye on, of course, is 
the point where we can obtain optimal leverage, maximum 
leverage, and at the same time we are not alienating key people 
that we need to work with in a coalition. Where these are 
stronger, they are more effective, they are more fearful, even 
if it is just the optics of it as well, and in actuality the 
bite is much deeper when we have a united front, when we have a 
coalition.
    To date, we can report success, notwithstanding the points 
that Representative Chaffetz has mentioned, in terms of China. 
I know it is a continuing concern with the Congress. There just 
aren't easy responses to that. But, nonetheless, we have six 
U.N. Security Council resolutions where they, too, have put ink 
on the paper; they, too, have assented to this; and they agree 
on the fundamentals, as do the Russians, that the idea of this 
regime having a nuclear weapon is not a good one.
    Mr. Tierney. We have had people make the argument to us 
that at some point you could take an action that in fact would 
go beyond hurting the Guard, the Qods Force, the regime, and 
hurt the Iranian people and make their lives so miserable that 
at some point they start to support a government that right now 
many of them might be inclined to resist. Is there such a 
tipping point, in your view, and do you take that into account 
in your calculations?
    Mr. Wooster. Yes, sir. In terms of a tipping point, I can't 
offer you an exact point on the curve where that is located. 
But there is.
    I mean, we have witnessed, most particularly around the 
issue of the nuclear question, a lot of this data is available 
through--in fact, the overwhelming amount of is it is available 
through public polling, Iranian polling, third government 
polling, academic institutions, think tanks, and, of course, in 
terms of resources that each government has, particularly our 
allies.
    But it comes up resoundingly with the conclusion that the 
nuclear issue is very much one of those events. There is a lot 
of nationalism behind the notion of a nuclear Iran. There, of 
course, are deleterious effects as well. But the fact is that a 
good number of Iranians are very much united around the issue 
of their country, too, being a member of the, if you will, 
nuclear club. So it is something that we keep an eye on.
    Our--as I mentioned at the outset of my remarks, the 
paramount objective for us is ensuring that the regime does not 
obtain a nuclear weapon. Between that point, the apex, if you 
will, and the area below it, there is considerable room for 
maneuver.
    Mr. Tierney. Thank you.
    Thank you, Mr. Chairman.
    Mr. Chaffetz. Now recognize the gentleman from Illinois, 
Mr. Quigley, for 5 minutes.
    Mr. Quigley. Thank you, Mr. Chairman.
    Dr. Kahl, the International Atomic Energy Agency report 
that just came out, obviously quite sobering but not a surprise 
to anyone. We have been at this a little while now. A window to 
do something seems to be narrowing. What is the plan? It seems 
tough to say here, but it seems almost inevitable. What is the 
plan? What do we do if we have a nuclear Iran?
    Dr. Kahl. Well, first of all, it is obviously our policy to 
prevent Iran from getting a nuclear weapon. The administration 
sees that, the acquisition of a nuclear weapon, as 
unacceptable. You know, how much time we have, I think there is 
some debate in that.
    Obviously, the IAEA report is troubling. I think that, 
though, there is still time to keep on the path that we are on 
now, which is to turn up the heat diplomatically and through 
economic pressure.
    Meanwhile, ensuring that the President has all options 
available to him so that when he says all options are on the 
table, those options are viable. So the Defense Department's 
activities currently are oriented in the region to convey to 
Iran our resolve to counter their destabilizing activities and 
their aggression, to defend our partners, and to deny the 
benefits of their nuclear and ballistic missile program through 
our defense activities.
    But I think it is our view that we still have some time and 
that any discussion of military action or something else has to 
be viewed very much as a last resort, given the highly 
uncertain consequences that that action would have.
    Mr. Quigley. I get it. But I have only been here a short 
time now. I am in my second term. But I feel like Bill Murray 
in Groundhog Day, right?
    I mean, I have been at this meeting before. And we could 
save the tapes--and no disrespect--we could have this meeting 
again next year, and we could be talking--last year, I believe 
we were talking about years. Now we are talking about a year 
from a very credible agency.
    And what we have also seen is that the window tends--every 
time we hear something else, the window is narrower. There is 
exponential growth. It is very scary.
    So this last year went by very quickly since we had a 
significant discussion about that. So I get it. And I voted for 
sanctions, and I am up for all options. But, you know, I am not 
sure we are--Monty Hall is pointing to door number two or door 
number three at some point in time.
    Are we ready, facing what is--whether there is a debate or 
not--a very credible agency is less than a year now. We have 
our allies, we have our troops, we have destabilization. Prime 
Minister Netanyahu talked about exporting a very strong threat. 
So, beyond all that--I know you don't want to talk about it--
but is there a plan? Are we ready?
    Dr. Kahl. So I think we need to treat all these timelines 
with--kind of put an appropriate context around them. So when 
you have groups estimating 1 year, 2 years until they could 
have a testable nuclear device, the important caveat in that is 
from a decision by the Iranian Government to dash for a nuclear 
device. There is no evidence that that decision has been made. 
So that 1 year in a sense is sliding.
    So part of the reason why you have this Groundhog Day is a 
couple of years ago you might have heard a similar estimate, 
but that was also based on the notion that the Iranians hadn't 
made a decision. So what's clear is what the Iranians are doing 
is trying to put themselves into a position in which the 
Supreme Leader can make a decision, and we do have to be 
worried that when and if that decision is ever made the time to 
actually complete a testable device could shrink over time. So 
we are watching that very, very, very carefully.
    But I think we still do have some time. But it is the 
responsibility of our Department to do prudent planning to 
ensure that all options are available when and if we detect 
that Iran has made a decision to do this.
    Mr. Quigley. That's as good as it gets, Mr. Chairman. I 
thank you, and I yield back.
    Mr. Chaffetz. Thank you.
    I now recognize the gentleman from Vermont, Mr. Welch, for 
5 minutes.
    Mr. Welch. Thank you very much.
    Mr. Wooster, I am wondering, can you describe what the 
competing arguments are within Iran, as you see it, on this 
question of proceeding aggressively toward the development of a 
nuclear weapon?
    Mr. Wooster. I can comment, if you will, or make some 
observations about the national level discussion. Is that what 
you mean?
    Mr. Welch. Right. And I am assuming there is some internal 
debate, that there are forces that are arguing for an 
aggressive approach. There are probably some forces that are 
arguing against that. I am wondering about your Department's 
assessment of what those arguments internally within Iran are, 
who is making them, and who is prevailing.
    Mr. Wooster. Thank you.
    Well, the party lines, if you will, are drawn fairly 
clearly. They have been for some time. Some of the names and 
personalities have changed, but there remains a hard core inner 
circle who are keen to develop a nuclear program. That has been 
demonstrated for years.
    The IAEA report demonstrates also what the United States 
has known for a long time, that Iran had a nuclear weapons 
program. We have continuing concerns about that. That is 
emphatically clear to all of you. As one of your colleagues 
mentioned, we have all seen that before.
    In terms of the debate within the country, a good number--
remember, the astonishing--one of the astonishing facts about 
Iran is that we have an extraordinary demographic, 70--75 
million people, 70 percent of whom are 30 something or under. 
It is really extraordinary. So you have a lot of folks who look 
toward the future and who think about what their prospects are. 
And when they do, the notion of living in a pariah state, where 
options are foreclosed to them in terms of business, travel, 
education, that's not a heartening prospect for them. And 
they've demonstrated that.
    Those folks obviously are keen, notwithstanding whatever 
sympathy they may have to see their nation, if you will, belly 
up to the bar with other nuclear powers, to be recognized as a 
great country or a great power. Nonetheless, they haven't 
demonstrated that element that I am speaking of, hegemonic 
tendencies. They wouldn't fit into the camp of what we would 
call those with desires for destabilizing regional influences. 
Many of them are keen on rapport with the West, particularly 
with the United States. But--and this is a big but--they don't 
hold the power.
    So the folks who have the power, the predominant power, 
this is--again, you are familiar with the host of characters: 
the Supreme Leader, the IRGC, its constituent elements such as 
the Qods Force, and various other deeply conservative political 
figures. But again, beyond that circle--and that is a 
relatively small circle, but it is a very powerful circle--
there is room for maneuvering.
    Mr. Welch. That being what?
    Mr. Wooster. I am sorry?
    Mr. Welch. What would that room for maneuver be?
    And then Dr. Kahl can comment on that as well.
    Mr. Wooster. We find that the Iranians remain 
extraordinarily interested in the United States. It is the 
aspiration of a good number of Iranians, the older Iranians, to 
send their children here to be educated, to visit, to travel, 
to have the opportunity to enjoy aspects of American culture 
and education that they knew in another era. That's not an 
option. They show up----
    Mr. Welch. I am going to be out of time. I would just like 
to hear a little bit from Dr. Kahl. I hate to interrupt, but it 
is a time issue.
    Mr. Wooster. Certainly. Please.
    Dr. Kahl. I think in general, again, our role is to try to 
convince the Iranian leadership that they will be less safe, 
not more, if they keep going on this nuclear weapons path. So 
we are doing that, again, by trying to deny them the benefits 
of those activities through our security cooperation 
relationships in the Gulf, our ballistic missile defense 
architecture, our efforts to build up their capabilities, our 
efforts to work with Israel on their defenses and provide for 
their qualitative military aid.
    So all of that is oriented, again, against--about sending 
the Iranians a very clear signal that not only are they facing 
increasing diplomatic and financial isolation but they are 
aligning the rest of the region against them in a way that's 
going to make them profoundly unsecure. And so this is trying 
to create an incentive structure that leads them to one 
conclusion, which is they should stop doing this. So that's our 
number one objective.
    I would just say, on the young people in Iran, you know, 
there is a lot of evidence that they think--many of them think 
very favorably of the United States. So I think we need to be 
careful in a lot of what we do to make sure that we are not 
alienating a group of individuals that we want to work with and 
have a relationship with over the long term, as long as they 
can stop being held hostage by their government.
    Mr. Welch. Thank you very much. Yield back.
    Mr. Chaffetz. Thank you.
    I now recognize myself for an additional 5 minutes.
    Mr. Wooster, I want to make sure I heard you properly. When 
talking about the IAEA report, you said that Iran had a nuclear 
program. They currently have one, though. Is that correct? They 
have had one, and they have one.
    Mr. Wooster. Sir, it was that they had a nuclear weapons 
program. Not a nuclear program but a nuclear weapons program.
    Mr. Chaffetz. Do you believe that they have one now?
    Mr. Wooster. They provided no assurance that they have 
abandoned the pursuit of a nuclear weapon.
    Mr. Chaffetz. I am asking what--do you believe the report 
that was just issued or not?
    Mr. Wooster. Sir, the administration's position is--and has 
been for years--reflected in what you see in the report. The 
report remains a restricted document, although I am aware that 
it has been leaked to folks and it is available on the 
Internet.
    The limits--because we are having a conversation about 
these issues with ministers today--excuse me, Thursday and 
Friday in Vienna, there are limits on what I can say in this 
setting. I can't offer my personal opinion.
    Mr. Chaffetz. I am trying to get--I am sorry, I wasn't 
trying to get your personal opinion. I want to understand the 
administration's opinion as to whether or not they believe that 
they have a nuclear weapons program. No or yes?
    Mr. Wooster. We remain concerned that the Iranian regime 
has obfuscated on precisely this issue. We don't have 
transparency. We want to know, we want certainty that they do 
not have a weapons program. That's what we are seeking.
    Mr. Chaffetz. Mr. Dubowitz listed 18 firms--I will come 
back to Mr. Szubin here. Mr. Dubowitz listed 18 firms connected 
to the Islamic Revolutionary Guard, IRGC, which formed part of 
the crude oil supply chain. These firms' activities were 
detailed in a report from the Foundation for the Defense of 
Democracies to the administration in February. So I want to 
come back to this issue and say where are you at in sanctioning 
these particular 18? And what's happening with this report? 
This has been since February.
    Mr. Szubin. And we have that report. And we have had our 
analysts take a very careful look at it.
    As you have seen, if you have been following the releases 
from our Department, we have made sanctions against the IRGC 
and its entities the key plank in our Iran strategy on the 
reasoning that the IRGC is one of the most culpable actors for 
supporting terrorism, supporting WMD development, and including 
repression, including in Syria. But also on the reasoning that 
IRGC is becoming increasingly unpopular in Iran. And so it 
plays into this domestic discontent which I think is going to 
be key if these sanctions do have the impact we are looking 
for.
    We have announced sanctions against lots of IRGC fronts, 
including their largest port operator and a whole host of 
companies; and we have also designated companies in Iran's oil 
infrastructure. And we have been able to get the United Nations 
as well to act in this area by restricting petroleum imports 
into Iran.
    Mr. Chaffetz. What about these particular 18?
    Mr. Szubin. On these particular 18, I can't comment on 
which we are poised to designate. We don't comment on upcoming 
designations. But I can say that to designate any and all IRGC 
companies is very much consistent with what has been our 
strategy.
    Mr. Chaffetz. I guess the concern is you have had this 
report since February, and I just would appreciate an update as 
one becomes more publicly available.
    Let me go back to you again, Mr. Szubin, here. Is the 
administration prepared to sanction Chinese firms like--I am 
going to pronounce this improperly--Zhuhai Zhenrong, a 
subsidiary of NORINCO, which is openly flouting these sanctions 
at this time? Are you familiar with this organization? I am 
sorry. My pronunciation is terrible.
    Mr. Szubin. I believe that is an energy firm; is that 
right?
    Mr. Chaffetz. Yes, correct.
    Mr. Szubin. So I would defer to my colleague from the State 
Department, who administers the energy sanctions.
    Mr. Chaffetz. Mr. Wooster, are you familiar with this firm 
and where we are at on this?
    Mr. Wooster. I am not so familiar with the particulars of 
the firm. I am familiar with the concerns about China and the 
energy sector.
    Primarily, our concern there is that, because the Chinese 
have in fact been pulling back in this area and because we have 
engaged at the highest levels, the President has engaged, the 
Secretary of State and others, we have also wanted them not to 
in particular backfill behind any other energy firms that have 
left. And to date--and to date we can report that what we are 
seeing is satisfactory. We continue to keep an eye on it. We 
continue to discuss it. It was discussed in Beijing less than a 
week ago with Deputy Secretary of State Burns, and we continue 
to keep a close eye on this.
    Mr. Chaffetz. And the last point I would like to make here 
before we wrap up, Mr. Wooster, there is deep concern about our 
presence in Iraq after the 31st of December, with the 
Department of Defense pulling out, 16,500 people there under 
the control of Secretary Clinton. How prepared are we for what 
may or may not happen come January 1st?
    Mr. Wooster. Sir, I have limited capability to give you a 
good response about the management particulars of the 
Department in terms of its Iraq-particular preparations. 
However, what I can say from the policy perspective is that we 
are committed to a long-term relationship with Iraq. No one 
should doubt the U.S. Government's commitment to that country.
    We have a transition now in our relationship with Iraq. It 
is tempting to see it as going from black to white, but in fact 
it is not. It is a transition. We're moving from one phase in 
our relationship to another phase in that relationship. Again, 
our commitment to the region and to Iraq is longstanding, and 
it endures.
    Mr. Chaffetz. Thank you.
    I appreciate your all being here, for your testimony here 
today, and the work that you do on behalf of our country. 
Again, we appreciate your presence.
    The committee now stands adjourned.
    [Whereupon, at 11:48 a.m., the subcommittee was adjourned.]

                                 
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