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



 
   IRANIAN INFLUENCE IN THE SOUTH CAUCASUS AND THE SURROUNDING REGION

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

                                HEARING

                               BEFORE THE

                   SUBCOMMITTEE ON EUROPE AND EURASIA

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                            DECEMBER 5, 2012

                               __________

                           Serial No. 112-192

                               __________

        Printed for the use of the Committee on Foreign Affairs


Available via the World Wide Web: http://www.foreignaffairs.house.gov/ 
                                  or 
                       http://www.gpo.gov/fdsys/



                  U.S. GOVERNMENT PRINTING OFFICE
77-164                    WASHINGTON : 2012
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202ï¿½09512ï¿½091800, or 866ï¿½09512ï¿½091800 (toll-free). E-mail, [email protected].  

                                 ______

                      COMMITTEE ON FOREIGN AFFAIRS

                 ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey     HOWARD L. BERMAN, California
DAN BURTON, Indiana                  GARY L. ACKERMAN, New York
ELTON GALLEGLY, California           ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
DONALD A. MANZULLO, Illinois         BRAD SHERMAN, California
EDWARD R. ROYCE, California          ELIOT L. ENGEL, New York
STEVE CHABOT, Ohio                   GREGORY W. MEEKS, New York
RON PAUL, Texas                      RUSS CARNAHAN, Missouri
MIKE PENCE, Indiana                  ALBIO SIRES, New Jersey
JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
CONNIE MACK, Florida                 THEODORE E. DEUTCH, Florida
JEFF FORTENBERRY, Nebraska           BEN CHANDLER, Kentucky
MICHAEL T. McCAUL, Texas             BRIAN HIGGINS, New York
TED POE, Texas                       ALLYSON SCHWARTZ, Pennsylvania
GUS M. BILIRAKIS, Florida            CHRISTOPHER S. MURPHY, Connecticut
JEAN SCHMIDT, Ohio                   FREDERICA WILSON, Florida
BILL JOHNSON, Ohio                   KAREN BASS, California
DAVID RIVERA, Florida                WILLIAM KEATING, Massachusetts
MIKE KELLY, Pennsylvania             DAVID CICILLINE, Rhode Island
TIM GRIFFIN, Arkansas
TOM MARINO, Pennsylvania
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
ROBERT TURNER, New York
                   Yleem D.S. Poblete, Staff Director
             Richard J. Kessler, Democratic Staff Director
                                 ------                                

                   Subcommittee on Europe and Eurasia

                     DAN BURTON, Indiana, Chairman
ELTON GALLEGLY, California           GREGORY W. MEEKS, New York
GUS M. BILIRAKIS, Florida            ELIOT L. ENGEL, New York
TIM GRIFFIN, Arkansas                ALBIO SIRES, New Jersey
TOM MARINO, Pennsylvania             THEODORE E. DEUTCH, FloridaRemoved 
JEAN SCHMIDT, Ohio                       6/19/12 deg.
TED POE, Texas                       BRIAN HIGGINS, New YorkAs 
                                         of 6/19/12 deg.


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Brenda Shaffer, Ph.D., senior lecturer, University of Haifa......     9
Ariel Cohen, Ph.D., senior research fellow, The Kathryn and 
  Shelby Cullom Davis Institute for International Studies, The 
  Heritage Foundation............................................    26
Michael Rubin, Ph.D., resident scholar, American Enterprise 
  Institute......................................................    37
Mr. Alex Vatanka, adjunct scholar, Middle East Institute.........    45

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Dan Burton, a Representative in Congress from the 
  State of Indiana, and chairman, Subcommittee on Europe and 
  Eurasia: Prepared statement....................................     4
Brenda Shaffer, Ph.D.: Prepared statement........................    11
Ariel Cohen, Ph.D.: Prepared statement...........................    28
Michael Rubin, Ph.D.: Prepared statement.........................    39
Mr. Alex Vatanka: Prepared statement.............................    47

                                APPENDIX

Hearing notice...................................................    66
Hearing minutes..................................................    67


   IRANIAN INFLUENCE IN THE SOUTH CAUCASUS AND THE SURROUNDING REGION

                              ----------                              


                      WEDNESDAY, DECEMBER 5, 2012

                  House of Representatives,
                Subcommittee on Europe and Eurasia,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:08 p.m., in 
room 2172, Rayburn House Office Building, Hon. Dan Burton 
(chairman of the subcommittee) presiding.
    Mr. Burton. We will now call the hearing to order.
    This is a very important hearing, in my opinion. Some of 
them are not nearly as important as others, but this one is 
extremely important because Greg and I, the ranking member, and 
Jean, we are all concerned about the influence of Iran in the 
entire region, in the Caucasus and also in the Gulf Region.
    So today we are here to discuss the influence, expanding 
influence in the South Caucasus, but we are also talking 
about--I intend to talk about some of the problems in the 
Persian Gulf region because that is of vital interest to us. If 
the Straits of Hormuz or the Persian Gulf or the Suez Canal are 
blocked in any way, it could have a devastating impact on the 
United States because we still get a large part of our energy 
from that region.
    I traveled to Azerbaijan and Armenia in early September, 
and you have been over there, too, Greg?
    Mr. Meeks. Absolutely.
    Mr. Burton. Yeah. And I also stopped in Georgia and met in 
Tbilisi with President Saakashvili. When I talked to these 
leaders, Iran was one of the things that came up at the very 
beginning because they all feel the influence and the 
aggressive attitude underneath the cover, so to speak, of Iran.
    In particular, I think Azerbaijan feels a great deal of 
concern, and when I talked to the President and the members of 
their Parliament and others there, it was readily apparent to 
me that they thought that there ought to be closer ties between 
Azerbaijan and the United States and Georgia, and hopefully 
Armenia, because Iran is really trying to destabilize or 
undermine those governments. We believe that is their long-term 
goal.
    Iran has been involved in terrorism, as we know, for some 
time. It is hardly unique in that area. We have seen the 
Iranian regime operating through organizations such as the 
Republican Guard and employ such tactics around the globe, 
including right here in Washington, DC.
    However, the proximity of the South Caucasus to Iran, as 
well as strong relationship Armenia, Azerbaijan, and Georgia 
have with both the United States and Israel, it increases the 
appeal of the Iranians for targeting those countries. I applaud 
those governments in the region for their vigilance against the 
Iranian threat. However, I am particularly concerned about the 
security at the U.S. Embassy in Baku, as the age and location 
of that facility leave our people there particularly 
vulnerable.
    I often find myself comparing the geopolitics of the South 
Caucasus to a Gordian knot. The tangle of the historical and 
current events leaves countries in the region isolated from 
their neighbors. Unfortunately, such isolation can play into 
the hands of powers lying on the periphery of the region. Press 
reports and conversations that I had while I was in the region 
indicate that Iran is taking, or at the least has potential to 
take advantage of Armenia's regional isolation, and thus the 
country's economic dependence on their common border, to use 
Armenian banks and enterprises to skirt international 
sanctions.
    The United States and our regional partners, including 
Armenia, must be vigilant by fully applying current laws and 
regulations and by amending sanctions as needed to close the 
loopholes. I hope the legislation that is currently pending in 
the Congress makes its way through rapidly, that will do just 
that.
    Regarding energy, sanctions are an essential tool in our 
continued attempts to isolate the Iranian regime. However, we 
have to recognize that for many countries in this 
subcommittee's jurisdiction decreasing consumption of Iranian 
energy means increasing consumption of Russian energy. Such a 
chain reaction is not in the national interest of the United 
States.
    The solution to this problem requires renewed American 
leadership, or partnership, to increase the development of 
resources that lie across the South Caucasus and Central Asia, 
as well as the infrastructure, the pipelines and other things 
needed to transport these resources.
    I would also like to elaborate a little bit more about 
Bahrain. We have some people on the panel today that we will 
ask questions about Bahrain, and they have some intimate 
knowledge of some of the problems that have taken place there. 
And as I said before, the concerns that we have in the Caucasus 
and the whole region is only part of the concern that we feel 
for the region. Bahrain has been an ally of the United States 
for a long, long time. We have our 5th Fleet there. And the 
attempts by Iranians to work with dissident forces there in 
Bahrain to undermine that government is something that we must 
be concerned about.
    I have talked to the leadership over there, and they are 
concerned about the problems that some of the people feel 
toward the government, and they have tried to work with them to 
solve that problem. But so far the problems have not all been 
solved, and for that reason they continue to try to work with 
them even though we know and they know from intelligence 
sources that Iran is stirring things up over there and trying 
to undermine that government.
    Since we have a great relationship with that government, I 
think it is extremely important that we try to work with them, 
as long as we have our 5th Fleet there, and it is vital to the 
United States interests that we do everything we can to solve 
that problem, the problems in that country, without giving Iran 
the ability to undermine and destroy that government.
    In conclusion, let me just say that the South Caucasus is 
of extreme importance, and we have today with us a number of 
people from Azerbaijan. They have sent a delegation over here 
to follow this hearing because they are very much aware of how 
important it is that we illuminate the issue of Iranian 
expansionism or their attempt to expand their influence 
throughout the region.
    The United States must not look weak in this entire region. 
We have to look strong. If we look like we are weak, it will 
give them the encouragement that they need to continue to move 
throughout that whole region. We are concerned, as my 
colleagues know, about Libya, we are concerned about Egypt, we 
are concerned about Syria, we are concerned about Azerbaijan, 
Armenia, Georgia, and the Gulf States, especially Bahrain right 
now.
    So I will end up by just saying that this is going to be 
probably my last hearing as chairman of this committee, but my 
good friend Greg, and I am sure my other colleagues will do 
everything they can to make sure we continue to pursue this 
issue to make sure that not only the region is secure, but our 
interests, the United States of America's interests are safe as 
well.
    [The prepared statement of Mr. Burton follows:]

    
    
    
    
                              ----------                              

    Mr. Burton. With that, I will yield to my colleague, Mr. 
Meeks.
    Mr. Meeks. Thank you, Mr. Chairman. And I want to thank you 
for holding, as you said, this most important hearing, and I 
also want to say to a degree sad, sad because this probably 
will be your last hearing here in the United States House of 
Representatives after almost 3 decades of service to our 
country, and we want to salute you for that.
    Some, you know, may be with regret not having Dan Burton to 
kick around anymore, but we, indeed, are going to miss you. And 
I got to say that it has been an honor and a personal privilege 
for me to sit as the ranking member and to work with you over 
the last 2 years on this subcommittee.
    Mr. Burton. Thank you.
    Mr. Meeks. You have been a chairman that has been very fair 
and open, and we have worked together, and you are going to be 
missed here. And so I hope that as you retire you will enjoy a 
fruitful and prosperous life with your beautiful wife, who is 
here, and your family, and you have a great retirement, and 
maybe now you will have time to schedule that round of golf 
with Bill Clinton.
    Mr. Burton. That is an inside joke, folks.
    Mr. Meeks. Let me turn to the subject at hand. I believe we 
are dealing with an important question in the South Caucasus 
region, which represents a complex web of both regional 
alliances and conflicts, bitter rivalries, varying degrees of 
Western orientation, desperate economic trajectories, and a 
potential venue for instability and even violence.
    In terms of viewing the South Caucasus region from the 
perspective of this subcommittee, it is important to note that 
some of our strongest instruments, the Euro-Atlantic 
institutions of NATO and the European Union, have a weak 
presence in this region and, therefore, are not as relevant as 
they are in the Balkans, for instance. Ultimately, this means 
that Europe and the United States have less leverage in the 
region. This allows other countries in the region to compete 
for political, economic, and military influence in the region.
    And I am looking forward to hearing our witnesses discuss 
this issue today. I really want to hear what you have to say in 
this regards. I believe that Armenia, Azerbaijan, and Georgia 
represent trustworthy allies of the United States, but I 
realize full well that their bilateral relationships are 
complicated and that they have to take their immediate 
neighborhood into account also.
    With only two open borders, and one of them being with 
Iran, Armenia faces the constant threat of isolation, and this 
is a core driver in managing Armenia's relationship with Iran. 
Azerbaijan has a sizable diaspora in northern Iran, but a 
vastly different strategic, social, and political orientation 
than Iran's leaders. Despite a potential religious kinship 
between Iran and Azerbaijan, Iran has historically sided with 
Armenia over the contested region of Nagorno-Karabakh. 
Furthermore, Azerbaijan enjoys a solid relationship with 
Israel, which further distances Baku and Tehran from one 
another.
    Georgia has the strongest Western orientation in the 
region, and my sense is that this will remain intact even after 
their change of government. But like any other country, Georgia 
is seeking economic opportunities everywhere, including 
potential trade or investment relations with Iran.
    I believe there is a potential for Iran to exploit the 
complicated relationship between each of these countries and 
that the others in the region have significant regional 
interests that compete or overlap with Iran. Simultaneously, 
each of the South Caucasus nations play an important role in 
Western relations with Iran, particularly their ability to 
comply with international sanctions, and I think it is 
important for the United States policy toward the region to 
find ways to strengthen this compliance.
    Russia appears to want to limit both the influence of the 
United States and Turkey in the South Caucasus, but it is 
unclear to me whether they also seek to minimize Iranian 
influence. I have followed with great interest Turkey's 
attempts to normalize relations with Armenia, and my sense is 
that such a step holds the greatest potential to improve both 
stability and prosperity in the region. Lifting Armenia's 
isolation would not only allow Yerevan greater independence 
from Iranian and Russian influence, it would also be mutually 
beneficial for Turkey and Armenia in a number of ways, and I am 
interested in hearing the panel's perspectives on whether this 
is an issue the Turkish and Armenian Governments might be able 
to reengage on.
    What we can all agree on is this, as I conclude, is that it 
is in no one's interest to see a nuclear-armed Iran. And I look 
forward to exploring how the South Caucasus region can help the 
United States and Europe to prevent this outcome. We cannot 
have that as an outcome.
    I anxiously await hearing the testimony of our witnesses. 
And again, Mr. Chairman, it has been a pleasure, and I think 
that this hearing is very timely at this date.
    Mr. Burton. Thank you very much. And I am sure my wife put 
you up to that nice comment, so I want to thank you for that as 
well.
    Mr. Gallegly.
    Mr. Gallegly. Thank you very much, Mr. Chairman. This is a 
special day for me as well, a bittersweet day after having had 
the honor to serve in the People's House for 26 years, and on 
this committee for 24 years, and had the honor of chairing this 
subcommittee.
    I can't tell you what an honor it has been to serve with 
you, Dan, not only on this committee, but as next door 
neighbors in the Rayburn Building for many years, and for 
bringing this important issue before us today. I can't think of 
anything that seems to be more timely than bringing this issue 
up today.
    I would like to also associate myself with a comment that 
our ranking member made, a good friend of mine. While I 
recognize that Mr. Burton does have a beautiful wife here in 
the audience today, I also have a beautiful wife in the 
audience here today as well. And we have had the great honor of 
having Dan at our home in California, and I am going to leave 
the porch light on for the two of you and hope that you will 
join us out West.
    It has been an honor to serve with you, Jean. The three of 
us will be leaving Congress here in a few days. It may be quite 
a few days with the way things are going on the Hill and over 
on the other side of town. Hopefully we will get through that.
    But words can't express the honor that I feel for having 
had the opportunity to do so many of the things we have done, 
and this being our closing hearing. I want to make sure we have 
ample time for all of our witnesses today, so I will defer from 
an opening statement. I would like to place one into the record 
as a part of the hearing, and just thank you all for the 
friendship and the dedication you have shown this great country 
for all the years.
    And with that, Mr. Chairman, I yield back.
    Mr. Burton. Well, without objection, we will put your 
written statement in the record. But I want to tell you, we are 
patting each other on the back here today because this is 
probably the last time we will get a chance to do that. But, 
Elton, you have been a great member, too, and I reciprocate. I 
really enjoyed it. And I am glad you are leaving the light on.
    He has a beautiful house in California and an extra 
bedroom, so I may be going out there to spend a little bit of 
time.
    Mr. Gallegly. The porch light is on.
    Mr. Burton. The porch light.
    And Jean is going back to Ohio.
    And, Jean, you have been a great person to work with, and 
we are going to miss you as well. Sure, we will yield to you.
    Mrs. Schmidt. Well, first off, parting is such sweet 
sorrow. But I am only sorry that more people aren't here to 
listen to this panel on what I believe is one of the most 
critical national security issues that the world faces. And I 
am glad that Congressman Meeks will be carrying the banner for 
this very important region in the world.
    It is important for a lot of reasons, but one of those 
reasons is the potential for energy, energy from Azerbaijan, to 
really free Western Europe from other alternative sources that 
may not be right for them or right for the world. And yet it is 
not in certain countries' best interest--Iran, Russia comes to 
light--for the pipeline to go through to bring natural energy, 
oil and gas resources to parts of the world that would like to 
have alternative sources
    And so I think that it is important for Congress to keep an 
eye on this region and to make sure that the stability that has 
been in place continues and that these emerging markets are 
allowed to continue to grow and prosper, because I truly 
believe that they are a bright spot in the world's future.
    I yield back.
    Mr. Burton. Thank you very much, and I will miss all you 
guys.
    Ariel Cohen is a leading expert in Russia, Eurasia, Eastern 
Europe, and the Middle East. He serves as a senior research 
fellow in Russian and Eurasian studies and international energy 
policy at the Heritage Foundation.
    And we are glad to have you here. Thank you very much.
    Michael Rubin is a resident scholar at the American 
Enterprise Institute and a senior editor of the Middle East 
Quarterly. He was a former senior adviser at the Pentagon.
    Thank you for being here.
    Dr. Brenda Shaffer is a specialist on the Caucasus, ethnic 
policies in Iran, Caspian energy, energy and foreign policy, 
and Eastern Mediterranean energy issues. She previously served 
as the research director of the Caspian Studies Program at 
Harvard University--should have been a Big Ten school, but we 
will settle--Harvard University. In January she will be a 
visiting scholar at Georgetown University Center for Eurasian, 
Russian, and Eastern European Studies.
    Alex Vatanka specializes in Middle Eastern affairs with a 
particular focus on Iran. He joined the Middle East Institute 
as an adjunct scholar in 2007. He also lectures as a senior 
fellow in Middle East studies at the U.S. Air Force Special 
Operations School and at the Defense Institute of Security 
Assistance Management.
    Want to welcome all of you, and we will start--I think we 
will start with you, Dr. Shaffer, since she is the prettiest 
gal at the table.

STATEMENT OF BRENDA SHAFFER, PH.D., SENIOR LECTURER, UNIVERSITY 
                            OF HAIFA

    Ms. Shaffer. Thank you very much. Thank you for the 
opportunity to testify in front of this committee.
    We often think of Iran as a Middle Eastern country, but 
actually it sits in the crossroads of a number of regions, 
Southwest Asia, Central Asia, and the Caucasus. And actually 
the influence between Iran and the South Caucasus is two ways. 
Not only is Iran, as you pointed out correctly, extremely 
active in subversion in the region and destabilizing any of the 
countries that are pro-Western in the region, but also there is 
two-way influence because Iran itself is a multi-ethnic 
country.
    So to understand any of Iran's policies in the region, we 
have to remember that half of the population of Iran isn't 
Persian; of that half of the whole of the population of Iran, a 
third is ethnic Azerbaijani. And this is really what drives 
Iran's policies in the region, is to destabilize Azerbaijan, to 
make sure that its own ethnic minorities cannot be attracted to 
Azerbaijan, cannot be thinking about breaking off from Iran or 
any type of other activity.
    And for this reason, for instance, we find that the Islamic 
Republic of Iran is actually an ally of Christian Armenia in 
its struggle against Azerbaijan, and in fact the war effort, 
the occupation of Armenia, of 20 percent of Azerbaijani 
territory could not have taken place without Iranian supplies, 
Iranian support.
    And in fact the ethnic minorities of Iran are located 
mostly in the border areas of Iran, so it affects Iran's 
relations with a number of neighboring states, with Pakistan, 
with Turkey, with Turkmenistan, with Iraq, because there is co-
ethnics on each side of the border with the states that are 
Iran's neighbors.
    Many of the top leaders of Iran are actually ethnic 
Azerbaijanis. Khamenei, the spiritual leader, is actually from 
Khomein on northwest Iran. When he goes to that area he speaks 
Azerbaijani. Mousavi, the head of the Green Movement, is also 
ethnic Azerbaijani. And despite the integration of Azerbaijanis 
into the leadership of Iran, all the non-Persian minorities are 
not allowed to use their language in schools, they are not 
allowed to use it in court, and the Azerbaijanis, among them a 
third of the population, women going into trials in courts in 
Persian and not understanding even what is happening in the 
court side.
    The ethnic minorities have a variety of views toward 
Tehran, toward the state. Most of the Iranian Azerbaijanis I 
would say to date see themselves as citizens of Iran but would 
like a place also for their culture, not to separate from Iran, 
not to break up Iran, but to change, to change Iran. But a 
number of the other groups, for instance the Baloch, the Arabs, 
the Kurds, are really having an active, full-scale insurgency 
going on. We don't hear about it too much in the press, we 
don't hear about it too much from American officials, but real 
insurgencies where Iranian soldiers, when they go into the 
Baloch-populated areas, the Arab-populated areas of Iran, are 
seriously under threat.
    I welcome and thank you, Mr. Burton, for being one of the 
only Members of Congress and U.S. officials who has actually 
tried to integrate Iran and South Caucasus policies, because 
again we tend to think about it, even think, for instance, in 
the National Security Council we have the Caucasus together 
covered with the Balkans, two regions that are completely 
different, the dynamics are completely different, there is no 
dominant power in the Balkans, where in the South Caucasus we 
have a region with huge influence of Turkey, Iran, Russia all 
competing in this region, and this region is vitally important 
for the outcomes in Russia-Iran, Iran and Turkey. So I thank 
you, first thing, for calling attention of integrating these 
two policies.
    As part of that integration, I think U.S.-Iran policy could 
benefit if the South Caucasus was integrated into these 
policies. One issue pointed out is the sanctions regime. These 
countries are crucial to the sanctions regime, both on the 
negative and positive, meaning the countries like Azerbaijan 
that fully implement the sanctions are watchdogs for the United 
States, are doing a very important job, but the countries that 
don't implement the sanctions, it is a loophole, it is very 
dangerous. And I think especially we see this in the 
nongoverned territories, Nagorno-Karabakh, South Ossetia, 
Abkhazia, their financial institutions, moving of gold. It is a 
real black hole for the sanctions, and it is something that I 
hope the U.S. will pay attention to monitor and to close these 
gaps.
    Another point is that the U.S. Congress, we should work 
harder to resolve these secessionist conflicts in the Caucasus. 
They also make the countries more vulnerable to Iranian 
influence, to Iranian destabilization issues. And I think one 
thing that the Congress, I could say, has not been so helpful 
is that for most of its history the Congress has earmarked 
money to the secessionist region of Nagorno-Karabakh. That is 
in violation of U.S. law. It would be as if you were earmarking 
money for Jewish settlements in the occupied West Bank, 
something the Congress even wouldn't do for an ally of the 
United States like Israel, let alone to earmark money for 
occupation of a territory that the U.S. law recognize as 
occupied territory.
    I think also we should follow up in terms of monitoring the 
institutions like Voice of America that receive U.S. financial 
support to see if they can give more of a voice to the ethnic 
minority issue in Iran.
    And I think we should be well aware, as you pointed out, 
that if there will be any sort of tightening of the sanctions, 
military action in the region, one of the first countries to be 
attacked by Iran, and Iran has made this clear, is Azerbaijan. 
It is a long border, it is very porous, people are going back 
and forth. They are trying constantly to do terrorist events, 
and we must increase our security cooperation with Azerbaijan 
to make sure that they don't pay the price for being a neighbor 
of Iran.
    Thank you.
    [The prepared statement of Ms. Shaffer follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                              ----------                              

    Mr. Burton. We will now go to Mr. Cohen.

 STATEMENT OF ARIEL COHEN, PH.D., SENIOR RESEARCH FELLOW, THE 
  KATHRYN AND SHELBY CULLOM DAVIS INSTITUTE FOR INTERNATIONAL 
                STUDIES, THE HERITAGE FOUNDATION

    Mr. Cohen. Mr. Chairman, it is indeed with sorrow that I 
hear about your stepping down. I testified before you several 
times, and it was always a great pleasure. I was always very, 
very impressed by your knowledge, the knowledge of other 
members. And I am sorry to hear Ms. Schmidt and Mr. Gallegly 
are retiring.
    The topic today is important indeed. The Islamic Republic 
of Iran has emerged as a major anti-status quo actor in the 
Middle East, threatening America's Sunni Arab allies along the 
so-called Shi'a Crescent, from Lebanon, via Syria and Iraq, to 
the Persian Gulf. Iran's implacable hatred of Israel and 
threats to wipe the Jewish State off the map are widely 
reported. What is less known are the threats Iran presents with 
its destabilizing influence in South Caucasus.
    Our country worked for the last 20 years in a bipartisan 
fashion, in the first Bush, Clinton, and the second Bush 
administrations, to stabilize South Caucasus to have for the 
peoples of the region security, economic development, the rule 
of law, and democracy. Today all these American interests are 
threatened by Iranian attempts to export terrorism, destabilize 
neighboring Azerbaijan, bypass U.N. and E.U. Sanctions.
    The energy development is also stalling because of Iranian 
policies objecting to the national sector regime for the 
Caspian, are preventing gas from Kazakhstan and Turkmenistan to 
traverse the Caspian Sea in pipelines and be shipped further 
west to Turkey and Europe. But the main current concern is 
Iranian export of terrorism into the South Caucasus.
    The U.S. Embassy in Azerbaijan, which I visited in October 
and spoke to Ambassador Morningstar, and such ``iconic'' 
locations as McDonald's were all targeted by Iranian terrorist 
cells and were rounded up by Azeri security. The Qods--or 
``Jerusalem''--Force, the Iranian elite paramilitary 
organization of the Islamic Revolutionary Guard Corps, IRGC, is 
exporting the Islamic revolution by fostering militant Shiite 
movements, creating deterrence and retaliatory networks, 
destabilizing regimes unfriendly to Iran, and Azerbaijan is in 
their crosshairs.
    The relationship with the United States, Western Europe, 
and Israel are irritating the Iranian leadership to the point 
that some of their statements are questioning the sovereignty 
of the country of Azerbaijan, reminding the Azeri leaders that 
in the distant past Azerbaijan used to be a province of the 
Persian empire.
    Iran's anti-Israel agenda is brought to bear by targeting 
the Embassy of Israel, the Ambassador of Israel, and even local 
Jewish community leaders and a rabbi. These cells, too, were 
rounded by Azeri security.
    In the broader geopolitical sense, the Iranian activity in 
South Caucasus is dangerous because they are aiming to bust the 
sanctions regime by developing their presence in Armenia and 
Georgia, possibly in Azerbaijan, by putting their front 
organizations, front companies to acquire dual-use technologies 
and technologies with military applications to plan banking 
operations, very important for our Treasury effort, such as the 
Mellat Bank, a bank that is under U.S. Treasury sanctions and 
the British Treasury sanctions. Mellat Bank branch is operating 
out of Yerevan.
    The Iranian drug trade is an especially pernicious activity 
that is targeting South Caucasus. While Iran is becoming 
increasingly a transit country for Afghan opium and heroin, 
Iran is running its own drug operation, such as methamphetamine 
production, supervised by pharmacists and professional 
chemists, and trying to run these with speedboats into 
Azerbaijan, et cetera.
    I would like the rest of my presentation to be included in 
the record and just focus on our policy recommendations.
    The U.S. Government needs to expand anti-terrorism and drug 
trafficking cooperation between the U.S. and the three South 
Caucasus States, neutralizing Iranian subversive activities; 
focus Intelligence Community efforts on collecting and 
neutralizing Iranian sanction-busting activities in financial 
and technology transfer sectors in the region; cooperating with 
our Western European and other allies; uphold the interests of 
small South Caucasus countries when attempting to construct an 
effective Iran policy, which leads to elimination of Tehran's 
nuclear weapons program; sustain Caspian energy projects, and 
help European countries in diversifying their energy supplies 
by connecting them to energy resources of the Caspian Sea and 
Central Asia region. And specifically we should support and 
help Turkey and Azerbaijan and Europe to finalize the TANAP and 
Nabucco West projects.
    Finally, we should develop a comprehensive interagency soft 
power strategy, including broadcasting, including exchanges to 
powerfully support the Iranian opposition, including that of 
the Iranian Azerbaijanis, and leading to a victory of 
democratic forces in Iran.
    As Professor Blank of the U.S. Army War College wrote,

        ``The administration has hitherto treated South 
        Caucasus as an afterthought or as an overflight issue 
        on the road to Afghanistan. Such neglect is dangerous 
        and misconceived. The mounting threats in the Middle 
        East, Iran, and the Caucasus show how vital it is that 
        the U.S. strengthen pro-Western regimes, for if we 
        continue to neglect the Caucasus, this neglect will 
        quickly become malign, and malign neglect invariably 
        generates not only instability, but also protracted 
        violence.''

    By its aggressive action, Iran is endangering the fragile 
equilibrium in the strategically sensitive region which is 
important for U.S. interests. America should remain vigilant to 
deter violence, extremism and terrorism practiced by the 
Islamic Republic against America's friends and allies in the 
Caucasus. Thank you so much.
    Mr. Burton. Thank you, Doctor.
    [The prepared statement of Mr. Cohen follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                              ----------                              

    Mr. Burton. I think we will now go to you, Michael.

 STATEMENT OF MICHAEL RUBIN, PH.D., RESIDENT SCHOLAR, AMERICAN 
                      ENTERPRISE INSTITUTE

    Mr. Rubin. Thank you very much. Mr. Chairman, Honorable 
Members----
    Mr. Burton. Incidentally, before we do, Dana Rohrabacher, 
Congressman Rohrabacher from California has joined us. He is a 
valuable member of the Foreign Affairs Committee. And the next 
ranking member from New York, thank you for coming. We 
appreciate. He is going to be the ranking member of the full 
committee.
    So we are pleased to have both of you here today. Thank 
you.
    And with that we will go ahead with your statement. And if 
we could keep your statements to 5 minutes, it would be great.
    Mr. Rubin. Mr. Chairman, Honorable Members, thank you for 
the opportunity to testify.
    Iranian officials sometimes quip that they play chess while 
Americans play checkers. Increasingly this appears to be the 
case in the Caucasus and the surrounding region. While many 
American policymakers focus on Iranian influence and activity 
in Afghanistan and the broader Middle East and perhaps describe 
the Islamic Republic as a regional power, the Iranians 
themselves now describe themselves as a ``pan-regional power.'' 
Iranians have a sense of near abroad over the former domains of 
the Persian Empire as strong as that of Russian nationalists 
who pine to exert their influence over the states of the former 
Soviet Union. Azerbaijan, Armenia, and Georgia are front and 
center in this conception.
    Iranian strategy is multifaceted, combining both terror 
campaigns and soft power. Beyond headline-grabbing bombings and 
assassination plots, the Islamic Republic seeks to expand its 
reach through education and with charities.
    Within the Caucasus, the Islamic Republic concentrates its 
subversion efforts at Azerbaijan. Azerbaijan is one of only 
three countries beyond Iran--Bahrain and Iraq being the 
others--which is majority Twelver Shiite. Because these 
countries' success challenge the claim that the Islamic 
Republic's rule is divinely inspired, Tehran subverts them. 
Baku's rejection of religious populism and its mosque-state 
separation contrast sharply with Iran's theocracy. The fact 
that Azerbaijanis enjoy a greater life expectancy, are more 
literate, and because of recent sanctions on Iran enjoy greater 
purchasing power than Iranians embarrasses the Iranian clergy. 
It is hard for the Supreme Leader to claim that he presides 
over a near-perfect Islamic system as the deputy of the messiah 
on Earth when secular governments outperform him.
    As I detail in my written testimony, Iran has sought to 
undermine Azerbaijani territorial unity and sponsored anti-
Western political parties. After attempts to send radical 
missionaries into Azerbaijan failed, Tehran shifted to provide 
scholarships to train Azerbaijani clerics in Iran. This has 
been a tactic which has paid long-term dividends to the Islamic 
Republic in other countries, like Bahrain.
    Iranian authorities also utilize charities to expand their 
influence. Of myriad Iranian charities, the Imam Khomeini 
Relief Committee is the regime's chief aid organization abroad. 
With assets supplied by the Supreme Leader, the committee 
sponsors programs similar to those conducted by Western NGOs, 
but while the committee's activities might look at first sight 
benign, its track record is sinister. In 1997 its office 
provided cover for surveillance against the U.S. Embassy in 
Tajikistan. In 2010 the U.S. Treasury Department designated the 
committee's branch in Lebanon to be a terrorist entity. With 
both Revolutionary Guard and Relief Committee funded from the 
same trough, it is likely that the committee offices in 
Azerbaijan now also provide cover for Revolutionary Guard 
activities.
    Is Armenia the weak link, however? For American policy, 
Armenia is the weak link. It increasingly provides the central 
pivot for a Russia-Iran access which undermines both U.S. 
interests and national security. In 2008 U.S. diplomats 
concluded that Armenia shipped Iran weaponry which the Islamic 
Republic used to kill Americans in Iraq.
    Whereas the Armenian Government has long sought to keep its 
banking cooperation with Iran outside the limelight, Armenia's 
warm embrace of Iran is apparent. Sanctioned Iranian banks 
appear to operate in Yerevan. In October 2011 the Iranian press 
reported that a member of Armenia's Nuclear Energy Organization 
suggested that Iran had enticed several Armenian nuclear 
scientists to work in Iran's nuclear program.
    While the Armenian-American community is vibrant, it is 
unfortunate that organizations representing the diaspora in the 
United States do not do more to encourage change in the 
Armenian Government's behavior. By ignoring Armenia's pro-
Iranian orientation, Armenian-American community--the community 
squanders an opportunity to build a true strategic partnership 
between Washington and Yerevan.
    What worries me looking into the future is this: The 
strategic situation has never been more perilous. The recent 
Georgian elections threaten to radically reorient Georgia, 
which under President Saakashvili has been reliably pro-
Western. A reorientation of Georgia's relationship with Iran 
might accompany its shift to Moscow.
    Georgia is not the only company in play. While there remain 
sectarian tensions between Turkey and Iran, it would be a 
mistake for American policymakers to assume Turkey will 
cooperate with the West regarding Iran. To dismiss Turkish 
outreach to Iran, such as the gold for gas scheme, as simply 
economic opportunism misses the point.
    Across administrations, U.S. strategy is too often reactive 
rather than proactive. Alas, the absence of a coherent U.S. 
strategy to counter and roll back Iranian influence in the 
Caucasus increasingly proves the Iranian chess and checkers 
quip correct. Thank you very much.
    Mr. Burton. Thank you very much, Doctor.
    [The prepared statement of Mr. Rubin follows:]

    
    
    
    
    
    
    
    
    
    
    
    
                              ----------                              

    Mr. Burton. Mr. Vatanka.

  STATEMENT OF MR. ALEX VATANKA, ADJUNCT SCHOLAR, MIDDLE EAST 
                           INSTITUTE

    Mr. Vatanka. Thank you very much. Chairman Burton, members 
of the committee, thank you very much for having me here this 
afternoon. It is an honor to join you.
    I wanted to focus on Iran's failures to project its 
influence in the South Caucasus region, if I may. As has been 
said, Iran has deep roots in this part of the world. It is the 
giant neighbor to the south after all. Much of the South 
Caucasus has at one time or another been under Iranian 
influence or been part of the Persian Empire. Therefore cross-
border, that is to say people-to-people ties remain strong.
    By most estimates there are some 20 million people in Iran 
that are ethnic Azerbaijani. Just to remind everyone, that is 
over twice as many as you have in the Republic of Azerbaijan. 
One of the largest Armenian diaspora communities anywhere in 
the world is also to be found in Iran, estimated at some 
80,000.
    But I would argue that while Iranian civilization is close 
to the peoples of the region, the world views and goals of the 
Islamist regime in Tehran have no appeal.
    I think we have to deal with three key facts when assessing 
Iran's influence in the South Caucasus. First, because the 
Islamist regime in Tehran is beholden to Russia and Moscow's 
support oftentimes that it provides to Iran in places like the 
U.N. Security Council, the Iranians are very worried about 
upsetting Russia's interests in the South Caucasus. This is 
best reflected by Iran's position in regards to Armenia and 
Georgia, where Russian interests are strongest. I have provided 
more detail in my testimony and provided some examples.
    Second, I think where we have a failure, it is Iran's so-
called big brother approach, which I think is heavily tainted 
with an ideological syndrome. So I would quickly say it is not 
just that Iran doesn't want to be active in the South Caucasus 
because it fears that the Russians might be upset, but it is 
also because of a failure of its model as a political 
invitation that has extended over the last 20 years to these 
three countries, particularly Azerbaijan.
    In Azerbaijan, where Russian interests are least sensitive, 
in my view, Iran has also failed to gain any traction. This is 
thanks to--excuse me--where Iran has basically insisted on Baku 
sharing its anti-American and anti-Western positions, and this 
is a call which the authorities in Azerbaijan have repeatedly 
over the last 2 decades rejected.
    I think Baku would have been far more open to Iranian 
overtures if Iran did not insist on this anti-Westernism as a 
common platform, but I am afraid to say that seems to still be 
the case if you listen to the latest statements coming from 
Tehran.
    One of the best examples of how Iranian intervention in 
Azerbaijan have failed to result or produce results for Tehran 
is this Iranian insistence that Azerbaijan walk away from its 
relations with the State of Israel. In doing so not only does 
Iran want to impose this ideological will on a smaller and pro-
Western neighbor in Azerbaijan, but it also fails to recognize 
the needs of Baku.
    In my conversations with diverse voices in Azerbaijan, I 
was constantly reminded of the fact that the State of Israel 
provides material support to Baku as the country develops and 
looks to enhance its international position.
    What can an internationally isolated Iran in turn offer 
Azerbaijan? The answer to that is very little, at least while 
Tehran pursues the policies that it is pursuing at the moment.
    Let me also say this. This is widely recognized to be a 
problem, but those nonideological actors in Tehran, they see 
the problem. The trouble is they are not in the driving seat, 
so they are just banging their heads against the wall, saying, 
we are losing on the regional level. And the narrow sets of 
interest, Iran Ayatollah Supreme Leader Ali Khamenei are 
calling the shots to the detriment of the national interests of 
the country of Iran.
    Let me just very briefly say a few words about the Iranian 
influence that does exist. This refers to Armenia and Georgia. 
It is very important to recognize that overwhelmingly we are 
talking about economic cooperation and trade between Iran 
versus Armenia and Georgia. These countries are not looking 
to--it is very important to emphasize this--these countries are 
not looking to hear the Iranian political message of anti-
Westernism. They look to Iran, particularly Armenia, out of 
simple necessity and the geographic reality that they have to 
deal with. But whenever they can they have preferred Western 
partners, particularly look at Armenia's continued pursuit of 
better ties with Turkey.
    In conclusion, let me very briefly say that the South 
Caucasus, when you measure the Iranian influence there, simply 
does not match the proximity of Iran and historical ties that 
that country has with the region, and this can be, as I said, 
overwhelmingly blamed on Iran's insistence on this anti-Western 
platform that it continuously seeks and will not get from the 
three States of the Caucasus.
    Final point I will make, and I am running out of time, I 
say the only real negative driver that I can see changing the 
status quo is if the Iranian standoff with the U.S. and the 
international community continues, there is a likelihood that 
radical elements in Tehran, and we have already heard this, 
will look at the region, particularly Azerbaijan, as a platform 
and a battleground to confront the United States and its 
allies.
    Chairman Burton, members of the committee, thank you very 
much for your time.
    [The prepared statement of Mr. Vatanka follows:]

    
    
    
    
    
    
    
    
    
    
                              ----------                              

    Mr. Burton. First of all, before I take my time, I want to 
congratulate Mr. Engel on being the ranking Democrat. He is 
going to be a powerhouse here on the committee for the next 
couple of--well, maybe 6 years. So congratulations. You have 
worked hard for it, and you deserve it.
    One of my concerns and the reason I wanted to hold this 
hearing is because we have been focusing on Iran's nuclear 
program. We have been talking about the threat that that 
presents to the entire region and how Israel would have to 
respond to that in the event that they continue with that 
program.
    But one of the things that is not being discussed is what 
this hearing is about today, and that is the subversive 
movement by Iran to undermine governments in the entire region. 
Our hearing today is on the Caucasus and that whole region, but 
I want to go into a broader area. Bahrain is one of the areas 
that I am very familiar with because I was in the Persian Gulf 
region recently. It is not under this committee's purview, but 
it fits into the overall problem that we see.
    So I would like to start with you, Dr. Rubin, and ask you 
what you think of Iran's underground movement to try to 
undermine those governments to gain more and more influence and 
how extensive is it. And I would like for you to include 
Azerbaijan, that whole region, Georgia, Armenia, and I would 
like for you to also interject into your comments, and I will 
let your other colleagues speak as well, what is going on in 
Bahrain and in the Persian Gulf.
    Mr. Rubin. Sir, I spent 14 years in a Quaker school, and 
when I was being schooled in the Quaker school we always 
learned that multiculturalism was always about appreciating our 
differences. But fundamentally multiculturalism isn't about 
walking into a sushi restaurant and ordering a mojito. It is 
ultimately about different peoples thinking in very, very 
different ways.
    When it comes to Iran, we need to recognize that both in 
the constitution and in the statute of the Islamic 
Revolutionary Guard Corps is the imperative to export 
revolution. In the year 2008 the former President, Mohammad 
Khatami, said, well, when we talked about export of revolution, 
what we meant is to build ourselves up into a soft-power power 
which everyone around could emulate, and it was actually the 
Revolutionary Guard and the hardline judiciary which shot him 
down and said, no, export of the revolution is fundamentally 
about insurgency. I have detailed this in my written testimony.
    Now, when it comes to the Iranian strategy, I already 
talked about the soft-power strategy of trying to infiltrate 
countries through charities. We also have the infiltration in 
through the media as well.
    Within Bahrain there is a special problem, and I 
highlighted this, the parallels in Azerbaijan. In Bahrain's 
case, because of Saddam Hussein's crackdown in Iraq over the 
decades, most Bahraini clergy, instead of going to Najaf and 
Karbala to study, ended up going to Qom in Iran where the 
Iranians tried to indoctrinate them. I would hazard to guess 
that there is not a single village mullah under the age of 55 
in Bahrain who hasn't studied in Iran, and that is going to be 
a problem which will take generations to work out of the 
system.
    Now, many of the grievances in Bahrain are real, but that 
doesn't mean that the Iranians aren't trying to take advantage 
of them. As you know, earlier this year I went to Bahrain, and 
when I was meeting with oppositionists, I found many of the 
younger opposition to be quite sincere. Some of the older 
opposition, from the days of the 1981 fighting, what they were 
saying to me in English versus what we Googled them saying to 
the Persian press in Persian was radically different as to the 
status of the U.S. 5th Fleet headquarters and so forth. So we 
do have a constant problem in which many of the people working 
on behalf of Iranian interests----
    Mr. Burton. But what did they say? You said you spoke to 
them in Persian.
    Mr. Rubin. Okay. When they spoke in English, they would 
talk about how we genuinely want reforms and that so long as 
the reforms occur, the United States of course would be welcome 
to keep the 5th Fleet headquarters in Bahrain. Not when I spoke 
to them in Persian, but when we Googled their names in Persian 
to call up what they had said to the Iranian press, they talked 
about how the colonial vestige of the American satan must be 
expelled forthwith. So a slight difference in tone between what 
they were saying in English and what they were saying in 
Persian. That is constantly a problem, of course, in the Middle 
East, as you know, where interlocutors will be told one thing 
and they will be told another subsequently.
    When it comes to television, most Bahrainis will listen to 
Iranian television and radio almost exclusively. Most Bahraini 
Shiites I should say. Now, when it comes to the Bahraini--the 
media--oftentimes what the Iranians will do is distribute cell 
phones, distribute video cameras, and urge students to be 
stringers. If you can film anything of interest, send it back, 
and we will give you a salary. This encourages people to film 
greater unrest. Instead of having one Voice of America 
correspondent in the area, imagine having 500 Voice of Iran 
correspondents in the area, and this is ultimately the problem 
we have.
    Mr. Burton. Mr. Rubin, we will proceed with that. I want to 
give you all a chance to respond. But Mr. Rohrabacher has to 
catch a plane, he has got to go back to California, and he is 
going to be very active in this region in the next couple of 
years I understand.
    So, Mr. Rohrabacher, we will recognize you so you can catch 
your plane.
    Mr. Rohrabacher. Thank you very much. And I would like to 
especially thank Ms. Schmidt and Congressman Burton for the 
hard work they have put in over the last 2 years and actually 
many more years than that, and just thank you both for laying 
the stage. Whoever is going to be coming next will be able to 
pick up something and carry the flag, and I hope whoever that 
is, it could be me, who knows, will do half as good a job as 
you guys have done. So thank you very much.
    I would like to thank the panel and thank the chairman for 
this particular hearing. I think that Americans' understanding 
of what is going on in Iran and around Iran is so limited and 
so cliched that it really is a threat to making the policies 
that we need to make that will benefit the United States as 
well as benefit the cause of world peace.
    Most people only know that the mullahs in Iran are 
oppressive to their own people and have said they are going to 
wipe out Israel, and that is it. And most people think all 
Iranians are Persians, and today's testimony is going to be of 
great assistance in laying the foundation for perhaps new 
policies that will be approached in the coming year.
    Let me just note, and, Mr. Chairman, for the record I have 
a copy of H. Con. Resolution 137, which is a resolution that I 
submitted earlier this year which basically states that the 
people, that the Azeri people who we have heard in testimony 
number up to 20 million in Iran, that those Azeri people have a 
right of self-determination to determine what their status will 
be in the future, whether it is a status as part of Azerbaijan 
or whether it is a part of Iran or whether it is a sovereign 
country of their own. And that resolution, while it didn't go 
many places here on Capitol Hill, it certainly was an area of 
discussion in that part of the world.
    And let me just note, I believe in the right of self-
determination not only for the Azeri people, but for all the 
peoples of that region and of the world. It is a part of the 
things that we as Americans are supposed to believe in because 
our Declaration of Independence was a declaration of the rights 
of people to determine self-determination that God has given 
every person, not just Americans.
    I also am very grateful to the panel today for pointing out 
the complications of Iranian policy to the various, not just 
Israel, but the other conflicts in the region as well, 
especially dealing with Armenia and Azerbaijan.
    I think that we owe a great deal of debt to the Government 
of Azerbaijan for being willing to step up to this threat from 
the mullah regime and not cower before it. And that type of 
courage, I hope, would be--would actually inspire those of us 
in the United States who are engaged in policymaking to 
understand that the mullah regime needs to be treated for what 
it is.
    The Mullah regime is a gangster regime that murders its own 
people and threatens the peace and civility of an entire region 
of the world. And we should be looking for allies in that part 
of the world, and not just Israel, but other countries of the--
other countries in that region to try to isolate and, yes, 
empower the people of Iran to win their freedom against this 
gangster regime. Whether it is promoting self-determination or 
the right to self-determination or just pure democracy, we 
should--the Iranian mullahs should not be on the offensive, 
they should be on the defensive, because they do not represent 
anything but an evil force in their own country and in that 
region.
    So, Mr. Chairman, I had my say. Maybe there is someone who 
has 45 seconds to comment on that on the panel. Thank you.
    There you go. Mr. Cohen. You have got 15 seconds.
    Mr. Burton. If you have a comment, go ahead.
    Ms. Shaffer. I think it is very important that you 
mentioned Iran's policies toward the conflicts in the region, 
because I think we can learn really how--how there is such a 
gap between Iran's rhetoric of Islamic solidarity, helping 
oppressed peoples and its activities in actuality. And, I mean, 
Iran should be the poster child of helping Muslims around the 
world, but in its close region, it helps Armenia against 
Azerbaijan, it helps Russia against Chechens, it bowed out of 
Tajikistan for Moscow's interest.
    And even when it tries to explain its hostility toward 
Azerbaijan, it says, well, it is about Israel. To tell the 
truth, Azerbaijan and Israeli relations actually came to 
``frutation'' only about 4 to 5--5 years ago did they establish 
close cooperation. Iran has been trying to undermine Azerbaijan 
stability and supporting its adversaries in the region since 
the beginning of independence.
    Again, it goes back to this ethnic issue. Just as you have 
brought attention of Congress on the multiethnicity of the 
Iran, Iranian leaders, the first day in the Tehran Times when 
the Soviet Union broke up, the first article was not about what 
a great opportunity to expand Islamic fundamentalism and 
Islamic influence, it was, we must be careful that the ethnic 
hand won't come over the border the other way. And this is what 
drives Iranian policy in the region.
    Mr. Rohrabacher. We have people in Belujistan, we have 
people who are Azeris, we have many different groups of people 
who deserve their freedom who are now under the thumb of the 
mullah dictatorship. We should be on the side of democracy and 
freedom in Iran, and that would solve a lot of our other 
problems.
    Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Burton. Thank you, Mr. Rohrabacher.
    Mr. Engel.
    Mr. Engel. Thank you very much, Mr. Chairman. I won't take 
the whole time.
    I want to start by, first of all, telling you how much I 
have appreciated our friendship through the years, and from the 
time we both served on the Western Hemisphere Subcommittee, 
first you as chair and me as ranking member, then me as chair 
and you as ranking member, we have always been friends, and you 
have always been a gentleman and a very good student of foreign 
policy. And it has just been a pleasure working with you, and 
personally I am going to miss you. So I hope you will come back 
and visit.
    I hope your district and the country understands how--what 
a patriot you are and how much you care. Even when we've 
disagreed on things, I never have had doubt for one moment that 
you didn't say anything that you didn't believe. That you--you 
are a patriot, you are a tremendous American, and you really 
love this country. And, you know, we love you; even on this 
side of the aisle we are going to miss you.
    And I want to say something to you're my good friend, dear 
friend, Jean Schmidt. Going to miss you, too, my cochair of the 
Albanian Issues Caucus and someone that I have gotten to know 
very well. We have traveled together, as Mr. Burton and I have, 
and we have gotten to know our families on a personal level. 
And I'm going to miss you very, very much. And you, too, are a 
great patriot and amazing woman, amazing woman.
    I don't know, I tell a little tale out of school, we are--
when we are traveling abroad, we always have these big, strong 
Marine guys or whatever following us and taking care of us and 
whatever. And Congresswoman Schmidt is an avid runner. She 
competes in all kinds of classical marathons, thank you. And I 
want to tell you, those Marine guys that are less than half her 
age, they couldn't hold a candle to her when she gets up at 
4:30 in the morning and is ready to do running. So we are going 
to miss you, Jean. Please keep in touch. And honored to call 
both of you my friend. So thank you.
    I wanted just to ask anyone who can answer just one 
question. It involves the relationship with Azerbaijan and 
Israel. There had been reports, I guess it must have been 6 
or--6 months ago to a year, I guess, where there was talk that 
Azerbaijan had agreed to let Israel use its bases in case 
Israel felt it had to make a strike on Iran to destroy Iran's 
nuclear capability. There seemed to be, whether it was our 
State Department or someone somewhere, went public on it. And 
it seemed to me that it undermined any kind of deal that 
Azerbaijan and Israel have had.
    I am wondering if any of you can shed some light on that 
for me and, you know, just tell me your thoughts. Because I 
have to tell you, my thoughts were I was disappointed when I 
thought on the U.S. side that we were--we were sort of bringing 
that to light. I was--I thought that was something that was 
better left unsaid.
    Yes, Ms. Shaffer. Dr. Shaffer.
    Ms. Shaffer. I think this shows the power, also the 
negative power, of the Internet. Here a guy wrote an article, 
who, by his own biography, had served as an advisor to Yasser 
Arafat, for instance, when he was in Lebanon, an article based 
on six unnamed sources--I can understand an article that has a 
couple unnamed sources and some people on the record--six 
unnamed sources, two independent scholars--in my opinion, 
independent scholars are either unemployed or on the payroll of 
someone they don't want to mention--and this creates noise all 
over the world as if it is the reality, and everyone else has 
to respond to it.
    I think there has been a big disinformation campaign going 
on in a number of media sources that are trying to break apart 
the friendship between Israel and Azerbaijan. It makes a lot of 
people--and trying to make Azerbaijan pay in the Muslim world 
for its close friendship to Israel. And I think these articles 
that are always, you know, talking about military cooperation 
here, military cooperation there. If you show a map, there is a 
lot of countries that Israel is going to have a military attack 
on Iran. There is a lot of countries it has to pass over before 
it gets to Azerbaijan. Azerbaijan is a landlocked country. So 
that would mean that its planes were flying over Turkey, 
Georgia, a number of other countries, before it reached 
Azerbaijan.
    This really isn't about Azerbaijan and Israel. I think that 
we have to be very careful with many of these--the impact of 
these articles, which we really don't know who is behind them 
and why--I mean, if a student of mine wrote paper with six 
unnamed sources, I wouldn't give them a very good grade.
    Mr. Engel. Yes. Dr. Cohen.
    Mr. Cohen. I am not sure if it is the purview of this 
committee or the full committee, but as that publication hurt 
U.S. policy and U.S. relations with both Israel and Azerbaijan, 
I am wondering if an investigation can be made as to whether 
U.S. sources were involved in leaking this information; or, 
alternatively, maybe it was commissioned by the Iranian regime. 
And because what Dr. Shaffer mentioned the connections of the 
author to Yasser Arafat, and I am personally aware of those 
connections, he is not hiding them. It could be it was done on 
behalf of the Islamic Republic here in Washington, which also 
raises very serious questions as to the influence of that.
    Mr. Chairman, if I may go back to the Bahrain issue? If you 
look at the map, Bahrain is there across Iran on the shores of 
the Persian Gulf. As Dr. Rubin said, Bahrain has 70 percent 
Shia majority. Some Iranian officials claim that Bahrain is a 
14th province of Iran. This is kind of rhetoric that we heard 
by Saddam Hussein which led to the war in Kuwait. So this is a 
highly explosive territorial claim, and if, through its 
military power or through subversion, and supporting the Shia 
radicals in Bahrain, Iran overthrows the current regime and 
establishes hold on Bahrain, then it can close the Persian Gulf 
from both sides, which has tremendous implications for energy 
traffic--40 percent of all oil in the world is shipped through 
the Persian Gulf--and it establishes an Iranian bridgehead on 
the southern or eastern shore of the Persian Gulf aimed right 
at Saudi Arabia.
    So geopolitically, purely looking at the map, and 
understanding that such a step would unfortunately prevent the 
Fifth Fleet to continue being there, this is a development that 
Iranians are pursuing, and that is extremely dangerous to our 
national security interest, to the interests of the Kingdom of 
Saudi Arabia, and to our allies in the Persian Gulf.
    Mr. Burton. Thank you very much.
    Mr. Meeks.
    Mr. Meeks. Let me also join the chorus to say to Jean that 
we will miss you. I was just thinking before Eliot, when he was 
talking about our travel together, and the fact that you outrun 
everybody, and also the fact that we have gotten to know one 
another on these trips and talked about family, and friends, 
and life and what it really means, and your dedication as a 
true patriot to our great country of ours. So we are going to 
miss you and the service that you have rendered here in the 
United States Congress, and I want to wish you well in your 
future endeavors.
    Let me now go to the witnesses.
    As I indicated in my opening statement, it seems to me 
influence is stronger when you divide and conquer. It seems to 
me if you can divide folks up in the region, et cetera, then 
you can have more influence. And that is what my concern is, to 
a large degree, in the South Caucasus. And that is why I will 
just open up with this question.
    I have been watching, because I think it is extremely 
important, if we could get Turkey and Armenia to have a better 
relationship, to move that tighter together, because if you 
have them divided, et cetera, that helps weaken the 
relationship.
    So my question, first question, is, do you think that 
there's any prospect maybe in--because I always have the 
statement that there is--there is two of the oldest forms of 
relationships between countries. One is trade or economic 
engagement, and the other is war. I like trade and economic 
engagement much better than war to try to have relationships. 
So I was wondering whether or not did you see any prospect for 
increased economic engagement in between Armenia and Turkey 
and--or would the relaxation of the closed border between 
Turkey and Armenia or even the normalization of diplomatic 
relations in the region, would that make a difference? Would 
you see that being possible anytime soon in any--I am one to 
believe the glass is half full all the time, but I would like 
to get your viewpoints.
    You can start. go ahead.
    Mr. Vatanka. I will be very brief, if I may.
    As far as I can see, the Turks have already said they are 
interested in that kind of a development vis--vis Armenia. And 
Armenians, as I stated earlier, definitely are trying to expand 
in terms of their partners that they have in the region. But I 
am not sure about the timing right now. Certainly I think the 
Turks have their hands full with everything going on in the 
region, specifically in Syria. So I am not sure if they are 
going to do something as radical as that, because that is going 
to be perceived, at the very least, as a radical step in Baku. 
And Turkey does not want to walk away from its very close ties 
with Azerbaijan.
    So that is how I see it. I think timing here is very 
important. Secondarily, you want to make sure those areas 
understand the motive, that this is not going to be done at 
their sort of cost.
    If I may just very quickly, two points I also wanted to 
make in terms of Israel and Bahrain. First, when I was in 
Azerbaijan, there were two messages that pretty much stood out 
for me very clearly. One was the Israel-Azerbaijan relationship 
which is not just about Iran. It is a key factor, but it is 
more about developing Azerbaijan's diplomatic, economic, and 
political clout on the international stage, Israel being 
forthcoming. So that, I think, is an important factor to 
remember.
    But number two, equally important, Azerbaijan, as far as I 
could see, is not interested in becoming battleground and 
certainly doesn't want to be involved in a war with Iran. It 
will play its role, as far as I could see, as an international 
partner in terms of maintaining the sanctions and so forth, but 
it is not going to sort of stick its head out because it 
certainly doesn't feel comfortable in that regard.
    On Bahrain, the thing to remember--again, I was in Bahrain 
this year. And one of the issues, again, that stood out 
clearly, there is some genuine grievances on the ground, and I 
heard Bahraini officials admit to that. So there are things, 
reform, that needs to be done on the ground.
    Where the Iranian danger comes in if there is a vacuum, 
because whenever Iran has really succeeded under a regional 
level has been where there has been a vacuum. We have seen that 
in Lebanon in the 1980s. We saw that with the creation of 
strength in Hamas in the 1990s. That is what the Iranians are 
very good at, to come in and fill vacuums.
    The important thing for the United States is that 
opposition in Bahrain, at least the moderate voices in the 
Bahraini opposition, don't feel the need that there is only 
Iran to turn to. United States, I think, can play an important 
role in that regard.
    Ms. Shaffer. Mr. Meeks, I think you are correct that the 
conflicts create vulnerability to the countries, but more for 
Iranian influence, for Russian influence. And for precisely 
this reason, the normalization between Turkey and Armenia and 
the opening of the Turkish-Armenian border has to take place in 
a greater regional context, meaning if you just look at Turkey-
Armenia, you say, okay, fine, they trade, yes, there can be 
many benefits. But we have to use this border issue as a means 
to further resolve the Nagorno-Karabakh complex, because if one 
border happens, but still the conflict between Armenia and 
Azerbaijan continues, we don't have peace in the region, we 
won't have that kind of stability we want to achieve.
    In fact, today Armenia occupies 20 percent of Azerbaijan's 
territory. The only nonmilitary means, the only thing Armenia 
wants that it doesn't have, is actually the trade with Turkey. 
Therefore, we have to use that lever for some movement in the 
peace process to really--you know, maybe not the whole 
resolution for Armenians to leave a few of the occupied 
districts to show some sort of sign of the process moving 
forward. And so to put peace, again, peace on two sides of 
Armenia's borders, because if not, all we are doing is putting 
war closer and closer in the region.
    Mr. Rubin. Representative Meeks, I certainly agree with the 
desire that there would be some sort of rapprochement, but, in 
the larger context, I really don't think it would be enough, 
given the recent changes in Turkey.
    Turkish and Iranian leaders coordinate closely on 
international efforts to restrict free speech that criticizes 
Islam. Hakan Fidan, Turkey's Intelligence Chief, makes little 
secret of his preference to Tehran over Washington, which 
raises questions about intelligence sharing, especially when it 
comes to some of the coding and technology for the F-35 Joint 
Strike Fighter.
    In 2010, what concerns me most is that Turkish and Chinese 
Air Forces conducted joint war games over the--over Turkey 
without first alerting either NATO or the Pentagon. And, of 
course, the Chinese fighter jets couldn't have gotten to Turkey 
if they hadn't stopped first and refueled in Iran.
    What I see now beyond just the issue of the Turkish-
Armenian dispute is that Iran feels that it is about to deliver 
us a coup de grace, because they have Armenia in their camp, 
increasingly they seem to have flipped Turkey in many ways, 
they are very optimistic about what the future will bode with 
regard to Georgia, which only leaves only Azerbaijan behind, 
which leads me to think that even if you do have some 
rapprochement between Turkey and Armenia, that we are going to 
have a much hotter time in the region over the months and 
perhaps year to come.
    Mr. Cohen. Just to follow up on this, Armenia enjoys a 
historic and strategic relationship with Russia. It has very 
strong ties with Iran. So two out of three major powers in the 
Caucasus are in the Armenians' corner. On the other hand, 
Turkey, historically, is supporting Azerbaijan and made it 
clear to Armenia, after the memoranda was signed back in 2010, 
I believe--2010 or 2009--in 2009, that Turkey will link the 
opening of the border to progress on the Karabakh issue. And we 
understand it because countries support their allies. In the 
case of Turkey, Azerbaijan is an ally.
    But I also want to support what my colleague Mr. Rubin said 
about Turkish-Iran relations. Those relations are developing. 
And doubling of trade by 2015 between Turkey and Iran while 
Iran is under international sanctions is proclaimed again and 
again as a strategic goal of the Turkish Republic, which raises 
a question how our ally, Turkey, is playing a policy or 
conducting a policy that appears to be contradicting our 
sanctions against Iran.
    Mr. Meeks. And I know I am out of time, but just following 
up on that, though, it seems to me--and this is what I also 
stated in the opening statement--that when you look at some of 
our allies, whether it is Turkey in particular and others, they 
look at their national interests, and they are dependent upon 
either Russia or Iran for their oil or their--you know, their 
resources. So they go back and forth because they need it. And 
one or the other could be bad for us, et cetera, if they are 
completely dependent upon it. So people are looking at what 
they have in their particular regions.
    What I would think, then, in order to eliminate some of 
that--and I throw that question out as my last question for 
now, then I yield to the chair and to Jean--is my thought is 
what could we do to help transit from the Caspian so that we 
can get oil into these regions so they are not dependent on 
Russia or Iran? And what do you see the United States doing, or 
how we can be more helpful to make sure that transit exists so 
that they can get the resources they need with regards to what 
they need for their vital necessities?
    Mr. Cohen. Sir, these are very important questions. And on 
oil, the United States took a principled and active position 
both under Clinton and George W. Bush to promote the Baku-
Tbilisi-Ceyhan main oil export pipeline--Ceyhan is a port in 
Turkey. That pipeline is at capacity of about 1 million barrels 
a day, but because of the Iranian obstructionist position on 
delineating and demarcating the Caspian, additional oil 
pipelines cannot be built from Kazakhstan, for example, and 
they are going to have to ship that oil into the Baku-Tbilisi-
Ceyhan pipeline by tanker.
    On gas, the same Iranian position prevents gas from going 
from Turkmenistan or, in the future, from Kazakhstan into 
Azerbaijan and then into Turkey. But today the TANAP Pipeline, 
the Trans-Anatolian pipeline, between Azerbaijan, Georgia, and 
Turkey, is going to join a pipeline that will supply additional 
gas and also natural gas from Kurdistan, from Northern Iraq; 
can be pumped into Turkey and then further to the European 
markets.
    Additionally, Turkey has excellent relations with Sunni 
Arab countries, many of which are exporters both of oil and 
liquid natural gas, like Qatar. So Turkey has its sources of 
both oil and gas, and if Turkey wasn't so disruptive in its 
relationship with Israel, there could be a place of discussing 
the Israeli and Greek Cypriot offshore gas fields supplying 
some gas to Turkey in the future.
    Unfortunately, the Turkish leadership today is at the head 
of the crowd that is bashing Israel and supporting the 
terrorist organization Hamas, including its latest attacks on 
Israel with rockets. And right now I think Turkey shot itself 
in the foot by excluding itself from the east Mediterranean gas 
development of Israel and Cyprus.
    Thank you.
    Mr. Burton. Before we go to my good friend Jean, let me 
just say that you have been an outstanding panel, and I hope 
that we can get the information you are giving us today out to 
everybody, because I don't think the things you are telling us 
today are widely known. And so we really appreciate you being 
here.
    Jean.
    Mrs. Schmidt. Thank you. And I want to continue on 
Congressman Meeks' discussion about oil. Forty years ago--and I 
can't believe I can say 40 years ago--when I was studying 
Middle East politics, I had a professor that said the reason 
why the Middle East is important is a three-letter word, and 
that is called ``oil.'' And it still is.
    And as we look at the emerging markets of Azerbaijan and 
Kazakhstan, we see oil-rich, natural-gas-rich countries that 
really want to not just continue the development of these 
energy resources, but also distribute it into areas that, quite 
frankly, are good for international security, which I am 
talking about is Western Europe, which right now has to get 
their energy sources from places that aren't so popular.
    But in reading your testimony, Mr.--Dr. Cohen, I--I am 
getting a deeper understanding as to why Iran doesn't want 
this. Iran doesn't want it for a multitude of reasons. One, it 
doesn't want these countries to continue to develop and become 
more Western and more attractive for business, international 
business, to come to their borders; but also because it is not 
in Iran's best interest to have anybody else pumping these 
supplies.
    So it is in Iran's best interest, it seems, to be 
subversive in all of these countries in any single way that 
they can, including trying to make Turkey not be as friendly to 
the United States as I believe Turkey wants to continue to be, 
to be disruptive by not allowing the Caspian Sea to be open 
enough to allow these pipelines to go through.
    And so really what we--we have to do not just as the United 
States, but as an international body, in my view, is apply 
international pressure to allow these new countries to develop.
    And the other thing that I am thinking of when I am looking 
at this--maybe I am wrong in this, and please tell me--is it is 
not in Russia's best interests either. You know, Russia lost 
its--some of its best parts of itself 20 years ago, when you 
look at Kazakhstan and Azerbaijan and the fact that they are 
free. And they can do what they want to do. It is not in 
Russia's best interest for these countries to make money and 
become emerging markets that can be world players. And so of 
course Russia, in my view, is looking at Iran to smother them 
and hurt them.
    And am I right or am I wrong in this? And what as an 
international body should the international body be doing in 
the--concretely to allow that pipeline to go through? Because I 
truly believe it is in the best interests of the world for it 
to start pumping energy quickly.
    Mr. Cohen. Yes, ma'am. Clearly the increase of supply of 
oil and gas, and now gas is becoming a globally transshipped 
commodity in the form of LNG, liquid natural gas, it is very 
much in the interests of every developed economy, every 
developing economy that is not hydrocarbon rich.
    And you are absolutely right. There is a confluence of 
interest between Russia and Iran. These two countries form a 
north-south axis, whereas Kazakhstan, Turkmenistan, and 
countries all the way east to China and West to Europe comprise 
an east-west axis, the corridor through which oil, gas, but 
also industrial goods, ideas, and information can flow.
    The Russian situation is not dissimilar. The Russian 
situation in Europe with gas is similar to Iranian or Saudi 
situation with oil. It is all about market share.
    Mrs. Schmidt. Right.
    Mr. Cohen. So if you have Azerbaijani gas, Turkmen gas 
competing with the Russian gas in European markets, or, for 
that matter, Qatari LNG, or LNG from Algeria or Nigeria, it 
will drive the Russian market share down, it may drive the 
prices down. And Europe is really at a--at a crossroads, 
because they need to decide whether to go with natural gas or 
they continue with coal and continue with nuclear. So gas plays 
a strategic energy role in Europe right now.
    And you asked about what can we do.
    Mrs. Schmidt. That is the most important question of all.
    Mr. Cohen. A $64-trillion question.
    We did not coordinate enough with Western Europe. Western 
Europe by itself, especially now with the economic crisis, is 
not really focused enough on ensuring that east-west pipelines 
will go through.
    I think the EU lost to the Russians on Nabucco, the big 
pipeline that was supposed to carry gas from the Caspian 
through Turkey into Western Europe. But TANAP is a good, 
smaller alternative to Nabucco, with a spur, a side pipeline, 
most probably what is called West Nabucco, which is a pipeline 
to Austria.
    We could have done more, especially when the regime, the 
leader, changed in Turkmenistan. I had conversations with 
senior State Department officials saying, let us invite the new 
leader, Gurbanguly Berdimuhamedow--the new--Turkmenbashi--the 
new President, to Washington. And there was a huge pushback 
because they wanted for the Foreign Minister to visit, then 
they wanted the Prime Minister to visit. Then they were 
concerned, justifiably so, about human rights in Turkmenistan. 
In the meantime, Mr. Putin was there in 2 weeks signing deals. 
The Chinese now are the principal buyer for Turkmen gas.
    So I do not want to present it as only a zero-sum game, but 
this is a game of immense and intense competition between the 
buyers of these natural resources.
    Ms. Shaffer. Yes. Russia and Iran have been allies in 
trying to make sure that less and less oil from the Caspian 
region reaches international markets; unsuccessful, thanks to 
really strong U.S. policy efforts in the early days after the 
Soviet break-up.
    But where actually Russia and Iran are rivals is the 
question of natural gas, and I talk about this in depth in my 
testimony. The only country that really has the volume that 
could--to be a true rival to Russian dominance in a number of 
markets in Europe is Iran. And now because of the conflict 
between Iran and the West, Iran is in a box.
    It really helps us understand Russia's kind of policy on 
Iran. Sometimes it is with us, sometimes it is against us on 
the sanctions, because basically what Iran's interest is that 
Iran--Russia's interest on Iran is that there is no war, no 
peace; no resolution of the conflict, no ending of the nuclear 
Iranian nuclear; on the other hand, no full-scale war, because 
it is in Russia's interest that the Iran volumes are locked up 
in Iran and don't reach outside markets and compete with 
Russia.
    We saw this even--for instance, Iran opened the pipeline to 
Armenia to supply gas. Gazprom bought up this pipeline, even 
though what does it matter to the--a pipeline between Iran and 
Armenia, Armenia is not a large market, just to make sure the 
Iranian gas doesn't transit through Armenia and end up in 
European markets.
    Mr. Cohen. Let me add about Iran. I have been watching 
Iranian oil and gas industry for a long time. With this regime, 
because this is a highly ideological regime that does not allow 
private property of natural resources, doesn't allow Western 
investment, that creates such an oppressive atmosphere inside 
the country that a lot of Iranian engineers, scientists, 
doctors leave the country. This regime is not really capable to 
be a good steward of Iranian natural resources in a way like 
Saddam Hussein was not a good steward of the Iraqi natural 
resources.
    What we are facing in terms of the economic and 
developmental interests of the West, of the newly 
industrialized countries of Asia, and from the point of view of 
the Iranian people themselves is a recognition that is often 
lacking that this particular ideological Islamist dictatorship, 
Shia militant dictatorship, is working against best interests 
of their own people as well as against the economic interests 
of potential buyers of Iranian natural resources. They don't 
negotiate well. They don't have the legal base to allow Western 
investment. And, yes, they are under sanctions and will be, God 
willing, until such time as they reverse their nuclear military 
program.
    Mr. Burton. Thank you, Jean, Mrs. Schmidt.
    Let me just end up by saying I want to thank my colleague, 
my buddy here for about 20 years, for being such a good friend.
    And I want to thank you once again for being such a great 
panel. I really, really appreciate it.
    The one thing I hope--and I know we have C-SPAN here, and I 
hope this is transmitted to our State Department--it sounds to 
me like where Azerbaijan is concerned, where the Persian Gulf 
is concerned, and Bahrain, as well as the other Persian Gulf 
countries, as well as the entire region, Turkey and everything 
else, it is extremely important that our State Department 
doesn't drop the ball. They need to be extremely involved right 
now, and I hope the administration realizes.
    One of the things that I am concerned about--and my 
colleague and I have some differing opinions on some of these 
things. One of the things I am concerned about right now is we 
are so concerned about the financial cliff that we are losing 
sight of something that may be of greater importance in the 
next 5 or 10 years, and that is if everything goes awry in the 
Middle East, we could be shutting off some of our lights here 
because of a war that would get out of hand. So our State 
Department and people like you need to be listened to. We need 
to be involved. And I want to thank you once again for being 
here.
    And I want to thank our friends from Azerbaijan and Bahrain 
and others who are here today for attending.
    And with that, we stand adjourned.
    [Whereupon, at 3:35 p.m., the subcommittee was adjourned.]
                                     

                                     

                            A P P E N D I X

                              ----------                              


     Material Submitted for the Hearing RecordNotice deg.





               \\ts\



                                 
