[Senate Hearing 112-367]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-367
 
 THE STATE OF HUMAN RIGHTS AND THE RULE OF LAW IN RUSSIA: U.S. POLICY 
                                OPTIONS

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


                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON EUROPEAN AFFAIRS

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           DECEMBER 14, 2011

                               __________

       Printed for the use of the Committee on Foreign Relations


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





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                COMMITTEE ON FOREIGN RELATIONS         

             JOHN F. KERRY, Massachusetts, Chairman        
BARBARA BOXER, California            RICHARD G. LUGAR, Indiana
ROBERT MENENDEZ, New Jersey          BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
ROBERT P. CASEY, Jr., Pennsylvania   MARCO RUBIO, Florida
JIM WEBB, Virginia                   JAMES M. INHOFE, Oklahoma
JEANNE SHAHEEN, New Hampshire        JIM DeMINT, South Carolina
CHRISTOPHER A. COONS, Delaware       JOHNNY ISAKSON, Georgia
RICHARD J. DURBIN, Illinois          JOHN BARRASSO, Wyoming
TOM UDALL, New Mexico                MIKE LEE, Utah
               William C. Danvers, Staff Director        
        Kenneth A. Myers, Jr., Republican Staff Director        

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

                SUBCOMMITTEE ON EUROPEAN AFFAIRS        

            JEANNE SHAHEEN, New Hampshire, Chairman        

BENJAMIN L. CARDIN, Maryland         JOHN BARRASSO, Wyoming
ROBERT P. CASEY, Jr., Pennsylvania   JAMES E. RISCH, Idaho
JIM WEBB, Virginia                   BOB CORKER, Tennessee
RICHARD J. DURBIN, Illinois          JIM DeMINT, South Carolina

                              (ii)        

  
?

                            C O N T E N T S

                              ----------                              
                                                                   Page

Barrasso, Hon. John, U.S. Senator from Wyoming, opening statement     2
Cardin, Hon. Benjamin L., U.S. Senator from Maryland, statement..     4
Gordon, Hon. Philip H., Ph.D., Assistant Secretary of State, 
  Bureau of European and Eurasian Affairs, U.S. Department of 
  State, Washington, DC..........................................     5
    Prepared statement...........................................     8
Kramer, David, president, Freedom House, Washington, DC..........    29
Malinowski, Tom, Washington director, Human Rights Watch, 
  Washington, DC.................................................    32
    Prepared statement...........................................    35
Melia, Thomas O., Deputy Assistant Secretary of State, Bureau of 
  Democracy, Human Rights, and Labor, U.S. Department of State, 
  Washington, DC.................................................    12
    Prepared statement...........................................    15
Shaheen, Hon. Jeanne, U.S. Senator from New Hampshire, opening 
  statement......................................................     1
Verona, Edward, president and CEO, U.S.-Russia Business Council, 
  Washington, DC.................................................    39
    Prepared statement...........................................    41

              Additional Material Submitted for the Record

Hon. Roger F. Wicker, U.S. Senator from Mississippi, prepared 
  statement......................................................    51
December 13, 2011, New York Times article, ``2 Leaders in Russian 
  Media Are Fired After Election Articles''......................    52
Letter in support of S. 1039 from Boris Nemtsov, cochairman, 
  People's Freedom Party (Russia)................................    54
Prepared statement in support of S. 1039 from Garry Kasparov, 
  chairman, United Civil Front, London, England..................    55

                                 (iii)




 THE STATE OF HUMAN RIGHTS AND THE RULE OF LAW IN RUSSIA: U.S. POLICY 
                                OPTIONS

                              ----------                              


                      WEDNESDAY, DECEMBER 14, 2011

                               U.S. Senate,
                  Subcommittee on European Affairs,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:02 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Jeanne 
Shaheen (chairman of the subcommittee) presiding.
    Present: Senators Shaheen, Cardin, Barrasso, and Corker.

           OPENING STATEMENT OF HON. JEANNE SHAHEEN,
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Shaheen. Good morning, everyone. We're going to try 
and begin right on time because we have votes scheduled. 
Obviously, since we're doing a hearing in Foreign Relations we 
will have votes scheduled. So hopefully we will have someone 
here who can continue to cover the hearing during the votes. 
But if not, we may have to recess between the panels. So I will 
just advise everyone that we expect that to happen about 10:45.
    So thank you all very much for joining us. The Senate 
Foreign Relations Committee meets today to discuss the state of 
human rights and the rule of law in Russia, a particularly 
timely topic given the protests over the past week in response 
to national elections that have been marred by fraud and abuse.
    This month, the world commemorates the 20th anniversary of 
the fall of the Soviet Union. The leadership in Russia chose to 
mark this anniversary by manipulating elections and engineering 
a carefully orchestrated political switch at the top. Misters 
Putin and Medvedev plan to swap spots, with Putin returning as 
President and Medvedev taking the Prime Minister post.
    Following Russia's parliamentary elections, independent 
domestic monitors as well as international observers on the 
ground in Russia reported vote stealing, fraud, and abuse from 
Putin's United Russia Party. Initial protests saw a swift 
response from riot police, who unjustly arrested hundreds of 
peaceful protesters, opposition leaders, and human rights 
activists, some of whom are still in jail today. Despite the 
dangers, protesters continue to take to the streets, calling 
for the release of those arrested, new parliamentary elections, 
and an investigation of the recent fraud.
    Despite President Medvedev's strong rhetoric on fighting 
corruption, the absence of an adequate rule of law doesn't just 
mean that the judicial system is weak. It also undermines 
entrepreneurial business leaders in Russia and scares off 
foreign investment. This leads to an anticompetitive 
environment where connections to the ruling regime matter more 
than business models.
    A strong, successful, and transparent Russia that protects 
the rights of its citizens is squarely in the interests of the 
United States and the entire international community. So, even 
as we work with Russia on areas of mutual interest through the 
Obama administration's ``reset'' policy, we still need new 
tools to press its leaders on areas where we disagree.
    One way currently being considered is the Sergei Magnitsky 
Rule of Law Accountability Act. This legislation, introduced by 
Senator Cardin--you arrived just in time--cosponsored by 25 
Senators, including myself, is currently pending before this 
committee.
    Sergei Magnitsky was a Russian lawyer who exposed 
government corruption and who died under questionable 
circumstances during his detention. The legislation, named in 
his honor, would blacklist any Russian believed to be 
responsible for major human rights violations from receiving a 
visa to travel to the United States. The measure would also 
subject these individuals to a possible freezing of their 
assets.
    This summer the State Department barred dozens of Russian 
officials from traveling to the United States over their 
involvement in the detention and death of Mr. Magnitsky. I 
appreciate the administration's efforts, but hope there is more 
that we can do. I hope our witnesses today will provide their 
views on the current legislation and we look forward to a very 
constructive dialogue.
    I also want to call attention to one more immediate action 
that the Senate could take. Right now Dr. Michael McFaul, a 
renowned human rights and democracy expert, still awaits 
confirmation as the next U.S. Ambassador to Moscow. Given the 
ongoing volatility in Russia, we need a strong diplomatic 
presence in the country as soon as possible, and I hope the 
Senate will act very soon on his nomination.
    Now, before introducing our first two witnesses, I want to 
recognize our ranking member, Senator Barrasso, as well as the 
cochair of the Helsinki Commission and, as I said, the author 
of the Magnitsky legislation, Senator Cardin, both of whom have 
some brief opening remarks.
    Senator Barrasso.

            OPENING STATEMENT OF HON. JOHN BARRASSO,
                   U.S. SENATOR FROM WYOMING

    Senator Barrasso. Thank you very much, Madam Chairman. 
Following up on your remarks about the election, widespread 
election fraud, there was an article in today's New York Times, 
``Two Leaders in Russian Media Fired After Election Articles.'' 
And it talks about how there was an apparent conflict over 
coverage that appeared to highlight the widespread anger across 
the country with results of parliamentary elections this month. 
So I'd like to, if I could, Madam Chairman, put that into the 
record.
    Senator Shaheen. Without objection.
    Senator Barrasso. Well, thank you.
    So I just want to thank you. I want to welcome the 
witnesses, thank all of you for being here today, because it's 
a critical time to be examining the status of the rule of law 
and human rights. The United States has always been a strong 
advocate for democracy, for rule of law, and for human rights 
abroad. These are incredibly important issues and deserve the 
attention of this committee and of the entire United States 
Senate.
    Over the last 3 years, the administration has touted their 
reset of United States-Russian relations. I perceive the reset 
as not successful and I believe it has simply amounted in a 
number of ways to a series of appeasements to Russia. Even in 
the few areas where the administration does claim progress, 
Russia has taken several steps back or even reversed course.
    I have serious concerns with the actions being taken by the 
Government of Russia. Some of these concerns include Russia's 
attempt to undermine U.S. missile defense, Russia's continued 
occupation and interference in the sovereign territory of the 
Republic of Georgia, Russia's supplying of weapons to the 
Government of Syria as the Assad regime continues a violent 
crackdown against its own citizens, Russia's extensive 
corruption throughout its government, Russia's ongoing 
violations of human rights, Russia's disregard for the rule of 
law, and Russia's repression of the freedom of speech and 
expression.
    Several reports and studies continue to emphasize the 
problems and deteriorating conditions in Russia. The Department 
of State's 2010 Human Rights Report included a 92-page section 
describing the human rights violations in Russia. The report 
outlines serious human rights abuses, including the killing of 
journalists, extremely harsh and life-threatening conditions of 
prisons, violations of the freedom of speech, failure to abide 
by the rule of law, as well as a number of arbitrary 
detentions.
    If you take a look at how they rank the 183 countries in 
perceived levels of public sector corruption, something called 
the Transparency International's Corruption Perception Index, 
Russia is seen as more corrupt than 142 other countries. The 
Reporters Without Borders ranked Russia as 140th in the 2010 
World Press Freedom Index.
    So, Madam Chairman, I believe that today's hearing is 
particularly timely to the recent electoral fraud and protests 
taking place in Russia that you have mentioned and that are in 
today's New York Times. Secretary Clinton has characterized the 
December 4 elections as neither fair nor free, and I agree with 
her. The preliminary report from the Organization for Security 
and Cooperation in Europe outlined numerous problems with the 
elections, including attempts to stuff ballot boxes, to 
manipulate voters lists, and other abuses.
    Our Nation believes in a fundamental value of democracy. We 
believe in the right of people to freely express their views 
about their government and have their votes counted. The people 
of Russia are expressing this same desire.
    Last week, the world watched as tens of thousands of 
Russian citizens gathered to protest the rigged elections. It's 
important that we support the people of Russia in their pursuit 
of free, fair, and transparent elections.
    So thank you, Madam Chairman. I look forward to the 
testimony.
    Senator Shaheen. Thank you very much, Senator Barrasso.

             STATEMENT OF HON. BENJAMIN L. CARDIN,
                   U.S. SENATOR FROM MARYLAND

    Senator Cardin. Well, Madam Chair, first of all thank you 
for convening this hearing, and thank you for allowing me to 
make just very brief opening comments.
    Let me thank our witnesses for their work. Russia is an 
important country for the United States and our relationship 
with Russia. It's important in our fight against terrorism. 
It's important in our work within the United Nations, within 
Europe, and around the world. So it's an issue that we all take 
very, very seriously as to how we can improve the relationship 
between our two countries.
    But what we have seen in Russia are troubling trends. We 
saw that most recently in the Duma elections, which were 
anything but fair and free and open, the intimidations that 
were used, and now the concern as to how Russia will handle 
legitimate protests against the manner in which that election 
was conducted.
    We see that in the safety of journalists, who have been 
intimidated against investigative reporting. And we see it in 
widespread corruption within the Russian Government.
    As the chairman indicated, I have the honor of being the 
Senate chair of the U.S. Helsinki Commission, which is one of 
our oldest human rights organizations. We monitor human rights 
certainly within the OSCE geography, but basically globally, 
and we will bring out what's happening in countries. In Russia 
it's very concerning to us, the amount of human rights 
violations.
    But people sort of gloss over the numbers, but when you 
have an individual case I think people can relate to just the 
tragedy of what's happening. Sergei Magnitsky is an example of 
a person who tried to do the right thing, as the chairman 
pointed out. He was representing a client and discovered 
corruption within the governmental system. So he did what he 
should have done, brought it to the attention of the Russian 
authorities, and he paid a heavy price for doing that. He was 
arrested on trumped-up charges and thrown in prison. He was 
tortured. Then we believe the higher authorities instructed the 
prison system not to give him health care to meet his needs, 
and he died in prison.
    So that's why we all get concerned about this, is that 
there are so many Sergei Magnitsky's that are out there and 
unless we put a spotlight on this it will just continue. So we 
are concerned about this, and we are concerned about how Russia 
is responding to this.
    The bill that I filed on behalf of many of my colleagues 
makes it clear that if you violate basic human rights, don't 
ask for the privilege to visit the United States. We think that 
is something we should all be doing. And I applaud the 
administration for taking action under the authority that they 
have--which, by the way, I pointed out with a letter that we 
wrote before filing our legislation, that that authority 
exists--of denying people the right for a visa to come to 
America if they have violated basic human rights. That needs to 
be done.
    But because the United States acted, the international 
community is now acting, and we're finding other countries are 
passing similar statutes to deny the rights of those who have 
violated human rights to visit their country. That's 
leadership.
    Madam Chair, we know at the same time that Russia is moving 
for admission within the WTO, and in order for that to be 
effective in the United States we have to repeal what's known 
as the Jackson-Vanik law. Jackson-Vanik was passed by Congress 
to speak about human rights, the basic right for people to 
emigrate from the former Soviet Union. That's how Jackson-Vanik 
came about. It was a human rights connection.
    I think it's right for us to be asking that if we want to 
have normal trade with Russia, we have a right to expect that 
they will adhere to basic human rights.
    That's why, Madam Chair, I am so pleased that you're 
holding this hearing, where we can explore the human rights 
record within the Russian Federation.
    Senator Shaheen. Thank you very much, Senator Cardin.
    I'm pleased to welcome our first panel this morning: Dr. 
Phil Gordon, who's the Assistant Secretary of State at the 
Bureau for European and Eurasian Affairs; and we also have 
Thomas Melia, who is the Deputy Assistant Secretary of State at 
the Bureau of Democracy, Human Rights, and Labor. Thank you 
both for being here. Dr. Gordon, would you like to begin?

STATEMENT OF HON. PHILIP H. GORDON, PH.D., ASSISTANT SECRETARY 
    OF STATE, BUREAU OF EUROPEAN AND EURASIAN AFFAIRS, U.S. 
              DEPARTMENT OF STATE, WASHINGTON, DC

    Dr. Gordon. Thank you very much, Madam Chairman, Ranking 
Member Barrasso, and other members of the committee. We very 
much appreciate the opportunity to discuss the question of 
human rights and democracy in Russia. With your permission, 
I'll submit my longer statement for the record and focus on 
some critical elements here.
    Madam Chairman, thanks also for your remarks about the 
nominee for Russia, Mike McFaul. Mike is a supremely qualified 
nominee for Russia and, as you suggested, given everything 
that's going on there, it would be very useful to have him out 
there as soon as possible.
    The topic of today's hearing is particularly timely 
following the parliamentary elections in Russia 10 days ago. 
Secretary Clinton and the White House have publicly expressed 
serious concern about the conduct of these polls, which were 
marred by numerous irregularities. This past Saturday, tens of 
thousands of Russians took to the streets across the country in 
demonstrations that were notably peaceful and free from 
official interference.
    As Secretary Clinton said following the election--and I 
want to reiterate here--``The Russian people, like people 
everywhere, deserve the right to have their voices heard and 
their votes counted.'' And that means they deserve free, fair, 
transparent elections and leaders who are accountable to them. 
We believe that's in the best interest of Russia and we're 
going to continue to speak out about it.
    Now, of course speaking out about democracy and human 
rights in Russia is not new for this administration. Our policy 
has been and remains guided by clear principles that enable us 
to have an effective working relationship with Russia's 
Government while also strongly supporting civil society, 
democracy, and human rights.
    Let me start with a word on foreign policy cooperation in 
general. President Obama, Vice President Biden, and Secretary 
Clinton have invested significant time in the bilateral 
relationship with Russia. The thinking behind this investment 
is clear: The United States and Russia have many common 
interests, in nonproliferation, in counterterrorism, regional 
security, economic relations, and other areas, and we should 
pursue those interests even as we stand firmly behind our 
principles and our friends in cases where we may disagree, and 
there are such cases.
    The benefits of this engagement strategy are particularly 
relevant in the foreign policy arena. We signed, ratified, and 
implemented the new START Treaty, brought into force a 123 
agreement on civilian nuclear cooperation, and reached and 
implemented a critical military transit accord on Afghanistan. 
We have also been effective partners in the development of 
multilateral solutions to global challenges, working together 
to address shared concerns such as Iran, North Korea, and 
Middle East peace.
    However, there are foreign policy matters on which we 
disagree, for example our responses to events in Syria, as well 
as issues related to the territorial integrity and sovereignty 
of Georgia, which the United States strongly supports. We 
regularly raise these subjects at all levels of the Russian 
Government and we will continue to do so.
    Now, having achieved many concrete goals in the first 3 
years of the administration, our aim now is to deepen this 
engagement and widen the arc of our cooperation. In particular, 
we want to expand economic ties, which remain underdeveloped. 
While two-way trade flows grew in the past year, they still 
comprise less than 1 percent of our total trade.
    The pending accession of Russia to the World Trade 
Organization matters to the United States economy, as it will 
create new markets for American exporters in one of the world's 
fastest growing markets and support new jobs at home. In 
addition to the economic benefit, Russia's membership in the 
WTO will oblige Russia to comply with WTO rules that underlie 
open, transparent, and fair global economic competition.
    As part of the accession process, Russia has also agreed to 
predictable tariff rates and will be subject to an enforceable 
dispute resolution mechanism.
    Now, for American companies to take advantage of this new 
market opening, Congress must terminate the application of the 
Jackson-Vanik amendment and extend permanent normal trading 
relations to Russia. Russia has met, as Senator Cardin said, 
the freedom of emigration criteria under the Jackson-Vanik 
since the early 1990s. This has been certified annually by 
every administration since 1994, demonstrating that the 
amendment long ago achieved its historic purpose by helping 
thousands of Jews emigrate from the Soviet Union.
    But until permanent normal trading relations are extended 
to Russia and we can apply WTO agreements to Russia, American 
companies will not fully benefit from nondiscriminatory terms 
of trade and the United States will not be able to use WTO 
mechanisms to resolve trade disputes. So just to be clear, it 
would be a very unfortunate result, to say the least, if we 
achieved the historic goal, not just of Jackson-Vanik, but of 
bringing Russia into the WTO, only to leave United States 
companies as the only ones in the world unable to benefit from 
Russian accession.
    In the coming weeks and months, the administration looks 
forward to consulting with Congress on the way forward to 
address the question of the repeal of Jackson-Vanik and to 
continue to address the question of human rights in Russia.
    Terminating the application of Jackson-Vanik to Russia is, 
as I have suggested, critical for United States business and 
foreign policy interests. While we believe that Jackson-Vanik 
has long since accomplished the goals for which it was adopted, 
we do want to work together with Congress to address our shared 
concerns about human rights and democracy in Russia.
    In that regard, the administration has strongly welcomed 
Senator Cardin's campaign for justice after the tragic death of 
Sergei Magnitsky following the denial of necessary medical 
treatment while he was in pretrial detention. Congressional 
calls for travel restrictions against officials responsible for 
his death have helped keep global attention focused on this 
case.
    The State Department has taken important actions, using the 
existing authorities of the Immigration and National Act, as 
well as the expanded powers provided by the Presidential 
Proclamation 8697 issued in August, to ensure that no one 
implicated in Mr. Magnitsky's death can travel to the United 
States.
    In Russia two prison officials involved in Mr. Magnitsky's 
death have been arrested and several investigatory commissions 
have been established. These actions are steps in the right 
direction, but we are absolutely clear that more needs to be 
done. Deputy Assistant Secretary Melia and I look forward to 
discussing these issues with you during the hearing today.
    Now, unfortunately the Magnitsky case is not the only human 
rights challenge in Russia. Well-known journalists, such as 
Anna Politkovskaya, Paul Klebnikov, and Natalya Estemirova, 
have been killed. Mikhail Khodorkovsky remains in prison on 
politically motivated charges. And Russian activists encounter 
difficulties while attempting to exercise their rights to free 
speech and assembly.
    As already noted, last week Secretary Clinton and the White 
House expressed concerns about the conduct of the December 4 
elections, as, by the way, did the European Union and other of 
our key partners in Europe. These concerns are reflected in the 
preliminary report issued by the OSCE's international election 
observation mission, which noted the lack of a level playing 
field and a process marked by limited political competition.
    As I said at the start, the administration welcomes the 
fact that following the election tens of thousands of Russians 
were able to hold a peaceful political demonstration in Moscow 
this past Saturday. In a democracy the people have the right to 
make their voices heard in a lawful way, the authorities have 
the responsibility to provide the safe and secure conditions 
for the pursuit of that right. We were greatly encouraged to 
see these rights and responsibilities carried out so well. We 
look forward to the results of President Medvedev's call for an 
investigation into allegations of electoral fraud and 
manipulation.
    We also, again, look forward to working with Congress to 
promote our national economic interests, as well as our 
interests in democracy and human rights in Russia.
    To conclude, let me assure you that the United States will 
continue to be forthright in our firm support for universal 
human rights, as well as our conviction that democratic 
institutions and rule of law are the keys to unlocking Russia's 
enormous human potential. We do not seek to impose our system 
on anyone else. Change within Russia must ultimately be 
internally driven. Nevertheless, we will continue to work with 
Russian partners to foster democracy and respect for human 
rights by encouraging transparent and accountable government 
and strengthening civil society.
    I look forward to your questions and the discussion during 
this hearing.
    [The prepared statement of Dr. Gordon follows:]

  Prepared Statement of Assistant Secretary of State Philip H. Gordon

    Chairman Shaheen, Ranking Member Barrasso, and members of the 
committee, thank you for inviting me here today to discuss the state of 
human rights and the rule of law in Russia. These issues have always 
been central to the administration's strategy toward Russia. As 
President Obama said in July 2009, ``Americans and Russians have a 
common interest in the development of rule of law, the strengthening of 
democracy, and the protection of human rights.'' There are real 
challenges in these areas, as you well know. And there are not always 
easy solutions. But we believe that our policy is guided by clear 
principles that enable us to have an effective working relationship 
with Russia's Government and civil society on a wide range of important 
foreign and domestic policy concerns. I welcome the opportunity to 
discuss these principles and challenges with the committee.
    When President Obama and President Medvedev first met in London in 
April 2009, bilateral relations in the wake of the Russia-Georgia war 
were as contentious as they had been in more than 20 years. The 
decision to make a fresh start, to reset relations between the United 
States and Russia, has brought practical benefits for both countries as 
well as for the rest of the world. U.S. policy toward Russia in this 
administration has been guided by several defining principles. First, 
we recognize that the United States and Russia have many common 
interests. Second, we believe that engagement with Russia's Government 
can produce win-win outcomes, by rejecting ideas such as ``privileged 
spheres of interest'' or ``great game'' politics as well as the notion 
that we cannot engage on human rights concerns. Third, we have sought 
to develop a multidimensional relationship that goes beyond the 
traditional security arena and advances core U.S. national interests. 
And finally, we remain guided by the belief that we can engage 
effectively with Russia's Government and civil society at the same 
time, that we can cooperate with its government without checking our 
values at the door, and that we can pursue a reset with Russia without 
compromising our relations with countries that have difficult relations 
with Russia.
    To be sure, few things come quickly or easily in U.S.-Russian 
relations and it will take considerable time and effort to overcome a 
legacy of mistrust. Our interactions are often an uneasy mix of 
competition and cooperation. We are not so naive as to think that areas 
of common ground can be fully insulated from areas of friction, but our 
starting point has been that problems in one area of our relationship 
should not preclude progress in others. We have much to gain by working 
together on global security and economic challenges, as opportunities 
for effective collaboration far outweigh our differences.
    President Obama, Vice President Biden, and Secretary Clinton have 
invested significant time in the bilateral relationship with Russia. 
Their diplomatic efforts, as well as constant contact between working-
level officials, have produced practical results. The benefits of our 
engagement strategy are particularly evident in the foreign policy 
arena. We signed the New START Treaty. We brought into force a 123 
Agreement on civilian nuclear cooperation, and agreed to dispose of 
enough weapons-grade plutonium for 17,000 nuclear warheads. We reached 
a military transit accord on Afghanistan that--as of this week--has 
allowed over 1,700 flights across Russian airspace, carrying more than 
275,000 U.S. military personnel to the region. Our law enforcement 
agencies have stepped up information-sharing and conducted joint 
operations to slow the flow of narcotics.
    Russia and the United States have been effective partners in the 
development of multilateral solutions to global challenges. We are both 
key participants in the six-party talks and resolute in our 
determination to achieve the denuclearization of the Korean Peninsula. 
We are also working together to hold Iran to its international 
nonproliferation obligations and prevent it from developing nuclear 
weapons. Russia remains an important partner in the Quartet, which is 
working to implement the vision for Middle East peace outlined by 
President Obama in his May 2011 remarks. As cochairs of the OSCE Minsk 
Group, the United States and Russia coordinate closely, along with 
France, on efforts to achieve a peaceful, negotiated settlement of the 
conflict in Nagorno-Karabakh.
    There are certainly foreign policy issues on which we have 
different perspectives; these remain the topic of regular discussion. 
Our governments differ in their preferred responses to events in Syria. 
We disagree fundamentally about the situation in Georgia. The United 
States strongly supports Georgia's sovereignty and territorial 
integrity and has raised consistently and at high levels the need for 
Russia to fulfill its obligations under the 2008 cease-fire agreement. 
We have participated in the Geneva talks to help resolve the conflict 
through direct dialogue between Georgia and Russia. We have repeatedly 
urged Moscow to provide transparency regarding Russian militarization 
of the occupied regions and reestablish an international monitoring 
presence in Abkhazia and South Ossetia. We also remain concerned about 
the insurgency in the North Caucasus. While we recognize the Russian 
Government's right and duty to protect its citizens, we remain troubled 
by security forces who--in the name of fighting the insurgency--have 
engaged in human rights abuses.
    Our aim now is to deepen the reset and widen the arc of our 
cooperation. In particular, we need to expand our economic ties. This 
remains one of the most underdeveloped areas of our relationship, yet 
is vitally important--especially amidst a global financial crisis.
    After a decade of growth, an emerging generation of Russians 
aspires to belong to a wealthy nation that boasts an economy able to 
compete in the global marketplace, a culture of entrepreneurial 
success, and a strong middle class. Russia's realization of these 
aspirations would have profound importance for Americans. In the last 
year alone, we have seen major business deals such as Boeing's sale of 
50 aircraft to Aeroflot and 40 planes to Russian airline UTAir, the 
ExxonMobil-Rosneft joint venture to explore the oil and gas fields of 
the Arctic, and General Electric's joint ventures with two Russian 
partners.
    Yet much more could be done. While two-way trade flows grew last 
year, they still reached just $31 billion--less than 1 percent of our 
total trade. Russia is the world's seventh-largest economy, but it is 
our 37th-largest export market. Today, Russia is the only member of the 
G20 that does not belong to the World Trade Organization (WTO). 
However, this is about to change as Russia is on the verge of 
completing procedures to become a WTO member. The simple fact is that 
Russia's accession to the WTO matters to the U.S. economy, as it will 
create new markets for American exporters in one of the world's fastest 
growing markets and support new jobs at home.
    In addition to the economic benefit for American companies and 
workers, Russia's membership in the WTO will deepen its investment in 
the success of the global economy. For the first time, Russia has 
pledged to comply with the WTO rules that underlie open, transparent, 
and fair global economic competition. Russia has agreed to predictable 
tariff rates and will be subject to an enforceable dispute resolution 
mechanism. History shows that economic and political modernization goes 
hand in hand, as Vice President Biden said in his speech to the 
students of Moscow State University this past March. As the first 
generation in Russia that never lived under communism begins graduating 
from universities and taking its place in the Russian workforce, there 
is good reason to expect considerable change in coming years.
    For American companies to take advantage of this new market 
opening, Congress must terminate the application of the Jackson-Vanik 
amendment and extend permanent normal trading relations to Russia. 
Because this step has not yet been taken, the United States will invoke 
``nonapplication'' of the WTO agreements with regard to Russia because 
of the conditions on normal trading relations status applied under 
Jackson-Vanik. Russia has met the freedom of emigration criteria under 
Jackson-Vanik since the early 1990s, demonstrating that the amendment 
long ago achieved its historic purpose by helping thousands of Jews 
emigrate from the Soviet Union. But until permanent normal trading 
relations are extended to Russia and we can apply the WTO agreements to 
Russia, American companies will not fully benefit from 
nondiscriminatory terms of trade and the United States will not be able 
to use WTO mechanisms to resolve trade disputes. If this situation 
remains unchanged, foreign competitors will benefit fully from Russia's 
accession to the WTO and American firms will be disadvantaged.
    After meeting with President Medvedev in Hawaii last month, 
President Obama said that Russia's pending entry into the WTO meant 
``this is going to be a good time for us to consult closely with 
Congress about ending the application of Jackson-Vanik to Russia, so 
that the U.S. businesses can take advantage of Russia's membership in 
the WTO, and we can expand commerce and create jobs here in the United 
States.'' Our timeline is short, as the Russian Parliament is likely to 
act on ratification in the spring of 2012. In the coming weeks and 
months, the administration looks forward to consulting with Congress on 
a way forward.
    Terminating the application of the Jackson-Vanik amendment to 
Russia is critical for our business interests. While we believe that 
Jackson-Vanik has long since accomplished the goals for which it was 
adopted, we want to work together with Congress to address our shared 
concerns about human rights in Russia. The administration has already 
shown it is committed to this objective.
    The administration has welcomed Senator Cardin's campaign for 
justice after the tragic death of Sergey Magnitskiy following the 
denial of necessary medical treatment while he was in pretrial 
detention. Congressional calls for travel restrictions against 
officials responsible for his death have helped keep attention focused 
on this case. The State Department has already taken important 
actions--using the existing authorities of the Immigration and 
Nationality Act, as well as the expanded powers provided by the 
Presidential proclamation issued in August--to ensure that no one 
implicated in Mr. Magnitskiy's death can travel to the United States. 
In Russia, two prison officials involved in Mr. Magnitskiy's death have 
been arrested and several investigatory commissions have been 
established. These actions are steps in the right direction but more 
needs to be done. We look forward to continuing to work with the 
committee on these issues.
    Unfortunately, the Magnitskiy case is not the only human rights 
challenge in Russia. Well-known journalists--such as Anna 
Politkovskaya, Paul Klebnikov, and Natalya Estemirova--have been 
killed. Mikhail Khodorkovsky remains in prison on politically motivated 
charges. And Russian activists encounter difficulties while attempting 
to exercise their rights to free speech and assembly. Last week, 
Secretary Clinton and the White House expressed concerns about the 
conduct of the December 4th Duma elections. These concerns are 
reflected in the preliminary report issued by the OSCE's international 
election observation mission, which noted the lack of a level playing 
field and a process marked by limited political competition. The 
administration welcomes the fact that, following the elections, the 
Russian public was able to hold a peaceful political demonstration in 
Moscow this past Saturday. In a democracy, the people have the right to 
make their voices heard in a lawful way; the authorities have the 
responsibility to provide the safe and secure conditions for the 
pursuit of that right. We were greatly encouraged to see these rights 
and responsibilities carried out so well.
    Let me take the opportunity of today's hearing to review the 
administration's Russia human rights strategy, which relies on 
simultaneous engagement with both governmental and nongovernmental 
actors to advance democratic development and human rights promotion.
    First, there is considerable government-to-government engagement at 
all levels on these issues. The President and Secretary regularly raise 
human rights concerns in meetings with their Russian counterparts. In 
fact, administration officials have made 84 public declarations on 
Russian human rights issues over the last 35 months--all of which are 
compiled for public access on the State Department's Web site [see 
www.state.gov/p/eur/ci/rs/c41670.htm].
    Second, the United States continues to use the full range of legal 
measures to impose serious consequences on those involved in serious 
human rights abuses in Russia. As I noted earlier, we have restricted 
travel to the United States by such individuals.
    Third, the United States provides financial support to Russian 
civil society. Since 2009, the U.S. Government has given approximately 
$160 million in assistance to support programs on human rights, rule of 
law, anticorruption, civil society, independent media, good governance, 
and democratic political processes. Most recently, U.S. funding was 
used to support independent Russian monitoring of the Duma elections 
and education for independent media on professional and unbiased 
reporting, encourage informed citizen participation in elections, and 
enhance the capacity to conduct public opinion polling. We are grateful 
to Congress for continuing to provide these resources, especially in 
this difficult budgetary environment.
    As part of our democracy strategy, the administration has been 
consulting with Congress on an initiative to create a new fund to 
support Russian nongovernmental organizations that are committed to a 
more pluralistic and open society. The fund would not require an 
additional appropriation, as necessary funding would be drawn from the 
liquidated proceeds of the U.S.-Russia Investment Fund--an example of 
successful U.S. foreign assistance to Russia. We are working with 
several congressional committees to address their questions and hope to 
resolve these issues soon.
    Fourth, American officials engage regularly with Russian 
nongovernmental leaders involved in strengthening democracy, human 
rights, and the rule of law. For example, President Obama met with 
hundreds of civil society leaders and opposition political figures 
during his July 2009 visit to Moscow. Vice-President Biden and 
Secretary Clinton have similarly engaged with civil society and 
opposition leaders.
    Fifth, the United States supports the modernization of Russian 
civil society organizations by, among other things, taking advantage of 
new technologies to make their work more effective.
    Sixth, we have supported a range of Russian Government efforts to 
fight corruption, provide more transparency about government 
activities, and improve the rule of law. For example, at their June 
2010 meeting in Washington, Presidents Obama and Medvedev issued a 
joint statement underscoring the need to cooperate on open government. 
The U.S. Government has been providing small grants to civil society 
organizations in Russia to work with local governments to identify and 
address community priorities. In addition, the United States has 
strongly backed Russia's efforts to become a member of the OECD--a key 
part of Moscow's efforts to address endemic corruption. We welcome 
Russia's membership in the OECD Working Group on Bribery, which it 
joined in May; we look forward to Russia's deposit of the instrument of 
ratification of the Convention on Combating Bribery of Foreign Public 
Officials in International Business Transactions.
    Seventh, a credible dialogue about democracy and human rights 
should involve direct communication between American and Russian NGOs 
and policy experts. Through the U.S.-Russia Bilateral Presidential 
Commission and its 20 working groups, we have built new partnerships 
and engaged our citizens, businesses and nongovernmental institutions 
in areas such as health care and energy efficiency. We have launched a 
U.S.-Russia Civil Society Partnership Program to build peer-to-peer 
relationships between U.S. and Russian civil society organizations. In 
addition, concrete steps have been taken to improve the daily lives of 
our citizens. Last July, Secretary Clinton and Foreign Minister Lavrov 
signed an agreement to build trust on intercountry adoptions. They also 
approved a reciprocal visa agreement to make it easier for business 
people and tourists to travel between our countries.
    Let me assure you that the United States will continue to be 
forthright in our firm support for universal human rights, as well as 
our conviction that democratic institutions and the rule of law are the 
keys to unlocking Russia's enormous human potential. We do not seek to 
impose our system on anyone else, and change within Russia must be 
internally driven. Nevertheless, we will continue to work with Russian 
partners to foster democracy and respect for human rights by 
encouraging transparent and accountable government and strengthening 
civil society. We believe, as President Obama said in his speech to the 
New Economic School in Moscow in July 2009, that ``the arc of history 
shows that governments which serve their own people survive and thrive 
. . . governments which serve only their own power do not.''
    In conclusion, the reset in U.S.-Russia relations remains a work in 
progress. We are proud of our accomplishments to date, which have 
advanced core American national interests. However, we recognize that 
there is much more to be done--including on the important issues of 
human rights and the rule of law. This is a moment of domestic 
preoccupation in both Russia and the United States, when election-year 
decisions and political personalities dominate the headlines. While 
personalities matter, national interests don't change. Both nations 
have pragmatically approached issues such as arms control and Iran's 
attempts to acquire a nuclear weapon. We expect to continue our 
successful approach of cooperating with Russia when it is in our 
interests, addressing our disagreements honestly, building links to 
Russian society and government, and maintaining the United States long-
held commitment to keep our values at the center of our foreign policy.
    With that, I welcome your questions.

    Senator Shaheen. Thank you very much, Dr. Gordon.
    Mr. Melia.

  STATEMENT OF THOMAS O. MELIA, DEPUTY ASSISTANT SECRETARY OF 
   STATE, BUREAU OF DEMOCRACY, HUMAN RIGHTS, AND LABOR, U.S. 
              DEPARTMENT OF STATE, WASHINGTON, DC

    Mr. Melia. Chairwoman Shaheen, Ranking Member Barrasso, 
Senators Cardin and Corker. Thank you for the invitation to 
appear before you today. Assistant Secretary Michael Posner is 
on a mission to Bahrain at present and he asked me to convey 
his regards and to emphasize how much we value our cooperation 
with this committee. He and I look forward to continuing to 
work with you to ensure that robust support for human rights 
and the rule of law, the issues you have identified for today's 
hearing, continue to be integral elements of our Russia policy.
    I have a longer statement I'd like to ask be submitted for 
the record. But I want to emphasize that President Obama's 
policy of dual-track engagement with Russia includes very 
explicitly support for democratic advancement in our public and 
private statements with Russians and in our very public 
assistance program, even as we engage the government on other 
issues of importance to our two countries. We appreciate that 
Russia has been a good partner on some security and economic 
issues and we want that to continue, and we will continue to 
support those many Russians who want to see a strengthening of 
the rule of law and democratic processes in their country.
    We have no illusions that this will be easily or quickly 
done. The 92-page report that Senator Barrasso mentioned that 
we produced in cooperation with Embassy Moscow makes very clear 
that we're fully aware of all of the shortcomings in Russia's 
human rights environment.
    Last week's flawed Duma elections and the Russian 
Government's initial response to citizen protests dramatically 
underscored how this dual track policy works. Over the last 3 
years, we have sought to support the modernization of aspects 
of Russia's institutions, its economy, and civil society. Yet 
when we witnessed Russian Government actions inconsistent with 
these goals, the Secretary of State spoke out, both privately 
and publicly.
    For instance, in the months prior to the elections, the 
Obama administration expressed our concerns about the conduct 
of the campaign, in which independent political parties such as 
Parnas were denied the right to participate, and about the 
unequal treatment of parties and candidates in the mainstream 
media. We supported the effort very vigorously to get observers 
into Russia from the OSCE's Office for Democratic Institutions 
and Human Rights, and in this we were successful, in contrast 
to the previous elections in 2007 and 2008, which had no 
observers from the OSCE. This was critical, as we now know, as 
ODIHR reported on the fraudulent practices on election day and 
in the period just before election day, and it was echoing 
those reports Secretary Clinton spoke plainly about the need 
for honest elections, stating that ``The Russian people, like 
people everywhere, deserve the right to have their voices heard 
and their votes counted.''
    We would also like to see an independent investigation of 
the distributed denial of service, DDOS, attacks on the Web 
site of Golos, the domestic nonpartisan election monitoring 
organization, and on other independent media outlets that were 
echoing their findings and tracking election fraud. These 
attacks underscore broader concerns we have about the parlous 
state of media freedom in the country, where virtually all of 
national television, most radio, and much of the print media 
are government-owned or influenced. While free expression still 
remains largely possible on the Internet, the Government of 
Russia has begun to take steps to monitor and control the 
online media space. We will watch that space closely.
    We have also expressed concern repeatedly about the 
detention of the hundreds of protesters and at least six 
journalists and the sentencing last week of democratic 
activists like Ilya Yashin and Alexei Navalny. They are still 
behind bars today, notwithstanding the peaceable protests over 
this past weekend.
    We welcome President Medvedev's call for investigations 
into allegations of election fraud and were encouraged about 
the peaceable way in which last weekend's protests unfolded. 
Moscow's police have now demonstrated that they can facilitate 
large gatherings when instructed to do so. We urge Russia to 
make this type of respect for free assembly the norm going 
forward.
    Madam Chairwoman, the United States cannot make Russia 
respect human rights and we cannot build democracy in Russia. 
Only the citizens of Russia can do that. What we can do is act 
in support and defense of civil society organizations that are 
already working to promote human rights, the rule of law, and 
democracy.
    Prime Minister Putin's assertion that the funds that the 
United States and other donors provide to civil society groups 
constitute unwarranted interference in Russia's internal 
affairs is a tiresome cliche, a well-worn canard, and without 
foundation. After all, it was just 1 year ago at the OSCE 
Astana summit when Russia joined all the other participating 
states in reaffirming ``categorically and irrevocably that the 
commitments undertaken in the field of the human dimension are 
matters of direct and legitimate concern to all participating 
states and do not belong exclusively to the internal affairs of 
the state concerned.''
    Let me briefly address now the mutually reinforcing 
elements of our democracy strategy. First, as we have 
discussed, we are committed to a frank government-to-government 
dialogue as President Obama, Secretary Clinton, and others of 
us regularly engage our counterparts on human rights and 
democracy concerns. In addition, the Bilateral Presidential 
Commission Civil Society Working Group has broadened our 
dialogue into other areas: anticorruption, migration, 
protection of child welfare, prison reform, other very 
important matters.
    Recently I was named to be the U.S. cochair of this 
commission, this working group, and I hope to be able to use 
this vehicle to address our continuing concerns about 
fundamental freedoms, the enabling environment for civil 
society. We are consulting with Russians both inside and 
outside of government and without Americans inside and outside 
of government on future directions for this working group.
    Second, we make public statements that are critical of 
human rights abuses and constraints on democratic processes. We 
have voiced our concerns about violence and harassment against 
those in Russia who dare to speak truth to power, uncover 
corruption, call out abuse of others--murdered human rights 
activists and journalists Anna Politkovskaya, Natalya 
Estemirova, and victims of selection prosecution and unpunished 
abuse, like Sergei Magnitsky, and the members of groups like 
Strategy 31 and the Khimki Forest Defenders, whose exercise of 
the right of peaceful assembly has made them the victims of 
violent attacks.
    We met with them just a few weeks ago. Mike Posner and I 
were in Russia. We met with people from all of these groups, to 
demonstrate very visibly our support for their work.
    We and other U.S. officials continue to raise concerns 
about the serious human rights violations by security forces, 
including the brutal and corrupt administration of Ramzan 
Kadyrov in Chechnya. We also continue to raise concerns about 
antisemitism, xenophobia, and homophobia in Russian society and 
the lack of tolerance for nontraditional peaceful religious 
minorities and the misuse of the antiextremism law against 
them. This is all covered in the 92-page report that we produce 
every year.
    Third, we're taking action to deny human rights abusers 
entry into the United States. In compliance with the 
Immigration and Nationality Act and the proclamation issued by 
President Obama last August, we restrict travel to the United 
States by those in Russia, as elsewhere, involved in gross 
human rights violations. As you know, the State Department has 
taken action to ensure that individuals involved in the death 
of Sergei Magnitsky do not have U.S. visas. We share Senator 
Cardin's concerns about this case and about the rule of law in 
Russia more broadly. Congressional attention to this issue has 
been instrumental in building demand for accountability in the 
Magnitsky case in the international community. We very much 
appreciate Senator Cardin's initiatives and his tenacity in 
keeping this issue in front of all of us.
    Beyond travel restrictions, we've taken other actions 
against human rights abusers. For example, even though the 
United States may not be able to keep brutal and corrupt 
Chechen leader Kadyrov from committing human rights abuses in 
Chechnya, we can deny him the opportunity to showcase his 
newfound wealth in the United States.
    Fourth, we demonstrate solidarity with and help strengthen 
and modernize Russian civil society. On his first visit to 
Moscow in 2009, President Obama spent one of his two working 
days in Russia meeting with civil society and opposition 
leaders. The Vice President makes a point of doing this when he 
visits. Secretary Clinton does. Assistant Secretary Gordon, 
Ambassador Beyrle, Assistant Secretary Posner and I, we all 
reach out, spend time with, very visibly, with civil society 
and opposition leaders in Russia, to demonstrate that we think 
they play an important role in any modern society.
    We do this to demonstrate very visibly our support for 
their efforts. Change in Russia will be driven by the people of 
Russia and we will continue to look for opportunities to 
support Russian citizens seeking reform. Since 2009, the United 
States Government has provided approximately $160 million to 
Russian groups working to advance democracy and the rule of 
law. In October, the Obama administration submitted a 
congressional notification on the creation of a new $50 million 
fund that would support Russian civil society. The money would 
come from the liquidation of the U.S.-Russia Investment Fund 
and so would not require any new appropriation. We would 
welcome your support in allowing this proposal to move forward 
quickly.
    We believe that Jackson-Vanik has fulfilled its stated goal 
of ensuring freedom of emigration and that its application to 
Russia should now be terminated. Termination would not mean 
that the United States Congress and the Obama administration 
would cease to press our concerns about human rights in Russia.
    We look forward to working with the House and Senate to 
ensure that our efforts on behalf of human rights, the rule of 
law, and democracy in Russia continue to be robust. I want to 
echo the call that has been made here already, that we hope the 
full Senate will soon provide its consent to the President's 
nomination of Michael McFaul to be our Ambassador to Russia. 
Mike is supremely qualified, perhaps uniquely qualified, to be 
our Ambassador at this vital time.
    Secretary Clinton has repeatedly stated that when 
governments push back against their citizens, the United States 
will not waver in its support for those working at great 
personal risks for democracy and human rights.
    Thank you. I look forward to our discussion.
    [The prepared statement of Mr. Melia follows:]

                 Prepared Statement of Thomas O. Melia

    Chairwoman Shaheen, Ranking Member Barrasso, Senator Cardin and 
members of the committee, Thank you for the invitation to appear before 
you today. Assistant Secretary Michael Posner is not able to be here 
today--he is on a mission to Bahrain--and he asked me to convey his 
regards and to emphasize how much we value our cooperation with this 
committee on a wide range of shared interests. He and I look forward to 
continuing to work with you, and with Assistant Secretary Gordon and 
his bureau, to ensure that the issues you have identified--human rights 
and the rule of law--continue to be integral elements of our Russia 
policy.
    Senators, we agree with you on the challenge we face in trying to 
support those many Russians who want to see a strengthening of the rule 
of law and democratic processes in their country. Indeed, President 
Obama's policy toward Russia throughout this administration has been to 
support democratic advancement quite explicitly--in our public and 
private statements, and in our very public assistance program--even 
while engaging the Russian Government on the full range of security and 
economic issues described by Assistant Secretary Gordon. We all 
appreciate that Russia has been a good partner on a range of security 
and economic issues important to our two countries, and we want that 
cooperation to continue.
    Our policy is one of dual-track engagement, where we are 
simultaneously engaging Russia's Government officials and Russia's 
civil society leaders to advance democracy and defend human rights. 
Madame Chair, last week's flawed Duma elections and the Russian 
Government's initial response to citizen protests dramatically 
underscored how our dual-track engagement works.
    Over the last 3 years, we have engaged with the Russian Government 
and civil society to support modernization of Russia's state, economy, 
and civil society. When we witnessed Russian Government actions 
inconsistent with these goals, we spoke out, both privately and 
publicly. For instance, in the months prior to the elections, the Obama 
administration expressed our concerns about the conduct of the 
campaign, where PARNAS and several other independent political parties 
were denied the right to participate, and where parties and candidates 
had unequal access to the mainstream media. We supported the effort to 
get observers into Russia from OSCE's Office for Democratic 
Institutions and Human Rights, and in this we were successful (unlike 
the previous elections in 2007 and 2008). Obviously, this was critical, 
as the OSCE observers reported fraudulent practices on Election Day, 
such as ballot box stuffing and the manipulation of voter lists.
    Echoing these reports, Secretary Clinton spoke plainly about the 
need for honest elections, stating that ``the Russian people, like 
people everywhere, deserve the right to have their voices heard and 
their votes counted.'' We also urged that Russia's Government 
immediately investigate the concerted distributed denial of service 
(DDOS) attacks on the Web site of Golos (``Voice''), a nonpartisan 
election monitoring organization and other independent media outlets 
tracking election fraud.
    These attacks underscore broader concerns about the parlous state 
of media freedom in the country, where all of national television, most 
radio, and much of the print media already are government-owned or 
government-influenced. This has broader implications. While free 
expression still remains largely possible on the Internet, which was 
used to organize Saturday's protests, the Russian Government has begun 
to take steps to monitor and control the online media space. We will 
watch that space closely in the period ahead.
    We have also made it clear that the authorities' initial response, 
including the detention of hundreds of protesters, including at least 
six journalists, and the sentencing of democratic activists like Ilya 
Yashin and Alexei Navalniy, raised serious questions about the Russian 
authorities' respect for fundamental freedoms of expression and 
peaceful assembly. We welcomed Medvedev's call for investigations into 
allegations of electoral fraud, and were encouraged to see that the 
Russian Government authorities in most, but not all, cities allowed 
peaceful demonstrations to occur last Saturday. We urge Russia to make 
this type of respect for free assembly the norm throughout the country 
going forward.
    Madame Chair, the United States cannot make Russia respect human 
rights and we cannot build democracy in Russia. Only the citizens of 
Russia can do that. What we can do is support those in Russia who are 
working to promote human rights, the rule of law and democracy, 
including civil society organizations. Prime Minister Putin's assertion 
that the funds the United States and other donors provide to civil 
society groups constitute interference in Russia's internal affairs is 
a well-worn canard and without foundation.
    After all, just 1 year ago at the Astana summit of the OSCE, Russia 
joined all the participating states in adopting a Declaration 
reaffirming ``categorically and irrevocably that the commitments 
undertaken in the field of the human dimension are matters of direct 
and legitimate concern to all participating States and do not belong 
exclusively to the internal affairs of the State concerned.'' That 
Declaration went on to state: ``We value the important role played by 
civil society and free media in helping us to ensure full respect for 
human rights, fundamental freedoms, democracy, including free and fair 
elections, and the rule of law.'' Change in Russia is being driven by 
the people of Russia, and we should and will continue to look for 
opportunities to support Russian citizens seeking reform.
    Madame Chair, let me now briefly address the mutually reinforcing 
elements of our strategy of dual-track engagement--simultaneous 
engagement with both governmental and nongovernmental actors to advance 
democratic processes and human rights promotion. This is the basis of 
our democracy strategy.
    First, as I mentioned, we are committed to a frank government-to-
government dialogue. President Obama, Secretary Clinton, and other U.S. 
Government officials regularly engage the Russian Government on our 
concerns about ongoing abuses that are contrary to human rights, the 
rule of law, and democratic governance.
    The creation of the Bilateral Presidential Commission (BPC) in July 
2009 has helped to facilitate ongoing contacts and discussions between 
our two governments on these concerns. As part of this Commission, the 
Civil Society Working Group has broadened our dialogue on such issues 
as anticorruption, migration, child protection, and prison reform--all 
real issues affecting people's lives in both countries.
    I am honored to have been recently named the U.S. cochair of the 
Civil Society Working Group, and I look forward to using this vehicle 
to address directly our continuing human rights and democracy concerns. 
I plan to lead an interagency delegation that draws upon a wide range 
of U.S. expertise on issues of civil society. The Russians have named 
Ambassador Konstantin Dolgov, the Ministry of Foreign Affairs' 
Commissioner for Human Rights, Democracy and the Rule of Law, to be 
their new cochair. During my October trip to Russia with Assistant 
Secretary Posner, we consulted with Russians both inside and outside 
the government on future directions for the Working Group.
    In addition, through the Open Government Partnership, the U.S. 
Government engages the Russian Government to support efforts to fight 
corruption, provide more transparency about government activities for 
citizens, and improve the rule of law.
    Second, we make public statements that are critical of human rights 
abuses and constraints on democratic processes. [A list of statements 
can be found at: www.state.gov/p/eur/ci/rs/c41670.htm] This year, the 
Department of State and the White House have spoken out through press 
statements and public remarks about specific threats to the fundamental 
freedoms of religion, expression, and assembly, and, most recently, 
regarding the already mentioned deeply flawed conduct of Russia's 
parliamentary elections. The United States also has raised concerns 
about human rights and rule of law in Russia at international fora. 
Most recently, as I mentioned, Secretary Clinton's speech at last 
week's OSCE Ministerial Meeting in Vilnius made specific references to 
Belarus, Ukraine, and Russia--with their Foreign Ministers seated at 
the table--and garnered worldwide media coverage. In September, I 
represented the United States at the OSCE Human Dimension 
Implementation Meeting in Warsaw, where we raised the full range of our 
concerns regarding Russia, as Ambassador Ian Kelly does throughout the 
year at the OSCE Permanent Council in Vienna.
    More generally, we have voiced concerns about violence and 
harassment against those in Russia who dare to speak truth to power, 
such as: murdered human rights activists and journalists Anna 
Politkovskya and Natalia Estemirova; victims of selective prosecution 
and unpunished abuse as exemplified by the case of Sergei Magnitsky; 
and members of groups like Strategy 31 and the Khimki Forest Defenders, 
whose exercise of the right of peaceful assembly has made them the 
victims of violent attacks.
    Meanwhile, in the North Caucasus, serious human rights violations 
by security forces and other parties continue unabated, with ongoing 
reports of killings, torture, and politically motivated abductions. 
These occur with near-total impunity. In particular, the brutal and 
corrupt administration of Ramzan Kadyrov in Chechnya is creating an 
atmosphere of fear and intimidation for human rights groups, the media, 
religious communities, and anyone else who might raise an independent 
voice.
    We also remain concerned about anti-Semitism, xenophobia, and 
homophobia in Russian society, and particularly about the lack of 
tolerance for ``nontraditional'' religious minorities. Russia's 
antiextremism law is used to ban the literature and prosecute 
individual members of religious communities, such as the followers of 
Turkish theologian Said Nursi, the Jehovah's Witnesses, Scientologists, 
and the Falun Gong. During our recent visit to Kazan, the capital of 
Tatarstan, a majority Muslim region, I observed good relations among 
Christians and Muslims. But I also learned that even this vaunted 
example of tolerance has limits. Nontraditional religious groups face 
harassment and isolation by the two large religious denominations and 
by the regional authorities.
    Third, we are taking action to deny human rights abusers entry into 
the United States. The United States has used and will continue to use 
the full range of legal measures to impose consequences on those 
involved in serious human rights abuses in Russia. Consistent with the 
Immigration and Nationality Act (INA) and President Obama's 
``Proclamation on the Suspension of Entry as Immigrants and Non-
immigrants of Persons Who Participate in Serious Human Rights Abuses 
and Humanitarian Law Violations and Other Abuses,'' issued on August 4, 
2011, our administration has taken action to restrict travel to the 
United States by those in Russia--and elsewhere--involved in such 
abuses.
    For instance, the Department of State has taken action to ensure 
that individuals involved in the tragic death of Sergei Magnitsky do 
not have U.S. visas. We have and will continue to prevent the entry of 
those responsible for human rights violations. We share Senator 
Cardin's concerns about the Magnitsky case and about rule of law in 
Russia more broadly, and believe that congressional attention to this 
issue has been instrumental in building demand for accountability in 
the Magnitsky case in the international community.
    Beyond travel restrictions, we have taken other actions against 
human rights abusers. For example, the United States may not be able to 
keep brutal and corrupt Chechen leader Ramzan Kadyrov from committing 
human rights abuses in Chechnya, but we can deny him the opportunity to 
showcase his newfound wealth in the United States.
    Fourth, we are committed to engaging with, strengthening and 
modernizing Russian civil society. Parallel to our engagement with 
Russian Government officials, U.S. officials engage regularly with 
Russian nongovernmental leaders involved in strengthening democracy, 
human rights, and the rule of law as well as civil society more 
broadly.
    On his very first visit to Moscow in 2009, President Obama spent 
nearly an entire day meeting with civil society and opposition leaders. 
The Vice President did the same when he visited. The Secretary of State 
does so regularly as well. Assistant Secretary Gordon and Ambassador 
Beyrle do so, as do Assistant Secretary Posner and I, along with other 
U.S. officials in Moscow and Washington.
    In fact, just 6 weeks ago, Assistant Secretary Posner and I 
traveled to Moscow, Nizhniy Novgorod, and Kazan, and earlier this year 
I traveled to Yekaterinburg and Perm. Our visits have received 
notable--and generally objective--coverage in the local and regional 
press in Russia. We took the opportunity to reiterate the United States 
longstanding commitment to human rights and democracy and to highlight 
our concerns about specific cases, most recently the beating of 
environmental activist Konstantin Fetisov (with whom Mr. Posner met in 
October), the murder of activist Maksharip Aushev, and the imprisonment 
of activist Alexei Sokolov (with whose family I met in March).
    We also actively encourage the development of peer-to-peer ties 
between Russian and U.S. civil society groups. In 2009 and again in 
2010, Russian and American nongovernmental leaders convened parallel 
civil society summits that took place at the same time that President 
Obama and President Medvedev met. We firmly believe that a credible 
dialogue about democracy and human rights should involve not only 
contacts between the American and Russian Governments, but also direct 
communication and linkages between American and Russian nongovernmental 
organizations, independent policy experts, and regular citizens to 
confront common challenges and learn from different experiences faced 
by our societies. Thus, USAID has launched a U.S.-Russia Civil Society 
Partnership Program to build, leverage, and expand peer-to-peer 
relationships between U.S. and Russian civil society organizations. The 
program will include three conferences of civil society leaders from 
our two countries, a small grants competition to support collaborative 
projects, and an Internet resource platform that will enable 
participants to exchange information about their activities and publish 
news and events.
    In addition, the Obama administration--working with the U.S. 
Congress--has continued to secure funds to support Russian efforts to 
advance human rights, civil society, rule of law, independent media, 
and good governance. Let me emphasize: we are helping Russian groups, 
like Golos, already working in these areas. Since 2009, the U.S. 
Government has provided approximately $160 million in assistance to 
advance democracy and promote civil society in Russia. We have 
prioritized small, direct grants to Russian civil society 
organizations. And we help them take advantage of new technologies to 
make their work more effective.
    In October, the Obama administration submitted a Congressional 
Notification proposing to create a new $50 million fund to increase our 
support of Russian civil society. Once established, the fund would 
provide new and long-term support to Russian nongovernmental 
organizations committed to a more pluralistic and open society. This 
proposal would not require additional appropriation because the
$50 million would come from liquidated proceeds of the U.S. Russia 
Investment Fund. We would welcome your support in allowing this 
proposal to move forward as quickly as possible.
    I have laid out for the committee the variety of mechanisms and 
instruments upon which the United States draws in our efforts to 
support democracy, human rights, and rule of law advocates in Russia 
and around the world. Before concluding, I would like to say a few 
words about the Jackson-Vanik amendment.
    We believe that the Jackson-Vanik amendment has fulfilled its 
stated goal of ensuring freedom of emigration first from the Soviet 
Union and then from the Russian Federation, and that its application to 
Russia should now be terminated.
    Termination of Jackson-Vanik would not mean that the U.S., 
Congress, and the Obama administration will cease to press our concerns 
about human rights conditions in Russia. Secretary Clinton, my 
colleagues at the Department of State, and I look forward to working 
with the House and Senate to ensure that our efforts on behalf of human 
rights, the rule of law, and democracy in Russia continue to be robust 
and effectively channeled. Indeed, we continue to stand firmly with 
Congress and the human rights community in calling for improvements in 
Russia's human rights record, knowing that our best partnerships are 
with countries that share our commitment to universal democratic 
values.
    Secretary Clinton has repeatedly stated that when governments push 
back against their citizens, the United States will not waiver in its 
support of those working at great personal risk for democracy and human 
rights.

    Senator Shaheen. Thank you very much, Mr. Melia.
    Over the last week the world really has been watching, I 
think, the growing protests in Russia and the courageous stand 
that thousands have taken by coming out into the streets to 
protest. You both mentioned that. I know we all agree that it's 
critical for the United States to stand behind these protesters 
and it's important that they know that we hear what they're 
doing and support their right to demonstrate.
    Obviously, the reports from the elections detail 
significant tampering, abuse, and fraud. In some areas turnout 
exceeded 140 percent. In Chechnya, reports suggest that United 
Russia was able to garner 99.5 percent of the vote. Nobody 
familiar with democracy believes that that's a real number.
    I think equally important, as you both mentioned, was the 
significance of the Kremlin's first response to what happened 
in the elections and to the protests, the cyber attacks that 
hit, as you pointed out, Mr. Melia--and I was pleased to hear 
you say that we are continuing to watch any efforts to shut 
down the Internet and access to it. The people who have been 
jailed and who remain in jail; and of course, Prime Minister 
Putin's initial reaction playing the anti-American card and 
accusing us of being behind the efforts to discredit the 
elections.
    I think all of it gives us all reasons for grave concern. 
There have been some who have indicated that they don't believe 
that the administration has been forceful enough in calling 
attention to what happened in Russia and in supporting the 
protesters.
    So I wonder if first you, Dr. Gordon, might respond to what 
again our official reaction has been to the elections and what 
more we can do to point out our grave concerns about what's 
happening in Russia.
    Dr. Gordon. Thank you, Madam Chairman. I think I can say 
that our official response to the allegations of fraud and 
irregularities in the Russian election was immediate and 
forceful and clear. I was with Secretary Clinton at the Bonn 
conference on Afghanistan and when the word started to come out 
about how the Russian election went, we waited to hear what the 
OSCE observers were going to say about it, in addition to the 
reporting from our Embassy and social media and other. And once 
it became clear that there were these serious irregularities, 
the Secretary went on record, and I already quoted what she 
said about our concerns, and you listed some of them.
    It was the cyber attacks that preceded the election. It was 
the nonregistration of parties in advance of the election, that 
precluded an open playing field. And then it also included 
serious allegations from those on the ground, including the 
OSCE observers, about stuffing ballot boxes and other serious 
irregularities.
    So I think if anyone has questioned whether the United 
States response was clear and serious, that doesn't seem to 
include the Russian leadership, which noticed what we had to 
say about it. The White House immediately followed up and 
issued a statement of its own, and I think we have consistently 
expressed those concerns.
    I would note, first of all, it was a welcome thing that 
Russia allowed OSCE observers in the first place, and that was 
not least at our vigorous urging, and that allowed some 
independent authority to assess how the elections went on. We 
also note that President Medvedev has called for investigations 
into these allegations and we hope to follow up on that, and 
that's as it should be. Foreign Minister Lavrov today said that 
there would be followup on what the OSCE report said.
    So we will continue to draw attention to the 
irregularities. To take this back to the very first thing I 
said about our government-to-government relations with Russia, 
we will continue to pursue our common interests in the foreign 
policy area because it's in our interest to do so. But we said 
all along we would never be shy about talking frankly about 
differences, and here's a case where there were differences and 
I think we've been pretty frank in talking about it.
    Senator Shaheen. Thank you.
    Mr. Melia, what are we hearing from people on the ground in 
Russia, some of those civil society leaders, about how they're 
responding to the administration crackdown in Russia?
    Mr. Melia. Well, in the last 10 days since the elections we 
have seen unprecedented mobilization of citizens in Russia. The 
most visible aspect was the demonstration of perhaps 50 to 
70,000 people in Moscow, but there were demonstrations in 
scores of cities across Russia. I read one account that said as 
many as 60 places across Russia had demonstrations of 500, 
1,000, 3,000 people.
    So it is a nationwide awakening, if you will, of citizens 
who want to see their government be accountable. They want to 
see elections that matter. What's interesting is that in most, 
not all, but most of those places, the demonstrations over the 
weekend were allowed to proceed in an orderly fashion, again 
underscoring that the authorities in Moscow and the police in 
all the cities know how to do this if they get the right 
orders.
    So we're hoping that--having demonstrated that citizens can 
demonstrate peacefully and that the authorities can accommodate 
that--that that becomes the new normal. Time will tell going 
forward. The Moscow city authorities have granted permission 
for a demonstration of up to 50,000 people in Moscow on 
December 24. We'll hope that that goes at least as well.
    Those demonstrators are asking for a revisiting of the 
announced election results, for dismissal of the chairman of 
the election commission, and some other things. How and whether 
the Russian Government responds to those, we will see. The 
President of Russia has said that there will be an 
investigation. We hope that that's genuine and we hope that the 
results are made public.
    So we're in a very interesting moment right now, where some 
things have changed, and we'll see how much things have changed 
as we go forward.
    Senator Shaheen. Thank you.
    I'm almost out of time, so I'm going to turn over to 
Senator Barrasso.
    Senator Barrasso. Thank you very much, Madam Chairman.
    Secretary Gordon, how would you characterize Russia's 
record on adherence to its international treaty obligations?
    Dr. Gordon. I don't know, Senator, if there are specific 
treaties that you have in mind. But broadly, I think it's 
accurate to say that they're in compliance generally with their 
treaty obligations.
    Senator Barrasso. I'm thinking about the Strategic Arms 
Reduction Talks Treaty from last time and some of the concerns 
that we have in terms of missile defense and what they have 
said in terms of their actions and how they interpret it may be 
different than the way that it's been interpreted here.
    Dr. Gordon. Well, since we have been absolutely clear that 
nothing in the New START Treaty constrains missile defenses or 
should constrain missile defenses, any position they take on 
that issue is not inconsistent with what's in the treaty. Now, 
as you suggest, they may like to see a linkage between 
offensive reductions and constraints on missile defenses, but 
from the start we rejected any such linkage and no such linkage 
appears in the treaty.
    Senator Barrasso. I'm going to switch to Syria for a 
second. There has been, obviously, a lot of concern about 
Russia's lack of cooperation on the situation in Syria. Russia 
blocked efforts to pass a resolution at the United Nations that 
U.S. Ambassador Rice described as ``a vastly watered-down 
resolution which did not,'' she said, ``did not even mention 
sanctions.''
    Also we see the Assad regime continues its brutal 
crackdown, reportedly killing over 5,000 of its own citizens. 
Russia recently delivered cruise missiles worth about $300 
million, I understand, to the Syrian Government.
    What kind of cooperation does the administration expect 
from Russia regarding Syria and what's the administration's 
response to what's happened there?
    Dr. Gordon. Thank you, Senator. We are clearly not 
satisfied with the degree of cooperation on Syria. As I've 
said, there are issues on which we are cooperating well in our 
mutual interests, in the United States national interest, and 
there are others on which we are not and continue to address it 
with the Russian Government, and Syria is clearly one of them.
    The United States believes that, at an absolute minimum, 
the international community should be on record at the Security 
Council in denouncing Assad's use of violence against his own 
people and that consequences and sanctions should be part of 
our international response. Russia disagrees and we vigorously 
disagree with that disagreement and continue to raise it with 
the government.
    Senator Barrasso. A final question on corruption. Russia 
ranked 143rd of 183 countries in terms of transparency and 
corruption issues. Does the administration continue to work 
with those Russian officials and branches engaged in what we 
view as corrupt practices and are listed internationally as 
corrupt practices?
    Dr. Gordon. Well, we certainly continue to work to try to 
confront and eliminate those corrupt practices. There is 
clearly a long way to go. One of the reasons we want to see 
Russia accede to the WTO is that the transparency that comes 
along with WTO membership should be an important tool in 
opening the Russian economy and helping to confront the 
corruption that undermines them and those they deal with.
    Senator Barrasso. Thank you.
    Madam Chairman, I do have a statement from Senator Wicker. 
I ask unanimous consent to----
    Senator Shaheen. Without objection.
    Senator Barrasso. Thank you, Madam Chairman.
    Senator Shaheen. Senator Cardin.
    Senator Cardin. Thank you, Madam Chair.
    Let me start, Secretary Gordon, in thanking you and the 
administration for the manner in which you have been very clear 
about the human rights agenda and the problems within Russia. I 
very much support your efforts in that regard. I do want to 
just underscore from your statement, which I totally agree 
with, when you say, ``We do not seek to impose our system on 
anyone else and change within Russia must be internally 
driven.'' I completely agree with that. ``Nevertheless, we will 
continue to work with Russian partners to foster democracy and 
respect for human rights by encouraging transparent and 
accountable government and strengthening civil society.''
    The United States must be in the leadership in this regard. 
The international community looks to the United States. If we 
don't stand up, unfortunately, it's not going to happen. So we 
have to be unambiguous as to the expectations.
    You mentioned the fact that the advantages of Russia 
entering the World Trade Organization from the point of view of 
transparency and other issues. But let me just point out that 
the WTO is not a panacea. China is a member of WTO. We have our 
problems with China on trade. And I remember very vividly when 
China entered the WTO we said that would be an opportunity for 
America to advance human rights in China, and we, of course, 
enacted a mechanism, a commission that does meet, that has some 
impact. But I would hope that what we have learned from that 
experience is that we have to set the bar higher when we have 
opportunities to advance human rights.
    Then recently in the OSCE Kazakhstan, a former republic 
within the Soviet Union, came forward and wanted to be chair in 
office, and the United States was very clear about that, that 
we welcomed a Central Asian nation to take on the chairmanship 
of the OSCE, but we expected human rights advancements. For the 
chair to be of the OSCE, the premier international organization 
on human rights, we want to see the country that hosts the 
chairmanship make the advancements. We got some progress, but 
we should have set the bar higher.
    But I point this out as to what we can expect to come out 
as you seek to enact permanent normal trade relations with 
Russia and repeal the Jackson-Vanik law. You point out that, 
while we believe Jackson-Vanik has long since accomplished the 
goals for which it was adopted, we want to work together with 
Congress to address our shared concerns about human rights in 
Russia. Then you go on to point out that more needs to be done. 
We're in agreement.
    So what should we do? We have an opportunity to advance 
human rights. The international community is looking at us. The 
issue that I have brought forward with many of my colleagues on 
the Magnitsky bill is to say that we should at least use the 
visa applications and look at asset freezes for human rights 
violators. That has gained international credibility and 
support. Europe is looking at similar restrictions.
    My question to you is, can you give us a roadmap as to how 
we can use the next several months to come together with the 
expectations of what we should be doing to establish human 
rights advancements in Russia and hold them accountable as we 
look to enact permanent normal trade relations with Russia?
    Dr. Gordon. Thank you, Senator Cardin. You make a number of 
important points. Let me try to address all of them, starting 
with thanking you for your leadership on this issue. What you 
said about leadership is absolutely right. Somebody has to get 
out there and lead the charge, and what you have done has been 
a spur to our actions and the actions of others across the 
world, including in Europe, and we're very grateful for that.
    WTO membership for Russia is indeed not a panacea, either 
on the trade matters or on human rights. There are no panaceas 
in that regard. We do think it will help. We think the 
transparency will help. We think the rules-based organization 
will help. But we're not pretending that this is going to be a 
magic wand that will really achieve all of our goals on human 
rights in Russia.
    We agree, therefore, that we need other mechanisms to 
continue to promote human rights and democracy in Russia. I 
guess the point I would make about this constellation of issues 
having to do with Jackson-Vanik and the WTO is that Jackson-
Vanik is not the answer, either. So when some may suggest that, 
since WTO itself isn't the answer, we need to keep Jackson-
Vanik as some sort of lever to get the Russians to respond on 
democracy and human rights, that's not the lever. It's been on 
the books for 40 years. Its specific aims have been achieved 
and it is standing in the way of what we think are some really 
important benefits we would get from Russia's WTO membership. 
And I stress that we would get. This is not a gift to Russia. 
It is in the interests of U.S. exporters, businesses, and the 
United States in general.
    So we agree that WTO alone won't do it. I would argue that 
Jackson-Vanik isn't the answer. So then you ask, what is? What 
can we do? I think we have presented to you today and in 
previous discussions the reality of what we are already doing, 
even as we're ready to work and look at other things we might 
do. Tom listed a number of steps very specifically that we have 
already been taking through the bilateral Presidential 
Commission, through our direct engagement and other means, to 
promote democracy and human rights in Russia.
    We also have, as for the very specific set of issues you 
mentioned in terms of visas and denying visas to those guilty 
of human rights abuses--as we have been clear, the Secretary 
has already used the authorities in the Immigration and 
Naturalization Act to make clear that we will not give a visa 
to anybody who we believe is guilty, either in the tragic death 
of Sergei Magnitsky or, more generally, guilty of grave 
violations of human rights. Those authorities were strengthened 
by the President's August proclamation, which makes it clear 
that it's the policy of the United States not to give a visa to 
anyone responsible for grave violations of human rights, 
including arbitrary detention, which is one of the most 
relevant aspects of the Magnitsky case.
    Senator Cardin. Let me point out, I think we are in 
agreement on many of those issues. Where we will be talking 
during the next several months is how we provide a more 
permanent basis for these types of issues. Action by one 
administration can be forgotten by a second administration. So 
how do we institutionalize the standards for human rights, 
taking a look at this opportunity as we move toward Russia's 
integration in the WTO, it gives us a chance to advance 
institutional changes for human rights. We look forward to 
seeing how we can advance legislation that achieves that.
    Thank you, Madam Chair.
    Senator Shaheen. Thank you.
    Senator Corker.
    Senator Corker. Thank you, Madam Chairman, for having this 
hearing and for your being here as witnesses.
    It's interesting. First of all, I appreciate the efforts 
that Senator Cardin has put forth in a one-off situation, and I 
think he's talking about trying to figure out a way to 
implement greater efforts on human rights.
    At the same time, as I listen it seems like Russia sort of 
evokes different emotions in people than countries like China--
the elections process there is certainly very different even 
than it is in Russia, nonexistent--and the Congo, Saudi Arabia, 
where a woman was beheaded yesterday.
    So is it your experience that there is sort of a general 
sense here about Russia that's very different than other 
countries that maybe have even worse human rights records 
within Congress?
    Dr. Gordon. Senator, I think it is fair to say that we have 
very high standards for Russia. We see Russia as a European 
country. We believe it belongs in this European space, which is 
predominated by democracies and countries that have strong rule 
of law and fight corruption and well-developed institutions and 
good relations with their neighbors. So yes, we are holding 
Russia to a high standard, the standard that their leaders 
themselves have talked about wanting to reach, and will 
continue to do so.
    Senator Corker. And I assume that in holding them to that 
high standard and hoping that there is an evolution that 
continually moves in a more pro-West direction, the best way 
for us to do that is to have even greater ties to them as it 
relates to trade and other activities; is that correct?
    Dr. Gordon. That is correct. That's one of the things we're 
trying to achieve.
    Senator Corker. And Jackson-Vanik I think is sort of one of 
those things. I mean, people want to use it as leverage, but 
it's a ``cut your nose off to spite your face.'' It's basically 
saying we're going to leverage Russia by not repealing Jackson-
Vanik, and if we don't we'll just shoot ourselves in the foot. 
Is that basically what's happening?
    Dr. Gordon. You said it very well, Senator. One could argue 
that even before the WTO accession process Jackson-Vanik was 
anachronistic and should have been taken off the books. And 
surely, once they ratify the WTO agreement it would really be 
cutting off our nose to spite our face.
    Senator Corker. And generally speaking, as it relates to 
just pro-democracy, pro-human rights efforts, I think it's been 
fairly well realized that the more interaction that U.S. 
companies and citizens have with countries like this and 
citizens in these countries see how the United States acts in 
that regard and see how our citizens regard them, that 
generally speaking over time there is an evolution toward 
Western cultural acceptance; is that correct?
    Dr. Gordon. Absolutely, Senator.
    Senator Corker. So I think what you're saying is that we 
can talk about human rights, which we all care about, and we 
certainly can promote efforts from within, like you're talking 
about the administration has proposed, but to hold Jackson-
Vanik up as some kind of leverage is just one of the most 
foolish things Congress could possibly do. Is that what you're 
saying?
    Dr. Gordon. We believe Jackson-Vanik should be repealed, 
Senator.
    Senator Corker. OK. We thank you for being here today and 
look forward to the second panel.
    Senator Shaheen. Perhaps you'd like to send Senator Corker 
out on the speaking circuit. [Laughter.]
    I think I was quite surprised looking at the returns that 
we did get from Russia and what happened to Prime Minister 
Putin and his party in those elections. I was surprised that he 
didn't do any better despite efforts to manipulate the election 
results. I think I certainly have had a perception, that I 
think is shared by many, that President Medvedev has been 
easier to deal with in terms of human rights concerns, that he 
seems to have expressed more concern about some of the human 
rights abuses than we had heard previously from President 
Putin.
    So as we look at Mr. Putin's return to the Presidency and 
the switch that they have orchestrated, how does that 
complicate our future efforts to address some of the human 
rights concerns that everyone here has spoken to very 
eloquently? Maybe you could both address that question if you 
would.
    Dr. Gordon. I'll just make two brief points, Madam 
Chairman. First, on the election result itself, obviously it's 
our view that it's up to Russians to decide who they want to 
elect. The one comment I would make about it is not so much who 
ended up getting what proportions of the vote, but the fact 
that some of the parties that ought to have been able to 
campaign and compete for votes weren't given the opportunity to 
do so, and that's an irregularity that should really be 
addressed moving forward so we can see a true expression of 
what the Russian popular will is.
    As far the possible return of President Putin, I don't want 
to get into analysis of different personalities, but I would 
just note the fact that, even as we have reached the various 
agreements that I have alluded to over the past 3 years and 
developed our relationship with Russia and pursued the reset 
and so on, Mr. Putin was the Prime Minister of Russia, not 
apparently without power, and didn't stand in the way of the 
significant progress that we've made.
    So all we can do if he were to come back is continue to 
test the proposition that we have common interests and we will 
continue to pursue them.
    Senator Shaheen. Mr. Melia, Dr. Gordon didn't really 
address the human rights piece of my question. Can you shed any 
light on that, whether we expect a return of President Putin to 
be more hard-line than we've seen, to the extent that that's 
possible?
    Mr. Melia. Well, sometimes we have to take leaders at their 
word, and in a couple ways that's relevant here. One is that 
President Medvedev in announcing the plan for the March 
elections and the return of Mr. Putin to the Presidency, he 
said that decisions have been taken collectively by the two of 
them these past 4 years. So I think we have to think that 
that's at least a possibility, that the two of them have been 
jointly managing Russia and that most of the things that have 
been done reflect some kind of consensus between them or a 
balance between them.
    Whether that balance will continue to be played out and be 
continuing after next March, we'll have to see. I don't think 
it's the case that things will be altogether different after 
March. Mr. Putin has not been far from leadership in Russia 
these last 4 years.
    So all of that means that it will continue to be difficult. 
It will continue to be something for Russian people to address 
what the nature of their political system is, how free their 
society is. Our role is as a supporting actor in this. The 
Russians are the leading actors in this drama, and I think that 
the curtain has gone up on a new act right now since last 
weekend's elections. I think it was--clearly something happened 
the day before, the day of, or the day after last week's 
elections that mobilized a lot of people to come out into the 
streets in a way they had not done in 20 years.
    So what that means going forward we don't know. But I think 
that it's at least as much up to these Russian people who've 
been mobilized as it is up to Mr. Putin what the future course 
will take. And our job will continue to be to demonstrate our 
support, not for particular candidates or electoral outcomes, 
but for a process that is more open and genuine and for people 
that speak for the values that we support. We'll continue to do 
that.
    Senator Shaheen. You mentioned in your testimony the 
interest in creating a new fund to support civil society in 
Russia. I think you both mentioned that in your testimony. Can 
you talk about what we're hearing from civil society leaders on 
the ground in Russia about how helpful that will be to them and 
whether it will exacerbate efforts on the part of the current 
administrations in Russia to crack down on their activities?
    If we're being accused of being behind efforts to open up 
Russia, is it helpful for people on the ground there to have 
this kind of a fund to assist them?
    Mr. Melia. Well, as with the funding opportunities that 
have been available in Russia from USAID, from the National 
Endowment for Democracy, from our own grants program at DRL 
within the State Department, Russians make their own decisions 
about whether to apply for or receive those funds, and we 
respect their decisions about how visibly they want to be 
associated with us.
    So as around the world, that's generally the rule of thumb 
that I would subscribe to, is that we should indicate that 
we're prepared to help and to help in ways that people on the 
ground ask us to and respect their wishes for how directly they 
want to be associated with us or whether they want to take our 
money or not, and leave the decisions about how they best use 
that funding largely to them.
    So I think what would be significant about the new fund is 
that it would be a substantial new amount of money that would 
be available over a period of time. We haven't worked out all 
the modalities of that. But it would I think, particularly at 
this moment, it would send a very powerful signal to the 
Russian people that the United States is stepping up its 
willingness to invest in their future.
    Senator Shaheen. Thank you.
    Did you want to add anything to that, Dr. Gordon?
    Dr. Gordon. No, thank you.
    Senator Shaheen. Thank you.
    Senator Cardin.
    Senator Cardin. Well, let me just make an observation 
following up on the chairman's comment. President Medvedev has 
been outspoken about a lot of the human rights tragedies in 
Russia, promising full investigations, et cetera, et cetera. 
Then somewhere along the line that doesn't happen, and at least 
the common belief is that Mr. Putin has been involved in 
stopping the reforms and independent investigations, et cetera.
    So I just really want to follow up on the chairman's 
question. It seems to me that, with it likely that Mr. Putin 
will be ascending to the Presidency again, we're not exactly 
sure how to decisions will be made under his Presidency. But 
one thing becomes at least clearer to this Senator, that it's 
going to be more hard-line on the human rights advancements and 
that it even puts more of a spotlight in importance on how we 
deal internationally with the human rights dimension.
    Any comments on that?
    Dr. Gordon. Maybe just a couple of things, Senator. I can't 
comment or speculate on who may have been responsible for 
halting different investigations.
    Senator Cardin. The President did make certain pretty 
strong statements.
    Dr. Gordon. He did, and he has supported the work of a 
number of commissions in Moscow that have actually been quite 
clear about what happened in the Magnitsky case, the most 
recent one essentially admitting that there was no due process 
and that he was inappropriately jailed and he was likely beaten 
and held in arbitrary detention. That's progress, to have 
Russian officialdom on the record stating what many of us 
believe to be true.
    There hasn't been full followup, as I think I said in my 
opening statement. A couple of prison officials, doctors, mid-
level, have been charged, but the more senior people 
responsible for what took place have not been.
    So yes, it is a positive thing that he's called for these 
investigations, but followup needs to happen. Again, I don't 
know why it hasn't, but I would say, taking us back just 
briefly to this point about leadership, without your efforts 
and I would hope to be able to say our collective efforts, we 
wouldn't have gotten as far as we have, and that's why we are 
in complete agreement about the need to keep the pressure on. 
Whether that will have the same result if there's a President 
Putin remains to be seen. But again, what's in our hands is the 
ability to keep the spotlight and the pressure on.
    Senator Cardin. And I appreciate that diplomatic answer.
    Mr. Putin's reputation is much more concerning, 
problematic, from our point of view, and it seems to me that 
with the elevation of his position--he may very well have been 
calling the shots over the last 4 years; we don't know--it just 
puts an additional burden on the human rights dimension. At 
least we have seen some action in Russia that may not be there 
under the Putin administration. It just I think underscores the 
need why we need to pay even a little bit closer attention to 
make sure we get the strongest possible policy we can to 
advance human rights.
    Thank you, Madam Chairman.
    Senator Shaheen. Go ahead, Mr. Melia.
    Mr. Melia. I think Senator Cardin has very aptly described 
the challenge we face. I think Mr. Putin has demonstrated that 
he's certainly more pugnacious in the way he responds to our 
statements and what he says about the West and the United 
States in particular.
    I think it's all the more important, therefore, going into 
this next year and whatever period he might be in office that 
we stay steady on our course, that we maintain the course of 
engagement, principled and purposeful engagement, not 
engagement for its own sake, but principled and purposeful 
engagement with Russia in all its facets--the government, civil 
society, the business community.
    It's a large, complex relationship we have with one of the 
largest, most complex countries in the world, and we need to be 
engaged on all fronts, including not least focusing on 
supporting the efforts of Russians to strengthen democracy and 
the rule of law, for all the reasons that we've talked about 
today, and we will remain focused on that.
    Certainly the European Bureau and our Embassy in Moscow 
place a lot of effort on this. We have some of the best shoe 
leather reporters in the business in Moscow, fluent Russian 
speakers, out and about across the country. We learned a lot 
about these elections from our front-line diplomats there. They 
do an outstanding job demonstrating our commitment to civil 
society and democracy every day they're there, and we try to 
use that good information to elevate the information and make 
policy points with the Secretary of State, as she did, not just 
once last week, but repeatedly when challenged.
    So we're going to remain focused on this, hopefully with 
your support.
    Senator Shaheen. Thank you both very much. I know we have 
lots of other questions and comments that we could raise, but 
in the interest of trying to get the second panel on before 
voting starts I'm going to thank you very much and hope we will 
see you again, and appreciate the efforts that you're both 
making to address the human rights issues in Russia.
    Now I would like to turn to the second panel, who I will 
introduce as we're making the switchover. First is David 
Kramer, who's the current President of Freedom House in 
Washington. We also have Tom Malinowski, who is the Washington 
Director of Human Rights Watch; and finally, rounding out the 
second panel is Edward Verona, who is the current President and 
CEO of the U.S.-Russia Business Council. Given all of the 
comments about Russia's participation in the WTO, I think I'm 
particularly looking forward to your comments as well.
    So again thank you all for being here, and I'm going to 
ask, David, if you would like to begin.

             STATEMENT OF DAVID KRAMER, PRESIDENT,
                 FREEDOM HOUSE, WASHINGTON, DC

    Mr. Kramer. Chairwoman Shaheen, Senator Cardin thank you 
very much for holding this hearing today. I know this hearing 
was considered even before the latest developments in Russia on 
December 4 and since, and I think this is an incredibly timely 
and important hearing and I commend you for doing it.
    Despite the Kremlin's concerted efforts, including rampant 
harassment of opposition, civil society groups, cyber attacks 
on liberal platforms like LiveJournal, the efforts to go after 
the independent election monitoring organization Golos, and 
pervasive fraud and ballot-stuffing, the ruling United Russia 
Party still couldn't muster 50 percent of the vote on December 
4. And given the extensive ballot-stuffing and vote 
manipulation, United Russia undoubtedly received even less 
support than the official 49 percent that was announced. By 
comparison, it managed to secure 64 percent, according to 
official results, in 2007.
    So what happened between 2007 and December 4? Well, I think 
the level of frustration among many Russians reached a point 
where they decided enough is enough. Concomitantly, I would say 
United Russia's, Putin's, and Medvedev's polling have hit new 
lows. A growing number of Russians have been talking about 
emigrating from their country, fed up with Russia's political 
stagnation and never-ending corruption, and on December 4 many 
voters decided that it is the authorities who should leave, not 
they.
    Russians did not react well to the plans announced by 
Medvedev and Putin on September 24 that they were going to 
switch jobs and have Putin come back as President for possibly 
another 12 years. The prospect of 24 years under Putin, from 
2000 until 2024, was simply too much for many Russians to 
stomach. To many, this undemocratic return to the Presidency 
was made so that Putin could preserve the status quo and the 
corrupt system that he's overseen since 2000.
    It's true that during Putin's time many average Russians 
have seen an improvement in their standard of living. But the 
corrupt nature of the regime meant that their enhanced personal 
situation was never safe from thieving officials. So Russians 
decided on December 4 that it was time to retake control over 
the future of their country and said enough is enough.
    After casting their ballots against the status quo, tens of 
thousands of Russians across the country reinforced their 
desire for real change by taking to the streets peacefully. The 
vote on December 4, I would argue, can really be considered a 
vote against United Russia, against Putin, against the status 
quo. Missing for many Russians, though, is what to vote or whom 
to vote for. That's going to be for Russians to determine, not 
for us.
    The current authorities are desperate not to lose the reins 
of power and may resort to desperate measures. And because he 
has so much at stake in preserving the status quo, Putin will 
not merely stand still. Just last week, as you've already 
discussed with Phil Gordon and Tom Melia, Putin blamed the 
United States and Secretary of State Hillary Clinton personally 
for instigating the protests last week.
    Since his early years as President, Putin has always been 
blaming others, seeing threats in particular from the West. 
Whether after the Beslan tragedy in 2004 or in his infamous 
Munich speech in 2007 or in his comments last week, Putin sees 
threats to Russia from beyond the country's borders, coming 
from the West, and it's simply patented nonsense.
    The greatest threats to Russia come from the Kremlin's 
ineffective and destabilizing policies in the North Caucasus, 
the lack of a sound ethnic policy, lawlessness among the 
security services and law enforcement sector, and a rotting 
ruling clique with an insatiably corrupt appetite. To find a 
real threat to Russia, Putin and those around him would need to 
buy mirrors.
    Russia's future, it goes without saying, will be decided by 
Russians themselves, but there are steps that this Congress and 
the Obama administration can and should be taking. Let me 
identify four.
    The first is to raise the profile of democracy and human 
rights concerns as it relates to Russia and speak truth to 
power.
    Second, pass S. 1039, the Sergei Magnitsky Rule of Law 
Accountability Act of 2011. I commend Senator Cardin in 
particular for his outstanding leadership on this piece of 
legislation.
    Third, graduate Russia from Jackson-Vanik, but do it only 
if there is the Magnitsky legislation to take its place or 
something comparable.
    Last, I agree with both of you and with the previous panel: 
Confirm Mike McFaul as the new U.S. Ambassador to Russia.
    Very quickly, Secretary Clinton had a good week last week 
when it came to Russia. She did a very good job abandoning the 
administration's previous reticence to criticize Russian 
authorities for the human rights abuses, corruption, and 
electoral fraud. Her clear and repeated condemnation of the 
Kremlin's efforts to rig the Duma elections was the clearest, 
strongest language uttered by a Cabinet-level Obama 
administration official to date. Clinton unambiguously stood 
with those who protested against Putin and United Russia.
    Despite Putin's attacks against her, she didn't back down. 
Her candor, however, should have been reinforced by the White 
House and President Obama in particular. When Putin went after 
his Secretary of State, the President should have been out 
there defending her personally and stating unambiguously that 
he supported her criticisms of the elections. Since a laudable 
speech and a good visit to Russia in 2009, the President, 
sadly, has been virtually silent when it's come to Russia's 
deteriorating political situation. The President should lay 
down the expectation that the United States will be watching 
the government's treatment of protesters and the conduct of 
next March's Presidential elections, dispelling any myth that 
the reset policy means that the United States will remain 
silent when things go wrong in order to keep relations friendly 
and warm.
    If the Presidential election next March is riddled with as 
many problems as the Duma election 10 days ago, then the United 
States should raise serious questions about the actual 
legitimacy of the next Russian leadership. Some are even 
raising questions about the new Duma, and given how much time 
President Obama has invested in the reset, it is important for 
him personally to speak out and reinforce Secretary Clinton's 
assessment. It matters who in the U.S. Government conveys these 
messages.
    When Russian officials behave in blatantly undemocratic 
ways, as they did on December 4, as they've done on many other 
occasions, they should not get a pass from the White House 
because of fear that criticism of their actions might upset the 
reset.
    On the Magnitsky legislation--and Senator Shaheen, I also 
commend you for your cosponsorship of this bill--this is an 
extremely important measure that Congress needs to pass as 
quickly as possible, and I strongly urge the Senate Foreign 
Relations Committee to take this up in as soon a schedule as 
possible.
    You've already discussed, Senator Cardin, the tragedy that 
befell Sergei Magnitsky, his family, and all who knew him, and 
you've also talked about the importance of other Parliaments in 
Europe and Canada that are moving forward with legislation. It 
is important that this is not just a U.S. initiative, but that 
it is a trans-Atlantic initiative, in order to demonstrate to 
Russian officials that if they engage in gross human rights 
abuses there will be a penalty to be paid, and that penalty 
should include not just depriving them of the privilege, as you 
said, Senator Cardin, not right but privilege, to travel to the 
United States, but we should also go after their assets. They 
shouldn't be allowed to deposit their ill-gotten gains in 
Western financial institutions and we should freeze their 
assets. They put their money, by the way, in the West, they 
don't keep it in Russia. There's $70 billion in capital flight 
estimated for this year. They don't put it in Chinese banks. 
They put it in Western institutions, and that means we do have 
leverage and we do have means by which to go after them.
    It is critically important that we demonstrate to Russian 
officials, that we demonstrate to Russian society, that we 
demonstrate to Russian opposition figures, that if Russian 
officials engage in human rights abuses they will not be 
allowed in the West either personally or fiscally.
    I strongly urge rapid passage of this legislation, which 
has forced Russian officials to take this case more seriously, 
although the lag since it was first introduced has given the 
Russians the sense that it is not going to pass. We need to 
disabuse them of this notion and let them know that this 
legislation will in fact be passed by this Congress and will be 
signed by this administration.
    I know I'm out of time. Very quickly, Madam Chair, Jackson-
Vanik. As I've mentioned, I agree with Senator Corker that it 
should be lifted, and it will only hurt ourselves if we don't 
lift it. But we also have to keep in mind the symbolism of 
lifting Jackson-Vanik if we don't do anything else 
legislatively.
    There has to be another piece of legislation that addresses 
modern-day problems and challenges in Russia, and that 
legislation is the one that Senator Cardin has introduced. I'm 
all for lifting Jackson-Vanik and replacing it with a current 
piece of legislation that addresses today's Russia.
    Last, Mike McFaul is as qualified as anyone could be to 
serve as Ambassador to Russia. On democracy and human rights 
issues he has an outstanding record. I strongly urge his 
confirmation as soon as possible, though I also recognize that 
there are some Members of the Senate who have some serious 
issues that need to be addressed by the administration.
    In conclusion, contrary to Putin's claims that last week's 
developments were the inspiration of the United States, it was 
Russians who took to the streets, with the hope that their 
voices would be heard and their government held accountable. 
Last week was a victory for the Russian people over 
authoritarianism, corruption, and repression. There's a long 
way to go, but last week for sure was a promising beginning.
    Thank you.
    Senator Shaheen. Thank you very much.
    I'm sorry that, Mr. Malinowski and Mr. Verona, I'm going to 
have to ask you to hold on your testimony for a little while. 
We're almost out of time on the first vote. There are two 
votes, so it will take us a little while to come back, but 
hopefully not any longer than about 10 minutes--10 or 15 
minutes.
    So we will break for a few minutes and we will--at least I 
will see you back here shortly.

    [Recess from 11:20 a.m. to 11:47 a.m.]

    Senator Shaheen. We will resume the hearing. I should 
realize voting always takes longer than I thought it was going 
to. But we will continue with Mr. Malinowski's testimony. Go 
ahead.

STATEMENT OF TOM MALINOWSKI, WASHINGTON DIRECTOR, HUMAN RIGHTS 
                     WATCH, WASHINGTON, DC

    Mr. Malinowski. Thank you very, very much, Madam Chairman, 
for having me, for holding the hearing, for doing it now, when 
we so need a spotlight on these events.
    The events we've seen in Russia in the last few days are 
extraordinary and I would argue they're extraordinarily 
important. For all the talk about resets with respect to Russia 
in the last 3 years, the Russian people have now brought about 
the biggest reset of them all. We don't know where this is 
heading or what's going to happen, but I think it's safe to say 
that Russia is not going back to what it was before this 
awakening on the part of the Russian people, and our policies 
can't go back either. We have to realign as well.
    A few words about what's happened, why it happened, and 
what I think we should be doing in response. As David stressed, 
this came about because of the frustrations of the Russian 
people, and I would stress that those frustrations have been 
building for a very long time. They've been building because in 
the last 10 years the Russian Government has either weakened or 
dismantled every institution that might have limited its power 
or increased the power of its citizens--judicial independence 
increasingly undermined, independent broadcast media brought to 
heel, local and regional governments coming under Kremlin 
control.
    In the eyes of most Russians, their country has become a 
place where those with power can do essentially whatever they 
want, without regard to the law, without regard to what the 
people of the country think.
    Now, the most terrible consequences of those policies, if 
we're thinking about the human rights situation in Russia, have 
been felt by the people of the North Caucasus--Chechnya, and 
its neighboring provinces. You mentioned the 99.5 percent of 
the vote that the ruling party got in Chechnya. We need to 
think about what lies behind that. It's a climate of complete 
terror that people are living in there. Security forces 
routinely disappear people, execute people, torture people in 
custody, and exercise just absolute control over the political 
life there.
    Serious human rights abuses haven't been limited to those 
conflict areas. Outside of Moscow and most cities, if you want 
to hold a demonstration before these latest events, it's going 
to get broken up. If you want to protest something like the 
Khimki Forest problem, you get beaten up by the police before 
you can do anything. If you go to prison, you'll be abused. And 
of course, we've seen, as in the case of Magnitsky, that 
powerful people can basically purchase the justice system to 
arrest you and hold you in detention as a form of extortion.
    Now, a lot of people, I think, have wondered in the face of 
all this, why were the Russians so silent? Is it because 
they're apathetic or cynical or just resigned to their fate? Is 
it because Putin somehow bought them off with all of the oil 
money? So this sudden outburst of protest I think took a lot of 
people by surprise. It's interesting, we've been taken by 
surprise a lot in the last year in a lot of parts of the world. 
It's become kind of a habit.
    But I think there are analogies one can draw. In a lot of 
these countries, whether it's Egypt or Syria or Russia or you 
name it, the absence of popular resistance to repression is 
rarely a sign of real apathy. It's more often a case that 
people choose not to resist because their governments make it 
seem like resistance will be futile. If you come out, you'll be 
one of 10 people and there will be 100 riot police to stop you, 
and no one wants to do it under those circumstances.
    But beneath the surface in these societies, there's a 
different kind of resistance that builds. People have private 
conversations with each other. They ridicule their leaders in 
private. They vent on social networking sites. A friend of mine 
recently said that protests in Russia have gone from second 
life to real life. That's what we saw in the last few days.
    Members of the elite may project a lot of confidence, but 
deep down they're not all that confident, and all it takes is 
one spark to light a fire. The spark in this case was this 
announcement that Putin and Medvedev would change places. 
People just couldn't tolerate that, kind of like Egyptians 
couldn't tolerate Mubarak passing down power to his son, as if 
their views just didn't matter and it's going to be like this 
forever. They just didn't want that.
    Now, it's very critical what happens in the next few months 
before the Presidential elections. I don't think Putin is going 
to massacre people in Red Square. I don't think he can do that. 
I also don't think it's in his nature to give up. So we have to 
look for kind of the old tricks of trying to coopt the 
opposition, to give them a little space while hoping that this 
all goes away.
    But I don't think that works any more all that well. People 
no longer feel they're alone in Russia if they go out and 
protest, and a government that loses its legitimacy doesn't 
have the same kind of options that it used to have.
    What can we do? No. 1, I totally agree we need to keep 
speaking about this in a very clear and public way. The more 
angrily that Russian leaders insist that they don't care what 
the world thinks, the more I think they actually really do 
care. So when Secretary Clinton spoke out as she did, I thought 
that was extremely eloquent and powerful. She doesn't need a 
compliment from me because she already got the best compliment 
that any Secretary of State can ever get, and that is being 
denounced by Vladimir Putin. My life won't be complete if that 
never happens to me. [Laughter.]
    No. 2, the United States should apply targeted pressure 
against those elements of the security apparatus in Russia that 
tortured and killed the very individuals who were trying to 
make the government accountable. That's what Senator Cardin's 
legislation, which you have supported--and I thank you for 
that--seeks to do.
    Obviously, the Russian people have to change their country. 
It's up to them. But in some ways inadvertently, the West, the 
United States and Europe, do play a role in enabling these 
problems in Russia, in the sense that we provide an escape 
valve for the people who are creating those problems, a place 
where they can spend and shelter their money, a place where 
they can go when things get a little bit tough inside their own 
country. What this bill does is it closes that escape valve. It 
says that if you have committed murder, if you are responsible 
for torture, you can't come here, you can't park your money 
here. And if the EU were to adopt it, it would be especially 
powerful.
    So this is the reason for it. It's not just a way of 
expressing our anger. It's actually something that the worst 
elements in Russia I think fear a great deal.
    Now, the State Department has said it's not necessary to do 
legislation because they've already taken action on visas. But 
if you notice, what they're stressing is, and the only thing 
they've really stressed publicly, is we've taken action against 
the people guilty in the Magnitsky case. Of course that's very 
important, but that's one case. It happens to be very 
prominent. But it's not the way one would respond if one were 
really aggressively, proactively trying to deal with a range of 
human rights abuses in Russia. There are a lot of cases like 
Magnitsky that deserve equal attention.
    So whether it's done by legislation or executive action, it 
needs to be done right. It needs to cover people responsible 
for the range of very serious, the most serious human rights 
abuses in Russia. Very, very importantly, it needs to be joined 
by the Europeans. One thing I really want to see the 
administration do is to make an active effort to persuade the 
European Union to adopt similar measures. If they don't want 
Congress to do it, that's fine, but they should be asking the 
European Union to join them so that it actually works in the 
way that we intend.
    Now, is this going to undermine cooperation with Russia on 
other important issues? I can't guarantee that it won't, but I 
would note that the people who are targeted by this legislation 
are people who are despised by the majority of Russians. Most 
Russians I think are going to be quite happy if these people 
are unable to park their money in the French Riviera or New 
York City. And I think it's going to be politically dangerous 
for the Russian Government to be seen as standing up too much 
for those people in opposition to this legislation. So, the 
Russian Government's duty is to convince you that it will end 
the relationship, but I don't think that that's the case. In 
fact, I also think a good case can be made that the Cardin 
legislation would be as good for the Russian economy as joining 
the WTO if it does, in fact, help stop capital flight by these 
individuals. So I think it's actually a fairly popular measure 
among the Russian people.
    Then, finally, I completely agree that we need a strong 
Ambassador in Russia and no gap when the current Ambassador 
leaves. So absolutely I would join your calls and David's for 
the Senate to act very quickly on the President's nomination. 
There are other important concerns that have been expressed in 
the context of this nomination. I don't want to diminish their 
sincerity, but this is the time to prioritize our response to 
these incredible events inside Russia which are going to 
determine the outcome of everything that matters in our 
relationship. That should be the priority right now.
    Thank you.
    [The prepared statement of Mr. Malinowski follows:]

                  Prepared Statement of Tom Malinowski

    Madam Chairman, members of the committee, thank you for your 
invitation to testify this morning.
    Over the last several days, Russians have come out in numbers not 
seen in years to express frustrations long simmering beneath the 
surface--about abuse of power, corruption, and their political leaders' 
complete lack of accountability and infantilizing of the public. We do 
not know where this popular awakening will lead. But it is safe to say 
that Russia is not going back to what it was before it began. We've 
heard a lot about ``resets'' with respect to Russia in the last 3 
years. The Russian people have now brought about the biggest reset of 
them all.
    The concerns that led to these demonstrations have been building 
among Russians for some time. To many Russians, their country in the 
last few years has once again become a place where those with political 
power, or political connections, can do what they want without regard 
to the law or to the will of the people they are supposed to serve. As 
the death of Sergei Magnitsky and other activists who have challenged 
the authorities suggests, it has again become a place where the 
powerful can, literally, get away with murder.
    That's not to say that Russia today is what it was during the days 
of the Soviet Union. Russians enjoy vastly more freedoms in their 
personal lives than they did then. They can own property. They can 
travel throughout the country and abroad. They can inform and express 
themselves more or less freely through the Internet. Opposition parties 
struggle, but do exist. There are still newspapers critical of the 
government. Some of the forms of democracy are still respected, 
including semicompetitive elections. But the substance of democracy--
the checking and balancing of authority that make governments answer to 
people--has gradually evaporated.
    During the Presidency of Vladimir Putin, the Russian Government 
weakened or dismantled every institution that might have limited the 
power of its leaders or increased the power of its citizens. Under 
President Medvedev, some reforms were carried out, such as the 
decriminalization of libel, improvements to the criminal code, and 
somewhat greater openness to domestic and international scrutiny of 
government policies. But there was no notable improvement in respect 
for civil and political rights. Over the past decade, local and 
provincial elected governments were made subservient to the Kremlin. 
Strict and arbitrary registration requirements made it hard for 
opposition parties to function (practices that the European Court for 
Human Rights found in 2011 to violate the European Convention on Human 
Rights). Television networks that once featured independent political 
coverage and commentary were brought to heel. Courts, never fully 
independent after the fall of the Soviet Union, increasingly became 
tools of the state--or of those who could afford to purchase the legal 
judgments that served their interests.
    The most terrible consequences of these policies have been felt by 
people in the North Caucasus region. In Chechnya, ruled by the brutal 
pro-Kremlin warlord Ramzan Kadyrov, the 99.5-percent support that the 
pro-Kremlin United Russia Party was recorded as receiving in the recent 
Duma elections testifies to the shameless rigging by local authorities 
there, and the degree of control they exercise. Law enforcement and 
security agencies in Chechnya have routinely forcibly disappeared 
people suspected of supporting insurgent groups and those who 
challenged Kadyrov's authority. The European Court of Human Rights has 
ruled over 185 times that the Russian Government and its proxies were 
responsible for extrajudicial executions, torture, and enforced 
disappearances in Chechnya; in none of these cases have those 
responsible been brought to justice. Far from eliminating terrorism, 
this repression has contributed to the spread of violence by insurgent 
groups and state security forces alike--to other provinces, such as 
Dagestan, Ingushetia, and Kabardino-Balkaria.
    But serious abuses of human rights in Russia have not been limited 
to conflict areas--far from it. Though small freedom assembly rallies 
have been permitted in Moscow on the 31st day of each month, similar 
demonstrations have rarely been allowed in other cities. In all parts 
of Russia, torture and abuse is common in prisons and pretrial 
detention facilities. Powerful individuals and well-connected companies 
can arrange to have their political enemies or business competitors 
placed in detention as a form of revenge or extortion.
    Many human rights defenders and those who challenge these 
injustices risk harassment and violent attack, whereas those who 
threaten them enjoy continued impunity. Those responsible for ordering 
the murder in Moscow of Anna Politkovskaya, the courageous journalist 
who exposed atrocities committed in the North Caucasus, remain 
unpunished. No one has been brought to justice for the murders of three 
activists in Chechnya in 2009--Natalya Estemirova, Zarema Saidulaeva, 
and Alik Dzhabrailov. Local citizens and journalists who protested the 
construction of a highway through the once protected forest reserve of 
Khimkhi near Moscow have been subjected to brutal assaults. Whistle 
blowers, like Sergei Magnitsky, have been persecuted by the same 
judicial system that should be protecting them.
    All of this has been clear for some time. Many people have 
therefore wondered why most Russians seemed so passive in the face of 
such injustice and indignity. It was often said that Russians were 
somehow historically apathetic or apolitical or simply cynical and 
resigned. Or that they had simply been bought off by the greater 
prosperity that came to them, courtesy of Russia's energy exports, 
during the Putin era.
    And so, the sudden outburst of protest in Moscow and other big 
Russian cities in the last week took many observers by surprise.
    Then again, so did the revolution in Tunisia, where a repressive 
government had also maintained stability for years by making its people 
more prosperous than their neighbors. When the government in Tunisia 
was toppled, many experts quickly cautioned that the same could not 
happen in Egypt, given how weak and divided the pro-democracy activists 
there had been, for as long as anyone could remember. When revolution 
did spread to Egypt, it was said that the same lightning could not 
strike in Libya or Syria, where dictators exercised near complete 
control, and where civil society barely existed.
    The absence of popular resistance to repression is rarely a sign of 
true apathy; more often, people choose not to resist because their 
governments work hard to make resistance futile. This has been the 
Russian Government's strategy (just as it was the strategy of the 
Egyptian Government under Mubarak)--to persuade people that if they 
challenge the state, they will stand alone and surely lose, and thus 
endanger themselves for nothing.
    But beneath the surface in such societies, a different kind of 
resistance can gradually erode the legitimacy of a state. People share 
their disgust with their families, coworkers, and friends. They lose 
respect for their leaders and greet their pronouncements with ridicule. 
Children of the elite confront their parents and ask how they can be 
part of such a lie. Members of the elite project confidence to the 
outside world, but often recognize, privately, that they are not 
telling the truth, and sometimes feel doubt and even shame as a result. 
Under such circumstances, a single spark can ignite unstoppable 
movements for change and cause a seemingly powerful state's authority 
to crumble.
    There were always reasons to believe that this would be an 
interesting period in Russia, because of the parliamentary elections 
and next year's Presidential transition. You can stage-manage an 
election, but it is hard to control, or predict, how people will react 
to being managed on such a massive scale. But the real spark turned out 
to be Prime Minister Putin and President Medvedev's public announcement 
back in September, more than 2 months before the parliamentary vote, 
that they would switch places and even more so, that this decision was 
made ``years ago.'' This was not even the pretense of democracy. Two 
men--or more likely one--would decide who would rule Russia. They 
weren't even going to pretend that the views of the millions of 
Russians they were asking to ``vote'' to confirm their arrangement 
mattered.
    Even worse, it became clear that the injustices and indignities 
many Russians had been enduring would continue for perhaps another 12 
years. And then, adding injury to insult, observers found widespread 
evidence of cheating in last week's Duma elections, soon confirmed by 
videos showing just how brazenly, and clumsily, pro-Kremilin forces 
tried to increase their advantage.
    And so, activists took to the streets in protests. Security forces, 
behaving as usual, violently suppressed those protests and arrested 
hundreds of people. But this time, ordinary Russians responded by 
coming out in even greater numbers--tens of thousands over the weekend. 
This time, they seemed to know that they would not be standing alone. 
And it was the government, for once, that decided resistance would be 
futile. Indeed, police worked cooperatively with protest organizers, 
discussing security arrangements well in advance of the rally--
hopefully a precedent for the coming months.
    During the period between now and the Presidential election, 
scheduled for March 4 next year, we will see if the protests continue 
to grow, and if so, how the state will respond. A critical question 
will be whether the government allows a credible, independent 
investigation of allegations of vote rigging during the Duma elections. 
Of course, no one can know now what will happen. The Russian state is 
still strong. Civil society is still rather weak. Putin and his 
security apparatus may lash out in ways that increase the degree of 
repression in Russia in the short term. We have already seen some signs 
of that the government has pressed online social networks to censor 
calls for demonstrations, and prosecutors have questioned executives of 
networks that have refused to do so.
    But many of their old tactics--whether arresting protest leaders, 
or blaming the West--not only are not working, but are backfiring.
    What can the United States do to support the Russian people and to 
increase the chance that they will be able to exercise their rights and 
freedoms? Of course, the United States cannot play a decisive role in 
these events, and should not try. But there are some steps the United 
States could take that would help.
    First, the Obama administration and Members of Congress should keep 
speaking--calmly but firmly and publicly--against abuses by the Russian 
Government and in favor of Russian's struggling for universal rights. 
The more angrily Russian leaders insist that they do not care what the 
world thinks, the more I think that they care a great deal. 
International legitimacy matters to the Russian political elite, as it 
does to elites in most countries. They would prefer to be respected 
than looked down upon. Many value their connections to the West and 
abilities to travel and do business internationally. They try to 
convince their people that all this Western talk about human rights is 
insincere and inconsistent; that Americans will bend their principles 
whenever it suits them. It is important to disprove that argument.
    Secretary of State Clinton does not need me to praise her for her 
recent words about the Russian elections, since she's already received 
the best compliment any Secretary of State can ever get--a denunciation 
from Vladimir Putin. But I thought that her comments--her insistence 
that Russians, like people everywhere, have a right to choose their 
leaders and have their voices count--were eloquent, principled, and 
effective. I hope that she and President Obama will continue to speak 
out.
    Second, the United States should apply targeted pressure against 
those elements of the Russian security apparatus that have tortured and 
killed the very individuals who are trying to make the government 
accountable. This is what Senator Cardin's legislation--the Sergei 
Magnitsky Rule of Law Accountability Act--seeks to do. It is not 
designed to sanction Russia or the Russian Government or to interrupt 
any diplomatic or economic cooperation between the United States and 
Russia. It targets individuals inside Russia who are reasonably and 
objectively suspected of having committed terrible crimes--such as 
extrajudicial executions and torture--and whom the Russian Government 
cannot legitimately embrace or seek to protect. It says that such 
people should not be allowed to travel to the United States or to pass 
their money through U.S. banks--something that the U.S. Government has 
a legitimate interest in preventing.
    Especially if joined by the European Union, such measures would 
help to isolate and disadvantage these elements in Russia vis-a-vis 
other members of the elite who are more open to reform and respectful 
of dissent. Targeted visa and financial restrictions would also help to 
cut off the escape valve enjoyed by many of the worst human rights 
violators in Russia--their ability to convert power into wealth and 
then to spend and store that wealth from New York to London to the 
French Riviera.
    Now, the State Department has said that this legislation is not 
necessary because it has already imposed sanctions against Russian 
officials linked to the death in custody of Sergei Magnitsky. I 
appreciate the administration's action in that case. But the 
administration has not announced whether it has taken such measures 
against those responsible for other, less prominent, but equally 
horrible crimes committed against Russians fighting for their rights 
and freedoms. Any targeted measures imposed by the United States should 
address all such cases in a principled and consistent way, not just one 
emblematic case. The administration should also exercise its existing 
legal authority to deny visas to Russian officials implicated in 
corruption. And--very importantly--it should make it a priority to 
persuade the European Union to apply similar visa and financial 
restrictions as well.
    At the end of the day, it doesn't matter whether all this is done 
through legislation or executive action. But it should be done right. 
It should be done publicly. It should be done as much as possible in 
concert with other nations. It should be done as part of a real 
strategy to support the cause of human rights in Russia, not as a do-
no-more-than-is-necessary response to pressure from the Congress or 
activist groups. If the administration won't act in this way, then the 
Congress should advance and ultimately enact Senator Cardin's bill.
    I appreciate the concerns some in the administration have expressed 
that such measures might undermine the bilateral relationship between 
Russia and the United States, and cooperation on important issues such 
as nonproliferation and maintaining transit routes to Afghanistan. 
Russian officials must, of course, try their best to convince you that 
this will be the case. I cannot guarantee that it will not be. But keep 
in mind that the people targeted by Senator Cardin's bill and the visa 
bans already imposed by the administration are despised by many 
Russians. Many Russians would be happy to learn that these people will 
no longer be able to make shopping trips to the United States or to 
park their money overseas, adding to the capital flight that so hurts 
prospects for broad based prosperity in Russia. If push comes to shove, 
it will be risky for the Russian Government to defend the targets of 
this legislation, or to denounce international action against them, or 
to use such action as a pretext to end cooperation with the West that 
advances Russia's national interests.
    Finally, Madam Chairman, it is very important that the United 
States have the best possible diplomatic representatives on the ground 
in Russia as these historic events unfold. The United States should 
have an ambassador in Moscow who is not only a good diplomat, but who 
sincerely believes in the cause of human rights, and can convey that 
conviction effectively to the Russian Government and to the Russian 
people. I hope that the Senate will act to ensure that such an 
ambassador is in place the moment America's current ambassador to 
Russia leaves his post. Whatever the reasons for delay--and I do not 
question their sincerity--what should matter to the Senate now, above 
all else, is how best to seize the historic moment presented by 
Russia's political awakening and the promise it holds.
    This is one more lesson of the Arab Spring that perhaps does apply 
to Russia and indeed universally. Whether one believes that these 
struggles for dignity and freedom that have been joined by millions of 
people around the world should be a primary preoccupation of American 
foreign policy is academic. For wherever such struggles arise, they 
will be a central preoccupation. Most foreign policy experts never 
imagined 2 years ago that the President of the United States would 
spend far more time thinking about how to promote democratic change in 
Egypt than he's spent contemplating Egypt's role in the Middle East 
peace process.
    But he has. Few imagined that any issue would be more important to 
America's relationship with Syria than the complex role it plays in 
supporting or undermining regional security in the Middle East. But the 
Syrian people did something this year that caused us to set aside those 
concerns to defend a set of values that trump all else.
    What happens next in Russia is up to the Russian people. But if 
they choose to keep taking risks to regain their democratic freedoms, 
then their struggle will become everyone's preoccupation. The ways in 
which the United States relates to Russia not only should change, but 
will change. The question will not be whether to support a democratic 
struggle, but how to do so most appropriately and effectively. For 
virtually everything that matters in this relationship to Russians and 
Americans alike will depend on the outcome.

    Senator Shaheen. Thank you very much.
    Mr. Verona.

         STATEMENT OF EDWARD VERONA, PRESIDENT AND CEO,
          U.S.-RUSSIA BUSINESS COUNCIL, WASHINGTON, DC

    Mr. Verona. Thank you, Chairman Shaheen. It's an honor and 
a privilege to testify before you today on behalf of the 250 
member companies of the U.S.-Russia Business Council. In 
offering my views today on rule of law issues with respect to 
business, trade, and the investment climate in Russia, I would 
suggest you consider the broader context of affecting change in 
a legal and regulatory system that to date has not lent itself 
easily to transparency or much external input, but that has 
nevertheless achieved progress in recent years in rule of law 
with respect to the commercial sphere.
    In recent years there have been a number of positive 
developments in the rule of law in Russia and I don't want to 
conflate the progress made in commercial law with the ongoing 
problems in the criminal court system and continued concerns 
about the overall lack of an independent judiciary. However, I 
would point out that there has been significant progress in the 
implementation of commercial law and its application by judges 
within the commercial court system.
    Among these advancements have been the creation of an on-
line commercial law library and a database of cases pending 
before the commercial courts that can be accessed at any time 
by both parties to a dispute. Thanks in part to the efforts of 
organizations like the Open World Leadership Center, which is 
sponsored by Congress, many Russian judges and prosecutors have 
come to the United States to meet with their counterparts, to 
exchange ideas and to share views on best practices.
    Another important step in the strengthening of rule of law 
with respect to foreign investment in Russia was the adoption 
of the law on foreign investment in strategic sectors in 2008. 
The USRBC is encouraged by what we see as the professional 
manner in which the provisions of that law have been 
implemented by the Federal Anti-Monopoly Service.
    Now I would like to turn to a question of great topical 
importance to the business community, Russia's membership in 
the WTO, and address the influence it may have on the 
development of the rule of law in Russia. By the end of this 
week, Russia will formally be invited to join the WTO. I don't 
think there's any doubt about that. Barring some unlikely 
reversal, the State Duma should ratify Russia's WTO accession 
agreement within the stipulated 
6-month period. So at the very latest, Russia will be a full 
member of the WTO by mid-July of next year, allowing for a 30-
day period after deposit of the instruments of ratification.
    We believe that this will bring multiple benefits to Russia 
and to United States companies doing business there. First, 
Russia will be required to implement its commitments on lowered 
tariffs for a broad range of imported goods. Some of those 
tariff reductions will be phased in over time and some will 
become effective immediately. The United States industries most 
likely to benefit are those that have already developed 
successful export-based businesses with Russia--manufacturers 
of commercial aircraft, farm equipment, automobiles and 
automotive parts, chemicals, pharmaceuticals, communications 
equipment, oil and gas producing equipment, and a variety of 
other goods too numerous to cite here.
    United States goods exports to Russia increased 
significantly over the last decade, from $2 billion in 2000 to 
a peak of $9 billion in 2008, an amount that we think we'll be 
coming very close to matching this year. American exports of 
components to third countries for assembly and re-export to 
Russia account for a possibly significant, if unsubstantiated, 
amount of additional exports.
    It's difficult to estimate the precise number of United 
States jobs that exclusively depend on trade with Russia, but 
using recent Department of Commerce calculations for average 
number of jobs created per dollar of exports, and they use one 
job per $165,000 of exports as their benchmark, we can assume 
that trade with Russia supports about 55,000 U.S. jobs. It 
bears emphasizing that these are by and large high-value 
exports with a significant human capital component. Moreover, 
this does not capture those service sector jobs that will 
increase as a result of Russia's WTO accession.
    Second, there are indirect benefits that will improve the 
business climate and create the conditions for a virtuous cycle 
of increased investment, economic growth, and expansion of the 
middle class. Russian membership in the WTO is a prerequisite 
for membership in the Organization for Economic Cooperation and 
Development, the OECD, which in turn requires that all members 
adopt certain international standards in the financial and 
business realms. Collectively, this will lead Russia in the 
direction of better corporate governance and transparency in 
many areas of economic and social policy. WTO membership in 
particular carries with it specific commitments to improve 
transparency, such as advance publication of proposed laws and 
measures that affect trade in goods, services, or intellectual 
property rights and ample time for interested parties to 
provide comments on those proposed measures.
    In addition, Russia has undertaken a commitment to provide 
a right of appeal to interested parties. As a WTO member, it 
will be required to consult with other members on a wide range 
of issues at their request and will provide for member 
consultation both before and after the adoption of new rules 
and regulations.
    By joining the WTO, Russia will also accept the principle 
of international review and arbitration in the event of trade 
disputes. This is crucial to U.S. companies and farmers, who 
have complained on numerous occasions about tariffs, quotas, 
and nontariff barriers against their exports.
    Third, encouraging trade, tightening Russia's integration 
into the global economy, and greater access by Russian 
consumers to transformative technologies, such as the Internet 
and hand-held communications devices, is likely to contribute 
to growing societal demands for accountable government and 
vigorous action to combat corruption, which first and foremost 
affects the average Russian citizen.
    One should not underestimate the effect of an increase in 
the size of the middle class on Russia's political and economic 
system. Our members have developed lucrative businesses trading 
with and investing in Russia and we perceive a major market in 
that country for the types of goods and services in which the 
United States has a very strong competitive advantage. We 
believe that United States companies' presence in the Russian 
market exerts a constructive influence and has a positive 
effect on many Russian companies.
    However, we are at risk of falling behind our global 
competitors if the United States is the only country in the WTO 
that is unable to extend permanent normal trade relations to 
Russia, which would be the case for as long as the Jackson-
Vanik amendment applies to Russia. I was very gratified that 
Senator Corker made it very clear that that would be the case.
    Jackson-Vanik fulfilled its purpose admirably and for that 
we should be very grateful. With respect to Russia, however, 
its time has passed and it provides no leverage in our 
relationship now that Russia will be a full member of the WTO. 
Failing to lift Jackson-Vanik will have no other effect than to 
harm American commercial interests and to put American jobs at 
risk. Therefore we urge Congress to act quickly to ensure that 
we are able to have PNTR by the time that Russia's accession 
becomes effective.
    I would like to add the voice of business to those who have 
urged the Senate to confirm Michael McFaul as the new 
Ambassador to Russia. We believe it's critically important that 
we have the best possible representation in Russia as we go 
through this next critical phase in our bilateral relationship.
    Thank you very much.
    [The prepared statement of Mr. Verona follows:]

                 Prepared Statement of Edward S. Verona

    Chairwoman Shaheen, Ranking Member Barrasso, and members of the 
Subcommittee on European Affairs, it is an honor and a privilege to 
testify before you today on behalf of the 250 members of the U.S.-
Russia Business Council. The USRBC provides business development, 
dispute resolution, government relations, and market intelligence 
services to its member companies, which range from Fortune 100 firms to 
small businesses in the United States and Russia that support increased 
trade and investment between our two countries.
    In offering my views today on rule of law issues with respect to 
business, trade, and the investment climate in Russia, I would suggest 
you consider the broader context of effecting change in a legal and 
regulatory system that to date has not lent itself easily to 
transparency or much external input, but that has, nevertheless, 
achieved progress in recent years with respect to rule of law in the 
commercial sphere. It is in both Russia's and the United States 
interest for Russia to conduct its commercial operations and adapt its 
corresponding legal and regulatory environments with greater 
transparency and accountability.
    I will begin my testimony today by highlighting specific regulatory 
developments in Russia that indicate progress toward stronger rule of 
law in the commercial sphere. Then, I will proceed to address the 
specific benefits that we expect to see from Russia's membership in the 
World Trade Organization (WTO) and the successes that American 
companies have achieved in exporting to Russia and the potential for 
increasing the volume of goods and services that the U.S. exports to 
Russia. I will conclude by underscoring why it is critically important 
for American businesses and American jobs that Congress lift the 
Jackson-Vanik amendment as it applies to Russia.
                   regulatory developments in russia
    In recent years, there have been a number of positive developments 
in the rule of law in Russia motivated by the need to attract foreign 
investment as well as the necessity to adapt to the rules and norms 
required for membership in the WTO and the Organization for Economic 
Cooperation and Development (OECD).
    I do not want to conflate the progress made in commercial law with 
the ongoing problems in the criminal court system and continued 
concerns about the overall lack of an independent judiciary. However, I 
would point out that there has been significant progress in the 
implementation of commercial law and its application by judges within 
the commercial court system.
    Among these advancements have been the creation of an online 
commercial law library and a database of cases pending before the 
commercial courts that can be accessed at any time by both parties to a 
dispute. Thanks in part to the efforts of organizations like the Open 
World Leadership Center--which is sponsored by Congress--many Russian 
judges and prosecutors have come to the United States to meet with 
their counterparts to exchange ideas and share views on best practices.
    Another important step in the strengthening of rule of law with 
respect to foreign investment in Russia was the adoption of the Law on 
Foreign Investment in Strategic Sectors in 2008. While this law may 
have been too broad in defining which sectors are ``strategic,'' it 
codified a clear procedure for vetting foreign investment in these 
sectors. In the past, foreign investment in areas that could be deemed 
to be strategic was a matter of trial and error. The process 
established by the new law has been compared by some to the Committee 
on Foreign Investment in the United States (CFIUS) process in the 
United States.
    The Russian Government has since amended and modified the Law on 
Foreign Investment in Strategic Sectors to liberalize rules for 
investment in that area. Specifically, it increased the threshold for 
review of investment in the oil and gas sector from 10 percent 
ownership to 25 percent.
    Further, the USRBC is encouraged by what we see as the professional 
manner in which the provisions of the Strategic Sectors Law have been 
implemented by the Federal Anti-Monopoly Service (FAS). This agency has 
a mandate to enforce competition law and oversight of foreign 
investment in strategic sectors. Thanks to professional and technical 
exchange programs with the United States and Russia's other trading 
partners, FAS has developed a cadre of highly qualified specialists who 
are recognized for their impartiality and transparent enforcement of 
the law. The FAS is led by General Director Igor Artemyev, who has been 
extremely accessible to the private sector and remarkably candid in 
expressing his views on the need to combat monopolistic and 
oligopolistic tendencies in the Russian economy.
    These advances will be extremely important as the Russian 
Government launches its privatization initiative, intending to sell 
upward of $40 billion in state assets and shares in state-owned 
enterprises. It is in the Russian Government's interest that these 
sales are conducted in a manner that will achieve the greatest possible 
proceeds. Investors expect well-defined rules and absolute transparency 
in the conduct of these tenders.
    Additionally, through the U.S.-Russia Bilateral Presidential 
Commission, we have had a constructive dialogue about the importance of 
the electronic procurement process as part of the wider effort to 
reduce corruption in Russia. Various Russian Government officials have 
come to the United States under the auspices of the Commission to learn 
about e-government and how it is implemented in the United States.
                 implications of russia's wto accession
    Now, I would like to turn to a topical question for the business 
community, Russia's membership in the WTO, and address the influence it 
may have on the development of the rule of law in Russia.
    By the end of this week, Russia will be formally invited to join 
the WTO. Barring an unlikely reversal, the State Duma should ratify 
Russia's WTO accession agreement within the stipulated 6-month period. 
At the very latest, Russia will be a full member of the WTO by mid-July 
of next year. What has been an elusive goal during 18 years of on-
again, off-again negotiations will finally have been realized. We 
believe that this will bring multiple benefits to Russia and to U.S. 
companies doing business there.
    First, Russia will be required to implement its commitments on 
lower tariffs for a broad range of imported goods. Some of those tariff 
reductions will be phased in over time, and some will be immediate. The 
U.S. industries most likely to benefit are those that have already 
developed successful export-based businesses with Russia: manufacturers 
of commercial aircraft, farm equipment, automobiles and automotive 
parts, chemicals, pharmaceuticals, communications equipment, mobile 
communications devices, oil and gas producing equipment, and a variety 
of others too numerous to cite.
    U.S. goods exports to Russia increased significantly over the last 
decade, from $2 billion in 2000 to a peak of $9 billion in 2008--an 
amount that we will come close to matching this year. American exports 
of components to third countries for assembly and re-export to Russia 
account for a possibly significant, if unsubstantiated, amount of 
additional exports.
    It is difficult to estimate the precise number of U.S. jobs that 
exclusively depend on trade with Russia, but using recent Department of 
Commerce calculations for average number of jobs created per dollar of 
exports (one job per $165,000), we can assume that trade with Russia 
supports about 55,000 U.S. jobs.
    It bears emphasizing that these are, by-and-large, high value 
exports with a significant human capital component--in other words, 
these are quality jobs. Moreover, this does not capture those service 
sector jobs that will increase as a result of Russia's WTO accession.
    Second, there are indirect benefits that will improve the business 
climate and create the conditions for a virtuous cycle of increased 
investment, economic growth and expansion of the middle class. Russian 
membership in the WTO is a prerequisite for membership in the OECD, 
which in turn requires that all members adopt certain international 
standards in the financial and business realms.
    Collectively, this will lead Russia in the direction of better 
corporate governance and transparency in many areas of economic and 
social policy. One important example of this is Russia's signing of the 
OECD Anti-Bribery Convention in May, which establishes benchmarks for 
compliance with international anticorruption standards.
    In accordance with the requirements of OECD membership, Russia will 
be expected to provide economic and financial data with an 
international baseline, including information on publicly traded but 
state-controlled enterprises; to adhere to guidelines on procurement, 
public tender policies and internal costs; and to comply with 
internationally accepted competition policies. These issues have been 
raised by some of Russia's most prominent activists in areas of 
financial and economic reform, such as Alexey Navalny.
    WTO membership in particular carries with it specific commitments 
to improve transparency, such as advance publication of proposed laws 
and measures that affect trade in goods, services, or intellectual 
property rights and ample time (not less than 30 days) for interested 
parties to provide comments on these proposed measures. In addition, 
Russia has undertaken a commitment to provide a right of appeal to 
interested parties--including recourse to the Eurasian Economic 
Community (EurAsEC) court that has jurisdiction over Customs Union 
disputes--as well as ensure transparency on issues such as the 
application of price controls and fees charged for importing and 
exporting goods. As a WTO member, Russia will be required to consult 
with other members on a wide range of issues at their request and will 
provide for member consultation both before and after the adoption of 
new rules and regulations.
    By joining the WTO, Russia will also accept the principle of 
international review and arbitration in the event of trade disputes. 
This is crucial to U.S. companies and farmers, who have complained on 
numerous occasions about tariffs, quotas, and nontariff barriers 
against their exports.
    In a broader sense, joining the WTO will be a signal to exporters 
and to foreign and domestic investors alike that the Russian economy is 
becoming more predictable and that governance in the areas that affect 
business is on a path of gradual improvement. Membership in the WTO 
and, later, the OECD will apply subtle but firm pressure on Russia to 
adhere to international norms and standards.
    Third, encouraging trade, tightening Russia's integration into the 
global economy and greater access by Russian consumers to 
transformative technologies (i.e., smartphones and the Internet) is 
likely to contribute to growing societal demands for accountable 
government and vigorous action to combat corruption, which, first and 
foremost, affects the average Russian citizen.
    One should not underestimate the effect of an increase in the size 
of the middle class on Russia's political and economic system. For 
example, the World Bank estimates that WTO membership will result in at 
least a 3.7-percent increase in GDP in the next 5 years. According to 
several socioeconomic studies, when per capita GDP exceeds roughly 
$15,000, individuals become more attentive to quality of life issues, 
including quality of government. Russia's current per capita GDP of 
nearly $12,000 (at market exchange rates) places it at the threshold of 
that category.\1\
---------------------------------------------------------------------------
    \1\ Prosperity enables societies to acquire the very instruments 
that have been demonstrated recently to have a powerful effect on the 
public consciousness and to provide motivation to affect constructive 
change. Some historical examples are South Korea, which began the 
process of democratic transition in the late 1980s, assisted greatly by 
membership in the OECD in 1996 when per capita GDP was about $12,000. 
Mexico is another example. It joined the OECD in 1994, providing added 
momentum to a process that would result in the PRI party losing its 
influence, resulting in its electoral defeat in 2000 after 72 years in 
power.
---------------------------------------------------------------------------
                               conclusion
    Our members have developed lucrative businesses trading with and 
investing in Russia. We perceive a major market in Russia for the types 
of goods and services in which the United States has a strong 
competitive advantage. We believe that U.S. companies' presence in the 
Russian market exerts a constructive influence and has a demonstrably 
positive effect on many Russian companies.
    We welcome Russia's WTO membership and wish to take advantage of 
the market opportunities that it creates, many of which are the result 
of the hard work of U.S. negotiators over the last 18 years. However, 
we are at risk of falling behind our global competitors if the United 
States is the only country in the WTO that is unable to extend 
permanent normal trade relations (PNTR) to Russia, which would be the 
case for as long as the Jackson-Vanik amendment applies to Russia.
    Jackson-Vanik fulfilled its purpose admirably, and for that, we 
should be grateful. With respect to Russia, however, its time has 
passed and it provides no leverage in our relationship now that Russia 
will be a full member of the WTO. Failing to lift Jackson-Vanik will 
have no other effect than to harm American commercial interests and to 
put American jobs at risk.
    We, therefore, urge Congress to act quickly to ensure that we are 
able to have PNTR by the time that Russia's accession becomes 
effective.
    Thank you for the opportunity to testify before the subcommittee 
today. I will be pleased to address any questions you may have.

    Senator Shaheen. Thank you very much, Mr. Verona.
    I'm going to start with you and with where you ended, which 
is in the confirmation of Michael McFaul. I'm sorry that there 
aren't more Senators here to have heard your comments. Can you, 
just for the record, relay what you have heard from the 
business community about Dr. McFaul and about the importance of 
having an American Ambassador on the ground in Russia?
    Mr. Verona. Certainly. First, I would like to say that we 
have worked very well with Ambassador Beyrle and have the 
highest regard for him and all that he has accomplished in the 
almost
4 years that he has been there. And we have also worked very 
closely with Mr. McFaul in his current capacity. He has kept 
the business community apprised of issues that are relevant to 
them. He understands our concerns. He certainly understands the 
broader perspective. He's spoken on numerous occasions in 
public forums, and we feel very comfortable that he would 
adequately convey the concerns of business once he is at post 
in Moscow.
    Senator Shaheen. Thank you.
    You, as I think almost everyone this morning, talked about 
the importance of repealing Jackson-Vanik. Senator Cardin in 
his comments pointed out that both with accession to the WTO 
and in thinking about the repeal of legislation like Jackson-
Vanik we should think about how we can set the bar high in 
terms of expectations for those actions. Can you talk about 
where you think the business community is on what some of those 
expectations ought to be as we look at potential repeal?
    You talked about the benefits of WTO accession, but are 
there areas where we should be trying to set the bar higher in 
terms of what that means in some other areas for Russia?
    Mr. Verona. Well, I think every company has to decide for 
itself if the business climate presents opportunities or if the 
risks outweigh those opportunities. So it's an individual firm-
level decision.
    As a community, we support the obligations, the 
conditionalities, of WTO membership, of the OECD, which 
requires every incoming member, incidentally, to sign its 
anticorruption convention, which Russia has already done in 
advance of its eventual accession to the OECD. I think we would 
like to see continuing emphasis on--by the U.S. Government--on 
engaging with Russian leaders in the commercial and economic 
realm to ensure that there is a level playing field, that 
Russia lives up to the obligations that it has incurred by 
joining the WTO.
    We certainly, with respect to the Magnitsky case, because I 
know that's really what you may be referring to, personally I 
believe it was a reprehensible act against a man who has worked 
for an American law firm, who was representing an American 
investment fund, and who did what an individual of integrity 
would have done. He called--he brought it to the attention of 
the authorities.
    We have written an open letter to President Medvedev. I 
have spoken in various forums, not only here but in Russia, 
about the Magnitsky case and pointed out that, with or without 
any action by foreign governments, the Magnitsky case is an 
indictment of the Russian judicial system, a failure of 
justice, and that it does not help Russia in its efforts to 
become more integrated with the world community, to encourage 
new foreign investment, and that something should be done about 
it in Russia's own best interests.
    Senator Shaheen. Thank you very much.
    I wonder, Mr. Kramer, if you would also pick up a little 
bit on those comments with respect to the Magnitsky case, 
because I think you referred to it in your testimony as 
striking a chord in Moscow among the population. Can you talk 
about how the Russian people view this case or elaborate a 
little more, and whether you think that was a factor in 
Medvedev's decision to review and reopen the case?
    Mr. Kramer. Senator Shaheen, the push in the U.S. Congress 
and also consideration in Europe for Magnitsky-kind of 
legislation forced President Medvedev to announce he would 
reopen the investigation. And he had his human rights council 
do an investigation of it. The human rights council came to the 
conclusion that Magnitsky had been beaten and then left to die 
by depriving him of necessary life-saving medication. So 
essentially Magnitsky was murdered.
    But nothing happened of either President Medvedev's call 
for a new investigation or of his human rights council's own 
report. And in fact, the Ministry of Interior, in a remarkable 
display of defiance, has awarded and promoted a number of 
officials who were involved in the investigation and detention 
and arrest and murder of Magnitsky. They rejected President 
prevention's human rights council's report, and they have 
engaged in a gross coverup of what happened to Sergei 
Magnitsky.
    It was the serious talk earlier this year that there might 
be legislation passed by the U.S. Congress that forced Russian 
officials to take this case more seriously, to reopen the case, 
to look at the doctors at the prison who were involved. Absent 
outside pressure, none of that would have happened. There was 
only the possibility, and it has subsided because there is, I 
fear, among Russian officials a sense that the legislation may 
not pass after all, but there was the possibility that justice 
might be served, at least with some of the officials involved 
in the murder of Magnitsky.
    The problem with the reinvestigation is that it is being 
done against the wishes of the family, which runs counter to 
Russian law, where you have to have permission of the deceased 
family member to move forward with a reinvestigation. But the 
possibility that some officials will be held to account is 
somewhat encouraging. I think the only way to get further into 
the list of those involved in this case is to pass this 
legislation, because the people who were involved--it's an 
indefensible case, and so, as Tom rightly said, it is hard to 
imagine that Russian officials will go back to the outrageous 
rhetoric that they uttered in June and July, saying this will 
destroy the reset. Over officials who were responsible for 
killing a lawyer in jail? I doubt it.
    Senator Shaheen. Well, and just to be clear for anybody who 
missed it, one of the reasons for holding this hearing is to 
hopefully bring some more momentum to passage of this 
legislation, which I believe and I think most of the Senators 
who were here today believe is very important.
    Mr. Kramer. Absolutely.
    Senator Shaheen. Mr. Malinowski, we've heard a lot of 
discussion about the tragedy of the Sergei Magnitsky case. 
There have been a number of other murders of particularly 
Soviet journalists that have been reported in the West. But I 
think for the most part many of the abuses that have occurred 
in Russia we don't hear about.
    I wondered if there are any particular cases that you have 
been following or been involved in that you would like to raise 
today at this hearing and talk about some of those individuals 
who have gone unknown and unnoticed by the international 
community?
    Mr. Malinowski. Well, thank you for that question. The 
Magnitsky case is powerful because it was so terrible and it 
was politically important because he was a member, in effect, 
of the Moscow elite, and had connections to the United States. 
So people thought, if it can happen to him it can happen to me. 
Powerful people felt that way.
    But there are just so many ordinary people across the 
length and breadth of Russia to whom that sort of thing just 
happens routinely. There is one young guy who we've written 
about at Human Rights Watch recently because we've come to know 
him, and maybe I'll tell you his story because I think it's 
emblematic in its ordinariness. He's a 24-year-old guy named 
Islam Umarpashaev who lives in Chechnya. He was caught posting 
very undiplomatic statements about the police on an Internet 
chat room.
    So the local pro-Kadyrov militia picks him up and they take 
him to a detention facility. They beat him, they torture him, 
electric shock, all the rest. When they realize this guy is not 
a militant, that they're not going to get any information out 
of him, instead of letting him go they say: Well, we're going 
to keep you here, we're going to feed you, we're going to let 
your beard grow, and once your beard is fully grown we're going 
to turn you into a suicide bomber. What that means, of course, 
is they were going to kill him, because the local security guys 
get a reward every time they resolve a terrorism case of that 
sort, and that has happened to a lot of people in Chechnya.
    Now, this young man was saved because his family refused to 
let that happen. They found a group of very brave Russian 
lawyers, who started filing complaint after complaint after 
complaint. They went to the European Court of Human Rights. 
Eventually he was let go. Holding him was more trouble than it 
was worth. But he had to promise he would not reveal any of 
this. He made that promise, but once released he did actually 
want to speak.
    So now he's in a safe house. The interesting end of the 
story is the family actually found a journalist working with a 
national television network, NTV, who was willing to do a story 
about this, and they produced a 10-minute program about this 
case. And he almost became famous, because the story was seen 
by Russian television viewers in Siberia. What happens is, 
sometimes they put these things on TV, they're seen in the Far 
East, and then as the time zones shift someone catches it and 
presses the ``Off'' button, and in the rest of Russia all 
people saw were commercials for those 10 minutes.
    So a very ordinary case and the sort of thing that people 
are just fed up about throughout the country.
    Senator Shaheen. Can you talk about what--recognizing that 
we may not see dramatic shifts in the near term in addressing 
some of the human rights abuses, but looking at least at the 
response to the election results and seeing a shift in how 
Putin and Medvedev have responded, so their changing approach 
in responding, are there actions that you would like to see 
that they could take or that we might expect them to take in 
response to some of the human rights abuses that would be 
positive, that would indicate an effort to begin to address 
some of the worst practices that have existed?
    And how would you--I mean, if you were going to detail they 
should do these three things?
    Mr. Malinowski. Well, it has to begin with the elections 
because that's what's on everybody's mind right now, and it's 
the key to creating some accountability in the system. Medvedev 
has promised an investigation. Very few Russians believe that 
regular Russian Government institutions can investigate in a 
credible way what just happened.
    So somehow, if he were serious, if Putin and Medvedev were 
serious, about dealing with the election fraud, they would need 
to create an independent commission or perhaps empower the 
human rights and civil society council that David mentioned, 
which has done good work, to lead an investigation of the 
fraud.
    There are a lot of things that they've promised. There were 
a lot of promises about cleaning up abuses in pretrial 
detention, what happened to Sergei Magnitsky and what happens 
to so many other people who are railroaded into prison and then 
abused as a form of extortion. We haven't actually seen action 
taken, and in our experience you can talk about that all you 
want, but if you don't hold accountable the people who are 
responsible the system doesn't change. You can give all kinds 
of speeches, you can issue orders, you can issue directives, 
but if the people in the system see that the guy who's 
responsible for murder or for rampant abuse in a prison or 
taking bribes is not punished, they don't take it seriously.
    Senator Shaheen. Mr. Kramer.
    Mr. Kramer. Could I just add? It doesn't help Russia's 
image when British authorities are pursuing someone for a 
murder investigation and that target is chosen to join the 
Duma, Mr. Lugavoy. It shows utter defiance and utter contempt 
for international human rights standards. There isn't 
indifference among Russian authorities toward human rights; 
there's hostility toward human rights among Russian officials. 
And they send these signals, where they don't even have to 
issue orders. People understand if they want to stay in the 
good graces of the Kremlin they have to eliminate opposition.
    The elimination of governors in 2004 by Putin was a 
terrible blow to democracy in Russia, removing accountability, 
removing connection between the population and voters and those 
who serve in government. The move more recently to eliminate 
election of mayors, further damage to any hopes that Russia 
would move in a democratic direction.
    So these efforts need to be reversed. There needs to be 
resolution to the murders of Litvinenko, of Politkovskaya, of 
Klebnikov, of Estemirova, of Magnitsky. Sadly, as Tom was 
saying, there is a long list here. In very few cases do they 
find the people who ordered these murders. Sometimes they find 
the people who actually pulled the trigger.
    They also need to get serious about corruption. But the 
problem there, I would argue, is they can't. They're so deeply 
involved in it themselves that they're incapable of launching a 
serious anticorruption campaign. You need a change in the 
Russian leadership in order for that to be done in a serious 
way.
    If I could just add one other thing. You had asked me about 
the reaction to the bill in Russia, and I would be remiss if I 
did not cite two letters that I think you also had received, 
Senator Shaheen, from Boris Nemtsov and Garry Kasparov, 
strongly endorsing and supporting S. 1039. So if I could be so 
bold as to suggest these be admitted for the record, that would 
be terrific.
    Senator Shaheen. We will do that. Thank you.
    Senator Shaheen. Let me just ask--the previous panel, Dr. 
Gordon and Mr. Melia, talked about the efforts under way to 
support civil society groups in Russia. Can you, either you or 
Mr. Malinowski, elaborate on the effectiveness of this kind of 
support and whether there is more we can or should be doing and 
what the reaction is on the part of those people, of those 
Russians who are part of those organizations and their ability, 
given the current environment, to accept that kind of 
assistance?
    Mr. Kramer. Well, first, it is a positive development that 
Mr. Serkov on the Russian end is no longer the cochair of the 
U.S.-Russia Civil Society Working Group. It was a terrible 
decision to agree to let him be the cochair.
    I tip my hat to Tom Melia and Mike Posner for the trips 
they've made to Russia and the outreach that they've made to 
Russian civil society activists and others, to people in the 
Embassy who have done the same. There are Russian organizations 
that need Western support. They can't get that kind of support 
inside Russia.
    As Tom Melia I think rightly said, we should have that 
support available and let Russians decide whether they want to 
avail themselves of it, rather than to decide on our own that 
it's too dangerous for them, and we, therefore, shouldn't try 
to support these organizations. They would go out of business 
in some cases were it not for Western support. So I think it's 
critically important to look at the U.S.-Russia Investment 
Fund, which expired but had $300 million left over, over $150 
million of which has gone back into a new kind of fund. There's 
still $150 million some odd of that left over, and I know that 
a congressional notification has come up to put some of those 
funds toward civil society and human rights and democracy work. 
I would strongly encourage support for that and hope that there 
would be more funds available should Russian organizations want 
to avail themselves of it.
    Thank you.
    Senator Shaheen. Thank you.
    Do you want to add anything, Mr. Malinowski?
    Mr. Malinowski. I can't comment on the effectiveness of 
every dollar that's been spent, but I would note that the very 
brave people and organizations inside Russia that have 
documented, exposed, and challenged some of the cases that 
we've been talking about, including the one that I mentioned in 
Chechnya, life-saving work and life-risking work, many of them 
have benefited over the years from assistance from the United 
States, from their connections to the United States.
    Yes, they get attacked for it, but I think those attacks 
are resonating less today in Russia than they might have 
elsewhere. I think so long as they are willing to have those 
partnerships with us, I think we should be willing to have them 
with them.
    Senator Shaheen. Thank you.
    Mr. Verona, I just want to ask you to comment on something 
that Mr. Kramer said about corruption. You talked about the 
progress that's been made in the business community in terms of 
addressing commercial and some of the economic issues--the 
commercial issues that businesses face. Mr. Kramer talked about 
an inability to really fundamentally address corruption without 
a change in leadership in the government.
    President Medvedev said that he was going to root out 
corruption, that he was going to make that a real hallmark of 
his Presidency. Have you seen his leadership in some of the 
efforts that you referenced, and does the business community 
feel that--I'm trying to think about how to phrase this in a 
way that it will be possible for you to answer it, recognizing 
that you can't answer for the entire business community. But 
are you hearing concerns from the business community about the 
leadership in the same way that Mr. Kramer referenced it about 
the fundamental corruption that exists at the top levels?
    Mr. Verona. I think all of our members are very aware of 
the problem, are very concerned about it. I don't think it's an 
exaggeration to say the problem's endemic. When President 
Medvedev made his first speech, his major speech as President, 
the inaugural address, he identified corruption, lack of rule 
of law as major issues that his administration would tackle. 
And on repeated occasions he's said much the same thing, and 
that was very encouraging to the business community.
    I would have to say that the implementation of that 
aspirational rhetoric has been very minimal. But it did do one 
thing. It gave license to speak about the issue, surprisingly 
often within the Russian Government. You had the Defense 
Minister acknowledge a couple of months ago that roughly 20 
percent of defense procurement spending was unaccounted for. 
You have the Russian accounting chamber issuing a report after 
the initial concerns raised by Mr. Alexei Navalny about 
corruption in the construction of the Eastern Siberia-Pacific 
Ocean Pipeline, a report that revealed 
$4 billion of capital expenditure that was somehow unaccounted 
for.
    The fact that people began to talk about it and felt it 
wasn't something that was off limits suddenly made people, the 
general public, much more aware of it or, if they were already 
aware of it, of how extensive the problem was. You might say 
that was a huge step forward, unintentional perhaps, but it did 
have that impact.
    And thanks, I think, to the transformative technologies 
that I mentioned, awareness of these issues has been propagated 
throughout the country, through the Internet, through these 
mobile handheld devices that have been so effective in 
organizing popular demonstrations.
    Our companies, I think their presence in Russia has a very 
salutary effect. We are all very sensitized to the risks of 
violating the Foreign Corrupt Practices Act and now a host of 
other laws recently propagated in other countries. The new 
British antibribery law is even more comprehensive and has 
criminal provisions. So it's become very clear to our partners 
in Russia that we're not a soft mark. It's not worth it to try 
to get money out of American companies. There may be a couple 
of rare exceptions, but I think it's given us a form of 
protection or cover.
    Our example I think is an encouraging one to those elements 
in Russia that want to see an improvement in the society. I 
think that, while many of the programs that have been mentioned 
here and funding for civic organizations is a good thing, I 
think it's much more fundamental that we've got this open 
communication through the Internet. Let's hope it stays that 
way.
    I am just a little concerned sometimes if we become too 
forward on these issues that the United States becomes the 
subject of discussion, the issue, and not the violations of 
human rights that Russians are very aware of, and when they 
hear their own leadership speak about it and not simply those 
who are well known to us, but people who have emerged sui 
generis, it has a much greater impact.
    Senator Shaheen. Thank you.
    Did you want to add something, Mr. Malinowski?
    Mr. Malinowski. This reinforces something that David 
mentioned--we should remember that systems like this are based 
on the principle that you can't get rich without permission, 
for Russian businessmen at least, and permission is purchased 
through bribes, and by provision of political support to the 
leadership. And that kind of corruption is a critical source of 
power for the political leadership. They get to choose who the 
economic winners and losers in Russia will be, at least in the 
upper strata.
    Losing that power would be a really radical shift in how 
the Russian Government operates and would be very difficult for 
them to do, a very difficult habit to break. Now, perhaps the 
Putin administration, whatever we want to call it, like many 
authoritarian governments, has a window of opportunity now to 
adjust to the shifting political climate in Russia by beginning 
to do things that will be popular and that address popular 
demands.
    But as we've seen, very few leaders in that position in 
recent years have taken advantage of that window of 
opportunity. They tend to revert to the methods that have 
worked for them in the past, and then it's too late. Then they 
come out with reforms that people reject because it comes too 
late.
    So we'll have to see what the Russian leadership does. But 
I think we need to understand that dealing with corruption is 
not something that can be done irrespective of the political 
context, that corruption is a core element of the system that 
the Russian Government has built up over the last 10 years.
    Senator Shaheen. Yes, Mr. Kramer.
    Mr. Kramer. Just very quickly, corrupt authoritarian 
regimes never want to let go of power, and it's why we've seen 
in Russia the elimination of gubernatorial elections, the move 
to eliminating mayoral elections, the appointment of the 
Federation Council, the upper house, rather than through 
elections. It's why they rig elections, or at least try to, and 
they didn't do a very good job this last time, fortunately, 
because if they give up power then they may be subject to 
prosecution and some of those Russian officials sitting in the 
Kremlin today could be sitting in the jail cell that Mikhail 
Khodorkovsky is sitting in instead. They don't want to risk 
that.
    They become desperate and they do desperate things. There 
are concerns now that what happened in 1999 may be repeated 
again, the bombings that killed 300 people, that turned the 
political situation in Russia upside down. This concern that 
there will be something else now because what happened on 
December 4 and since has spooked the Kremlin, spooked Putin, 
and that he may resort to some desperate measures. We really 
have to be vigilant about this and make sure that nothing like 
1999 happens again.
    Senator Shaheen. On that note, I'm going to thank you all 
very much, we very much appreciate your being here, and close 
the hearing.
    [Whereupon, at 12:33 p.m., the hearing was adjourned.]
                              ----------                              


              Additional Material Submitted for the Record


     Prepared Statement of Hon. Roger F. Wicker, U.S. Senator From 
                              Mississippi

    I would like to thank the chairman and ranking member for holding a 
hearing today on this important and timely topic. The deteriorating 
rule of law and respect for human rights in Russia is troublesome. For 
many years I have spoken out against the continued imprisonment of 
Russian businessmen, Mikhail Khodorkovsky and Platon Lebedev. It has 
long been my hope that Russia will choose the right path and that 
justice will prevail in the Khodorkovsky case, but unfortunately that 
is doubtful.
    The case of Sergei Magnitsky is one of many in Russia that 
highlight the lack of respect for basic human rights. Earlier this year 
I joined my colleague, Senator Ben Cardin, in introducing the ``Sergei 
Magnitsky Rule of Law Accountability Act.'' The bill extends the 
application of visa and economic sanctions to officials in the 
Magnitsky case and in other cases of gross human rights abuses. The 
legislation currently has 25 bipartisan cosponsors. It is my hope that 
the list of cosponsors will continue to grow and that we will have the 
opportunity to consider this bill on the floor of the Senate very soon.
    The protests in Russia following the recent elections indicate that 
the Russian people have grown tired of business as usual. I was 
encouraged by the comments from our administration in support of a full 
investigation of electoral fraud and manipulation. I urge President 
Obama and Secretary Clinton to make human rights and rule of law in 
Russia a central part of our bilateral relationship with Russia. 
Without commitment to these basic principles, our efforts to find 
common ground on other issues of mutual concern will continue to be 
undermined.
                                 ______
                                 
                [From the New York Times, Dec. 13, 2011]

      2 Leaders in Russian Media Are Fired After Election Articles

                         (By Michael Schwirtz)
    MOSCOW--A high-ranking editor and a top executive from one of 
Russia's most respected news publications were dismissed on Tuesday 
after an apparent conflict over coverage that appeared to highlight 
widespread anger with the results of parliamentary elections this 
month.
    The dismissals followed the publication this week of an election 
issue of the newsmagazine Kommersant Vlast, which detailed accusations 
of large-scale electoral fraud by the ruling party, United Russia, and 
included a photograph of a ballot scrawled with profanity directed 
against Prime Minister Vladimir V. Putin.
    The firings came as tensions built between the Kremlin and a new 
constituency of reform-minded activists who held a protest against the 
election results here last weekend that drew tens of thousands of 
people.
    President Dmitri A. Medvedev announced on Tuesday that the first 
session of the new Parliament would be held on Dec. 21, an indication 
that the Kremlin would not concede to increasingly vocal calls for new 
elections.
    Meanwhile, the leaders of the protest movement met to plan what 
they said would be an even bigger demonstration on Dec. 24, and vowed 
not to relent in their demands.
    The tremors from this standoff have been particularly acute in the 
city's print and online newsrooms. Under Mr. Putin, the authorities 
have generally tolerated a community of liberal-minded journalists 
whose criticism of the Kremlin has often been withering, but not widely 
broadcast.
    ``But there are rules,'' said Yevgeniya Albats, the editor in chief 
of New Times, a magazine strongly critical of the Kremlin. ``Do not 
touch Putin.''
    Yet an apparent desire by journalists to test the limits these days 
has brought some into confrontation with their bosses.
    This week's issue of Kommersant Vlast had several articles 
detailing bald attempts at falsification in the recent elections 
apparently aimed at increasing the vote for United Russia. One article 
warned that the declining popularity of United Russia would lead to a 
``tightening of the screws.''
    The magazine's cover showed Mr. Putin, lighted from the bottom and 
with a sinister expression, standing before a voting machine.
    But it was the photograph of the ballot, apparently defaced in 
protest, that caused an uproar.
    Scribbled across the ballot in thick orange marker was a searing 
Russian expletive in reference to the male anatomy, suggesting Mr. 
Putin should leave power. Beneath the profanity, which can lead to a 
fine or arrest if uttered in public here, a caption read sarcastically: 
``A correctly marked ballot that was ruled invalid.''
    The swipe at Mr. Putin was clearly too much for the owner of the 
Kommersant Publishing House, Alisher B. Usmanov, a billionaire metals 
tycoon who, like many of Russia's richest people, is wary of alienating 
the Kremlin.
    Mr. Usmanov, who incidentally owns a stake in Facebook, immediately 
fired Maksim Kovalsky, the editor in chief of Kommersant Vlast, and 
Andrei Galiyev, the general director of the publication's holding 
company. Another deputy editor announced that she was resigning. The 
photograph of the ballot was removed from the magazine's Web site, and 
printed copies were difficult to find on Tuesday.
    ``These materials verge on petty hooliganism,'' Mr. Usmanov told 
Gazeta.ru, a news Web site that is also part of his media holdings.
    News of the firings prompted a debate over journalistic ethics 
here. Some questioned the decision to publish the profanity, though 
many considered the response too severe.
    ``It's dead clear,'' Ms. Albats said. ``This is a signal sent to 
the entire mass media in the country: guys, be careful. There are 
limits.''
    In a twist, a representative from an investment fund owned by 
Mikhail Prokhorov, another Russian billionaire, who this week made a 
surprise announcement that he was running for president, said he was 
considering making an offer to buy the Kommersant publishing house from 
Mr. Usmanov, according to Russian news reports. No further details were 
offered.
    Mr. Kovalsky, the editor of Kommersant Viast, said he had never 
been pressured in his editorial decisions before.
    ``There have been difficult times when I knew that the Kremlin and 
the owner were unhappy,'' he told the online news portal, Slon.ru. 
``But usually I learned of this after the fact, after publication when 
there was no possibility of changing anything. But in the last few 
weeks there was none of this.''
    Pressures did begin to surface in some publications even before the 
elections. About a week before the vote, Grigory Okhotin quit his job 
as a freelance editor at the government-controlled RIA Novosti news 
agency when one of his managers recommended that negative material 
about United Russia and Mr. Putin not be posted on InoSMI, a Web site 
that publishes Russian translations of articles that appear in Western 
outlets.
    Mr. Okhotin then published a Web chat between himself and the 
manager, who told him that ``ahead of elections there are additional 
orders, because the situation is nonstandard. This will probably go on 
until summer.''
    RIA Novosti rejected Mr. Okhotin's assertion and threatened to sue 
him.
    Journalists at publications owned by Mr. Usmanov said that he had 
rarely interfered in editorial decisions, but that they had come under 
serious scrutiny for their coverage of this month's elections.
    Roman Badanin, a former deputy editor at Gazeta.ru, resigned last 
month after he was told to remove from the outlet's Web site a map 
documenting campaign violations, mostly committed by United Russia.
    ``These were not simple elections,'' Mr. Badanin said. ``They were 
very nerve-racking, showing little support for both United Russia and 
Putin. And Alisher Usmanov is nervous. It is a fact that he has put a 
lot of pressure on editors recently.''
                                 ______
                                 

 Letter in Support of S.1039 From Boris Nemtsov, Cochairman, People's 
                         Freedom Party (Russia)


Prepared Statement in Support of S. 1039 From Garry Kasparov, Chairman, 
                  United Civil Front, London, England


                                  
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