[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
                  RUSSIA'S DESTABILIZATION OF UKRAINE

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON FOREIGN AFFAIRS

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 8, 2014

                               __________

                           Serial No. 113-176

                               __________

        Printed for the use of the Committee on Foreign Affairs


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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
STEVE CHABOT, Ohio                   BRAD SHERMAN, California
JOE WILSON, South Carolina           GREGORY W. MEEKS, New York
MICHAEL T. McCAUL, Texas             ALBIO SIRES, New Jersey
TED POE, Texas                       GERALD E. CONNOLLY, Virginia
MATT SALMON, Arizona                 THEODORE E. DEUTCH, Florida
TOM MARINO, Pennsylvania             BRIAN HIGGINS, New York
JEFF DUNCAN, South Carolina          KAREN BASS, California
ADAM KINZINGER, Illinois             WILLIAM KEATING, Massachusetts
MO BROOKS, Alabama                   DAVID CICILLINE, Rhode Island
TOM COTTON, Arkansas                 ALAN GRAYSON, Florida
PAUL COOK, California                JUAN VARGAS, California
GEORGE HOLDING, North Carolina       BRADLEY S. SCHNEIDER, Illinois
RANDY K. WEBER SR., Texas            JOSEPH P. KENNEDY III, 
SCOTT PERRY, Pennsylvania                Massachusetts
STEVE STOCKMAN, Texas                AMI BERA, California
RON DeSANTIS, Florida       ALAN S. LOWENTHAL, California
TREY RADEL, Florida--resigned 1/27/  GRACE MENG, New York
    14 deg.                          LOIS FRANKEL, Florida
DOUG COLLINS, Georgia                TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
TED S. YOHO, Florida
LUKE MESSER, Indiana

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

The Honorable Victoria Nuland, Assistant Secretary, Bureau of 
  European and Eurasian Affairs, U.S. Department of State........     7
The Honorable Daniel Glaser, Assistant Secretary, Office of 
  Terrorism and Financial Intelligence, U.S. Department of the 
  Treasury.......................................................    16

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Victoria Nuland: Prepared statement................    11
The Honorable Daniel Glaser: Prepared statement..................    19

                                APPENDIX

Hearing notice...................................................    64
Hearing minutes..................................................    65
Written responses from the Honorable Victoria Nuland to questions 
  submitted for the record by:
  The Honorable Steve Stockman, a Representative in Congress from 
    the State of Texas...........................................    67
  The Honorable Brad Sherman, a Representative in Congress from 
    the State of California......................................    70
The Honorable Gerald E. Connolly, a Representative in Congress 
  from the Commonwealth of Virginia: Prepared statement..........    72


                  RUSSIA'S DESTABILIZATION OF UKRAINE

                              ----------                              


                         THURSDAY, MAY 8, 2014

                       House of Representatives,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The committee met, pursuant to notice, at 10:10 a.m., in 
room 2172 Rayburn House Office Building, Hon. Edward Royce 
(chairman of the committee) presiding.
    Chairman Royce. This committee will come to order. Despite 
the warnings issued and despite the sanctions imposed by the 
U.S. and our allies, we continue to see aggression against 
Ukraine. This is a crisis with violence intensifying. The 
presence of heavy weapons and the downing of Ukrainian 
helicopters betray the Kremlin's claim that it is not behind 
the unrest. Unfortunately, President Vladimir Putin appears to 
have calculated that the price will be bearable and this has to 
change.
    The ranking member and I led a delegation to Ukraine last 
month where we heard loud and clear the desire for strong 
American leadership.
    Fortunately, we have something to work with.
    The Russian economy is weakening due to the Ukraine crisis. 
Russia's own Central Bank has said that $63.7 billion in 
capital has fled the country in the first quarter, a figure 
that the IMF predicts will reach $100 billion by the end of 
this year.
    The Russian stock market, since the beginning of the year, 
has dropped 16 percent of its value and the ruble has also lost 
much of its value as interest rates have risen.
    The World Bank has warned that Russia's growth rate this 
year could become negative. Much of this economic weakness is 
driven by the political risk of doing business in Russia.
    Investors hate risk. We should do more to increase their 
risk perception if the Russian Government attempts to undermine 
the election on May 25th. That is a very important election.
    We spent time in the eastern most part of Ukraine and the 
information that we received from talking to every group that 
we could access was that they were looking forward to the 
election. They felt the election would pull the country 
together.
    I think there will be a big turnout on May 25th as long as 
it is not destabilized. We must stop reacting to Putin's moves 
while waiting patiently for the Europeans to join us.
    Instead, we must adopt a proactive strategy that will 
convince President Putin that his aggression will have a 
significant and lasting cost to the Russian economy and 
ultimately to his rule should he intervene in that election.
    We must also undermine Russia's ability to use its oil and 
gas exports to offset its economic weakness. Oil and gas make 
up over half of Russia's national budget. It is 52 percent of 
the support for the military and the government there. It is 70 
percent of the exports.
    President Putin understands that he is vulnerable to even 
small reductions in energy revenues.
    To accomplish this longer-term goal of leverage, we must 
enhance energy efficiency in Ukraine and other countries that 
have traditionally depended on subsidized Russian energy 
exports in Eastern Europe.
    We must assist European countries in developing their own 
energy resources. When we were there, we talked at length with 
the government in Ukraine about the ability to develop shale 
gas in the western part of that country and to bring new 
sources of energy to the European market, including through 
expediting the approval of LNG export facilities and ending the 
U.S. ban on crude oil exports.
    Both in Poland and in Lithuania they are working on 
bringing online a receipt station for LNG by the end of the 
year and the reality is that they are very desirous, since we 
have a glut on our market, of having exports come from the 
United States into Eastern Europe. As you know, the Poles can 
directly flow that gas into Ukraine.
    By allowing abundant U.S. energy resources to flow to 
Europe, we can help end energy dependency on Russia, helping to 
weaken Moscow's economic and political grip on its neighbors.
    We must also expand and sharpen our international 
broadcasting to Russia and to Ukraine and others in the region 
in order to counter the propaganda that Moscow is peddling to 
spread instability and fear that it can then exploit. One of 
the most important things that can happen here is if we get 
back up on our feet with the type of effective broadcasting 
Radio Free Europe and Radio Liberty used to do into that part 
of the world. This committee just passed and the President 
signed legislation to improve broadcasting into Ukraine. We are 
in an information war and we are looking to see what else is 
needed in this effort to have surrogate radio bring real news 
in real time in terms of what is actually happening in the 
eastern part of the country and in Russia into that region.
    It is essential that the U.S. reinforce our defense 
commitment to our NATO allies such as Poland and Lithuania, 
Latvia and Estonia to ensure that President Putin does not 
miscalculate and initiate a far more serious confrontation. But 
our NATO allies must take long overdue steps to increase their 
defense spending to 3 percent of GDP.
    I feel that there are some real challenges here and I fear 
that our failure to match our warnings with equally strong 
action has undermined our credibility in some ways. It is my 
hope that we can restore our credibility by convincing 
President Putin that he is indeed risking his future in pursuit 
of objectives that are unworthy of a great nation.
    I now turn to the ranking member, Mr. Eliot Engel of New 
York, for his remarks.
    Mr. Engel. Well, thank you, Chairman Royce, for calling 
this hearing. The situation in Ukraine is one of the most 
urgent issues for American foreign policy. Madame Assistant 
Secretary and Mr. Assistant Secretary, thank you both for 
appearing before the committee today and thank you for your 
hard work in support of Ukraine.
    I also want to acknowledge the presence here this morning 
of Ukrainian Ambassador Motsyk, who is in the audience. 
Welcome, Mr. Ambassador.
    Right now, Ukrainian troops are battling separatists in 
Eastern Ukraine. The people of Odessa, the vibrant multi-
cultural birthplace of one of my grandparents, are mourning 
those killed last weekend.
    Tensions are high and there is a danger of further 
escalation in certain parts of the country. I want to express 
my condolences to the families of those who were killed.
    It is clear that President Putin is responsible for this 
crisis. He has trampled on Ukraine's sovereignty. He has 
illegally seized Crimea, the first annexation in Europe since 
the end of World War II.
    He has tried to instigate separatism and destabilize the 
country. He has massed his troops on Ukraine's border, promoted 
discord and conflict, and set individuals, families and peoples 
against one another.
    Meanwhile, the people of Ukraine are trying to chart a new 
course for their country's future. The interim government in 
Kiev has done all it can to maintain stability and the 
Presidential election scheduled for May 25th gives Ukraine a 
path forward for a democratic return to political and economic 
health.
    Chairman Royce and I, along with several other colleagues 
on this committee, recently visited Kiev. We heard the same 
thing over and over again. Ukrainians do not want Russian 
interference and they resent Russian attempts to tear their 
country apart.
    The people of Ukraine are looking to us and our allies to 
ensure Putin's attempts to weaken their country do not succeed. 
The reality hit home for me when we visited a synagogue in 
Eastern Ukraine.
    Two older men approached me to talk about the crisis. They 
had seen it all. They fought against Hitler's army in World War 
II to stop the spread of tyranny, only to find themselves 
living under the yoke of Soviet dictatorship for the next half 
century.
    They saw the Wall crumble and felt the breeze of freedom 
and democracy blow across Eastern Europe and there, wearing the 
medals they had earned on the Ukrainian front, they were 
looking toward the east and seeing an all too familiar threat 
on the horizon.
    ``Don't abandon us,'' one of them said. Like so many 
others, those men want Ukraine to thrive in peace and 
prosperity. We need to have their backs. So President Putin 
must understand that his actions have consequences.
    The White House did right by imposing targeted sanctions 
against individuals and companies associated with Putin and 
yesterday withdrawing Russia as a GSP beneficiary.
    But if Russia continues to threaten and destabilize Ukraine 
we need to ratchet up the pressure further. We need stronger 
sanctions. I also call on our European partners and others 
around the world to work with us in imposing sanctions.
    But sanctions will only be effective if they are part of a 
broader strategy on Ukraine and Russia. First, the best answer 
to Russian aggression is for Ukraine to become a fully 
democratic prosperous state. Wouldn't it be nice if Putin's 
aggression accelerated the process of democratization of 
Ukraine and made Ukraine look westward rather than eastward?
    That is why I support robust international assistance 
including the U.S. and EU and centered on the IMF agreement to 
address Ukraine's immediate economic crisis.
    Next, serious reform efforts--we should help Ukraine 
address structural economic weaknesses, combat corruption, 
secure its borders, rebuild its military, strengthen rule of 
law, and increase its energy security.
    Secondly, to answer future threats from Russia, we need to 
focus on the role of a 21st century NATO. Even as NATO 
addresses challenges around the world, the alliance has to 
remain the guarantor of peace and security in Europe.
    NATO allies, especially those on the eastern side of the 
alliance, must be confident that Article 5 guarantees remain in 
force. NATO needs to ramp up cooperative activities in Central 
Europe. We need to take a hard look at NATO's force posture and 
defensive assets in the region.
    And most importantly, all 28 NATO allies need to live up to 
their responsibilities. Right now, only four countries devote 
at least 2 percent of their budgets to defense as they have 
committed to do by being a member of NATO.
    If we increase NATO defense spending while joining in a 
coordinated embargo on all arms sales to Russia, including 
halting the sale of two French-built Mistral amphibious ships, 
it will send a clear message to Putin that he will not be 
allowed to trample on the rights of his neighbors.
    On that note, I think the U.S. and our allies should work 
with Paris to find a way for NATO to purchase or lease these 
advanced warships to expand our capabilities while preventing 
their delivery to Moscow.
    Third, in addition to helping Ukraine increase its energy 
security, we must urgently work with our European allies and 
others to reduce Europe's energy dependence on Russia.
    And finally, we need to help ensure that the May 25th 
elections in Ukraine are safe, free and fair, and reflect the 
will of the people of Ukraine.
    We hope that Ukraine's new President will begin the process 
of reconciliation by making clear that he or she represents all 
Ukrainians regardless of their regional, ethnic or religious 
identity.
    Ukrainians need to work together to build a tolerant, 
pluralistic society. The new Ukrainian Government must be truly 
inclusive, support minority rights, and condemn all forms of 
intolerance.
    As I heard repeatedly while in Ukraine, there is strong 
support for constitutional reforms and decentralization to give 
greater powers to regional and municipal authorities.
    I want to emphasize that Ukraine's future is for Ukrainians 
alone to decide. At the same time, a lasting solution ensuring 
the stability of Ukraine requires Russia's cooperation.
    So we must continue to talk with Russia and facilitate 
direct talks between Moscow and Kiev, including through 
international and regional fora such as the U.N. and OSCE.
    I would like to close by again thanking our witnesses and 
the administration for all the work over the past several 
months to support democracy in Ukraine.
    This is a very difficult time for Ukraine and it is 
important that its people know they have a friend in the United 
States. We support their country's sovereignty and territorial 
integrity and we support the aspirations of Ukrainians to build 
a better future for their country.
    Thank you, Mr. Chairman.
    Chairman Royce. Well, thank you, Mr. Engel. I do want to, 
again, thank Eliot Engel for his assistance on this CODEL and 
some of our other colleagues here as well--Lois Frankel, Alan 
Lowenthal, Judge Ted Poe, Mike Quigley, Jim Gerlach, David 
Cicilline. We appreciate the members of this committee and some 
of our other colleagues in the House for their engagement.
    I now go for 2 minutes to Mr. Rohrabacher, chair of the 
Europe and Eurasia Subcommittee.
    Mr. Rohrabacher. Thank you, Mr. Chairman. I just happen to 
be chairman of this subcommittee at this particular moment in 
history. How interesting.
    I think that we should all understand that the situation in 
Ukraine is much murkier than what is being presented by the 
rhetoric that we hear every day. This is not simply a case of 
Russian aggression.
    This all began--when did this crisis begin? When did the 
chaos that we see begin? It began when an elected President of 
Ukraine, who was probably elected in the fairest and most 
honest election Ukraine has ever had, when that President, 
Yanukovych, was forced out of office by street violence. That 
is when this chaos started.
    So let us not say, ``Oh, my goodness, the Russians are 
responsible for this problem that is going on.'' The fact is it 
started before there was any Russian intervention at all when 
an elected President was thrown out and, my gosh, the United 
States didn't seem to be concerned that this elected person in 
a free election was being kicked out by what basically was 
based on street violence that created chaotic--a chaotic 
situation in which, of course, we ended up with what? And when 
was that street violence?
    When did it start? It started when the elected President 
decided, as he rightfully was elected to do, to make an 
economic agreement with Russia rather than the EU.
    No, this is much, much murkier than what is being 
presented. One thing is for sure. We should not be jumping into 
it. We should not be borrowing, and I am looking forward to the 
testimony of our witnesses today to find out exactly how much 
this is costing the American taxpayer.
    When we are going into debt by hundreds of billions of 
dollars a year, for us to borrow more money in order to give it 
to Ukraine in situations like this doesn't make much sense. But 
I am anxious to hear what our witnesses have to say about how 
much this is costing the United States.
    So with that, I thank the chairman for holding this 
hearing. I am interested in learning as much as I can and thank 
you very much, Mr. Chairman.
    Chairman Royce. Thank you, Mr. Rohrabacher.
    We now go for 2 minutes to Mr. Keating, the ranking member 
of the Europe, Eurasia, and Emerging Threats Subcommittee.
    Mr. Keating. Thank you, Mr. Chairman, and I would like to 
begin by thanking Assistant Secretary Nuland and Assistant 
Secretary Glaser for appearing today.
    I have seen first hand, both in Europe and back home, how 
they and their teams of experts have been working overtime for 
the past 6 months to respond quickly and constantly to the 
changing situation in Ukraine.
    Ambassador Pyatt and his team at the Embassy in Kiev merit 
special recognition for their heroic efforts. I am looking 
forward to hearing our witnesses' assessment of Russia's 
efforts to destabilize Ukraine's interim government and the 
effectiveness to date of U.S. sanctions.
    Despite its April 17th pledge to help de-escalate the 
crisis in Ukraine, Russia has done exactly the opposite. There 
is nothing murky about that. It is clear as can be.
    The role that Russian Special Services have played in 
destabilizing Eastern Ukraine is indisputable in supporting so-
called separatists, coordinated armed attacks on government 
buildings, orchestrating kidnappings, and violence against 
local politicians, reporters, and even OSCE monitors.
    Russian disinformation campaigns have only made matters 
worse and I echo the sentiments of the chairman of this 
committee as this committee has moved forward in a bipartisan 
effort to increase international broadcasting.
    Russian forces' use of masked warfare and other covert 
tactics seems to signal a strategic shift in its approach to 
the region and to European security.
    It is essential that the United States and NATO allies 
respond. I support the administration's decision to impose 
sanctions on individuals and entities closely linked to the 
Russian leadership's inner circle.
    I also welcome the decision to impose export restrictions 
on key Russian companies and the additional restrictive 
measures on defense exports. The goal of these targeted 
sanctions is to send a clear signal that Russian aggression 
against Ukraine comes at a price.
    I share the President's hope that these measures will 
persuade President Putin to reverse course. While President 
Putin's statement today is a hopeful sign, his true intentions 
remain unclear.
    I am troubled by separatists' insistence that they move 
ahead with a referendum this weekend and I therefore fully 
support the administration's readiness to impose additional 
penalties if Russia continues to press forward, including 
targeted sanctions against specific sectors of the Russian 
economy.
    As the United States moves forward, it is imperative that 
we do so in coordination with our European allies and I look 
forward to hearing about the status of the administration's 
ongoing discussions with the EU as well as efforts within NATO 
to counter Russian aggression and reassure our Central European 
and Baltic allies.
    With that, I yield back, Mr. Chairman.
    Chairman Royce. I thank the gentleman. This morning we are 
pleased to be joined by representatives of the Department of 
State and the Department of the Treasury.
    Ms. Victoria Nuland. Before assuming her position as 
Assistant Secretary for the Bureau of European and Eurasian 
Affairs at the Department of State, she served as the 
Department of State's spokesperson.
    She also served as the United States Permanent 
Representative to the North Atlantic Treaty Organization from 
2005 to 2008, focusing heavily on NATO-Russia issues, among 
other distinguished roles.
    Mr. Daniel Glaser. Prior to his confirmation as Assistant 
Secretary for Terrorist Financing in the Office of Terrorism 
and Financial Intelligence in the Department of the Treasury, 
he served as the first director of the Treasury's Executive 
Office of Terrorist Financing and Financial Crimes and was an 
attorney for the U.S. Secret Service. We worked with Mr. Glaser 
some years ago because he was heavily involved in U.S. efforts 
to target North Korea with financial sanctions when he caught 
them in the act of counterfeiting $100 bills in Macao.
    Macao was laundering the bills from North Korea into the 
financial system and the sanctions put on that bank and 10 
other banks until they were lifted by the Department of State 
were particularly effective in stopping hard currency flows 
into North Korea.
    Without objection, the witnesses' full prepared statement 
will be made part of the record. Members will have 5 calendar 
days to submit statements and questions, extraneous materials 
for the record if you wish.
    And Ambassador Nuland, if you would, please summarize your 
remarks to 5 minutes and then we will go to Mr. Glaser and then 
to questions.

     STATEMENT OF THE HONORABLE VICTORIA NULAND, ASSISTANT 
   SECRETARY, BUREAU OF EUROPEAN AND EURASIAN AFFAIRS, U.S. 
                      DEPARTMENT OF STATE

    Ms. Nuland. Thank you, Chairman Royce, Ranking Member 
Engel, members of this committee for inviting us today. As you 
said, Mr. Chairman, I have submitted a far more detailed 
statement for the record.
    Let me begin by expressing my gratitude for the strong 
bipartisan engagement of this committee in support of Ukraine 
and its people. Your passage of the U.S. loan guarantee 
legislation demonstrated the American people's commitment to 
help Ukraine at this critical time, and your visits to Kiev and 
to Dnipropetrovsk reinforce America's solidarity with Ukrainian 
people and made an enormous impact on the ground. So thank you 
to all of you who travelled and to the bipartisan leadership of 
this committee.
    Today, I want to outline four pillars of U.S. policy to 
address the challenges that we face in Ukraine. First, the 
United States is supporting Ukraine with financial, technical, 
and non-lethal security assistance as it prepares for the 
democratic Presidential elections on May 25th and we agree with 
you, Mr. Chairman, these are absolutely the most vital 
elections Ukraine has had in recent history.
    Second, we are working with Ukraine and our European 
partners to leave the door open for diplomatic de-escalation 
should Russia change course and make a serious effort to 
implement its April 17 Geneva commitments.
    Third, we are steadily raising the economic costs for 
Russia's occupation and illegal annexation of Crimea and any 
continuing efforts to destabilize eastern and southern Ukraine.
    And fourth, we are stepping up our efforts to reassure our 
NATO allies. So let me go through them quickly.
    First, in addition to the $1 billion loan guarantee 
approved on April 1st, the United States is providing $178 
million in Fiscal Year '13 and '14 State and AID funds, plus an 
additional $50 million in technical assistance to support 
programs to maintain macroeconomic stability, to advance anti-
corruption reform, to mitigate the vulnerability of Ukraine to 
outside economic pressure, especially from Russia, and 
especially in the energy sector, and to support energy 
efficiency, and to recover stolen assets of the Ukrainian state 
and the Ukrainian people.
    We are also providing more than $18 million in non-lethal 
security assistance to the Ukrainian armed forces and the state 
border guard service. Our $11 million in electoral assistance 
supports efforts at voter education and civic participation.
    It assists the Central Electoral Commission to administer 
the elections effectively and transparently. It supports 
election security, which will be absolutely essential, and it 
guarantees a diverse, balanced, and policy-focused media.
    We are also supporting 255 long-term local observers and 
over 3,300 short-term observers. In addition, we are working 
with the OSCE's Office of Democratic Institutions and Human 
Rights, ODIHR, as they prepare to deploy 1,000 observers 
throughout the country monitoring the elections, the largest 
monitoring effort in ODIHR's history.
    Second, along with our allies and the international 
community we remain committed to a diplomatic de-escalation 
should that be possible. As you know, on April 17th in Geneva 
the United States, Ukraine, Russia and the EU came together to 
develop a blueprint for such de-escalation.
    At its core, the Geneva joint statement was and remains a 
grand bargain that offered amnesty for those who vacate seized 
buildings plus deep, broad decentralization of power to 
Ukraine's regions through national dialogue and constitutional 
reform in parallel with an end to violence, intimidation, and 
the seizure of buildings and weapons.
    As you know, the Ukrainian Government began implementing 
its part of the Geneva agreement even before the ink was dry on 
the text. The day after the Ukrainian Government sent a draft 
amnesty bill to the Rada. Within a week, Ukrainian authorities 
had dismantled barricades in Kiev and opened streets.
    On April 14th, 29th, and just yesterday, the Constitutional 
Reform Commission has held broad public conferences with all 
the regions and Ukrainian security forces instituted an Easter 
pause in their operations and sent senior officials out with 
the OSCE teams to Donetsk and Slovyansk and Luhansk and other 
embattled cities to try to talk separatists into pursuing their 
aims politically, rather than through violence.
    And you will have seen the trip of Prime Minister Yatsenyuk 
to the most embattled area of the east Slovyansk yesterday on a 
mission of political reconciliation.
    In contrast, Russia has fulfilled none of its commitments. 
The separatists in Donetsk and Luhansk told OSCE observers that 
they hadn't even received any messages at all from Russia 
urging them to stand down.
    Yesterday was in fact the first time we heard President 
Putin call for the illegally armed groups to stand down. 
Instead, since April 17th all of the efforts of Ukraine and the 
OSCE have been met with more violence, more mayhem, 
kidnappings, torture and death.
    As Secretary Kerry has stated, we continue to have high 
confidence that Russia's hand is behind this instability. And 
yet Russia can still step back from supporting separatism and 
violence.
    Today, we are working closely with the Government of 
Ukraine, with the OSCE, with key European governments including 
Germany, to once again support a diplomatic path forward--a 
rejuvenation, if you will, of the Geneva commitments.
    We do consider it a positive step that President Putin 
yesterday spoke out in opposition to the proposed May 11th 
separatist referendum in Donetsk and Luhansk.
    Now what we hope to see is Moscow completely end its 
support for separatists altogether and actively encourage an 
end to building occupations, disarmament of illegal groups, and 
the healing of Ukraine through the political process. That 
means Presidential elections, national dialogue on broad 
constitutional reform through decentralization.
    This is the peaceful path forward, and we will judge 
Russia's sincerity by its actions in the coming days, not by 
its words.
    This brings me to the third pillar of our strategy. In 
response to Russia's continued occupation of Crimea and its 
aggressive acts in east and south Ukraine, the United States 
has imposed significant costs on Russia.
    Just last week we enacted new sanctions on seven Russian 
Government officials including two members of Putin's inner 
circle and 17 entities.
    Assistant Secretary Glaser will go into the details, and as 
the President made clear last week we are prepared to exact a 
higher cost if Russia takes further steps to destabilize 
Ukraine, including disrupting the May 25th elections, and we 
are working now with our European and global partners on a 
package of sectoral sanctions that will bite quite deeply into 
the Russian economy, if we have to use them.
    The Russian economy, as you said, Mr. Chairman, is already 
buckling under the pressure of these internationally imposed 
sanctions. Its credit ratings are hovering just above junk 
status.
    Fifty one billion in capital has fled Russia since the 
beginning of the year, which is close to the $60 billion they 
lost in all of 2013. Russian bonds are trading at higher yields 
than any debt in Europe and as the ruble has fallen, the 
Central Bank has raised interest rates twice and has spent 
close to $30 billion from its reserves since early March to try 
to prop up the ruble.
    And finally, our fourth pillar--we are working intensively 
with our NATO allies to provide visible reassurance on land, on 
sea, and in the air that Article 5 of the NATO treaty means 
what it says. Our message to Russia is clear: NATO territory is 
inviolable. We will defend every piece of it and we are 
mounting a visible deterrent to any Russian efforts to test 
that.
    The United States, as you know, has increased our own 
contribution to NATO Baltic air policing. We have bolstered the 
U.S.-Poland aviation detachment at Lask Air Force Base and we 
have maintained a steady U.S. naval presence in the Black Sea. 
We have also deployed a total of 750 U.S. ground troops to 
Estonia, Latvia, Lithuania, Poland and Romania.
    We are now heartened that more than half of the other NATO 
allies have also offered visible reassurance contributions to 
the NATO mission to support the front line states, including 
increased air and land reassurances by the U.K., France, Canada 
and Germany and reassurances at sea from Norway, Belgium, the 
Netherlands and Estonia.
    Taken together, these four pillars of our policy--support 
for Ukraine, costs for Russia, an open door for de-escalation 
through diplomacy, and allied reassurance--are the foundation 
of the work we are doing together and with this committee and 
with the Congress.
    In this effort, we appreciate your bipartisan support and 
your bipartisan contribution and we hope to continue to work 
closely with you.
    Thank you.
    [The prepared statement of Ms. Nuland follows:]
    
    
    
    
    
    
    
    
    
    
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    Chairman Royce. Mr. Glaser.

STATEMENT OF THE HONORABLE DANIEL GLASER, ASSISTANT SECRETARY, 
OFFICE OF TERRORISM AND FINANCIAL INTELLIGENCE, U.S. DEPARTMENT 
                        OF THE TREASURY

    Mr. Glaser. Thank you, Chairman Royce, and thank you for 
that kind introduction. I am going to go off script just for a 
second to thank you for calling the work that we did together 
in 2005, 2006, 2007, that really was the proof of concept that 
it is possible to apply targeted financial measures in a 
strategic way against a target and we learned a lot from that 
and we have really taken off since then and it was a pleasure 
working with you back then. I look forward----
    Chairman Royce. I just wish we had done it again, Mr. 
Glaser.
    Mr. Glaser. Well, we are doing our best, Mr. Chairman. But 
to my remarks, Chairman Royce, Ranking Member Engel, 
distinguished members of the committee, thank you for inviting 
me to speak today about the U.S. Government's response to 
Russia's illegal annexation of Crimea and its continued 
provocative actions in Ukraine.
    The Department of the Treasury is designing and 
implementing a strategy that uses targeted financial measures 
to raise the costs to Russia of its actions.
    Our approach is calibrated to impose immediate costs on 
Russia and to create conditions that will make Russia 
increasingly vulnerable to sanctions as the situation in 
Ukraine escalates.
    To this end, Treasury has targeted not only corrupt former 
Ukrainian officials, Crimean separatists and their backers in 
the Russian Government, but individuals in President Putin's 
inner circle who have important interests and holdings 
throughout the Russian economy.
    Russia is already feeling the impact of our measures. In my 
remarks today, I will describe Treasury's sanctions tools and 
how we are deploying them. I will also discuss the important 
measures we are taking to buttress the Ukrainian economy.
    By pursuing these dual tracks, the Treasury Department is 
using the tools at our disposal to contribute to the 
development of a strong and sovereign Ukraine.
    President Obama has signed three Executive orders that 
provide the Secretary of the Treasury with expanded authority 
to sanction individuals responsible for the continuation of the 
crisis in Ukraine as well as entities under their control. In 
total, we have designated 45 individuals and 19 entities over 
four traunches of designations.
    The most important of these targets include those in 
Putin's inner circle and the companies they control or own. 
These include Igor Sechin, the chairman of the state-run oil 
company Rosneft, Sergei Chemezov, the CEO of the Russian 
weapons and metals conglomerate Rostec, and Gennady Timchenko, 
who runs Gunvor, one of the world's largest commodity trading 
firms.
    We have also targeted Russian officials directing the 
annexation of Crimea as well as Crimean separatists and former 
Ukrainian Government officials.
    We have a range of options we can deploy should Russia's 
leadership continue to destabilize Ukraine. For example, 
Treasury has additional authority authorized by President Obama 
under Executive Order 13662 to significantly enhance Russia's 
economic costs in isolation.
    This Executive order authorizes the targeting of entities 
operating in broad sectors of the Russian economy such as 
defense, metals, mining, finance, engineering, and energy.
    I should note the importance of coordination with our 
international partners, particularly those in the European 
Union and the G-7. To be clear, the United States always stands 
ready to take actions we deem necessary to safeguard our 
national security and to safeguard international security.
    We do, however, recognize that our financial measures are 
more powerful and effective when done in a multilateral 
framework.
    Our partners have taken sanctions measures of their own and 
they have started to prepare to do more. We are working to 
ensure that our international partners continue and expand 
their measures, and that we move forward together to address 
Russia's aggression.
    For example, this week Under Secretary David Cohen is 
leading an interagency delegation in Europe to coordinate 
precisely this, going to stops such as London, Paris and 
Berlin.
    But even as we lay the groundwork for expanded measures if 
necessary, our sanctions are having an impact on Russia's 
already weak economy, and actually Chairman Royce rattled off 
most of the numbers that I have to rattle off.
    But I will do it again because I do think they bear 
repeating. As sanctions increase, the costs to Russia will not 
only increase but their ability to mitigate the costs that they 
incur will diminish.
    Already market analysts are forecasting significant 
continued outflows of both foreign and domestic capital and a 
further weakening of growth prospects for the year. The Russian 
stock market has declined over 13 percent and the Russian 
currency has depreciated by almost 8 percent since the 
beginning of the year, the worst numbers within the group of 
emerging markets.
    The IMF has downgraded Russia's growth outlook to .2 
percent this year. That is the second downgrade within a month 
and they have suggested that a recession is not out of the 
question.
    This stands in stark contrast to previous IMF forecasts, 
which as recently as February were projecting 2 percent growth 
for Russia. The IMF also indicated that they expect as much as 
$100 billion in capital flight from Russia this year, which has 
caused rating agencies such as Standard & Poors to downgrade 
Russia's sovereign credit rating to just above junk status.
    In addition to our measures that isolate the Russian 
economy, the Department of the Treasury is working with the 
international community to support the Ukrainian Government in 
returning the country's economy to solid footing.
    As an important first step, Ukraine received the first 
traunch of $3 billion from the IMF--from the IMF's 2-year $17 
billion reform package with an additional $3 billion expected 
to be disbursed by the end of May.
    Treasury is also offering its expertise in identifying, 
tracking, and recovering stolen Ukrainian assets in support of 
Department of Justice efforts. Expert Treasury advisers have 
also been deployed to Kiev to help the Ukrainian authorities 
stabilize the financial sector and implement reforms.
    As the United States and our international partners 
continue to confront Russia's illegal actions in Ukraine, we 
stand ready to further employ our arsenal of financial measures 
as the situation escalates.
    A diplomatic resolution of the crisis remains our goal, but 
if Russia chooses to continue its illegal and destabilizing 
actions in Ukraine, we can impose substantial costs on and 
expand the isolation of an already weak Russian economy.
    Thank you for the opportunity to speak today and I will be 
happy to answer your questions.
    [The prepared statement of Mr. Glaser follows:]
    
    
    
    
    
    
    
    
    
    
    
    
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    Chairman Royce. Thank you, Mr. Glaser.
    From our standpoint and I think--I think it is pretty clear 
to the members here that our goal is to get a resolution to 
this thing as quickly as possible, to get some measure of 
reconciliation.
    The Presidential candidates that are running on May 25th, 
they are mature candidates. They are going to push for the use 
of both Ukrainian and Russian. If we can get to the May 25th 
election, I think you have got a chance there for a huge 
turnout.
    When we were in Dnipropetrovsk, when we were meeting with 
these Russian-speaking associations, representatives of women's 
groups, representatives of the Jewish community, and other 
minority communities, the uniform position, especially the 
different NGO groups, was that they were manning these ballot 
box stations to make certain that there was security for those 
who go to the polls.
    Now, if you get the kind of turnout that at least we see in 
polling as anticipated, and you have this Presidential election 
followed by the election of local representatives from every 
district, I think we are on our way, potentially, to a system 
where we can begin to de-escalate this.
    We have one big problem for the attempt by journalists to 
cover this story in the east and that is the disappearance of 
these journalists. We have got several journalists who have 
been disappeared by Russian separatists, taking them into 
custody. The campaign of intimidation, of course, is intended 
to shutter all indigenous outlets for uncensored news and 
information.
    You have already got the seizure of the local broadcasting 
systems. So it suddenly becomes very, very important to support 
journalists going in to cover this election and also to counter 
Russian propaganda and that takes me to an issue I wanted to 
talk to Ambassador Nuland about.
    The propaganda that you hear coming out of that part of the 
world is really in overdrive. Our committee recently passed 
legislation that is now signed into law, directing U.S. 
international broadcasts to be ramped up.
    We are working on legislation to revamp and cut the 
bureaucracy over the top of Radio Free Europe and other 
surrogate broadcasters so that they can do the type of job they 
have done in the past.
    And I was going to ask you, Ambassador, how do you assess 
our efforts in this information battle? How important do you 
think this is in terms of being able to get a flow of 
information into eastern Ukraine especially, so that people 
have the coverage going up to the election?
    Because I think once the election occurs--and the other 
thing I will ask you to comment on: President Putin said in 
reference to the May election as you--as you quoted him--that 
he does not want to go forward with a referendum on the 11th. 
That is very good news, okay. But he also said he thinks the 
Presidential election on May 25th is a step in the right 
direction.
    If we can build on this statement to get a huge turnout I 
think it increases the leverage for those in the country, in 
the east and the west, who want to see a reconciliation.
    Ms. Nuland. Well, thank you, Mr. Chairman. We couldn't 
agree with you more that what is most important if you want to 
hear what the people of Ukraine have to say about their future 
is to let them vote. Let them vote across the country and most 
especially in the east and south of Ukraine.
    I can talk at some length about how the OSCE assesses the 
electoral environment, which is surprisingly good with the 
exception of Crimea, of course, where people will have to be 
offered a place outside Crimea to vote and the Ukrainians are 
working on that, and a few of the most dangerous parts of 
Donetsk, including Slovyansk.
    But the Ukrainians--in fact, Secretary Kerry spoke this 
morning to Prime Minister Yatsenyuk just before I came over 
here and one of the things that the Ukrainians are very focused 
on now is a ``get out the vote'' campaign across the country.
    That speaks to the second part of your question, which is 
about free media. Would that Russia allowed it, would that the 
separatists allowed it, this would be the freest media 
environment Ukraine has ever enjoyed for an election.
    But as you know, it is precisely that free media 
environment that is threatening to this illegally-armed 
movement and that is why some of the sites of occupation have 
included TV towers in Donetsk, Oblast, and in Luhansk.
    The government has made a good effort to try to reclaim 
some of those, but when separatists seize TV towers they close 
out a plurality of voices and the Russian propaganda megaphone 
is the only thing that can be heard.
    So we are very grateful to this committee. We are very 
grateful to the Congress for the support that you are showing 
for the programming we are helping the Ukrainians support.
    We recently increased by $1.5 million our support to 
Ukrainian Government efforts to help prepare for the election 
and get truth out across. We are also, as you know, running and 
working on a very intensive effort with our allies and partners 
to support those voices trying to correct Russia's false 
narratives.
    I think you have probably seen our United for Ukraine 
campaign, which is now only 5 percent government content. The 
other 95 percent is taken up by global supporters of Ukraine.
    So these efforts are very important, but we are going to 
have to do more if this--if we are now back to the future and 
in a propaganda environment where truth is not an obstacle.
    Chairman Royce. You gave us some numbers on the number of 
election observers that were being fielded-out by NGO groups in 
the U.S. and there are several thousand coming from Europe.
    Do you have any estimate of how many NGOs or how many 
volunteers, election observers we are going to have on the 
ground in eastern Ukraine in order to try to monitor? And in 
southern Ukraine?
    Ms. Nuland. I don't yet have a breakdown from the OSCE on 
their monitor posture, but I think it will be distributed 
across the country with 1,000 OSCE across the country. We would 
expect at least 500 of those in the south and the east. But 
that is the OSCE alone.
    As I said, we are supporting some 3,300 indigenous 
Ukrainian NGO observers and they will be spread across the 
country, and that is before you get to what IRI, NDI and like 
institutions across Europe and from other countries will send.
    So as I said, we expect this to be the best observed 
election in the transatlantic space since the end of the Cold 
War, per capita.
    Chairman Royce. Thank you, Ambassador Nuland. My time has 
expired. We will go to Mr. Engel.
    Mr. Engel. Thank you, Mr. Chairman, and once again thanks 
to both of you for the very, very fine work that you both are 
doing.
    The equation for NATO since the fall of the Soviet Union 
has essentially been looking at Russia as a--as a partner, at 
least some kind of a partner. If this is no longer the case and 
Russia is now an adversary, not a partner, it changes the whole 
equation.
    When we speak to the representatives of countries like 
Moldova, Georgia, Romania, Latvia, and Lithuania, they are all 
scared to death, and Russia has been pressuring them and we can 
only expect this pressure to increase in the coming months, 
particularly in Moldova and Georgia.
    So what are we doing to support the rights of the people in 
these states in the region to choose their own futures and 
build democratic states? Because I really believe that if we 
don't step up to the plate on this you can almost kiss NATO 
goodbye because if we are not going to back up what we say we 
stand for then I think Putin will have won.
    So I just think it is absolutely imperative that we 
reassure the other countries in the surrounding region who all 
come to see all of us and tell us that they have terrible fears 
of being collateral damage in this whole process.
    Ms. Nuland. Thank you, Mr. Ranking Member. First, as I 
said, with regard to those countries who are members of the 
alliance, from the Baltic all the way down to the Black Sea, 
NATO is scoping and already deploying a massive reassurance 
mission on land, air, and sea.
    I gave some details of that in my opening statement. We 
expect that mission to continue through the end of 2014 and we 
expect heads of state and government when they meet in Wales to 
review whether it needs to continue beyond that.
    So Article 5--the traditional Article 5 reassurance of NATO 
is now going to be at a co-equal pillar yet again at the 
summit. With regard to the states who are partners of NATO--
Moldova, Georgia, Ukraine itself--as you know, we have greatly 
increased our economic, our energy support to countries like 
Moldova who are most vulnerable to Russian pressure.
    I have been out there twice. Secretary Kerry has been out 
there. A number of Members of Congress have been out to support 
them. The Prime Minister of Moldova was received in the White 
House, including by President Obama.
    We are working with them on first diversifying their market 
away from Russia. As you know, the EU has now granted visa-free 
status to Moldova.
    We are working to help them to explain in advance the 
benefits of Europe, including to the people of Transnistria, 
and we have worked a lot on imports of Moldovan wine, on energy 
interconnectors between Moldova and Romania to help them with 
reverse flow, et cetera, and reduce their energy dependence.
    So those efforts will continue. In Georgia, as well, the 
new Prime Minister was here. We have had repeated visits 
including my own out there and those of Members of Congress and 
we are working with them primarily on strengthening rule of 
law, helping them prepare for their association agreement and 
to really maximize the trade and people-to-people benefits of 
their association with Europe.
    Mr. Engel. Thank you. I want to ask you also a question 
about foreign assistance because in recent years it has 
diminished greatly for Central Europe and Eastern Europe.
    There have been some improvements in some countries but in 
others needs have increased and at the same time, you know, the 
budget sequester, which I think was a disaster, there has been 
excessive budget cutting to these countries as a result.
    So is the United States providing adequate assistance for 
Ukraine and other Eastern European countries now under Russian 
pressure and trying to consolidate their democracies? And if 
Congress provided more assistance would that help our efforts 
and what would be the effect on U.S. and regional security and 
what types of efforts might expanded assistance provide?
    Ms. Nuland. Thank you, Congressman. As you know, as from 
your own efforts in Europe, once countries join the European 
Union they graduate from U.S. assistance. So at the current 
moment we don't provide much U.S. bilateral assistance. There 
are some programs that are active but very few for any of the 
countries that are currently in the European Union.
    So our focus is to the east. It is certainly the case that 
in my budget, in the Bureau of European and Eurasian Affairs, 
we are shaking out the couch cushions and scraping the side of 
the pot to get more support of the kind I discussed for Ukraine 
in the first instance, but also for Moldova, for Georgia, for 
increasing U.S. trade opportunities for countries like Armenia 
that are feeling increasingly squeezed. With more we could, 
obviously, do more.
    I want to just briefly mention another threat that I would 
like to have more resources to combat and that is the threat of 
corruption.
    We see a new tool of outside influence, not just in the 
post-Soviet space, but increasingly in Central Europe and the 
Balkans, which is this corrupt oligarchical practices, dirty 
money flowing into these countries, buying politicians, then 
going into parliaments and dismantling democratic structures, 
dismantling free media, dismantling protections for NGOs.
    I believe the United States has to do more to help 
countries across the European and Eurasian space resist this 
pernicious cancer of corruption, which is also a tool of 
outside influence and a threat to sovereignty for many of them.
    Mr. Engel. Thank you. Thank you, Madame Chair.
    Ms. Ros-Lehtinen. Thank you very much, Ranking Member 
Engel.
    The chair recognizes herself for 5 minutes.
    The situation in Ukraine is indeed a powder keg ready to 
explode at any given moment. Putin is an unrepentant thug with 
an expansionist ideology who has thus far proven that he will 
not be deterred by the actions that the U.S. has taken in 
response to his aggressive moves in Ukraine and this is 
extremely dangerous for the stability of Ukraine and, indeed, 
the entire region.
    His actions have been meant to destabilize Ukraine, foment 
pro-nationalist and anti-Western sentiments in Russia and 
manufacture a crisis so that he can play the role of the hero 
at home.
    By creating this crisis, Putin is trying to mask the ills 
that he faces at home and who better to play his foil than us 
here in the United States?
    With a growing number of Russians dissatisfied with the 
economy and his policies, the latest news that Putin is now 
supporting the May 25 election must be taken with a grain of 
salt because there are surely ulterior motives at play here.
    I congratulate this committee under the leadership of 
Chairman Royce and Ranking Member Engel for the tough but fair 
bills that we have passed. Our President has issued several 
Executive orders imposing sanctions on Russian officials and 
that has gained some support in the EU. But I wanted to focus 
on the EU part.
    We have been unable to get the EU on board for stronger, 
more effective sanctions. And so following up on your 
testimony, what more do we need to do to get the EU on board to 
impose additional sanctions? What are the major concerns and 
obstacles in getting the EU's backing?
    And we had talked about Under Secretary Cohen's trip. What 
specifically will he--will the Secretary be pushing in his trip 
to Germany, France, and the U.K.? And there clearly has to be a 
U.S. strategy for dealing with Russia and a separate strategy 
toward Ukraine. But they must work together in order for us to 
be our most effective.
    I believe that the administration is not willing to be 
strong enough in the face of Putin's aggression--doesn't wish 
to cause any more friction with Moscow. So we will then fall 
short of what is necessary to truly help the people of Ukraine 
who oppose Russian meddling over its sovereignty.
    But perhaps the administration is unwilling to stand up to 
Putin's aggression because they are worried that we need his 
support for the chemical weapons program in Syria and our 
misguided negotiations with Iran over the nuclear program.
    And if that is the case, then that just shows the 
consequences of our failed leadership, the fact that we are so 
desperate to keep a bad nuclear deal with Iran alive that we 
can't help those who are seeking our assistance because we 
don't want to upset Moscow too much.
    Last month there were reports that our Department of Energy 
informed a Russian state-run nuclear corporation on suspension 
of cooperation projects. Can you provide us with an update on 
the status of our 123 Agreement with Russia and is there any 
discussion about reexamining our PNTR agreement with Moscow? So 
EU, Under Secretary Cohen's trip, and 123 and PNTR. Thank you.
    Ms. Nuland. Thank you, Congresswoman. On 123 and PNTR, I am 
going to take the question. I, frankly, am not as briefed as I 
need to be.
    With regard to the EU, why don't I start and then Assistant 
Secretary Glaser pick up? As you know, in the rounds of 
sanctions that we have had we have been able to move with the 
Europeans.
    Their legislation, their legal base is somewhat different 
than ours. Their procedures are different. So it has been a 
matter of constant consultation with them to try to move in 
lockstep.
    We have had success in the sanctions we have imposed for 
the occupation of Crimea on senior Russian officials 
responsible for orchestrating that and the violence in the 
south and east.
    We are working now on encouraging the European Union to 
match the sanctions that the U.S. has put in place on those 
closest to Putin and their organizations because we do believe 
that those sanctions have had a serious impact on the Russian 
economy and, frankly, in destabilizing markets, which, as we 
both cited statistics, are the most impactful aspect.
    And as I said in my testimony, what will have the biggest 
impact is if we move to sectoral sanctions. The President, as 
Assistant Secretary Glaser has made clear, has given us an 
Executive order that allows us to look at energy, banking, the 
defense sector, mining.
    So we are now in intense consultations including those that 
David Cohen and Ambassador Dan Fried are engaged in this week 
on how those sectoral sanctions could work because they will be 
far----
    Ms. Ros-Lehtinen. Well, thank you so much. As usual, I have 
talked too much and I ran out of time. So we will give you 
another opportunity. Maybe somebody will bring it up.
    And so pleased to yield to Mr. Meeks of New York for his 
question and answer.
    Mr. Meeks. Thank you, Madam Chair, Madam Secretary, Mr. 
Glaser. My line--my first questions were somewhat on the same 
line as Ms. Ileana Ros-Lehtinen but for different reasons.
    I am always--I believe in sanctions when they are 
multilateral, not unilateral, you know, because unilateral 
sanctions don't seem to work. We don't--we are not able to 
really accomplish what our goal is when it is just us by 
ourselves and/or what effects they have on our allies who we 
work very closely with.
    And so I want to make sure of that because I am very 
concerned about the aggression of Russia and I want to make 
sure that we do certain things but we are not isolating 
ourselves in the long run.
    So it is important to me that we are in fact working with 
NATO and others in the Baltic States and every--because I know, 
for example, we met with some individuals from Latvia, for 
example, and they are saying it is important to have certain 
kinds of sanctions as opposed to others because it could be 
devastating to them and their country and cause turmoil within 
their own ranks and will end up hurting the very people that we 
want to help.
    So with that being said, let me--let me ask this question. 
Do you feel that we are having the level of cooperation from 
our NATO allies, et cetera, as they understand the same vision? 
Are we on the same playing field with the vision of how we have 
got to fight back the aggression that has been moved--you know, 
as we see with Russia moving forward into the East Ukraine and 
Crimea?
    Ms. Nuland. Thanks, Congressman. I would say that in the 
rounds of sanctions we have done heretofore we have moved 
largely in lockstep with Europe. There are some differences 
that have to do with the legal authorities and we are seeking 
to close the gaps that exist, as I said, and particularly with 
regard to those closest to Putin.
    But as we get to sectoral sanctions it does get harder and 
the principles that you outlined are the same ones that we 
have. Assistant Secretary Glaser can speak to it. But we want 
to have more of an impact on the Russian economy than we have 
on our own.
    We want to share the pain, if there is to be economic pain, 
across different sectors. That helps keep Europe together but 
it also ensures that one sector of our economy isn't hit harder 
than another.
    We want to use a scalpel and not a--not a sledgehammer. We 
want to talk primarily about forward investment opportunities.
    Mr. Meeks. And as you have testified, of course, already 
having the door open because I am also a firm believer in 
diplomatic solutions. I don't think that anybody--I don't think 
really that a military solution, as some have hinted at, or 
giving of military equipment is the answer here.
    I think that we have to try to figure out a way to do it 
through joint sanctions as well as with, you know, with our 
NATO allies, and then try to--hopefully that the Russians will 
end up coming to the diplomatic table and we can resolve this 
crisis on a diplomatic basis because--my next question would 
be--there are other serious issues that we still have to deal 
with Russia.
    Last week, Principal Deputy Assistant Secretary of State 
Anita Friedt testified before this committee and I asked her 
about U.S.-Russian cooperation still because there were a lot 
of other things that we were doing with Russia.
    And she informed me that despite the ongoing crisis in the 
Ukraine that the U.S. is still cooperating with Russia on 
certain matters such as nuclear arms agreements--that that's 
still going.
    So I was wondering also, you know, in regards to Iran--
dealing with Iran with the P5+1, could you tell us more 
specifically what is the status of our cooperation with Russia 
on other issues that are very important to us, for example, 
military cooperation and development and economic and anti-
piracy and so on in dealing with Syria? Where are we with--are 
we still working in accord in those regards?
    Ms. Nuland. Thank you, Congressman. We have, as you know, 
curtailed most of our bilateral economic work with Russia, most 
of our bilateral military-to-military.
    But on all of the global issues that you mentioned, whether 
it is Iran, Syria, the arms control commitments that we have to 
each other, we have largely maintained these conversations. We 
don't do that as a favor to Russia.
    Russia participates because it is in their interest to keep 
Iran from getting a nuclear weapon, et cetera. So those have 
largely continued.
    Mr. Meeks. And lastly--I have got 11 seconds, I don't know 
if I am going to get it in--I was wondering, do you think that 
the sanctions that are in place are affecting at all our 
cooperation with Russia?
    Are they trying to push back saying, ``Oh, if you don't 
stop these sanctions we are going to''--are they threatening us 
at all in that regard--threatening to stop cooperating on these 
international events?
    Ms. Nuland. Again, heretofore the assessment holds that 
Russia cooperates in these issues not as a favor to us either, 
but because they judge them to be in their interest and that 
cooperation has continued.
    Chairman Royce. Would the gentleman yield for 1 minute? One 
thing I did want to clarify and that is, Mr. Meeks, I have 
never heard anyone argue for a military solution. And as a 
matter of fact, in our conversations with the President of 
Ukraine and the Prime Minister of Ukraine, both made clear to 
us that they didn't expect any U.S. military involvement.
    So I just did want to clarify that comment that you alluded 
to because I just, in the Senate or House, haven't seen any 
member----
    Mr. Meeks. I just heard several--some of our colleagues say 
that we should be giving some arms to the Ukraine or arming 
them in that regard and so that tells me----
    Chairman Royce. That was the second half of your statement. 
But the first part went to a military solution. I just wanted 
to clear the record on that.
    Let us go now to Mr. Chris Smith of New Jersey.
    Mr. Smith. Thank you so much, Mr. Chairman, and thank you 
to our two distinguished witnesses today for their work. I do 
have a couple of questions.
    You know, the recent IRI poll suggested an overwhelming 84 
percent of Ukrainian citizens said they will definitely or are 
likely to vote in the elections, including a substantial 
majority in the two regions in which the militants are very 
active. So that is a tremendous sign of ownership of their 
future.
    And I do have a couple of questions. As co-chair of the 
Commission on Security and Cooperation in Europe, Ben Cardin 
and I will co-lead a delegation on the 25th of May to be 
election observers, and if any members here are interested 
please see me and, you know, perhaps you could join us in that 
effort.
    But I do have some questions about the Ukrainian 
preparations for the elections, your thoughts on how well they 
are progressing, a breakdown of what voters-distant third.
    But it did trigger a runoff. You know, we didn't get the 
winner. It was Yanukovych and it was judged to be a free and, 
you know, a true election with some discrepancy but largely 
free and fair.
    The 2012 elections had more problems on the parliamentary 
level. So I am just wondering if enough safeguards are in place 
to ensure that this ballot even though there are 20 people 
running it probably is a two-way race between Poroshenko and 
Tymoshenko, although it may be a single winner because she is 
trailing significantly in the teens right now.
    So I am just wondering if, you know, again, integrity of 
the ballot, people who vote, particularly in disputed areas, 
what precautions are being put into place to ensure their 
safety.
    Ms. Nuland. Thanks, Congressman, and we are enormously 
grateful that you are going to lead an election observer team 
with Senator Cardin and we encourage anybody who has an 
interest to go because the more observers the better an 
election we will have.
    First of all, just on what ODIHR, OSCE--ODIHR's findings 
are as of the middle of April--the Central Election Commission 
has met all of its legal deadlines, that it has registered 23 
candidates, that there is a sound framework for free media, 
that there are 35.9 million registered voters--they have all 
registered online--that election commissions have been formed 
in virtually every one of the 225 districts.
    There are 32,000 Presidential precinct election 
commissions. All of them, with the exception of those in Crimea 
and some locations in Donetsk, notably Slovyansk, are fully on 
schedule to prepare for these elections, including with regard 
to preparation of lists and all of those things.
    Obviously, security leading up to the elections and on 
election day at polling places for election materials, et 
cetera, will be paramount. As I said, Secretary Kerry spoke to 
Prime Minister Yatsenyuk this morning.
    The prime minster made clear that they are focused like a 
laser on this as they are on getting out the vote. They are 
also talking about--I think they are working with the OSCE now 
on alternative sites for Crimeans to exercise their right to 
vote if they choose and for places like Slovyansk where it may 
be too violent to vote.
    But just to underscore where you started, the polling is 
indicating almost 70 percent of folks in the east of Ukraine 
are excited about casting their ballot, and that is the most--
the best guarantee of political stability in Ukraine.
    Mr. Smith. Thank you. I appreciate that. Assistant 
Secretary Glaser, can you describe in more detail the sanctions 
that have been taken by our European allies? How effective do 
you think they have been in light of their financial, economic 
integration with Russia, particularly in the area of the energy 
sector?
    Mr. Glaser. Yes, sure. I would be happy to try to answer 
that question. The European Union so far has focused its 
targeting on specific individuals that have been involved with 
the violation of the sovereignty of Ukraine and the incursion 
into Crimea.
    That, in combination--I think it is--I think you can't 
really break out the impact of the European measures from the 
impact of the U.S. measures. I think you have to look at the 
situation in total and when you look at the--at the situation 
in total, again, Chairman Royce and I both rattled off some 
numbers as to what the impact has been to date in terms of 
impact on the Russian economy.
    I think equally as important as that, although not quite as 
quantifiable as that, has been the market uncertainty that it 
creates--the chilling effect on further business dealings with 
Russia, on further investments in Russia. And what that does is 
it sets a framework--it sort of sets the table for us all to 
collectively take more significant action.
    When Chancellor Merkel was here in Washington last week, 
she and President Obama made clear, as has Ambassador Nuland 
just now, that the next step in that would very likely be 
sanctions that target entities within sectors of the Russian 
economy. But there has been a lot of discussion about the 
financial sector or the energy sector, things like that.
    That is precisely, and this gets to a question that was 
asked earlier, precisely what Under Secretary Cohen and 
Ambassador Fried are in Europe and in London, Paris, Berlin 
this week talking about because I do think that the U.S., even 
acting on our own, can exact costs on Russia.
    I think we have demonstrated that. But, certainly, given 
the economic, financial, energy integration between Russia and 
Europe, anything that we do is going to be so much more 
effective in a multilateral context, both from an actual 
financial economic point of view and certainly from a political 
messaging point of view.
    And what they are doing right now is sitting down with our 
European counterparts and going through, you know, concepts on 
how do we do this--how do we and Europe work together to have a 
very effective targeted set of actions against sectors of the 
Russian economy that, as Ambassador Nuland articulated, 
maximize the impact to Russia--on Russia while minimizing the 
impact on our own businesses and our own economies.
    We understand that there are going to be costs to these 
actions. We understand that. But if we do it in a smart 
strategic way, we think we could have the impact that we are 
looking for and I am quite certain the that the Russians 
understand that very well.
    Mr. Smith. Thank you both.
    Chairman Royce. Mr. Albio Sires of New Jersey.
    Mr. Sires. Thank you, Mr. Chairman, and thank you for being 
here. You know, along the same line as my colleague from New 
Jersey, these sanctions--I would think that in order for them 
to really be effective, the people of Russia have to feel it.
    Do we have any evidence that the actual people, not just 
Putin's friends or the people in leadership, are impacted but 
this but the actual Russian people? Because it seems that his 
numbers keep going up as more popular and more popular as he 
makes these moves.
    Mr. Glaser. Yes. I mean, it certainly sometimes takes time 
for damage to an economy to reflect in opinion polls with 
respect to leadership. But it is certainly the case that Russia 
is feeling on a very, very broad level the impact of the 
measures we have taken.
    As we said, as recently as February, the IMF was 
forecasting a 2-percent growth for Russia. That is for Russia. 
That is not for Putin's inner circle. That is for Russia, and 
now it is forecasting near 0 percent and speculating that it 
might, in fact, be a recession. That is a recession for Russia 
as a whole.
    So I think that the Russian leadership has to understand 
that the health of the Russian economy is very much at stake 
with respect to the measures we have taken and these are the 
initial measures that we have taken.
    As we have said, we are in very, very intense consultations 
and discussions with Europeans on taking measures that would 
have an even greater impact on the Russian economy.
    And as I said, I think that, even in and of itself, has 
created a level of market uncertainty that is continuing to 
damage the Russian economy quite broadly.
    Mr. Sires. Because it seems to me that these sanctions are 
directed at his friends, not necessarily the people of Russia. 
Is that accurate? I mean the people are the ones that are going 
to speak and say, ``Hey, let us stop this.''
    Ms. Nuland. We have--as you know, sanction not only people 
in leadership, but also those close to Putin but what----
    Mr. Sires. Right.
    Ms. Nuland [continuing]. But the effect has been general 
market uncertainty, which is affecting the whole economy.
    For example, the cost of borrowing inside Russia is going 
up and up and up. Inflation is going up and up and up. I was in 
Europe last week talking to----
    Mr. Sires. Well, these are--these are what people are 
feeling.
    Ms. Nuland. That people will begin to feel it. I was about 
to say that I was talking to a number of European business 
folks on a trip I took around allied capitals last week, 
including on sanctions, and business folks were reporting that 
Europeans are not making new investments, that the cost of 
their products exported to Russia are going up because of 
inflation, that they are not getting the orders for luxury 
goods because Russians are biding their time and waiting to see 
what happens.
    So there is a lot of impact already. But our goal is not to 
hurt the Russian people per se. Our goal is to get Putin to 
change course.
    Mr. Sires. Well, you know, obviously, our goal is not to 
hurt the Russian people, but the Russian people are the ones 
that are going to speak to make sure that the leadership 
changes the course that they have taken.
    Can you talk to me a little bit about this Russian colonial 
federalization, that they want the proposed amendment to the 
Constitution? What is this federalization? What does it mean? 
What are they talking about?
    Ms. Nuland. Well, obviously, if I was still at the 
spokesperson's podium I would refer you to Russia as to what 
they are talking about.
    But the original concept appeared to be such a broad 
decentralization of power that regions would have the right to 
independently vote to secede, attach themselves to Russia, et 
cetera, which, obviously, under nobody's Constitution, is the 
right way to go.
    What the Ukrainian Government and what the Constitutional 
Reform Commission are offering, however, is very, very broad 
decentralization of authority and budgeting to local regions. 
Ukraine has been too centralized a state and that has been part 
of the problem.
    But when Prime Minister Yatsenyuk was here, he gave a 
speech at the Atlantic Council in which he talked about 
devolving authority for everything except defense, foreign 
affairs, and some judicial functions to the regions--keep their 
own tax money, administer it themselves, education, language as 
well as electing their own officials.
    So there is a really heavily decentralized future for 
Ukraine, but it needs to be achieved politically and not at the 
barrel of a gun.
    Mr. Sires. Thank you very much.
    Chairman Royce. We go now to Mr. Dana Rohrabacher of 
California.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman.
    Ambassador Nuland, so what is the bottom line for the cost 
of all of this to the United States?
    Ms. Nuland. As I--I gave some numbers, I believe, in my 
opening----
    Mr. Rohrabacher. Yes, you did.
    Ms. Nuland [continuing]. With regard to Fiscal Year '13 and 
'14, so we are at $187 million, which is about where we have 
been in support for Ukraine over the last 5 years.
    We have increased it by another $50 million in the loan 
guarantee.
    Mr. Rohrabacher. Well, that is just one program. But with 
all of the election observers--that includes the election 
observers and every----
    Ms. Nuland. That includes the U.S. participation in the 
OSCE election observers.
    Mr. Rohrabacher. So it was $187 million?
    Ms. Nuland. $187 million plus $50 million----
    Mr. Rohrabacher. Plus $50 million.
    Ms. Nuland [continuing]. Which was appropriated on April 
1st.
    Mr. Rohrabacher. Okay.
    Ms. Nuland. $18 million from the Defense Budget for support 
for security services and border guards. But it is not that 
much more with the exception of the $50 million than what we 
have been spending in Ukraine over the years.
    Mr. Rohrabacher. Okay. Have we signed on into something 
with World Bank guaranteeing any loans, for example?
    Ms. Nuland. So the--as you know, you have appropriated 
the--you have authorized the $1 billion loan guarantee, which 
scores at $400 million for the Treasury. With regard to the 
World Bank, they are just at the beginning of what they might 
be able to do to support. So I am not aware of any new loans 
that they have executed. I think they are going to wait and see 
how the elections go.
    Mr. Rohrabacher. Okay. So we are--we have spent about $200 
million and we have got $400 million that we have scored for 
the guaranteeing of that loan.
    Ms. Nuland. Which will come back to the U.S. Treasury when 
the loan is paid back, as you know.
    Mr. Rohrabacher. Right. When the loan is paid back.
    Ms. Nuland. With interest.
    Mr. Rohrabacher. Right. Shall we all hold our breath for 
that? So do we have preferential payback then? Does that mean 
that all the other bills that the Ukrainian Government owes, 
they are going to have to pay us that $400 million first?
    Ms. Nuland. Congressman, we will have to get you the 
details on exactly what the terms of this are.
    Mr. Rohrabacher. Yes. Okay.
    Ms. Nuland. I think it is with the Treasury to do that.
    Mr. Rohrabacher. I think that that--we know what the answer 
to that is, but I would be happy to get it officially. Let me 
ask you this. When we were talking about the election--the best 
observed election--Yanukovych, of course, was the one who was 
elected the last time--a very well observed election, I might 
add.
    Matter of fact, Chris Smith was there observing that 
election and gave that election a very big plus. Yanukovych was 
elected so he does represent a significant point of view in 
that country.
    Is there someone from his party who is going to be on the 
ballot?
    Ms. Nuland. In fact, his party, the Party of Regions, is 
fielding four of the 23 candidates who are registered. 
Communists are also there. Every single color of the political 
spectrum in Ukraine and every region is represented among the 
23 candidates. So there is somebody for everybody to vote for.
    Mr. Rohrabacher. So it is better--it is more than just the 
best observed election. It is a legitimate election.
    Ms. Nuland. That is what the OSCE assesses.
    Mr. Rohrabacher. Right. Well, we did have an election. We 
did have a legitimate election before and the elected President 
was removed after we had major street violence and reaction to 
his decision of going with an economic agreement with Russia 
rather than the EU.
    About that street violence that happened that led to this--
Mr. Yanukovych's removal, there were pictures that people--
people were running around with these--that were, we were told, 
were neo-Nazis. Is that--were there neo-Nazis in those effort--
street violence that led to Mr. Yanukovych's removal?
    Ms. Nuland. First of all, the vast majority of those who 
participated on the Maidan were peaceful protestors. If you had 
a chance to see the pictures--many of us visited, including 
many members here--there were mothers and grandmothers and 
veterans and every----
    Mr. Rohrabacher. Yes. Let me note that I have----
    Ms. Nuland. However----
    Mr. Rohrabacher. Before you go on, I saw those pictures as 
well. I also saw a lot of pictures of people throwing fire 
bombs at groups of policemen who were huddled in the--over in a 
corner.
    There were people shooting into the ranks of police. So 
yes, there were mothers with flowers, but there were also very 
dangerous street fighters who were engaged in those 
demonstrations. The question is were there neo-Nazi groups 
involved in that?
    Ms. Nuland. There were--as I said, almost every color of 
Ukraine was represented including some--including some ugly 
colors.
    Mr. Rohrabacher. So the answer is--the answer is yes then.
    Ms. Nuland. But if I could say that with regard to the 
violence, all of those incidents are subject to investigation, 
notably including the deadly sniper incident in February, and 
there is good evidence to believe that there were outside 
agitators involved in that.
    Mr. Rohrabacher. Was there any indication that there were 
guns being involved with the anti-government demonstrators at 
that time?
    Ms. Nuland. There is no question that as the protests 
became more and more virulent, and as the response of 
Yanukovych's police became more and more brutal, the tensions 
and the potential for use of weapons escalated on both sides--
--
    Mr. Rohrabacher. On both sides.
    Ms. Nuland [continuing]. Which was why we were----
    Mr. Rohrabacher. That is correct.
    Ms. Nuland [continuing]. So intent on a political 
settlement in February.
    Mr. Rohrabacher. I have one last question before my time is 
totally up and that is were those--the neo-Nazi groups that we 
are talking about here, which, again, were not dominating this.
    There were very many, very good people, like you say, out 
demonstrating against this deal with Russia. They wanted to go 
with more of a European country than a pro-Russian country.
    But those people who were not the good guys, but were part 
of that effort to push that country in that direction, were any 
of those neo-Nazi groups affiliated with any other Nazi groups 
in other countries?
    Ms. Nuland. Congressman, what I can tell you--I don't know 
what the answer to that specific question with regard to the 
early period is.
    What I can tell you is that in the violence and separatism 
that we have seen in the recent months, we have also seen 
recruiting on the neo-Nazi and fascist sites in Russia for 
volunteers to go participate in the seizing of buildings in 
Eastern Ukraine and the Ukrainians report stopping very large 
numbers of such people at the Ukrainian-Russian borders.
    Mr. Rohrabacher. I am sure. But you haven't seen that--any 
evidence that there are people in Western Europe--neo-Nazi 
groups that were supporting their brothers in Ukraine?
    Ms. Nuland. I don't have any information to corroborate 
that. But I would refer you to the Ukrainians as they 
investigate these incidents of violence.
    Mr. Rohrabacher. Thank you.
    Chairman Royce. Brad, did you want to yield for the moment?
    Okay. We go now to Mr. Ted Deutch of Florida.
    Mr. Deutch. Thank you. Thank you, Mr. Chairman, and thank 
you, Mr. Sherman, for yielding.
    I want to thank you, Mr. Chairman, and Ranking Member Engel 
for your continued focus on the crisis in Ukraine. You have 
acted swiftly and with resolve since Russia's first 
provocations and because of that the world knows where this 
Congress stands.
    Ambassador Nuland, Assistant Secretary Glaser, as you are 
well familiar there are many moving parts to this situation. 
Rightfully, the United States has been in the forefront taking 
aggressive economic action to dissuade the Russian Government 
from any further meddling in the domestic events of another 
country, providing Ukraine with a loan guarantee and non-lethal 
military aid to bolster their ability to withstand subversive 
external pressure.
    And we are working closely with our European allies to 
create a unified front against Russian influence in Ukraine. We 
must sustain this pressure until we are sufficiently reassured 
and can verify that the Russian Government will not continue to 
stir dissent within Ukraine's borders or threaten the 
territorial integrity of any of its neighbors.
    But I want to talk about the way we are working with our 
European allies to achieve that. Ambassador Nuland, you had 
said earlier that sector-based sanctions may be something we 
consider if needed.
    Now, for all of us who have been so involved in Iran's 
sanctions, it is the sector-based sanctions that we know are so 
effective and what I would like you to do is explain, one, what 
those sector-based sanctions will look like and, two, given 
that European trade with Russia is 10 times greater than that 
between the United States and Russia, what do we do to bring 
our European allies firmly on board, especially at a time when 
there are some in Europe--some former government officials who 
were deeply involved in the Russian economy?
    What do we do? What should that look like? When will it be 
necessary and how do we ensure that we can go forward together 
with our European allies?
    Ms. Nuland. Thanks, Congressman, and I would invite 
Assistant Secretary Glaser, who is the sanctions expert, to 
jump in here. But as we develop this sectoral approach, the 
idea here is, as I said, to use a scalpel rather than a hammer, 
to focus primarily on high-tech and other investment where 
Russia needs us far more than we need Russia.
    I don't want to get into too much detail, but to say that 
the approach would also involve taking a sectoral slice across 
a bunch of different sectors at the same time such that the 
pain is shared among sectors of the economy and to help keep 
Europeans together because different ones are vulnerable in 
different sectors.
    But we do think that we can be quite effective. I would 
note that whereas Europe trades 9 percent with Russia, Russia's 
trade is 50 percent based in Europe.
    So they are far more vulnerable and we do believe that they 
are particularly vulnerable in the area of the high-tech 
imports that they need to take their economy to the next stage. 
I don't know if Assistant Secretary Glaser wants to add.
    Mr. Deutch. Mr. Glaser.
    Mr. Glaser. Thank you, Congressman, and thank you--thank 
you for the question. You know, you and I have spoken many, 
many times about strategically applying targeted sanctions. So 
I don't think I am telling you anything that you don't already 
know.
    If you look at the way we have applied targeted measures in 
the past in a strategic way--it has been pursuant to an 
escalation, which, as you say in certain cases, culminated in 
broad targeting of sectors.
    When that happened in the case of Iran, it happened well 
into the escalation and into the strategy and then it also 
happened, if you will recall, in that same summer in the 
context of Europe taking significant action to target virtually 
every bank that the United States was targeting and that is--
all that together is why it was so effective.
    Now, in this case, I understand that we are operating on a 
much more compressed time frame. There is much more urgency 
with respect to acting quickly on that and that is why you see 
us taking similar sorts of measures on a somewhat sort of 
compressed time frame.
    We have started off by targeting individuals. We have 
targeted individuals, which have significant holdings 
throughout their Russian financial economic sector. I think we 
have already significantly weakened it and now we are in 
conversations with our European colleagues on how to, in a very 
smart way, do exactly what you want us to do, which is target 
sectors more broadly.
    Mr. Deutch. I appreciate that. Just in my final seconds, I 
wanted to follow up on something that was in the New York Times 
on Monday. At the end of a report it said that Ukrainian 
security forces stopped the transport of contraband uranium 
that originated in Transnistria.
    It is alarming that any amount of radioactive material 
would be in the hands of non-state actors, both for Ukraine's 
defenses and for regional security and stability. Can you 
comment on that report? We have not seen it widely reported. 
How concerned should we be? Where does this come from?
    Ms. Nuland. Well, it just--it speaks to the lawlessness on 
borders and the fact that we are going to have to continue to 
help the Ukrainians going forward with border security. We are 
involved in supporting them in this incident.
    Mr. Deutch. Right. Thank you, and thank you. I will yield 
back to the chairman. Thank you again, Mr. Sherman. But I--but 
I yield to Mr. Chabot.
    Mr. Chabot. Thank you. I appreciate the chairman yielding.
    Madam Ambassador, let me start out with, first of all, 
relative to Crimea, there seems to be often in the stories that 
we read and the attitude and the statements that are made 
relative to Crimea that it is more or less a fait accompli now.
    It has occurred. Russia won. It has now been annexed. 
Crimea is now part of Russia, which I certainly don't share 
that attitude, and I would like to hear what the administration 
has to say about that.
    It is almost like we are completely focused now on, you 
know, Eastern Ukraine and we have to make sure that Putin 
doesn't do the same thing there he did in Crimea, but Crimea is 
gone, and I am very concerned about that attitude. Could you 
address that, please?
    Ms. Nuland. We are concerned, too, Congressman. That is why 
in the most recent round of sanctions that we did, not the 
round a week ago but 2 weeks ago, we deepened and broadened the 
sanctions on those who have taken up illegal posts in Crimea.
    We sanctioned all of the leaders of the illegal Crimean 
Government. We also sanctioned a major gas entity that had been 
expropriated by Russia and we are continuing to look at more 
targets in Crimea and more targets in Russia associated with 
Crimea and we will do that.
    I would just take this opportunity to say that we are also 
gravely concerned about the deteriorating human rights 
situation inside Crimea where there appears to be a mirroring 
of some of the practices that Russia exercises at home.
    Mr. Chabot. Thank you. I would just urge the administration 
in both their statements and their interactions with Russia 
especially, but with our allies and everybody else not to fall 
into that trap where we just sort of, even without 
acknowledging that it is a fait accompli, and therefore let us 
move on and try to keep them from going even further because I 
do not think that we ought to consider Crimea to be an 
unalterable part of Russia at this point on.
    Let me move on. In your statement, you had quoted President 
Obama, his March 20th statement, which I will quote again here: 
``America's support for our NATO allies is unwavering. We are 
bound together by our profound Article 5 commitment to defend 
one another,'' and that is our NATO allies.
    Now, of course, Ukraine is not a member of NATO and so I 
just want to make sure here, is that unwavering commitment of 
our support or how wavering or unwavering is it for the Ukraine 
since they are not a part of NATO? Although the Clinton 
administration, of course, signed the Budapest Memorandum 
which, after Ukraine gave up their nukes basically--you can 
interpret it different ways but many would interpret it that 
the Brits and us and Russia more or less guaranteed or ensured 
the sovereignty of Ukraine, which has clearly been violated by 
Russia's actions here. Could you comment on just how unwavering 
our commitment to Ukraine is?
    Ms. Nuland. Thanks, Congressman. The President's statement 
referred to our solemn treaty commitment ratified by the Senate 
to mutual defensive NATO allies. As you know, Ukraine is not a 
member of NATO and therefore is not covered by the U.S. 
security guarantee.
    That said, we have had a long and deep 20-year security 
relationship with Ukraine and this Congress has authorized 
significant support for our military-to-military relationship, 
including helping Ukraine deploy with us to Afghanistan, to 
Kosovo.
    We believe that some of the support we have given to the 
Ukrainian military over the years, including miliary education, 
contributed to their refusal to fire on their own people when 
Yanukovych wanted them to.
    And then, as you know, in recent months, we have 
contributed $18 million in non-lethal assistance to Ukrainian 
security forces and to the border guards. As we mentioned, 
border guard--border defense is absolutely essential to keep 
separatists and thugs out of Ukraine.
    Mr. Chabot. Thank you. I have only got about 30 seconds 
left so I will be real quick on this final question. What is 
the administration and our allies doing to counter the Russian 
propaganda in the Ukraine and what is being done by the West 
and by the U.S., in particular, to assist Ukraine in disbursing 
the truth out there, particularly prior to an election?
    We, obviously, don't want to get involved in who wins but 
what are we doing to get the truth out there?
    Ms. Nuland. We have a very sizeable public diplomacy 
program in Ukraine. We also have mounted in the last couple of 
months, under Under Secretary for Public Diplomacy Rick 
Stengel's authority, an all-of-government effort to counteract 
Putin's lies. It includes our ``United for Ukraine'' Twitter 
campaign, which now has totally outstripped government.
    Only 5 percent of the content is government. It is 95 
percent now a public conversation. We put out a regular product 
twice a week to all of our Embassies, to all of our contacts in 
the media around the world and particularly in Europe, 
counteracting falsehoods and putting out truths.
    We have recently increased the support we give to the 
Ukrainian Government for its own media center. But as we talked 
about at the beginning of the hearing, among the difficulties 
we face is this massive Russian propaganda campaign that 
includes separatists dismantling TV towers in the east of 
Ukraine to ensure that only Russian programming gets through. 
But also that there are no journalistic standards, including 
the standard of truth in what is being pumped out.
    So it is very important and we are very grateful that you 
are continuing to look at how to get us back to the kinds of 
tools that we used to have for this kind of--this kind of an 
effort.
    Mr. Chabot. Thank you. Yield back.
    Mr. Rohrabacher. Yes. Mr. Brad Sherman.
    Mr. Sherman. One of the thorniest issues in foreign policy 
is self-determination versus territorial integrity. We 
supported the independence of South Sudan and accepted the 
independence of Eritrea.
    In Europe, we supported the independence of each of the 
republics of the Union of Soviet Socialist Republics. We 
supported the independence of each of the republics of the 
Federation of Yugoslavia. We created the independence of 
Kosovo.
    On the other hand, we oppose the independence of Northern 
Kosovo. We oppose the independence of the Krajina region of 
Croatia, which was inhabited by Serbs. We oppose the 
independence of Abkhazia in South Ossetia and we, of course, 
oppose the independence or any other action with Crimea.
    Seems kind of haphazard. In Moscow, they note, that 
although I have identified, like, 30 different decisions we 
have had to make in Europe that seem haphazard every single one 
of those decisions is the anti-Moscow decision.
    What are our policies? When are we in favor of territorial 
integrity? When are we in favor of self-determination? When are 
we cheering on the people of South Sudan or Croatia? When are 
we opposed--why do we oppose the independence of Northern 
Kosovo? Is there--is it haphazard, Ambassador?
    Ms. Nuland. Congressman, thanks for the opportunity to 
remind, that in keeping with the U.N. Charter, the United 
States and our European allies and most civilized nations on 
the planet oppose the changing of borders by force, and that is 
what happened in Crimea or that was the effort in Crimea. With 
regard to Kosovo----
    Mr. Sherman. Are you saying that Northern Kosovo is not--
well, that Kosovo was in force, South Sudan was in force?
    Ms. Nuland. Kosovo was, first and foremost, a victim of a 
marauding military operation of ethnic cleansing by Milosevic, 
which, as you know, the international community spent more than 
a decade trying to pacify----
    Mr. Sherman. Well, there was certainly force in the----
    Ms. Nuland [continuing]. And the decision on independence 
was the result of a referendum of the people.
    Mr. Sherman. The independence of several of the Yugoslav 
republics was achieved by force. There are--it is not like 
every time we have supported independence it was some clean, 
bloodless operation.
    But I will agree with you the people of Kosovo had--
survived some terrible onslaughts that caused for change. Let 
me shift to another issue. Has the Right Sector militia been 
disarmed and has Kiev tried very hard to disarm them?
    Ms. Nuland. The Government of Ukraine has made a massive 
effort to disarm the Pravy Sector--to lock up those leaders who 
have been found to use violence. They are also putting them on 
trial. They have also offered a weapons buy-back program and 
they are working very intensively in the----
    Mr. Sherman. How successful has that effort been?
    Ms. Nuland. They have made significant progress and there 
is more progress to make.
    Mr. Sherman. The Language Law of 2012 in the Ukraine gave 
special treatment or security to those who speak Russian. There 
was an attempt to repeal that law. I believe that repeal was 
vetoed.
    Has the--have the leaders of the Ukraine committed to their 
own people or committed to the world that they are willing to 
keep that law in force or are we in the United States in a 
situation where we may suffer costs and disruption and danger 
because Kiev wants to repeal a language law?
    Ms. Nuland. Well, as you said, Congressman, that effort to 
repeal the law was vetoed by Acting President Turchynov. The 
Ukrainian Constitutional Commission and the current government 
have made broad statements to the effect that language rights 
will be protected in the constitutional reform process.
    You know that Ukraine currently has one of the most liberal 
language regimes in the world where, if you have 10 percent 
local population they can study, they can have local services 
in their local language.
    So the expectation is that that will be continued, but it 
is a matter for the Ukrainian people to decide----
    Mr. Sherman. Let me----
    Ms. Nuland [continuing]. In the constitutional reform 
process.
    Mr. Sherman. Will you squeeze in one more question? Some 
have proposed that we export natural gas to the Ukraine. The 
Ukraines can't afford to buy that natural gas for $10 a unit 
from Russia.
    The Japanese bid $15 or $16 per unit for natural gas that 
they purchase on the world market, which means anybody 
exporting natural gas from the United States would sell it to 
the--for the world market price.
    Do you know of a pot of money that would allow us to 
subsidize Ukrainian natural gas purchases that came from us and 
from our private companies? Do you got tens of billions of 
dollars lying around to do that?
    Ms. Nuland. Congressman, it is not--it is not actually 
going to go that way. What we are working on to help Ukraine 
with its energy independence are a number of things. The 
fastest short-term step is to help with reverse flows of gas 
from the European market into Ukraine.
    We have worked intensively with the EU, with Slovakia, with 
Ukraine to get that reverse flow going. It is also coming now 
from Poland, from Hungary.
    Mr. Sherman. And but----
    Ms. Nuland. But over the longer term it goes to Ukraine's 
own resources----
    Mr. Sherman. Ambassador, you have--here in Congress we are 
all talking about exporting U.S. gas to the Ukraine. So that 
was the question, but we will have to go on to someone else.
    Mr. Rohrabacher. Thank you very much. Next we have Judge 
Poe.
    Mr. Poe. I thank the chairman. Thank you for being here. I 
share my friend's frustration with U.S. foreign policy because 
even though I thought he asked the question very well about 
when do we support self-determination and when do we support a 
current government, sorry, I didn't get an answer.
    I don't know what our policy is. It seems to me like a 
decision is made at the time and I am not sure whose interest 
it is made in.
    It seems to me that the Russians--and I was in Ukraine with 
some other Members of Congress and saw first hand the people at 
Maidan and also saw the memorial to all that were killed by the 
old government--the civilians.
    The Russians believe in creating a crisis in somebody 
else's country, unrest--political unrest--and then the Russians 
want to go in militarily or some other way and solve the 
unrest.
    It seems like they did that in Georgia. The world got all 
upset about the Russians taking one-third of the Georgian 
country, but the Russian tanks are still there. I saw them not 
too long ago. And now they went into Crimea. The world said 
that is not nice and they are still there.
    It looks to me like they are moving into the eastern part 
of Ukraine. I think we have a map, if we could show this--
members also have their own personal copy, if we can put this 
map up, let me just know when you are ready--of what the 
Russian troops look like on the Ukrainian border.
    It is a little scary if you live on that side of Ukraine, 
and I met with other countries--Moldova--in Parliament 
yesterday. They all want to talk about we are next--we think 
the Russians are taking us next, and other countries are very 
concerned that the Russian mode of operation is to cause a 
crisis, go in, solve the crisis, intimidate countries. And I 
think that is what they want to do with Ukraine--intimidate 
them into ceding some of that land.
    But we shall see. Is the purpose of the sanctions--American 
sanctions--to stop the Russians where they are? Or is the 
purpose of the American sanctions to say you not only can't go 
any further, you have got to give Crimea back? Which of those 
two? It has got to be one or the other.
    Ms. Nuland. The latter, Congressman.
    Mr. Poe. So we want them out of Crimea?
    Ms. Nuland. We do not recognize their occupation of Crimea 
and they need to roll back, and they need to get their 40,000 
troops off Ukraine's borders as well. I have talked, as you 
just did, about the arsonist setting the fire and then coming 
in dressed as the fireman----
    Mr. Poe. Oh, yes.
    Ms. Nuland [continuing]. And then occupying the building.
    Mr. Poe. And the Russian special forces going into Georgia 
dressed like Georgians, if you will, and then they come in to 
Crimea and now in Eastern Europe and they cause the 
hostilities. There are Russian special forces causing these 
disturbances, according to some reports. Do you believe those 
reports, Ambassador?
    Ms. Nuland. We have high confidence, I can say, in a 
setting like this of Russian involvement in the planning, 
financing, and organizing of these efforts to destabilize 
Eastern Ukraine, including the presence of Russian agents.
    Mr. Poe. I would say that the purpose of sanctions--I don't 
think it worked, in all fairness. I don't think they stopped 
Russians from doing anything.
    But if we impose further sanctions, I hope we are careful 
that we don't punish American companies. We punish--if we are 
punishing somebody, we punish the Russian economy, if you will, 
and are careful about what we do to American companies.
    I think, you know, as far as the sanctions go I think, to 
coin a phrase, the proof is in the Putin and in this case it 
hasn't seemed to stop him at all in what he wants to do.
    Here is a map. You have, I think, a small one there in 
front of you. I hope somebody gave you the small one. If you 
can't see it then we will come back to it before my 5 minutes 
is up. Supply the witnesses with a smaller map. It is not a 
trick question.
    I just want you to look at it, see if you agree that this 
might be the Russian mode of operation and where the Russians 
are on Eastern Ukraine.
    Georgia, I want to go back to Georgia--their security 
operation, they want to be in NATO. Does the United States--on 
the upcoming NATO conference--do we support offering Georgia a 
MAP? We support that?
    Ms. Nuland. We have long believed that Georgia has met the 
criteria for MAP. The concern is that we have to have 28 votes 
in the alliance in order to grant them MAP and we don't have 
them at the moment.
    Mr. Poe. Okay. I do believe we ought to help Europe 
economically, and it is one way we need to--we can help this 
crisis is if we give the Europeans--not just Ukraine but 
Europeans an alternative to Gazprom. I was in Ukraine when the 
Russians turned the gas off. It was cold. It was dark. They 
need an alternative.
    We have got an abundance of both natural gas and crude oil. 
I would hope the administration would expedite the sale to 
Europe of those products to give competition to ease the 
tensions in the area.
    I am almost out of time. If I could ask one more question, 
Mr. Chairman. Lok at the map that I just showed you. If I were 
Ukrainian I would be a little nervous about all the Russian 
movement from Russia up to the border.
    Do you think that is a fair analysis of what the Russians 
have done toward Ukraine? Either one or both of you. That will 
be my last question.
    Ms. Nuland. We do believe that this deployment of troops 
ringing Ukraine's border is designed to be intimidational, yes.
    Mr. Poe. And they are still there?
    Ms. Nuland. They are. They have been on high alert for some 
3 months. It must be extremely expensive.
    Mr. Poe. All right. Thank you both. I yield back, Mr. 
Chairman.
    Chairman Royce. Thank you, sir. The chair will now 
recognize Mr. Keating from Massachusetts.
    Mr. Keating. Thank you, Mr. Chairman. You mentioned briefly 
about the human rights issues in Crimea and I am concerned 
particularly with the Tatar population that is there.
    In response to peaceful protests, Russian authorities have 
reportedly beaten some Tatar leaders, forced others into exile. 
Russian authorities have also threatened to shut down Tatar 
communities' Parliament.
    What is your assessment, particularly of the Tatar 
population in Crimea, and do you expect any tensions in that 
regard to even grow when we get around to May 18th and the 70th 
anniversary of the Soviet Union's forced deportation of Crimean 
Tatars?
    Ms. Nuland. Congressman, we are extremely concerned about 
the human rights situation for all Crimeans, but notably for 
Tatars. I think you know what we know, which is, first and 
foremost, that the Crimean Tatar leader himself, Mustafa 
Dzhemilev, has been banned from Crimea until 2019.
    We had a Euromaidan Crimean activist abducted in Sevastopol 
and tortured. We have had more than 7,000 IDPs come out of--
come out of Crimea in this period.
    The local Crimeans are being told that they have to vacate 
their property, give up their land and, as you say, the 70th 
anniversary is coming. So our grave concern is that Russia is 
cloning its local human rights practices in Crimea now.
    Mr. Keating. There is one thing I think that is important 
to underscore to those from the outside looking at today's 
hearing and that is the fact that when we are talking about our 
actions and we are talking about diplomatic solutions, it is 
important to really underscore the fact that this isn't about 
Russia and the United States determining the future of Ukraine, 
but the Ukraines--the Ukrainian people themselves.
    What can we do to continue to get that message across to 
the rest of the world? You made it clear, I think, here to us 
that that is important, but I think it is an important message 
to underscore.
    Ms. Nuland. Absolutely, Congressman, and that speaks, first 
and foremost, to ensuring that this election on May 25th, where 
every eligible Ukrainian voter--north, south, east or west--
gets a chance to express their will about their future from a 
slate of 23 candidates, takes place.
    But it also speaks to the great care that we are taking in 
our diplomatic conversations with Europe, with Russia, with the 
OSCE. Nothing about Ukraine without Ukraine. They must be part 
of all of this.
    Mr. Keating. Great. An important point, and I yield back, 
Mr. Chairman.
    Mr. Connolly. Would the gentleman yield?
    Mr. Keating. Yes. The gentleman yields to----
    Mr. Connolly. I thank the gentleman, and welcome to both of 
you. Mr. Glaser, you particularly enumerated, as did Ambassador 
Nuland, the economic consequences to Russia, and they are 
growing. To what extent do we believe that Putin is feeling 
that pressure from his own business community and is cognizant 
of the macroeconomic consequences that can ensue, even absent 
sanctions just because of their behavior--his own behavior?
    Ms. Nuland. Congressman, one of the parlor games that I 
have found it unlucky to play is to try to get inside the head 
of President Putin and speculate as to what he knows. But the 
facts and the economic statistics are--could only smack any 
sane person in the head. So----
    Mr. Connolly. Do you think he calculated that and made a 
calculated risk when he did what he did in Crimea nonetheless? 
I mean, you just said, ``sane person.'' Certainly, you don't 
think Mr. Putin is something other than sane, do you?
    Ms. Nuland. I didn't mean to make any calculation with 
regard to his mental state. But I do believe that----
    Mr. Connolly. Do you want to speculate?
    Ms. Nuland. But I do believe that the degree to which the 
Russian economy is integrated now into the global economy, 
which is a different situation than the one that he grew up 
with, causes vulnerabilities that may not be well understood by 
folks who don't work in the business sector day in and day out.
    Mr. Connolly. Yes. And let me just ask one more question 
real quickly. I want to go back to the whole question of our 
European allies.
    There have been some, both in the media and here in 
Congress, who kind of look at our State Department, our 
approach on possible sanctions--coordinated sanctions as a bit 
of a feckless enterprise, given the reluctance of the 
Europeans, frankly, to do anything tough, and perhaps we 
haven't been all that tough on them to get tough. I wonder if 
you would comment on that.
    Mr. Glaser. I am happy to try to take that question, 
Congressman. I think that we have been quite tough to date and 
I think that things are only going to get tougher and tougher 
for the Russians if the situation continues to escalate. I 
think the President has made that quite clear.
    Mr. Connolly. Mr. Glaser, the question, though, was how 
tough are the Europeans willing to be and how tough are we 
being on them to be so?
    Mr. Glaser. Well, I think last week President Obama and 
Chairman Merkel stood--Chancellor Merkel stood up together and 
made quite clear that if the May 25th elections were disrupted 
then the United States and Europe were going to take 
significant actions and President Obama made quite clear that 
very well could include sectoral sanctions.
    And on the heels of that, we have a very senior group--
Under Secretary Cohen, Ambassador Fried--in Europe right now 
working with the Europeans to determine exactly what that would 
be.
    Europe works sometimes on different processes than we have. 
We have certain advantages in the way our sanctions program 
works. It allows us to be a bit faster and sometimes we are a 
bit stronger and I don't think we should be shy about that.
    I think the key is that we are both moving in the same 
direction, creating the market uncertainties and I think we are 
doing that and I very much hope that when we--that if things 
don't go as we want them to go with respect to the elections, 
we are going to be prepared to take very, very significant 
measures that will have significant impacts on the Russian 
economy and that would include the Europeans as well.
    Ms. Nuland. I would just add that in every single 
diplomatic conversation between any European and any American 
at any level over the last 6 weeks the issue of sanctions has 
been topics one, two and three along with our efforts to work 
with Europe to de-escalate the conflict.
    Chairman Royce. We are going to go to Mr. Ron----
    Mr. Connolly. I thank my friend.
    Chairman Royce [continuing]. DeSantis from Florida.
    Mr. Connolly. Yielding.
    Mr. DeSantis. Thank you, Mr. Chairman. Ambassador Nuland, 
does the administration assess that the actions of Russia may 
require us to relook at our force posture in Europe and our 
requirements for future deployments, exercises and training in 
the region?
    Ms. Nuland. Congressman, I would say that the NATO 
reassurance mission that you are seeing begin to deploy out and 
which I spoke about at the beginning already constitutes a 
change in the way we are postured, that reassurance in Article 
5 have come back to the forefront of the alliance's business.
    With regard to the medium and the long-term, I think it 
depends on what we see from Russia and whether we are able to 
de-escalate this. As you know, the current mission, which has 
land, air and sea reassurance and visible exercising, goes 
through the end of 2014.
    When we have our NATO summit in Wales in September, we will 
evaluate just the question that you have, whether more needs to 
be done and where and how.
    Mr. DeSantis. So at this time there is no either commitment 
or plan to have a presence on a more permanent basis in some of 
the region?
    Ms. Nuland. I think that we are open to doing what is--what 
is necessary as we see the situation evolve. But I would simply 
say that it has already caused the Pentagon to look at plans 
that it had about how to posture globally and they are working 
on that now.
    Mr. DeSantis. And some of our allies--our NATO allies like 
Latvia, Estonia, Lithuania, Poland--what have they, if 
anything, asked of us in this regard?
    Ms. Nuland. We have fulfilled--the U.S. has fulfilled all 
of the asks that we have had, which were primarily for 
increased air policing and for ground troops. As I said at the 
outset, we have 750 U.S. troops now, including deployments in 
all of the Baltic States, and that has been very reassuring.
    They have also wanted the high-level visits that they have 
had from Members of Congress, from the Vice President, from 
others. We will continue to look at what more might be 
appropriate.
    As you know, we opened a new base in Estonia or we 
supported use of an Estonian base for NATO missions. So we will 
keep looking at that.
    Mr. DeSantis. Now, in light of what has happened with 
Ukraine, Putin has taken this position that well, look, all 
these people are Russians--I am actually saving them by 
violating Ukrainian sovereignty, and that same argument could 
obviously be applied to Latvia, Estonia, and some of our NATO 
allies because they have ethnic Russian populations.
    And so if that kind of pretext were used in some place like 
Latvia, you would--the administration's position would be that 
Article 5 of NATO would, clearly, be invoked?
    Ms. Nuland. Absolutely. We have a solemn treaty commitment 
to our NATO allies.
    Mr. DeSantis. And how do you--and maybe this is just news 
reports, but there have been some reports coming out of Latvia 
of--even though we have assured them that we stand shoulder to 
shoulder, there is a lot of fear about what would happen and 
whether we would be willing, if push came to shove, to actually 
stand with them.
    So I am wondering--is that something that you have received 
from folks in Latvia or is that kind of the press puffing this 
up?
    Ms. Nuland. No. They are very concerned. They are now 
front-line states, a word I never wanted to use again in my 
career, but we have to use now. So that is why the physical 
reassurance of having American ground troops, having American 
planes in the air and now working with other allies to also 
join us in the Baltic states, in Poland, in Romania, in 
Bulgaria is so important.
    Mr. DeSantis. So, but is the fear--of course, there is fear 
from--about Russia may do, but is there--is that fear amplified 
because of perhaps not knowing what we may do or do you think 
that they are satisfied that we would be there to support them?
    Ms. Nuland. Again, I think the reassurance mission and the 
arrival particularly of ground troops has gone a long way 
toward making it clear that we intend to honor our commitments. 
But we have to continue to talk to them and evaluate what they 
need.
    Mr. DeSantis. Thank you for that, and I yield back the 
balance of my time.
    Chairman Royce. Thank you. We go now to Mr. David Cicilline 
of Rhode Island.
    Mr. Cicilline. Thank you, Mr. Chairman, and I thank you for 
this hearing and also for leading our delegation recently to 
Ukraine. I thank Ambassador Nuland and Secretary Glaser for 
being here.
    I think it is very clear and I hope this hearing reinforces 
the notion that there are tremendous consequences, obviously, 
for the Ukrainian people for what is currently happening there, 
but also for the region and, ultimately, significant 
geopolitical consequences for the world, including the national 
security of our own country.
    So we--I think we are--our assessment is the same as yours, 
that there was significant evidence of Russia's involvement in 
planning, organizing and inciting events inside of Ukraine and 
we were also, I think, struck by the overwhelming Ukrainian 
support for a unified democratic country and that includes in 
Crimea.
    And I think, you know, to build on a question earlier about 
our ability to kind of support a response to this incredibly 
sophisticated, incredibly well-financed Russian propaganda 
machine that includes taking over television stations and 
denying access to Ukrainian television so they are receiving 
all of their information from Russian television.
    And I was very happy to hear the efforts that you described 
and whatever else you think we can do in the Congress to 
support that. I think it is critical. I know it is an important 
issue the chairman raised, but we saw lots of evidence of that.
    Second thing I want to mention is there was a recent report 
in the Sunday New York Times that began to reveal some of the 
kind of wealth that President Putin has accumulated and 
questioned some of the ways in which that has happened, and it 
would be useful, I think, for the world to understand more 
about that.
    And to the extent that the State Department and others can 
share that information I think the Russian people have a right 
to know that. Certainly, the Ukrainian people have a right to 
know that.
    What I want to ask you about is specifically, Ambassador 
Nuland, is the NATO and European response. While your fourth 
pillar spoke about the importance of kind of reassuring our 
NATO allies and, obviously, that is critical, but I also hope 
it is an opportunity for our NATO partners to reexamine their 
own commitments to NATO and to sort of understand that they 
have maybe, in almost every instance but I think four 
countries, not met the requirements, and while this is of grave 
concern to us because of the geopolitical implications, it is 
on the front door of many of our European allies, and so I 
would like you to speak to that.
    Do they understand that? Are they beginning to use this as 
an opportunity to kind of reawaken the importance of NATO and 
recommit to its role? And then, secondly, if you would just 
speak to the human rights violations in Crimea to the extent 
that you can. I think we should know as much about that as we 
can. And I want to also mention before I forget to thank you 
for your staff that were a part of accommodating our visit. It 
was a very productive visit and the Embassy staff there were 
outstanding.
    Ms. Nuland. Thank you, Congressman. We are very proud of 
our Embassy in Kiev led by Ambassador Pyatt. First, with regard 
to the new reality that NATO cannot simply be an exporter of 
security beyond its space, as we had been focusing on 
throughout the past 20 years, but that Article 5 is back as an 
area of primary focus for the alliance, I think it has been a 
wake-up call for all of us and if, as you saw when the 
President was in Europe in March, and I think you will see when 
he goes back to Europe in June, he is availing himself of every 
opportunity he has with European leaders to say it is time now 
to reverse the slide in European defense spending.
    He certainly raised that with Chancellor Merkel. He will 
raise it with everybody else, and we are looking for each ally 
to do their part going forward. And, frankly, this reassurance 
mission is not cheap either so people are having to find budget 
and find capability.
    With regard to the human rights abuses in Crimea, I don't 
know if you were in the room when I answered Congressman 
Keating's question, but I went through some of what we are 
seeing--first and foremost, the Crimean leader himself being 
blocked from returning to Crimea until 2019, 7,200 IDPs, mostly 
Crimean Tatars, having fled from the Crimean Peninsula, 
concerns that local authorities have now announced the Crimean 
Tatars are going to have to vacate their property, give up 
their land, particularly if they refuse to take Russian 
citizenship.
    So very, very concerned now that the human rights standards 
of Russia have migrated to Crimea.
    Mr. Cicilline. And just if I could ask one final question. 
I think the chairman mentioned this--from everyone that we 
spoke to, they all see the Presidential elections on May 25th 
as a very important turning point and all of the efforts of the 
Russians and particularly President Putin to destabilize 
Ukraine to try to prevent those elections from happening as a 
key strategy of the sort of aggressive--aggression plan.
    Are there additional things we can be doing or encouraging 
our European partners to do to make sure those elections happen 
and that they are free and fair and that the Ukrainian people 
get to decide who their democratically elected President will 
be?
    Ms. Nuland. Well, as we have been saying, you are 
absolutely right. This is the opportunity. If you really care 
what the people of the East think, let them vote and let them 
vote for one of these 23 candidates. Let them express 
themselves politically.
    So this speaks to two pieces of the strategy. One is all 
the effort that we and the Europeans are putting into the 
strongest possible OSCE ODIHR monitoring mission in the 
transatlantic space ever and the $11 million the U.S. has given 
to help ensure free, fair elections and training.
    The second piece is what we are talking about in terms of 
the President's press conference with Chancellor Merkel where 
he said efforts by Russia to destabilize or prevent these 
elections from happening will result in sectoral sanctions.
    That is why we are working so hard now to prepare these 
sanctions so that that stick is visible and is real and is well 
understood, because we all have to let the Ukrainian people 
have their say.
    Mr. Cicilline. Great. Thank you. Thank you, Mr. Chairman. I 
yield back.
    Chairman Royce. Thank you, Mr. Cicilline. We now go to Mr. 
Ted Yoho of Florida.
    Mr. Yoho. Thank you, Mr. Chairman. Thank you both for being 
here. I want to touch on Crimea again because you were talking 
about it and it was one of my questions and you answered most 
of it. What is the atmosphere and environment of the pro-
Russian people in Crimea?
    You just answered about the human rights violations. What 
are you seeing over there? Are they--do they--are they on edge? 
Do you see the country stabilizing? It doesn't sound like it, 
and are they accepting the separation?
    Ms. Nuland. You are talking about how do ethnic Russians in 
Crimea feel about what has happened?
    Mr. Yoho. Yes, ma'am.
    Ms. Nuland. I don't think it is a secret that they are not 
sad about what is happening, but there is a great amount of 
instability and lack of confidence in what comes next, 
including whether they are going to get the enormous investment 
that Russia has promised in their economy.
    Mr. Yoho. All right. Are you seeing a functioning 
government there with the people they have elected?
    Ms. Nuland. Frankly, I am not going to take that one 
because I haven't looked at it very carefully.
    Mr. Yoho. Okay. I want to ask you both about the $1 billion 
loan guarantee that we voted here on, which I voted against, 
but I didn't get it recorded.
    Have we given guaranteed loan guarantees to Ukraine before?
    Ms. Nuland. It is conceivable that we did a facility 
similar to this in the '90s. I will have to--we will have to 
check.
    Mr. Yoho. Okay. I am going to submit that and I would like 
an answer on that. And the reason I bring that up is after that 
vote we had, somebody came to visit our office and they thanked 
me for my vote and I told them I had voted against it and he 
goes, ``I know you did, but we realize that is a gift to the 
Ukrainian people that we will never pay back,'' and that kind 
of bothered me and I shared that with some other Congressmen 
and they said they had no idea of that.
    So I want to check into that. If we are going to help out a 
country, I would like to get the money back, especially in 
these tough economic times.
    You had also brought up working with Russia in Syria and 
the work that we have with them--you see that going forward 
with the destruction of the chemical weapons. Seems like we 
have done a pretty good job of getting most of those. Do you 
see that continuing and Russia working with us on that?
    Ms. Nuland. Well, as you know, our cooperation with Russia 
on Syria has been mixed. But in the area of chemical weapons, 
we have largely worked fine together. We have now pulled, I 
think, 92 percent of the chemical weapons out. We have a final 
8 percent.
    Secretary Kerry, as you know, has had probably three phone 
calls with Foreign Minister Lavrov over the last 2 to 3 weeks 
to try to concert U.S. and Russian efforts together.
    Mr. Yoho. Okay. I just want to make sure that was going 
that way and I hope that continues. And what about future space 
flights and returning our astronauts? Because that one person 
said that we could use a trampoline and, you know, those kind 
of working relationships--do you see those continuing?
    Ms. Nuland. That aspect of our space relationship is 
expected to continue, yes.
    Mr. Yoho. All right. And then----
    Ms. Nuland. Because it benefits both Russia and the United 
States.
    Mr. Yoho. Okay. And then you were talking about helping 
Ukraine secure its borders and the amount of money that we have 
given--I think you said $187 million, plus $50 million, plus 
another $18 million. And you said--had alluded that we had 
given them approximately $750 million over the last 5 years. 
You said roughly $180--$150 to $180 million a year.
    Yet the reports I have read say that the Ukrainian 
Government was wrought with corruption. There were human rights 
abuses, and I even heard reports of human trafficking.
    If they had a functioning government now, to go in there 
now, what is going to make the dynamics different that they are 
going to secure the border and do those things that we wish 
them to do with the money that we are lending them or giving 
them? Not lending, giving.
    Ms. Nuland. Well, first of all----
    Mr. Yoho. Hard-working American taxpayers' money.
    Ms. Nuland. Right. The vast majority of money we have given 
to Ukraine over these years has not gone to the government. It 
has gone to support independent efforts and to support the NGO 
sector and to support Chernobyl and those kinds of thing.
    But going forward, among the things that the transitional 
government has already gotten through is the first real anti-
corruption legislation that we have seen in Ukraine through all 
of these years.
    So as part of the IMF program preparation, they supported 
broad public procurement, transparency legislation, changes in 
the way energy is dealt with, the agricultural sector, a lot of 
these sectors that have been rife with corruption. Now, 
granted, these are setting a legislative bar and they now have 
to be implemented.
    But it was precisely fighting corruption that was one of 
the main motivators for the Maidan movement in the first place. 
So the expectation is that there will have to be, whoever is 
elected, broad implementation now to clean up Ukraine.
    Mr. Yoho. Thank you for your answers. I yield back.
    Chairman Royce. Thank you, Mr. Yoho. We now go to Dr. Ami 
Bera of California.
    Mr. Bera. Thank you, Mr. Chairman, and thank you, 
Ambassador Nuland and Mr. Glaser.
    You touched on the propaganda machine that is coming out of 
Russia and Moscow and the control of media and information, 
which, if we look back at history, is critical and particularly 
history in this part of Eastern Europe.
    Going back to World War II, going back to the Cold War, one 
mechanism to control the masses and one mechanism to get people 
fighting against each other was that propaganda machine and 
that control of the free flow of information.
    I was glad to hear that we are helping the Ukrainian people 
use social media. The Twitter account was United Ukraine--the 
hashtag. So what are some other mechanisms that we are doing to 
help the Ukrainian people, empower them and get access to 
credible information?
    Ms. Nuland. Well, as you mentioned a couple of them. So 
putting forward our own positive information, helping them to 
get information translated, not just in Ukrainian, but in 
Russian out to counteract all of this.
    We are supporting the government's media center so that 
they can get positive decisions on decentralization and 
constitutional reform out in Russian, in Ukrainian, in English 
as quickly as possible.
    We are also supporting independent media and particularly 
digital media because that is harder to take down. We support 
digital media in Russia and in Ukraine and that was very 
effective during the Maidan period in getting instant 
communications.
    But as I said, at the beginning it is very difficult an 
environment where Russia is taking down the infrastructure.
    Mr. Bera. Right, and so a lot of that infrastructure may 
not have existed in the first place, but in terms of cell phone 
capability and so forth and using hand-held devices, have they 
taken that infrastructure down as well?
    Ms. Nuland. Well, it is primarily the TV capacity, which is 
where the vast majority of Eastern Ukrainians get their--get 
their news. So that has been the problem.
    But the government, in its operations to liberate entities, 
has put a priority on liberating TV towers and they did get two 
back just in the last week. But, as you know, when truth is 
optional, it is difficult. So our truth and their truth is what 
we need to get out.
    Mr. Bera. So we certainly, under Chairman Royce's 
leadership, you know, are very supportive of increasing our 
ability--you know, Radio Free Europe and other capabilities, to 
get information out and so forth.
    The other thing that I find disturbing, you know, a month 
ago, you know, again, on this kind of propaganda and turning 
people against each other, I found the anti-Semitic fliers that 
were distributed incredibly reprehensible and very worrisome, 
given the history.
    Some of the worst tragedies of the Holocaust occurred in 
Ukraine and to, you know, really look at some of these fliers 
and they very much are reminiscent. You know, asking members of 
a large and vibrant Ukrainian Jewish community to register or 
face deportation, you know, just rings of some trends that are 
worrisome.
    I am glad that the administration and Secretary Kerry came 
out very strongly against these, and while we don't know where 
they came from, it is actions like that that I find worrisome.
    Have we seen other trends against, you know, not just the 
Ukrainian Jewish population, but many folks in my community 
fled Russia, fled Ukraine in search of religious freedoms and 
settled in the Sacramento area. Are we seeing other forms of 
propaganda or hate?
    Ms. Nuland. We are, not just in Crimea, against all 
minority communities. I can give you some things here. On April 
22nd, the Holocaust Memorial in Sevastopol was sprayed with a 
red hammer and sickle. The Slovyansk TV tower that was taken 
over began broadcasting anti-Semitic programming.
    We have had Roma fleeing particularly from Slovyansk, but 
other parts of Eastern Ukraine under threats of intimidation. 
There have been death threats against the chief rabbi of 
Crimea, who has now fled.
    Pro-Russian thugs kidnapped priests of the Ukrainian Greek 
Catholic Church in Crimea, interrogated them. So it is bad. It 
is bad.
    Mr. Bera. So just in the few remaining moments, given the 
history and some of the tragedy and atrocities that have taken 
place in Ukraine during the Holocaust, you know, we have to be 
very vigilant in standing with this and, you know, I think on 
behalf of this entire body we find those acts reprehensible and 
unacceptable.
    Ms. Nuland. As do we.
    Chairman Royce. We go now to Mr. Adam Kinzinger of 
Illinois.
    Mr. Kinzinger. Thank you, Mr. Chairman, and thank you both 
for being here and for serving your country in such a capacity. 
I apologize I was not here for most of the hearing so I hope I 
don't touch on questions that were already asked.
    I want to stress a very important thing that I think gets 
lost in this and that is my concern of this idea that we are 
not hearing much of a discussion about Crimea anymore and it is 
almost a feeling that Crimea is just going to go to Russia, and 
I understand the difficulties that we are dealing with and the 
nature of this whole situation.
    But I would just remind everybody in the--about the 
situation in Ukraine that an agreement was signed by these 
countries to respect the territorial integrity of a country 
that is now being torn apart by a nation like Russia and this 
is something that is very concerning to me, as I know it is 
very concerning to you all.
    I would like to stress what was said earlier about the 
support for Radio Free Europe. I think that is also very 
important and I hope in Congress we consider that when we are 
dealing with our budget priorities.
    I also would like to mention just the issue of Georgia and 
what has been going on there and put a plug in for NATO 
enlargement. I think when we deal with the membership action 
plan for Georgia as NATO comes together, I hope they will 
consider putting Georgia in that.
    I don't think Georgia is asking for, you know, Article 5 
protection, but at least to get them on the track of 
understanding that America stands with its friends.
    What I would like to actually really touch on and hopefully 
I won't take all 5 minutes, in 2011, France agreed to sell 
Russia two amphibious assault warships. It was a deal worth 
about $1.5 billion.
    In fact, the Russians said that they needed this capacity 
because, quote--I guess, kind of quote, in the war in Georgia 
they were unable to control the Black Sea like they really 
wanted to.
    So they signed this deal with the French to buy these ships 
called the Mistrals and it is the first-ever sale of a 
significant offensive military capability by a NATO member to 
Russia.
    The first of these ships is scheduled to be delivered at 
the end of this year. In fact, I believe that Russian Marines 
are going to be coming to France to, in fact, train on these in 
the middle of this time, which is actually kind of shocking to 
me.
    In light of the U.S. decision to suspend exports that could 
strengthen the Russian military, does the U.S. believe that 
France should or will proceed with the delivery of these 
assault ships?
    Ms. Nuland. Congressman, we have regularly and consistently 
expressed our concerns about this sale even before we had the 
latest Russian actions and we will continue to do so.
    Mr. Kinzinger. Okay. I think it is important just to 
mention on that that, again, at a time when we are looking at 
what is happening, I would hope the French--I understand the 
economic pressure and I am not here to bash the French.
    But I think this is a time when the French could stop that 
sale from happening and send a very strong message to the 
Russians and, in fact, I intend to pursue this issue and 
continue to bring it to the attention of the American people, 
the administration, everyone else. So thank you for your 
support on that.
    Mr. Chairman, I don't have a whole lot else. I am sure much 
of the--many of the issues were touched so I would like to 
yield back the remaining 2 minutes.
    Chairman Royce. We thank the gentleman from Illinois and we 
go to Lois Frankel of Florida.
    Ms. Frankel. Thank you, Mr. Chair, and I was very honored 
to travel with you to Ukraine a couple weeks ago and I want to 
thank the staff for their great work and also our State 
Department that helped us over there.
    I want to--first, I just want to answer some of the--we 
heard some comments from some of our colleagues that somehow we 
forced Mr. Yanukovych out.
    I will tell you what we learned. He was very corrupt. This 
is a man who lied, cheated, and stole from his people and 
really undermined his government and I think that is one of the 
reasons I am so happy that we have been trying to address this 
corruption, because that does undermine the confidence of 
people and sets the stage for a bully like Putin to--just to 
move in.
    I actually, after visiting and really trying to study this, 
I feel--I am very appreciative of the position that our 
President has taken and our administration, moving carefully 
with economic sanctions because knowing the--how our European 
allies, how their economy is so interwoven with Russia and also 
dealing with these elections that are coming up, having fair 
and free elections, dealing--continuing to deal with the ethics 
and transparency, the corruption in Ukraine's Government and 
also trying to help them toward some type of energy efficiency.
    With all that said, here is what I think is missing, and I 
know we have had some discussion here today about why we are 
involved with Ukraine--why this should matter. I believe it 
matters after being there and after studying this and I think 
one of our colleagues talked about the assurances we gave to 
Ukraine when they gave up a nuclear arsenal that they would 
keep their territorial integrity.
    There are some other things that go with it, too--the 
nervousness of our NATO allies, what would happen if you had a 
failed state and so forth. But I would like to hear from you 
and I think the American public really needs to hear from our 
administration why it is that what is going on in Ukraine, why 
the Russian aggression is something that we should care about. 
That is question number one.
    And secondly, I think it would also be important, and I 
would like you to give an opportunity to articulate to the 
American public, why it is that we have not just unilaterally 
tried to go in with sanctions--why it is so important to be 
respectful to what the--our European allies--you know, what 
their concerns are in this matter.
    So I would like to--if you could address those two points.
    Ms. Nuland. Well, apart from our long-time support for 
democratic peoples and governments and the right of free choice 
of citizens, this goes to the core of the rules of the road of 
the global world order, that you can't simply chop off a piece 
of another country by force and get away with it.
    And this has been how conflicts start the world around. So 
it is about maintaining rule of law, maintaining democratic 
choice for people who want it and have struggled for it and are 
willing to sacrifice for it, not simply in Ukraine, but it is 
also about a very important piece of our 20-year project of a 
Europe whole, free and at peace.
    And if Ukraine loses the opportunity to live freely then 
the borders of the free world in Europe shrink and the borders 
of opportunity in Europe shrink and that is difficult for us 
and it is difficult for our allies.
    With regard to unilateral sanctions, we are always stronger 
when we work together because then you are sanctioning these 
entities not simply from the U.S. market but from the European 
market as well, and Russia depends 50 percent on the European 
market for all of its trade.
    So if we don't do things together then not only are you 
blocking U.S. business from access to a market, you are 
potentially having U.S. businesses' holes backfilled by others 
so that is both ineffective and unfair. But on the whole, it is 
a matter of speaking with one voice about these rules of the 
road being inviolable.
    Mr. Glaser. If I could just add to that answer on 
sanctions, I also think it is important to emphasize the U.S. 
has acted unilaterally and we are always prepared to act under 
our own authorities when we feel we need to.
    President Obama, in this crisis, has signed three Executive 
orders authorizing sanctions and we have been implementing 
those Executive orders and those--that is under U.S. domestic 
authorities.
    As Ambassador Nuland points out, as we move forward in 
this, we have been moving in conjunction and in coordination 
with the Europeans, but we are--we are acting under our own 
authorities and taking action as we feel necessary, as 
Ambassador Nuland points out, especially as we move to the next 
phase of sanctions, which could more broadly impact sectors of 
the Russian economy.
    It is important that we are even more on the same page with 
our European counterparts and that is what we are doing 
precisely because the economies are so integrated.
    But we are--we are prepared to work with our European 
allies to do exactly what we need to input significant costs on 
the Russian economy.
    Ms. Frankel. Thank you. Mr. Royce, may I just follow up on 
that?
    Chairman Royce. Yes, you certainly may, Ms. Frankel.
    Ms. Frankel. I would just say and then--and then there were 
none here. You know what I think would also help for us to 
understand is what are the implications to the European economy 
with these sanctions and why do we have to be careful?
    Ms. Nuland. I would just say broadly and then invite 
Assistant Secretary Glaser, we need--we need to ensure--
different European economies are more exposed, more vulnerable 
in different sectors.
    So as we look at sectoral sanctions we are looking at 
sharing the burden across sectors so no one European country is 
more impacted than another. That is one thing.
    And then some of them are vastly energy dependent, some of 
them up to 100 percent, on Russian energy. So they worry about 
retaliation. They worry about other vulnerabilities.
    And the last thing is, of course, as you know European 
economies are just starting to grow again after 5 years of 
recession. So we don't want to throw them back into that.
    Mr. Glaser. I thought that was very well said. I don't have 
anything to add.
    Ms. Frankel. Thank you, Mr. Chair, and I yield back.
    Chairman Royce. Ms. Frankel, thank you. We are going to go 
now to Mr. Scott Perry of Pennsylvania.
    Mr. Perry. Thank you, Mr. Chairman, and thank you, folks, 
for your testimony. Phase three of the European phased adaptive 
approach envisions the deployment of the AEGIS Ballistic 
Missile Defense System and advanced SM-3 Interceptors, which 
Poland agreed to host in 2009 to counter short-, medium- and 
intermediate-range missile threats.
    Some folks around town here are calling for the deployment 
of this system to be sped up. I am just asking--I want to ask 
what practical challenges are there, if any, to accelerating 
the deployment of missile defense to Poland, and is this 
something that the administration is pursuing or considering 
pursuing?
    Ms. Nuland. Again, I would defer to the Missile Defense 
Agency for a technical answer. But my understanding is it would 
be considerably more expensive and there are technical 
challenges we haven't overcome if we were to try to accelerate.
    So there would be money that would have to go into 
technology and money that would have to go into speeding up the 
timetable. I think we are comfortable that the phase two and 
phase three are coming online as the threat develops just to 
remind that is designed not with Russia in mind, but with 
threats from Iran and elsewhere to the south.
    Mr. Perry. So those technical questions--are they technical 
between the two countries or technical to the systems 
themselves, as far as you know?
    Ms. Nuland. My understanding and, again, I haven't wonked 
out on this in a long time--my understanding is that it goes to 
the technical readiness of the system inside the United States.
    Mr. Perry. Okay. Moving on, I am wondering if exporting LNG 
to Ukraine and Central Europe would be a prudent response to 
what is happening currently and just what your thoughts on it 
as far as America increasing or working to increase or having a 
policy and a policy statement and kind of a public statement in 
that regard, to what effect that would be and if that is 
something that the administration is interested in pursuing--in 
pursuing an answer to what is currently occurring.
    Ms. Nuland. Well, certainly, as you know, we were already 
working intensively with Europe to energize, if you will, their 
internal energy market to encourage them to make the 
investments in interconnectors and efficiencies in LNG 
terminals to allow a more dynamic cheaper market where Gazprom 
has to compete.
    Some of that is taking place through the third energy 
package. In terms of the immediate Ukrainian need, our primary 
focus is on reverse flow energy from Europe, reverse gas into 
Ukraine. We have a new agreement now between brokered--that we 
helped broker between Slovakia and Ukraine that is going to get 
gas flowing reverse.
    Also Poland and Hungary are pushing gas into Ukraine. Over 
the medium-term, we have U.S. companies investing in shale gas 
in Ukraine and that has the potential to make them energy 
independent as soon as 8 to 10 years. With regard to U.S. 
exports, there is quite a lot of U.S. LNG on the market.
    It is going to Asia, though, because the price is higher. 
So here, again, we have to create more opportunities and more 
dynamism in the European market as the best way for both 
Ukraine and other countries of Europe to resist monopoly 
pricing by Gazprom.
    Mr. Perry. So the exports--the American exports that are 
currently going to Asia because the price is higher would it 
be--is it reasonable to say that if we produce more, exported 
more that the world market would then be able--the price would 
come down because there is more--you know, supply would be 
higher and then make the viability of Ukraine receiving or 
Western Europe receiving some American LNG more viable?
    Ms. Nuland. Sorry. The most expedient thing that we could 
do to create a more vibrant LNG market across the Atlantic 
would be to complete work on our transatlantic trade and 
investment partnership agreement--the U.S. trade agreement with 
the EU--because once you are a preferential trade partner you 
have--you go to the head of the queue, if you will.
    Mr. Perry. And I would agree with you on that. But so there 
is no viewpoint from the administration that increasing or 
setting the table from a policy standpoint to increase LNG 
exports from America is part of that equation, devoid of those 
other things that we already discussed?
    Ms. Nuland. Again, I think the President spoke about this 
quite a bit when he was in Europe and I am also not an LNG 
wonk. But he spoke about the fact that there is currently a lot 
of LNG coming from the U.S. on the world market but we need to 
continue to look at it.
    Chairman Royce. If the gentleman would yield.
    Mr. Perry. Yes, Mr. Chairman.
    Chairman Royce. There is some LNG coming on to the market 
from the United States but we have a glut on our market here in 
the United States.
    We have the capacity--at least in speaking to the 
representative of the LNG facility in Louisiana we have the 
capacity to export into the market in Eastern Europe. By the 
end of the year we will have receipt facilities in place in 
Lithuania and Poland that are currently being built.
    The question is since the shipment of gas into those 
markets would represent additional export of gas and given the 
attitudes of the administration on fossil fuels can we get the 
administration out front on an initiative which is the request 
by the government in Ukraine. The President--Acting President 
spoke to this issue. The Prime Minister spoke to this issue.
    I think most of the Presidential candidates we met with 
spoke to this issue. They are desirous of a commitment by the 
United States to ship gas to Ukraine and it can be done through 
Poland, of course, now that the--now that the pipes have been 
reverse engineered. The administration seems to be on the other 
side of this argument.
    Certainly, we have had the initiative in the Energy and 
Power Subcommittee and then the full committee on this issue 
that is coming before the floor and Congress will probably 
force this issue, just as it has the question of the Keystone 
pipeline, another example where the administration has stood, 
because of its position on fossil fuels, against importing that 
asset into the United States.
    So I think what we are seeing is just an opposition to this 
policy based upon opposition to gas being a fossil fuel. We 
spent an hour talking with the Vice President about a number of 
issues in Kiev.
    One of the ones we raised was trying to solicit his support 
for breaking the opposition and allowing--to breaking the 
opposition to exportive gas and incorporating that into sort of 
an encompassing strategy that includes the very components that 
Ambassador Nuland spoke to but including in that the exportive 
gas, which is the prime interest of the government in Ukraine, 
the government in Ukraine making the point that the reason they 
are in this situation now is because they were whipsawed on the 
issue of gas by Russia and that was manipulated to create the 
crisis, in their view anyway, inside the country that led to 
the current situation.
    So their point is when Russia has the monopoly and when the 
United States doesn't announce a policy to come in and directly 
compete with that and drive down those prices and make this 
available, especially given the cooperation of Poland and 
Lithuania in trying to solve this equation, we are compounding 
the problem. So that was a big element of our discussions 
there.
    We now go to Mr. Doug Collins of Georgia.
    Mr. Collins. Thank you, Mr. Chairman. As, obviously, the 
last participant it looks like here today most of this has been 
discussed. I think one of the concerns is I know in talking to 
other members and the member from Pennsylvania we all share as 
one who has served and look at the issue of why we are here.
    I mean, we can get into the specifics, you know, is 
sanctions working and I do believe that we are being too 
reactive in this regard, Madam Ambassador, to say that we are 
reactive and I know we have the issues of European nations that 
are concerned.
    But at the same point, if we continue to back off their 
reserves are not going to stop Russia and Putin from doing 
this. I think it is sort of a false argument here as we look at 
it.
    So my question is is we have been, I think, frankly, too 
reactive to the situations as a whole and not active enough. We 
do see them working. Iran sanctions work. They got to the table 
although I think they should have been in Kiev. That is not 
your area.
    Help me out here. What brought us to this in a sense of 
after it has happened and now do you believe we are being too 
reactive? Was it prior policies that have led Russia to given 
the fact that they think they can do this now?
    I would like to hear your just thoughts more on a 30,000 
foot level and not the--you know, the tactical level. I want to 
see your strategic level about where you believe what brought 
us to this point.
    Ms. Nuland. Well, that would probably be an 8-hour lunch 
which we could--we could have at some point. I think there are 
a lot of factors here including Putin's own view of lost 
empire, his view of opportunity, his need for an external 
adventure to mask problems at home.
    Mr. Collins. Madam Ambassador, I don't mean to interrupt 
here. But you brought up a great point there and like I said 
if, you know, have a discussion over, you know, a cup of--a 
glass of tea would be great.
    But you brought up something. We have known who Mr. Putin 
is. He is not a secret. He never has been a secret in his 
thoughts, his mind set, his whole thoughts.
    And then with us pulling back from missile defense, with us 
doing other things in Eastern Europe, I am wondering--and 
frankly, I am of the opinion that some of those actually gave--
in a reactive way we reacted around the world gave an 
empowering sense to one who does have illusions of the former 
empire.
    I believe we have just been too reactive here and I know 
there is the concerns of Eastern Europe. There is the concerns 
of others, and I know it is not in your place to say yes, we 
have been too reactive.
    But in this discussion I think you would at least 
acknowledge that that has to be part of the equation that we 
have to deal with going forward here and should we be as 
reactive as we are and not be proactive because these same 
countries right now that are scared of their--of their gas 
content and their relationship with Russia will be the same 
ones that turn to us if something else happens.
    Ms. Nuland. Congressman, I think that speaks to exactly the 
kind of deterrent that we have to put forward. That is why in 
the NATO context for the NATO space this reassurance mission 
where we are doubling down on land, sea and air we have to make 
it absolutely clear we will defend our own space.
    But it also speaks to this issue of agreeing with the 
Europeans as we did last week that if he disrupts these 
elections sectoral sanctions will be triggered as compared to 
where we were a month before which was that sectoral would be 
triggered by Russian forces coming over the border.
    We now see that he doesn't need to come over the border to 
upset. So we are continuing to re-evaluate. But it also speaks 
to doing the hard work that we are doing now to develop a clear 
demonstrable sectoral package that he can see, that he knows 
what it triggers as a deterrent and to be ready if we have to 
use it.
    Mr. Collins. I am very concerned though he does not know 
the triggers because what we have done is we have set these 
sort of guidelines for it and then we react. Well, we put 
sanctions in and then we react.
    And even with this agreement, you know, in looking with the 
other European nations if he does this, well, you just said he 
didn't have to cross the border to cause chaos right now.
    So is that the trigger? I mean, are we--are we making--are 
we setting ourselves up to say well, the trigger is he crossed 
the border instead of saying the trigger is he is causing 
internal chaos in the Ukraine.
    Why is that not the discussion? Why are we limiting 
ourselves to a singular kind of focus instead of saying well, 
it doesn't matter if you cross the border--you are causing 
chaos in the country? That should be the trigger. Why are we, 
again, still very reactive, in my opinion?
    Ms. Nuland. Well, Congressman, as you know, the last round 
of sanctions, which was about a week and a half ago, was 
precisely in response to the fact that we went to Geneva, we 
had an agreement on everybody supporting de-escalation and the 
Russians did nothing thereafter.
    And therefore we hit seven more people. We hit 17 entities. 
We blocked U.S. export of high technology in the defense 
sector. So as we work to build the sectoral package there is 
also more head room in this category of sanctions that we will 
continue to use if necessary.
    Mr. Collins. Okay. Well, again, thank you all for sitting 
through all of this. It is always, I am sure, fun for you all 
to come up here and discuss and get many questions.
    I appreciate your answers and I would like to see a little 
more aggressiveness in this because, like I said, we are 
dealing with a man who does have--he is not an unknown 
quantity. It is not like he all of a sudden came out of nowhere 
and went to power.
    We know his background and it is just very concerning to me 
that we are not a little more--because like I said, the Eastern 
European countries will be the very ones who will turn to us in 
a heartbeat if they are in trouble, irregardless of economic 
issues.
    So I do appreciate you both. Thank you so much for your 
time.
    Chairman Royce. Thank you. Thank you. And I--let us thank 
both the witnesses here. Ambassador Nuland, Mr. Glaser, thank 
you very much for your testimony. One of the key points that 
was reinforced in this hearing was the central importance of 
the May 25th elections.
    Those elections will be a watershed in Ukraine's history. 
The United States must do all it can to make certain that they 
are fair, they are free and that people can safely get to the 
ballot box to cast their ballot in those elections.
    It is also clear that we need a more active and long-term 
strategy to undermine Russia's ability to use its oil and gas 
exports to coerce Ukraine. When they can turn off the gas in 
the dead of winter, when they get that choke hold over a 
regime--over a government in Ukraine, you can--you can see the 
consequences.
    So that is going to require the administration to end the 
sanctions that we have imposed upon ourselves. It is one thing 
to impose sanctions on Iran. It is another thing to impose gas 
and oil sanctions on the U.S. and not allow us, at a time when 
we have got a glut on the gas market, to put forward a strategy 
that will help our balance of payments, help our exports, and 
undermine Russia's monopoly in Eastern Europe.
    And lastly, I think we must also ramp up our international 
broadcasting efforts to counter Russia's propaganda. Only when 
the people of Ukraine and the region as a whole have access to 
objective information will democracy and peace have a chance to 
flourish there.
    Again, I thank our witnesses and the members, and we stand 
adjourned.
    [Whereupon, at 12:50 p.m., the committee adjourned.]
                                     

                                     

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