[Senate Hearing 113-]
[From the U.S. Government Publishing Office]


 
                 STATE, FOREIGN OPERATIONS, AND RELATED 
                     PROGRAMS APPROPRIATIONS FOR FISCAL 
                     YEAR 2015

                              ----------                              


                         TUESDAY, APRIL 8, 2014

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:17 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Patrick J. Leahy (chairman) 
presiding.
    Present: Senators Leahy, Landrieu, Coons, Graham, Coats, 
Johanns, and Boozman.

           UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

STATEMENT OF DR. RAJIV SHAH, ADMINISTRATOR

             OPENING STATEMENT OF SENATOR PATRICK J. LEAHY

    Senator Leahy. Good morning.
    We are meeting today to hear testimony from Dr. Rajiv Shah, 
who is the Administrator of the U.S. Agency for International 
Development, to discuss USAID's fiscal year 2015 budget 
request. Dr. Shah, thank you for being here.
    USAID, like every Federal agency, needs to adapt to a 
changing world, and so does Congress. If we want to do that 
effectively, we need a shared understanding of USAID's core 
purpose.
    I have always assumed it is sustainable development, and I 
believe, Dr. Shah, you would agree with that. But today, 
USAID's strength seems to be saving lives, and feeding people, 
technological innovation, and other such things that are 
unquestionably important. Many of them I strongly support: 
efforts to bring down the rate of maternal deaths, ways to help 
immunize more children; these I strongly support.
    I do not want to over generalize, but these activities are 
often not the same as building institutions and organizations, 
owned and run by foreign governments and communities which, to 
me, is what real development, sustainable development, is 
about.
    And while USAID's renewed emphasis on partnership is 
welcome, it often seems as if USAID still tends to view NGOs, 
or other organizations, as instruments of what USAID wants to 
do, not as partners.
    I am optimistic about USAID Forward and its focus on 
country ownership, and eventually working yourselves, USAID, 
out of a job. Outsiders can help. And local entities--whether 
governments, civil society, or private companies--need to be in 
charge and take responsibility for the results.
    There is a lot of talk about capacity, either the lack of 
it or the need to build it. Of course, it is necessary to be 
able to set realistic goals, and do the work, and keep track of 
money spent. But I also know that a lot of capacity already 
exists, especially if we do not try to do too much, too fast.
    Many local organizations may not have the clout, or the 
connections, or the lobbyists that big U.S. contractors or 
grantees have. All they have going for them is they are often 
better at getting results than we are. What they lack is the 
capacity to navigate the reams of pages of extremely technical, 
incomprehensibly bureaucratic USAID applications for funding. I 
am a lawyer. I did well in college. I did well in law school 
and I am benumbed by some of these applications; a lot of this 
is government-wide and not just of USAID's making. I worry 
about creating a whole new industry of high priced, capacity-
building consultants. They would love the idea. We have a lot 
of lobbyists in this town who rely on it.
    But even though there has been progress, I think after 4 
years you would agree, USAID Forward has a long way to go. 
Local organizations may increasingly look for other models than 
USAID, if USAID does not make further changes in how staff is 
recruited, trained, and deployed to work with local 
organizations and institutions.
    Other than responding to humanitarian crises, it makes no 
sense to spend money without a coherent strategy focused on 
sustainability. Afghanistan is probably the most egregious 
example of what not to do, but there are others.
    Now, I say this as I also recognize that USAID has a lot to 
be proud of. I have seen some of those successes. I have seen 
your people in the field, sometimes in dangerous conditions, 
and I applaud you for that. But I am worried about our foreign 
aid programs. I am worried that they are not as relevant or 
effective as we may think and say they are. And we have to pay 
attention in this committee because it has been 25 or 30 years 
since we have had an authorization bill, so we have to do it 
here.
    You inherited an Agency that had lost its bearings. I told 
you 4 years ago, I think I said that I did not know whether to 
offer you congratulations or condolences when you became the 
head of it. There has been progress, but we have to focus on 
producing sustainable outcomes.
    Now, I want to mention the recent press reports on USAID's 
Twitter program in Cuba. I will have a number of questions 
about it. We should remember that while we debate what USAID is 
doing in Cuba, U.S. citizen Alan Gross remains in solitary 
confinement in his fifth year of captivity, solely because he 
was carrying out a USAID program which was poorly conceived and 
poorly implemented.
    Alan Gross is confined to his cell 23 hours of every day. I 
have visited Mr. Gross twice. On April 3rd, he began a hunger 
strike to protest his detention by the Cuban Government, and 
the failure--the failure--of the United States Government, and 
this Administration, to take effective steps to obtain his 
release.
    It is long past time for the Administration and the Cuban 
Government to negotiate a resolution of this ordeal so Mr. 
Gross can return home. Now, I am told by the Administration, 
``Well, if you only knew all the things we are doing.'' All I 
know is whatever they are doing has not accomplished anything.

                           PREPARED STATEMENT

    There is a way to resolve it, there is ample precedent for 
doing so, it is in our national interest, and it could be done 
immediately if the Administration really wants to. That is my 
own personal view.
    [The statement follows:]
             Prepared Statement of Senator Patrick J. Leahy
    Good morning. We are meeting today to hear testimony from Dr. Rajiv 
Shah, Administrator of the United States Agency for International 
Development, who will discuss USAID's fiscal year 2015 budget request. 
Dr. Shah, thank you for being here.
    USAID, like every Federal agency, needs to adapt to a fast changing 
world. So does the Congress. In order to do that effectively, we need a 
shared understanding of USAID's core purpose.
    I have always assumed it is sustainable development, and I am sure, 
Dr. Shah, you would agree.
    But today, USAID's strength seems to be saving lives, feeding 
people, technological innovation, and other such things that are 
unquestionably important. Many of them I strongly support.
    I don't want to overgeneralize, but these activities are often not 
the same as building institutions and organizations, owned and run by 
foreign governments and communities, which to me is what real 
development--sustainable development--is about.
    And while USAID's renewed emphasis on partnership is welcome, it 
often seems as if USAID still tends to view non-governmental 
organizations (NGOs) or other organizations as instruments of what 
USAID wants to do, rather than as partners in their own right.
    I was optimistic about USAID Forward, and its focus on country 
ownership and eventually working yourselves out of a job. Outsiders can 
help, but local entities, whether government or civil society or 
private companies, need to be in charge and take responsibility for the 
results.
    There is a lot of talk about capacity--either the lack of it or the 
need to build it. Of course it is necessary to be able to set realistic 
goals, do the work, and keep track of money spent.
    But I also know that a lot of capacity already exists--especially 
if we do not try to do too much, too fast. Many local organizations may 
not have the clout or connections that big U.S. contractors or grantees 
have, but they are often better at what they do.
    What they lack is the capacity to navigate the reams of pages of 
extremely technical, incomprehensibly bureaucratic USAID applications 
for funding. A lot of this is governmentwide and not of USAID's making, 
but I worry about creating a whole new industry of high-priced 
capacity-building consultants.
    There has been progress, but after 4 years I suspect you would 
agree that USAID Forward has a long way to go. Local organizations may 
increasingly look for other models than USAID, if USAID doesn't make 
further changes--from how staff are recruited, oriented, and deployed 
to how USAID missions get to know and work with local organizations and 
institutions.
    Other than responding to humanitarian crises, it makes no sense to 
spend money without a coherent strategy focused on sustainability. 
Afghanistan is probably the most egregious example of what not to do, 
but there are many others.
    USAID has a lot to be proud of. I have seen some of those 
successes, and I applaud you for them. But I am worried about our 
foreign aid programs. I am worried that they are not as relevant or 
effective as we may think and say they are.
    You inherited an agency that had lost its bearings. I told you 4 
years ago that I did not know whether to offer my congratulations or 
condolences. There has been progress, but we need to focus on producing 
sustainable outcomes.
    I also want to mention the recent press reports on USAID's twitter 
program in Cuba, and I will have a number of questions about it. But we 
should remember that while we debate what USAID is doing in Cuba, U.S. 
citizen Alan Gross remains in solitary confinement in Havana in his 5th 
year of captivity, solely because he was carrying out a USAID program.
    Alan Gross is confined to his cell 23 hours of every day. On April 
3, Mr. Gross, who I have visited twice, began a hunger strike to 
protest his detention by the Cuban Government and the failure--the 
failure--of his own Government to take meaningful steps to obtain his 
release. As far as I can tell, USAID has all but forgotten about him.
    It is long past time for the administration and the Cuban 
Government to negotiate a resolution of this ordeal so Mr. Gross can 
return home. Whatever past attempts have been made on his behalf have 
achieved nothing, and I believe in some respects they have made his 
situation worse. There is a way to resolve it, there is ample precedent 
for doing so, and it is in our national interest.

    Senator Graham.

                  STATEMENT OF SENATOR LINDSEY GRAHAM

    Senator Graham. Thank you, Mr. Chairman.
    This is what oversight is all about, is it not? Asking hard 
questions and making people justify their action, or lack of 
action.
    From the committee's point of view, $20.1 billion is what 
the USAID budget is, of about $48 billion of foreign 
assistance. So it is a big part of what we do.
    From an Afghanistan point of view, I think the elections 
have seemed to have gone very well. I know that you have people 
all over Afghanistan trying to build capacity that is 
sustainable. And I hope the American people appreciate that 
these elections came off because of a lot of sacrifice by 
Afghans, coalition forces, and people on the ground. So that is 
something to appreciate and, quite frankly, celebrate. We have 
some articles about USAID aid in Afghanistan that we would like 
you to comment on, Dr. Shah.
    But bottom line, 4 years ago, you did inherit, for lack of 
a better word, a mess and I think you have done, overall, a 
very good job of trying to bring the private sector to partner 
with the Government. As Senator Leahy said, there is more to 
do, particularly in the faith-based area.
    But the collaboration between our Government, NGOs, and the 
private sector, particularly in Africa, has unlimited ability. 
And I appreciate your willingness to reach out and form these 
partnerships because that makes sure that we have the highest 
and best use of the money that the taxpayer puts forward.
    Finally, from a taxpayer's point of view, there is a strain 
in my party, I am sure all over America, quite frankly, that 
wants to disengage. And I just want to reinforce that the 
entire foreign operations budget is about 1 percent of Federal 
spending, and the world is rapidly changing. Some areas for the 
better; in many places, it is deteriorating. USAID is a way for 
the Government of the United States to have a presence without 
military force that, I think, can be a positive presence.
    So I want to continue to support Senator Leahy's view of 
oversight, but also continue to support Budget Requests that 
make us stronger as a Nation.
    So on behalf of the committee, and I think the senate as a 
whole, we appreciate the dangers that your people face every 
day, and your willingness to represent our Government and the 
American values we all share in some of the most dangerous, 
contentious places in the world. And I look forward to hearing 
your testimony.

                  SUMMARY STATEMENT OF DR. RAJIV SHAH

    Dr. Shah. Thank you, Senator Leahy, Senator Graham, members 
of the committee.
    I would like to start just by saying thank you to you, 
Senator Leahy. Your leadership on behalf of America's 
engagement around the world on human rights, on civil society, 
on supporting local institutions, and on all of the things we 
do in health, food, agriculture, water, sanitation, have 
literally helped tens of millions, hundreds of millions of 
people improve their lot in life all around world, and to help 
make our country safer and more secure.
    Senator Graham, thank you for your specific leadership, 
especially on difficult, but important issues like Afghanistan 
where, I believe, we first had the chance, one of the chances, 
to meet out there together. And I look to you for guidance and 
counsel in carrying out my duties.
    I also want to thank all the members of the committee. I 
have appreciated, and continue to appreciate, your engagement, 
advice, and support as we have been trying to carry out our 
mission.
    Over the course of the last year, one of the things we did 
was ask 2,700 of our staff to work with us to more clearly 
define and articulate our mission. And today, we know that our 
core mission is to partner to end extreme poverty and promote 
resilient, democratic societies while advancing American 
security and prosperity.
    For the first time in decades, it is now possible to 
envision a world without the kind of dollar-a-day poverty that 
robs people of their human dignity. You have supported, over 
the last 4 years, a significant investment in rebuilding USAID 
as the world's premiere development institution, and I want to 
say thank you for that.
    Under your leadership, and with your support, we have 
rebuilt our staff; hired dozens of experts across a range of 
different areas; rebuilt our budgets in areas like food, and 
agriculture, and child survival; engaged and built a policy 
team that allows USAID to articulate America's vision for 
partnership to address the needs of the world's most 
vulnerable; and worked to expand our partner base to work with 
hundreds of new institutions, many local organizations, and 
most through direct new partnerships that enable them to drive 
forward success.
    You have helped us ensure that we monitor and evaluate all 
of our major programs, going from publishing a few dozen 
monitoring and evaluation reports a year, to now publishing 
nearly 300 a year, all of which are available on an iPhone app, 
if you have the interest, and a long plane ride. These efforts 
collectively have helped us deliver comprehensive results 
across our major areas of investment.
    And the President's fiscal year 2015 budget request for 
USAID focuses on, and invests, in what works in global 
development. The Budget includes $1 billion for the President's 
Feed the Future program that now works in 19 countries, reaches 
7 million farm households, gets them access to new agricultural 
technologies, helps to move 12\1/2\ million children who 
otherwise would be malnourished out of a condition of under-
nourishment and towards nutritional sufficiency. And has 
already leveraged nearly $400 million of private investment out 
of the nearly $4 billion of commitments we have secured from 
more than 140 companies to co-invest with us.
    These efforts, together and with your support, will allow 
us to reduce extreme poverty in the countries where we work by 
more than 20 percent, and reduce the number of children who are 
stunted from malnutrition by an equivalent amount.
    The budget asks for nearly $2.7 billion for child survival, 
and over the last decade, there has been no other area of work 
where the United States gets a better return on investment. 
Having gone from having more than 11 million children die every 
year to 6.6 million this year, and well on our way to having 
that number be near 1 million in the next 15 to 20 years going 
forward.
    In other areas--like education, water, and energy--with 
your support, we have crafted new partnerships, new goals, 
created and put forth transparent metrics, and reported on 
progress in a quantitative, specific, businesslike way.
    Our efforts to promote disaster assistance have been taxed 
significantly over the past year, given the fact that we now 
have three Level 3 disasters around the world: In and around 
Syria, in the Central African Republic, and in South Sudan. I 
appreciate the extra efforts the committee has made to ensure 
that humanitarian funding exists for these efforts. And our 
work has been carried out to a level of excellence that we just 
saw in the Typhoon Haiyan response in the Philippines that was 
just the subject of a roundtable discussion with ASEAN Defense 
Ministers that Secretary Hagel and I co-chaired in Honolulu 
early last week.
    Our work in democracy and governance helps to improve our 
national security, and we are actively working to support the 
free and fair conduct of elections in Ukraine. And I am 
extraordinarily proud of our Embassy and USAID mission teams 
that have spent 18 months working to ensure that the Afghan 
election was accessible, particularly to women, safe, carried 
out by institutions led by Afghans themselves, and had a 
complaints process and fraud mitigation strategy that was 
effectively deployed just last week as nearly 58 percent of 
eligible voters went to the polls.
    I look forward to our discussion on Cuba because I want to 
talk about some of our work that is more difficult to execute, 
and learn from members of the committee.
    And I want to conclude just by noting that I often worry 
about what is difficult for us. Can our country maintain a high 
level of political commitment so that we can lead the world in 
humanitarian development and global health efforts over the 
next two decades?
    In my more than 4 years in this role, I have seen hundreds 
of new partnerships with private businesses, with scientists 
and universities, with faith communities, with leaders from 
congress in both the House and the Senate on both sides of the 
aisle. And I am convinced, especially after having the 
opportunity to deliver this year's Prayer Breakfast Address 
that, in fact, America can, should, and if we do our jobs well, 
will lead the world to end extreme poverty in the next two 
decades.
    Thank you, and I look forward to your questions.
    [The statement follows:]
                  Prepared Statement of Dr. Rajiv Shah
    Thank you Chairman Leahy, Ranking Member Graham, and members of the 
subcommittee. I am pleased to join you to discuss the President's 
fiscal year 2015 budget request for the U.S. Agency for International 
Development.
    Four years ago, President Obama set forth a new vision of a 
results-driven USAID that would lead the world in development. We have 
since risen to this challenge, pioneering a new model of development 
that brings a greater emphasis on partnerships, innovation, and 
results. We are guided in these efforts by a new mission statement: we 
partner to end extreme poverty and promote resilient democratic 
societies while advancing our security and prosperity.
    Although these goals are not new, they reflect a unique moment in 
development today when exciting opportunities are emerging to change 
what is possible. In a time of fiscal restraint, we are applying the 
new model to seize this moment and reach more people, save more lives, 
and leverage more private investment than ever before--delivering 
results for the American people and those in greatest need around the 
world.
    The President's fiscal year 2015 budget responds to unprecedented 
development challenges, including some of the most significant events 
unfolding on the world stage today.
    When Typhoon Haiyan swept across the Philippines, we swung into 
action, leading and coordinating the U.S. Government civilian and 
military humanitarian response and distributing life-saving aid, 
including highly-nutritious food products to feed hungry children and 
adults. In Ukraine, we remain committed to helping citizens realize the 
democratic aspirations that many spent months on the Maidan demanding. 
For nearly 20 years, we have stood shoulder-to-shoulder with the people 
of Ukraine, putting 1.8 million land titles into the hands of farmers 
and helping civil society leaders develop recommendations, including on 
anti-corruption, in an comprehensive reform package for the government. 
Many of the recommendations are being implemented through new and 
revised legislation.
    In South Sudan, as citizens face a looming humanitarian catastrophe 
that will leave half the country on the brink of famine, we are racing 
against the clock to save lives. And as we saw just a few days ago, 
citizens in Afghanistan voted for a new president to lead them towards 
a brighter, more stable future. In support of the Afghan-owned election 
process, USAID provided extensive guidance on how to prevent electoral 
fraud, as well as capacity building support for independent domestic 
observers, civil society, media, and political parties to help ensure a 
transparent electoral process.
    The budget enables us to respond effectively to these events and 
address the underlying causes of extreme poverty through President 
Obama's Feed the Future, Global Health, Global Climate Change, and 
Power Africa initiatives. It advances our national security by building 
linkages to emerging markets, strengthening democracy and human rights, 
and promoting broad-based economic growth. It helps vulnerable 
communities strengthen their resilience to crises and natural 
disasters. It facilitates strategic engagement in the Middle East and 
North Africa, as well as across the Asia-Pacific and Latin America. It 
also focuses our activities in Afghanistan, Pakistan, and Iraq, 
ensuring that we sustain the gains we have made.
    Even though we work far from home, our work continues to realize 
benefits for our home: for opportunities we open for American 
businesses, the skills of our young people we help build, and the 
threats to our security that we help prevent. For less than 1 percent 
of the Federal budget, we are delivering results that shape a more 
secure and prosperous future for the American people and the world.
                      a new model for development
    The fiscal year 2015 budget request for USAID managed or partially 
managed accounts is $20.1 billion, 1 percent below the total enacted 
fiscal year 2014 funding for these accounts. In this constrained budget 
environment, USAID is focused on maximizing the value of every dollar. 
Over the past 5 years, we have made difficult choices about where our 
work will have the greatest impact, shifting resources and personnel to 
better advance our mission of ending extreme poverty around the world.
    Since 2010, regional bureaus have reduced program areas by 34 
percent; USAID global health program areas have been phased out of 23 
countries; and Feed the Future agriculture programs have been phased 
out of 26 countries. We are reducing programs in countries that have 
turned a corner, like Mongolia, and transitioning Missions to Offices. 
We are shifting resources to countries in critical need and where our 
work has the widest impact.
    Over the past 3 years, the USAID Forward reform agenda has touched 
upon every part of our Agency. We've revamped our budget to include 
more rigorous performance monitoring and impact evaluation, expanded 
the use of science, technology, and public-private partnerships, and 
improved talent management. In each area of reform, we set aspirational 
targets that have established a common language for success, challenged 
our partners, and encouraged us to step out of our comfort zone.
    Taken together, these reforms have formed the foundation of a new 
model of development that defines the way we work around the world. 
With this new model, we are backing cutting-edge innovation, taking 
advantage of fast-moving technology, and harnessing the vast potential 
of the development community to achieve unprecedented results.
    Today, all our major programs are independently evaluated, and 
those evaluations are available right now on an iPhone app--an 
unprecedented level of transparency. The quality of our evaluations has 
improved significantly, which is an important sign that we are 
increasingly grounding our work in evidence and data. Missions are 
reporting dozens of different ways that these evaluations are 
strengthening our programs in the field. Through an evaluation in 
Benin, we learned that community health programs naturally favored men 
in their hiring, which limited our ability to provide care to women. So 
we're redesigning our recruitment to help more women become community 
health workers.
    Working closely with local leaders, governments, and organizations, 
we are strengthening the capacity of our partner countries to create 
stronger communities and brighter futures without our assistance. In 
2013 alone, our emphasis on local solutions enabled us to support 1,150 
local organizations in 74 countries. In the Democratic Republic of the 
Congo, for instance, we have worked with 12 local governments to 
improve their tax collection, so they can afford to pay the salaries of 
teachers and health workers. As a result, they have increased revenues 
by 95 percent since 2009.
    We are also mobilizing a new generation of innovators and 
scientists to advance our mission. Launched last week, the U.S. Global 
Development Lab represents an historic investment in the power of 
science and technology to bend the curve of development. With $151 
million in funding, it will generate and scale breakthrough solutions 
to complex development challenges, while attracting private sector 
investment to improve the sustainability of our solutions. Already, it 
has generated cutting-edge inventions--including the bubble continuous 
positive airway pressure (CPAP), a device from Texas that can 
resuscitate newborns at a fraction of the price of existing machines.
    To maximize the impact of the Lab, we seek new authorities from 
Congress. These include the ability to hire a diverse range of staff; 
to use development assistance funding programmed for science, 
technology, and innovation for all development purposes, including 
health; and to use a ``pay-for-success'' model to incentivize the best 
solutions from innovators around the world--all of which will help us 
catalyze a wave of innovation that solves the toughest development 
challenges on the planet.
    We are increasingly focused on engaging a wide array of partners, 
from our long-standing partners in the development community, to faith 
organizations, to multi-national corporations. Through our Development 
Credit Authority (DCA), we unlocked a record $1.02 billion over the 
last 2 years alone in commercial capital to empower entrepreneurs 
around the world. Earlier this year, we partnered with GE and Kenya 
Commercial Bank to help healthcare providers buy life-saving healthcare 
equipment, including portable ultrasound devices and magnetic resonance 
imaging (MRI) machines. For the first time ever, our private sector 
partner is covering the cost of the loan guarantee--making this program 
virtually costless for the American taxpayer. To build on this success, 
the request seeks to increase the annual cap on loans under DCA 
guarantees from $1.5 billion to $2 billion, a measure that will enable 
us to ramp up high-impact projects, particularly through Power Africa.
                            core priorities
    Under the leadership of President Obama, we are applying the new 
model to deliver unprecedented results across our work, from expanding 
access to mobile money to empowering women and girls to strengthening 
land tenure rights to safeguarding the world's biodiversity.
Feed the Future
    In this request, $1 billion is devoted to Feed the Future, 
President Obama's global food security initiative. After several years, 
Feed the Future has hit its stride--delivering results that are 
changing the face of poverty and hunger for some of the world's poorest 
families.
    In 2012, we reached 12 million children with programs to strengthen 
their nutrition and helped more than 7 million farmers increase their 
yields through new technologies and management practices. Reported 
incremental sales of farmers working with Feed the Future programs 
worldwide increased their sales from $100 million in 2012 to over $130 
million in 2013. These results are grounded in a robust management 
system for gathering timely, accurate data that measures everything 
from household income to the participation of women to the prevalence 
of stunting. Just as the Demographic and Health Surveys helped 
dramatically expand monitoring capabilities in global health, Feed the 
Future's new open data platform is transforming our knowledge and 
informing cutting-edge approaches.
    This year's budget request builds on these results with an 
integrated nutrition approach to reduce stunting by 20 percent--a 
target that will prevent 2 million children from suffering from this 
devastating condition over the next 5 years.
    In Kenya, the reported gross margin of livestock farmers receiving 
training on improved management practices and support to partner with 
cooperatives increased over 45 percent from 2012 to 2013, from $371 to 
$541 per cow. Feed the Future activities in Kenya support rural 
smallholders who account for over 80 percent of the country's raw milk 
production. Farmers in Bangladesh using new fertilizer technologies 
more than doubled the production of rice from 2011 to 2013. New 
technologies and management practices such as this also contributed to 
increases in the rice farmers' gross margin per hectare from $431 in 
2012 to $587 in 2013. Across Central America, Feed the Future is 
helping trading unions to meet international standards and maintain 
access to agricultural markets in the United States.
    Two years ago, President Obama led global food security efforts to 
the next stage, introducing the New Alliance for Food Security and 
Nutrition. Today, it is a $3.75 billion public-private partnership that 
is enabling reforms from 10 African governments and commitments from 
more than 140 global and local companies. For instance, Ghana Nuts--an 
agricultural business that was once an aid recipient--is now a multi-
million dollar company employing 500 people. Under the New Alliance, it 
has committed to strengthening local supply chains, reaching 27,000 
smallholder farmers with more than $4 million in investments.
    At the same time, the governments we work with through the New 
Alliance have committed to significant market-oriented policy reforms. 
Recently, Burkina Faso launched an electronic platform that increases 
the transparency and speed of their customs processes. Last summer, 
Mozambique, Cote d'Ivoire, and other New Alliance nations committed to 
policy reforms that will foster private sector investment in 
smallholder farmers, particularly women.
Global Health
    With strong bipartisan support, we are providing critical health 
assistance more efficiently than ever before. We have narrowed our 
focus on maternal and child health to the 24 countries that represent 
more than 70 percent of maternal and child deaths in the developing 
world. Through the $2.7 billion request for USAID Global Health 
Programs--along with State Department Global Health Programs for $5.4 
billion--we will work towards ending the tragedy of preventable child 
and maternal death, creating an AIDS-free generation, and protecting 
communities from infectious diseases.
    Around the world, we are seeing real results of global partnerships 
to accelerate progress towards these goals. Since 2010, 15 of our 24 
priority countries have rolled out the pneumonia vaccine with Global 
Alliance for Vaccines and Immunization (GAVI) support; and since 2011, 
8 have introduced rotavirus vaccines against diarrheal diseases. In 
2013, the President's Malaria Initiative (PMI) protected over 45 
million people with a prevention measure. Since 2006, all the original 
15 PMI focus countries have had reductions in childhood mortality 
rates, ranging from 16 to 50 percent.
    In 2013, Saving Mothers Giving Life, a USAID-led public-private 
partnership, contributed to a 30 percent decline in the maternal 
mortality ratio in target districts of Uganda and a 35 percent 
reduction of maternal deaths in target facilities in Zambia.
    Since 2006, our support for neglected tropical diseases has 
expanded to reach 25 countries. In the countries where we work, nearly 
35.8 million people no longer require treatment for blinding trachoma, 
and 52.4 million people no longer require treatment for lymphatic 
filariasis.
    Since USAID's 2012 Child Survival Call to Action, nearly a dozen 
countries, representing those with the highest global rates of child 
death, have launched their own local calls to action, set national 
targets, and are creating evidence-based business plans to focus 
resources in acutely vulnerable regions.
    We will continue to make cost-effective interventions that save 
lives--from preventing the spread of disease, to providing nutrition to 
millions of hungry children around the world.
Climate Change
    Of the President's $506.3 million request for the Global Climate 
Change Initiative implemented in partnership with the Department of 
State, USAID implements approximately $348.5 million and invests in 
developing countries best suited to accelerate transitions to climate-
resilient, low-emission economic growth. In fiscal year 2013, USAID 
helped over 600,000 stakeholders implement risk-reducing practices or 
use climate information in decisionmaking. These stakeholders are 
impact multipliers, including meteorologists, agricultural extension 
workers, and disaster planners who use this information to improve the 
climate resilience of millions of people in their countries and 
regions.
    Across the world, we are harnessing innovation, evidence, and 
technology to help vulnerable communities anticipate and take action to 
reduce the impacts of climate change. Today, a joint venture between 
USAID and NASA--called SERVIR--provides communities in 29 countries 
with global satellite-based climate information, including sending 
frost alerts to tea growers in Kenya and fire alerts to forest 
officials in Nepal.
    USAID is pioneering a new approach that puts people on a path from 
dependency to resilience, while expanding broad-based economic growth. 
From small farming collectives to multi-national corporations, our 
partners are pursuing climate-resilient, low-emission development. In 
support of the Tropical Forest Alliance 2020, we recently helped launch 
the Global Forest Watch, a forest alert system that utilizes real-time 
satellite data to help countries reduce tropical deforestation and 
enable companies to monitor their supply chains.
    The Global Climate Change Initiative advances practical, on-the-
ground solutions to help developing countries contribute to the global 
effort to reduce greenhouse gas emissions while achieving development 
goals. Since 2010, USAID and the State Department have established 25 
bilateral agreements with partner countries to develop and implement 
for low emissions development strategies. This support is helping 
advance the transition to lower carbon energy systems by creating 
enabling environments for public and private investments in efficient, 
clean energy sources, and sustainably reduce emissions from land use 
such as deforestation and agriculture.
Power Africa
    The fiscal year 2015 request advances our Nation's commitments to 
Africa with initiatives like Trade Africa and Power Africa. With $77 
million requested in this budget, Power Africa represents a bipartisan 
approach to use public-private partnerships to double access to power 
on the continent and connect American investors and entrepreneurs to 
business opportunities abroad. Less than a year since launching, more 
than 5,500 mega-watts of power projects have been planned--putting us 
more than halfway towards our goal of expanding electricity to 20 
million people and businesses. For every dollar that the U.S. 
Government has committed, the private sector has committed two--over 
$14 billion so far.
    With an initial set of six partner countries, Power Africa focuses 
on completing projects quickly and efficiently, while encouraging 
countries to make energy sector reforms critical to their success. In 
Ethiopia, for example, Power Africa is supporting the first independent 
power producer geothermal plant in the country, a project that will 
pave the way for future private sector investment and provide enough 
power to reach tens of thousands of people. In Kenya, Power Africa is 
enabling the construction of the largest privately-owned wind farm in 
Sub-Saharan Africa--helping millions leapfrog dirtier, unhealthier 
phases of development and join a global low-carbon economy.
Education
    Education remains a critical focus for the Agency. Our request for 
Basic Education is $534.3 million, an increase of 6.6 percent over our 
fiscal year 2014 request.
    Through the ``Room to Learn'' program, we are intensifying our 
efforts in six countries--including Nigeria and Afghanistan--where 
endemic poverty and conflict conspire to rob children of their futures. 
In the Katanga Province in Democratic Republic of the Congo, in the 
schools we support, we have seen a 40 percent decrease in students 
repeating a grade from 2010 to 2013. The drop-out rate was also 65 
percent lower than in 2010.
    From Kenya to Afghanistan, we're seeing reading skills develop and 
enrollment--especially for girls--jump. Our strategic shift to 
improving primary grade reading for tens of millions of kids brings 
with it a commitment to measuring results through student learning 
achievements. In Malawi, we used early grade reading assessments to 
evaluate students' foundation skills--giving their parents and teachers 
a way to measure their progress. Today, second graders who receive 
interventions like these have comprehension levels four times those in 
control groups.
    By maintaining our focus on global education as a core development 
objective, we can brighten the future for millions of vulnerable 
children, including children in crisis environments. With widespread 
illiteracy estimated to cost the global economy more than 1 trillion 
dollars this year alone, these programs are not only advancing 
America's standing as the world's development leader in education, but 
are also energizing the global economy.
Water
    While the world has seen tremendous progress on expanding access to 
safe drinking water--halving the proportion of people without 
sustainable access since 1990--a lot of work remains. This budget 
request continues the implementation of our first-ever Water and 
Development Strategy, which outlines a goal to save lives and advance 
development through improvements in water for health and water for 
food. The Strategy sets explicit targets of sustainably providing 10 
million people with access to improved water supply and 6 million 
people with access to improved sanitation over the next 5 years.
    Through our Development Innovation Ventures fund, we're partnering 
with the Gates Foundation to help bring safe drinking water to at least 
4 million of the world's poor. Called WASH for Life, this initiative 
will source and rigorously test great ideas to improve access to water 
and sanitation service. Last year, in Kenya, we leveraged a Development 
Credit Authority guarantee to extend piped water supply in Kisumu for 
over 1,500 piped water connections to benefit over 8,500 individuals.
    The request for WASH funding is $231 million in this budget. Budget 
requests for WASH programs have typically been about $230 million, and 
because of the number of program areas we engage in with water 
investments--from OFDA's emergency response work, to resilience 
programs in regions of chronic crisis like the Horn of Africa and the 
Sahel, to Feed the Future agricultural infrastructure support--our 
actual programming for all water activities has grown to over $500 
million, and we expect similar levels in the year ahead.
   supporting regional priorities and strengthening national security
    This budget also maintains our Nation's tremendous leadership in 
humanitarian response with $4.8 billion requested in State and USAID 
funding. In the last year, we have responded to unprecedented need 
around the world--saving lives from the Philippines to South Sudan.
    In Syria, we currently provide life-saving aid for 4.2 million 
people in all 14 governorates across the country, as well as more than 
2 million people who have fled the violence into neighboring countries. 
At the same time, we are supporting neighboring Jordan and Lebanon to 
manage the overwhelming influx of refugees from Syria. We have worked 
with local school systems to accommodate Syrian children, and in some 
areas, helped them adjust their schedules so that local children can 
learn in the morning and Syrian kids in the afternoon.
    Thanks to strong bipartisan support, we have begun reforms that 
mainly address our development food aid programs, allowing us to reach 
an additional 800,000 hungry people every year with the same resources. 
The need for this flexibility grows more urgent every day, as crises 
deepen from Syria to the Central African Republic to South Sudan. That 
is why this budget calls for reforms to be extended to emergency food 
assistance. We are seeking the flexibility to use up to 25 percent of 
title II resources for life-saving tools, like vouchers and local 
procurement--allowing us to reach 2 million more people in crises with 
our existing resources.
    While we remain the world's leader in humanitarian response, we are 
increasingly focused on ensuring communities can better withstand and 
bounce back from shocks--like droughts, floods, and conflict--that push 
the most vulnerable people into crisis again and again. In the Horn of 
Africa, which suffered a devastating drought 2 years ago, we're 
deploying mapping technology to help farming communities find new 
sources of water. In the Sahel, we're partnering with U.S. Special 
Operations Command to conduct detailed analysis and geo-spatial mapping 
of the region. These efforts have given U.S. development and military 
professionals a deeper understanding of both the drivers of conflict 
and ways to build resilience.
    We are working effectively to both protect and manage the 
environment that supports us. In addition, we are harnessing 
innovation, evidence, and technology to reduce consumer demand for 
endangered species and stop wildlife trafficking. For instance, no 
tigers or rhinos were poached in Nepal in 2013 due to our sustained 
investments in community-based conservation. This past January, USAID 
partners convened 28 African and Asian countries to participate in an 
enforcement operation that resulted in more than 400 arrests and the 
seizure of three metric tons of ivory, 10,000 turtles, and 1,000 skins 
of protected species.
    We're pioneering a new approach that puts people on a path from 
dependency to resilience, while expanding broad-based economic growth.
    USAID and State Department are requesting $2 billion globally in 
the Development Assistance and Economic Support Fund accounts to 
strengthen democracy, human rights, and governance. Thanks to USAID's 
rapid-response capability on civil society laws, we were able to take 
advantage of political openings in Libya, Tunisia and Burma to 
encourage early reformers to adopt consultative government-civil 
society processes that have led to much-improved civil society 
legislation, which in turn will pave the way for further political 
opening.
    In fiscal year 2015, the State Department and USAID have requested 
nearly $1.5 billion to support democratic transitions and respond to 
emerging crises in the Middle East and North Africa. For example, in 
Tunisia, we worked with civil society and the government to implement 
some of the most progressive non-governmental organization (NGO) laws 
in the region. The new law passed as a result of a consultative 
government-civil society process and is now considered a model for the 
region; the new Libyan draft civil society organization law is based on 
peer consultations with Tunisians on their law.
    Of the President's $2.8 billion assistance request for the 
Frontline States, USAID implements $1.8 billion for long-term 
development assistance, continuing to work closely with interagency 
partners--including the State and Defense departments--to move toward 
long-term stability, promote economic growth, and support governance 
reforms, including the rights of women.
    This request is tailored to support our three-fold transition 
strategy in Afghanistan, including maintaining gains in health, 
education, and the empowerment of women; promoting economic growth; and 
improving stability by supporting more accountable and effective Afghan 
governance, which is especially critical in the first year after the 
2014 presidential election.
    Our assistance in Afghanistan has helped deliver incredible gains. 
Today, 77,000 university students--a nine-fold increase from 2001--will 
form a new generation of leaders. The wait time for goods crossing the 
border with Pakistan has fallen from 8 days to 3.5 hours--saving $38 
million every year and opening access to new markets for farmers and 
entrepreneurs. The rapid expansion of mobile technology across the 
country is empowering Afghan women to demand an equal stake in their 
nation's future.
    Building on our strong legacy of progress in Latin America and the 
Caribbean, we're focusing on spurring economic growth and strengthening 
democracy by tackling the biggest drivers of instability, from drug 
trafficking to climate change. Today, for example, we work with a range 
of partners, including Nike Foundation and PepsiCo, to train thousands 
of at-risk youth in 18 countries of the region. The program has had an 
extremely high success rate, with 65 percent of graduates getting jobs, 
returning to school, or starting their own business within 1 year of 
graduation.
    In Colombia, we've partnered with Starbucks to improve yields for 
25,000 coffee-farmers, giving them a shot at the global market and a 
reason to invest in their land after decades of conflict. In Peru, our 
partnership with the Government of San Martin has helped reduced 
poverty by more than 67 percent and cut coca production from 22,000 
hectares to around 1,200.
    We're also investing in the future innovators, doctors, and 
entrepreneurs throughout Latin America. For instance, in Honduras, we 
partnered with a telecom company to connect our network of 40 youth 
outreach centers--providing Internet access, online education and 
virtual job training to more than 17,000 people. On the whole, these 
investments produce immense gains in literacy, stability, and long-term 
economic growth.
    From empowering small businesses in Burma to helping eradicate 
extreme poverty in Nepal, we are supporting the administration's Asia-
Pacific Rebalance, renewing U.S. leadership, deepening economic ties, 
and promoting democratic and universal values. Today, we are bolstering 
regional cooperation around shared solutions to complex challenges 
through deepened engagement in ASEAN and the Lower Mekong Initiative. 
In March, we signed an agreement with the U.S.-ASEAN Business Council 
to help link small- and medium-sized enterprises across Asia to 
regional and global value chains.
                        usaid operating expenses
    In recognition of development's centrality to U.S. national 
security, the President's National Security Strategy calls for 
investing in development capabilities and institutions. The fiscal year 
2015 USAID Operating Expenses account request for $1.4 billion will 
provide that investment--advancing U.S. interests, enhancing national 
security, and reaffirming our global development leadership. The 
request will enable USAID to maintain core operations, and to continue 
USAID Forward reforms--as well as better collaborate with partner 
countries and local institutions--to maximize the value of each dollar.
    Although an increase from fiscal year 2014, the request represents 
the minimum level of resources necessary to preserve our agency's 
current services and operations and support the existing workforce to 
meet U.S. foreign policy objectives and global development needs. The 
requested funding will allow our agency to offset the projected 
decrease in other funding sources, such as recoveries, reimbursements, 
and trust funds that support operations. At the same time, it will 
restore the new obligation authority needed to maintain its current 
level of operations into fiscal year 2015.
    The request reflects our agency's focus on working through a more 
efficient, high-impact approach. We are continuing to reform operations 
to improve management processes and generate significant cost savings 
for fiscal year 2015, like real property disposals and space 
optimization. In addition, our agency restructured its overseas 
presence to strengthen its ability to meet its foreign policy and 
national security mission.
                               conclusion
    Today, for the first time in history, we have new tools and 
approaches that enable us to envision a world without extreme poverty.
    This is an unprecedented moment for our Nation--one where we can 
again lead the world in achieving goals once deemed too ambitious, too 
dangerous, or too complex. In doing so, we can protect our national 
security and spur economic growth. But above all, we can express the 
generosity and goodwill that unite us as a people.
    As President Obama said in the 2013 State of the Union address, 
``We also know that progress in the most impoverished parts of our 
world enriches us all--not only because it creates new markets, more 
stable order in certain regions of the world, but also because it's the 
right thing to do.''
    As we step forward to answer the President's call with renewed 
energy and focus, we remain committed to engaging the American people 
and serving their interests by leading the world to end extreme 
poverty.
    Thank you.

                                  CUBA

    Senator Leahy. Thank you.
    The U.S. provides $15 million to $20 million for so-called 
democracy programs in Cuba. They traditionally have been 
administrated by USAID. It is the same program that got Alan 
Gross arrested. He is in his fifth year of a 15 year sentence, 
which at his age is basically a death sentence. Last week, he 
began a hunger strike because he has given up waiting for any 
kind of a sign by this Administration they are doing anything 
meaningful to get him out.
    According to a recent Associated Press report, between 2009 
and 2012, USAID funded a program named ZunZuneo. They used 
personal data obtained overseas, secret bank accounts, a shell 
company to support cell phone access for Cubans who had no idea 
it was funded by the U.S. Government. The irony being if we did 
not have the embargo we have, we probably would have had ten 
legitimate American companies down there vying for the ability 
to sell cell phones and Internet access.
    Whose idea was it to undertake this program in this manner?
    Dr. Shah. Senator Leahy, first let me--thank you for your 
question.
    Let me address Alan Gross first, we believe----
    Senator Leahy. No, how you--first answer the question. 
Whose idea was this?
    Dr. Shah. The program was designed in 2007 and 2008, at 
that timeframe. That said, the legislation that crafts the 
purpose of the program----
    Senator Leahy. No. Whose idea was it for this specific 
program? I have read the legislation. The legislation does not 
say anything about setting up a cockamamie idea in Cuba with 
Twitter accounts and all, on something that the Cubans would be 
so easy to discover.
    Whose idea was this specific program in Cuba? Who? It is a 
simple question.
    Dr. Shah. Sir, the program was in place before I arrived.
    Senator Leahy. Sir, do you know whose idea it was? I know 
it was in place before you arrived. But do you know whose idea 
it was?
    Dr. Shah. I--well, first let me say, and I think this is 
important, sir, and I greatly respect your point of view. But 
that AP story had a number of critical inaccuracies----
    Senator Leahy. I have read--I have read----
    Dr. Shah. And I am, I am----
    Senator Leahy. I will put that in the record. I will put it 
in the record, both the AP story and USAID's response to the AP 
story.

    [Clerk's note: The information below is the Associated 
Press story.]
                 [From the Miami Herald, Apr. 3, 2014]

         U.S. Secretly Created ``Cuban Twitter'' to Stir Unrest

  (By Desmond Butler, Jack Gillum and Alberto Arce, Associated Press)
         Copyright 2014, The Miami Herald. All Rights Reserved.

    Washington.--In July 2010, Joe McSpedon, a U.S. Government 
official, flew to Barcelona to put the final touches on a secret plan 
to build a social media project aimed at undermining Cuba's Communist 
Government.
    McSpedon and his team of high-tech contractors had come in from 
Costa Rica and Nicaragua, Washington and Denver. Their mission: to 
launch a messaging network that could reach hundreds of thousands of 
Cubans. To hide the network from the Cuban Government, they would set 
up a byzantine system of front companies using a Cayman Islands bank 
account, and recruit unsuspecting executives who would not be told of 
the company's ties to the U.S. Government.
    McSpedon didn't work for the CIA. This was a program paid for and 
run by the U.S. Agency for International Development, best known for 
overseeing billions of dollars in U.S. humanitarian aid.
    According to documents obtained by the Associated Press (AP) and 
multiple interviews with people involved in the project, the plan was 
to develop a bare-bones ``Cuban Twitter,'' using cellphone text 
messaging to evade Cuba's strict control of information and its 
stranglehold restrictions over the Internet. In a play on Twitter, it 
was called ZunZuneo--slang for a Cuban hummingbird's tweet.
    Documents show the U.S. Government planned to build a subscriber 
base through ``non-controversial content'': news messages on soccer, 
music, and hurricane updates. Later when the network reached a critical 
mass of subscribers, perhaps hundreds of thousands, operators would 
introduce political content aimed at inspiring Cubans to organize 
``smart mobs''--mass gatherings called at a moment's notice that might 
trigger a Cuban Spring, or, as one USAID document put it, ``renegotiate 
the balance of power between the state and society.''
    At its peak, the project drew in more than 40,000 Cubans to share 
news and exchange opinions. But its subscribers were never aware it was 
created by the U.S. Government, or that American contractors were 
gathering their private data in the hope that it might be used for 
political purposes.
    ``There will be absolutely no mention of United States Government 
involvement,'' according to a 2010 memo from Mobile Accord, one of the 
project's contractors. ``This is absolutely crucial for the long-term 
success of the service and to ensure the success of the Mission.''
    The program's legality is unclear: U.S. law requires that any 
covert action by a Federal agency must have a presidential 
authorization. Officials at USAID would not say who had approved the 
program or whether the White House was aware of it. McSpedon, the most 
senior official named in the documents obtained by the AP, is a mid-
level manager who declined to comment.
    USAID spokesman Matt Herrick said the agency is proud of its Cuba 
programs and noted that congressional investigators reviewed them last 
year and found them to be consistent with U.S. law.
    ``USAID is a development agency, not an intelligence agency, and we 
work all over the world to help people exercise their fundamental 
rights and freedoms, and give them access to tools to improve their 
lives and connect with the outside world,'' he said.
    ``In the implementation,'' he added, ``has the government taken 
steps to be discreet in non-permissive environments? Of course. That's 
how you protect the practitioners and the public. In hostile 
environments, we often take steps to protect the partners we're working 
with on the ground. This is not unique to Cuba.''
    But the ZunZuneo program muddies those claims, a sensitive issue 
for its mission to promote democracy and deliver aid to the world's 
poor and vulnerable--which requires the trust of foreign governments.
    ``On the face of it there are several aspects about this that are 
troubling,'' said Sen. Patrick Leahy, D-VT and chairman of the 
Appropriations Committee's State Department and Foreign Operations 
Subcommittee.
    ``There is the risk to young, unsuspecting Cuban cellphone users 
who had no idea this was a U.S. Government-funded activity. There is 
the clandestine nature of the program that was not disclosed to the 
appropriations subcommittee with oversight responsibility. And there is 
the disturbing fact that it apparently activated shortly after Alan 
Gross, a USAID subcontractor who was sent to Cuba to help provide 
citizens access to the Internet, was arrested.''
    The Associated Press obtained more than 1,000 pages of documents 
about the project's development. The AP independently verified the 
project's scope and details in the documents--such as Federal contract 
numbers and names of job candidates--through publicly available 
databases, government sources and interviews with those directly 
involved in ZunZuneo.
    Taken together, they tell the story of how agents of the U.S. 
Government, working in deep secrecy, became tech entrepreneurs--in 
Cuba. And it all began with a half a million cellphone numbers obtained 
from a Communist Government.
    ZunZuneo would seem to be a throwback from the Cold War, and the 
decades-long struggle between the United States and Cuba. It came at a 
time when the historically sour relationship between the countries had 
improved, at least marginally, and Cuba had made tentative steps toward 
a more market-based economy.
    It is unclear whether the plan got its start with USAID or Creative 
Associates International, a Washington, DC, for-profit company that has 
earned hundreds of millions of dollars in U.S. contracts. But a ``key 
contact'' at Cubacel, the state-owned cellphone provider, slipped the 
phone numbers to a Cuban engineer living in Spain. The engineer 
provided the numbers to USAID and Creative Associates ``free of 
charge,'' documents show.
    In mid-2009, Noy Villalobos, a manager with Creative Associates who 
had worked with USAID in the 1990s on a program to eradicate drug 
crops, started an instant messaging (IM) chat with her little brother 
in Nicaragua, according to a Creative Associates email that captured 
the conversation. Mario Bernheim, in his mid-20s, was an up-and-coming 
techie who had made a name for himself as a computer whiz.
    ``This is very confidential of course,'' Villalobos cautioned her 
brother. But what could you do if you had all the cellphone numbers of 
a particular country? Could you send bulk text messages without the 
government knowing?
    ``Can you encrypt it or something?'' she texted.
    She was looking for a direct line to regular Cubans through text 
messaging. Most had precious little access to news from the outside 
world. The government viewed the Internet as an Achilles' heel and 
controlled it accordingly. A communications minister had even referred 
to it as a ``wild colt'' that ``should be tamed.''
    Yet in the years since Fidel Castro handed over power to his 
brother Raul, Cuba had sought to jumpstart the long stagnant economy. 
Raul Castro began encouraging cellphone use, and hundreds of thousands 
of people were suddenly using mobile phones for the first time, though 
smartphones with access to the Internet remained restricted.
    Cubans could text message, though at a high cost in a country where 
the average wage was a mere $20 a month.
    Bernheim told his sister that he could figure out a way to send 
instant texts to hundreds of thousands of Cubans-- for cheap. It could 
not be encrypted though, because that would be too complicated. They 
wouldn't be able to hide the messages from the Cuban Government, which 
owned Cubacel. But they could disguise who was sending the texts by 
constantly switching the countries the messages came from.
    ``We could rotate it from different countries?'' Villalobos asked. 
``Say one message from Nica, another from Spain, another from Mexico''?
    Bernheim could do that. ``But I would need mirrors set up around 
the world, mirrors, meaning the same computer, running with the same 
platform, with the same phone.''
    ``No hay problema,'' he signed off. No problem.
    After the chat, Creative hired Bernheim as a subcontractor, 
reporting to his sister. (Villalobos and Bernheim would later confirm 
their involvement with the ZunZuneo project to AP, but decline further 
comment.) Bernheim, in turn, signed up the Cuban engineer who had 
gotten the phone list. The team figured out how to message the masses 
without detection, but their ambitions were bigger.
    Creative Associates envisioned using the list to create a social 
networking system that would be called ``Proyecto ZZ,'' or ``Project 
ZZ.'' The service would start cautiously and be marketed chiefly to 
young Cubans, who USAID saw as the most open to political change.
    ``We should gradually increase the risk,'' USAID proposed in a 
document. It advocated using ``smart mobs'' only in ``critical/
opportunistic situations and not at the detriment of our core platform-
based network.''
    USAID's team of contractors and subcontractors built a companion 
website to its text service so Cubans could subscribe, give feedback 
and send their own text messages for free. They talked about how to 
make the Web site look like a real business. ``Mock ad banners will 
give it the appearance of a commercial enterprise,'' a proposal 
suggested.
    In multiple documents, USAID staff pointed out that text messaging 
had mobilized smart mobs and political uprisings in Moldova and the 
Philippines, among others. In Iran, the USAID noted social media's role 
following the disputed election of then President Mahmoud Ahmadinejad 
in June 2009--and saw it as an important foreign policy tool.
    USAID documents say their strategic objective in Cuba was to ``push 
it out of a stalemate through tactical and temporary initiatives, and 
get the transition process going again towards democratic change.'' 
Democratic change in authoritarian Cuba meant breaking the Castros' 
grip on power.
    USAID divided Cuban society into five segments depending on loyalty 
to the government. On one side sat the ``democratic movement,'' called 
``still (largely) irrelevant,'' and at the other end were the ``hard-
core system supporters,'' dubbed ``Talibanes'' in a derogatory 
comparison to Afghan and Pakistani extremists.
    A key question was how to move more people toward the democratic 
activist camp without detection. Bernheim assured the team that 
wouldn't be a problem.
    ``The Cuban Government, like other regimes committed to information 
control, currently lacks the capacity to effectively monitor and 
control such a service,'' Bernheim wrote in a proposal for USAID marked 
``Sensitive Information.''
    ZunZuneo would use the list of phone numbers to break Cuba's 
Internet embargo and not only deliver information to Cubans but also 
let them interact with each other in a way the government could not 
control. Eventually it would build a system that would let Cubans send 
messages anonymously among themselves.
    At a strategy meeting, the company discussed building ``user volume 
as a cover . . . for organization,'' according to meeting notes. It 
also suggested that the ``Landscape needs to be large enough to hide 
full opposition members who may sign up for service.''
    In a play on the telecommunication minister's quote, the team 
dubbed their network the ``untamed colt.''
    At first, the ZunZuneo team operated out of Central America. 
Bernheim, the techie brother, worked from Nicaragua's capital, Managua, 
while McSpedon supervised Creative's work on ZunZuneo from an office in 
San Jose, Costa Rica, though separate from the U.S. Embassy. It was an 
unusual arrangement that raised eyebrows in Washington, according to 
U.S. officials.
    McSpedon worked for USAID's Office of Transition Initiatives (OTI), 
a division that was created after the fall of the Soviet Union to 
promote U.S. interests in quickly changing political environments--
without the usual red tape.
    In 2009, a report by congressional researchers warned that OTI's 
work ``often lends itself to political entanglements that may have 
diplomatic implications.'' Staffers on oversight committees complained 
that USAID was running secret programs and would not provide details.
    ``We were told we couldn't even be told in broad terms what was 
happening because 'people will die,''' said Fulton Armstrong, who 
worked for the Senate Foreign Relations Committee. Before that, he was 
the U.S. intelligence community's most senior analyst on Latin America, 
advising the Clinton White House.
    The money that Creative Associates spent on ZunZuneo was publicly 
earmarked for an unspecified project in Pakistan, Government data show. 
But there is no indication of where the funds were actually spent.
    Tensions with Congress spiked just as the ZunZuneo project was 
gearing up in December 2009, when another USAID program ended in the 
arrest of the U.S. contractor, Alan Gross. Gross had traveled 
repeatedly to Cuba on a secret mission to expand Internet access using 
sensitive technology typically available only to governments, a mission 
first revealed in February 2012 by AP.
    At some point, Armstrong says, the Foreign Relations Committee 
became aware of OTI's secret operations in Costa Rica. U.S. Government 
officials acknowledged them privately to Armstrong, but USAID refused 
to provide operational details.
    At an event in Washington, Armstrong says he confronted McSpedon, 
asking him if he was aware that by operating secret programs from a 
third country, it might appear like he worked for an intelligence 
agency.
    McSpedon, through USAID, said the story is not true. He declined to 
comment otherwise.
    On September 20, 2009, thousands of Cubans gathered at Revolution 
Plaza in Havana for Colombian rocker Juanes' ``Peace without Borders'' 
concert. It was the largest public gathering in Cuba since the visit of 
Pope John Paul II in 1998. Under the watchful gaze of a giant sculpture 
of revolutionary icon Ernesto ``Che'' Guevara, the Miami-based Juanes 
promised music aimed at ``turning hate into love.''
    But for the ZunZuneo team, the concert was a perfect opportunity to 
test the political power of their budding social network. In the weeks 
before, Bernheim's firm, using the phone list, sent out a half a 
million text messages in what it called ``blasts,'' to test what the 
Cuban Government would do.
    The team hired Alen Lauzan Falcon, a Havana-born satirical artist 
based in Chile, to write Cuban-style messages. Some were mildly 
political and comical, others more pointed. One asked respondents 
whether they thought two popular local music acts out of favor with the 
government should join the stage with Juanes. Some 100,000 people 
responded--not realizing the poll was used to gather critical 
intelligence.
    Paula Cambronero, a researcher for Mobile Accord, began building a 
vast database about the Cuban subscribers, including gender, age, 
``receptiveness'' and ``political tendencies.'' USAID believed the 
demographics on dissent could help it target its other Cuba programs 
and ``maximize our possibilities to extend our reach.''
    Cambronero concluded that the team had to be careful. ``Messages 
with a humorous connotation should not contain a strong political 
tendency, so as not to create animosity in the recipients,'' she wrote 
in a report.
    Falcon, in an interview, said he was never told that he was 
composing messages for a U.S. Government program, but he had no regrets 
about his involvement.
    ``They didn't tell me anything, and if they had, I would have done 
it anyway,'' he said. ``In Cuba they don't have freedom. While a 
government forces me to pay in order to visit my country, makes me ask 
permission, and limits my communications, I will be against it, whether 
it's Fidel Castro, (Cuban exile leader) Jorge Mas Canosa or Gloria 
Estefan,'' the Cuban American singer.
    Carlos Sanchez Almeida, a lawyer specializing in European data 
protection law, said it appeared that the U.S. program violated Spanish 
privacy laws because the ZunZuneo team had illegally gathered personal 
data from the phone list and sent unsolicited emails using a Spanish 
platform. ``The illegal release of information is a crime, and using 
information to create a list of people by political affiliation is 
totally prohibited by Spanish law,'' Almeida said. It would violate a 
U.S-European data protection agreement, he said.
    USAID saw evidence from server records that Havana had tried to 
trace the texts, to break into ZunZuneo's servers, and had occasionally 
blocked messages. But USAID called the response ``timid'' and concluded 
that ZunZuneo would be viable--if its origins stayed secret.
    Even though Cuba has one of the most sophisticated counter-
intelligence operations in the world, the ZunZuneo team thought that as 
long as the message service looked benign, Cubacel would leave it 
alone.
    Once the network had critical mass, Creative and USAID documents 
argued, it would be harder for the Cuban Government to shut it down, 
both because of popular demand and because Cubacel would be addicted to 
the revenues from the text messages.
    In February 2010, the company introduced Cubans to ZunZuneo and 
began marketing. Within 6 months, it had almost 25,000 subscribers, 
growing faster and drawing more attention than the USAID team could 
control.
    Saimi Reyes Carmona was a journalism student at the University of 
Havana when she stumbled onto ZunZuneo. She was intrigued by the 
service's novelty, and the price. The advertisement said ``free 
messages'' so she signed up using her nickname, Saimita.
    At first, ZunZuneo was a very tiny platform, Reyes said during a 
recent interview in Havana, but one day she went to its Web site and 
saw its services had expanded.
    ``I began sending one message every day,'' she said, the maximum 
allowed at the start. ``I didn't have practically any followers.'' She 
was thrilled every time she got a new one.
    And then ZunZuneo exploded in popularity.
    ``The whole world wanted in, and in a question of months I had 
2,000 followers who I have no idea who they are, nor where they came 
from.''
    She let her followers know the day of her birthday, and was 
surprised when she got some 15 personal messages. ``This is the coolest 
thing I've ever seen!'' she told her boyfriend, Ernesto Guerra Valdes, 
also a journalism student.
    Before long, Reyes learned she had the second highest number of 
followers on the island, after a user called UCI, which the students 
figured was Havana's University of Computer Sciences. Her boyfriend had 
1,000. The two were amazed at the reach it gave them.
    ``It was such a marvelous thing,'' Guerra said. ``So noble.'' He 
and Reyes tried to figure out who was behind ZunZuneo, since the 
technology to run it had to be expensive, but they found nothing. They 
were grateful though.
    ``We always found it strange, that generosity and kindness,'' he 
said. ZunZuneo was ``the fairy godmother of cellphones.''
    By early 2010, Creative decided that ZunZuneo was so popular 
Bernheim's company wasn't sophisticated enough to build, in effect, ``a 
scaled down version of Twitter.''
    It turned to another young techie, James Eberhard, CEO of Denver-
based Mobile Accord Inc. Eberhard had pioneered the use of text 
messaging for donations during disasters and had raised tens of 
millions of dollars after the January 2010 earthquake in Haiti.
    Eberhard earned millions in his mid-20s when he sold a company that 
developed cellphone ring tones and games. His company's Web site 
describes him as ``a visionary within the global mobile community.''
    In July, he flew to Barcelona to join McSpedon, Bernheim, and 
others to work out what they called a ``below the radar strategy.''
    ``If it is discovered that the platform is, or ever was, backed by 
the United States Government, not only do we risk the channel being 
shut down by Cubacel, but we risk the credibility of the platform as a 
source of reliable information, education, and empowerment in the eyes 
of the Cuban people,'' Mobile Accord noted in a memo.
    To cover their tracks, they decided to have a company based in the 
United Kingdom set up a corporation in Spain to run ZunZuneo. A 
separate company called MovilChat was created in the Cayman Islands, a 
well-known offshore tax haven, with an account at the island's Bank of 
N.T. Butterfield & Son Ltd. to pay the bills.
    A memo of the meeting in Barcelona says that the front companies 
would distance ZunZuneo from any U.S. ownership so that the ``money 
trail will not trace back to America.''
    But it wasn't just the money they were worried about. They had to 
hide the origins of the texts, according to documents and interviews 
with team members.
    Brad Blanken, the former chief operating officer of Mobile Accord, 
left the project early on, but noted that there were two main criteria 
for success.
    ``The biggest challenge with creating something like this is 
getting the phone numbers,'' Blanken said. ``And then the ability to 
spoof the network.''
    The team of contractors set up servers in Spain and Ireland to 
process texts, contracting an independent Spanish company called 
Lleida.net to send the text messages back to Cuba, while stripping off 
identifying data.
    Mobile Accord also sought intelligence from engineers at the 
Spanish telecommunications company Telefonica, which organizers said 
would ``have knowledge of Cubacel's network.''
    ``Understanding the security and monitoring protocols of Cubacel 
will be an invaluable asset to avoid unnecessary detection by the 
carrier,'' one Mobile Accord memo read.
    Officials at USAID realized however, that they could not conceal 
their involvement forever--unless they left the stage. The predicament 
was summarized bluntly when Eberhard was in Washington for a strategy 
session in early February 2011, where his company noted the ``inherent 
contradiction'' of giving Cubans a platform for communications 
uninfluenced by their government that was in fact financed by the U.S. 
Government and influenced by its agenda.
    They turned to Jack Dorsey, a co-founder of Twitter, to seek 
funding for the project. Documents show Dorsey met with Suzanne Hall, a 
State Department officer who worked on social media projects, and 
others. Dorsey declined to comment.
    The State Department under then-Secretary Hillary Rodham Clinton 
thought social media was an important tool in diplomacy. At a 2011 
speech at George Washington University, Clinton said the U.S. helped 
people in ``oppressive Internet environments get around filters.'' In 
Tunisia, she said people used technology to ``organize and share 
grievances, which, as we know, helped fuel a movement that led to 
revolutionary change.''
    Ultimately, the solution was new management that could separate 
ZunZuneo from its U.S. origins and raise enough revenue for it to go 
``independent,'' even as it kept its long-term strategy to bring about 
``democratic change.''
    Eberhard led the recruitment efforts, a sensitive operation because 
he intended to keep the management of the Spanish company in the dark.
    ``The ZZ management team will have no knowledge of the true origin 
of the operation; as far as they know, the platform was established by 
Mobile Accord,'' the memo said. ``There should be zero doubt in 
management's mind and no insecurities or concerns about United States 
Government involvement.''
    The memo went on to say that the CEO's clean conscience would be 
``particularly critical when dealing with Cubacel.'' Sensitive to the 
high cost of text messages for average Cubans, ZunZuneo negotiated a 
bulk rate for texts at 4 cents a pop through a Spanish intermediary. 
Documents show there was hope that an earnest, clueless CEO might be 
able to persuade Cubacel to back the project.
    Mobile Accord considered a dozen candidates from five countries to 
head the Spanish front company. One of them was Francoise de Valera, a 
CEO who was vacationing in Dubai when she was approached for an 
interview. She flew to Barcelona. At the luxury Mandarin Oriental 
Hotel, she met with Nim Patel, who at the time was Mobile Accord's 
president. Eberhard had also flown in for the interviews. But she said 
she couldn't get a straight answer about what they were looking for.
    ``They talked to me about instant messaging but nothing about Cuba, 
or the United States,'' she told the AP in an interview from London.
    ``If I had been offered and accepted the role, I believe that 
sooner or later it would have become apparent to me that something 
wasn't right,'' she said.
    By early 2011, Creative Associates grew exasperated with Mobile 
Accord's failure to make ZunZuneo self-sustaining and independent of 
the U.S. Government. The operation had run into an unsolvable problem. 
USAID was paying tens of thousands of dollars in text messaging fees to 
Cuba's communist telecommunications monopoly routed through a secret 
bank account and front companies. It was not a situation that it could 
either afford or justify--and if exposed it would be embarrassing, or 
worse.
    In a searing evaluation, Creative Associates said Mobile Accord had 
ignored sustainability because ``it has felt comfortable receiving 
United States Government (USG) financing to move the venture forward.''
    Out of 60 points awarded for performance, Mobile Accord scored 34 
points. Creative Associates complained that Mobile Accord's 
understanding of the social mission of the project was weak, and gave 
it 3 out of 10 points for ``commitment to our Program goals.''
    Mobile Accord declined to comment on the program.
    In increasingly impatient tones, Creative Associates pressed Mobile 
Accord to find new revenue that would pay the bills. Mobile Accord 
suggested selling targeted advertisements in Cuba, but even with 
projections of up to a million ZunZuneo subscribers, advertising in a 
state-run economy would amount to a pittance.
    By March 2011, ZunZuneo had about 40,000 subscribers. To keep a 
lower profile, it abandoned previous hopes of reaching 200,000 and 
instead capped the number of subscribers at a lower number. It limited 
ZunZuneo's text messages to less than 1 percent of the total in Cuba, 
so as to avoid the notice of Cuban authorities. Though one former 
ZunZuneo worker--who spoke on condition of anonymity because he was not 
authorized to speak publicly about his work--said the Cubans were 
catching on and had tried to block the site.
    Toward the middle of 2012, Cuban users began to complain that the 
service worked only sporadically. Then not at all.
    ZunZuneo vanished as mysteriously as it appeared.
    By June 2012, users who had access to Facebook and Twitter were 
wondering what had happened.
    ``Where can you pick up messages from ZunZuneo?'' one woman asked 
on Facebook in November 2012. ``Why aren't I receiving them anymore?''
    Users who went to ZunZuneo's Web site were sent to a children's Web 
site with a similar name.
    Reyner Aguero, a 25-year-old blogger, said he and fellow students 
at Havana's University of Computer Sciences tried to track it down. 
Someone had rerouted the Web site through DNS blocking, a censorship 
technique initially developed back in the 1990s. Intelligence officers 
later told the students that ZunZuneo was blacklisted, he said.
    ``ZunZuneo, like everything else they did not control, was a 
threat,'' Aguero said. ``Period.''
    In incorrect Spanish, ZunZuneo posted a note on its Facebook page 
saying it was aware of problems accessing the Web site and that it was 
trying to resolve them.
    ``;Que viva el ZunZuneo!'' the message said. Long live ZunZuneo!
    In February, when Saimi Reyes, and her boyfriend, Ernesto Guerra, 
learned the origins of ZunZuneo, they were stunned.
    ``How was I supposed to realize that?'' Guerra asked. ``It's not 
like there was a sign saying `Welcome to ZunZuneo, brought to you by 
USAID.' ''
    ``Besides, there was nothing wrong. If I had started getting 
subversive messages or death threats or `Everyone into the streets,' '' 
he laughed, ``I would have said, `OK,' there's something fishy about 
this. But nothing like that happened.''
    USAID says the program ended when the money ran out. The Cuban 
Government declined to comment.
    The former Web domain is now a placeholder, for sale for $299. The 
registration for MovilChat, the Cayman Islands front company, was set 
to expire on March 31.
    In Cuba, nothing has come close to replacing it. Internet service 
still is restricted.
    ``The moment when ZunZuneo disappeared was like a vacuum,'' Guerra 
said. ``People texted my phone, `What is happening with ZunZuneo?' ''
    ``In the end, we never learned what happened,'' he said. ``We never 
learned where it came from.''

    [Clerk's note: The information below is USAID's response to 
the Associated Press story.]
  [A Blog From the United States Agency for International Development,
                             Apr. 7, 2014]

                       Eight Facts About ZunZuneo

                 (Posted by Matt Herrick, Spokesperson)
    On Thursday, April 3, the Associated Press published an article on 
a social media program in Cuba funded by the U.S. Agency for 
International Development. The article contained significant 
inaccuracies and false conclusions about ZunZuneo, which was part of a 
broader effort that began in 2009 to facilitate ``twitter like'' 
communication among Cubans so they could connect with each other on 
topics of their choice. Many of the inaccuracies have been re-reported 
by other news outlets, perpetuating the original narrative, or worse.
    The article suggested that USAID spent years on a ``covert'' 
program to gather personal information to be used for political 
purposes to ``foment'' ``smart mobs'' and start a ``Cuban Spring'' to 
overthrow the Cuban Government. It makes for an interesting read, but 
it's not true.
    USAID's work in Cuba is not unlike what we and other donors do 
around the world to connect people who have been cut off from the 
outside world by repressive or authoritarian governments. USAID's 
democracy and governance work focuses on strengthening civil society, 
governance, and promoting human rights.
Here are eight claims made by article, followed by the facts:
    (1) The story says the ``program's legality is unclear'' and 
implies the program was ``covert.''
    FACT: USAID works in places where we are not always welcome. To 
minimize the risk to our staff and partners and ensure our work can 
proceed safely, we must take certain precautions and maintain a 
discreet profile. But discreet does not equal covert.
    The programs have long been the subject of congressional 
notifications, unclassified briefings, public budget requests, and 
public hearings. All of the Congressional Budget Justifications 
published from 2008 through 2013, which are public and online, 
explicitly state that a key goal of USAID's Cuba program is to break 
the ``information blockade'' or promote ``information sharing'' amongst 
Cubans and that assistance will include the use or promotion of new 
``technologies'' and/or ``new media'' to achieve its goals.
    In 2012, the Government Accountability Office--the U.S. 
Government's investigative arm--spent months looking at every aspect of 
USAID's Cuba programs. GAO's team of analysts had unrestricted access 
to project documents, extended telephone conversations with Mobile 
Accord (ZunZuneo) and even traveled to Cuba. The GAO identified no 
concerns in the report about the legality of USAID's programs, 
including ZunZuneo, and offered USAID zero recommendations for 
improvements.
    (2) The article implies that the purpose of the program was to 
foment ``Smart Mobs,'' funnel political content and thereby trigger 
unrest in Cuba.
    FACT: The ``USAID documents'' cited in the article appear to be 
case study research and brainstorming notes between the grantee and the 
contractor. The specific reference to ``Smart Mobs'' had nothing to do 
with Cuba nor ZunZuneo. The documents do not represent the U.S. 
Government's position or reflect the spirit or actions taken as part of 
the program in Cuba. The project initially sent news, sports scores, 
weather, and trivia. After which, the grantee did not direct content 
because users were generating it on their own.
    (3) The story states there was a ``shell company'' in Spain formed 
to run the program.
    FACT: No one affiliated with the ZunZuneo program established a 
private company in Spain as part of this program. The project sought to 
do so if it was able to attract private investors to support the effort 
after USAID funding ended. Private investment was never identified and 
thus no company was ever formed.
    (4) The story implies that the United States Government (USG) tried 
to recruit executives to run ZunZuneo without telling them about USG 
involvement.
    FACT: A USAID staff member was present during several of the 
interviews for candidates to lead ZunZuneo. The staff member's 
affiliation with USAID was disclosed and it was conveyed that the 
funding for the program was from the U.S. Government.
    (5) The article states that private data was collected with the 
hope it would be used for political purposes.
    FACT: The ZunZuneo project included a Web site, as is typical for a 
social network. Users could voluntarily submit personal information. 
Few did, and the program did not use this information for anything.
    (6) The article says that the funding was ``publicly earmarked for 
an unspecified project in Pakistan,'' implying that funds were 
misappropriated.
    FACT: All funds for this project were congressionally appropriated 
for democracy programs in Cuba, and that information is publicly 
available.
    (7) The story stated, ``At its peak, the project drew in more than 
40,000 Cubans to share news and exchange opinions.''
    FACT: At its peak, the platform had around 68,000 users.
    (8) The article suggests there was an inappropriate base of 
operations established in Costa Rica outside of normal U.S. Government 
procedures.
    FACT: The Government of Costa Rica was informed of the program on 
more than one occasion. The USAID employee overseeing the program 
served under Chief of Mission Authority with the U.S. Embassy, as is 
standard practice.

    Dr. Shah. Okay.
    Senator Leahy. Having said that, do you know whose idea it 
was?
    Dr. Shah. I do not specifically, but I will say this, that 
working on creating platforms to improve communication in Cuba, 
and in many other parts of the world, is a core part of what 
USAID has done for some time and continues to do.
    Senator Leahy. Did----
    Dr. Shah. Part of the Administration's policy is to 
continue to support efforts to allow for open communications. 
To the extent that the AP story, or any other comment, creates 
the impression that this effort, or any other, goes beyond that 
for other ulterior purposes, that is simply inaccurate.
    Senator Leahy. Was it a covert program?
    Dr. Shah. Absolutely not. It was conducted----
    Senator Leahy. Was anyone at the U.S. Interests Section, at 
either the Department of State or the White House, aware of the 
facts of this program?
    Dr. Shah. This program has been notified publicly in 
congressional budget justifications dating back to 2008----
    Senator Leahy. I have read those and you are talking about 
bureaucratese. If you could figure out that it meant this, you 
are a lot better than most of us.
    Now, Alan Gross----
    Dr. Shah. Well, sir, may I speak to that?
    The notifications point out that we are working to increase 
the free flow of information and support civil society and 
engagement using new technology. They specifically highlight 
work to reduce Internet restrictions to information. They 
highlight using new digital methods to increase information 
flow in and out of the island, and they talk about work on 
Internet freedom. More detailed conversations took place in 
staff briefings.
    Senator Leahy. And we have spent millions of dollars, for 
example, on the Marti program even though we just made a lot of 
people wealthy, but it has not done much of any good 
whatsoever, but it makes people feel good to spend the money.
    Alan Gross was arrested in December of 2009. Did USAID 
consider what the possible discovery of this program by the 
Cuban Government, did anybody consider what that might have 
meant for Alan Gross?
    Dr. Shah. Look, Alan's detention is wrong. The 
responsibility for his detention rests with Cuban authorities. 
And our administration has worked, and since you mentioned it, 
I should highlight that the State Department has led an 
aggressive effort to help Alan secure his release. And 
specifically, Under Secretary Sherman has worked this issue at 
the highest levels, it has been addressed.
    Senator Leahy. I have seen some nice press releases, but I 
have not seen any steps that would actually get him out.
    Dr. Shah. We can share that with you in a private setting, 
I am sure. She would be eager to do that.
    Senator Leahy. Okay.
    Dr. Shah. Because I know that----
    Senator Leahy. Let me ask you this----
    Dr. Shah [continuing]. There is a lot of focused work on 
behalf of the Gross family, whom we think about and care about 
deeply.
    Senator Leahy. Is the program that Alan Gross was sent down 
there to carry out, did USAID consider the fact that if he was 
discovered in that program that he would be arrested? Was that 
ever a consideration of USAID?
    Dr. Shah. Yes, these programs are conducted more discreetly 
precisely because of a recognition that providing Internet 
access in an authoritarian environment----
    Senator Leahy. Then why has----
    Dr. Shah [continuing]. Exposes partners to certain risks.
    Senator Leahy. There are USAID people who are doing 
wonderful things that you and I would applaud all over the 
world, many at great risk to themselves because of the places 
they are in. And they are constantly faced with the suspicion 
``You are not here to help us. You are really a spy.'' And they 
have to say, ``Well, no. We do not work for the CIA. We work 
for USAID.''
    Did you not worry that having a USAID employee do this, 
knowing how the Cuban secret police and informants work, that 
he would be discovered? Does that not taint all USAID employees 
around the world as spies? I mean, we are already getting 
emails from USAID employees, current and past, saying, ``How 
could they do this and put us in such danger?''
    Dr. Shah. Sir, we support civil society. We support and 
implement the fiscal year 2014 appropriations language that 
directs us to improve access to information and Internet 
freedom in many parts of the world. We do it transparently and 
with public notifications. The fact that we are discussing it 
in this hearing highlights the reality that these are publicly 
notified programs.
    Senator Leahy. Where are some other countries where you do 
it openly?
    Dr. Shah. Literally, around the world. And we have had 
efforts in Kenya to support the Yes Youth Can----
    Senator Leahy. Have they always been done with----
    Dr. Shah [continuing]. Movement student groups.
    Senator Leahy. Has it always been done with full knowledge 
and support of our U.S. ambassadors in those countries in every 
instance?
    Dr. Shah. That is the aspiration.
    Senator Leahy. Is that the reality?
    Dr. Shah. I think for the major ones that I am most 
familiar with, absolutely. There are things we review. There 
are things that our Embassy teams are more than aware of.
    And, in fact, the Yes Youth Can program in Kenya is a great 
example. They can work. Sometimes they help lean and tip the 
scales towards protection of communities and rights, allowing 
people to gain access, promoting democratic transitions from 
one administration to the next, supporting safe participation 
in elections, and we have seen it time and time again. They do 
not always work, and I will be the first to admit that, but 
often they do.
    Senator Leahy. This one had, this one from the get-go had 
no possibility of working. That is my problem with it.
    Senator Graham.

                              AFGHANISTAN

    Senator Graham. Thank you, Mr. Chairman.
    There is an article, I think, in ``USA Today,'' April the 
2nd. The title was, ``AID Agency Accused of Cover Up in 
Afghanistan.'' The Special Inspector General for Afghanistan 
Reconstruction issued a report asserting that USAID kept 
information from congress and the American people regarding 
Afghan ministries unable to account for cash and other 
assistance. And the concern was that some of this money was 
going to suppliers and beneficiaries of the funds that have 
links with terrorist organizations.
    Could you comment on that article?
    Dr. Shah. Yes, absolutely, and thank you for the 
opportunity, Senator.
    First I will say that we have been fully open with all of 
these documents. These are assessments that we conduct in order 
to mitigate the risks of all of our partners, whether they are 
Government partners or others. We have made those full 
documents open without any redaction whatsoever to anyone who 
wants to be a part of an in-camera review, and that has taken 
place in the past.
    We have also made documents that were jointly redacted by 
the USAID and State available externally, in terms of moving 
the documents forward to, I think in that case, it was the 
House Oversight and Government Reform Committee where 
personally identifiable information and other things that were 
deemed national security sensitive were redacted.
    But the full, open documents are open. And, by the way, I 
am proud of these documents. These documents show that our 
teams are doing careful assessments, they assess 13 or 16 
ministries. They found some deficiencies in the controls, and 
procurement, and financial management systems. So instead of 
moving money directly to those ministries, they used a 
mechanism called the Afghan Reconstructions Trust Fund run by 
the World Bank, and a different central bank mechanism that 
allows us to carefully monitor and measure where our resources 
are going, and only expend them when we know costs have been 
incurred.
    And the final thing I will say about this, sir, is that, 
for 2 to 3 percent of the cost of this war, USAID has helped 8 
million kids go to school, nearly 3 million girls. We have 
helped support elections over the past weekend. We have seen 
the fastest reduction in maternal and child death anywhere in 
the world in Afghanistan over the last decade, and the 44 year 
increase in women's longevity in Afghanistan is not something 
that I made up. It is actually coming from a properly conducted 
demographic and health survey which is the gold standard for 
data collection in these types of efforts.
    The 2,200 kilometers of road have allowed real economic 
growth. And to the extent that Afghanistan has a shot at a 
secure and prosperous future, in large part, I believe, 
retrospectively people will see this 2 to 3 percent of our 
total investment as a very important part of giving that 
country a chance and of supporting American security interests 
in the long term.
    Senator Graham. I would agree with that assessment.

                            FEED THE FUTURE

    Let us now go to Africa. Genetically modified organisms, 
GMO's: what role do they play in our Feed the Future 
initiative? How are you integrating them into Africa? And very 
briefly, could you tell me, are we making progress with our 
European partners regarding GMO's utilization in Africa?
    Dr. Shah. Well, thank you, sir. And I want to thank the 
committee for its support for the Feed the Future program.
    When we launched Feed the Future, at the President's 
direction at the beginning of the first term, the goal was to 
help African institutions develop their own seeds, fertilizers, 
improved agricultural technologies that could help millions of 
people move beyond needing food assistance, and become self-
sufficient in their own right and commercially prosperous. Part 
of that transition is testing the use of all different kinds of 
technologies.
    And so, we have engaged in a series of partnerships to 
develop improved, drought-resistant or water efficient corn for 
east Africa; improved, bio-fortified products for west Africa 
and southern Africa. And these products are being developed, 
tested and introduced based on the regulations and the science 
norms in those countries.
    I think we are making tremendous progress. The fact that we 
have gone from virtually nothing to reaching 7 million farm 
households in a 4-year period, I believe, is an extraordinary 
effort. And the fact that we have motivated private companies 
to join us, most are local, African companies to make nearly $4 
billion of commitment----
    Senator Graham. And the goal----
    Dr. Shah [continuing]. And $48 million of investments is a 
big step forward as well.
    Senator Graham. And the goal is to create some disposable 
income in these farming families so they will have some 
purchasing power, building roads to get their crops to the 
market, and having some trade agreements in Africa to further 
advance farming. Is that correct?
    Dr. Shah. That is exactly true, sir. And the goal is, 
furthermore, to recognize that when these countries and their 
economies stand on their own two feet, they become trading 
partners. That creates jobs and security, trade and prosperity 
for the United States as well as Ghana, or Tanzania, or 
Mozambique, or Bangladesh.
    Senator Graham. Thank you.

                              HEPATITIS C

    Egypt has, I think, one of the highest levels of Hepatitis 
C infection in the world; over 12 million people infected. 
There is--I do not know if it is a new drug--but a drug 
available that can actually cure the disease.
    Would you be willing to talk with this committee about a 
pilot program where we, the United States, could supplement 
what the Egyptian Government is doing in terms of treating 
people who are infected with Hepatitis C and try to leverage 
some of the Sunni Arab countries who provide aid to Egypt to 
put some of their money into this program, and see if we can 
turn this around?
    Dr. Shah. I would be eager to learn more about it, sir, 
yes.
    Senator Graham. I think it is an opportunity for the 
committee and the congress to really weigh-in and help the 
Egyptian people with a huge problem, which is Hepatitis C 
infection that creates a lot of drain on their economy, and 
health problems that have to be addressed.

                                UKRAINE

    On Ukraine, do you have a presence in Ukraine?
    Dr. Shah. We do. Yes.
    Senator Graham. Where is it located?
    Dr. Shah. In Kiev.
    Senator Graham. I am very concerned that what you see in 
the east is a precursor to more Russian advancement that is 
pretty obvious that Putin is setting up a scenario where he is 
coming to the aid of ethnic Russians in the east, justifying a 
further incursion into Ukraine.
    Do you share those concerns? What purpose is our money 
being spent on? And is there any chance that the money that we 
are investing in Ukraine can yield results? And if we need to 
invest more, what would you advise the committee to do?
    Dr. Shah. Well, thank you, Senator and we have already 
significantly increased the investment just over the last few 
weeks in the Ukraine.
    Our investment serves two major purposes. One is to support 
the elections and civil society and democratic processes, so 
they are implemented effectively. And the second is economic--
--
    Senator Graham. Do you believe that Putin is trying to 
undercut this election? That the actions in the east are trying 
to, basically, dismember the country according to the Prime 
Minister of Ukraine's statement that that is going on before 
our eyes?
    Dr. Shah. They appear significant, sir, but our role is to 
focus on supporting the economic reforms, getting the IMF 
package, which is tens of billions of dollars to help bolster 
the Ukrainian economy.
    Specifically we will be, and are, providing technical 
assistance to do everything from providing land titles to 1.8 
million Ukrainian farmers, so they can provide commercial 
activity; to supporting the Government to make transitions in 
its fuel policies so that it can be more fiscally secure and 
have an economy that is more resilient to some of the 
geopolitical realities.
    Senator Graham. Thank you for all your good leadership and 
hard work.
    Dr. Shah. Thank you, sir.
    Senator Leahy. Senator Landrieu.
    Senator Landrieu. Thank you very much, Administrator. Thank 
you for the leadership you have provided and the partnerships 
that you have developed with other Governments, and nonprofit 
organizations, and businesses to leverage the money that the 
taxpayers of the United States are putting towards some of 
your, some of our very worthy goals.

                   NATIONAL ACTION PLAN FOR CHILDREN

    I have three questions today, and one is about the National 
Action Plan for Children. Secretary Kerry sent me a letter in 
September of this year and he wrote that the State Department 
and USAID were moving forward aggressively to implement the 
first-ever U.S. Action Plan for Children in Adversity, which 
the White House released in December of 2012. More 
specifically, he stated, ``USAID and State recently formed a 
senior policy operating group.'' So I have a few questions 
about that.
    In the 15 months since the National Action Plan on Children 
was released, what concrete actions has USAID, under the 
direction of this senior advisory committee, taken to advance 
the plan's implementation? And specifically, how many people 
have been assigned and how much money has been spent in 
standing up this Action Plan for Children in Adversity?
    Dr. Shah. Thank you, Senator Landrieu, and thank you for 
your strong support for USAID, for our reforms all around the 
world, and for your tremendous leadership on the issue of 
Children in Adversity in particular.
    As Secretary Kerry noted, we have made great strides moving 
forward. We have a coherent strategy that prioritizes birth 
registration efforts to move children to family care and out of 
orphanages, and to support efforts to help children survive and 
thrive as they grow into adolescence.
    We at USAID, to contribute to that strategy most 
effectively, have restructured our work, merging a few of our 
offices and moving them from global health to our humanitarian 
assistance bureau which, I think, will help take this forward.
    We have also increased our budget commitments to this area. 
The fiscal year 2015 request in addition to the 10 percent of 
the PEPFAR program that focuses on orphans and vulnerable 
children, will include additional resources specifically for 
this Center of Excellence. And we intend to support both new 
grand challenges in this area that will allow innovators and 
new partners to work with us in partnerships with companies 
like IKEA, H&M, and the Lumos Foundation, which was created by 
J.K. Rowling, to help leverage our resources and drive other 
people's money into this space as well.
    The one other thing I would like to highlight is that 
because of your leadership, and as a result of our mutual 
actions, last year, 500 kids were moved from orphanages in 
Cambodia, Rwanda, and Guatemala to family care in those 
settings. And our Children in Adversity advisor, our program 
partners, and certainly your office, have played a critical 
role. And for that, I want to thank you.
    Senator Landrieu. Well, thank you, Administrator.
    But we have, as you know, a lot more work to be done and 
there are 5 members of this committee, and over 60 members of 
congress, that have signed on to a piece of legislation called 
Children and Families First. And you would not think that a 
piece of legislation like that would be necessary. Think about 
it. Children and Families First, where else would children be?
    So I tell myself every day, it is interesting that I have 
to try to pass a bill in congress because when I read your 
statement today, even though that we have made a lot of 
progress, and I do believe that you are sincere. I cannot find 
the word ``family'' in, on any one of these pages. I see 
``children.'' I see ``young people.'' I see ``girls.'' I see 
``child.'' I see ``childhood,'' on and on and on.
    But as I have tried to explain to the chairman and he is, I 
think, very sympathetic, one of my big problems in this whole 
State Department, whole USAID space is I cannot find the word 
``family.'' And when you talk to regular Americans, regular 
Americans, Americans whether they are in Delaware or Louisiana 
or Vermont, the basis of society is family. Children belong in 
families. Families belong together.
    And I am sure you are aware of the studies that have been 
done by some of the outstanding doctors in our country. Are you 
aware of the Bucharest Early Intervention, Harvard Early 
Childhood Development, the work of Charles Zeanah at Tulane? 
Would you give a minute to explain to the committee what the 
findings of this work have been?
    Dr. Shah. Well, Senator, I do not have the specific 
findings in front of me, but the studies that I have been 
briefed on show very clearly that family care is good for kids, 
and my kids appreciate being in a family, sometimes.
    And so the reality is that you are right. We are trying to 
use the flexibilities and the capabilities we have to help 
support children to make the transition into families where 
that is not possible.
    I have met with kids in eastern Congo, just recently, who 
are working with our partners there to help them get placed 
into families, coming out of the conflict and the war that has 
been taking place there, and this should be a bigger part of 
what we do.
    Senator Landrieu. Okay. Well, let me ask you this question. 
Do you agree, then, that child welfare, particularly 
international child welfare, is more than a counselor issue? 
And needs to be handled in a way that represents or supports 
its importance in building civil societies?
    Dr. Shah. Yes.
    Senator Landrieu. Okay. Because this piece of legislation, 
which will be moving through, that is exactly what it attempts 
to do, to use the models that are very effective.
    And we have, on this committee, helped to create some of 
these very effective models for combating trafficking, 
providing humanitarian assistance for resettlement of refugees, 
AIDS relief, fighting terrorism. I mean, those are four really 
extraordinary successes that this chairman, and we have, and 
our authorization committee have led.
    That is what we are talking about with CHIFF is focusing 
the work so that we can put our money and our strategies in 
line with our views and values that children belong in 
families. Keeping them to the one they are born into, keeping 
that family together. If they are separated, reuniting them. 
And if we cannot keep the family together or reunite, find 
another family for them, in-country preferably, and if not, 
inter-country adoption.
    The chair is--I am on my last 3 seconds--the chair is aware 
that our numbers for inter-country adoption have fallen from a 
high of 20,000 down to 7,000. If we do not change this--20,000 
just 8 years ago to 7,000--we will be down to zero.
    Now, what that means to me is that we are not doing the 
very best job we can to help children find families. Most of 
them will find families in their own country. But inter-country 
adoption is an important--not the only, not the first, not the 
central--but an important part of that equation.
    So I thank you, Mr. Chairman, for your support and the 
members of this committee will continue to work on this. My 
other questions were about the Lord's Resistance Army and about 
the children in Syria, but I will submit those for the record.
    Senator Landrieu. Thank you.
    Senator Leahy. Thank you very much. We will continue to 
work on this issue. Thank you very much for that.
    Senator Johanns.
    Senator Johanns. Mr. Chairman, thank you.
    If I might start out, I do not have any questions to follow 
up on the chairman's comments relative to Cuba. I think those 
comments are extremely important, and I would strongly suggest 
that somebody in the Administration should pay attention to 
those comments. But here is just a general observation having 
worked with USAID as the ex-Secretary and now with you.
    I really like what you are doing, and I think you have 
bipartisan support on this committee for what you are doing. I 
think in many ways, you and your team have revitalized the 
image of USAID and I just see progress wherever I look.
    But when I think about USAID, I think about words like 
``humanitarian,'' ``caring,'' ``road-builders,'' people who are 
really trying to get in the midst of very difficult situations, 
some of the worst poverty in the world, for example, and change 
the course of that country.
    I cannot imagine why USAID would want to be involved, or 
even should be involved--maybe that is the more appropriate 
comment--in something like going into a country and dealing, 
and trying to get Internet access for people opposing the 
regime or some other. Not to say that that is not an important 
mission. But why would we put that mission in USAID? Why would 
you not look at some other part of the Federal Government to 
place that mission? And you do not have to comment on this, Dr. 
Shah, but to me, it seems crazy. It just seems crazy that you 
would be in the middle of that. That is just my observation.

                                FOOD AID

    Let me, if I might now, turn my focus to something that 
everybody on this committee cares very deeply about, and that 
is food aid. Just within the last few days, on April 4th, I 
wrote a letter to Mark Pryor, Senator Mark Pryor, the chairman 
of the subcommittee on Agriculture, Rural Development, FDA, and 
Related Agencies, and to Senator Roy Blunt, who is the ranking 
member. The letter was my opportunity to urge them to do this 
and that on their appropriation.
    I am going to read something to you that I put in that 
letter, and I would ask you comments on it. ``Over the past 
decade,'' I say, ``Funding has declined in Public Law 480--
Title II as commodity prices have gone up. This has meant fewer 
commodities have been made available while global hunger has 
remained at alarming levels. While I know the committee has 
competing priorities, food aid can literally save the lives of 
hungry people around the world, generating good will towards 
the United States.''
    And then I say, ``This request that I am making would 
simply restore the average of funding levels over the past 
decade.'' So it would boost funding to the average. I could 
make, I think, a very compelling case that it should be higher 
than that. What is your reaction to that request? And is that a 
request that you would support, the Administration would 
support?
    Dr. Shah. Well, thank you, Senator. Thank you for your 
strong advocacy for food aid reform that is carried out 
responsibly.
    On face value, just hearing that for the first time, I am 
supportive of the basic idea that you are articulating, which 
is if we can reform the way we provide our food assistance, we 
can update and modernize our programs, save more lives, reach 
more children and families in critical need, and do that 
without costing the Federal Government extra resources. And 
that was the motivation behind President Obama's budget 
proposal last year. It continues to be his motivation behind 
this year's request for some additional flexibility in the 
program.
    I will say one additional thing, which is the farm bill 
combined with some efforts that you, personally, engaged in and 
that Senator Pryor and others supported, will allow us in 
fiscal year 2014 to reach 800,000 additional children whom we 
otherwise would not have because of partially adopting the 
President's proposal.
    That is 800,000 kids at a time when in and around Syria, in 
and around the Central African Republic, in and around South 
Sudan, we are going to have needs that far outstrip our 
capacities in terms of humanitarian response. And that is a 
real, in my view, step forward we can all jointly take pride 
in.
    Senator Johanns. I will make sure you get a copy of this 
letter. I am hoping that the chairman and ranking member of 
this committee will also take a look at it. You are almost 
never going to see me come down to a subcommittee hearing and 
say, ``We need more funding.'' It is not in my DNA, typically.
    But having said that, again, based on my experience in 
looking at what you are dealing with Syria, Sudan, etcetera, I 
do not think there is any other conclusion to that. I think the 
resources are just disappearing and, of course, we went through 
a very difficult time where prices were extremely high. That 
has changed a little bit here, but I just think at the end of 
the day, we are trying to stretch the rubber band too tight and 
at some point, it breaks.
    Dr. Shah. Thank you, sir.
    Senator Johanns. Let me, if I might, ask about the proposal 
that the Administration has made on the Food for Peace Title II 
program. It is scaled back from last year's proposal. You are 
still supportive of local and regional purchases. And, as you 
know, I have got some history with that proposal too. In fact, 
I think you have used the same proposal that I made when I was 
Secretary.
    Talk to us about local and regional purchases, what you are 
trying to do here, and why you think that could be a 
difference-maker. And that will wrap up my questions.
    Dr. Shah. Well, thank you. And I will just say we have been 
really recognized for the strength, speed, and effectiveness of 
the response in the Philippines.
    Almost all of the food that you saw provided in the first 
few weeks, and even months, were the result of local and 
regional purchased and prepositioned food stocks with the 
American shipped foods then coming in 8 to 12 weeks later. And 
your leadership as the Secretary of Agriculture helped make 
that possible, helped feed those kids.
    We have a lot of data from that program that shows that we 
can do this at a lower cost, more effectively buying the types 
of food products that have more nutrition value, can be 
delivered quicker, safer, are more preferred for communities. 
And, frankly, can help communities then get back on their feet 
because we are buying from those local environments, creating 
incentives for local farmers.
    You pioneered this effort, sir, and I think we are excited 
to have the opportunity to continue to build bipartisan support 
to take it forward. And if the Senate and the House were to 
adopt this year's proposal from the President, we would reach 
another 2 million additional children at the end of this year 
when it is absolutely, critically needed in core and emergency 
environments.
    So thank you, very much, for your leadership, and I look 
forward to continuing to take your guidance.
    Senator Johanns. Well, thank you. It is a difference maker.
    Thank you, Mr. Chairman.
    Senator Leahy. Thank you, Senator Johanns.
    I completely agree with your concept that we have got to 
make it possible for the people in the area to do things, to be 
able to help themselves. We can give them the help to help 
themselves. And Dr. Shah, I appreciate the fact that you have 
taken that attitude as strongly as you have since you have been 
here.
    Senator Coons, you visited many of the areas, some very 
unglamorous areas wherever the USAID has been very helpful, and 
I am glad to have you here.
    Senator Coons. Thank you, Mr. Chairman. I am grateful for 
the opportunity you gave me to travel to Cuba with you, and to 
be able to meet Alan Gross in person, to be able to see the 
conditions of his imprisonment, and to get to hear personally 
how difficult his experience has been. I just want to say that 
I share and support the chairman's concerns about doing 
everything we can to secure Alan's release.
    I also have enjoyed working with my colleague, Senator 
Johanns, on food aid reform, and I look forward to continuing 
to work together on responsible reform that sustains our 
investment in food aid relief, but that also makes it more 
efficient and more effective. So if we can strike the midpoint 
that sustains our relief around the world, but also makes a 
better use of American taxpayer dollars, well, that would be a 
great outcome.

                              POWER AFRICA

    I recently chaired a hearing in my senate subcommittee on 
Africa about Power Africa with Senator Flake of Arizona, and I 
am optimistic about the potential power of this Administration 
initiative to tackle energy poverty and to really make a 
lasting difference as we work together towards your ambitious 
goal of ending extreme poverty and making other significant 
advances in development and in security.
    What steps are you planning to take to ensure that Power 
Africa is sustained? Some of the most significant initiatives 
in development today, such as PEPFAR and the Millennium 
Challenge Corporation, were started under the Bush 
Administration, but structured in a way that they have lasted 
well beyond it, and have a made a real difference.
    How can Power Africa be funded, authorized, and sustained? 
And have you thought of a future expansion that would allow it 
to function beyond the initial six countries, and that would 
allow it to have a timeline that is more appropriate for power 
infrastructure projects?
    Dr. Shah. Thank you, Senator.
    Thank you for your extraordinary leadership on development. 
The depth of your knowledge, experience, and your help in 
connecting us to great businesses, universities, and others who 
can be part of this effort to end extreme poverty have been 
invaluable.
    I want to thank you specifically for the efforts you have 
made on food aid reform. I know that it is a difficult topic on 
which we need to work together, and I am very hopeful that the 
President's proposal of this year is perceived as and is, in 
fact, an effective midpoint that can help us continue to make 
the kind of progress that people have not previously expected, 
but we have, with your leadership Senator, have been able to 
deliver.
    With respect to Power Africa, I believe this is the key to 
unlocking growth and development, particularly in sub-Saharan 
Africa where around 550 million people still go without real, 
consistent power access. And we can only imagine how hard it 
would be to start a business or to create economic opportunity 
in your community if you were paying exorbitant prices for 
diesel that is trucked in and put into generators because there 
is no proper energy access.
    Power Africa is structured to bring a lot of different 
American agencies together. USAID coordinates the effort and 
the coordinator is based in Nairobi, but we work hand in glove 
with the Overseas Private Investment Corporation, the Export-
Import Bank, State Department and, very importantly, the 
Treasury Department that brings all the multilateral partners 
together in support of this effort.
    We are supportive of the Electrify Africa legislation in 
the House and look forward to further authorizing and 
appropriations language in both the House and the Senate to, in 
fact, codify this as something America can do in Africa over 
the long term. And we believe that it will need appropriate 
funding. We have committed upwards of $250 million of 
appropriated resources, which then leverages billions of 
dollars of private investment commitments. But we should not be 
too excited about the private investment commitments if the 
appropriations do not come through.
    And so, your advocacy for the Development Assistance 
Account, specifically, which funds Power Africa, as well as 
education, water, Feed the Future, and so many of our other 
high priority development initiatives, and is under a lot of 
pressure is particularly valued for the Power Africa program.
    And finally, I think with respect to partnerships, this has 
unlocked a new level of public-private partnership that can 
really dramatically improve energy access. We have seen of the 
10,000 megawatts we committed to supporting in six countries, 
we have already identified more than 5,000 of the megawatts 
through specific projects and programs. Those are moving 
forward.
    We are actively considering right now how to expand this 
program and also how to ensure that countries that are not 
formally Power Africa countries, but where there are 
businesses, and local leaders, and Governments that want to do 
the right thing, and allow for public-private partnerships to 
create low cost energy access, that we are supporting that 
effort as well.
    Senator Coons. Thank you.
    I share your concern that the Development Assistance 
Account is under significant pressure. My concern is that Power 
Africa and Feed the Future are funded out of it, but there are 
significant pressures on democracy, governance, and peace 
building around the world in a variety of countries addressed 
by other members of this subcommittee.
    So I frankly think it could stand to have more robust 
funding and, frankly, to have a dedicated line that makes it 
clear that Power Africa is being separately sustained for the 
long term.
    I have a number of other topics and relatively little time. 
There are, as you mentioned, three Level 3 crises going on in 
the world at the moment: Central African Republic and South 
Sudan being two of the three. I am worried about how we address 
the urgent short-term humanitarian needs in both countries, and 
the significant requirement for peacekeeping assistance, and 
then the requirements for USAID to provide support for 
stabilization and return to normalcy, if that is possible in 
these two countries. Let me just mention that as a first a 
question, and then a second and third, and give you a few 
minutes to answer, if I might.
    Second, the Global Development Lab; I think one of the 
things that has been the hallmark of your leadership of USAID 
has been a focus on transparency, accountability, and 
innovation. When we combine science, innovation, and 
entrepreneurship, we really can solve the grand challenges of 
development, and the Global Development Lab really shows 
promise for making this possible.
    What sort of additional legal authorities does USAID need 
from congress to maximize the efforts and the long term impact 
of the Lab?
    Then last, I am concerned about wildlife trafficking. We do 
not yet have the details of your fiscal year 2015 budget, the 
detailed congressional budget justifications, and I look 
forward to reviewing them and seeing what sort of investment 
there will be in combating wildlife trafficking, particularly 
in Africa.
    Dr. Shah. Thank you, Senator.
    On South Sudan, we agree with you. There, our Famine Early 
Warning System is noting that there is a very high famine risk 
for a variety of reasons, mostly due to violence. Last week, we 
announced $83 million of food items that will be prepositioned. 
But it is going to be very, very difficult and we will 
appreciate your support through what is a difficult period.
    With respect to wildlife trafficking, we also recognize 
that this is an important issue, and I think between fiscal 
year 2014 and 2015, we are doing some very innovative and 
important things, and I would look forward to following up with 
you on it. I am very excited about what the supply side and 
demand side efforts we are going to be pursuing.
    On the Global Development Lab, I want to thank you for 
raising it. We have worked for years on an effort that both 
President Obama, and Secretary Clinton, and now Secretary Kerry 
have been very enthusiastic about. We have identified 32 
partners including private companies, research universities, 
student groups, NGOs. They have all come together to say, ``Let 
us work together to bring science, technology, innovation to 
global development so we can achieve the end of extreme 
poverty, better, cheaper, faster.''
    We are seeking some important, new authorities. There are 
some hiring authorities under Schedule A that we hope to pursue 
as part of this discussion. We are requesting the ability to 
use some amount of development assistance funding for health 
purposes so that we are not as sectorally focused going 
forward.
    We are looking forward to having some, notwithstanding, 
authority that might help the Lab do its work. And we are 
supportive of efforts to, over time, have the ability to own 
and commercialize intellectual property.
    So we look forward to working with you, but if American 
development institutions over the long term are going to have a 
DARPA-like institution that can bring high powered, high 
quality, well meaning American science and innovation to the 
field of development, we would, in fact, need those types of 
authorities. And we value the continued support in helping us 
find the partners to build this Lab.
    Senator Coons. Well, thank you, Administrator and I value 
your tireless leadership, your personal commitment to making 
sure that USAID is transparent, is responsive to congress, and 
spends taxpayer money as responsibly as possible. I look 
forward to continuing to work with you on these very important 
issues. Thank you.
    Dr. Shah. Thank you.
    Senator Leahy. Senator Boozman.
    Senator Boozman. Thank you, Mr. Chairman and thank you for 
being here. We appreciate your leadership, and you and your 
Agency's hard work.

                             CHILD SURVIVAL

    Can you talk a little bit about, there is concern about 
decreasing maternal and child health funds, and especially cuts 
to the bilateral programs. Talk a little bit about how that is 
going to impact child survival.
    Dr. Shah. Thank you, Senator.
    First, let me say, thank you for your partnership and 
support for child survival, for malaria, for all the issues you 
have fought and worked hard on over the years. And I know you 
know, but your efforts have helped generate some real successes 
that mean that more children survive in many, many parts of the 
world. So thank you for that.
    With respect to this year's commitments in maternal and 
child health, they do represent a small increase in our 
commitment relative to the fiscal year 2014 request level. And 
I, of course, always want more resources in general from the 
U.S. Government, from private partners, from countries 
themselves that still pay for the bulk of this, to help 
accelerate the end of preventable child death.
    We have worked aggressively with more than 170 countries 
now to have everyone commit to an evidence-based, results-
oriented approach to end preventable child deaths. In 24 
countries specifically, we have restructured our programs to 
invest in the most cost-effective ways to save children's 
lives. Those 24 countries account for just over 70 percent of 
the 6.6 million children that die every year unnecessarily.
    I am confident that these resources, especially if we can 
continue the successful track record we have had of getting 
companies, faith institutions, NGOs, and just as importantly, 
the countries themselves to put more in, will allow us to be 
successful to achieve our goal.

                               NUTRITION

    Senator Boozman. In relation to that, talk a little bit 
about the U.S. Global Nutrition Strategy, which I know that you 
are working very, very hard to develop. We appreciate your 
leadership in that, and talking about that as a roadmap to 
achieve some of the goals that we want to achieve.
    Dr. Shah. Well, thank you, Senator.
    As part of both Feed the Future and our global health 
efforts, we have seen a lot of new science that shows that 
children who are malnourished early in their lives are stunted 
and have less effective and full brain development that then 
affects their capacity to contribute to society for the rest of 
their lives.
    We also know that there are targeted, specific ways to 
prevent that kind of disastrous consequence of large scale 
child malnutrition. So we are leading an interagency process to 
create a U.S. nutrition strategy.
    Last year at the G8 meeting, I committed on behalf of the 
United States, that we would make significant investments in 
health and agriculture that focus on child and maternal 
nutrition in particular. We are the world's largest funder of 
nutrition efforts with, over a 3 year period, nearly $1 billion 
going to specifically child and maternal nutrition efforts 
according to our analysis.
    And our strategy will show a very clear way to set a 
target, which will be reducing stunting by 2 million kids, to 
measure outcomes in the countries where we are going to focus, 
and to bring together public-private partnerships and NGOs to 
expand the resource commitment in this area.
    But this, I think, is the one area where we work in this 
space, in which the science has evolved tremendously over just 
the last few years. And so, our ability to produce new and 
improved food products as part of our food assistance programs; 
our ability to target women, pregnant women with clean water 
interventions to ensure that they avoid disease during a period 
of time when they are at high-risk; and our ability to support 
child nutrition during pregnancy, but also just after, with 
specific, low cost, supplemental feeding can really help change 
the trajectory for some of these countries that have 40-50 
percent child stunting rates.

                          CHILDREN'S VACCINES

    Senator Boozman. Very good. Again, along the same vein, the 
GAVI Alliance, Global Assistance Vaccination, for those that 
are listening that are not familiar, but do you feel our 
contribution is being leveraged to the maximum to get the 
results that we need?
    And, the other thing is what more can we do, what more can 
the United States do--and it does a tremendous amount--to 
ensure that our work with GAVI countries has the high rate of 
success that it has enjoyed?
    Dr. Shah. Well, thank you.
    The fiscal year 2015 budget includes a $200 million 
commitment for the Global Alliance on Vaccines and 
Immunization. We, like Bill Gates and so many others, who have 
invested in this effort, believe this is one of the most cost 
effective ways to save children's lives and that is why we are 
proposing a unique increase in our commitment.
    We also recognize that GAVI helps low income countries 
reach children with new vaccines that they simply would not get 
otherwise. By doing deals with pharmaceuticals and vaccine 
manufacturers, they secure the vaccines at lower prices for 
those countries than they would otherwise gain access to.
    USAID then works to supplement GAVI's work in countries to 
help train health workers, to help provide some infrastructure, 
whether it is motorbikes or bicycles or refrigerators to make 
sure that those vaccines can get to where they are most needed.
    One of the most hopeful moments I have had in this role was 
walking through a refugee camp in Dadaab during the Somali 
famine and seeing that these emaciated Somali children were 
actually getting a world-class pneumococcus vaccine because of 
the efforts of GAVI and the United States together.
    Senator Boozman. That is great.
    Finally, and I think this is really important, but last 
year, you announced USAID would be scaling back and winding 
down missions in certain countries in order to focus its 
resources on areas with the most potential impact, and USAID 
has recently closed some countries. You also noted that USAID 
could graduate at least seven countries from assistance by 
2015.
    What progress have you made in moving more countries beyond 
aid and, as you like to say, putting yourself out of business? 
Which, again, is really what this is all about, and you have 
done a great job, I think, in moving the Agency in that 
philosophy.
    Dr. Shah. Well, thank you, Senator. We absolutely believe 
our mission should be to work to end extreme poverty, but do it 
in a way that builds local capacity, so we do not have to be 
there over the long, long term. And in that context, I am proud 
to have supported this effort to close out of certain programs 
and missions.
    Over my tenure, we have taken down 34 percent of our total 
programs around the world in order to be able to focus 
resources in food, Feed the Future, in child survival, in the 
kinds of programs that we think deliver the best return on 
investment for the American taxpayer in terms of supporting the 
world's most vulnerable people. And we are on track to fulfill 
our commitments that we made to change our mission structures 
and downscale in some of the places we highlighted by the end 
of fiscal year 2015.
    Sometimes those mission close outs cost us a little money 
in terms of staff transitions and programmatic transitions. We 
are cognizant of trying to find local partners to pick up the 
costs of some of the programs that are ongoing because they are 
effective programs the countries value. So we are trying to do 
this in a very responsible and sensitive way.
    But over my tenure, I have felt that this approach was the 
only way to, in a largely budget-neutral environment, have the 
flexibility to invest in the things that we think will make the 
biggest difference in terms of serving the world's most 
vulnerable people. Thank you.
    Senator Boozman. Thank you. Thank you, Mr. Chair.
    Senator Leahy. Thank you very much.

                                  CUBA

    Let me ask about a couple of these other things. You said 
the Cuban Twitter program was not a covert program, it was just 
a discrete program. Is that correct?
    Dr. Shah. Yes.
    Senator Leahy. It was U.S. Government activity, correct?
    Dr. Shah. We supported the program, but it is no longer 
active.
    Senator Leahy. And its purpose was to influence political 
conditions abroad by gathering information about Cuban cell 
phone users to encourage opposition to the Cuban Government. Is 
that correct?
    Dr. Shah. No, that is not correct. The purpose of the 
program was to support access to information and to allow 
people to communicate with each other as we do in many other 
parts of the world. The program was not----
    Senator Leahy. And were the people----
    Dr. Shah [continuing]. For the purpose that you just 
articulated, sir.
    Senator Leahy. Were those people told that this was a U.S. 
Government program?
    Dr. Shah. Well, the platform was built and then people were 
able to communicate on the platform, and some 48,000-plus 
people did.
    Senator Leahy. Did they know that it was a U.S. 
Government----
    Dr. Shah. I do not believe so, no.
    Senator Leahy. Thank you.
    Dr. Shah. That was part of discretion.
    Senator Leahy. And, in fact, there were quite a few efforts 
made to conceal the fact that it was a Government program. Is 
that correct?
    Dr. Shah. Well----
    Senator Leahy. Using shell companies and others?
    Dr. Shah. Well, the program was conducted discreetly. Some 
of the details to which you are referring, sir, in the AP story 
were inaccurate. There was no shell company, or Spanish 
company----
    Senator Leahy. So, there was no----
    Dr. Shah [continuing]. And there was no Pakistan money 
involved. We put out a point by point rebuttal, but----
    Senator Leahy. Did we tell them it was U.S. Government 
money and a U.S. Government program?
    Dr. Shah. I am sorry. Could you repeat that?
    Senator Leahy. Did we tell the people in Cuba that this was 
a U.S. Government program?
    Dr. Shah. No.
    Senator Leahy. Well, who did we tell them this was coming 
from?
    Dr. Shah. Well, we conduct programs in lots of different 
places without branding----
    Senator Leahy. On this particular one----
    Dr. Shah [continuing]. Or advertising USAID.
    Senator Leahy. You know, on this particular one, where were 
they told the program was coming from?
    Dr. Shah. I do not know. We did not advertise that this was 
a U.S. program just as we, as you know, sir, provide--We have 
provided 250,000 surgeries inside of Syria, and we do not 
disclose or highlight that those are American programs 
providing them medical support because----
    Senator Leahy. Did we tell them it was a Spanish company 
that was doing it?
    Dr. Shah. To be honest, we can go back and get you the 
details, sir, but I know that there was no Spanish company 
created, and that was one of the inaccuracies in the AP story.
    Senator Leahy. But there had to be somebody who was doing 
it.
    Dr. Shah. Well, I will----
    Senator Leahy. And they had to be told it was from 
somebody. Is that correct?
    Dr. Shah. Well, when you create a platform and then people 
would use the platform, we did not advertise that that platform 
was supported by the U.S. Government. So that is an inaccurate 
representation.
    Senator Leahy. If we did not have our embargo, you would 
have so many American companies down there, fighting for the 
chance to do this and very openly doing it, it would have 
accomplished a lot more than this program did.
    Dr. Shah. Sir, that----
    Senator Leahy. And probably put a lot fewer people at risk.
    Dr. Shah. Sir, let me speak to that because it highlights a 
reality that we struggle with. This is a program that we are 
specified to do and the restrictions on it are quite clearly 
specified as well. And, of course, as you are aware, sir, USAID 
does not define the full extent of that policy.
    My goal is to make sure that we are implementing the 
program consistent with the law and managing it well. And if 
you look at the GAO report that came out in 2013, I believe the 
title of the report was ``USAID Significantly Improves 
Management Over This Program.'' And you compare that to the 
2008 or 2006 GAO reports that, I think, the title of those 
reports were, ``USAID Needs to Improve Management Over This 
Program.''
    Senator Leahy. I think everybody on this panel, both 
democrats and republicans, have praised you for improving----
    Dr. Shah. Thank you, sir.
    Senator Leahy [continuing]. As have I, but on this 
particular one, we are talking about Alan Gross. He was in 
Cuba. He was carrying out a USAID-funded program. He was given 
very little training about the enormous personal risk. He was 
arrested. He is now facing, in effect, a life sentence. I am 
told by everybody in the Administration, ``Oh, we are working 
so hard on this,'' but I do not see where they have achieved 
anything. He does not either. That is why he started a hunger 
strike.
    Have you done anything specifically, personally, to get him 
home?
    Dr. Shah. I have, sir, but the responsibility and the 
leadership for this rests with the State Department, and the 
Secretary, the prior Secretary, Under Secretary Sherman, and 
President Obama have all been involved in efforts to secure 
Alan's release.
    And again, that is not something I can speak about 
publicly, but I am certain that Wendy Sherman or others that 
are responsible for that body of work would be, would 
appreciate the opportunity to disclose what they have done to 
you in the right setting.
    Senator Leahy. Well, I have asked----
    Dr. Shah. And I would also say----
    Senator Leahy. Let me read you what another USAID 
contractor wrote to me this morning about Alan Gross. He said, 
``I always held out the hope that maybe the silence by the 
USAID was an effort to find a quiet, diplomatic solution to 
secure Alan's release. Now, with the revelation of the Cuban 
Twitter program, it seems that the Agency was never very 
concerned with Alan's fate and their silence was really a 
reflection of callousness. I think the Agency and Congress need 
to think through the U.S. Government's moral responsibilities 
to any American, even a lowly contractor, that it puts into 
harms way by ordering them to engage in programs that are 
illegal under the host country's law. Either USAID needs to 
refrain from these programs entirely,'' he says that is 
preferable to him. ``Or if it is going to run these types of 
programs, it needs to take steps to ensure in the event 
something goes wrong that it is ready to take a level of 
responsibility for the people hurt.''
    What about that?
    Dr. Shah. Well, sir, three things.
    The first is we do care about work on behalf of and support 
Alan, and his family, and Judy and, we think about them all the 
time. But more importantly than thinking about him, we have a 
very, very sophisticated leadership team led out of the State 
Department that has been, has tried a number of things to 
secure his release.
    Second, his incarceration is offensive and completely 
inappropriate, and entirely the responsibility of the Cuban 
authorities that are holding him for simply carrying out an 
effort to help people gain access to the Internet.
    And third, I would like to just point out, because this was 
reflected in the letter you just read. There are environments 
like Uganda right now, where it would be inconsistent with 
their new law to try to find and provide antiretroviral drugs 
to people who are homosexual. We do that anyway and we do that 
because it is a reflection of our values and it is a part of 
our programmatic responsibilities.
    So, these are difficult issues. I have struggled with the 
challenges of managing these efforts, but we are doing them 
better than they have been done in the past. We have external 
validation that has been pretty comprehensively assessed. Not 
just some desk review of what USAID is doing, but the GAO went, 
interviewed the partner, interviewed the sub-grantee, had 
access to all the documents, and highlighted and complimented 
our improved management performance in the title of their 
report.
    And I think about Alan every day, but I also know that I am 
buffeted by a State Department that takes the lead in these 
types of issues, and they are highly sensitive and I would 
defer to them to be able to explain to you in the appropriate, 
private setting or classified setting what----
    Senator Leahy. I have had private----
    Dr. Shah [continuing]. Has taken place.
    Senator Leahy. I have had private settings with them; I 
have yet to hear any explanation whatsoever.
    Thank you for mentioning Uganda. I struggle with that 
because of the absolutely irresponsible position taken by their 
government; unfortunately promoted by an American missionary 
and those associated with him. I struggle with whether we 
should cut off aid to Uganda or not. You do not want to hurt 
the people, but I question sending money to a country that 
would do something like that.
    Senator Graham, thank you for coming back.
    Senator Graham. Thank you, Mr. Chairman. You bring up a 
good point, and you are in countries where women, young girls, 
are basically denied opportunity for an education. Afghanistan, 
obviously, is trying to move forward.
    We have to be somewhat practical in our aid, but also not 
abandon our values, and one of our values is people should be 
able to freely communicate. You should be able to get drugs 
when you are in a lethal situation regardless of your sexual 
orientation and regardless of your gender. You should be able 
to have access to schools and that is what we believe in as a 
Nation, so it is a complicated world.
    Let us go to the West Bank right quick. President Abbas, of 
the Palestinian Authority, signed letters of accession for 15 
international conventions and treaties. They are threatening to 
try to seek membership at different levels in the United 
Nations, going around the peace process. We have legislation 
cutting off funds if they continue to seek membership in the 
U.N. and become an independent State without negotiating with 
their neighbor Israel.
    How do you see these actions of President Abbas? Do you 
believe it violates existing law? And what would the effect be 
if we had to terminate our aid programs in the West Bank and 
Gaza?
    Dr. Shah. Well, thank you, Senator, for your comment about 
women and girls in Afghanistan and Uganda.
    With respect to the West Bank, and I appreciate the 
question. Immediately, the signing of those particular 
documents did not trigger any of the concerns with respect to 
specific U.N. organizations and American funding for them.
    With respect to our work in the West Bank, and I was just 
there with Secretary Kerry a few----
    Senator Graham. Would you consider these letters 
provocative?
    Dr. Shah. I will let Secretary Kerry best characterize the 
reaction to that.
    Senator Graham. I do.
    Dr. Shah. I know he is working very, very hard and the 
whole team is working hard to abide by and try to honor the 
fact that both parties have said they want to continue to be a 
part of negotiations.
    Now, with respect to what we do in the West Bank, we 
provide a significant amount of resources to the authority 
there to help provide basic services and support for its 
communities. We have public-private partnerships that help 
create some economic opportunity and micro enterprise.
    I had a chance to visit many of the farmer co-ops and 
things that we have, where we provide support, and I personally 
think it would be a significant step back for the people of the 
West Bank if our support were to go away. In addition to all of 
the direct support we provide, we are their lead partner in 
trying to mobilize international private investment commitments 
should the economy open up. And Secretary Kerry and Tony Blair 
have announced a $4 billion investment package from a series of 
companies. This puts all of that, of course, at risk and I 
think those are important steps.
    Senator Graham. Let me just make it clear. This 
Administration's position is the Palestinians should negotiate 
with the Israelis and vice versa----
    Dr. Shah. Absolutely.
    Senator Graham [continuing]. Before they try to seek 
independent State status at the U.N.
    Dr. Shah. Yes.
    Senator Graham. That is the congress' decision.
    Thank you very much.
    Senator Leahy. Well, certainly, I have, you can imagine, 
other questions, but I also understand the constraints you have 
in answering some of them.
    You have, incidentally, a terrific record on child 
survival, for which I have applauded you both publicly and 
privately.
    Have you considered working with the Cuban Government on 
child survival programs, something that could be done openly?
    Dr. Shah. Sir, my understanding of the Helms-Burton 
legislation is that we would not. We would be precluded from 
engaging in those kinds of----
    Senator Leahy. So the Helms-Burton Act would make sure 
that, to show how tough we are, we could not help Cuban 
children who have health needs.
    You know, I kind of, you do not have to answer this, but I 
look at some of these programs and the money we waste on Radio 
Marti and other things, and I would like to see free markets in 
Cuba. I would like to see an openness there. I would like to 
see an end to the repression of people who speak up for their 
rights in Cuba. I am not blind to things that every one of us 
could disagree with in Cuba.
    But I have to think that some of these programs, somebody 
dusts off a memo that says, ``If we had just carried this out, 
we would get rid of those Castro's.'' And they strike out the 
fact of who that memo was given to, first, to President 
Eisenhower, and then to President Kennedy, and then to 
President Johnson, and then to President Nixon, and then to 
President Ford; you get the drift of where I am going.
    And of course, the Castro's are still there. I often think, 
``What would have happened if we had tried the kind of direct 
engagement as we have with other countries that have been 
historically repressive or communist?'' But when we have 
flooded them with American tourists, and students, and exchange 
programs, and programs that improve health, and education, and 
other things, how much they have changed afterward.
    I think if we had had that kind of a non-embargo, you would 
have had, as I mentioned earlier, so many telecommunication 
companies from the United States to set up the things that you 
were trying to set up clandestinely. And that Cubans would have 
no more ability to cut that off than Turkey had to cut it off 
when they wanted to cut off Twitter accounts.
    There will come a time, I suppose, when we will move from 
the 1950's maybe to the 1970's or even the 1980's, and the 
United States would be better off for it. We know how it is 
reflected in the rest of Latin America.
    Here we are, the most powerful Nation on earth, and we act 
as if we are afraid of a tiny island country, a country where, 
when I visited there, most of the people would love to be able 
to communicate more with the United States, eager to hear about 
life here.
    I would like to be able to see you doing the things you do 
so well. I mention child health, and that is something that you 
can be proud of, and you have done so much personally around 
the world; just think how great it would be if we were doing 
that in Cuba. You do not have to answer, but I have no further 
questions.

                     ADDITIONAL COMMITTEE QUESTIONS

    I will keep the record open for written questions until 
Friday.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
                 Questions Submitted to Dr. Rajiv Shah
            Questions Submitted by Senator Patrick J. Leahy
    Question. Development Experience. I wonder to what extent 
significant experience in overseas development is a requirement for 
working at USAID? I am struck by the fact that few if any of USAID's 
senior officials appear to have that background. They are very 
experienced in their own specialized fields, but it is not the same as 
sustainable development--meaning, extensive field work building 
relationships with local organizations and institutions in a way that 
helps them achieve their goals. Can you respond?
    Follow Up. Since 2008, USAID's Development Leadership Initiative 
has hired 820 new permanent Foreign Service Officers increasing USAID's 
permanent Foreign Service corps by 80 percent. How many of these 
recruits have strong backgrounds in development?
    Answer. The Development Leadership Initiative (DLI) hiring from 
2008 through 2012 capitalized on the low rate of hiring by USAID during 
the previous decade, which created an eager and well qualified group of 
applicants for almost all of the specialty areas (backstops) needed by 
USAID. The combination of minimum requirements of a master's degree in 
most backstops and strong competition resulted in a talented and 
experienced group of new Foreign Service Officers (FSOs) who have 
already made valuable contributions to the Agency since joining USAID. 
Additional qualifications are required for specific backstops, such as 
law degrees and accounting majors.
    The average of about 3 years of relevant overseas experience for 
the entire group does not adequately capture the range of experience 
and skills that all of the new officers have brought to the Agency. 
Thirty percent (246) of the new FSOs have Peace Corps experience as 
volunteers and/or staff. A majority of the new hires also brought 
relevant foreign language skills to the Agency which helped them meet 
the mandatory language requirements before deployment.
    The smaller group of mid-level DLI hires had considerably more 
overseas experience as contractors or working in other capacities with 
USAID, other development agencies, or non-governmental organizations. 
Our estimate is that the group of mid-career DLIs has an average of 
over 10 years of development experience, most of which is overseas.
    Question. Local Organization Capacity. I recently learned about a 
$600 million ``Indefinite Delivery--Indefinite Quantity Contract'' for 
capacity development of national and sub-national governments, private 
sector entities, and non-governmental organizations (NGOs). The 
performance period of the contract is 2013 through 2020. The 
implementers are mostly the usual big U.S. contractors. Is this an 
example of USAID Forward?
    Answer. A key element of USAID Forward is increasing the Agency's 
work directly with local governments, NGOs and private sector--and 
building those actors' ability to perform without U.S. assistance. The 
Agency's Human and Institutional Capacity Development (HICD) initiative 
is a model of structured and integrated processes designed to identify 
fundamental causes of performance gaps in host country partner 
institutions, address those gaps through a wide array of performance 
solutions in the context of all human performance factors, and enable 
cyclical processes of continuous performance improvement through the 
establishment of performance monitoring systems.
    The ultimate goal of HICD is to help USAID's partners improve 
performance in critical areas leading to measurable results in 
achieving the organization's goals and objectives. In undertaking HICD 
initiatives, USAID missions will strengthen their partner 
organizations' abilities to more effectively perform for their 
constituents and stakeholders and will increase the effectiveness of 
ongoing technical assistance provided by the United States Government 
and other International Donors.
    HICD is implemented through two mechanisms: the Human and 
Institutional Capacity Development (HICDpro) indefinite delivery/
indefinite quantity contract (IDIQ) and HICDpro for Critical Priority 
Countries (CPCs) IDIQ.
    The HICDpro IDIQ is a mechanism under which all awards were 
reserved for small businesses. This 100 percent small business 
mechanism has a maximum ordering limitation of $300 million over a 5-
year ordering period for programs worldwide.
    The HICDpro for CPCs IDIQ provides an overarching framework for 
capacity development programs. Under the HICDpro IDIQ for CPCs, there 
is a maximum ordering limitation of $500 million over a 5-year ordering 
period. Two of the five prime awards were reserved for small 
businesses, increasing competition and further contributing to the 
diversification of contractors doing business with USAID.
    Task orders under HICDpro and HICDpro for CPCs are subject to a 
comprehensive review involving the Bureau for Economic Growth, 
Education and Environment's Office of Education (E3/ED) and mission 
technical staff, technical offices throughout the Agency, and both 
mission and headquarters senior management who are well versed in best 
practices of implementing USAID Forward initiatives. These safeguards 
help ensure that USAID funding directly impacts local organizations and 
host country governments.
    All six awards under the HICDpro IDIQ were made to U.S.-based small 
businesses, including one minority-owned firm. Under the HICDpro for 
CPCs IDIQ, two (2) of the five (5) awards were also made to U.S.-based 
small businesses, one of which is a minority-owned, SBA-certified 8(a) 
disadvantaged, and woman-owned firm from an Historically Underutilized 
Business Zone. These eight HICDpro prime contracts ensure maximum 
practicable small business participation in HICDpro activities and are 
in full support of the Agency's mission for small and disadvantaged 
business utilization. This exemplifies another aspect of USAID Forward, 
which is broadening the Agency's partner base.
    Building on already existing capacity of host country governments 
and local organizations, technical design features and required 
outcomes of the HICDpro model include:
  --Transferring HICD knowledge and expertise to local key performers 
        and other local staff for the organization's own internal use 
        and functionality.
  --Sub-contracting or otherwise outsourcing HICDpro technical 
        expertise and services to local organizations.
  --Host country governments and local organizations designating 
        engaged and participatory leaders and key staff to coordinate 
        and provide HICDpro activities, expertise, and performance 
        solutions. Most institutional performance solutions are 
        internal business changes and can only be implemented by each 
        organization itself.
  --Host country partner organizations institutionalizing an internal 
        performance monitoring system that enables the host country 
        partner to regularly monitor its own organizational performance 
        for its own evidence-based management and reporting.
    USAID is confident of the HICDpro model's contribution to USAID 
Forward objectives and principles. The HICDpro model equips host 
country governments and local organizations with methodologies and 
tools designed to strengthen each organization's capability of 
providing quality services and products to their constituents and 
stakeholders.
    Question. Follow Up. For years, I have been asking why USAID 
``Requests for Proposals'' are so mind-numbingly technical and 
bureaucratic and impossible for anyone but a USAID procurement officer 
or U.S. contractor to understand. It makes it very hard for local 
organizations to compete. What is being done about this?
    Answer. USAID appreciates your support for our efforts, under the 
Local Solutions (LS) initiative, to increase the use and participation 
of local organizations where prudent and appropriate. We also share 
your desire to make our Requests for Proposals (RFP) and other 
solicitations comprehensible to all potential partners, including local 
ones.
    As you know, this is a key goal of the Agency's LS initiative and 
we have taken a number steps to make things easier for local 
organizations. For example, we have:
  --created Webinars, e-learning modules that explain USAID contract 
        and grant making procedures to potential new partners;
  --encouraged two-step application processes that start with 
        submission of a concept paper followed by a full proposal that 
        often include how-to information sessions;
  --translated procurement documents and standard agreement provisions 
        to the extent the law allows (see below) into local languages;
  --conducted in person, pre-award conferences to explain procurement 
        procedures to local organizations, as well as answer questions 
        raised about the RFPs or other Agency solicitations; and
  --offered post award, new partner conferences which explain in local 
        working languages USAID's standard form agreements, including 
        terms and conditions of the award that may be difficult for 
        speakers of English as a second language to understand.
    To further facilitate our work with local organizations, USAID 
conducts outreach to current and potential partners through training, 
industry days, and other events. As part of the LS initiative, we are 
also establishing a feedback mechanism to spot and address further 
instances where red tape or overly technical communications frustrate 
our attempts to work more with local partners.
    More broadly, USAID has developed ``Principles of Plain Language'' 
and related training courses to promote clear government communications 
that the public can understand and use, and requires all Agency 
guidance to be written in plain language. While we acknowledge that 
this is a work in progress, we understand that clarity of 
communications and to the extent possible, in local working languages, 
is critical to the success of our Agency's mission.
    That said, there are some limitations on what we can do under 
current law. USAID's RFPs and other solicitations for contracts must 
comply with the Federal Government's laws and regulations applicable to 
government contracts, including the Federal Acquisition Regulation 
(FAR) (48 CFR Parts 1-53) for all acquisitions using appropriated 
funds.
    The FAR requires that Contracting Officers use the Uniform Contract 
Format (UCF) when drafting RFPs. The FAR prescribes forms and 
approximately 580 possible solicitation provisions and contract 
clauses. These are used to prepare 8 of the 13 sections required by the 
UCF. To comply with the FAR, a typical RFP may contain more than 100 
prescribed FAR solicitation provisions and contract clauses.
    Due primarily to new and amended Federal legislation and Executive 
orders, the number of FAR provisions and clauses continues to grow each 
year. For example, FAR Part 52 Solicitation Provisions and Contract 
Clauses now requires over 600 pages to set out these often complex 
provisions and clauses.
    The FAR also limits the use of languages other than English; FAR 
52.214-34 explicitly provides that all offers in response to contract 
solicitations must be in English and those in other languages must be 
rejected.
    USAID does have more flexibility in designing Requests for 
Applications (RFA) for assistance awards (cooperative agreements and 
grants), which is where the bulk of USAID awards to local organizations 
are occurring, as the FAR does not apply to grants and cooperative 
agreements.
    However, in accordance with the Federal Grant and Cooperative 
Agreement Act, USAID may only use an RFA when the anticipated purpose 
of the relationship between USAID and the cooperative agreement or 
grant recipient is to transfer something of value (such as money, 
property, or services) to the recipient to carry out a public purpose 
authorized by U.S. law. An RFP for a contract must be used when USAID 
seeks to acquire, by purchase, property or services for the direct 
benefit or use of the Agency in achieving its mission.
    Question. Afghanistan. The Special Inspector General for 
Afghanistan Reconstruction has identified lessons learned from USAID's 
programs in Afghanistan based on the numerous audits and inspections 
that the Inspector General has conducted since 2008.
    According to the Inspector General, USAID programs must take into 
account the recipient country's ability to afford the costs of 
operating and sustaining completed projects. SIGAR's recommendation 
comes 2 years after USAID's budget justification for Afghanistan said 
this: ``The United States has structured its partnership with 
Afghanistan to be sustainable, durable, and realistic in terms of 
funding levels.''
    Over the past dozen years, USAID has obligated more than $18 
billion for Afghanistan. Do you think those amounts were realistic and 
sustainable?
    Answer. In 2001, Afghanistan was a country wracked by decades of 
conflict and a safe haven for terrorists from which emanated the 
attacks of 9/11 on the United States. The United States' core policy 
objective in Afghanistan is to ensure that the country is never again a 
safe haven for terrorists who threaten the United States or our allies. 
Over the past 13 years, civilian assistance has supported our national 
security objective by investing in improvements in governance, the 
provision of basic services, private sector-led economic growth, and 
the strengthening of civil society, starting from a very low level in 
2001. In addition, through multi-sectoral, mutually reinforcing 
investments, the U.S. has made a concerted effort to prioritize the 
advancement of the political, social, and economic rights of Afghan 
women and girls.
    Since 2001, Afghanistan has made remarkable development gains 
across multiple sectors, as a result of the investment and programming 
provided by the United States and other donors, along with our 
international partners, the Afghan Government and the Afghan people. In 
recent years, USAID has made a concerted effort to ensure the 
sustainability of these investments.
    Weaning Afghans from extraordinary levels of assistance is 
necessary for us, and essential for them. To achieve this goal without 
triggering a crisis that could ensue should U.S. and related donor 
investment precipitously decline, the U.S. seeks to continue to provide 
assistance in areas critical to Afghan development and stability, and 
to request the resources needed to establish a funding glide path to a 
more sustainable level of annual funding. Following on the issuance of 
the June 2011 Administrator's Sustainability Guidance for USAID in 
Afghanistan, utilized in the Fiscal Year 2012 Appropriations Act, USAID 
has regularly reviewed and adjusted its programs in an ongoing effort 
to ensure that they are achievable and sustainable.
    The effort to promote sustainability has several facets. USAID 
performs regular portfolio reviews of USAID programs, both internally 
and coordinated with the Afghan Government. Through portfolio reviews, 
USAID has oriented its programming to support the development of 
Regional Economic Zones that cover major population centers and 
promoted regional trade and economic opportunities--especially with 
regional markets in Central and South Asia. In addition, through 
technical assistance and direct government-to-government assistance 
that is subject to stringent safeguards, USAID is building the capacity 
of the Afghan Government to implement programs, provide services, and 
preserve key development gains, as well as raise the revenue necessary 
to financially support services.
    Throughout our efforts, we are applying important lessons from the 
past 12 years in Afghanistan, as well as from other high-risk 
environments in which USAID has worked. As USAID navigates through the 
2014 transition period and looks to 2015 and beyond, we are committed 
to expending every effort to safeguard taxpayer funds and ensure that 
the remarkable development progress in Afghanistan is maintained and 
made durable, in order to secure our overall national security 
objectives.
    Question. For fiscal year 2015 you are requesting hundreds of 
millions of dollars in additional aid for Afghanistan. Since sustaining 
our investment there seems to depend on continuing to spend large 
amounts of U.S. funds, how is that sustainable?
    Answer. Weaning Afghanistan from unsustainable levels of assistance 
is necessary for us, and essential for them. To achieve this goal 
without triggering a crisis, we believe it is essential to continue to 
provide assistance in areas critical to Afghan development and 
stability. We are making tough decisions and prioritizing investments 
that have the greatest potential for long-term sustainability.
    USAID has placed an overriding emphasis on promoting sustainability 
across all of the Agency's programs in Afghanistan, outlined in the 
Administrator's 2011 Sustainability Guidance which emphasizes the 
principles of (1) increasing Afghan ownership and capacity; (2) 
contributing to stability and confidence; and (3) effective and cost-
efficient programming.
    In Afghanistan over the past 3 years, USAID has shifted the focus 
of its programs from stabilization and infrastructure to creating the 
basis for sustainable, long-term development. USAID's strategy in 
Afghanistan is threefold:
  --Maintaining and making durable the gains made in health, education, 
        and for women;
  --Supporting continued economic growth and employment through a focus 
        on the agriculture sector and private sector development, 
        operations and maintenance of infrastructure investments, and 
        responsibly developing the extractives industry, all key to 
        ensuring future fiscal sustainability; and
  --Fostering legitimate and effective Afghan governance, the rule of 
        law, and a robust civil society.
          a.  USAID is also promoting sustainability by conditioning a 
        significant percentage of its assistance to the government on 
        progress toward economic and governance reforms. This process 
        was formalized by the international donor community and agreed 
        to by the Afghan Government in the 2012 Tokyo Mutual 
        Accountability Framework, which outlined reform indicators in 
        areas such as elections; governance, rule of law, and human 
        rights; public finance and commercial banking; government 
        revenues, budget execution and sub-national governance; and 
        inclusive and sustained growth and development.
          b.  USAID will use fiscal year 2015 funds to continue support 
        for economic growth and employment through the agriculture 
        sector and private sector development; work with the Afghan 
        Government on commercialization and cost recovery so it will be 
        able to fund operations and maintenance of infrastructure 
        investments; and assist them in responsibly developing the 
        extractives industry for the benefit of all Afghan citizens. 
        These efforts will help foster economic growth, connect 
        Afghanistan to its neighbors, improve the functioning of 
        government, and reduce dependence on international assistance, 
        while helping the Afghan Government increase revenue generation 
        to mitigate the impact of the troop drawdown.
    Question. SIGAR has brought to my attention a study USAID 
contracted for in 1988 which reviews 30 years of U.S. assistance 
programs in Afghanistan from 1950 to 1979. The study makes one wonder 
how many times we have to repeat the same mistakes. Here are some of 
the findings:
  --USAID's assistance programs in Afghanistan after 1955 were overly 
        ambitious in scale and timing, and were larger than could be 
        effectively administered by the U.S. or Afghan Governments. The 
        U.S. expectations of the time required to achieve effective 
        project results were generally unrealistic;
  --The U.S. placed too much confidence in the applicability of 
        technical solutions and U.S. values to complex social and 
        economic development issues in Afghanistan;
  --Infrastructure projects were too often done before planning for 
        institutional adaptation in the use of the facilities and the 
        training of personnel;
  --U.S. government-to-government assistance programs were at a 
        disadvantage because the Afghan Government was overly 
        centralized, largely ineffective, and out of touch with the 
        local communities; and
  --The use of assistance for short-term political objectives tends to 
        distort sound economic rationale for development and weaken the 
        longer-term political interests of the U.S.
    Does any of that sound familiar? Were you aware of this 1988 study 
and did it inform any of the approaches to USAID programs in 
Afghanistan? How can these and future lessons learned be incorporated 
into the culture and management of USAID so that they are not 
forgotten?
    Answer. USAID is aware of this study and, along with the project 
files of the earlier USAID programs in Afghanistan, utilized this 
information and lessons learned in the development of the USAID 
reconstruction program in 2001 and continues to incorporate these 
lessons in the implementation of the Agency's strategy in Afghanistan.
    USAID's development assistance, which represents approximately 3 
percent of the total military and civilian financial cost of the war, 
has helped Afghans achieve extraordinary gains for a country that in 
2002 had virtually no access to reliable electricity, roads or modern 
telecommunications, and disadvantaged almost half of its population--
women and girls--by prohibiting them from contributing fully to Afghan 
society and the economy. Specific examples include:
  --Health: Life expectancy has increased from 42 years to over 62 
        years since 2002; the maternal mortality rate has declined by 
        80 percent from 1,600 to 327 deaths per 100,000 births; and 
        child mortality decreased by 44 percent from 172 to 97 deaths 
        per 1,000 live births.
  --Education: In 2002, there were approximately 900,000 Afghan 
        children in school, and virtually none were girls. Today, 
        approximately 8 million children are registered to attend 
        school and more than one-third of them are girls.
  --Mobile Technology: In 2002, there were few fixed telephone lines 
        and making calls outside of Afghanistan required a satellite 
        phone. Today, the combined phone network covers 90 percent of 
        the Afghan population. Eighty-five percent of women have access 
        to a mobile phone. The telecommunications sector is 
        Afghanistan's greatest source of foreign direct investment, 
        largest remitter of taxes to the government, and biggest licit 
        employer, providing jobs for over 100,000 Afghans.
    USAID's current program is putting assistance on a more sustainable 
footing, focusing on operations and maintenance of infrastructure, and 
increasing Afghan capacity, including through direct government-to-
government assistance.
USAID's Development Strategy for Afghanistan
    In Afghanistan over the past 3 years, USAID has focused our 
programs on creating the basis for sustainable, long-term development. 
We have seen the dire consequences of neglect and disengagement play 
out in this region before, and the Obama administration is committed to 
not letting history repeat itself.
    USAID's strategy in Afghanistan is threefold:
  --Maintaining and making durable the gains made in health, education, 
        and for women;
  --Supporting continued economic growth and employment through a focus 
        on the agriculture sector and private sector development, 
        operations and maintenance of infrastructure investments, and 
        responsibly developing the extractives industry, all key to 
        ensuring future fiscal sustainability; and
  --Fostering legitimate and effective Afghan governance, the rule of 
        law, and a robust civil society.
Sustainability
    In June 2011 USAID implemented Sustainability Guidance for 
Afghanistan which includes the principles of increasing Afghan 
ownership and capacity, contributing to stability and confidence in the 
Afghan Government, and designing effective and cost-efficient 
programming. In line with this guidance, USAID also conducts annual 
portfolio reviews internally within the U.S. Government and then with 
the Afghan Government, to ensure USAID programming is fully aligned 
with U.S. Government-wide priorities and with Afghan priorities.
Infrastructure
    USAID has made a concerted effort since 2011 to reduce new 
infrastructure investments, while increasing efforts to build Afghan 
Government capacity to maintain the recent investments in critical road 
and energy infrastructure. This effort includes the planned Road Sector 
Sustainability project, designed to strengthen the capacity of the 
Afghan Government to perform operations and maintenance (O&M). This 
support will include short-term O&M emergency operations, medium-term 
capacity-building activities, and a longer-term effort to establish a 
road authority and road fund that will equip the Afghan Government with 
the necessary tools to manage its transportation infrastructure in a 
sustainable way.
Government-to-Government Assistance
    USAID has worked to responsibly increase on-budget assistance 
through Afghan Government mechanisms as an integral component of the 
Agency's strategy to build the government's capacity and enhance 
accountability. For example, in 2003, USAID, in partnership with the 
Ministry of Public Health (MoPH) and other donors, created an Afghan-
led Grants and Contract Management Unit (GCMU) in the MoPH to procure, 
manage, and oversee donor-funded health contracts. Since 2009, the GCMU 
has worked to ensure proper procedures are followed for procurement of 
services, contract and financial management, monitoring and evaluation, 
and coordination with other donors and ministry stakeholders, including 
USAID's Partnership Contracts for Health Services Program. This 
includes issuing solicitations and contracts on behalf of the MoPH.
Utilizing Local Solutions
    USAID believes that utilizing local solutions is integral to the 
sustainability of development efforts in Afghanistan, particularly in 
our efforts to build the capacity of the Afghan Government to be able 
to deliver goods and services to the Afghan people. USAID has 
incorporated local solutions across our portfolio, including through 
the World Bank-managed Afghanistan Reconstruction Trust Fund, direct 
assistance mechanisms, and by awarding grants and contracts directly to 
local organizations. During fiscal year 2014, approximately 45 percent 
of USAID's obligations were to mechanisms comprising local solutions.
    Question. How do we respond to constituents--as well as to 
Afghans--who complain that we are supporting a government of thieves 
who have enriched themselves and their relatives and friends thanks to 
us?
    Answer. Although there are inherent risks in conducting development 
programs in a country like Afghanistan, USAID prioritizes the effective 
and accountable use of taxpayer dollars and does not assume any level 
of acceptable fraud, waste, or abuse. The Agency approaches oversight 
as a stringent process that involves continual re-examination of 
ongoing efforts and flexibility to adjust to new oversight needs as 
they arise. Tolerance of waste, fraud or abuse not only would run 
counter to our responsibility as stewards of U.S. taxpayer resources, 
but would undermine our development goals in Afghanistan. Accordingly, 
USAID views robust oversight as an essential component of our 
development programming in Afghanistan. In designing oversight 
measures, USAID has learned important lessons over its 12 year 
engagement, and has drawn on experiences in other challenging 
environments, including Iraq, Pakistan, Yemen, Sudan and Colombia, to 
ensure strong oversight of U.S. assistance funds.
    In addition to standard USAID oversight measures implemented 
worldwide, USAID has implemented the Accountable Assistance for 
Afghanistan (A3) initiative, designed to prevent funds from being 
diverted from the development purpose to malign actors. Some of the 
approaches USAID employs in Afghanistan under A3 include:
    1. Award Mechanisms.--We rely less on large agreements and have 
increased the number of smaller and more flexible agreements. We are 
also utilizing assistance awards that provide the most visibility on 
project costs, such as cost-reimbursable contracts and limiting layers 
of subcontracts to two.
    2. Partner Vetting.--The USAID Mission established a Vetting 
Support Unit in February 2011. The unit conducts checks on non-U.S. 
companies and non-U.S. key individuals for prime contractors, sub-
contractors, grant recipients and sub-grantees to minimize the risk 
that the Mission's programs might support, even inadvertently, malign 
entities or individuals. As of April 2014, we have kept over $49 
million from being awarded to those who did not meet our vetting 
requirements.
    3. Financial Controls.--We are enhancing controls on project funds, 
such as using electronic funds transfers in lieu of cash payments, 
utilizing independent financial monitors to verify appropriate usage of 
funds, ensuring close review of recipients' claims prior to payment, 
and performing audits of locally incurred costs.
    4. Project Oversight.--USAID uses a multi-tiered monitoring 
approach that includes, as appropriate, independent monitoring 
contractors; observation by U.S. Government staff; reporting by 
implementing partners, local non-governmental organizations and civil 
society; and use of technological tools, such as time- and date-stamped 
photos. By using multiple sources of monitoring data, USAID can compare 
information received from separate sources to ensure the greatest 
degree of oversight possible.
    Approximately $283 million out of $14.4 billion dollars (or 
approximately 2 percent) disbursed by USAID has constituted direct 
government-to-government assistance to the Afghan Government, and there 
are stringent safeguards on this funding. USAID implements risk 
mitigation measures in order to ensure proper oversight of direct 
assistance funds, which may include:
  --Establishing a non-commingled, separate bank account for each 
        project;
  --Regular review and reconciliation of the bank accounts;
  --Disbursement of funds only after the ministry has achieved a 
        performance milestone or USAID has verified incurred costs;
  --Regular audits by a USAID OIG-approved firm;
  --Substantial involvement and oversight by USAID staff in procurement 
        processes; and
  --Technical assistance to increase the capacity of ministries while 
        addressing priority vulnerabilities or weaknesses identified in 
        the assessments.
    USAID requires that all direct assistance with the Afghan 
Government be in compliance with USAID accountability and oversight 
procedures, including site visits to ministries by USAID staff or 
independent contractors, as well as regular reporting. If Afghan 
ministries fail to adhere to these measures, the agreements are subject 
to immediate suspension or termination.
    For instance in 2012, USAID suspended the $24.5 million District 
Delivery Program (DDP), an on-budget program implemented by the 
Independent Directorate for Local Governance (IDLG) due to non-
compliance with requirements for receiving USAID direct assistance. At 
the time of suspension, USAID had obligated $4.9 million for the 
program and disbursed $2.3 million. Following a USAID-conducted 
financial audit of the program, USAID submitted a bill to the 
Government of Afghanistan for $703,884 to recover funds lacking 
supporting documentation.
    USAID also actively engages in training Afghan entities to ensure 
they have the capacity to properly manage and account for all funds. 
Our efforts to strengthen these institutions include capacity building 
for legal and judicial institutions in order to improve application of 
rule of law and access to justice; capacity building in other Afghan 
Government institutions, particularly those involved in revenue 
collection, financial supervision, and accountability and 
transparency--thereby reducing the space for corrupt practices; and 
direct engagement with Afghan civil society organizations in their 
efforts to address corruption in the provision of public goods and 
services and hold government accountable to its people.
    In addition, audits provide useful oversight and discipline, and 
complement and reinforce USAID's own efforts to ensure U.S. taxpayer 
dollars are used effectively and efficiently. There are currently over 
100 on-going audits of USAID programs in Afghanistan. In fiscal year 
2013, the USAID Office of Inspector General, the Special Inspector 
General for Afghanistan Reconstruction, and the U.S. Government 
Accountability Office completed over 65 financial and program audits in 
Afghanistan.
    Question. One thing everyone seems to agree about is the need to do 
whatever we can to protect the important progress that has been made 
for Afghan women, however limited it may have been for many who 
continue to face discrimination and abuse. Do you agree that this 
should be a top priority, and what are your plans?
    Answer. Afghanistan will not be able to achieve sustainable peace, 
reconciliation, stability, and economic growth if Afghan women are not 
empowered. Though many challenges remain for Afghan women, Afghan women 
and girls have achieved dramatic progress over the last 12 years 
through the engagement and support of the United States, our 
international partners, and courageous Afghan women and men. With 
substantial assistance from USAID, more than a third of all school 
children in Afghanistan are now girls compared to virtually none in 
2002. More than 120,000 young women have finished secondary school and 
40,000 are working on university degrees. Over the last decade, 
Afghanistan has seen one of the most rapid declines in maternal 
mortality anywhere in the world and an increase in overall life 
expectancy of 15-20 years. Women have entered the business and 
political arenas with women comprising more than 25 percent of the 
Afghan Parliament.
    Sustaining and maintaining these gains is a key objective of 
USAID's work in Afghanistan now and in the future. USAID's programming 
includes two women-specific programs as well as integration of gender 
into all sectors of programming. USAID's Gender Equality and Women's 
Empowerment Policy requires consideration of gender equity and female 
empowerment in all USAID project design and implementation across all 
sectors. Over 40 gender analyses have been done in Afghanistan, the 
findings of which help to ensure that opportunities arising from USAID 
investments are equitable. Our work in each sector supports women's 
progress.
    Similarly important for the preservation of gains for women and 
girls is the overall level of funding sought in the President's budget 
request for civilian assistance to Afghanistan. That funding request is 
intended to provide resources for programs in Afghanistan that support 
the provision of security, justice, and basic services to women and 
men.
    USAID has two projects that are designed specifically to advance 
women in Afghanistan. The Promoting Gender Equity in National Priority 
Programs (``Promote'') project that is expected for award later this 
year will be USAID's largest gender program in the world. The 5-year 
program is designed to support a cadre of educated women ages 18 to 30 
to enter and advance into decisionmaking and leadership positions in 
Afghanistan's public, private and civil society sectors. The program 
has four components: (1) Women's Economic Empowerment, (2) Women's 
Rights Groups and Coalitions, (3) Women in Government, and (4) Women's 
Leadership Development. The project will increase women's contributions 
to Afghanistan's development by strengthening women's rights groups, 
boosting female participation in the economy, increasing the number of 
women in decisionmaking positions within the Afghan Government, and 
helping women gain business and management skills. The project will 
help 75,000 women between 18 and 30 years of age who have at least a 
secondary education. USAID plans to allocate up to $216 million with 
the potential for other donors to contribute $200 million in additional 
funding.
    In addition, the ongoing Ministry of Ministry of Women's Affairs 
Organizational Restructuring and Empowerment (MORE) project is designed 
to strengthen the Afghan Government's capacity to develop and implement 
its National Action Plan for Afghan Women. This project works directly 
with the Ministry of Women's Affairs to implement national and 
provincial level ministerial restructuring and to improve public 
relations, awareness raising campaigns and women's rights.
    In addition, USAID will continue to focus on increasing and 
improving primary healthcare, safe childbirth, healthier adolescent 
girls and women, and training and job opportunities in health for 
women. Strengthening women's economic opportunities is planned to be 
pursued through reinforcing women's land rights and providing a full 
range of business development services to existing and women-owned 
enterprises. In agriculture, USAID will target opportunities from 
micro/household- to macro/financial institution-strengthening, 
expanding women's income-generating potential, improving access to 
markets, and addressing constraints that disproportionately affect 
women.
    USAID is also supporting quality education through teacher training 
and placing emphasis on access to formal and community-based education 
for boys and girls. USAID's programs additionally focus on increased 
literacy and inclusive educational opportunities in basic and higher 
education, and technical and vocational educational training. 
Democracy, rights and governance projects will continue to support 
women's participation in democratic governance and political processes 
through investment in women's civic leadership; support to women 
journalists and media professionals; judicial training and outreach 
programs; access to justice and legal rights awareness; and activities 
to ensure informed participation of Afghan women as voters, candidates, 
elections administrators and observers.
    Question. Partner Vetting. There is a lot of concern among U.S. 
non-governmental organizations (NGOs) about USAID's vetting of local 
partners. While steps need to be taken to prevent U.S. funds from 
ending up in the hands of a terrorist or terrorist organization, you 
also need to protect sensitive relationships with the local 
organizations we depend on to implement programs.
    What is the status of this? Are you still in the pilot phase? What 
happens next?
    Answer. The USAID Partner Vetting System (PVS) pilot program is in 
the implementation phase. USAID has completed PVS public rule making 
for acquisitions, identified contract actions in the pilot missions, 
and added notice of potential vetting of awards to pilot mission 
contract solicitations. USAID is completing public rule making for 
assistance awards under PVS. PVS pilot award applicants and their 
organizations will be vetted in accordance with established vetting 
protocols. USAID plans to analyze data collected from the pilot 
program, as well as from existing vetting programs, including those for 
West Bank/Gaza and Afghanistan, and produce a joint report to Congress 
with the Department of State in accordance with the requirements of 
Public Law 112-74, Section 7034(i).
    USAID makes it a priority to consult with its partners about 
vetting and recognizes the importance of regular dialogue and feedback 
from partners about the impact of vetting on partner operations and 
effectiveness. USAID seeks to make adjustments where possible while 
maintaining the effectiveness of the vetting programs. For example, in 
the PVS pilot program, USAID has agreed to test direct vetting in 
certain pilot missions. Direct vetting is a concept proposed by 
implementing partners that involves direct communication between USAID 
and sub-awardees for purposes of vetting, rather than through prime 
awardees. Likewise, in the Afghanistan vetting program, the Mission 
Order on vetting has been updated to put in place certain modifications 
to the vetting process to accommodate requests of implementing 
partners, including the exemption of certain routine commercial 
transactions from vetting. We will continue to stay in touch with 
USAID's implementing partners and seek to accommodate requests, while 
maintaining the effectiveness of vetting as a means of ensuring U.S. 
taxpayer funds are used for their intended purpose.
    Question. Many people have the same name and there have been many 
examples of personal information in U.S. databases being stolen or 
unintentionally released to the public. Do you tell individuals and 
organizations how information about them will be used and stored by the 
U.S. Government, including how a ``positive match'' would be handled 
and how to appeal such a match?
    Answer. USAID has engaged in several public notices and rule 
makings that have provided the public with notice on the planned use of 
Personally Identifiable Information (PII) for vetting. These public 
notices and rule makings include:
    Partner Vetting in USAID Assistance
    --Proposed Rule--August 8, 2013
    --Correction--November 21, 2013
    Partner Vetting in USAID Acquisitions
    --Final Rule--February 14, 2012
    --Proposed Rule--June 6, 2009
    Paperwork Reduction Act--Partner Information Form
    --June 6, 2011
    Privacy Act
    --December 12, 2012
    --February 2, 2009
    Public Briefings
    --August 8, 2011
    --April 4, 2008
    USAID has established procedures for the use of PII for vetting 
under the PVS pilot program. PII on key individuals of organizations 
applying for USAID funds, either as a prime awardee or as a sub-
awardee, is entered into a secure USAID database that is housed within 
USAID servers. Access to this data is strictly controlled and provided 
only to authorized U.S. Government staff with vetting responsibilities. 
Authorized U.S. Government personnel who have been assigned roles in 
the vetting process are provided role-specific training to ensure that 
they are knowledgeable in how to protect personally identifiable 
information. Access to this data is further restricted through role-
based limitations.
    Using the data provided by the applicant, USAID analysts search for 
any possible matches between the applicant organization or key 
individuals associated with that organization and one or more names 
contained in U.S. Government law enforcement and intelligence 
databases. Where a possible match is found, USAID staff will thoroughly 
analyze all available and relevant data to determine the likelihood of 
the match, and make a recommendation regarding the eligibility of the 
organization to receive USAID funding. In those instances where there 
is a positive match, USAID will update the existing public or non-
public database records for those organizations or individuals with any 
pertinent data provided by the organization or individual.
    The above process is also followed in the Afghanistan vetting 
program. Additionally, in an effort to improve the consistency of 
Afghanistan vetting among U.S. agencies, USAID participates in an 
Interagency Vendor Vetting Working Group facilitated by the U.S. 
Embassy. At these working group meetings, USAID shares its ineligible 
determinations and identifies significant assessments. USAID and the 
Embassy also participate in a weekly Vendor Vetting Advisory Panel 
convened by the Department of Defense regarding Afghanistan eligibility 
recommendations.
    In the event of an ineligible determination by USAID under the PVS 
pilot program, the applicant will be notified of the decision and may 
request reconsideration. Once USAID reviews any additional information 
provided by the applicant in the PVS pilot program, USAID will make a 
final determination and communicate such determination to the 
applicant, as appropriate. In the case of vetting programs, USAID may 
reconsider ineligible determinations and has done so in particular 
cases when it had reason to conduct such reconsideration.
    Question. Do you have the ability to waive the vetting requirement 
in order to avoid delays in responding to humanitarian crises?
    Answer. USAID may approve awards without pre-award vetting that 
ordinarily would be required for a program, including the PVS pilot 
program, if pre-award vetting would impede the delivery of emergency 
aid to an immediate humanitarian crisis. In such cases, USAID may 
conduct post-award vetting following the response to the crisis or once 
emergency aid has moved to the reconstruction phase of the relief 
effort. USAID's policy of allowing approval of awards without pre-award 
vetting in order to avoid delays in responding to urgent humanitarian 
crises is documented in the PVS pilot mission order.
    Question. Are USAID's partner vetting procedures the same as those 
used by the Department of State and other agencies implementing 
programs with overseas partners? What about the Department of Defense, 
which has gotten deeply involved in the foreign aid business in recent 
years?
    Answer. Both USAID and the Department of State (State) conduct 
searches of public and non-public databases for vetting programs. There 
are some differences in USAID and State vetting procedures and systems, 
including for reasons related to their differing procurement models. 
USAID's procurements are often executed at the Agency's overseas 
missions, while State's procurement function is centralized in 
Washington, DC. As a result, in the PVS pilot program, USAID has staff 
at the pilot missions and in the Washington, DC area that work together 
on the vetting process, whereas State vetting is conducted out of 
Washington, DC. The same State and USAID approaches to the vetting 
process are maintained for Afghanistan vetting. Regarding interagency 
coordination, USAID coordinates the PVS pilot program with State. USAID 
coordinates its Afghanistan vetting program with State and the 
Department of Defense (DOD), as noted by the Special Inspector General 
for Afghanistan Reconstruction (SIGAR) in SIGAR Audit 13-14. We 
respectfully refer detailed questions regarding vetting procedures at 
State and DOD to those agencies.
    Question. Disaster Relief Budget Request. Your request for 
International Disaster Assistance is $1.3 billion, which is $500 
million below the fiscal year 2014 appropriations level of $1.8 
billion. What is that cut based on? Do you have reason to believe that 
the needs of victims of war and natural disasters will be significantly 
less in 2015, or was this just an Office of Management and Budget (OMB) 
decision unrelated to reality?
    Follow Up. We cannot assume that we there will be less humanitarian 
need in fiscal year 2015 than in 2014. Syria and the Central African 
Republic are the best examples of that. It means that Congress will 
have to make the hard choices. Are there any programs which you regard 
as lower priority than disaster assistance that we should shift money 
from?
    Answer. The administration remains dedicated to providing robust 
support for humanitarian programs worldwide. The President's fiscal 
year 2015 request includes $1.3 billion for the International Disaster 
Assistance (IDA) account. The United States Agency for International 
Development plans to carry over fiscal year 2014 IDA funding into 
fiscal year 2015 to support humanitarian assistance needs. The 
President's request also includes $1.4 billion in Title II to respond 
to development and emergency food assistance needs and $2.097 billion 
for the Migration Refugee Assistance and the Emergency Refugee and 
Migration Assistance accounts. The administration has additional 
authorities, if needed, to draw upon to respond to humanitarian needs. 
Taken together, we anticipate having the funds needed to support our 
humanitarian assistance goals in Syria, Africa, and elsewhere. However, 
this is contingent upon avoiding a further deterioration in any of the 
current major emergencies, and no new large-scale emergencies before 
the end of the fiscal year.
    The President's fiscal year 2015 request reflects the 
administration's ongoing commitment to humanitarian programs, while 
taking into account the current constrained budget environment.
    Question. Global Health Budget Request. You propose cuts in several 
global health programs, from maternal and child health to neglected 
diseases, tuberculosis, vulnerable children, and nutrition. The overall 
cut in USAID's health programs below the fiscal year 2014 appropriated 
level is $89 million. Was this OMB's decision, or do you think we are 
spending too much on global health? Should we be spending less, the 
same as 2014, or more?
    Answer. The administration's fiscal year 2015 budget request for 
USAID's global health programs reflects difficult choices made in a 
constrained budget environment.
    USAID has undertaken an ambitious review of every dollar the Agency 
spends in order to identify inefficiencies and accelerate reductions in 
child and maternal mortality in 24 countries, primarily in sub-Saharan 
Africa and South Asia, which account for 70 percent of child and 
maternal deaths and half of the unmet need for family planning. Our 
goal of ending preventable child and maternal deaths will be achieved 
through increasingly effective efforts to link diverse health 
programs--in maternal and child health, malaria, family planning's 
contribution to the healthy timing and spacing of pregnancy, nutrition, 
HIV/AIDS, and sanitation and hygiene improvement--and through global 
cooperation.
    Our nutrition programs are effectively contributing to both the 
goals of Feed the Future and of ending preventable child and maternal 
deaths. On May 22, 2014, USAID released its new Multi-Sectoral 
Nutrition Strategy which aims to reduce the number of chronically 
malnourished or stunted children by at least 2 million over the next 5 
years and hold global acute malnutrition below the agreed emergency 
threshold of 15 percent in places with humanitarian crises, like South 
Sudan and the Central African Republic.
    USAID's approach will focus on the 1,000 days from pregnancy to a 
child's second birthday--the most critical time for a child's 
cognitive, intellectual, and physical development. Poor nutrition 
during these first 1,000 days can have negative, life-long impacts on 
children that prevent them from reaching their full potential. The 
strategy's new approach will bolster support for ongoing child and 
maternal health commitments, which aim to reach 500 million pregnant 
women and children under 2 years of age with improved nutrition, avert 
20 million additional cases of stunting, and prevent 1.7 million deaths 
due to poor nutrition and health--goals laid out in the Global 
Nutrition for Growth Compact.
    Further, USAID is a global leader in large-scale implementation of 
integrated treatment programs for neglected tropical diseases (NTDs), 
focusing on the scale-up of mass drug administration to target the 
control or elimination of lymphatic filariasis, blinding trachoma, 
onchocerciasis, schistosomiasis, and intestinal worms. The program 
currently supports 25 countries and regional programs in Africa and the 
Americas to reach treatment targets and monitor and evaluate the 
programs to document achievement of control and elimination goals. As a 
result of the support provided by USAID, 59 million people now live in 
areas where they are no longer at risk of acquiring lymphatic 
filariasis and treatment can be stopped, and 35 million people live in 
areas where active trachoma is no longer a public health problem. Over 
the past 7 years, the U.S. Government has leveraged $6.7 billion in 
donated medicines, resulting in the delivery of more than 1 billion 
treatments to approximately 467.9 million people.
    In part because of the USG's efforts, the rate of new TB cases has 
been declining for the past decade and the world is on track to meet 
the Millennium Development Goals of reversing TB incidence, along with 
a 50 percent reduction in the mortality rate by 2015, compared to 1990. 
Since 1990, TB treatment has saved the lives of more than 22 million 
people.
    There are 22 high-burden countries, which account for 80 percent of 
the world's TB cases. Five of these countries, which account for almost 
50 percent of the TB cases--Brazil, Russia, India, China and South 
Africa--have the ability and capacity to increase domestic funding to 
address TB. All of these five countries are now providing development 
assistance to other countries. For example, Russia has increased 
funding for its National TB Control Program from less than $500 million 
annually in 2007 to more than $1 billion annually beginning in 2010, 
and Brazil has increased annual funding to its National TB Control 
Program and will provide an additional $7.3 million in 2014.
    The Global Health Programs-USAID request for TB does not represent 
the totality of the U.S. Government response to this disease. USAID 
collaborates with other agencies and the Global Fund to integrate and 
expand TB health services and strengthen delivery platforms, and with 
the President's Emergency Plan for AIDS Relief (PEPFAR) on TB/HIV co-
infection interventions. It is important to note that three-quarters of 
annual international donor funding for TB is provided by the Global 
Fund, and the U.S. Government remains the largest donor to the Fund.
    Through the Displaced Children and Orphans Fund, USAID supports 
programs in 14 countries to prevent family separation, promote family-
based alternatives to institutional care for children and strengthen 
the capacity of families, communities and governments to care for 
children. As a result of our assistance, more than 14,000 child 
protective service providers were trained in fiscal year 2013 to 
provide comprehensive, sensitive care. In turn, these providers have 
directly reached more than 92,000 children and their family members, 
improving protection and wellbeing for vulnerable children.
    Follow Up. For many years, United States law, known as the Hyde 
Amendment, has permitted Federal funding of abortions in cases of rape, 
incest or to protect the health of the mother. That was most recently 
reaffirmed in the fiscal year 2013 Defense Authorization Act. Does 
USAID provide funding for this purpose, particularly in places like 
Eastern Congo where rape is widely used as a weapon of war against 
women and girls? If not, why not?
    Answer. USAID is committed to saving women's lives and advancing 
their health by investing in voluntary family planning and reproductive 
health programs, including in conflict settings and humanitarian 
emergencies. These programs have improved the health of women worldwide 
by helping to prevent unintended pregnancies, reducing the number of 
abortions and lowering the number of maternal deaths related to 
complications of pregnancy and childbirth.
    USAID's Gender Equality and Female Empowerment Policy stipulates 
that USAID will strive to reduce gender-based violence and mitigate its 
harmful effects on individuals and communities. USAID provides a range 
of health services for victims of sexual violence, including 
reproductive healthcare, emergency contraception, psycho-social 
counseling, family mediation, socio-economic assistance, and referral 
for legal services. USAID does not provide funding for the performance 
of abortion.
    Question. USAID Operating Costs. The USAID fiscal year 2015 request 
for operating costs are almost double what they were in fiscal year 
2007. This trend is not sustainable. What is USAID doing to reduce its 
operating costs and bring them into line with the current budget 
environment? What impact has this increase in operating costs over the 
past 8 years had on improving the delivery and effectiveness of U.S. 
foreign aid?
    Answer. Our mission to end extreme poverty and promote resilient, 
democratic societies while advancing the Nation's security and 
prosperity could not be achieved without the operational resources to 
support the delivery of our foreign assistance. The increase in 
operating costs since fiscal year 2007 was necessary for USAID to 
achieve its mission by rebuilding civilian capacity, improving 
development results and sustainability, regaining global development 
leadership, and supporting critical operations in Afghanistan and 
Pakistan vital to national security interests.
    Beginning in fiscal year 2008, recognizing that development is key 
to national security, Congress appropriated funding to launch the 
Development Leadership Initiative (DLI) to rebuild the Agency's human 
capital capacity to meet the stewardship and technical demands of 
implementing the National Security Strategy. With continued bipartisan 
support, the Agency received funding for an additional 820 permanent 
Foreign Service Officers (FSOs) under DLI, allowing USAID to align 
human capital resources strategically with foreign assistance goals and 
increased program funding.
    The main drivers of increases from fiscal year 2007 to fiscal year 
2015 include the following:
  --The U.S. Direct Hire (USDH) workforce grew by 81 percent, 
        reflecting the hiring of 820 new FSOs under DLI and Civil 
        Service staff to support USAID Forward reforms, the 
        Presidential Initiatives, and the expanded overseas workforce.
  --The cost for Afghanistan and Pakistan operations increased 
        significantly to support a ramp-up in USAID's presence in these 
        Frontline States.
  --Mandatory International Cooperative Administrative Support Services 
        (ICASS) costs, excluding Afghanistan and Pakistan, from the 
        Department of State increased by 351 percent due to challenging 
        security environments overseas.
    As a careful steward of taxpayer dollars, especially in this 
fiscally constrained environment, USAID strives to be more efficient 
and effective in its worldwide operations. The Agency continues to 
implement ambitious operational reforms to improve management processes 
and achieve efficiencies through real property disposals, in-sourcing, 
travel, conferences, information technology, and space optimization 
that generate cost savings and avoidance. USAID has achieved cost 
savings and avoidance of $57.6 million in fiscal year 2011, $92.6 
million in fiscal year 2012, $17.8 million in fiscal year 2013 and 
$12.6 million thus far in fiscal year 2014. Further, USAID has 
restructured its overseas presence to realign resources with policy 
priorities, strengthening its ability to meet its foreign policy and 
national security mission.
    Over the past 8 years, the increased budget for operating costs has 
allowed USAID to improve the delivery and effectiveness of U.S. foreign 
assistance through its new model of development. With the expanded 
workforce, USAID has been able to reform policy, harness innovation, 
and leverage private capital, thus maximizing development impact.
    The results the Agency has achieved in recent years to end extreme 
poverty and promote democratic, resilient societies would not have been 
possible without the human and financial resources made available to 
recruit, hire, train, deploy, and equip USAID's talented staff. The 
chart below illustrates the Agency's recent foreign assistance 
achievements.

----------------------------------------------------------------------------------------------------------------
                                          Funding Level
          Corporate Priorities             2006-2009 v.             Result              Cost-Effectiveness and
                                            2010-2013                                          Leverage
----------------------------------------------------------------------------------------------------------------
Feed the Future........................            +206%  Helped 6.7M farmers grow    Cost-benefit analyses show
                                                           more food and improved      an average rate of return
                                                           nutrition for 12.7M         of 32% for Feed the
                                                           children in 2013.           Future investments.
Child Survival.........................             +42%  Helped achieve 8%           Helping Babies Breathe
                                                           reduction in under-5        Alliance leveraged $3 for
                                                           mortality in our 24         every $1 we invested,
                                                           priority countries in 2     raising an additional
                                                           years alone, saving         $23M for this lifesaving
                                                           560,000 lives.              partnership.
AIDS-Free Generation...................             +29%  With PEPFAR, we provided    The Global Fund raised $2
                                                           antiretroviral treatment    for every $1 pledged by
                                                           to 6.7M people with HIV/    the U.S. Government,
                                                           AIDS in 2013--a four-fold   leveraging billions for
                                                           increase since 2008.        HIV/AIDS.
Power Africa...........................            +420%  2,500MW of power projects   For every $1 the U.S.
                                                           have financially closed;    Government has committed,
                                                           another 5,500MW are in      the private sector has
                                                           the planning stages--       committed $2--over $14
                                                           together enough to light    billion so far.
                                                           over 10M homes.
Resilience.............................           +$451M  Reduced disaster risk for   Each $1 of investment in
                                                           27M people and              resilience yields $2.9 in
                                                           strengthened resilience     development gains,
                                                           for 3.4M in targeted        avoided livestock losses,
                                                           zones in the Horn of        and unneeded aid.
                                                           Africa in 2013.
Education..............................             +28%  Expanded education          All Children Reading: A
                                                           opportunities for 19M       Grand Challenge for
                                                           students in 2013.           Development matched $1
                                                                                       for every $1 we invested.
Water..................................             +38%  Provided 38M people with    Securing Water for Food: A
                                                           access to water and 17.7M   Grand Challenge for
                                                           with access to improved     Development leveraged
                                                           sanitation since 2006.      roughly $2 for every $1
                                                                                       we invested.
----------------------------------------------------------------------------------------------------------------

    Question. Development Assistance Budget Request. Your request of 
$2.6 billion for Development Assistance is $113 million above the 
fiscal year 2014 appropriated level. Where do you plan to use the bulk 
of these additional funds?
    Answer. The fiscal year 2015 DA request of $2.6 billion is designed 
to achieve the goals outlined in Presidential Policy Directive-6 (PPD-
6) by supporting programs focused on sustainable development, economic 
growth, democratic governance, development innovations, sustainable 
systems for meeting basic human needs, and building resilience.
    The bulk of the additional resources of $113 million will support 
the Presidential Initiatives for Global Climate Change and Feed the 
Future and further development goals in the areas of education, water, 
governing justly and democratically as well as empowering women.
    Question. Follow Up. Do you expect higher or lower amounts in the 
countries of Central America, where poverty and violence are driving 
people to leave their homes and come to the United States?
    Answer. The fiscal year 2015 request prioritizes the countries of 
Central America with a $26.0 million increase in funding for the region 
as compared to the fiscal year 2014 Estimate.

                                         [$ in thousands for all items]
----------------------------------------------------------------------------------------------------------------
                                                            Fiscal Year 2014  Fiscal Year 2015      Increase/
                                                                Estimate           Request          Decrease
----------------------------------------------------------------------------------------------------------------
El Salvador...............................................            19,281            25,000             5,719
    Development Assistance................................            19,281            25,000             5,719
 
Guatemala.................................................            57,789            70,387            12,598
    Development Assistance................................            42,789            57,387            14,598
    Global Health Programs--USAID.........................            15,000            13,000            -2,000
 
Honduras..................................................            36,700            44,326             7,626
    Development Assistance................................            36,700            44,326             7,626
 
Nicaragua.................................................             7,400             8,000              -400
    Development Assistance................................             7,400             8,000               600
 
USAID Central America Regional............................            19,891            19,391            -1,500
    Development Assistance................................            11,500            11,000            -1,500
    Global Health Programs--USAID.........................             8,391             8,391                --
                                                           -----------------------------------------------------
      TOTAL...............................................           141,061           167,104            26,043
----------------------------------------------------------------------------------------------------------------

    In addition, through the Central America Regional Security 
Initiative, the fiscal year 2015 request includes $60.0 million of ESF 
for Central America, the majority of which will be managed by USAID.
    Question. Indigenous People. As you know, USAID now has an Advisor 
on Indigenous Peoples Issues, a position I established some years ago. 
This is important because many of the countries where USAID has 
programs have indigenous populations whose survival is threatened, 
particularly from extractive industries and the encroachment of 
agriculture and unchecked development. What steps is USAID taking to 
incorporate indigenous people as partners in the sustainable 
development process, to ensure that their rights and traditions are 
protected and their needs addressed?
    Answer. USAID recognizes the important role that indigenous peoples 
play in sustainable development, biodiversity conservation, and 
adapting to--and mitigating the effects of--global climate change. For 
several years we have worked to incorporate the issues and concerns of 
indigenous peoples into our work in many countries, including Colombia, 
Peru, Brazil, Ecuador, Guatemala, and Honduras. Now, with the 
appointment of our new Advisor on Indigenous Peoples Issues, USAID is 
taking steps to ensure that all of USAID's projects, programs and 
policies are designed and implemented to include indigenous peoples as 
partners in the entire development process, including:
A. Integrating Indigenous Peoples' Issues into USAID Programs, Policies 
        and Projects:
  --Evaluating the impact of USAID's projects and programs on 
        indigenous communities
  --Developing a USAID policy on Indigenous Peoples
  --Integrating Indigenous Peoples' Issues into other USAID Policies 
        (Internally Displaced People Policy, Biodiversity Policy, etc.)
  --Integrating Indigenous Peoples' Issues into USAID Country 
        Development Cooperation Strategies
B. Enhancing USAID Staff Capacity to Integrate Indigenous Peoples into 
        Programs and Projects:
  --Developing a USAID Training Program on Indigenous Peoples' issues
  --Developing a series of issue papers on Indigenous Peoples
  --Incorporating Indigenous Peoples into USAID's Democracy Human 
        Rights and Governance (DRG) Strategic Assessment Framework to 
        ensure that the situation of indigenous peoples is assessed 
        when a country's primary DRG challenges are identified, to 
        support USAID missions in developing strategies for addressing 
        them, and to guide resources to areas where investments will 
        have the greatest impact.
C. Improving Coordination:
  --Strengthening Intra-Agency Coordination
  --Enhancing Inter-Agency Coordination (Department of State, Treasury, 
        USUN, Bureau of Indian Affairs, White House)
  --Engaging International Financial Institutions on policy and project 
        issues (World Bank, Inter-American Development Bank, African 
        Development Bank, Asian Development Bank, European Bank for 
        Reconstruction and Development)
D. Engaging Indigenous Peoples:
  --Coordinated consultations with indigenous leaders at the 13th 
        session of the U.N. Permanent Forum on Indigenous Issues in May 
        2014.
  --Planning for the World Conference on Indigenous Peoples, a high-
        level plenary meeting of the United Nations General Assembly 
        that will take place September 22-23, 2014 at the UN 
        headquarters in New York.
  --Providing funding for indigenous peoples' issues through USAID's 
        Human Rights Grant Program. In the first round of grants since 
        the Advisor has been at USAID, a grant for $750,000 was awarded 
        to support the economic inclusion of Guarani farmers in 
        Paraguay. The next call for proposals will go out in the next 2 
        weeks and, because of outreach undertaken by the Advisor, we 
        expect a minimum of three proposals for indigenous peoples' 
        projects.
  --Organizing meetings between USAID staff and indigenous leaders from 
        Indonesia, Kenya, Bangladesh, Democratic Republic of Congo and 
        Peru
  --Serving on the planning committee of the World Summit of Indigenous 
        Funders that will be held in September 2014.
    Question. Columbia. The Colombian Government is trying to negotiate 
a peace agreement with the FARC, which if successful will end decades 
of civil war. That may be the easy part. If there is an agreement, 
securing and sustaining the peace will be extremely difficult.
    What plans is USAID making, if any, and how is it reflected in your 
fiscal year 2015 request for Colombia--which is decreasing--to help 
Colombia? Is this something you are anticipating for fiscal year 2016, 
rather than this year?
    Answer. USAID has been planning for nearly 2 years to ensure that 
its programs are flexible and relevant to adapt to the needs in 
Colombia in the coming years. Specifically regarding the peace process, 
USAID has been in close contact with the government about the status of 
the negotiations and we have encouraged them to inform us of any areas 
of anticipated support.
    USAID programs in Colombia will continue to work with the 
government, civil society, and the private sector to support conflict 
victims, reduce impunity, develop rule of law, bring government 
services to rural areas previously controlled by the FARC, and improve 
land tenure and livelihoods in rural areas. By supporting the efforts 
of the Colombian people to secure justice and good governance, we help 
lay the ground work for the accountability, stability, and 
reconciliation necessary for any peace deal to be successful.
    Question. USAID Overseas Presence. USAID proposed in the fiscal 
year 2014 budget request to restructure its overseas presence by 
closing or downsizing 10 USAID missions and establishing new or 
upgrading existing USAID offices in 10 countries. The fiscal year 2015 
budget doesn't propose any additional restructuring overseas. Given the 
dynamic and changing situations in Ukraine, Russia, Africa, and the 
Middle East, do you continue to think that no additional restructuring 
is needed? Are you looking at other ways to maintain overseas presence 
in a more flexible manner?
    Answer. USAID monitors closely the political and security 
situations in the countries where it has programs to determine whether 
changes in presence are warranted. At the time the Agency prepared the 
fiscal year 2015 budget, no changes in USAID presence were needed. 
However, given the recent deteriorating security situations in the 
Middle East and Africa and the conflict between Ukraine and Russia, the 
Agency is considering additional restructuring changes that will 
address security concerns while maintaining overseas presence in a 
flexible manner. As required, the Agency will notify Congress of any 
proposed presence changes.
    Question. Ethiopia. What steps have been or will be taken by USAID 
to ensure that no foreign aid is used to support activities that either 
directly or indirectly result in forced evictions?
    Answer. USAID will continue to conduct the appropriate planning, 
consultation, analysis, due diligence, and monitoring to ensure that 
foreign assistance does not support forced evictions, while continuing 
our important partnerships to improve the livelihoods of people in 
Ethiopia. Through consistent site visits to the areas in question, such 
as South Omo, implementing partner reports, and data quality analysis, 
USAID is diligent about ensuring that aid supports the intended project 
purposes and does no harm. In addition, USAID and other donors continue 
to insist that the Ethiopian Government conduct meaningful community 
consultations, offer appropriate grievance procedures, and allow for 
sufficient planning and the timely provision of services.
    Question. In two reports released in 2013, Development Aid to 
Ethiopia: Overlooking Violence, Marginalization, and Political 
Repression and Ignoring Abuse in Ethiopia: DFID USAID in the Lower Omo 
Valley, the Oakland Institute documented how officials from USAID heard 
first-hand accounts of forced resettlements and human rights abuses 
from villagers in Ethiopia and yet still came to the conclusion that 
the allegations of forced resettlements were ``unsubstantiated.'' They 
went on to say that no evidence exists to make the links between their 
programs and practices of the Ethiopian Government. What methodology 
did USAID use to reach this conclusion?
    Answer. USAID has conducted over six monitoring visits to the 
village sites in the lower Omo region since late 2011 with an 
additional visit ongoing presently. Some of these visits were jointly 
conducted with other donors. During each visit USAID has conducted 
numerous discussions with affected groups to assess their experience. 
Despite these discussions and the significant efforts expended by USAID 
on each trip to investigate alleged abuses, USAID has never encountered 
any evidence of the Ethiopian Government using violence to threaten or 
remove populations during its visits.
                                 ______
                                 
                Questions Submitted by Senator Roy Blunt
    Question. As you know, tuberculosis is the leading curable 
infectious killer in the world, claiming 1.3 million lives per year. 
Worldwide, tuberculosis is the third leading cause of death among women 
of reproductive age. I agree that continued advances in scientific 
health, specifically with tuberculosis, are imperative. The United 
States has been a leader on this issue and, as a result, has helped 
save and improve the lives of millions. I know the Foreign Assistance 
Act allows USAID to provide assistance to any U.S. or non-U.S. 
individual or entity. I also know that we must weigh the expertise of 
entities to ensure that the government is providing resources, 
especially research and development resources, to those that are most 
capable of achieving the outcomes. However, given the history of U.S. 
entities in TB research, I am frustrated by the level of funding going 
to entities outside the U.S. I am also frustrated that Requests for 
Applications specifically confirm that non-U.S. based groups are 
eligible, and to my knowledge, U.S. companies are not given any 
weighted preference in the selection process.
    Please share with me why we have significant USAID funding for TB 
being awarded to non-U.S. entities when we have plenty of U.S. entities 
more than capable of meeting the requirements?
    Answer. USAID's top priority in managing its tuberculosis (TB) 
program is to ensure that program operations achieve the maximum 
results possible in an effective and efficient manner. The TB program 
operates through a variety of mechanisms that are awarded based on 
technical excellence and cost effectiveness through a full and open 
application process. Our partners are composed of both U.S. and non-
U.S. based entities which carry out various elements of the diagnosis, 
treatment, and prevention of TB. We are proud of the results that have 
been achieved through USAID-assisted TB programs. Since 1990, deaths 
from TB have been reduced 41 percent and the overall prevalence of TB 
has been reduced 40 percent in USAID-supported countries. These 
countries are on track to meet the Millennium Development Goal target 
of a 50 percent reduction in mortality by 2015. Further, more than 1.31 
million people with TB were successfully treated and more than 45,000 
people with multi-drug resistant TB (MDR-TB) initiated treatment in 
2012, the most recent year for which data is available. This is a 40 
percent increase in 1 year of the number of people initiated on MDR-TB 
treatment, comparing the same number of countries in 2011.
    USAID's record demonstrates a strong commitment to partnering with 
U.S. companies, with USAID TB mechanisms in both Washington and 
worldwide awarded to numerous U.S.-based entities--including University 
Research Co., LLC, PATH, FHI 360, Abt Associates, Chemonics, and MSH. 
In addition, USAID partners with a number of U.S.-based organizations--
such as the TB Drug Alliance, Johnson & Johnson, and Cepheid, Inc.--to 
strengthen our TB programs. These organizations provide unique 
expertise that contributes to the Agency's impressive TB results. In 
certain cases, non-U.S. based entities--including the World Health 
Organization, the Stop TB Partnership, the International Union Against 
Tuberculosis and Lung Disease, and KNCV Tuberculosis Foundation--
possess a unique expertise and existing logistical access to improve TB 
care, treatment and prevention in a cost-effective manner. For example, 
the Stop TB Partnership's Global Drug Facility allows for the pooling 
of procurements, thereby creating the opportunity for countries to 
purchase improved quality commodities for lower prices.
    Question. What system of priorities does USAID give to U.S. 
companies for TB funding in order to further build our domestic 
capabilities?
    Answer. USAID's tuberculosis (TB) program follows the policies and 
procedures in USAID's Automated Directives System (ADS), specifically 
ADS Chapter 300 which outlines policies for the procurement of goods 
and services through Agency acquisition and assistance planning. 
Further, USAID follows the Code of Federal Regulations procurement 
standards. Through a competitive and transparent process, USAID makes 
awards to partners with applications that are of the highest technical 
merit, while providing the best value for money.
    USAID partners with a number of U.S. companies to further build TB 
capabilities in the international sector, including:
  --TB Drug Alliance, a non-profit U.S.-based organization dedicated to 
        the discovery and development of new, faster-acting and 
        affordable TB medicines. USAID funding is supporting the TB 
        Alliance to develop new, urgently needed TB treatments for use 
        both in the United States and globally. With USAID support, the 
        TB Alliance currently has multiple new TB drug combinations in 
        clinical development.
  --Johnson & Johnson, a U.S.-based company that includes 
        pharmaceutical products. USAID is supporting studies to 
        evaluate the efficacy of bedaquiline--a drug that can be used 
        as part of a combination therapy for pulmonary, multidrug-
        resistant TB (MDR-TB) in adults. Bedaquiline is the first drug 
        in 40 years with a specific indication for MDR-TB. USAID will 
        be supporting the implementation of a clinical trial that will 
        evaluate efficacy, as well as the safety of bedaquiline. Data 
        from the study will help Johnson & Johnson meet U.S. Food and 
        Drug Administration requirements for full approval of the drug. 
        Further, USAID is supporting countries to introduce bedaquiline 
        as part of TB treatment for MDR-TB and extensively drug-
        resistant TB (XDR-TB) patients--information that will directly 
        benefit U.S. MDR-TB and XDR-TB patients.
  --Cepheid Inc., a California-based molecular diagnostic system 
        manufacturer and supplier responsible for bringing to market an 
        exciting new TB diagnostic, Xpert MTB/RIF--a test capable of 
        accurately diagnosing TB and MDR-TB in 2 hours. USAID--in 
        partnership with PEPFAR, UNITAID and the Bill & Melinda Gates 
        Foundation--entered into a financial agreement with Cepheid to 
        reduce the cost of one Xpert test from $16.87 to $9.98--a 40 
        percent reduction. USAID is also supporting the roll-out and 
        scale-up of Xpert in countries through a comprehensive 
        technical approach, and experience from this roll-out will 
        inform better testing practices in the United States for 
        persons suspected of having TB and MDR-TB.
    Partnering with international organizations allows USAID to more 
efficiently leverage the funds of other donors, including other 
government donors and the Global Fund to Fight AIDS, Tuberculosis and 
Malaria, to develop new tools and drugs and reduce the price of 
commodities while increasing the quality. USAID also supports the Stop 
TB Global Drug Facility (GDF) to pool TB drug procurements so 
countries, including the United States, are able to access cheaper, 
high-quality drugs. USAID, through engagement with the GDF and U.S. 
Pharmocopeia, has contributed to the dramatic reduction of second-line 
drug costs for the treatment of MDR-TB.

                          SUBCOMMITTEE RECESS

    Senator Leahy. Thank you very much, Dr. Shah.
    Dr. Shah. Thank you, Senator.
    [Whereupon, at 11:43 a.m., Tuesday, April 8, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]