[Senate Hearing 113-729]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 113-729

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

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

                                HEARINGS

                                BEFORE A

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                                   ON

                           H.R. 5013/S. 2499

          AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENT OF STATE, 
           FOREIGN OPERATIONS, AND RELATED PROGRAMS FOR THE FISCAL  
           YEAR ENDING SEPTEMBER 30, 2015, AND FOR OTHER PURPOSES

                               __________

                          Department of State
           United States Agency for International Development

                               __________

         Printed for the use of the Committee on Appropriations
         
         
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]         


   Available via the World Wide Web: http://www.gpo.gov/fdsys/browse/
        committee.action?chamber=senate&committee=appropriations

                               __________
                               
                               
                               
                        U.S. GOVERNMENT PUBLISHING OFFICE
87-254 PDF                   WASHINGTON : 2015                        
                               
________________________________________________________________________________________ 
For sale by the Superintendent of Documents, U.S. Government Publishing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).
E-mail, [email protected].  
                              
                               
                              
                               
                      COMMITTEE ON APPROPRIATIONS

               BARBARA A. MIKULSKI, Maryland, Chairwoman

PATRICK J. LEAHY, Vermont            RICHARD C. SHELBY, Alabama, Vice 
TOM HARKIN, Iowa                         Chairman
PATTY MURRAY, Washington             THAD COCHRAN, Mississippi
DIANNE FEINSTEIN, California         MITCH McCONNELL, Kentucky
RICHARD J. DURBIN, Illinois          LAMAR ALEXANDER, Tennessee
TIM JOHNSON, South Dakota            SUSAN M. COLLINS, Maine
MARY L. LANDRIEU, Louisiana          LISA MURKOWSKI, Alaska
JACK REED, Rhode Island              LINDSEY GRAHAM, South Carolina
MARK L. PRYOR, Arkansas              MARK KIRK, Illinois
JON TESTER, Montana                  DANIEL COATS, Indiana
TOM UDALL, New Mexico                ROY BLUNT, Missouri
JEANNE SHAHEEN, New Hampshire        JERRY MORAN, Kansas
JEFF MERKLEY, Oregon                 JOHN HOEVEN, North Dakota
MARK BEGICH, Alaska                  MIKE JOHANNS, Nebraska
CHRISTOPHER A. COONS, Delaware       JOHN BOOZMAN, Arkansas

                   Charles E. Kieffer, Staff Director
             William D. Duhnke III, Minority Staff Director

                                 ------                                

    Subcommittee on State, Foreign Operations, and Related Programs

                  PATRICK J. LEAHY, Vermont, Chairman
TOM HARKIN, Iowa                     LINDSEY GRAHAM, South Carolina
BARBARA A. MIKULSKI, Maryland        MITCH McCONNELL, Kentucky
RICHARD J. DURBIN, Illinois          MARK KIRK, Illinois
MARY L. LANDRIEU, Louisiana          DANIEL COATS, Indiana
JEANNE SHAHEEN, New Hampshire        ROY BLUNT, Missouri
MARK BEGICH, Alaska                  MIKE JOHANNS, Nebraska
CHRISTOPHER A. COONS, Delaware       JOHN BOOZMAN, Arkansas

                           Professional Staff

                               Tim Rieser
                             Nikole Manatt
                             Janet Stormes
                         Paul Grove (Minority)
                        Adam Yezerski (Minority)

                         Administrative Support

                             Maria Veklich
                       LaShawnda Smith (Minority)
                           
                           C O N T E N T S

                              ----------                              

                        Thursday, March 13, 2014

                                                                   Page

Department of State: Office of the Secretary.....................     1

                         Tuesday, April 8, 2014

United States Agency for International Development...............    59

                              ----------                              

                              Back Matter

List of Witnesses, Communications, and Prepared Statements.......   119

Subject Index....................................................   121
    Department of State: Office of the Secretary.................   121
    United States Agency for International Development...........   121

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

                              ----------                              


                        THURSDAY, MARCH 13, 2014

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:43 a.m., in room SH-216, Hart 
Senate Office Building, Hon. Patrick J. Leahy (chairman) 
presiding.
    Present: Senators Leahy, Landrieu, Shaheen, Coons, Graham, 
Kirk, Coats, Blunt, and Boozman.

                          DEPARTMENT OF STATE

                        Office of the Secretary

STATEMENT OF JOHN F. KERRY, SECRETARY


             opening statement of senator patrick j. leahy


    Senator Leahy. Good morning. Only because these guys have 
the job I always wanted to have, to be one of the 
photographers, I don't want to call them off too quickly.
    Senator Graham. It is never too late for a career change.
    Senator Leahy. I was recently speaking to a group of 
prosecutors in Vermont, and I said the best job I ever had was 
as a prosecutor. I don't know why I ever left it. Five hands 
went up in the room and said, ``We'll trade.'' But I didn't.
    I do appreciate the Secretary being here. He has a very 
busy and peripatetic schedule. The Secretary and I have been 
friends for decades, and I will say publicly what I told 
Secretary Kerry privately: I am extremely impressed and proud 
about the way he has embraced what is, especially these days, 
one of the most difficult jobs in the world. And it is hard to 
imagine anybody who walked into that job more qualified or 
prepared than you. I appreciate what you have done. I think the 
world appreciates what you have done.
    Senator Mikulski is on the floor right now. She is an 
active member and strong supporter of the subcommittee, and 
thanks to her and Senator Shelby, we got our bills done last 
year. We are going to do everything possible to get them 
finished this year.
    You and I have talked about how it makes it a little easier 
if you know exactly how much money you are going to have or 
don't have.
    I also want to take a moment, I don't want to create 
problems for him at home, but I want to acknowledge Senator 
Graham.
    Senator Graham. We need to move on.
    Senator Leahy. He travels around the world to see how our 
programs are working or not working. He and I have a close 
friendship, and we have tried to keep this subcommittee as 
nonpartisan as possible.
    Senator Graham. Absolutely.
    Senator Leahy. He has been a strong defender of the 
national interests that the budget protects, and we have tried 
to bring, each time, our bill to the floor with both of us 
voting for it.
    Obviously, today we are focused on Russia's invasion of 
Ukraine, and there will be questions about that, but there is 
also Iran, Syria, Egypt, the Israeli-Palestinian conflict, 
North Korea, Venezuela, Sudan. It is an exhausting list.
    And, Mr. Secretary, fortunately, you are able to work 40 
hours a day, and juggle all of this. But with all this going 
on, the American people have all but forgotten about 
Afghanistan and Iraq, two enormously costly military ventures 
that went terribly awry. We and the people of these countries 
will be paying for these mistakes and for the care of wounded 
soldiers and their families for lifetimes to come.
    Iraq alone will eventually cost the U.S. taxpayers $2 
trillion, the only war this country has ever fought without a 
tax to pay for it. We just put it on a credit card.
    Around the world, we see civil society organizations and 
journalists harassed and persecuted, many forced to flee their 
countries. Independence of the judiciary, fundamental to any 
democracy and fragile in many countries, is under threat. 
Violence and discrimination against women; shortages of water, 
energy, food; climate change; religious extremism; trafficking 
in arms, drugs, people, and wildlife; there is no issue that 
this Secretary or subcommittee can ignore.
    The world looks more dangerous to many of us than it did 
during the Cold War. I don't think anyone could say that the 
administration's 2015 budget request for this subcommittee is 
excessive. In fact it is half a billion dollars, $536 million, 
below the 2014 level.
    I know our costs in Iraq have decreased, but there are 
several areas where I see potential problems, particularly the 
cut in funding for refugees and other humanitarian programs.
    And I worry about the Western Hemisphere, including 
Colombia. If there is a peace agreement to end the conflict in 
Colombia--and I support what President Santos is doing at some 
political risk to himself; I traveled there and talked to him 
about this--we are going to want to help him secure that peace.
    The many challenges that we face as a Nation, the costly 
mistakes since 9/11 that damaged our image and eroded our 
influence, I would like to think that when it comes to foreign 
policy, Democrats and Republicans can learn from history and 
learn to speak with one voice for the sake of the United States 
and its people.
    I would like to think that after fighting two long, 
inconclusive wars, the Secretary's diplomatic efforts in the 
Middle East and with Iran would have strong bipartisan support.
    Right now, we don't need a Democratic foreign policy or a 
Republican foreign policy. We need an American foreign policy 
that is rooted in our values and the example we set and which 
we can credibly ask others to follow.


                           prepared statement


    I will yield to Senator Graham, and then, Mr. Secretary, 
the floor will be yours, unless the chairwoman comes and wishes 
to speak.
    [The statement follows:]
             Prepared Statement of Senator Patrick J. Leahy
    We are here to discuss President Obama's fiscal year 2015 budget 
for the Department of State and foreign operations.
    Mr. Secretary, welcome. I want to say how impressed I am by the way 
you have embraced what can only be described as one of the most 
challenging jobs in the world. It is hard to imagine anyone more 
qualified for it, and we are very fortunate to have you there.
    I also want to recognize our committee chairwoman, Senator 
Mikulski, who has long been an active member and strong supporter of 
this subcommittee. Thanks to her and Senator Shelby, we got our bills 
done last year and we are going to do everything possible to finish our 
work this year by October 1.
    I also want to acknowledge Senator Graham. He travels around the 
world to see how programs are working--or not working--and he has been 
a strong defender of this budget and the important national interests 
it protects.
    This subcommittee has produced bipartisan bills for as long as I 
have been here, and we intend to work the same way this year.
    The world today is focused on Russia's invasion of Ukraine, and we 
will have many questions about that. But there is also Iran, Syria, 
Egypt, the Israeli-Palestinian conflict, North Korea, Venezuela, 
Sudan--it is an exhausting list. The Secretary is juggling them all.
    Yet with everything else going on, it is almost as if Congress and 
the American people have forgotten about Afghanistan and Iraq, two 
enormously costly military adventures that went terribly awry. We and 
the people of those countries will be paying for those mistakes, and 
for the care of our wounded soldiers and their families, for lifetimes 
to come.
    Around the world, civil society organizations and journalists are 
harassed and persecuted. Many are forced to flee their countries. The 
independence of the judiciary, fundamental to any democracy and fragile 
in many countries, is under threat.
    Violence and discrimination against women; shortages of water, 
energy and food; climate change; religious extremism; the trafficking 
in arms, drugs, people, and wildlife--there is no issue that the 
Secretary or this subcommittee can ignore.
    The world today looks more dangerous to many of us than it did 
during the Cold War, and I don't think anyone can credibly say that the 
administration's 2015 budget request for this subcommittee is 
excessive.
    In fact, it is $536 million below the 2014 level. While our costs 
in Iraq have decreased there are several areas where I see potential 
problems, particularly the cut in funding for refugees and other 
humanitarian programs.
    I also worry about the Western Hemisphere, including Colombia. If 
there is a peace agreement to try to end that conflict--and I support 
what President Santos is doing, at some political risk to himself--we 
will want to help him secure the peace.
    With the many challenges we face as a Nation and the costly 
mistakes since 9/11 that damaged our image and eroded our influence, I 
would like to think that at least when it comes to foreign policy, 
Democrats and Republicans can learn from history and find ways to speak 
with one voice.
    I would like to think that after fighting two long, inconclusive 
wars the Secretary's diplomatic efforts in the Middle East and with 
Iran would have strong bipartisan support.
    We do not need a Democratic foreign policy or a Republican foreign 
policy. We need an American foreign policy that is consistently rooted 
in our values and the example we set, and which we can credibly ask 
others to follow.
    After Senator Graham makes his opening remarks Mr. Secretary the 
floor will be yours.
    We will then have 7-minute rounds of questions in order of 
appearance.

                  STATEMENT OF SENATOR LINDSEY GRAHAM

    Senator Graham. Thank you, Mr. Chairman. I really have 
enjoyed this committee. I want to compliment the members on our 
side. At a time of $17 trillion national debt and a country 
being financially strapped, bipartisanship has reigned when it 
comes to the 1 percent of the budget that the country has 
available to us to affect outcomes throughout the world and 
help people in a way that will help us.
    So Senator Coats is a former Ambassador to Germany. Mark 
Kirk is sort of legendary in his understanding and support for 
Israel and the Middle East.
    And when I hear at home, ``If we just got rid of foreign 
aid, our problems would be solved,'' I understand people 
feeling frustrated about the world and how dangerous it is, but 
this 1 percent I think has been well-managed, better managed 
over time.
    Mr. Secretary, your folks are doing a great job in Africa. 
I am spending a lot of time in Africa, and you can see what 
President Bush started, and President Clinton. But the Bush 
initiatives have been carried on by the Obama administration. I 
want to have a hearing one day about the rate of return on 
investment, and the amount of money that we set aside to fight 
AIDS and malaria to develop health care opportunities on a 
continent that is under siege.
    For people in Africa, our investment is not lost upon them. 
The Chinese are there for a different purpose. They see America 
and NGOs and the faith-based community in a very positive 
light. This is where, in many ways, radical Islam is moving in 
that direction. And we are going to cut them off.
    We are going to cut them off not just militarily.
    So, Mr. Chairman, we have a few differences, but when it 
comes to trying to keep this bipartisan and use the money 
wisely to help the American taxpayer--whether it is helping 
Jordan, which is being overrun by refugees--we work well with 
the State Department.
    Mr. Secretary, I don't know how many miles a month you 
travel, but nobody can ever say that John Kerry has not been 
trying. You show up everywhere in the world where there is a 
conflict.
    And I want to help where I can. We will have some 
differences, but on behalf of the American people, thank you 
for being involved.
    And to all committee members, particularly on the 
Republican side, thank you for seeing the benefit that this 
account can offer our Nation.
    Senator Leahy. Please go ahead, Mr. Secretary.

                   SUMMARY STATEMENT OF JOHN F. KERRY

    Secretary Kerry. Mr. Chairman, thank you very much. And 
Ranking Member Graham and all the members of the committee, 
Senators, good friends of mine, I am very appreciative of the 
opportunity to be able to testify here.
    Even more so, I am really grateful for each of your service 
on this committee. I was around here long enough to know the 
difference between those committees that are easy to translate 
at home, and this is one of the hardest. This and the Foreign 
Relations Committee, it is tough, because people at home don't 
always see the connection.
    And, Senator Graham, I want to pick up on your comments on 
that in a minute, if I can.
    I am going to be very brief with my opening statement. I 
want to begin by, first of all, just telling you what a 
privilege it is for me to lead this extraordinary department, 
the Department of State, USAID, and the remarkable men and 
women who put themselves on the line every single day.
    They are not wearing a uniform, but a whole bunch of them 
are taking risks in this dangerous world we live in. And they 
are doing it because of their love of country, because of their 
desire to try to change things for the better in the world, and 
take our values abroad and help to protect our interests. And 
they do it in amazing ways.
    Senator Graham just mentioned the effort, trying. I believe 
we are getting a lot of things done, and I believe we are 
making a difference in many places. We can talk about that in 
the course of the morning, because it really is part of what 
translates into the return on investment that Senator Graham 
talked about.
    And there are just so many different parts of the world 
where people don't see how America has made the difference, but 
we are making a difference in place after place. And that 
people say okay, so what? What does that mean? It makes America 
more secure.
    It also opens up relationships that wind up growing 
economies, which means business for American companies, it 
means jobs at home, in every State, every district, in America. 
And we can show that. And we need to do more of showing it, and 
we intend to.
    But right now, I would just say to all of you that the one 
thing that struck me more than anything else in the course of 
the last year, and I say this without any chauvinism or 
arrogance at all, but it is the degree to which our leadership 
does make a difference. It is the degree to which, if we are 
not engaged in one place or another, bad things often happen.
    We are not the only force. I am not claiming that. We have 
great allies, great partners in these efforts. And some of them 
are equally as indispensable. But we do make that kind of 
difference.
    Last week, I was standing in Kiev, looking at the lampposts 
that were riddled with bullet holes, barricades made up of 
tires and bedposts and different detritus from homes, and an 
amazing film of burnt ash and mud on the street. And these 
remarkable memorials that have grown up spontaneously to the 
people who were killed there, flowers piled on flowers, 
candles, photographs of those who died, it was incredibly 
moving.
    And to talk to the people there and listen to them express 
their hopes, their desire to just be able to make choices like 
people in other countries, it was a privilege to listen to 
them. But I have to tell you, they are waiting for the world to 
back them up in these aspirations and to help them.
    And what is true in Kiev is true in so many other places 
where people look to us to be able to try to provide 
opportunities. South Sudan, a nation which many of you helped 
give birth to, is struggling now. It needs our support to have 
a chance of surviving beyond its infamy, so it doesn't fall 
back into its history of being the longest war in Africa that 
has taken more than 2 million lives.
    What we do matters in the Maghreb, where the State 
Department is coordinating with France in order to take down Al 
Qaeda there, make sure that French forces have the technology 
and weapons that they need.
    What we do matters in Central Asia, where we are working 
with several nations to stop the trafficking of narcotics and 
keep more heroin off our streets, and cut off financing for 
terrorists and extremists, all of which makes Americans safer.
    What we do matters in the Korean Peninsula, where we are 
working with our partners in the Republic of Korea, to make 
sure that we can meet any threat and to work toward the 
denuclearization of the Korean Peninsula. I was recently, a few 
weeks ago, in China, where we had very serious discussions 
about what the Chinese can do in addition to what they are 
already doing in order to have a greater impact on the 
denuclearization process. And we are working with Japan and the 
Republic of Korea in order to make sure they don't feel so 
threatened that they move toward nuclearization and self-help.
    Thanks to the State Department's work, the South Koreans 
are now making the largest contribution they have ever made 
toward our joint security agreement.
    What we do matters significantly where we support freedom 
of religion, and that is true from Bosnia to Indonesia, 
protecting universal rights of people to practice their faith 
freely and working to bring an end to the scourge of anti-
Semitism.
    And it isn't just what we do in the budget. Mr. Chairman, 
you know this better than anybody. It is an essential part of 
who we are as Americans.
    I also know from my experience here in Congress, 
particularly under the budget constraints that you have 
referred to, that you shouldn't tell anybody that anything that 
costs billions of dollars is a bargain. We understand this is 
important money to American citizens.
    But when you consider that the American people pay just 1 
penny of every dollar in the tax dollar for the $46.2 billion 
that is our budget, flatlined and down from where it was in 
2013, I believe the American people are getting an 
extraordinary return on investment.
    Now, some Members of Congress believe we ought to have 
larger budget cuts, but I have to say to you, when I measure 
what is happening in the world, the challenge and the Maghreb, 
in the Sahel, the Levant, and all of the Middle East, in South 
Asia, the challenge of huge numbers of young people under the 
age of 30 who are yearning for opportunity, yearning for their 
opportunity to touch what they see and know everybody in the 
world has today, because we are such an interconnected world, 
when I see the possibility of radical religious extremism 
grabbing them instead of the opportunity to have an education, 
the opportunity to get a good job, we better understand that 
threat to us. That is real.
    And we will deal with it, one way or another, either now 
and get ahead of it, or later when it is a bigger problem.
    For me, it is no coincidence that the places where we face 
some of the greatest national security challenges are also the 
places where the governments deny basic human rights and 
opportunities for their people, and where there is very little 
public discourse and accountability with any kind of free press 
or media or capacity for people to speak out.
    So that is why supporting human rights and stronger civil 
societies and development assistance, investing in our 
partnerships with allies, these are the surest ways to prevent 
the kind of horrible human tragedies that we are in the 
business of addressing in today's very complicated world.
    I also think that we have to remember that foreign policy, 
in 2014, is not all foreign. The fact is that we are, in the 
State Department, increasingly focused on economics, focused on 
building our strength here at home, on advancing American 
businesses and creating job opportunities. Every time I speak 
to the Department of State, I talk about foreign policy as 
economic policy. And every Foreign Service Officer today, and 
every civil service officer now, must also become an economic 
officer. And we have changed the training at the Foreign 
Service Institute in order to take all of our initial recruits 
and begin to structure ourselves differently than in the past.
    Some people express skepticism about this. But let me just 
tell you, our Embassy in Zambia recently helped create jobs in 
New Jersey. The patient advocacy of our diplomats helped an 
American construction company land an $85 million contract. 
They are building 144 bridges, and they have the potential to 
do far more. There may be a follow-on multi-hundred-million 
dollar contract.
    Our consular staff in Calcutta, they helped bring 
Caterpillar together with a company in India to develop a $500 
billion power plant. When 95 percent of the world's consumers 
live outside of our market, and when foreign governments are 
out there extremely aggressively chasing our RFPs, requests for 
proposals, contracts, jobs, opportunities, and they are backing 
their companies in a very significant way, we need to 
understand that we are living in a different world than we were 
in the Cold War, when America was the single powerhouse economy 
of the world and everybody else was recovering from World War 
II.
    Then you feel you could make mistakes and still win. Now 
you can't. It is a different economic marketplace.
    We believe this budget strengthens our partnerships where 
so many of our economic and security interests converge, in the 
East Asian Pacific region. And with this budget, we are 
bolstering our bedrock alliances with South Korea and Japan. 
And we are developing deeper partnership with Vietnam, 
Indonesia, the Philippines, and others, as they assume greater 
security roles.
    Finally, I would just say to everybody, as we make these 
investments and project our values and our power in places that 
we need to in order to protect our interests, there is no way 
that we can eliminate all risk, especially in a world where our 
interests are not confined to prosperous capitals. We can and 
will do more to mitigate risks, and I am pleased to tell you 
that the budget that we have implements all of the 
recommendations of our Benghazi report and makes additional 
investments above and beyond those.

                           PREPARED STATEMENT

    So it is fair to say we are doing the best we can in a 
difficult budget environment where we have caps and we had a 
budget agreement. I firmly believe that, with your help, and I 
thank you for it, this committee has done an extraordinary job 
of helping us to be able to strike a balance between the need 
to sustain long-term investments in American leadership and the 
political imperative to tighten our belts.
    So, thank you very much, Mr. Chairman. I look forward to 
having a discussion on these priorities.
    [The statement follows:]
                  Prepared Statement of John F. Kerry
    I want to thank Chairman Leahy and Ranking Member Graham for their 
leadership, as well as each member of the subcommittee for their 
commitment to America's leadership in the world.
    Of course, I was serving here with you for quite a while--29 years 
plus. Believe me, I know that choosing to be on this committee doesn't 
win you many votes back home. The work you do here doesn't drive 
fundraising. But it matters--it really matters--and this has never been 
more clear to me than over the past year--when I've seen firsthand and 
over and over again, just how much the world looks to the United States 
on issue after issue.
    Bringing people together and finding answers to tough challenges--
that's what the United States does. If we ``get caught trying,'' then 
we're living up to what the world expects from us and what we expect 
from ourselves.
    I think that's especially true in Ukraine. From the very beginning 
we have made our goal clear: to help the people of Ukraine achieve what 
brought thousands upon thousands into the Maidan in the first place. 
Our interest is in protecting the sovereignty, independence and 
territorial integrity of Ukraine, and with European partners and 
others, we absolutely have a responsibility to be engaged.
    Certainly we have to be clear-eyed about the challenges. But from 
the beginning, we've made it known that we are willing to sit down to 
try and deescalate this situation. That is why President Obama asked me 
to leave this evening for London and meet with Russia's Foreign 
Minister Sergey Lavrov tomorrow.
    I will make clear again, as we have throughout, that while we 
respect that Russia has interests in Ukraine, particularly in Crimea, 
that in no way--no way--justifies the military intervention the world 
has witnessed. There are many other legitimate ways to address Russia's 
concerns.
    In my discussions with Minister Lavrov I'll also make it clear that 
Russia has reasons to make the right choice. The costs for Russia's 
violations of international law--the cost of making Russia more 
isolated--not just from the United States, but from the international 
community--is a cost that Russia should not want to bear, and doesn't 
have to bear if they make a better choice.
    Congress' support is going to be absolutely vital. Whether its loan 
guarantees to help support a free Ukraine, an assistance stream, or 
support for additional sanctions if that's what we need, you give us 
the tools to accomplish our goals.
    So it couldn't be any clearer, what we do here really matters. When 
I think about that I remember last week in Kiev--standing in the spot 
where Ukraine's former president had snipers pick off peaceful 
protesters one by one. It was very moving to speak with some of the 
Ukrainian people and hear how much they look to us.
    The same is true far from Kiev or what's in the headlines. What we 
do matters to South Sudan, a nation some of you helped give birth to--a 
nation that's now struggling and needs our support to have a chance of 
surviving beyond infancy.
    What we do matters in the Maghreb, where the State Department is 
coordinating with France to take down al-Qaeda, making sure French 
forces have the technology and weapons they need.
    What we do matters in Central Asia, where we're working with 
several nations to stop the trafficking of narcotics, to keep more 
heroin off our streets and cut off financing for terrorists and 
extremists.
    What we do matters on the Korean Peninsula, where we are working 
with our partners from the Republic of Korea to make sure we can meet 
any threat and for the denuclearization of the Korean Peninsula. Thanks 
to the State Department's work, the South Koreans are now making the 
largest financial contribution to these efforts in the history of our 
joint security agreement.
    What we do matters everywhere we support religious freedom, from 
Bosnia to Indonesia. Protecting the universal rights of people to 
practice their faith freely and working to bring an end to the scourge 
of anti-Semitism--this isn't just what we do in this budget; this is an 
essential part of who we are as Americans.
    Now, I spent enough time in Congress to know that you shouldn't 
call anything that costs billions of dollars a bargain. But when you 
consider that the American people pay just one penny of every tax 
dollar for the $46.2 billion in investments in this request, I believe 
the American people are getting an extraordinary return on their 
investment.
    Our base request is $40.3 billion--and that's in line with what was 
appropriated to the Department and USAID last year. We're making a 
constant effort to be more effective and agile, and as you well know, 
we're doing that under some tight constraints.
    The additional part of our request for Overseas Contingency 
Operations (OCO), totals $5.9 billion. OCO provides the State 
Department and USAID the ability to respond to the humanitarian crisis 
in Syria. It gives us flexibility to meet some unanticipated 
peacekeeping needs. OCO funds our programs in Iraq, Afghanistan and 
Pakistan, where we continue to right-size our commitments.
    I know it might be easy for some members of Congress to support 
larger cuts in this budget. What's impossible to calculate is the far 
greater price our country would pay for inaction. What's impossible to 
calculate are the dangers in a world without American leadership and 
the vacuum that would create for extremists and ideologues to exploit.
    For me it's no coincidence that the places where we face some of 
the greatest national security challenges are also places where 
governments deny basic human rights and opportunities for their people. 
That's why supporting human rights and stronger civil societies, 
development assistance, investing in our partnerships with our allies: 
these are the surest ways to prevent the kind of horrible human tragedy 
we see Syria today.
    I know some of you have looked these refugees in the eyes and seen 
their numbers, as I have. There is simply no way the richest and most 
powerful nation in the world can simply look away. For both the Syrian 
people and for Lebanon, Turkey, and Jordan, trying to keep their 
societies running and keep extremists at bay as they cope with a 
refugee crisis, our support could not be more urgent. It is both a 
moral and security imperative.
    With our assistance to the Philippines, recovering from one of the 
worst natural disasters in its history, we are also leading the way. 
Through a $56 million contribution from State and USAID, we are working 
with our partners so that hundreds of thousands of people can put their 
lives back together. We're helping one of our oldest allies in the 
Pacific get back on its path to prosperity.
    Within our core budget request is also a $1.35 billion contribution 
to the Global Fund to fight AIDS, Tuberculosis, and Malaria. The goal 
that President Obama has set today for an AIDS free generation would 
have been absolutely unthinkable even 10 years ago but today that goal 
is within reach. Because of PEPFAR's incredible success, we are now 
working to transition the leadership of these life-saving programs to 
local hands with Rwanda, Namibia, and South Africa some of the first to 
take the reins.
    Because of our leadership, children waking up today in Sub-Saharan 
Africa face a far different future than they did a decade ago. Our 
commitment clearly matters. And just as our partners in Asia and Europe 
made a transition from being recipients of American aid to becoming 
donors, that kind of transformation is now possible in Africa.
    And to make sure that emerging markets around the world make the 
most of their opportunities, we need reforms to the International 
Monetary Fund. Just think about this: Brazil, Chile, Columbia, India, 
Korea, Mexico, Peru, the Philippines, Thailand--all of these nations 
once borrowed from the IMF. Now they are creditors with some of the 
most dynamic economies in the world.
    Ukraine's struggle for independence, particularly its financial 
independence, depends on Congress ratifying reforms that will help 
Ukraine borrow through the IMF's Rapid Financing Instrument. Our $1 
billion loan guarantee is needed urgently but it's only through the 
IMF--a reformed IMF--that Ukraine will receive the additional help it 
needs to stand on its own two feet.
    Our work with the IMF is vital to global economic stability. But 
remaining absolutely focused on creating opportunity here at home is 
essential. That means we have to be strong advocates for America's 
commercial interests across the globe. And that's why I've charged each 
of Foreign Service Officers with an economic mission: to create 
opportunities for Americans and work with our businesses to gain a 
bigger foothold abroad.
    I know there's some skepticism about this kind of economic 
diplomacy. But it's hard to argue with some of the results. Look at how 
our Embassy in Zambia helped create jobs in New Jersey. The patient 
advocacy of our diplomats helped an American construction company land 
an $85 million contract. They're building 144 bridges and have the 
potential to do far more.
    Look at the work of our consular staff in Kolkata. They helped 
bring Caterpillar together with a company in India to develop a $500 
million power plant.
    Look at what Embassy Wellington and Embassy Apia in Samoa are 
doing. Our diplomats helped a company right here on the East Coast land 
a $350 million contract to lay fiber optics across the Pacific.
    When 95 percent of the world's consumers live outside of our market 
and when foreign governments are out there, aggressively backing their 
own businesses, this is the kind of advocacy American workers need to 
compete.
    Telling our story where it matters most is vital to both the 
success of our businesses and the appeal of our values. With this 
budget's investments in stronger people to people ties, educational 
exchange and countering violent extremism, we are shaping the debate. 
We are keeping traditional programs strong, like those for 
International Visitor Leadership and English language programs. At the 
same time we are revitalizing the way we engage through quick-impact 
investments to shape emerging leaders in civil society.
    We call some of these investments quick impact but you and I both 
know their lasting benefits. I can't tell you how many times foreign 
leaders share their experience of studying in the United States and the 
permanent and positive impression it made. And all of you who have 
colleges and universities in your districts also see the financial 
impact from the $22 billion each year that international students bring 
to the U.S. economy.
    This budget also strengthens our partnerships where so many of our 
economic and security interests converge, in the East Asia and Pacific 
region. With this budget we are bolstering our bedrock alliances with 
South Korea and Japan. We're developing deeper partnerships with 
Vietnam, Indonesia, the Philippines, and others, as they assume greater 
security roles.
    As we make these investments around the world, we can never 
eliminate every risk--especially in a world where our vital interests 
are not confined to secure, prosperous capitals. But we can and will do 
more to mitigate risks and keep our people safe. This budget implements 
the recommendations of the independent Benghazi Accountability Review 
Board (ARB) and makes additional investments that go above and beyond.
    My friends, I think it's fair to say that we are doing the best we 
can in a difficult budget environment. I firmly believe that this 
budget strikes a balance between the need to sustain long-term 
investments in American leadership and the political imperative to 
tighten our belts. I believe this budget is a blueprint for providing 
the minimum our people need to carry out their mission: to enhance 
national security, to promote global stability and prosperity, and to 
help the American people seize the opportunities in a changing world. 
Thank you.

    Senator Leahy. Thank you for a very complete review.

                        U.S. SUPPORT OF UKRAINE

    Fortunately, I come from a State that believes in 
diplomacy. We export more per capita, I believe, than any other 
State, even though we are a small State. We share a border with 
a great and wonderful friend, Canada. We share another border 
with your own State of Massachusetts.
    Right now, we have two different pieces of legislation on 
Ukraine, one from the House, the other from the Senate Foreign 
Relations Committee, to authorize assistance for Ukraine. I 
think all of us hope we can get agreement on a bill that the 
President will sign.
    One of the things that seems to be missing from the press 
releases and op-eds is that it is the Appropriations Committee, 
and actually this subcommittee, in particular, that will 
actually decide what assistance and how much to provide.
    And, of course, that will depend on what happens in Ukraine 
over the coming months.
    I am sure that others have questions about Ukraine, but let 
me start with this. Many foreign policy experts, including your 
predecessors Henry Kissinger and Condoleezza Rice, and former 
Secretary of Defense Bob Gates, have offered opinions about how 
to respond to Russia's aggression in Crimea. Each of them 
recounts history, but then they each draw different conclusions 
and lessons from that history, and they advocate different 
responses, an indication that there is no unified view.
    How do you respond to former Secretary of Defense Bob 
Gates, who says he does not believe that Russia will give up 
Crimea? Is there another way to resolve this, that preserves 
Crimea as part of Ukraine, but also recognizes Russia's 
interest there?
    Secretary Kerry. Well, Mr. Chairman, the truth is we don't 
know the answer to that question yet. We can speculate.
    There are strong indications that could lead you to draw 
the conclusion Bob Gates did, and there are other thoughts out 
there that suggest that something short of the full annexation 
might also be achievable.
    Frankly, we won't know the answer to that until I meet with 
Foreign Minister Lavrov tomorrow in London. I talked to him 
briefly today. They are meeting in Russia in Sochi today with 
President Putin, their security team.
    My hope is that they will come aware of the fact that the 
international community is really strong and united on this 
issue.
    Senator Leahy. Suppose the people of Crimea vote to leave 
Ukraine. The Russian parliament, which will do whatever 
President Putin tells it to, votes to annex Crimea, how do the 
U.S. and Europe, our allies, respond at that point?
    Secretary Kerry. Well, I think the response will come well 
before that, Mr. Chairman. There will be a response of some 
kind to the referendum itself. In addition, if there is no sign 
of any capacity to be able to move forward and resolve this 
issue, there will be a very serious series of steps on Monday 
in Europe and here with respect to the options that are 
available to us.
    Now our choice is not to be put in the position of having 
to do that.
    Senator Leahy. I understand.
    Secretary Kerry. Our choice is to have a respect for the 
sovereignty and independence and integrity of the country of 
Ukraine. Our hope is to have Russia join in respecting 
international law.
    There is no justification, no legality to this referendum 
that is taking place. It violates international law. It 
violates the U.N. charter. It violates the Constitution of 
Ukraine.
    And I don't think anybody can believe that a hastily put 
together, rushed referendum taking place under the imprint of 
20,000-plus troops and all that has happened without debate, 
without opportunity, is a genuine referendum. But even if it 
were, I will just say one thing, I don't think there is much 
doubt, given the circumstances, what the vote is going to be. 
Nobody doubts that.
    So this is not a question mark. The question mark is, is 
Russia prepared to find a way to negotiate with Ukraine, with 
the contact group, with other countries involved, in order to 
be able to resolve this in a way that respects their legitimate 
interests, and they have legitimate interests, but respects 
them in a way that doesn't violate international law and is not 
at the butt of a rifle and a massive military imprint.
    Senator Leahy. Well, the new Government of Ukraine has made 
it very clear that they want closer ties with Europe. The 
Russians have invaded Crimea, notwithstanding the strange 
comments of President Putin that these are private people who 
bought uniforms at a store, which gave great fodder to the 
late-night comics. But are there other former Soviet republics 
who express interest in closer ties with Europe? Are they in 
similar danger of invasion by the Russian army?
    Secretary Kerry. They fear the ultimate possibility. They 
are not in danger of that as of today.
    But yes, I was talking this morning with the foreign 
ministers from the region, and they are all concerned about 
this rattling.
    But again, I think that the hope, Mr. Chairman, is that 
reason will prevail, but there is no guarantee of that 
whatsoever. The European Community is strongly united. They 
will meet on Monday.
    The President of the United States has made it clear he is 
prepared to move. He has already designated, without 
designating individuals, he has already issued an executive 
order creating the construct for personal sanctions, and we 
have a very clear list of those who would be included in the 
event that we can't move this process forward.
    Senator Leahy. I am glad you are meeting with the foreign 
minister. I wish you luck there. Having met with him at 
different times on other matters, I know that can be a 
difficult thing.
    We are working with Russia, and you helped engineer this, 
and I applaud you for it, for the removal of chemical weapons 
from Syria. We want to bring this horrible, horrible tragedy to 
an end in Syria with the continuing humanitarian disaster of 
refugees.
    We have negotiations with Iran over its nuclear program. 
Russia is involved in that.
    Is Russia's violation of the sovereignty of Ukraine going 
to affect the removal of chemical weapons in Syria? The 
possibility of a diplomatic solution in Syria? And thirdly, the 
negotiations with Iran over its nuclear program?
    Secretary Kerry. Well, we hope not, Mr. Chairman, but 
obviously it has the potential to. It has the capacity to.
    I have talked about that with Foreign Minister Lavrov. He 
is aware, we are aware, of that being one of the ingredients in 
this, which we hope would push people toward a more reasonable 
path. But there is no way to predict it.
    And the key will be to figure out whether or not President 
Putin is serious about looking for a way under international 
law to move this process forward.
    Can I just mention one thing quickly?
    Senator Leahy. Sure.

                   INTERNATIONAL MONETARY FUND (IMF)

    Secretary Kerry. You mentioned the IMF at the very 
beginning. I want to thank the committee, I want to thank the 
Senate, for being on track to do what is important here.
    We must have IMF reform. We must have a quota. And it would 
be a terrible message to Ukraine for everybody to be standing 
up talking appropriately about what is at stake, but then not 
to be able to follow through. The IMF is critical; we need that 
help.
    Senator Leahy. Senator Graham and I joined together to get 
this through the Senate, and we got it through the Senate with 
a bipartisan majority. I met with Ms. Lagarde and some House 
Members in Davos. She expressed enormous concerns that the 
House dropped it. I tried to make it very clear, we did it here 
in the Senate, and we are prepared to do it. And I wish they 
had, because it created enormous problems for the United 
States.
    It was a huge, huge blow to the United States, the fact 
that the other body did not go along with us on this.
    Senator Graham.
    Senator Graham. Thank you, Mr. Chairman.
    So many places to talk about, such little time. I mean, we 
could have a second round of questions. But let us get on with 
the IMF.
    Do you agree, Mr. Secretary, that the IMF, from an American 
point of view, is a tool in the toolbox that has shown to be a 
wise investment?
    Secretary Kerry. Absolutely. In fact, a huge number of 
countries that were IMF recipients are now donors in one way or 
another to economic initiatives around the world.
    Senator Graham. And this is the one area where it is not 
just our money. You have the international community coming 
together and the loans are given to reinforce the good guys, 
deter the bad guys, and bring about reform to make countries 
like Ukraine more stable. Is that correct?
    Secretary Kerry. Absolutely, Senator.
    Senator Graham. To my colleagues: I can understand being 
war weary. It is a natural response to being at war with 
radical Islam and other entities for a long time. But I can't 
understand taking everything off the table.
    If never use military force--I am certain we want to do 
that as a last resort. If we don't have foreign assistance. If 
we don't want to be involved in the IMF. What do we do? We just 
hope things get better?
    So I am all in, in trying to pursue what the Senate Foreign 
Relations----
    Secretary Kerry. Can I just say very quickly, Senator, our 
leadership on this is now in doubt.
    When people say the United States is retreating, we are 
inadvertently hurting ourselves by sending a message that we 
are not prepared to lead and step up and complete the task.
    We are the only country that hasn't ratified this. And the 
implications of that are just enormous in terms of American 
leadership. The IMF is the tool that helps to bring countries 
into alignment on their transparency, their accountability, 
their reforms, their market economy, all of the things that are 
in our interests.
    So I could not underscore more, Senator Graham, the 
importance of what you are saying and the importance of us 
following through on this.
    Senator Graham. Well, I have been critical, I think 
sometimes forcefully, and appropriately so, about the 
administration's foreign policy. But the Congress needs to do 
some self-evaluation of where we are as a body, what is our 
role in all of this.

                         SYRIAN REFUGEE CRISIS

    Let's talk about Syria very quickly. Do you think Assad is 
winning right now, on the battlefield?
    Secretary Kerry. I don't think anybody is winning, but he 
is not losing.
    Senator Graham. Okay.
    Secretary Kerry. And the way I would phrase it is he is 
doing better than he was doing. He has gotten somewhat of an 
upper hand, but this thing runs like a roller coaster. It is 
not going to be solved militarily.
    Senator Graham. The only trajectory we are sure of is that 
refugees are coming into Jordan and Lebanon at a pace that is 
unsustainable.
    Secretary Kerry. Absolutely true.
    Senator Graham. Would you reinforce to the American people, 
if this war goes on another year, and we are in this situation 
where the battlefield is basically as it is today, that Lebanon 
and Jordan are going to be in great peril?
    Secretary Kerry. Indeed, Senator. I appreciate the 
opportunity to say a word about it.
    Jordan is a critical ally to the United States. Jordan has 
been a partner with Israel, a partner with the United States, a 
significant partner in the region, for peace and for stability.
    And Jordan currently has over 900,000, close to 1 million-
plus refugees. And what is happening is, those refugees go out 
into Jordanian society, and they look for jobs. They get 
apartments. But they get 10 people in one apartment paying a 
much higher rent, and it squeezes out Jordanians.
    In jobs, they are willing to work for less. They are more 
desperate. They, therefore, affect the marketplace. They affect 
the entire political fabric of the country, and it begins to 
destabilize.
    Likewise, in Lebanon, in Lebanon, they don't have formal 
camps. You have almost 900,000 Syrian refugees scattered 
throughout Lebanon. I saw a map of it the other day from where 
it has gone in the last 3 years, with these few red dots up and 
down the coastline. Now the entire coast is red, from north to 
south, filled with refugees.
    The destabilization of that is very significant. So we have 
a national security interest in that.
    Also, the devastation on families, children, children not 
in school, the future problems for us in terms of potential 
terrorism, spread of terrorism, are very, very real. It is in 
our national security interests to try to change that.
    Senator Graham. I think that is well said, but having said 
that, the President's budget cuts aid to Jordan by $300 
million. So I would like to try to restore that. Would you help 
me?
    Secretary Kerry. Senator, we have provided significant add-
ons of aid to Jordan over the course of the last year, well 
over what was originally appropriated. And there is nobody we 
support more overall.
    But in view of some of the other things we are doing, this 
is a trade-off. We have been forced into a zero-sum game.
    Senator Graham. I got you.
    Secretary Kerry. I will help as much as I can, but in the 
end, you guys have the power on this one.
    Senator Graham. The statement you made about Jordan I think 
is very accurate.

                     RUSSIAN AGGRESSION IN UKRAINE

    On Ukraine, I don't know what Putin is going to do. I am 
not so sure he knows what he is going to do. He is probably 
making this up as it goes, and I think we have sent a lot of 
wrong signals to him and others.
    But let's look down the road and start talking about worst-
case scenarios.
    The worst-case scenario for me is that he annexes the 
Crimea, that the joke of the Duma ratifies this illegal 
referendum, and somehow they say that they are answering the 
call of the Crimean citizenry, which is a complete joke coming 
out of Hitler's playbook. And Secretary Clinton was right about 
that.
    What happens if they go east? What if they create friction 
in the eastern part of Ukraine, bring in paid-for thugs to 
create demonstrations, wanting the eastern part of Ukraine to 
be part of Russia. And the Ukrainians say enough already, we 
have a small army, but we will fight and we will die if 
necessary to protect the territorial integrity of Ukraine. And 
the Ukrainian Government asks NATO and us, not for boots on the 
ground, but for military hardware to help them fight the 
Russians, ask for weapons like other people have asked us in 
the past.
    What do you recommend we do, if that happens?
    Secretary Kerry. Well, Senator, we have contingencies. We 
are talking through various options that may or may not be 
available.
    Our hope is, however, not to create hysteria or excessive 
concern about that at this point in time. Our hope is to be 
able to avoid that. But there is no telling that we can.
    Senator Graham. See, and I----
    Secretary Kerry. Let me just finish one thought?
    Senator Graham. Yes.
    Secretary Kerry. We are watching, every day, very, very 
carefully, the movement of troops. Under the basing act, the 
basing agreement, which permits Russians to have their forces 
in Crimea, they are permitted to have up to about 25,000 troops 
under that.
    There is a requirement that they not interfere in the 
sovereignty of Ukraine from that base. And, obviously, and what 
they have done in the last days, they have done that, so they 
are in violation of the base agreement.
    We guesstimate, estimate, all of our input, somewhere in 
the vicinity of 20,000 troops there now, so they are not above 
the limit, to the best of our judgment. But we also make the 
judgment at this point that they don't have the assets in the 
places necessary to be able to, say, march in and take over all 
of Ukraine. But that could change very quickly, and we 
recognize that.
    The options, according to the Ukrainians themselves, are 
there probably would not be an all-out confrontation, 
initially, but you would have a longtime insurgency/counter 
effort that they will fight. And these are people who know how 
to fight, and they are committed to that one way or another.
    So there are a lot of different options, but I think before 
we get there, we have a number of options to make it clear to 
President Putin the level of isolation that he might be asking 
for, and the degree to which many of the people around him, if 
not he, himself, could be affected by that choice in very real 
ways before you get to any kind of troop and other kinds of 
evaluations.
    Senator Graham. Well, I hope we never get there, too.
    I don't want to take any more time. I would like to have 
another conversation with you.
    But just one final point, I really do believe that Russia 
is all in for Assad because he believes it is in their interest 
to keep Assad afloat, and they are supplying him with all the 
arms he needs, and it seems to be working.
    I just want the Ukrainian people to know that when we say 
we stand by you, that has some context.
    And I want the Russians to understand that there will be a 
point, and I don't know when that point is reached, that you 
really will pay a price. I don't think they believe that. But 
if you start marching eastward, and you start killing 
Ukrainians who are just asking to make their own determinations 
in life, apart from Russian tanks and thuggery, that that may 
be a point that you don't want to go across because the 
response may be greater than you think.
    Thank you, Mr. Chairman.
    Secretary Kerry. Senator, just 30 seconds, I would just say 
to you that I have been impressed by how united our European 
allies are on this. And we had a conference call this morning 
with foreign ministers on the phone, all the contact group, and 
to a person they are very, very committed, to a country, to 
make sure that there is accountability.
    Senator Leahy. Thank you very much.
    Thank you for what you said on Jordan. There is strong 
bipartisan support to help Jordan. Most of us have met with the 
king, many of us have traveled there. Frankly, I don't know how 
a small country like that handles the enormous burden put on 
it, but I applaud them for it.
    Senator Landrieu.
    Senator Landrieu. Thank you, Mr. Chairman.
    Mr. Secretary, thank you so much for testifying before us, 
and most importantly, thank you for your service. As a military 
leader, a Senator, and now as a Secretary, who I think is 
making a remarkable difference in the world with multiple 
challenges.

                           KEYSTONE PIPELINE

    I have four questions this morning. The first is on energy, 
and it relates to the Keystone pipeline and the decision that 
you are going to make, and the administration is going to make, 
about a critical, in my view, piece of infrastructure that will 
transport safely the cleanest barrel of oil produced in North 
America, contrary to popular belief.
    Canada is our closest and our strongest trading partner. 
You are aware that their environmental standards are in fact 
higher than ours, and among the highest in the world.
    And this resource of 30 billion barrels of oil represents, 
I understand, the largest single free-enterprise resource in 
the world.
    So from my perspective, and particularly the people that I 
represent, it is hard for us to even understand why there is a 
question as to whether this infrastructure is in the national 
interest.
    Could you comment about the economic benefits, the aspect 
of the strengthening of a relationship that is really vital to 
our long-term interests, and what your considerations are in 
addition to those two?
    Secretary Kerry. Well, Senator, I understand it is on a lot 
of people's minds. I mean, a lot of people. The department has 
received and evaluated more than 1.9 million public comments. 
And the final supplemental EIS on this is 11 volumes, more than 
7,000 pages. My job now is to review it and make a 
determination.
    But I also have to get feedback from eight different 
agencies. I am continuing to get additional information. And if 
I have any legitimate questions, then I need to have those 
answered.
    So I am not at liberty to go into my thinking, at this 
point. It is just not appropriate, except to say to you that I 
am approaching this tabula rasa. I am going to look at all the 
arguments, both sides, all sides, whatever, evaluate them, and 
make the best judgment I can about what is in the national 
interest.
    And I will forward that to the President of the United 
States, who has ultimate authority to make this decision.
    Senator Landrieu. Thank you. And I am going to stay focused 
not only in my role as a Senator, but as chair of the Energy 
Committee on really pressing the country to understand the 
importance of becoming an energy powerhouse with cleaner energy 
sources requires the infrastructure, whether it is our 
transmission lines, our pipelines, our roads, our ports, our 
import-export.
    And it is important not only to our economy, but I do think 
it has a real bearing on our position in the world as a 
superpower. And that is what this budget reflects, basically 
our defense budget and our State Department budget sets us up 
to be a superpower. And it is very relevant.

                             AID TO ORPHANS

    The next two questions are on children. PEPFAR was put into 
place, as you know, in 2003. It has been touted as one of the 
most successful programs internationally in the world. I 
believe that it has enjoyed broad bipartisan support.
    I think you were helpful when PEPFAR was created, as I 
remember, to set aside a very small portion of the $7 billion 
annually for orphans and vulnerable children--$350 million, 
that is all--to address the fact that AIDS creates orphans. It 
creates a lot of sick people, and it results in death. But it 
also results in orphans, kids that are double orphan, both 
parents dying, or a single orphan, one parent dying but 
abandoned by the surviving parent.
    When we reauthorized PEPFAR this last year, out of respect 
for Senators Menendez and Corker, who did not want any serious 
amendments, I did not offer an amendment to make sure that $350 
million was going more directly to help children reconnect to 
families.
    Would you commit to me today, and to others, that you and 
your team will work to try to meet the original objectives of 
that $350 million to reconnect children that are orphaned by 
AIDS to families?
    Secretary Kerry. We would like to do that very, very much. 
Again, this is a reflection of just the tension in the overall 
budget.
    But we do believe that the way we have been able to do 
this, Senator Landrieu, will in fact meet our available funding 
requirements with respect to this challenge.
    We have $1.35 billion in here. This honors the President's 
commitment to do $1 from us for every $2 contributed by other 
donors to the fund, up to a possible $5 billion. And this more 
than fully funds what we are seeing will be available from the 
pledges of other countries.
    Senator Landrieu. But the problem is, when PEPFAR was 
created, there were approximately 15 million orphans in the 
world. There are now 17 million. So the rate of infection is 
going down, but the rate of orphans is going up.
    This is the only money, $350 million.
    My second question, on children, is the CHIFF bill, 
Children in Families First. There are five members of this 
subcommittee who are cosponsors--Senator Kirk, Senator Blunt, 
myself, Senator Shaheen, and Senator Coons. We are very, very 
serious about helping you to organize and put resources in your 
department that can focus on the fundamental fact that children 
belong in families, children should be in families.
    It seems to be a missing component of our foreign policy. 
There are lots of components of foreign policy. We are having a 
hard time finding anywhere where it says children belong in 
families.
    So we are going to continue to work with you--I know my 
time is up--on this bill as it moves through Senator Menendez's 
committee.
    But I do want to put into the record one of the things that 
is propelling us, Mr. Chairman, is that there have been no 
reported international adoptions from any country that has 
become a Hague partner with the United States since 2008.
    A letter has been sent to you. It has not been answered. 
Please answer it and let's continue to work together to see 
what we can do to move this issue forward.
    And I thank you.
    Secretary Kerry. Well, if I could just comment quickly, 
first of all, Senator Landrieu, you know from our meeting and 
you know from our relationship--you are the champion on this 
whole issue of children and adoption, and you have done amazing 
work at it.
    I was struck, in the meeting that we had in the Senate, 
that you and Senator Blunt and Senator Angus King and myself 
are all beneficiaries of knowing about adoption. I have a niece 
who comes from China and has just been enormously important to 
our family, so I understand this.
    I also committed to you that the State Department needs to 
do more. It needs to do better. There is no question about it. 
But I don't want to be the Secretary of State who takes the 
State Department out of the business of helping to make this 
happen. I want to be the Secretary who helps get this to be 
more effective within the department and more effective 
overall.
    In that light, we should continue to work. I understand 
that talks have come to a little bit of a standstill on this 
question of jurisdiction and where it goes.
    I am convinced, as I said to you, that we can meet your 
needs. But I also know this: Embassies are holistic and they 
deal with all of the policies within a country. And sometimes 
there are many policies that affect adoption for children, 
which requires the ambassador and the whole of an Embassy to 
impact.
    I just do not believe we will advance this cause by putting 
it wholly and totally into DHS or somewhere else, where they 
are geared to handle the visa and that component of the 
analysis, but not all of the other parts that will make this 
policy as effective as it can be.
    That is what I want to do with you. So I can hope we can 
work at that.
    Senator Landrieu. We will continue to work.
    Thank you, Mr. Chairman.
    Senator Leahy. I am not sure when votes may start on the 
floor, so we are going to try to keep close to time. And here 
is the list, we will go to Senator Coats, then Senator Shaheen, 
Senator Kirk, Senator Coons, Senator Boozman.
    So, Senator Coats.
    Senator Coats. Thank you, Mr. Chairman. And I will try to 
be brief.
    Secretary Kerry, I assume you don't get frequent flyer 
miles, but if you did, you would be set for life.

                           RUSSIAN SANCTIONS

    A question, Senator Durbin and I yesterday coauthored a 
Senate resolution relative to some sanctions, really not 
sanctions so much as providing some isolation. There are 15 
separate items on there, and it passed the Senate 100-to-
nothing.
    We know the big one is coming, and you are negotiating all 
that, the economic sanctions and so forth are part of that. But 
just two of those areas that I will list in the 15, and I 
wonder if these are being included in what you are negotiating 
right now.
    One is the participation in the G8, Russia's participation 
in that. I don't think they were invited in there, would have 
been invited in there, had we known that they were going to 
breach their responsibility in terms of invading a neighbor.
    And secondly is the relationship between NATO and the 
Russian council.
    Is there anything in your considerations, the program you 
are putting together, incorporating those two issues?
    Secretary Kerry. Actually, it doesn't require a bill to do 
those, to be honest with you, Senator. And both of those have 
been talked about publicly by me, by the President. The 
President has already made it clear, I mean the G7 countries 
have made it clear that they are not thinking about going to 
Sochi under these circumstances and having a G8 meeting. That 
is step one.
    Whether there would be further steps with respect to 
changing the structure and becoming a G7 again or not, that is 
up for grabs.
    And the NATO Russia Council has been put on hold already, 
so there are a lot of downstream impacts already to the 
bilateral relationship and to the multilateral relationship.
    Senator Coats. Good. Thank you.

                        IRANIAN NUCLEAR PROGRAM

    And let me ask you a question about Iran, while we are 
here.
    Back in 2007, Iran had about 700 centrifuges that were 
spinning uranium. Virtually the entire community of nations 
indicated that that is too dangerous of a situation to 
tolerate. The U.N. Security Council then began passing a series 
of resolutions, demanding that this effort stop completely.
    The United States, led in many ways by the Senate--you were 
a member there at the time--went through the careful and, I 
think, painstaking process of both diplomacy and tough 
sanctions, all aimed at explicitly enforcing the Iranian regime 
to end enrichment activities. And that struggle has gone on.
    Now it appears to me that in the P5-plus-1 negotiations, 
that goal has been set aside. You have a better understanding 
of where we are right now than I do, but I have not seen any 
reference, either by you or anyone else, to these Security 
Council resolutions and the demand that enrichment activities 
be completely and immediately suspended.
    Has that goal been abandoned? I guess my question is, does 
the administration still seek to force the Iranians to give up 
enrichment, or have we basically decided that that is not going 
to be part of our negotiations for an ongoing comprehensive 
agreement?
    Secretary Kerry. Senator, what date did you attach to the 
700 centrifuges? 1990?
    Senator Coats. 2007.
    Secretary Kerry. 2000-what?
    Senator Coats. 2007.
    Secretary Kerry. Yes, well, 2001, there were, I forget, it 
is in the several hundred, I think, 2002. Now there are about 
19,000. That is where we have traveled in this ``don't talk, 
don't sit down'' journey.
    Senator Coats. Which is why sanctions probably played an 
instrumental role in that effort.
    Secretary Kerry. Absolutely. And what has brought us to the 
table to begin this negotiation are a combination of sanctions, 
but also I think fairness requires that we say that, with the 
election of President Rouhani, there was an effort, a conscious 
declaration by Iran, that they were going to reach out and 
attempt to see if they could get out from under this cloud.
    So we are now testing that proposition. And in the first 
step, it is not an interim agreement, it is a first step toward 
a final comprehensive agreement, we are ratcheting them back 
from where they are. The 20 percent uranium that is enriched 
today has to go down to zero over the course of these next 6 
months, now 4 months left. And they are reducing it.
    The 3.5 percent stockpile that they have cannot grow, so 
they are basically frozen there.
    On the Iraq plutonium reactor, they are under the 
requirement not to put in any component that could contribute 
to the commissioning of that reactor--no fuel--and they have to 
give us the plans for it, which they have done.
    In addition, we have inspectors within Fordow. We didn't 
have any before the agreement. We have inspectors at Natanz. We 
didn't have them before the agreement. And we have inspectors 
on a less frequent basis in the Iraq production facility.
    We also have the right to inspect their storage facilities 
for centrifuges. We are following and tracking their milling 
and mining of uranium, so that we are tracking from cradle to 
grave. And we have begun the process of putting in place very 
intrusive verification and so forth.
    Now, at this point in time, the U.N. resolutions are 
active. And there is a goal of trying to implement that. I 
can't tell you today whether or not that is achievable.
    And so the goal hasn't changed, but we are in a negotiation 
where the real goal is to guarantee that they cannot get a 
nuclear weapon and that whatever program they might have 
peacefully going forward is one where we have absolutely 
failsafe guarantees to the best of our ability to know it 
through the negotiating process and what we achieve that we 
will know what they are doing and know it well ahead of any 
potential of their breaking out.
    As we began this negotiation, the breakout time by most 
judgments, meaning the time to get sufficient uranium enriched 
for one nuclear weapon, was about 2 months. It is longer now, 
because of the first step that we have taken.
    And I can guarantee you that in order to have a final 
agreement that will be comprehensive enough to meet our 
standards, the standards of our gulf friends, of Israel, of 
others, it is going to have to grow significantly beyond where 
it is today.
    So we believe we are heading in the right direction. I 
can't tell you where it is going to finally land. We don't 
know. There are some very tough decisions the Iranians are 
going to have to make--very tough--in order to meet the 
international community's standard for certainty as to the 
peacefulness of this program.
    Senator Leahy. Thank you.
    Senator Coats. Mr. Chairman, I will not ask another 
question, if I could just respond there.
    Despite the efforts that we are making, the Iranians have 
declared publicly a negotiation victory over the fact that 
cessation of enrichment, which has been in a series of U.N.-
supported resolutions, Security Council-supported resolutions, 
that has been the determination and statements of four 
presidents, two Democrats and two Republicans, that that goal 
has been abandoned, and Iran has achieved in moving the ball 
toward a different kind of goal, which we hope will be 
successful. But the fact of the matter is that no longer is the 
goal.
    Keeping Iran from producing a nuclear weapon is far 
different than having the capability of doing that. It sounds a 
lot to me like what we went through with North----
    Secretary Kerry. Senator, if I could just say to you, 
remember the U.N. resolution wasn't that they couldn't have any 
enrichment at some point in time. It is what they had to 
suspend. And the reason for the suspension requirement was 
because we didn't know what was happening at Fordow. There 
weren't any restraints. There was no inspection. There was no 
certainty as to where they were going.
    So it is an open question, but nothing has been decided. 
The initial agreement, the JPOA, as it is referred to, 
specifically states nothing is agreed until everything is 
agreed. And I can guarantee you there has been no giveaway on 
that final issue at that this point in time.
    But we are talking about how do you get sufficient 
verification, intrusive inspection, capacity to know what is 
happening, so that no matter what is going on, we are protected 
and our friends in the region are protected.
    Senator Leahy. I think the most important thing is we 
continue the negotiations, and I do not think the Congress, 
whether responding to various lobbies or not, is a place to 
conduct such negotiations. Let's let the negotiators try to 
work it out.
    Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    Mr. Secretary, thank you very much for your tireless 
efforts to address so many of the crises we are facing in the 
world today. You make us very proud here.
    First, I don't have any questions on Ukraine, because there 
have been a number of those. But I do want to point out that I 
hope that the work of the Foreign Relations Committee yesterday 
to come to a bipartisan agreement on a bill to address Ukraine 
that includes both sanctions on Russia and support for the new 
government in Ukraine will be helpful as we are trying to 
address the crisis there.
    I think it is very important that we do work together here 
in Congress to support your efforts. And I think that is 
exactly what the committee did.

                        SYRIAN CHEMICAL WEAPONS

    I want to start with Syria. I have two questions about 
Syria. As you point out in your testimony, it is one of the 
greatest tragedies we are facing in the world today. It is just 
horrific what has happened to the people of Syria, the 
destruction of their country. And part of that has been the 
chemical weapons that Assad has had. And there was an agreement 
that you helped broker to have Assad commit to eliminate their 
chemical weapons stockpile.
    He has now missed several deadlines for commitments that he 
had made. It seems like it is not realistic to think that they 
are going to meet their end of April deadline. Can you say what 
more we can do to pressure Assad to make sure that they reduce 
these chemical weapons? And then can you also address 
humanitarian efforts there, and what more we can do to support 
and to get the Russians to engage with Assad to make sure that 
humanitarian efforts get to the people who need them?
    Secretary Kerry. Well, thank you very much, Senator 
Shaheen. Thank you for your generous comments at the beginning.
    And I do thank you, all of you. Those of you who serve on 
the Foreign Relations Committee, I thank the Foreign Relations 
Committee for its initiative, which is helpful.
    Syria is deeply troubling for all of the reasons that 
everybody on the committee understands. And it is also 
troubling for other reasons, not that you don't understand 
them, but they are not written about publicly that much.
    The opposition has been sidetracked, to some degree, 
focusing on extremists. So you have had a fight between the 
Islamic state in Iraq and the Levant, ISIL, as it is called, 
and some of the other groups. And that has detracted from their 
focus on the Assad regime, and Assad has played that.
    In addition, you have had a certain lack of, I guess the 
way to say it is coordination between some of the support 
countries, and there are a lot of reasons for that, so that 
there hasn't been as powerful of an effort as there might have 
been.
    Now that is changing a little bit. There have been some 
personnel changes within the framework of that support 
structure. And I think that there is a lot more coordinated and 
effective effort with respect to Syria beginning to take shape.
    In addition to that, the huge infusion of Hezbollah and 
Iran changed the game somewhat on the ground while the other 
people were sidetracked, focusing on the extremists. So that is 
part of what has shifted somewhat temporarily for Assad.
    But I say temporarily because I don't believe that the 
support countries, Saudi Arabia, the Emirates, Qatar, et 
cetera, are going to ever stop until Assad is gone. So he may 
have a breather in the interim, but this fight is going to go 
on.
    And therefore, what Senator Graham was saying earlier is 
the biggest guarantee is that a whole bunch people are going to 
suffer.
    We were working effectively with Russia up until recently, 
obviously, with respect to this, and it is a question mark 
where that is going to go.
    Now Russia was extremely helpful with respect to the 
chemical weapons effort, because of their influence on the 
regime and their ties to it. And we were also helpful because 
the President made it clear that if there wasn't some 
alternative, he was going to strike. And neither the Russians 
nor Assad wanted that to happen.
    So the President's decision, coupled with the cooperation 
that ensued thereafter, got this regime in place to remove the 
chemical weapons.
    I would say about 30 percent of the chemical weapons, a 
third of them are now removed and under control. We have the 
locations where the rest of them are now contained in 12 
different locations. We have to move them from there to the 
port in Latakia.
    And we believe that that can be done in about 35 to 40 
days. We have put that proposal before the OPCW and before the 
Russians. The Russians were helpful in reducing the amount of 
time the Assad regime was proposing to use, which was 100 days, 
down to 62. We are now on a 62-day schedule.
    We believe that can be reduced by another 20 to 25 days, 
and we would like to see that done. Whether or not we can 
succeed in getting that done will depend to some degree on the 
outcome of events that we are obviously all focused on with 
respect to Ukraine, and so forth.
    My hope is it will not interfere, that what happens in 
Ukraine will not interfere. I think Russia maintains a 
significant interest in not having these chemical weapons 
loose, not having them fall into the hands of terrorists, 
particularly since they are proximate neighbor. And therefore, 
my hope is we will continue no matter what.
    But we are focused on getting them out.
    Now the end deadline for this is June, not April. So, in 
fact, we are operating within the timeframe still. I still 
believe it is possible to achieve this. And we are going to 
stay focused on it.
    Senator Shaheen. Thank you very much.

                            TRADE WITH IRAN

    Mr. Secretary, I am almost out of time, but I wanted to 
raise the issue of Iran, because one of the things that is 
giving me pause, and I am sure others as well, is the increase 
in exports of their oil and the interest that has been 
professed and the delegations from a number of countries to 
Iran in this period that makes it appear that sanctions are 
going to be lifted in a way that I think is not helpful to the 
ultimate outcome of any agreement.
    So can you speak to what we are doing to discourage some of 
our European partners from sending trade delegations to Iran 
and how we keep the pressure on in this interim period?
    Secretary Kerry. Absolutely.
    Senator Leahy. And if we could have that briefly, because I 
have been alerted that we are going to have votes, and we are 
going to have to cut this off when the votes start.
    Secretary Kerry. I will move as fast as I can.
    Let me tell you that I have been personally in touch with 
foreign ministers of countries where we have heard there might 
be a trade delegation. We have made it crystal clear that Iran 
is not open for business. They have accepted that. They are not 
cutting deals. There are people who have traveled, but there 
have not been new deals. And where there have been, we have 
told people that if they transgress any component of the 
sanctions regime, their businesses will be sanctioned. They 
accept that.
    Now the fact is that Iran needs between $60 billion to $70 
billion a year to finance its imports. In the entire first step 
agreement here, there are maybe $6 billion to $7 billion that 
will be released through the increase in the oil export, and 
that is legit under the process that we created.
    But no sanction has been lifted. Nothing in the 
architecture of the sanctions regime has been changed 
whatsoever.
    Iran's economy contracted by 6 percent last year. It is 
expected to contract again this year. Inflation remains at 
almost 40 percent. And we are just a very, very clear that 2 
months into this, very little additional economic impact has 
flowed to Iran for a number of reasons--because banks are 
uncertain how to deal with it, there is a lot of uncertainty 
about where this is going to go, our strict enforcement of the 
sanctions has in fact acted as a deterrent to many people 
deciding to get engaged.
    And we have sent very strong messages through Treasury and 
the State Department that there will be consequences to anybody 
who tries to circumvent them.
    And one last thing, we have sanctioned additional people.
    Senator Leahy. Some Senators are not going to get a chance 
to ask questions if we don't keep ongoing.
    We are going to go to Senator Kirk, Senator Coons, Senator 
Boozman, Senator Blunt.
    Senator Kirk.

                     IRANIAN FUNDING FOR HEZBOLLAH

    Senator Kirk. Thank you. I will, Mr. Secretary, bring to 
your attention a chart that we have done on the cash flow into 
Iran.
    We estimate that Iran had about $20 billion ready liquid 
assets before the P5+1, and now has about $25 billion and that 
is the additional oil revenues that you talked about, and money 
released by the United States back to Iran, which equals about 
50 years of Hezbollah payments--that Iran now has. With an 
improving cash flow position, I would expect that we would see 
even more terrorism with this additional money available to the 
Islamic Republic of Iran.
    Secretary Kerry. Well, Senator, with all due respect, the 
fact is that Iran has huge economic problems. And I am 
guaranteeing you that whatever additional flow of money there 
was going to them is not all flowing--I can't tell you the 
amount--to Hezbollah because they have enormous challenges at 
home and demand on that money.
    There is no way Iran is better off when we are taking 
somewhere between $15 billion and $30 billion and putting it 
into a frozen asset fund. That is what is happening right now.
    And so they are losing. They are losing enormous sums of 
money, more than $100 billion that is now frozen, and growing 
in its amount, because the amount that our sanctions are 
depriving them of.
    As I have said, the release of this money--in fact, I don't 
even agree with that figure. There is no way that the release 
of the funds under the agreement has resulted in that, and I 
will tell you why, because the funds are only released on an 
incremental basis, month-to-month. And we are only 2 months in.
    And so there is no way they have received. I don't know 
what the total amount has, I mean, it may be $1 billion or so.
    Senator Kirk. Let me interrupt you to say that I believe 
the first payment to the Iranian delegation from the P5+1, it 
is paid for and rented by a $400 million regular payment.
    Of course, I know why the foreign minister is there, of 
course I know why he is there, because he is being paid to be 
there.
    I had a long discussion along with Congressman Israel with 
the Iranian foreign minister, who is a long and eloquent 
Holocaust denier. Has he raised that subject with you?
    Secretary Kerry. No, but I raised it with him on one 
occasion. But we are focused on the nuclear negotiation right 
now, Senator.
    Senator Kirk. I would just follow up and say it is about 
$1.55 billion released under the interim agreement to Iran that 
we estimate.
    At $100 million a year payments by Iran to Hezbollah, that 
is a lot of Hezbollah terrorism.
    Secretary Kerry. Well, if it is going to them, if they have 
money to give to Hezbollah, Senator--I mean, Senator, Hezbollah 
is fighting in Syria. They are paying for that. They are 
supporting it. No question about it.
    But, you know----
    Senator Kirk. Mr. Secretary, I am going to forward to you a 
list of 280 Americans who have been murdered by Hezbollah. This 
is broken down by State, including those from Illinois, Melvin 
Holmes and David Gay and John Phillips Jr., who I knew, who 
attended in my church in Wilmette, and Adam Sommerhof, and Eric 
Sturghill and Eric Walker and Eric Pulliam, were all from 
Illinois.
    Secretary Kerry. Well, Senator, look, I am glad that we 
have designated Hezbollah a terrorist organization, and we have 
led the effort to make sure that Europe has followed now and 
labeled them a terrorist organization.
    And if I had my druthers, obviously, we would like to see 
them disappear. But we are working at dealing with Hezbollah 
and other terrorist organizations in many different ways.
    But I do believe that we are on the right track with 
respect to this first step agreement with Iran, because the 
alternatives are not as productive as the possibility of being 
able to reach an agreement through the negotiating process.
    Senator Kirk. Thank you, Mr. Chairman.
    Senator Leahy. Thank you.
    Senator Coons.
    Senator Coons. Thank you, Chairman Leahy, Ranking Member 
Graham.
    And, Mr. Secretary, thank you so much for your tireless 
engagement and focus on the challenges that we face around the 
world, but particularly at this time of real difficulty in the 
Middle East, in Crimea, and elsewhere around the world.
    I will just simply add my voice to others on this committee 
who have urged increased support for Jordan, increased focus on 
ensuring that we do in fact deliver on the opportunity here to 
remove CBW from Syria; commend you for your tireless focus on 
trying to resolve one of the longest standing challenges we 
face in the world, the tensions between Israel and the 
Palestinian Authority; and urge you to continue to consult 
closely with Congress as you continue to make good on the 
prospect of peace around Iran's illicit nuclear weapons 
program.
    I stand with many of my colleagues in ensuring that we 
provide you the resources you need in order to carry forward on 
any agreement delivered, and that that ultimate agreement 
prevent any pathway, whether through uranium or plutonium, to a 
nuclear weapons capability for Iran.
    I also was pleased in your opening statement that you 
emphasized the importance of economic engagement with Africa 
and the prospects it holds for our country for job creation as 
well as sustaining our vital investments in PEPFAR, in MCC, and 
in other programs.
    Given the impending votes and the number of other Senators 
waiting, let me just mention a few topics across Africa. And 
then to the extent we have time for your response, I would 
welcome it.

                           AFRICA INITIATIVES

    First, I look forward to working with you and the chairman 
and others on this committee to ensure that there are the 
resources needed to support work on fighting wildlife 
trafficking. I want to commend you for taking a leadership role 
in co-chairing the Presidential Task Force on Wildlife 
Trafficking. And I want to make sure there are resources to 
support that national strategy.
    Second, as you referenced in your opening statement, there 
is a renewed wave of violence in Sudan, as well as in South 
Sudan, and I want to make sure that we have the resources to 
provide humanitarian support. There has been renewed aerial 
bombing in the Nuba Mountains and the Blue Nile, and a renewal 
of violence by the Janjaweed elements within Sudan.
    There are a range of challenges in Sudan and South Sudan, 
and you have been tireless in working hard to help give birth 
to a newly free country of South Sudan. I would hate to see us 
miss this opportunity when there are so many other things going 
on around the world.
    The two things I wanted to focus on most of this list, 
Power Africa, a tremendous initiative, one that I think really 
does hold out great promise for the continent of Africa and for 
the United States. Yet there is no specific request for this 
initiative, and I am concerned that AID is funding it out of 
existing accounts. With a significant number of difficult 
elections on the continent in the year ahead, I hope that we 
are not underfunding democracy and governance efforts by state 
and AID.
    And if there is a way we can work together to sustain Power 
Africa beyond the next 3 years, to lay out a framework for its 
funding and for its continuance, I think that could make a 
dramatic difference in meeting development and humanitarian and 
strategic needs, and in creating real opportunity for American 
business in partnership with our allies on the continent.
    Last, the Central African Republic continues to be deeply 
concerning. Twenty years after the Rwandan genocide, there are 
steadily escalating incidents of violence and a division within 
the country seemingly along ethnic and religious lines.
    Given the shortfall we face in our peacekeeping accounts, I 
would be interested in hearing your views on how we can meet 
our obligations. I think it affects our reputation in the U.N. 
and globally when we support a peacekeeping mission, but then 
don't meet our commitments.
    I was glad to support the work of our chair in SFRC in 
ensuring that we made our obligations around the IMF. Other 
members have spoken to that previously in this hearing. I would 
just love to hear from you what we can do to make sure that we 
make good on our commitment across all of these fields, the 
potential of Power Africa and peacekeeping, in particular.
    Thank you, Mr. Secretary.
    Secretary Kerry. Well, thanks. Because of the time thing, 
first of all, let me just say I want to thank you, Senator, for 
your unbelievable leadership. You are terrific in your 
dedication and tenacity with respect to all issues in Africa. 
The Foreign Relations Committee always had a terrific tradition 
of having someone who picked up that banner, and you have done 
it brilliantly, and I thank you for that.
    Secondly, on the issues that you raised, we really ought to 
have a longer conversation, and I am prepared to do that.
    Power Africa, we believe, is adequately funded. The 
President has designated the goal of trying to get about 10,000 
MW of power. We have identified 5,000, and we have identified 
funding and projects, 20-some projects, that will provide that. 
So we are proceeding forward.
    We are doing pretty well at it with existing U.S. 
Government resources and working the process. But I am game to 
think about how, if we can augment that, to get there faster, I 
am happy to do it.
    Senator Coons. And to be clear, my goal is not to simply 
expend U.S. Government resources. In fact, my general goal is 
to reduce our overall expenditures by making them smarter. I 
just think there are opportunities here to leverage private 
sector partnership with the public sector, over the long term.
    Secretary Kerry. Fair enough. We are currently designated 
to $7 billion out of OPEC and Ex-Im Bank in order to try to 
achieve this. And private sector commitments total $14 billion, 
which is not insignificant.
    So I think we are on track, but let's work at it and see 
how we can leverage it further.
    On the peacekeeping, some of the missions have reached a 
point where we can begin to close some of them, East Timor, we 
are looking at reduced assessments for Liberia, Haiti. But then 
we have new ones that have come on, as you know.
    We have increased by $342 million our commitments for Mali, 
Somalia, South Sudan. We put additional money beyond that into 
South Sudan, by the way, on a humanitarian basis.
    And my sense is that we have another problem, that we pay 
at I think it is 27-point-some percent, but we are being 
assessed by the U.N. at 28.4 percent, so we are behind in that 
regard, and we are going to have to think about long-term how 
we are going to meet that arrearage and deal with it.
    Senator Coons. I am eager to work with you on that. Seeing 
the press of time, thank you very much. I understand you have 
more pressing obligations. I look forward to a chance to talk 
through these issues when the current situation is resolved to 
some extent.
    Thank you, Mr. Secretary.
    Secretary Kerry. Thank you.
    Senator Leahy. Senator Boozman.
    Senator Boozman. Thank you, Mr. Chairman.

                                 PEPFAR

    And thank you, Mr. Secretary, for being here with us. I 
just want you to comment on a couple things very quickly. We 
have all of these pressing problems going on throughout the 
world right now, but I would like for us not to lose sight of a 
couple programs I think they are working very, very well.
    PEPFAR, in fact, I think you called this the most 
successful foreign assistance program ever. I know that you 
have been very, very supportive, President Bush, now President 
Obama, lots of different individuals on both sides of the 
aisle.
    Can you just comment on it real quickly and reassure us 
about PEPFAR's sustainability into the future?
    Secretary Kerry. The answer is, we believe we have funded 
it. The global fund is slightly reduced, but actually we have 
plussed that up.
    There is no question in my mind--I am proud to say that 
that effort really began in the Foreign Relations Committee and 
with Bill Frist, when he was here. And we had support from 
Jesse Helms. We passed it unanimously in the Senate. It was the 
first AIDS legislation for global efforts. And that led to 
PEPFAR.
    President Bush made a tremendous commitment to it. I think 
the original $15 billion and then it got doubled, and President 
Obama has continued it.
    We are looking at the potential now of a first-time-ever 
AIDS-free generation of kids, as a result of where we are. We 
believe the funding is at a level, notwithstanding a slight 
reduction, where we are going to be able to not just continue 
it, but take it to fruition in its targeted goal. So I think we 
feel very confident about it.
    Senator Boozman. Good. The 10-year anniversary, 1 million 
children born AIDS-free. I think that is something we can be 
very, very proud of.
    The Millennium Challenge Corporation, the MCC, again, along 
the same vein, I think it was ranked first among international 
donor organizations by an NGO that tracks transparency. Based 
on this success, can you again talk a little bit about how we 
can replicate this model, perhaps, and increase public 
accountability and transparency with some of our other 
assistance programs?
    Secretary Kerry. Absolutely, Senator.
    MCC, which I am privileged to chair the board of as 
Secretary and have had several meetings, is doing a tremendous 
job of providing a different model for how you approach 
development funding.
    The President increased the funding by 11 percent. It is up 
$101 million to just about $1 billion. I think the total amount 
of our development money is some $20-point-some billion, so we 
are looking at 1/20 of our development money done in this new 
metric-oriented, measurements, results-oriented determinative 
process.
    And it works effectively in certain situations. I am not 
saying it can translate into everything that we do in terms of 
development. But we have some new, since 2004, we have signed 
some 27 compacts. A compact we sign with a country is a certain 
approach, a certain set of expectations for what they have to 
do--reforms in government process. It is a tremendous lever for 
good governance, for transparency, for accountability. And we 
are very high on it and are trying to figure out how much more 
we can extend it as a significant new model tool for 
development on a global basis.

                        CENTRAL AFRICAN REPUBLIC

    Senator Boozman. And finally, CAR. This is an area that 
again, with all that is going on in the world, it has had 
tremendous problems. We have had to pull out our diplomatic 
community. Can you briefly touch on it and kind of give us your 
perspective? I know Samantha Power has been working hard in 
that regard in her abilities. Perhaps a plan of returning our 
diplomatic presence, where you see that going?
    Secretary Kerry. Well, we are working very closely with the 
French, I think you know. And we are providing an additional 
$100 million to assist the African Union-led International 
Support Mission, MISCA. We are providing strategic airlift. We 
are providing equipment and training for the forces that are 
deploying there.
    In the last 2 months, we have airlifted some 850 Burundian 
troops in, 860-plus Rwandan troops, so the total number is 
somewhere around 6,000 troops now.
    What has been missing is accountability. You have this 
incredible problem of young people running around with guns, 
tribal warfare, and so forth, and there is no enforcer, which 
is why we have pressed in the African Union, we pressed the 
international community, to try to support it. It is not just 
there. It was with M23 and the Great Lakes region and 
elsewhere. Thugs with guns who are running loose, and there is 
no countervailing government capacity.
    So what we are trying to do is to build the capacity. And 
we are grateful to the French. They have been terrific leaders 
in this effort, very committed, historically and otherwise. And 
we are doing our part to try to provide order through a 
government force that is present that holds people accountable 
for their actions and begins to lead people toward a 
development agenda, toward a governance agenda that is the only 
way ultimately to provide the stability necessary.
    This is an area where there are huge resources at stake, 
and that is the part of the battle.
    Unbelievably resource-rich, unexploited through a 
legitimate market of any kind, and that creates a lot of this 
chase for riches, which is at the butt of a gun.
    So we are trying to come in with some development capacity, 
governance, leadership capacity, and creating the kind of force 
that could help to provide stability, so those other things can 
take hold.
    Senator Boozman. Thank you, Mr. Secretary.
    Senator Leahy. Senator Blunt.
    Senator Blunt. Thank you, Chairman. Thanks to you and 
Senator Graham for holding this hearing and all you are doing 
to try to focus on the positive impact of aid and what it can 
mean in creating the kind of relationships we need.
    To try to cover a couple topics quickly that I think may 
not have been talked about yet, which is pretty hard to do at 
the end of this hearing, Secretary.
    And thank you for your time and your tireless efforts in 
this great responsibility you have accepted in this job.

                              CAMP LIBERTY

    Could you comment a little bit on what plans we might have 
for the disposition of the 3,000, roughly 3,000, Iranian 
dissidents at Camp Liberty in Iraq, and whether our allies, 
others in the world, are willing to take some of these people? 
And whether we are? Can you give me a sense?
    Secretary Kerry. Yes, I have appointed a special adviser, 
special envoy, a very qualified lawyer, who is really tackling 
this on a day-to-day basis with exceptional energy and focus.
    We have been able to place, I think it is around 300 or so. 
The Albanians have graciously agreed to accept some.
    Our goal is to get all 3,000 out of there, Camp Hurriya. We 
really want to get them out of there. We know that they are at 
risk. We know there are dangers. And we are trying to find the 
countries that are willing to do this. It is a tough 
negotiation.
    Frankly, it would be greatly assisted by our ability to 
make a determination about how many we are going to take, and 
that is where our focus is right now. We are making an analysis 
of that and some judgments. The sooner we can get that 
concluded and moving, I think the better opportunity we are 
going to have to get people relocated elsewhere.
    We had some problems, incidentally, in the beginning when I 
first came in, I learned that there were some problems 
internally in the camp, in the administrative process and the 
willingness of people to submit to interviews. And I think that 
has been resolved, but we have had a lot of difficulties in 
being able to really get the population properly vetted and 
defined, so we know who might be able to go where and what 
appropriate accommodations could be made.
    Senator Blunt. It is my view that time is not our friend 
there.
    Secretary Kerry. I agree completely.
    Senator Blunt. Nor for the people at the camp. And you 
agree with that?
    Secretary Kerry. I totally agree with that.
    Senator Blunt. Whatever I can do to be helpful and whatever 
I can do to encourage your efforts to find places for these 
people to go while they still can hopefully get there would be 
important.
    Secretary Kerry. Absolutely.

                      TURKEY AND SYRIAN RELATIONS

    Senator Blunt. Today in Turkey, there are tens of thousands 
of protesters protesting about the funeral of a 15-year-old boy 
who died after being hit by a canister, a tear gas canister, 
several months ago. It seems to me that Erdogan is not as 
helpful as he could be in a lot of areas, but one is that large 
Syrian border. What is our relationship there now? Are we able 
to try to encourage more help in solving the Syrian situation 
from Turkey?
    Secretary Kerry. The answer is we would like to get 
additional help. The Turks have been very forthcoming. We have 
been working with them very closely.
    We would like to see greater cooperation from them on the 
border pieces. There are too many people moving through, 
particularly in the eastern part and coming down to the 
northern part of Syria in the northeastern part.
    We have spoken to them about that. We have an ongoing, very 
healthy dialogue with people on the ground, working with them 
very closely. Their foreign minister is deeply engaged. He has 
been very, very forthcoming, very helpful to us.
    There is an election, as you know. There is a lot of 
political dynamic at play in Turkey right now, and it is 
difficult in the middle of that to get all the focus that you 
might like to have on this kind of an issue and to resolve some 
of it.
    But we are working also with Turkey, I might add, on the 
rapprochement with Israel, resolution of the blockade on Gaza 
issue that ran into problems with the Amorey Mulveek a few 
years ago.
    And I think it is fair to say that, at this moment, they 
are pretty inward looking in terms of the electoral process.
    Senator Blunt. And that is the end of this month, as I 
recall?
    Secretary Kerry. I beg your pardon?
    Senator Blunt. That is end of this month? March 30, is it?
    Secretary Kerry. It is April, isn't it?
    Senator Blunt. It is April? But soon?
    Secretary Kerry. Yes, soon.
    Senator Blunt. On a topic that I am sure has already been 
discussed, but on the view of whether Iran, and I am not 
suggesting this is your position, but whether Iran should ever 
be allowed to have the component parts that they could put 
together to make a weapon, whether they have a weapon or not, I 
would want to be strongly listed on the side they should not be 
allowed to have that.

                          NUCLEAR DEVELOPMENT

    And I would like you take comment on a couple things. One, 
if they did have the capacity to enrich, is it your view that 
we can monitor that in a way that would be satisfactory? And 
two, how do you keep that capacity to enrich from proliferating 
to other countries that we have been holding back, that have 
nuclear power, but we haven't let them have this capacity 
because of the danger that up until now most powers have 
understood was a danger if you let the proliferation of 
enrichment occur?
    So those are really my last two questions.
    Secretary Kerry. Well, most countries that have chosen to 
pursue some kind of nuclear power capacity have not chosen 
necessarily to enrich for themselves. Some have, so there is a 
precedent. It is not the majority, obviously.
    There are different reasons for one country or another 
having an argument that they might want to enrich, to some 
degree.
    My current judgment, you say, can we monitor? At this 
point, not completely, no. And that is why we are negotiating. 
It is to make sure that we can completely, ultimately.
    And how do you prevent the enrichment from leading 
elsewhere? I think that the constraints under which a country 
would have to operate if they are going to have some enrichment 
are really significant. I mean, we are talking about a need to 
know beyond reasonable doubt, not guess, but to know, what is 
happening on any given day, in any given facility.
    So this is all subject to the negotiation. This is not 
currently decided.
    And you asked me, I think, if we could consider at this 
moment in time that we have the ability to be able to know, or 
something? And the answer is that is actually what the subject 
of this negotiation is now.
    Senator Blunt. And you think that negotiation could 
produce----
    Secretary Kerry. Well, we hope it could. I don't know if it 
can yet, Senator. Honestly, I don't know.
    I know what we want to ask for. I don't know if we can get 
a yes to it.
    But you raised the question of warheads, et cetera. It is 
very much a subject of the negotiation. It has to be.
    And any of that technology has got to be part of this. Now 
that is distinct from missile, conceivably. It is a harder 
argument to make on some range of conventional weaponry that 
that falls under this.
    But certainly, R&D and warhead development or anything like 
that would very much fall squarely into the concerns that we 
would want to be talking about in negotiation.
    Senator Leahy. We have 6 minutes left on the roll call on 
the floor.
    Senator Blunt. Thank you, Mr. Chairman.
    Senator Leahy. I am not going to ask my further questions, 
other than to note, and we should talk about this later 
Secretary Kerry, we were lobbied, Congress was, to show how 
tough we were in our support of Israel by withdrawing payments 
to UNESCO. What that meant, of course, we lost our vote in 
UNESCO, so we are not able to protect America's interests, or 
Israel's interests, there. All we do is watch the Russians, the 
Iranians, the Syrians, the Chinese, the Palestinians who have a 
vote.
    I would like to see us get back in there and do what is 
best in America's interests.
    And we need to address the Avena court decision on the 
rights of consular access for foreigners arrested in this 
country. The Departments of Defense, Homeland Security, State, 
and Justice all support doing something on this. Chief Justice 
Roberts has. We should fix it.
    Senator Graham.
    Senator Graham. Thank you. I know you have a meeting. A 
little bit of homework here.
    Could you inform the committee in writing, there is a 
debate in Congress whether we should sell Apaches to the 
Egyptian regime. I think, Mr. Secretary, that the Egyptian army 
has not met the goals that we all would hope. They are not 
transitioning to democracy in a meaningful way, in my view.
    Could you inform the committee, in your view, what kind of 
role should the Congress play regarding aid to Egypt, 
particularly military aid? I don't want to send the wrong 
signal and undercut efforts to get the transition to democracy.
    Do you agree with the statement by the DNI that the Al 
Qaeda presence in Syria is building up and is becoming a threat 
to the homeland?
    Secretary Kerry. Yes.
    Senator Graham. Okay.
    When it comes to Israel, it has been our position that the 
Palestinians should recognize the Jewish state as part of their 
negotiating position, is that correct?
    Secretary Kerry. Yes.
    Senator Graham. Secondly, you can do this in writing, if 
you like, do you think President Abbas has the ability to speak 
effectively for Hamas regarding any potential peace agreement?
    Secretary Kerry. Part of our discussion at this point in 
time, Senator, is a requirement before some kind of agreement 
were to come into effect that that issue would have to be 
resolved.
    Senator Graham. Thank you.
    Secretary Kerry. Thank you very much.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Leahy. Mr. Secretary, thank you very much.
    I thank the members for their questions. We will keep the 
record open until Wednesday for any further questions.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
                  Questions Submitted to John F. Kerry
            Questions Submitted by Senator Richard J. Durbin
    Question. The United States recently decreased its pledge to the 
World Bank's International Development Association--the Bank's fund for 
helping the world's poorest countries. This drop hurts American 
leverage in at the Bank, creating more openings for China and others 
who may not share our priorities. Please elaborate on the U.S. 
commitment to the International Development Association and the 
international financial institutions as a whole.
    Answer. The United States recently pledged $3.87 billion to the 
International Development Association (IDA)--which represented a 5 
percent decrease from its previous pledge. While the administration 
would have liked to have pledged more, the $3.87 billion reflects the 
very difficult budget environment that we face. The U.S. pledge was 
still enough to make the United States the second largest contributor 
to the fund's record-breaking replenishment cycle, which yielded over 
$52 billion in pledges.
    IDA, the Asian Development Fund, and the African Development Fund--
the concessional windows at the World Bank, Asian Development Bank, and 
African Development Bank, respectively--provide grants to the world's 
poorest countries and support key U.S. development priorities. The 
United States remains one of the largest contributors to these funds, 
and our financial contributions send an important signal about the U.S. 
commitment to alleviating poverty and fostering economic growth and 
stability to other donors and developing countries.
    Question. Countries such as China, India, Turkey, and others have 
been gaining an economic foothold in Africa, too often at American 
expense. With 7 out of 10 of the fastest growing economics in the world 
being in Africa, the U.S. has a great opportunity to invest while 
supporting domestic jobs. I was pleased that part of my legislative 
efforts to address this issue became law in December and that the 
administration must designate a senior coordinator to boost U.S. 
exports to Africa. Can you comment on this larger challenge in Africa 
and administration efforts to help address it?
    Answer. The Department of State shares your view that Africa 
represents a great opportunity for U.S. companies to generate economic 
growth both in Africa and domestically.
    Commercial activities of other countries in Africa have generally 
not hindered investment opportunities for our firms.
    The U.S. Government's (USG's) Doing Business in Africa (DBIA) 
Campaign encourages U.S. businesses to take advantage of the many 
export and investment opportunities in Sub-Saharan Africa. The USG is 
encouraging U.S. companies--with a focus on small- and medium-sized 
businesses and African Diaspora-owned businesses--to trade with and 
invest in Africa. To support this initiative and in coordination with 
the Department of Commerce's Advocacy Center, our Embassies and 
Consulates provide robust commercial advocacy support of U.S. firms 
competing in Sub-Saharan Africa and facilitate numerous high value 
trade and investment missions and deals in key sectors, such as 
healthcare, agribusiness, and infrastructure and energy. The 
Presidential initiatives of Power Africa and Trade Africa harness the 
efforts of many U.S. Government agencies and the private sector to 
increase trade and investment in Sub-Saharan Africa.
    The Overseas Private Investment Corporation (OPIC), Export-Import 
Bank (Ex-Im Bank), and the U.S. Trade and Development Agency (USTDA) 
are building upon current assistance to U.S. business. For example, the 
U.S.-Africa Clean Energy Development and Finance Center opened its 
doors in 2013 at the U.S. Consulate General in Johannesburg, South 
Africa, to provide the U.S. private sector, as well as our Sub-Saharan 
African partners, with a centralized means to identify and access U.S. 
Government support for clean energy export and investment needs.
                                 ______
                                 
            Questions Submitted by Senator Mary L. Landrieu
    Question. As you know, last fall Senator Blunt, Congresswoman 
Granger, Congresswoman Bass, and I introduced the ``Children in 
Families First'' Act and have since gained the support of nearly 60 
Members of Congress for this legislation. At the core of this bill is a 
proposal for making necessary structural changes to the State 
Department's current approach to international child welfare. More 
specifically, we have proposed to unite issues related to international 
child welfare, including international adoption, in a single office to 
be housed in the State Department's Secretariat for Civilian Security, 
Democracy, and Human Rights. We believe such changes are necessary at 
the Department of State to ensure that, both internally and externally, 
international child welfare is treated as more than an immigration 
enforcement issue, which its current placement in the Bureau of 
Consular Affairs suggests that it is. We have seen the same approach of 
centralizing and empowering an office or bureau work to great effect in 
fighting terrorism, combatting trafficking, providing humanitarian 
assistance and resettlement to refugees, and providing AIDS relief and 
seek now to emulate that success on behalf of vulnerable children. It 
is my understanding that the U.S. Department of State opposes this 
effort and seeks to keep these functions in the Bureau of Consular 
Affairs, which handles border security and overseas citizen services, 
and has no real mandate or resources to engage in international child 
welfare issues writ large, and which, in our view, has a less than 
ideal track record even in its narrow mandate of implementing the Hague 
adoption and abduction conventions.
  --Can you affirm that this is in fact the State Department's position 
        and help clarify for the members of this subcommittee why that 
        is so?
  --Do you agree that international child welfare requires a dedicated 
        Bureau or Office in the Department of State?
  --Do you agree that international child welfare is more than a 
        consular issue and as such needs to be handled elsewhere in the 
        Department than the Bureau of Consular Affairs?
  --In the same way that refugee resettlement is part of the Bureau of 
        Population Refugees and Migration precisely because it is a 
        tool of refugee protection, do you agree that international 
        adoption is a tool of protection for children living without 
        families, not simply an immigration enforcement issue?
    Answer. The U.S. Department of State helps to serve and protect 
children around the world. Our global presence ensures that we are able 
to support children, youth, and their families through programmatic 
support and diplomatic engagement, under the leadership of the Chiefs 
of Mission of each U.S. Embassy and supported through the expertise of 
the Department's various offices and bureaus engaged on children's 
issues. Such policies, programs, and diplomatic efforts help strengthen 
families and protect children. Additionally, they help to support the 
U.S. Action Plan on Children in Adversity (APCA), which aims to promote 
a world in which children grow up within protective family care and 
free from deprivation, exploitation, violence, and danger.
    Many bureaus and offices across the Department and the U.S. Agency 
for International Development (USAID) diplomatically and 
programmatically engage on children's issues, including on matters 
related directly to international child welfare and protection. This 
work is accomplished via multifaceted approaches to improving health, 
education, security, social and child welfare systems, capacity to 
provide humanitarian assistance, governance, rule of law, and the 
protection and advancement of human rights across the globe.
    This multifaceted support extends beyond the expertise and capacity 
of any single office, bureau, or portfolio. It includes U.S. support 
for UNICEF's child protection-related efforts around the world; 
economic support aimed at strengthening families affected by HIV/AIDS 
to ensure that they can stay together; support for child welfare 
systems that includes addressing children outside of family care and 
promoting permanent family placements, made possible by the President's 
Emergency Plan for AIDS Relief (PEPFAR); support for family 
reunification and child protection programming in humanitarian 
emergencies through State's Bureau of Population, Refugees, and 
Migration and the Office of Foreign Disaster Assistance at USAID; and 
other bilateral and multilateral efforts. These are just a few 
examples.
    The Department's Bureau of Consular Affairs, which fulfills many of 
the Department's day-to-day responsibilities as the U.S. Central 
Authority under the Hague Convention on Protection of Children and Co-
operation in Respect of Intercountry Adoption (Hague Adoption 
Convention) and the Hague Convention on the Civil Aspects of 
International Child Abduction (Hague Abduction Convention), plays an 
important part in these efforts by supporting other countries in their 
implementation of either or both Conventions. Protecting children and 
families in the intercountry adoption process through the Hague 
Adoption Convention and ensuring that ethical and transparent 
intercountry adoption remains an option for children, when it is in a 
child's best interests, are important pieces of the Department's 
overall effort to protect children and promote healthy child 
development and responsive and supportive child welfare systems.
    The Department remains committed to working with Congress to ensure 
that U.S. support for children in adversity is robust, and that U.S. 
implementation of the Hague Adoption Convention is strong, effective, 
and transparent--without the establishment of a new, costly, and 
unnecessary bureaucracy. The creation of a new bureau or office within 
the Department focused on international child welfare or intercountry 
adoption will create overlapping mandates within the Department and 
with USAID. It would confuse and undermine multiple, well established 
roles and responsibilities of individual components of both agencies, 
and would be detrimental to their key relationships with U.S. and 
foreign governmental and non-governmental partners. A new bureau or 
office could also undermine existing capacities for effective, 
multilayered interventions, interfering with efforts to integrate 
programs across sectors so that they most benefit children, their 
families, and the communities in which they live. Centralizing 
activities under one office, with one mandate, may diminish existing 
activities that are not explicitly ``child-focused,'' yet are still 
fundamental for children in adversity, such as programs focusing on 
nutrition, shelter, livelihood, gender-based violence, women and girls' 
empowerment, and humanitarian assistance. It would also be 
inappropriate for a new Department office with an international child 
welfare mandate to be singularly focused on international adoption as 
its sole remedy.
    The Department and USAID have taken steps over the last year to 
improve coordination and collaboration in order to maximize the impact 
of our work to improve the lives of children in adversity. APCA was 
launched at the White House in December 2012; individual agency 
implementation plans were published in September 2013; programs from 
Department bureaus and offices that were not already consistent with 
the APCA's objectives have been increasingly aligning with them in new 
and ongoing programs; and the first meeting of the Senior Policy 
Operating Group on Children in Adversity (SPOG-CA) convened in 
February. In the interim, with support from the Department's Senior 
Advisor for Development, the Department created a Task Force on 
Children in Adversity (TFCA) to promote APCA and improve internal 
coordination and information sharing across the Department and with 
USAID. The TFCA also coordinates to identify complementary and 
strategic diplomatic, programmatic, and policy actions for the range of 
Department bureaus and offices that are already working to assist 
children in adversity globally. We expect that the SPOG-CA will 
reconvene soon under the leadership of the reformulated USAID Center 
for Excellence on Children in Adversity.
    International child welfare is a complex issue which requires a 
multitude of actors and responses. We believe by focusing on 
coordination we can enhance programming and best demonstrate the U.S. 
Government's commitment to assisting children around the world.
    Question. A number of prominent organizations that support 
international child welfare and adoption wrote to you in December to 
request that you take immediate action to address shortcomings in the 
Department of State's implementation of The Hague Adoption Convention. 
To my knowledge, that letter has not been answered.
  --How do you explain the fact that there have been no reported 
        international adoptions from any country that has become a 
        Hague partner with the United States since 2008?
  --Do you agree with the criticism in the letter that the Office of 
        Children's Issues has failed to implement a transparent and 
        effective system for determining partner country compliance 
        with the Hague Convention?
  --If so, what steps are you taking to correct the situation?
    Answer. The Department of State supports intercountry adoptions. As 
the U.S. Central Authority for adoptions, the Department's primary goal 
is to ensure that all U.S. intercountry adoptions are ethical, 
transparent, and protect children and families. To accomplish this, the 
Department maintains strong lines of communication with all Hague 
Adoption Convention (Convention) countries in order to promote 
cooperation, coordination, and the best interests of children. Every 
year, children from countries that are parties to the Convention are 
adopted by loving U.S. families. In fiscal years 2013 and 2012, 46 
percent and 37 percent of all U.S. adoptions were from Convention 
countries, respectively. China remains the top country of origin for 
U.S. intercountry adoptions, and last year, hundreds of children were 
adopted from Bulgaria, Colombia, India, Latvia, and the Philippines--
all Convention countries.
    Since the Convention entered into force for the United States, 15 
new countries have become party to the Convention: Cabo Verde, Fiji, 
Greece, Ireland, Kazakhstan, Lesotho, Liechtenstein, Macedonia, 
Montenegro, Rwanda, Senegal, Seychelles, Swaziland, Togo, and Vietnam. 
The annual number of intercountry adoptions from the majority of these 
15 countries did not change significantly after the entry into force of 
the Convention. Historically, few children immigrated to the United 
States through intercountry adoption from each of these countries, with 
the exception of Kazakhstan, Rwanda, and Vietnam.
    Several factors in all of the countries affect the number of U.S. 
adoptions. Five new Convention countries (Greece, Ireland, 
Liechtenstein, Macedonia, and Seychelles) have developed child welfare 
and adoption systems and/or have few children in need of intercountry 
adoption. Ireland provides a good example. Ireland identifies solely as 
an adoption receiving country, not a country of origin. Ireland's 
Central Authority strictly applies the Convention's subsidiarity 
principle with the result that most Irish orphans are placed 
domestically, and few children are eligible for intercountry adoption. 
Adoptions from Greece, Liechtenstein, Macedonia, and Seychelles are 
similarly very rare, as they were before these countries joined the 
Convention. Family preservation resources and effective, permanent 
domestic placement options are available in those countries.
    Three other countries (Rwanda, Senegal, and Swaziland) have 
suspended all intercountry adoptions while reviewing their ability to 
implement the Convention. A fourth, Kazakhstan, temporarily suspended 
intercountry adoptions to the United States in August 2012, citing 
concerns about the welfare of adopted children related to a number of 
very grave, but isolated, cases of abuse in the United States. The 
Department had announced its ability to issue Hague Adoption and 
Custody Certificates in incoming Convention adoptions from Kazakhstan 
in May 2012. Since 2012, the Department and U.S. Embassy Astana have 
made every effort to respond to Kazakhstani concerns and persuade the 
Government of Kazakhstan to resume intercountry adoptions for U.S. 
families. Our efforts include multiple, high-level bilateral meetings 
in the United States and Kazakhstan, facilitation of consular access of 
Kazakhstani officials to adopted Kazakhstani children in the United 
States, and communication with U.S. parents of adopted children on the 
importance of meeting post-adoption requirements.
    On the other hand, a number of countries, including Cabo Verde and 
Fiji, had not fully implemented the Convention at the time it entered 
into force. Both countries are still developing procedures to implement 
the Convention and the capacity to carry out Convention safeguards. 
Under U.S. law, the Department is not able to process Convention 
adoptions for countries that have failed to develop adoption systems 
that uphold these safeguards. The Department continues to work with 
such countries to assist with Convention implementation.
    The Department's efforts in Vietnam and Lesotho in this regard are 
particularly noteworthy. Following the Convention's entry into force on 
February 1, 2012, Vietnam has only recently trained its central and 
provincial adoption officials on the Convention and related new laws. 
Resuming adoptions with Vietnam is among U.S. Embassy Hanoi's highest 
priorities, and the U.S. Special Advisor for Children's Issues has 
travelled to meet with Vietnamese adoption officials four times since 
2010 to advocate for successful reforms. Additionally, USAID support 
for UNICEF on adoptions has been instrumental in improving Vietnam's 
legal and regulatory system. Currently, the Department is working 
towards establishing a limited adoption program for children with 
special needs, older children, and children in sibling groups. The 
Government of Vietnam is currently vetting U.S. adoption service 
providers and has indicated that it plans to authorize two. (For more 
information, please see the Department's September Adoption Notice, 
available here: http://
adoption.state.gov/country_information/
country_specific_alerts_notices.php?alert
_notice_type=notices&alert_notice_file=vietnam_7). The Department is 
hopeful that we will be able to announce our ability to issue Hague 
Certificates for adoptions from Vietnam later this year. In Lesotho, 
the Convention entered into force in December 2012. In February 2013, 
Lesotho lifted its suspension of intercountry adoptions, which had been 
in place as it implemented Convention procedures. We determined we 
would be able to process adoptions with Lesotho beginning March 1, 
2013. The Government of Lesotho has authorized one U.S. adoption 
service provider, published new procedures on intercountry adoptions 
fees, and is now processing adoptions.
    Additionally, three countries became party to the Convention on 
April 1, 2014: Croatia, Haiti, and Serbia. The Department has since 
announced positive determinations for these newest Convention partners, 
as well as for Montenegro, where the Convention entered into force in 
2012. The Department has announced our ability to issue Hague Adoption 
or Custody Certificates for all Convention adoptions from these 
countries.
    As the Central Authority for intercountry adoption, the Department 
must certify that adoptions are in compliance with the Convention. The 
examples provided above illustrate our commitment to this process. If a 
country's adoption system does not uphold the safeguards of the 
Convention, adoptions finalized in that country are not considered to 
be compliant. It is therefore instrumental for the Department to assess 
each country's ability to implement procedural safeguards and governing 
structures consistent with Convention standards. We accomplish this 
through review of a country's laws, procedures, practices, and 
infrastructure. Our Web site, adoption.state.gov, provides a thorough 
description of our approach.
    The Department has taken several additional steps to increase 
transparency and public dialogue as this review process unfolds. The 
Bureau of Consular Affairs (CA) posts frequent Adoption Notices and 
Alerts to adoption.state.gov on changes or expected changes to a 
country's adoption laws, procedures, practices, or infrastructure as 
information is made available. CA also hosts quarterly public 
stakeholder meetings for non-profit organizations and U.S. adoption 
service providers to provide updates and answer questions.
    If the Department determines that a country does not meet the 
required standards, we strongly encourage the country to implement the 
necessary legal framework and procedures to uphold the Convention's 
standards and principles before becoming a party to the Convention. The 
Department will also encourage the country's officials to consider 
establishing procedures to allow adoptions initiated prior to the 
Convention's entry into force be completed through the pre-Convention 
procedures. The Department's goal is to prevent a disruption in 
adoptions and ensure that there is no unnecessary delay in processing 
pending adoptions due to the Convention entering into force.
    Question. In a letter you sent to me on September 16, 2013, you 
indicated that the Department of State and USAID were moving forward 
aggressively to implement the Action Plan on Children in Adversity, 
which the White House released in December 2012, and which for the 
first time explicitly states that families for children is a priority 
goal of U.S. foreign policy. More specifically, you stated that you had 
recently formed a Senior Policy Operating Group (SPOG) made up of key 
players from the State Department and USAID and had directed them to 
lead implementation of the Action Plan. So is it fair then to say that 
this SPOG is the designated leader of the United States Government's 
efforts to implement the Action Plan for Children in Adversity and if 
so,
  --In the 15 months since the National Action Plan on Children in 
        Adversity was released, what concrete actions the Department of 
        State taken to advance the Plan's implementation?
  --How much funding did the U.S. State Department spend on programs or 
        policies implemented in support of the Action Plan in fiscal 
        year 2014? How much do you anticipate will be spent on 
        activities related to the Action Plan in fiscal year 2015?
    Answer. The umbrella of the National Action Plan for Children in 
Adversity provides an overarching platform and a welcome lens for 
ongoing State Department programs and activities, all of which address 
various dimensions of children in adversity around the world.
    For instance, to support building strong beginnings for children in 
adversity, the Department's Bureau of Population, Refugees, and 
Migration (PRM) supports protection activities including health and 
education programming for conflict-affected populations through 
humanitarian partners including the office of the UN High Commissioner 
for Refugees (UNHCR), the UN Children's Fund (UNICEF) and the UN Relief 
and Works Agency for Palestine Refugees in the Near East (UNRWA). For 
example, UNRWA runs one of the largest education programs in the Middle 
East, serving more than 490,000 school-age children at over 700 schools 
in Gaza, the West Bank, Jordan, Syria, and Lebanon. PRM also supports 
the No Lost Generation initiative, a campaign by the United Nations, 
governments, and international and non-governmental organizations to 
address the immediate and long-term impacts of the Syria crisis on a 
generation of children and youth in Syria and the Near East region.
    In another example, the President's Emergency Plan for AIDS Relief 
has supported family care for children by spearheading the 
strengthening of child welfare and protection systems, including the 
enhancement of the social welfare workforce. If child welfare and 
protection systems are strong and working, then the services required 
for children in adversity will be in place. These system-strengthening 
efforts therefore serve to bolster all aspects of child welfare to 
support all children, including those who are outside of family care. 
For example, through PEPFAR support:
  --In Uganda, more than 1,100 Community Development Officers and 
        probation officers have completed training and attained 
        university accreditation in child protection, and now provide 
        services to 66,000 children.
  --In South Africa, more than 2,000 para-professional social workers 
        have been provided stipends and child welfare skills training. 
        And a partnership with South Africa's Ministry of Social 
        Development has helped support 10,000 new Child & Youth Care 
        Worker positions by 2017. As a result, more than 1.4 million 
        vulnerable children will be served.
  --In Tanzania, 4,000 community volunteers provide support for 
        vulnerable children through various implementing partners. In 
        addition, a Twinning Center partnership has trained 2,408 para-
        social workers (PSWs) and 329 supervisors in 25 districts.
    Diplomatically, the Department's Bureau of International 
Organizations supports the United Nations in promoting child survival 
and child development. Following June 2012's ``Child Survival: Call to 
Action conference? meeting?'' which the U.S. hosted along with India 
and Ethiopia, the United States is pleased to see that to date, 
representatives of 174 governments, 215 civil society partners, and 221 
faith-based organizations have signed pledges to take action along with 
UNICEF. The United States is glad to be a partner with UNICEF in 
supporting this effort, which is believed to accelerate progress 
towards Millennium Development Goal 4 and 5 targets, and ultimately 
help to end all preventable child and maternal deaths. The United 
States continues to support the UN Population Fund (UNFPA), which 
supports and funds programs in more than 150 countries in an effort to 
achieve Millennium Development Goal 5 of improving maternal health, and 
in turn, also reduces maternal and child mortality.
    Additionally, by delivering national statements in UN forums--
including the UN General Assembly, the UN Human Rights Council, the 
UNICEF and UNFPA Executive Boards, and other UN organizations that 
support children--the United States calls on organizations and states 
to incorporate the needs of children in their planning and policies. 
The United States also emphasizes the particular needs, 
vulnerabilities, and potential of girls, and consistently raises these 
issues in UN forums and diplomatically with partner governments.
    The Department of State also works through diplomatic channels to 
strongly support intercountry adoption as an essential part of a fully 
developed child welfare system. We promote ethical and transparent 
adoption processes for prospective adoptive parents, birth families, 
and children involved in intercountry adoptions, a process that ensures 
that an adoption is completed in the best interests of the child and 
when a domestic placement in the child's home country is not possible. 
The Office of Children's Issues, within the Department's Bureau of 
Consular Affairs, engages bilaterally with foreign governments and 
collaborates with stakeholders in the adoption community and with our 
interagency partners on intercountry adoptions to promote these policy 
objectives. The Hague Adoption Convention is an important tool in 
support of this goal. Ninety-three countries are currently party to the 
Convention, including the United States.
    An important element related to concrete action and policy 
leadership includes the establishment of a Senior Policy Operating 
Group (SPOG) for Children in Adversity. This governmentwide, 
interagency body is co-led by the Department of State's Senior Advisor 
for Development and USAID's Center of Excellence for Children in 
Adversity (USAID/CECA). The SPOG is strengthened by the day-to-day 
coordination efforts of State's Task Force for Children in Adversity 
(TFCA), which works in partnership with USAID/CECA and the interagency 
working group led by USAID to advance the children in adversity agenda.
    For example, TFCA and USAID/CECA recently collaborated to develop a 
Key Issue, or secondary budget code in the foreign assistance budget, 
called ``Children in Adversity.'' The ``Children in Adversity'' Key 
Issue is formulated to match the objectives of the APCA and gives 
visibility to the funding of thematic areas that are not generally 
discernable in the foreign assistance budget. Going forward, the 
``Children in Adversity'' Key Issue, combined with other ongoing 
efforts at State and USAID, does three things: (1) sends a signal to 
State and USAID that the children in adversity issue is being further 
elevated across the foreign assistance portfolio, (2) establishes a 
common definition for children in adversity within foreign assistance 
programming, and (3) strengthens existing efforts to thematically 
integrate children in adversity into the foreign assistance strategic 
planning, budgeting and performance management processes.
    Finally, allocations for fiscal year 2014 foreign assistance 
appropriations are in the midst of being finalized; however, programs 
that support the world's most vulnerable population--children in 
adversity--are reflected throughout the budget. Similarly, the fiscal 
year 2015 request emphasizes the United States' continuing commitment 
to children.
    Question. Russia's invasion of Ukraine is not only an attack on 
that country's sovereignty but a threat to the stability of the entire 
region. One key aspect of Russian influence in Ukraine has been its 
energy exports, particularly natural gas flowing through Ukraine to the 
remainder of Europe. As you know, the administration recently proposed 
$1 billion in loan guarantees to help insulate the Ukrainian economy 
from the effects of reduced energy subsidies from Russia--a measure 
that has been reinforced by recently passed legislation in the House 
and legislation pending in the Senate.
  --In addition to these measures, how can the United States use its 
        diplomatic influence and growing energy production to mitigate 
        these threats?
    Answer. Ukraine's sovereignty and independence is a strategic 
foreign policy priority for the United States, and no issue is more 
important than Ukraine's energy security. Ukraine's energy security, 
and the commitment of the United States to support Ukraine, was at the 
forefront of the U.S.-European Union (EU) Energy Council meeting which 
I chaired with EU High Representative Ashton, EU Energy Commissioner 
Oettinger, and U.S. Deputy Secretary of Energy Poneman on April 2.
    The United States is working with Ukraine, its western neighbors, 
the EU, and the private sector to provide gas from European companies 
to Ukraine to offset its reliance on Russian imports. We are seeking to 
provide urgently needed international financial support to Ukraine and 
encouraging Ukraine to use its foreign exchange reserves to finance gas 
purchases.
    In addition to these short-term measures, we are working with other 
donors and the private sector to help Ukraine bridge to long-term 
increased self-sufficiency in gas by raising domestic production, 
through modernization of existing conventional fields and contracts 
negotiated in 2013 for unconventional gas development.
    The United States is also working closely with the Government of 
Ukraine to increase energy efficiency practices, which will further 
decrease reliance on energy imports. The $1 billion in loan guarantees 
provided by the United States will be available to help the Ukrainian 
Government ensure that increased energy costs, which will go into 
effect as early as May 1 as part of a reform package mandated by the 
IMF, will not adversely impact Ukraine's most vulnerable energy 
consumers.
    Under the auspices of the U.S.-Ukraine Energy Security Working 
Group, the U.S. Special Envoy for International Energy Affairs Carlos 
Pascual and Ukrainian Minister of Energy Yuriy Prodan, will continue to 
advance these initiatives.
    Question. Last July, the full Appropriations committee voted on a 
narrow waiver to the prohibition on funding UNESCO (United Nations 
Educational, Scientific and Cultural Organization). By a vote of 19-11, 
the full committee provided a waiver, as well as $700,000, to the World 
Heritage program at UNESCO. For no good reason at all, the House 
deleted this line item, and refused to include it in the Omnibus 
spending package that was approved this January. Let me explain why I 
am so passionate about this issue. Poverty Point is a cultural and 
historic gem in Louisiana. It is a landmark relic from prehistoric, 
hunter-gatherer times, and is a collection of magnificent earthworks 
that were a commercial center for the region. If the Congress does not 
provide waiver authority and funding for the World Heritage Program, 
then we hurt Poverty Point's chances of being designated a World 
Heritage site. This would have significant economic impacts on my 
State. And by the way, there are 13 other States that are in the same 
situation.
  --I see that the administration once again seeks waiver authority for 
        funding this and other UN entities. Given the critical U.S. 
        interests in providing waiver authority and funding to the 
        World Heritage program, given that this Committee already voted 
        to provide that funding, and given that the Israeli Government, 
        who should be most concerned about this issue, supports a 
        narrow waiver for World Heritage funds, what is the 
        administration able to do to show how critical this waiver is?
  --What can you do to educate Members of Congress on the critical 
        economic impact for 14 States that are at stake if World 
        Heritage funding is denied once again for no good reason?
    Answer. As a founding member and the driving force behind the World 
Heritage Convention of 1972, the United States remains committed to 
advancing the Convention's ideals to preserve our world's outstanding 
cultural and natural heritage. Partnering with our colleagues in the 
U.S. Department of Interior, the State Department strongly advocates 
for promoting and preserving our twenty-one inscribed U.S. World 
Heritage sites, and works diligently to advance vital U.S. economic and 
cultural interests by guiding the nomination process for inscribing new 
U.S. sites.
    As you mention, the World Heritage Committee will consider the 
inscription of Poverty Point State Historic Site in Louisiana during 
its 38th Meeting this June in Doha, Qatar. We will enthusiastically 
champion this nomination in Doha, and will send a delegation of U.S. 
cultural heritage policy and technical experts to support the 
inscription efforts on behalf of Poverty Point. We believe the 
administration's unwavering commitment to full engagement at UNESCO and 
our respected leadership on World Heritage issues will reinforce the 
compelling case for inscription of Poverty Point in 2014, and for the 
San Antonio Franciscan Missions nomination to be considered by the 
World Heritage Committee in 2015.
    As you rightly point out, designation as a World Heritage site can 
be a significant driver of international recognition, tourism, 
community pride, economic development, and long-term conservation 
planning and resources. For all these reasons, funding for the World 
Heritage program is, and will remain, an important priority for the 
United States.
    Withholding our assessed contributions to UNESCO led to the loss of 
our vote in UNESCO's General Conference in 2013. More generally, 
withholding our support to UNESCO hampers our ability to advance U.S. 
interests in World Heritage, to sustain Holocaust education as a means 
to combat anti-Semitism and prevent future atrocities, and to promote 
freedom of expression, including for the press, and safety for 
journalists globally. This administration seeks a national interest 
waiver to allow the discretion necessary to continue to provide 
contributions that enable us to maintain our vote and influence within 
the UN and UN specialized agencies, including UNESCO. Through the 
waiver, the administration aims to empower the United States to 
determine how and when we engage in multilateral organizations, and to 
advance the interests of the United States and its closest partners 
across the full spectrum of policy goals.
    Experts from the State Department are available to brief you and 
other Members of Congress in more detail on our important work at 
UNESCO and on the World Heritage program should you have more 
questions. I appreciate your ongoing efforts to highlight the 
importance of U.S. leadership at UNESCO and to advance our national 
interests through World Heritage recognition of U.S. sites with 
outstanding universal value for all of human kind.
    Question. The PEPFAR Stewardship and Oversight Act, a bill which 
reauthorizes the 10 percent set aside for Orphans and Vulnerable 
Children (OVC) in the President's Emergency Plan for Aids Relief 
(PEPFAR), became law last December. This OVC money represents a huge 
part of the international investment--about $350 million per year--for 
orphans and vulnerable children, and supports efforts to keep these 
children in school, reduce barriers to healthcare and nutrition, and 
improve protection from abuse and neglect. However, after extensive 
conversations with PEPFAR staff at the Department of State, I was 
shocked to learn that none of this $350 million in OVC funds is spent 
on programs that provide alternative family care for those children who 
are unable to remain with their biological family. Simply put, the 
largest U.S. Government-funded programming for double orphans does 
nothing to help these children to no longer be orphans! In fact, the 
number of worldwide orphans is increasing. When PEPFAR was first passed 
in 2003, there were an estimated 15 million children orphaned by AIDS. 
Today there are 17 million. I originally intended to file an amendment 
to S.1545 that would have fixed this ironic inadequacy with the OVC 
program, but out of deference to Chairman Menendez and Ranking Member 
Corker and in consideration of the overall goals of PEPFAR, I set aside 
my amendment and gave consent for the bill to move for final passage. 
I'd like to take the opportunity here to ask for your input on how 
Congress might work together with the State Department to improve the 
OVC Set Aside.
  --Are you aware that the OVC set aside in PEPFAR does not focus on 
        finding permanent families for children, other than family 
        preservation efforts?
  --What can be done to ensure that programs funded under PEPFAR for 
        orphans and vulnerable children through the 10 percent Set-
        Aside give priority to children who are living outside of 
        family care and are aimed at finding permanent placements for 
        children through family reunification and kinship, domestic or 
        international adoption?
    Answer. PEPFAR is strongly focused on both finding families for 
children and on maintaining children in permanent families.
               why pepfar focuses on family preservation
    As stated in the Action Plan for Children in Adversity, a whole-of-
government strategic guidance on international assistance for children, 
efforts for Objective 2: Putting Family Care First ``should primarily 
be directed to enabling the child to remain in or return to the care of 
his/her parents or, when appropriate, other close family members. 
Strengthening families is a first priority.'' (p.9) Stable, caring 
families and communities and strong child welfare systems are the best 
defenses against the effects of HIV/AIDS in the lives of children.
    While the majority of children affected by AIDS are not outside of 
families or ``parentless,'' this does not mean that very large numbers 
are not vulnerable as a result of AIDS.
    The most effective approach to addressing the extreme vulnerability 
that children face in the epidemic is to ensure that the parents and 
caregivers who are left and are caring for children stay strong and 
healthy and have the resources and skills to keep the children in their 
care safe and thriving.
                   how pepfar puts family care first
    PEPFAR Orphans and Vulnerable Children (OVC) programs work to put 
family care first by engaging in activities aimed at preventing 
separation and keeping children in families, and where necessary, 
reintegrating children into family care. These are all core principles 
of APCA Objective 2.
    Moreover, PEPFAR invests in evidence-based programming that 
dramatically increases a vulnerable family's ability to care for 
children. Household economic strengthening prevents the separation of 
children from families due to the economic burden of HIV. PEPFAR OVC 
programs have supported 10,000 savings groups in 15 countries. As a 
result, approximately 1,000,000 children affected by AIDS are living in 
families with improved economic stability. Such programs are enhanced 
by PEPFAR OVC programs that link parents to social protection efforts 
such as cash transfers, further increasing their ability to provide for 
children in their care.
           pepfar support for children outside of family care
    While family preservation remains at the core of PEPFAR's work, 
these efforts are intertwined with ensuring children outside of family 
care (COFC) are also supported as a priority within PEPFAR OVC 
programs.
    For example, in South Africa, PEPFAR, in partnership with the 
government has supported legislation and policies that encourage 
permanent family placement and in-country adoption specifically. The 
results of these efforts include a revised National Adoption Policy, 
which is enhanced by PEPFAR supported adoption education and an ``Adopt 
RSA Kids'' Web site, as well an updated National Action & Monitoring 
Plan for Children infected and affected by HIV and AIDS. In Mozambique, 
PEPFAR is supporting the placement of at least 6,000 vulnerable 
children deprived of parental care into families. These efforts will be 
supported by the development of a simplified guardianship information 
system to regulate placement of children and to ensure that a safe and 
monitored care placement.
    In addition, in Tanzania, an assessment of children living on the 
street and children within key and other vulnerable populations (e.g. 
sex workers and trafficked children) is planned for early 2015. 
Following on this assessment, implementing non-governmental 
organization (NGO) partners will strengthen linkages to health, 
temporary shelter, family placement/reintegration and other services 
for children living on the street or without reliable shelter and adult 
care. In Uganda and Ethiopia the PEPFAR supported organization Retrak 
works with street children by helping them to return to family (or find 
new families), and by ensuring those families have the follow up 
support (parental skills, economic opportunities) to ensure children 
can stay there.
    On a global level PEPFAR supports the development and dissemination 
of guidance and tools to build capacity in permanency solutions. For 
example, PEPFAR financially supported USAID's Center for Excellence on 
Children in Adversity in the development of a methodology for 
surveillance of children living outside of family care and contributed 
to the Evidence Summit on Children Outside of Family Care. PEPFAR is 
also a long-term supporter of the Better Care Network which 
disseminates state of the art evidence, tools and technical assistance 
aimed at promoting permanency solutions for children globally.
                  child welfare systems strengthening
    The best and most sustainable way to support children outside of 
family care is to support the child welfare systems that can ensure 
they are safe and placed in permanent family care. As stated in the 
APCA under Objective 4: ``Effective and well-functioning child welfare 
and protection systems are vital to a nation's social and economic 
progress, . . . Protection services prevent and respond to child abuse, 
both within and outside the home, and . . . provide appropriate care 
for children separated from their families of origin.''
    Strengthening child welfare and protection systems is a central 
focus of PEPFAR's OVC programming, and PEPFAR has spearheaded such 
efforts globally. PEPFAR works with governments to promote robust child 
welfare systems strengthening, and enhanced social welfare workforce 
capacity to prevent and respond to child abuse. PEPFAR partners work 
together to deliver high-quality child welfare and protection services 
that reduce vulnerability, ensure access to essential services--
including those for health and HIV--prevent and respond to violence 
against children, and preserve family structures in AIDS-affected 
communities. Important improvements in child welfare systems are 
underway in many countries, including social protection through child 
grants, deinstitutionalization, and foster care. Addressing these needs 
requires strong child welfare systems and intentional workforce 
strengthening that facilitates access to services across sectors for 
vulnerable children in and outside of families.
    Question. The scale of the Syria crisis continues to increase 
exponentially. Nine million Syrians, approaching half of the country's 
pre-war population, have fled their homes. Six and one-half million 
people are internally displaced and nearly 2.5 million have sought 
refuge in neighboring countries. The suffering of Syrian civilians is 
alarming and overwhelming, with women and children disproportionately 
vulnerable to the violence and the effects of the war. Before the 
conflict, Syria was a middle-income country with low child mortality 
rates. Now, deadly diseases such as measles and meningitis are on the 
rise and vaccine programs in Syria have collapsed. Even polio, 
eradicated in Syria almost 20 years ago, is now being carried by up to 
80,000 children across the country--a figure so high that medical 
experts have raised concerns about a potential international spread of 
the virus. Despite the continued expansion of humanitarian need, the 
President's fiscal year 2015 budget proposal requests $1.6 billion less 
in funding for the International Disaster Assistance and Migration and 
Refugee Assistance accounts than Congress provided in the fiscal year 
2014 Omnibus Appropriations bill.
  --How can the administration's proposed budget ensure that the U.S. 
        continues to provide its fair share of contributions to respond 
        to the Syria crisis in light of growing humanitarian needs?
  --What is the U.S. Government doing to provide immediate access to 
        child-focused health services in Syria to ensure that these 
        children do not only survive preventable and treatable 
        illnesses, but are also thriving in the arms of a permanent 
        caregiver?
    Answer. The U.S. Government is the single-largest donor of 
humanitarian assistance for those affected by the Syria crisis, 
providing more than $1.7 billion in humanitarian aid since the start of 
the crisis--nearly $878 million to support those inside Syria, and 
nearly $862 million to support refugees fleeing from Syria and host 
communities in neighboring countries. Support inside Syria goes through 
trusted international and non-governmental organizations.
    In the fiscal year 2014 Omnibus Appropriations bill, Congress 
generously provided $2.2 billion in Overseas Contingency Operations 
(OCO) funding for humanitarian programs. This funding is critical to 
address growing humanitarian needs worldwide, including the Syria 
crisis, where the combined UN humanitarian appeal for Syria has nearly 
doubled over the last year and represents approximately half of the 
2014 total worldwide humanitarian need of $12.9 billion. Given the 
significant ongoing humanitarian needs inside Syria and across the 
region, the Department of State and the United States Agency for 
International Development plan to carry over funding from fiscal year 
2014 into fiscal year 2015 to help address the substantial needs of the 
projected 11 million internally displaced persons (IDPs) in Syria, 5 
million refugees from Syria in the region, about half of whom are 
children under 18 years of age, and communities in refugee-hosting 
countries that are enduring strains on basic infrastructure and health 
and educational systems.
    U.S. health assistance inside Syria has provided training for 
Syrian medical workers, direct healthcare services, supplies for 
hospitals and clinics and support for polio vaccination campaigns. The 
United States is supporting 298 hospitals, health clinics, and mobile 
medical units across Syria, which have treated more than 1.9 million 
Syrian patients and performed nearly 265,000 surgeries. These patients 
include innocent children caught in the crossfire as well as basic 
primary healthcare and services for those who become ill. The United 
States is also supporting the childhood vaccination efforts led by the 
World Health Organization (WHO) and UNICEF, who are working to 
vaccinate 22 million children across the region. The WHO and UNICEF 
have consistently reached over 2.5 million children in each of the last 
four vaccination campaigns inside Syria. Additionally, the United 
States supports disease surveillance and vaccination campaigns as part 
of its emergency primary healthcare programs throughout Syria. U.S. 
funding to the Office of the High Commissioner for Refugees inside 
Syria has supported UNHCR's efforts to provide $4.6 million worth of 
medicine to hospitals across Syria.
    In addition, U.S. funding for the United Nations Relief and Works 
Agency for Palestine Refugees in the Near East (UNRWA) has been 
critical to ensuring continued care for the more than 540,000 
Palestinian refugees in Syria, about one-third of whom are children and 
over half of whom are displaced. Although only 14 of UNRWA's 23 health 
centers remain operational due to ongoing conflict and access 
constraints, UNRWA has deployed nine mobile health points to reach 
Palestinians refugees in areas of displacement inside Syria.
    In addition to healthcare, the U.S. Government is helping children, 
mothers, fathers, and caretakers cope with psychosocial stress. We are 
also helping to provide appropriate protective care for their children 
and training community members in basic social work and case management 
skills so they may identify children at risk and connect them to 
available support. UNRWA is making efforts to address the needs of the 
more than 67,000 children enrolled in its schools by increasing the 
number of psychosocial counselors working across its network of schools 
and providing additional support to out-of-school children.
    U.S. support to the International Committee of the Red Cross (ICRC) 
helps improve the supply of potable water and sanitation inside Syria, 
benefiting and protecting vulnerable children. In 2013, 20 million 
people in Syria benefited from ICRC's improvements to water and 
sanitation facilities, ten million people--in all 14 governorates--
benefited from emergency repairs to water system damaged by fighting, 
3.1 million people benefited from a waste and pesticides program in 
Aleppo and Idlib governorates, and 810,000 benefited from water 
delivered by truck.
                                 ______
                                 
             Questions Submitted by Senator Jeanne Shaheen
    Question. Since 1979, the Foreign Operations appropriations bill 
has prohibited the use of funds to provide abortion services for Peace 
Corps volunteers and trainees, without exception. Under this rider, 
official policy requires that volunteers pay out of pocket for abortion 
care even in cases of rape, incest, and where a woman's life would be 
endangered by carrying the pregnancy to term. This is at odds with all 
other Federal employees who do receive coverage for these exceptions, 
and I have long supported healthcare parity for the women volunteers 
who are carrying out our diplomatic and humanitarian interests 
overseas. I appreciate that in the fiscal year 2015 budget, the 
administration has allowed for the healthcare parity for Peace Corps 
volunteers, and has allowed for abortion coverage for volunteers in 
cases of rape, incest, and life endangerment. Can you comment on the 
importance of providing this health equity to our volunteers?
    Answer. The Department of State defers to the Peace Corps on this 
matter as it is not within the State Department's purview.
    Question. At least 222 million women in the developing world would 
like to prevent or delay pregnancy but lack access to safe, effective 
contraception, and each year an estimated 287,000 women still die from 
pregnancy related causes. Can you talk about where you see 
opportunities for U.S. leadership to continue to make progress on 
expanding access to family planning and reproductive health information 
and services?
    Answer. With the help of Congress, the United States continues to 
be the world's largest bilateral donor for international family 
planning. This furthers demonstrates the U.S. Government's firm 
commitment to helping men and women across the globe meet their 
reproductive health needs. Enabling an individual or couple to decide 
whether, when, and how often to have children is vital to safe 
motherhood, healthy families, and prosperous communities. Family 
planning can reduce the economic burden on poor families and allow 
women more time to work outside the home, which leads to increased 
family income. These economic benefits of family planning contribute 
directly to the U.S. Government goal of ending extreme poverty in two 
decades. Research clearly shows that voluntary family planning programs 
not only improve health, reduce poverty, and empower women, but also 
save lives. When women bear children too early, too late, or too close 
together, there are negative impacts on their health and their 
children's health. USAID-supported research shows that family planning 
could prevent up to 30 percent of the estimated 287,000 maternal deaths 
that occur every year, by enabling women to delay their first pregnancy 
and space later pregnancies at the safest intervals. And if all babies 
were born 3 years apart, the lives of 1.6 million children under the 
age of 5 would be saved each year.
    The U.S. Government will continue to show leadership on this issue 
in multilateral fora such as the UN Commission on Population and 
Development, the UN Commission on the Status of Women, and the UN Human 
Rights Council. We persistently make the argument at these venues and 
elsewhere that reproductive health services, especially voluntary 
family planning, are essential to promote sustainable economic 
development, advance gender equality, and contribute to the U.S. 
Government's goals of Ending Preventable Child and Maternal Deaths and 
Creating an AIDS-free Generation.
    Through USAID, the U.S. Government advances and supports voluntary 
family planning and reproductive health programs in more than 45 
countries around the globe. As a core partner in the Family Planning 
2020 Initiative, USAID is committed to working with the global 
community to reach an additional 120 million women and girls with 
family planning information, commodities, and services by 2020. These 
services empower individuals to choose the timing and spacing of their 
pregnancies, bear children during their healthiest years, prevent 
unintended pregnancies, and nurture healthier families and communities.
    Additionally, the U.S. Government actively supports the UN 
Population Fund (UNFPA), the UN High Commissioner for Refugees (UNHCR) 
and many other development and humanitarian organizations to respond to 
the challenges of providing access to reproductive health services in 
crisis settings. This includes training staff, offering community 
education, establishing client follow-up, providing a variety of family 
planning methods, and maintaining a contraceptive supply chain system. 
Access to these life-saving interventions is linked to recovery from 
humanitarian and post-conflict situations, not just for women and 
girls, but also for their communities.
    Furthermore, as we focus on the ongoing 20 year review of the 
International Conference on Population and Development (ICPD) Program 
of Action, as well as the upcoming 20 year review of the 1995 Beijing 
Declaration and Platform for Action and the review of the Millennium 
Development Goals in 2015, the U.S. Government will continue to work 
toward advancing these goals. Improving the health and well-being of 
all individuals, especially women and children, promotes political and 
economic stability and social and economic progress. We will seek every 
opportunity to promote the participation of all stakeholders as we 
discuss the appropriate inclusion of sexual and reproductive health and 
reproductive rights, including family planning, in the Post-2015 
Development Agenda and into our development and poverty reduction plans 
and policies.
    Question. Internet freedom is under assault around the globe. In 
Russia, the government has blocked tens of thousands of dissident Web 
sites. In Ukraine, sites have been attacked. In Iran, 16 Internet 
activists were arrested in December, and online blogs and news outlets 
are frequently subject to closure. In China, bloggers remain extremely 
concerned by a recent government crackdown on Internet discourse. We 
are also witnessing challenges to Internet freedom emerging in 
countries as wide-ranging as Pakistan, Vietnam and Turkey.
    Are you concerned about the state of Internet freedom worldwide and 
what do you believe the State Department and the U.S. Government can do 
to more effectively promote an open Internet?
    Answer. We are very concerned about the state of Internet freedom 
worldwide, and are committed to promoting the human rights of freedom 
of expression, peaceful assembly and association just as we do offline. 
As President Obama said, ``We will fight hard to make sure that the 
Internet remains the open forum for everybody--from those who are 
expressing an idea to those who want to start a business.''
    The State Department seeks to promote, protect, and advance 
Internet freedom through bilateral and multilateral engagement, foreign 
assistance programming, and partnerships with civil society and the 
private sector.
    Bilaterally, we raise Internet freedom regularly in human rights 
and economic discussions with a wide range of countries, from China and 
Vietnam, to Turkey. We also work to advance human rights online through 
multilateral coordination efforts, such as the Freedom Online Coalition 
(FOC), a group of 22 governments spanning Asia, Africa, Europe, the 
Americas, and the Middle East, that is committed to collaborating with 
each other, as well as with civil society and the private sector, to 
advance Internet freedom. By strengthening partnerships with like-
minded governments we empower them to be regional leaders on Internet 
freedom.
    We look forward to the April 28-29 Freedom Online Coalition 
conference in Estonia, where we will continue to work with partners to 
advance a free and secure Internet, to ensure that the same rights that 
people have offline are also protected online, and that protection of 
these rights is governed by rule of law. We also work through the 
Internet Governance Forum, UN processes, and other working groups to 
preserve the multi-stakeholder character of the Internet.
    Programming is a vital tool to protect people and organizations at 
risk, provide capacity to safely communicate, push for reform of 
repressive policies, and improve technologies. With the support of 
Congress, we have issued grants to increase open access to the Internet 
for people in closed societies, support digital activists, counter 
censorship and repression, create and leverage technological 
innovations, and provide training, research, and advocacy.
    Our embassies advocate on behalf of imprisoned and arrested online 
activists. We engage daily with the civil society actors who shape the 
future of the Internet in their countries.
    We keep a consistent dialogue with the private sector on issues of 
Internet freedom. We are encouraged by corporations that make 
meaningful and principled commitments to respect human rights, 
including through initiatives such as the Global Network Initiative 
(GNI). This is a multi-stakeholder group that brings together IT 
companies, civil society organizations, investors, and academics to 
help corporations develop effective, practical responses to human 
rights challenges that arise while interacting with governments around 
the world.
    In sum, Internet freedom is a major policy priority, and we look 
forward to working with subcommittee members to advance Internet 
freedom worldwide.
    Question. As you know, Saturday, March 8 was International Women's 
Day. In its honor, I introduced a resolution to the Senate recognizing 
that the empowerment of women is inextricably linked to the potential 
of countries to generate economic growth, sustainable democracy, and 
inclusive security, and honoring the women in the United States and 
around the world who have worked throughout history to ensure that 
women are guaranteed equality and basic human rights. We have made a 
lot of progress, but there is clearly still work to further the health, 
rights and empowerment of women worldwide. Women lag far behind men in 
access to land, credit and decent jobs, even though a growing body of 
research shows that enhancing women's economic options boosts national 
economies. How can the role of women in the global economy be elevated 
and sustained, and how can we ensure the U.S. remains a leader on 
women's economic empowerment issues?
    Answer. The Department of State has made economic empowerment a 
centerpiece of American foreign policy, and recognizes the central role 
of women's economic participation. As I said last year, ``The United 
States believes gender equality is critical to our shared goals of 
prosperity, stability, and peace, and [that is] why investing in women 
and girls worldwide is critical to advancing U.S. foreign policy.'' In 
order to achieve these goals, we need to encourage, and harness the 
untapped talent and productivity of women across the globe. These 
efforts also highlight the role of the U.S. as a leader on women's 
economic empowerment issues globally.
    The Department is committed to elevating the role of women in the 
global economy through comprehensive efforts across regional and 
functional bureaus at the Department, and at posts worldwide. The 
Department's efforts are structured to build upon our significant 
progress in integrating the importance of women's economic empowerment 
into our foreign policy agenda. We do this by analyzing the areas where 
women face additional barriers to economic participation and 
empowerment, and addressing them. These efforts to both identify gaps 
and create mechanisms to address those gaps are focused in four areas: 
(1) access to markets; (2) access to capital/assets; (3) access to 
skills, capacity building and health; and (4) women's leadership, voice 
and agency.
    The Department works in numerous ways to advance the economic 
status of women, and the Secretary's Office of Global Women's Issues 
(S/GWI) leads and coordinates these efforts across the Department. One 
key focus is to support and strengthen women's entrepreneurship 
initiatives and networks. The United States has created and expanded 
regional programs to provide women business owners, entrepreneurs, and 
leaders with training, skills, networks, and other resources needed to 
expand their businesses and increase potential. There are several 
efforts across the globe, including for example, the Africa Women's 
Entrepreneurship Program (AWEP) and Women's Entrepreneurship in the 
Americas (WEAmericas).
    A second is to integrate women's economic participation into major 
regional and international economic fora, including the Asia Pacific 
Economic Cooperation, Association of South East Asian Nations, Lower 
Mekong Initiative, Broader Middle East and Northern Africa Initiative, 
the Africa Growth Opportunity Act (AGOA), the Organization for Economic 
Co-operation and Development (OECD), the Summit of the Americas, the 
Pathways to Prosperity in the Americas Initiative, Regional Economic 
Cooperation Conference for Afghanistan (RECCA), the G-20 and the Equal 
Futures Partnership. Economic, trade, and finance ministers have 
reacted favorably and have continued to express interest in engaging on 
this topic. These meetings recognize the barriers women face in fully 
contributing to the economy and encourage governments and the private 
sector to implement policies and reforms, collect better data, and 
share best practices that will enable women to play a more active role 
in the economic sphere.
    Lastly, the Department utilizes public private partnerships to 
address barriers to women's economic participation. Current and past 
partnerships include partnerships with the private sector, 
universities, and international institutions. These partnerships have 
focused on support for specific initiatives, research, and data 
collection and analysis.
    Question. In your testimony, you mentioned the role the State 
Department is already playing on economic diplomacy and creating 
opportunities for American business overseas. I know Secretary Clinton 
focused on business advocacy abroad as well. I've heard first hand from 
businesses in my home State of New Hampshire the important role the 
State Department can play for our businesses abroad in advocating for 
their interests. Do you believe this budget provides you the resources 
necessary to make U.S. business advocacy a priority overseas?
    Answer. The Department of State works to advance the interests of 
the United States overseas, including our economic interests. By 
supporting U.S. businesses overseas--from knocking down trade barriers 
and protecting intellectual property rights to direct advocacy for 
specific U.S. firms seeking contracts with foreign governments--we 
expand our influence while creating jobs here at home. Business 
advocacy is already a priority for the Department, both in Washington 
and at our overseas posts. In fiscal year 2013 the Department recorded 
971 ``success stories,'' defined as an export deal achieved, dispute 
resolved, or foreign policy changed through Department advocacy. 
Additional resources would, of course, allow us to do more and to 
generate more wins for American businesses. However, recognizing the 
current austere budget environment we face, we will continue to work 
with business and with our partner agencies, including the Departments 
of Commerce and Agriculture, to generate the biggest return possible 
for the dollars we invest in supporting U.S. business overseas.
    Question. As you are aware, last year the State Department faced a 
growing backlog of immigration visa applications from Afghans who, at 
tremendous risk to their own lives and to the lives of their family 
members, assisted the United States and NATO as translators in 
Afghanistan. What is the status of the implementation of the new Iraqi 
and Afghan SIV procedures and provisions under the 2014 NDAA, and has 
the backlog been sufficiently addressed?
    Answer. The State Department and the other U.S. Government 
departments and agencies involved in the Special Immigrant Visa (SIV) 
process have the highest respect for the men and women who have taken 
enormous risks while helping our military and civilian personnel. We 
are committed to helping those who--at great personal risk--have helped 
us. Over the past year, we improved processing times, expanded outreach 
to current and former employees who may be eligible, and issued more 
SIVs in Afghanistan (and in Iraq) than in any previous year.
    In the first half of fiscal year 2014, we have issued more SIVs to 
Afghans and their dependents than in all of fiscal year 2013 and have 
more than doubled the total number of Afghan principal applicants 
issued in fiscal year 2013 (651). In fiscal year 2014, through April 8, 
we have issued 3,617 SIVs to Afghans and their dependents; 1,320 SIVs 
of which were issued to Afghan principal applicants. All approvable 
Iraqi principal applicants were issued prior to the program's temporary 
end on September 30, 2013. In fiscal year 2014, as of April 8, we have 
issued an additional 912 SIVs to Iraqis and their dependents, with 218 
of these SIVs to Iraqi principal applicants. The relatively low number 
of issuances to date in fiscal year 2014 for Iraqis reflects the 
success of the surge at the end of fiscal year 2013.
    We have done this while maintaining the highest standards of 
security for the SIV program. We have a responsibility to the American 
people to ensure all those who enter the United States, including SIV 
recipients, do not pose a threat.
    Provisions contained in the National Defense Authorization Act 
(NDAA) fiscal year 2014 have allowed us to streamline some SIV 
procedures. Under this legislation, a credible sworn statement 
depicting dangerous country conditions, together with official evidence 
of such country conditions from the U.S. Government, should be 
considered in determining whether an applicant has experienced or is 
experiencing an ongoing serious threat; therefore, the Embassy Kabul 
COM Committee no longer assesses the serious threat qualifier for each 
individual SIV applicant. Instead, the SIV Unit Manager, designated as 
Embassy Kabul's SIV Coordinator, now has authority to grant COM 
approval on SIV applications that clearly meet the legal requirements. 
As of March, the Embassy Kabul COM Committee reviews only those cases 
recommended for denial.
    International Security Assistance Force (ISAF) employees who worked 
for NATO countries do not qualify for the SIV programs under section 
1244 of the Refugee Crisis in Iraq Act of 2008, as amended, and section 
602(b) of the Afghan Allies Protection Act of 2009, as amended. Among 
the requirements to qualify for these programs is that the applicant 
must have ``provided faithful and valuable service to the United States 
Government'' while ``employed by or on behalf of the United States 
Government.'' ISAF employees may qualify for the SIV program under 
section 1059 of the NDAA fiscal year 2006. This program's criteria 
includes ``having worked directly with United States Armed Forces, or 
under Chief of Mission authority, as a translator or interpreter for a 
period of at least 12 months'' and, if the work was with a U.S. Armed 
Forces unit, having ``supported'' that unit. As such, an ISAF employee 
who can establish 1 year of qualifying work which was directly with and 
supporting a U.S. Armed Forces unit as a translator or interpreter 
could qualify under the section 1059 SIV program.
                                 ______
                                 
             Questions Submitted by Senator Lindsey Graham
    Question. What actions has the administration taken to secure the 
release of Pastor Saeed Abedini?
    Answer. The U.S. Government is dedicated to the return of U.S.-
Iranian dual national Saeed Abedini. The President, the Secretary, and 
U/S Sherman have raised Mr. Abedini's case directly with the Iranian 
Government. We have made clear that we are calling on Iran to release 
Mr. Abedini so he can be reunited with his family. At our request, the 
Swiss Government, in its role as our protecting power, has also 
continued to raise Mr. Abedini's case on our behalf, as have other 
countries that we have asked to press Iran to cooperate on these cases.
    The United States has publicly called for Mr. Abedini's release at 
the UN Human Rights Council, and has played a leading role in lobbying 
the UN Human Rights Council to extend the mandate of the Special 
Rapporteur for human rights in Iran, a useful mechanism for addressing 
in international fora our human rights concerns with Iran, including 
violations of religious freedom. We will continue to pursue all 
available options until he returns home safely.
    Question. Do you have an update on [Saeed Abedini's] health and 
status?
    Answer. According to media reports, Saeed Abedini was transferred 
to Dey Hospital on March 3, 2014, and his father has been permitted to 
visit him in the hospital. The Department of State remains in close 
contact with his family regarding his status, but due to Privacy Act 
considerations we cannot share any additional information.
    Question. What is the status of the non-governmental organization 
(NGO) trial in Cairo that has politically ensnared the International 
Republican Institute and the National Democratic Institute, among other 
organizations? Do you have any confidence that the Egyptian Government 
will resolve this issue prior to the holding of presidential elections?
    Answer. We continue to press the Egyptian Government at high levels 
for redress of the NGO trial verdict, including pardons for all 
Egyptian and international staff. We understand that Egypt has not 
pursued Interpol measures since the convictions in June 2013 (notices 
or extradition requests), and they have assured us they would not. Our 
understanding is that a general amnesty would require legislation; 
currently, Egypt has no parliament and will not have one until after 
the parliamentary elections tentatively scheduled for this fall. We 
will continue to raise the issue at high levels with the interim 
government and with future elected governments.
    Question. Can you provide assurances to the Subcommittee that 
proposed framework for rebidding the State Department's Global Aviation 
Services Contract in multiple components will maintain the high 
standards of safety and efficiency of the current contract?
    Does the State Department estimate that higher costs are associated 
with rebidding the contract in multiple components?
    Answer. When the aviation support contract was last competed in 
2004/2005, the Department solicited industry input. Firms expressed an 
interest in the Department breaking up its aviation requirements and 
being able to bid on separate functions. However, the Department did 
not have time then to consider such a division.
    Over a year ago, in January 2013, the Bureau of International 
Narcotics and Law Enforcement Affairs (INL) sponsored an Industry Best 
Practice and Vendor Identification Conference to identify potential 
business sources with the resources, capabilities, and experience to 
successfully deliver requisite services to sustain the Department's 
Aviation Fleet.
    Market research continued that spring, and all told over 200 
companies participated, with 140 firms meeting with Department 
representatives. These firms ranged from Fortune 100 companies to small 
businesses. The Department's research also evaluated whether any of the 
needed services could be provided by small businesses, including 
HubZone, Service Disabled Veterans, and Woman-owned small businesses.
    This market research enabled the INL program staff to identify more 
clearly which functions could be broken out for small business and 
which ones should be procured using unrestricted acquisition methods, 
including interoperability between all functional areas.
    This decision on how to divide the program areas into seven 
separate solicitations--four for small business set-aside and three for 
unrestricted competition--was made only after a thorough review of the 
extensive market research, and based on INL's more than 20 years of 
professional expertise on the feasibility of the successful performance 
of this INL mission using the combinations of breakout and unrestricted 
awards that they had identified.
    In developing this acquisition plan, the safety, reliability, and 
effectiveness of the aviation program have been paramount 
considerations. We are aware of the importance of this program and its 
impact on the safety and wellbeing of not only State Department 
personnel, but all those who rely upon us for air transportation. Our 
acquisition process is designed to ensure that we continue to provide 
aviation services at the same high level of safety and professionalism 
we have always maintained.
    We believe that the approach we are taking has the potential to 
save the U.S. Government money due to increased competition and reduced 
sub-contractor overhead charges. However, it is not possible to 
accurately predict the cost of the future contract arrangement compared 
to historical costs since this entails new solicitations that differ in 
terms of contract requirements, and we do not know what industry's 
final cost proposals will be. We believe that this approach will 
increase competition and will also allow us to modernize our 
operations. We identified modern industry practices and the most cost 
effective methods of providing our requirements in each functional 
area.
    Overall, we believe that we have considered the risks and benefits 
of our contracting approach for this recompete, and that our 
contracting plan will provide needed aviation services safely and 
efficiently.
    Question. What is the status of Dr. Shakeel Afridi, and is his 
release a talking point in bilateral relations?
    Answer. Dr. Afridi was convicted of aiding the banned militant 
group Lashkar-e-Islam in May 2012, though his role in trying to locate 
Osama bin Laden is believed to be the reason he remains in jail. He is 
currently in prison in Peshawar, Pakistan. In March 2013, his sentence 
was reduced from 33 years to 22 years. The Department believes Dr. 
Afridi's treatment is both unjust and unwarranted. Senior U.S. 
officials regularly and consistently raise his case with senior 
officials in Pakistan's Government, encouraging them to resolve his 
case and free him, given that bringing Osama bin Laden to justice was 
clearly in the interests of both the United States and Pakistan.
    Question. Bolstering the Baltic Air Policing Mission was an 
important step to reassure Russia's NATO neighbors that the United 
States takes their security concerns seriously. What additional steps 
can we take to provide security guarantees to Russia's neighbors both 
NATO and non-NATO, including Georgia and Moldova?
    Answer. The United States and NATO have already taken a number of 
steps to reassure NATO Allies and partners in light of the Ukraine 
crisis. In addition to the augmentation of NATO's Baltic Air Policing 
mission, these actions have included expanded U.S. air exercises 
coordinated by the U.S. Aviation Detachment in Poland, maritime 
training in the Black Sea among the U.S. and Black Sea Allies Romania 
and Bulgaria, and the deployment of NATO AWACS over Poland and Romania 
to monitor Polish, Romanian and Bulgarian air space. NATO's Supreme 
Allied Command Europe will be presenting a further package of air, land 
and sea reassurance measures in the coming weeks, and we expect Allies 
to fully contribute to this mission.
    In addition, at the April NATO Foreign Ministerial, Foreign 
Ministers agreed to increase practical cooperation with three of NATO's 
Eastern Partners: Moldova, Armenia, and Azerbaijan. All three asked for 
increased engagement with NATO during recent high-level meetings.
    The United States has worked in particular to improve Moldova's 
border security by expanding a Defense Threat Reduction Agency program. 
Under the program, the United States will give an additional $10 
million this year for equipment and training to Moldova's Border Police 
and Customs Service. The equipment will improve the overall capacity of 
Moldova's border guards and help protect against the smuggling of 
illicit nuclear/radiological materials. The United States has also 
launched a Strategic Dialogue with Moldova to enhance the security 
dialogue between our countries.
    NATO also works with Georgia in its efforts to build strong, 
modern, and capable armed forces. Years of participation in NATO 
operations have made the Georgian forces tough, skilled, and largely 
interoperable with Allied forces. NATO is committed to a continued 
program of close cooperation with Georgia via the NATO-Georgia 
Commission (NGC) and the activities laid out in its Annual National 
Program. The United States offers bilateral security assistance and 
military engagement with Georgia to support its defense reforms, train 
and equip Georgian troops for participation in ISAF operations, and 
advance Georgia's NATO interoperability. Since the agreement between 
our two presidents in January 2012 to take steps to advance Georgian 
military modernization, reform, and self-defense capabilities, the U.S. 
European Command has been working closely with Georgia's Ministry of 
Defense and Armed Forces to implement these new areas of cooperation. 
We are continuing to review implementation of this enhanced defense 
cooperation and identify opportunities to advance our strong security 
partnership.
    Question. What are the Department of State's long-term plans for 
operations out of Gaziantep, Turkey?
    Answer. As you know, the Syria Transition Assistance Response Team 
(START) is an interagency team comprised of offices and bureaus from 
State and USAID responsible for planning and delivery of non-lethal and 
humanitarian assistance. It works with international organizations, 
NGOs, the Government of Turkey, and the Syrian opposition in order to 
ensure an effective and efficient response to Syria's needs. START 
works from our Consulates in Adana and Istanbul and our Embassy in 
Ankara.
    With regard to START members' presence in Gaziantep, we constantly 
reassess plans based on developments on the ground. Currently, the 
planned U.S. presence in Gaziantep is intended to be limited and 
geographically close to Syria in order to facilitate coordination and 
delivery of assistance to the Syrian opposition and Syrian people.
    Question. What are the priorities of the State Department on 
foreign assistance to the Great Lakes Region?
    Answer. Our foreign priorities for the Great Lakes region are 
focused on resolving the root causes of conflict and instability which 
means focusing first and foremost on the Democratic Republic of the 
Congo (DRC). Our DRC priorities include consolidating peace and 
security in the country's east, improving governance through credible 
elections, and professionalizing and training Congo's security forces 
to protect its territory and citizens.
    The late 2013 defeat of the M23 rebel group in North Kivu and gains 
made against other rebel forces in eastern Congo in early 2014 provide 
an unforeseen opportunity for achieving sustainable stability in the 
DRC. The next 1-to-3 years could be decisive. The DRC is gearing up for 
local elections, its first since independence in 1960, and provincial 
and national elections before the end of 2016. Following the seriously 
flawed 2011 election, it is imperative that these next elections are 
peaceful and credible, and further the democratization of the country. 
Achieving this goal will require substantial donor assistance, 
including in the early stages of election planning.
    Another foreign assistance priority in the region is Burundi, where 
we are increasingly concerned about shrinking political space and the 
potential for political violence. USAID and the Department have 
identified an additional $7.52 million in immediate resources intended 
to support free and fair elections in Burundi scheduled for May 2015.
    Question. What actions are the State Department, USAID, or other 
U.S. agencies taking to assist the DRC in conducting successful 
elections? Is there adequate funding in the fiscal year 2015 budget 
request for this purpose?
    Answer. The DRC Government currently estimates the cost of 2014-16 
elections at more than $950 million, with $388 million needed for local 
elections next year. The DRC electoral commission hopes the government 
will provide 80 percent of funds needed to support elections, with the 
remaining 20 percent coming from donors. USAID has set aside $700,000 
in fiscal year 2013 funds to support elections programming. Allocations 
for fiscal year 2014 resources are not yet finalized. We will continue 
to work with others in the international donor community to support DRC 
elections.
    The United States also played a key role in revising the mandate of 
the UN peacekeeping mission in the DRC (MONUSCO) to enable the mission 
to provide much-needed logistical support for elections. MONUSCO is the 
only entity in the country with the capacity to fly ballot boxes around 
and provide other heavy-lift types of support. MONUSCO's mandate 
requires the DRC Government to adopt an electoral cycle roadmap and 
budget before the mission can provide support.
    Lastly, we are actively and continuously engaging the DRC 
Government on the need for inclusive, transparent elections according 
to the current constitution.
                                 ______
                                 
                Questions Submitted by Senator Mark Kirk
    Question. Do you agree that other than by exercising the existing 
national security waiver authority provided in the statute, the 
President may not suspend, lift or override the requirement to impose 
sanctions under Section 1245 of the National Defense Authorization Act 
for fiscal year 2012 (Public Law 122-78) without congressional 
legislative action to suspend, amend or repeal the statute?
    Answer. On January 20, 2014, the administration issued a set of 
waivers of certain sanctions pursuant to the Joint Plan of Action 
between the P5 + 1 and Iran. These included a waiver of section 
1245(d)(5) of the National Defense Authorization Act for fiscal year 
2012 (NDAA). In accordance with the law, the Secretary determined that 
this waiver was in the national security interest of the United States 
with respect to China, India, Japan, Republic of Korea, Switzerland, 
Taiwan, and Turkey, and certified these jurisdictions faced exceptional 
circumstances preventing them from reducing significantly their 
purchases of petroleum and petroleum products from Iran. Subsequently, 
on March 10, 2014, the Secretary executed a waiver under NDAA section 
1245(d)(5) for Oman. These actions enable the current purchasers of 
Iranian crude oil (China, India, Japan, Republic of Korea, Turkey, and 
Taiwan) to maintain their current average purchase levels for the 6-
month period of the Joint Plan of Action and facilitates the 
repatriation in installments of $4.2 billion to Iran of funds held in 
restricted accounts overseas over the 6-month period.
    Question. Do you believe the final nuclear agreement with Iran 
should be considered a Treaty and be subject to ratification by the 
Senate--why or why not?
    Answer. As we are still in the process of negotiating a 
comprehensive solution to address concerns with Iran's nuclear program, 
I can't comment on the form any such solution will take. However, 
Congress has been an important partner in this process, and we will 
continue to seek Congress' support as we pursue a comprehensive 
solution.
    Question. If an acceptable nuclear agreement with Iran was reached 
in Vienna, would Iran's financial system, including the Central Bank of 
Iran, still be a concern for money laundering and terror finance?
    Answer. We have not reached a comprehensive solution with Iran. We 
cannot speculate, therefore, on what concerns we may or may not have 
with Iran in a hypothetical future scenario. We are committed to 
continuing to utilize our various authorities to enforce those 
sanctions that remain in place in furtherance of our policies on both 
Iran's nuclear program, as well as a range of other illicit conduct, 
even during the Joint Plan of Action period.
    Question. Do you consider the current Government of Iran to be 
legitimate?
    Answer. We recognize the Government of Iran. This does not mean 
that we do not have concerns with the activities of the Iranian 
Government. For example, we remain concerned about Iran's nuclear 
program, its sponsorship of terrorism, destabilizing regional 
activities, and violations of human rights. We have also maintained our 
concerns about the electoral process in Iran. Observers have noted that 
polling falls short of international standards for free and fair 
elections, including the reported intimidation of activists and 
journalists, restrictions on freedom of expression, and the 
disqualification of a large number of candidates, including all female 
candidates, for elected office by the Guardian Council, which is an 
unelected and unaccountable body. That said, we congratulated the 
Iranian people last year for participating in the political process and 
demonstrating the courage to make their voices heard. The Iranian 
people were determined to act to shape their future. As a consequence, 
Iran's president was overwhelmingly elected by the Iranian people.
    Question. April 24, 2014 marks the 99th commemoration of the 
Armenian Genocide, the campaign of mass murder of 1.5 million Armenians 
perpetrated by the Ottoman Empire from 1915-1923. There are now only a 
few known living survivors of the Armenian Genocide, including 107-
year-old Helen Paloian of Chicago, who lost her parents and two of her 
brothers.
    As we approach the 100th anniversary of the Armenian Genocide, will 
the U.S. finally honor the few surviving victims like Helen Paloian and 
officially recognize the Armenian Genocide?
    Answer. The administration has commemorated the Meds Yaghem, and 
continues to acknowledge as a historical fact that 1.5 million 
Armenians were massacred or marched to their deaths in one of the worst 
atrocities of the 20th century. The administration supports diplomatic 
efforts that support the President's call for ``a full, frank, and just 
acknowledgement of the facts.'' We will continue to support the 
courageous steps taken by individuals in Armenia and Turkey to foster a 
dialogue that acknowledges their shared history.
    Question. According to the 2013 U.S. Commission on International 
Religious Freedom's (USCIRF) report on Turkey: ``[T]he Turkish 
Government still controls access and use of various religious sites 
such as the Greek Orthodox Sumela Orthodox Monastery in Trabzon, the 
1,000-year-old Akdamar Armenian Orthodox church on Lake Van, and the 
Syriac Mor Petrus and Mor Paulus Church in the eastern province of 
Adiyaman.'' There were also reports of vandalism and violence against 
Christians, such as attacks against three Christian churches over 
Easter Week in May 2013.
    What efforts has the U.S. Government undertaken to urge Turkey to 
return the remaining Christian properties to their rightful owners? Has 
the State Department communicated their concern to Turkish authorities 
about attacks against Christians and their places of worship?
    Answer. We recognize religious minority groups continue to face 
challenges in Turkey. We are encouraged by concrete steps the 
Government of Turkey has taken over the past year to return properties 
to religious communities, including the return of the Mor Gabriel 
Monastery and 47 acres of property surrounding Halki Seminary. The 
State Department regularly engages at all levels with Turkish officials 
regarding the importance of religious freedom, including the reopening 
of Halki Seminary, legal reforms aimed at lifting restrictions on 
religious groups, property restitution, and specific cases of religious 
discrimination. Furthermore, we strongly condemn violence toward all 
religious minorities in the strongest terms, and urge Turkish 
authorities to fully pursue investigations and bring perpetrators to 
justice. We continue to encourage the Government of Turkey to follow 
through on the return of religious minority properties and to take 
additional steps to promote religious freedom, such as allowing more 
religious communities to own property, register their places of 
worship, and train their clergy.
    Question. On January 21, 2014, the Iraqi Cabinet of Ministers 
announced that it agreed to create three new provinces in Iraq, 
including in the Nineveh Plains, which is home to Iraq's vulnerable 
Assyrian Christians minority. Since 2003, terrorists have 
disproportionately targeted the Christian community in Iraq. The U.S. 
Commission for International Religious Freedom (USCIRF) estimates that 
``half or more of the pre-2003 Iraqi Christian community is believed to 
have left the country.''
    Does the U.S. Government officially support the creation of the 
Nineveh Plains Province? Has the USG offered assistance to the Iraqi 
Government to assist in the creation of the Nineveh Plains province?
    Answer. The safety and rights of the Christian communities in Iraq, 
including security concerns and protection of their lands, are issues 
of long-standing concern to the State Department. We have provided over 
$83 million in assistance to organizations working with minority 
communities since 2008 for a variety of efforts including community 
stabilization, conflict mitigation, and cultural preservation.
    After the preliminary decision of the Council of Ministers (COM) 
January 21 to convert the districts of Tuz, Fallujah, and the Ninewa 
Plains to provinces, it referred this matter to committee for further 
development. In order for this proposal to come into effect under 
Iraq's constitutional framework, the COM must review and approve it in 
the final form of a draft law and then send the draft law to Iraq's 
Council of Representatives for its review and approval. We are 
monitoring this proposal closely and view it as an internal Iraqi 
matter.
    Question. Has the U.S. Embassy in Baghdad designated a liaison for 
the Nineveh Plains that works with the Iraqi Government, Iraqi 
Christian community groups, and the U.S. Government?
    Answer. Ambassador Beecroft, Deputy Chief of Mission Desrocher, 
Deputy Assistant Secretary of State McGurk (who also serves as the 
Secretary's Special Coordinator for Iraq's Religious and Ethnic 
Minorities), and other staff meet regularly with representatives of all 
religious and ethnic minority groups, including Christians, to discuss 
their concerns and how the U.S. might be of greatest assistance to 
them. They then share those concerns with the highest levels of the 
Government of Iraq. Embassy Baghdad, Consulate General Erbil, and 
relevant State Department offices have staff dedicated to understanding 
and addressing the most pressing issues facing religious and ethnic 
minorities in Iraq and the concerns of the Iraqi diaspora in the United 
States.
    Question. On February 17, 2014, the United Nations Commission of 
Inquiry on human rights in the Democratic People's Republic of Korea 
(DRPK) published its final report, which detailed horrific crimes 
including ``extermination, murder, enslavement, torture, imprisonment, 
rape and sexual violence.'' It notes that ``the gravity, scale and 
nature of these violations reveal a state that does not have any 
parallel.'' Mr. Secretary, I traveled to North Korea as a congressional 
staffer in the late 1990's and these findings are not surprising to 
those of us who have been following this country closely. What is 
surprising is the level of detail the Commission was able to document, 
especially given how closed North Korea has been.
    What is the next step you and our Mission at the UN will take to 
follow up on this report? How will you ensure that this won't simply 
become another UN report that becomes buried on a shelf and no action 
is ever taken? Have you and Ambassador Power had conversations with our 
allies regarding taking action on this report?
    Answer. We remain deeply concerned about the deplorable human 
rights situation in the DPRK and the welfare of the North Korean 
people. We strongly support the Commission's final report, including 
its calls for accountability for the perpetrators of the ongoing, 
widespread, and systematic violations of human rights taking place in 
North Korea. In March 2013, the United States co-sponsored, along with 
Japan, the European Union, and the Republic of Korea, the UN Human 
Rights Council (HRC) resolution that established the Commission. On 
March 28 this year, the United States was proud to co-sponsor the HRC 
resolution that passed overwhelmingly. In the resolution, the HRC 
condemned the DPRK's human rights violations, renewed the mandate of 
the Special Rapporteur on the human rights situation in the DPRK, 
stressed the need for accountability for those responsible for human 
rights violations, and requested the Office of the High Commissioner 
for Human Rights to establish a field-based mechanism to strengthen 
monitoring and documentation as well as maintain visibility of the 
situation of human rights in the DPRK.
    We support the Human Rights Council recommendation that the UN 
General Assembly forward the Commission's final report to the UN 
Security Council for its consideration. We continue to work closely 
with a broad range of partners in the international community to 
sustain attention to the deplorable human rights situation in North 
Korea and to seek ways to hold the regime accountable for its human 
rights violations. Our Special Envoy for North Korean Human Rights, 
Robert King, is working with these partners and the Office of the High 
Commissioner for Human Rights to identify the most appropriate venue 
and structure for the field-based mechanism called for in the HRC 
resolution. Deputy Secretary William Burns met April 14 with the 
Honorable Michael Kirby, former chair of the Commission, to discuss the 
findings of the Commission. And on April 17, Ambassador Samantha Power 
representing the United States--together with French and Australian 
officials--convened an Arria-formula meeting for UN Security Council 
members with the Commissioners to discuss the findings and 
recommendations of the Commission of Inquiry's (COI) report on the DPRK 
human rights situation. This meeting was a further testament to the 
growing international consensus that the human rights situation in the 
DPRK is unacceptable.
                    national endowment for democracy
    Question. The fiscal year 2015 State, Foreign Operations, and 
Related Programs budget proposes a $32 million cut to the National 
Endowment for Democracy (NED), which is a 23 percent reduction from 
fiscal year 2014. According to the Congressional Budget Justification: 
``NED makes approximately 1,200 grants per year in nearly 100 
countries. NED's grants advance long-term U.S. interests and address 
immediate needs in strengthening democracy, human rights, and rule of 
law.''
    With the recent democratic upheavals throughout the globe, 
including the Arab World, Ukraine and Venezuela, do you find it 
counterintuitive that you are asking Congress to significantly scale 
back NED funding in fiscal year 2015?
    Answer. The fiscal year 2014 congressional appropriation for the 
National Endowment for Democracy (NED) included both $100,000,000 for 
their core funding, as well as an additional $35,000,000 in directives 
for specific countries in lieu Economic Support Funds that NED received 
in prior years. The President's fiscal year 2015 budget request for NED 
was straight lined from fiscal year 2014 and is consistent with past 
requests (chart provided).

------------------------------------------------------------------------
              Funding Year                    Request      Appropriated
------------------------------------------------------------------------
Fiscal year 2011........................    $105,000,000    $117,764,000
Fiscal year 2012........................     104,252,000     117,764,000
Fiscal year 2013........................     104,252,000     111,802,000
Fiscal year 2014........................     103,450,000     135,000,000
Fiscal year 2015........................     103,450,000  ..............
------------------------------------------------------------------------

    Question. The Department of State's 2013 Human Rights Report for 
Afghanistan stated: ``Although the situation of women marginally 
improved during the year, domestic and international gender experts 
considered the country very dangerous for women, and women routinely 
expressed concern that social, political, and economic gains would be 
lost in the post-2014 transition.'' Organizations such as Human Rights 
Watch have specifically expressed concerns over signs of a rollback of 
women's rights in anticipation of the transition in Afghanistan.
    In your assessment, has there been a rollback in women's rights in 
Afghanistan?
    What efforts are being made by the United States Government to 
ensure the preservation and advancement of women's rights in 
Afghanistan post-2014?
    Answer. Afghan women have made enormous strides since 2001. Girls 
now make up 40 percent of enrolled students throughout the country, 
women are represented in parliament and on provincial councils, 
businesswomen and female entrepreneurs are playing a key role in the 
economic development of their country, life expectancy for women has 
risen from 44 years in 2001 to 64 years today and female activists are 
actively advocating for social justice and seeking a peaceful 
resolution to the Afghan conflict.
    While these gains remain fragile, it is important to note the 
growing change of attitudes towards women in Afghan society as it 
signifies the potential for continued advancement. Democracy 
International polling indicates that 92 percent of Afghans believe that 
women have the right to participate in elections. Across the country, 
illiteracy and the lack of education is identified as the biggest 
problem facing women in all regions. A 2013 Asia Foundation survey 
found that 83 percent of respondents agree that women should have the 
same educational opportunities as men.
    These changes were evident on election day when Afghan women turned 
out in large numbers to vote, acted as election officials, and even ran 
as candidates. Widespread reporting indicates Afghan women were able to 
participate in significant numbers, and the Independent Electoral 
Commission's (IEC) initial estimate is that 35 percent of ballots were 
cast by women.
    As we move forward in the transition process, we will continue to 
promote Afghan women's rights to sustain these gains. The U.S.-
Afghanistan Strategic Partnership Agreement and the 2012 Tokyo Mutual 
Accountability Framework speak to the mutual commitments of the United 
States and the Afghan Government in protecting and promoting women's 
rights and role in society.
    We have also adopted a ``Gender Strategy'' in order to continue to 
mainstream gender issues into all of our policies and programs through 
transition and beyond. This includes substantial assistance to women to 
build their capacity to participate fully in Afghan society--in the 
political, economic, education, health and social realms--and, thereby, 
help build their country's future.
    There can be no progress without women's progress, and nowhere is 
this more critical than in Afghanistan. As Secretary Kerry said at 
Georgetown last November, we view women's rights in Afghanistan as a 
strategic necessity and the surest way to guarantee that Afghanistan 
will sustain the progress of the last decade.
                            fly america act
    Question. The Fly America Act requires all Federal agencies, 
Government contractors, and subcontractors use U.S.-flag air carriers 
for U.S. Government funded air transportation of personnel or property. 
Although the Fly America Act is current statute and should be applied 
to all U.S. Government contracts regardless of whether the clauses are 
explicitly referenced, there have been several instances in which State 
Department solicitations do not reference the Fly America Act. There 
have also been instances of foreign air carriers being used without an 
authorized exception under the Act. While the State Department has 
published clear guidance on Fly America Act compliance for personnel, 
there does not seem to be guidance concerning contracts, subcontracts, 
and Part 135 Air Carriers, which are certified by the FAA for passenger 
service of up to 30 persons or cargo service of up to 7500 lbs., and 
traditionally provide nonscheduled air transportation services. (Part 
121 Air Carriers are also certified by the FAA for passenger and cargo 
service exceeding 30 persons or 7500 lbs., and usually provide 
scheduled air transportation services.)
    Does the State Department provide guidance on Fly America Act 
compliance? Does this guidance distinguish between Part 135 and Part 
121 Air Carriers? Can you provide a copy of that guidance?
    Answer. Regarding passenger travel, the Department's Fly America 
Act policy is defined in 14 FAM 583, Use of U.S.-Flag and Foreign Flag 
Carriers. The Fly America Act, 49 U.S.C. 40118, establishes as a legal 
requirement that all U.S. Government-financed air travel be performed 
on U.S.-flag air carriers, where available as defined by 14 FAM 583, 
unless certain narrow exceptions apply. The relevant Comptroller 
General Guidelines for implementing this Act are found in B-138942, 
March 31, 1981 (see 14 FAM 583.7 for travel between two points abroad). 
The use of American Flag carriers is enforced using contracted travel 
management centers, with close oversight by government travel managers.
    The Department's policies for purchasing air and ocean shipping 
services as they relate to the various American Flag laws are reflected 
in 14 FAM 311 and 14 FAM 314. The Department maintains a close working 
relationship with the Maritime Administration and the American Flag 
Industry to ensure maximum use of U.S. Flag vessels.
    The Federal Acquisition Regulation (FAR) requires the use of clause 
FAR 52.247-63 in solicitations/contracts that have possible travel 
requirements. The clause requires that all contractors and 
subcontractors comply with the Fly America Act. Enforcement is 
accomplished during invoice payment and subsequent Defense Contract 
Audit Agency (DCAA) audits. Unauthorized expenditures for air transport 
using foreign carriers are not allowed. If this happens on one of the 
Department contracts, the Contracting Officer's Representative (COR) or 
the Contracting Officer (CO) will take necessary action to advise the 
prime contractor of the clause violation.
    All Bureau of Overseas Buildings Operations (OBO) contracts contain 
the following clauses and a letter is attached to all Federal Business 
Opportunities, FedBizOpps.gov, acquisitions announcements.
  --I.79, 52.247-63 PREFERENCE FOR U.S.-FLAG AIR CARRIERS, June 2003
  --I.80, 52.247-64 PREFERENCE FOR PRIVATELY OWNED U.S.-FLAG COMMERCIAL 
        VESSELS, February 2006
    In addition to these Department policies and authorities, there are 
several internal procedures that institutionalize travel rules and 
regulations:
  --Department personnel are required to use a designated Travel 
        Management Center (TMC) to schedule their travel after 
        receiving approved travel orders;
  --A global logistics system is used by transportation managers to 
        monitor shipments as they move through our logistics system; 
        and
  --A travel vouchering process provides a system to review and approve 
        travel to ensure that Department rules and regulations have 
        been followed.
    Question. What measures does the State Department take to ensure 
contractors remain in compliance with the Fly America Act requirements 
for all aviation transportation services paid with State Department 
funds?
    Answer. The COR monitors the day to day administration of the 
contract, to include contractor compliance with the Fly America Act. 
The COR or the Contracting Officer will advise the prime contractor of 
the clause violation. Additional enforcement is accomplished during 
invoice payment and subsequent DCAA audits should a violation be 
observed.
    Question. Are all subcontracts also required to comply with the Fly 
America Act? How are they monitored initially and is there any ongoing 
review to ensure compliance?
    Answer. The COR is responsible for ensuring all subcontractors 
comply with the Fly America Act and the Fly America Clause, FAR 
52.247.63. If a subcontractor is found to be in violation of the FAR, 
the COR would address the matter with the prime contractor, as outlined 
above. There is no requirement to consent to every subcontract and 
there is no requirement to perform a constant on-going review.
    Question. Have foreign-owned entities ever participated as 
subcontractors or joint venture partners in airlift activities in 
violation of the Fly America Act? If so, please site the incident(s) 
and what steps were then taken by the DOS to ensure future compliance.
    Answer. The Department of State does not track such violations. Any 
violation found by a COR or CO would have been settled at that time. No 
data bases or reports exist that can be searched.
    Question. How does the State Department ensure that requirements 
written for subcontracts for Part 135 international aviation services 
are not written to purposefully exclude otherwise qualified U.S. 
carriers?
    Answer. Contracting Officers read the requirements documents very 
carefully and ensure that they do not violate other FAR requirements or 
clauses. If they note a requirement that would violate the Fly America 
Act and FAR Clause 52.247-63, they would have the program office remove 
that requirement.
                                 ______
                                 
              Questions Submitted by Senator John Boozman
    Question. In your testimony, you touched on several vital ways in 
which the foreign affairs budget is used: supporting ongoing struggles 
for self-determination and democracy, fighting narco-trafficking across 
the globe, and supporting global health initiatives like PEPFAR. One 
area that you did not touch on, however, was an area in which would see 
an increase of nearly 27 percent under the requested budget: efforts to 
counter global climate change. With the ongoing conflicts in Central 
Africa and Eastern Europe, Iran's and Syria's continued defiance of 
international norms, and many other pressing issues concerning global 
and national security, why have you prioritized climate?
    Answer. Climate change is one of the most significant global 
threats we face and addressing it is an urgent imperative. There is a 
pressing need to act now to assist developing countries in reducing 
greenhouse gas emissions while achieving economic growth, adapting to 
the impacts of climate change, and developing the technical expertise 
required to make and keep emission reduction commitments. Climate 
assistance is also an opportunity for the United States to lead efforts 
to reduce pollution, improve public health, grow our economy, and 
reduce poverty abroad. This budget requests targeted investments to 
help protect against rising seas encroaching on coastlines and coastal 
communities, prolonged and extreme droughts leading to food insecurity 
and threatening agriculture-dependent livelihoods, and other hallmarks 
of a dramatically changing climate.
    The requested funding investment will assist partners around the 
world in reducing emissions and adapting to climate change and will 
support U.S. diplomatic efforts to negotiate a new international 
climate agreement in 2015. In addition, this funding helps protect the 
significant efforts we are making at home under the President's Climate 
Change Action Plan by promoting a global response so that our actions 
are not undermined by inconsistent actions abroad. U.S. leadership is 
necessary to bring nations together and forge partnerships to safeguard 
future generations from the dangerous and costly repercussions of 
global climate change.
    This budget request includes nearly $200 million to support clean 
energy programs that promote the adoption of renewable and energy 
efficient technologies and leverage private sector investment in clean 
energy. It also includes almost $200 million to help the most 
vulnerable countries adapt and build resilience to the impacts of 
climate change and over $120 million to reduce emissions from land use.
    These investments also present economic opportunities for both the 
United States and developing country partners, including increased 
demand for U.S. technologies.
    Question. Yesterday the Senate Foreign Relations Committee approved 
legislation to provide aid to Ukraine while implementing sanctions 
against those responsible for the undermining of the country's 
sovereignty. With the pending illegal referendum in Crimea, can you 
comment on the specific steps that the administration is considering to 
prevent this attempted annexation by Russia?
    Answer. On March 16, 2014, the Ukrainian region of Crimea held an 
illegal referendum concerning accession to the Russian Federation. This 
referendum was in violation of the Ukrainian constitution, which states 
any questions ``of altering the territory of Ukraine are resolved 
exclusively by an All-Ukrainian referendum.'' By March 21, the Russian 
Federation Council had approved the treaty on Crimea's incorporation 
into the Russian Federation.
    Since the beginning of Russia's occupation of Crimea, the 
administration has engaged the international community, through 
organizations such as the United Nations, the OSCE, and the G-7 to 
demonstrate the resolute international consensus that such actions do 
not belong in the 21st century. The United States and our many partners 
have not, and will not, recognize the illegitimate annexation of 
Crimea.
    Concerning both Ukrainian and Russian individuals complicit in 
undermining Ukrainian sovereignty and territorial integrity, the 
administration has utilized, and will maintain, targeted sanctions 
against those in position to effect change in Russia's policy and 
actions. Close cooperation with European and other partners has been, 
and will remain, a fundamental component of ensuring that sanctioned 
individuals experience full financial costs. The consequent uncertain 
business climate has already had and will continue to have costs for 
Russian interests.
    As events move forward, the administration will sustain its efforts 
with our European partners in multilateral fora to resolve the crisis 
in Ukraine, and encourage Russia to return its troop deployments to 
pre-crisis levels and positions. Secretary Kerry pursued these efforts 
at the Geneva quadrilateral meeting with representatives of the 
European Union, Ukraine, and the Russian Federation on April 17. At the 
meeting, the participants agreed that all sides must refrain from any 
violence, intimidation or provocative actions; all expressions of 
extremism, racism and religious intolerance, including anti-Semitism, 
are to be condemned and wholly rejected; all illegal armed groups must 
be disarmed; all illegally seized buildings must be returned to 
legitimate owners; all illegally occupied streets, squares and other 
public places in Ukrainian cities and towns must be vacated. Amnesty 
will be granted to protestors and to those who have left buildings and 
other public places and surrendered weapons, with the exception of 
those found guilty of capital crimes. It was also agreed that the OSCE 
Special Monitoring Mission should play a leading role in assisting 
Ukrainian authorities and local communities in the immediate 
implementation of these de-escalation measures wherever they are needed 
most.
    Question. You stated in your testimony, ``Our $1 billion loan 
guarantee is needed urgently but it's only through the International 
Monetary Fund (IMF)--a reformed IMF--that Ukraine will receive the 
additional help it needs to stand on its own two feet.'' During 
Secretary Lew's testimony before the Senate Budget Committee yesterday, 
he confirmed the existence of programs within the IMF for extraordinary 
assistance, such as what is being proposed for Ukraine. In light of 
this, can you please comment on whether congressional approval of IMF 
reform is actually required to assist Ukraine?
    Answer. Ratification of the IMF reforms would support the IMF's 
capacity to lend additional resources to Ukraine and other countries in 
crisis, preserve the U.S. veto over important institutional decisions, 
and do so without increasing the current U.S. financial commitment to 
the IMF. The reforms would put the IMF's finances on a more stable 
long-term footing, which would provide the institution with more 
financial flexibility in lending additional resources to Ukraine, and 
increase Ukraine's IMF quota. We are the last major economy to act and 
our approval is the only remaining step for these important reforms to 
go into effect.
    Question. I would like to shift to Afghanistan. Just last week, 
General Austin testified that ``in the wake of such a precipitous 
departure, [the Afghan Government's] long-term viability is likely to 
be at high risk and the odds of an upsurge in terrorists' capability 
increases without continued substantial international economic and 
security assistance.'' Do you agree with this assessment? Additionally, 
what are the State Department's lessons learned from our withdrawal 
from Iraq, given the current instability and security situation there?
    Answer. Despite many advances in Afghanistan, we anticipate 
continued support will be necessary post-2014, consistent with the 
Strategic Partnership Agreement signed in 2012. This is why we seek to 
conclude a Bilateral Security Agreement (BSA) and why NATO is 
negotiating its own status of forces agreement.
    Afghanistan is different from Iraq in key respects. We have signed 
a Strategic Partnership Agreement with Afghanistan that commits us to 
continued security and economic cooperation over the long term. In 2011 
the Iraqis did not want a continued U.S. presence. They did not think 
they needed us, and no significant Iraqi official was prepared to argue 
publicly for a continued U.S. military presence. By contrast, 
consistent polling results and the outcome of the Loya Jirga in 
November 2013 show that there is broad support among political elites 
and ordinary Afghans for a continued international presence post-2014. 
Moreover, all of Afghanistan's leading Presidential candidates have 
said that signing the BSA would be a top priority once elected.
    Question. You have indicated that a bad deal with Iran is worse 
than no deal. Therefore, what do you believe would constitute a bad 
deal?
    Answer. The administration is working with the P5+1 and EU to reach 
a comprehensive solution to the international community's concerns with 
Iran's nuclear program. Our goal remains to prevent Iran from acquiring 
a nuclear weapon and ensure that its nuclear program is exclusively 
peaceful. All of the things on which we will have to reach agreement in 
the course of the negotiations are addressed in the Joint Plan of 
Action. We are looking to ensure that we have the right combination of 
measures in place to ensure Iran cannot acquire a nuclear weapon. This 
is why we agreed in the Joint Plan of Action that nothing is agreed 
until everything is agreed in a comprehensive solution. All members of 
the P5+1 must agree on any final decision, so we will be able to ensure 
that an agreement meets our needs. Anything that falls short of meeting 
our needs would be a bad deal.
    Question. As you know, in December of 2012, the United States 
closed its Embassy and recalled its diplomats in the Central African 
Republic (CAR) due to the escalating conflict. Despite the seemingly 
successful election of an interim president, sectarian violence and 
regional instability continue to rise. Can you comment on whether we 
plan on returning our diplomatic presence?
    Answer. The United States is concerned with inter-religious 
violence in the CAR and remains committed to working with the 
international community to support the CAR transitional government in 
its efforts to end the violence and build a transitional political 
process. The Department of State is reviewing the re-opening of Embassy 
Bangui in light of our strong interest in better supporting the 
restoration of democratic governance in CAR. The purpose of the review 
is to obtain a decision on whether a U.S. presence in Bangui is viable 
in light of the level of insecurity. There is no firm date for a 
decision on whether to re-open Embassy Bangui at this time. While not 
optimal, officials continue temporary duty visits and employ other 
mechanisms to monitor events in, and implement policies toward, CAR.
                                 ______
                                 

                          SUBCOMMITTEE RECESS

    Senator Leahy. On a personal note, I wish you luck on your 
trip tonight.
    Secretary Kerry. Thank you, Senator.
    Senator Leahy. Thank you for trying. Like in any diplomacy, 
you have to go down a lot of dead ends before you hit the right 
one. Thank you for keeping trying.
    Secretary Kerry. Thank for very much, Mr. Chairman. It is a 
privilege to be with you. Thank you.
    [Whereupon, at 12:28 p.m., Thursday, March 13, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]



  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.]


       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page

Blunt, Senator Roy, U.S. Senator From Missouri, Questions 
  Submitted by...................................................   115
Boozman, Senator John, U.S. Senator From Arkansas, Questions 
  Submitted by...................................................    55

Durbin, Senator Richard J., U.S. Senator From Illinois, Questions 
  Submitted by...................................................    34

Graham, Senator Lindsey, U.S. Senator From South Carolina:
    Questions Submitted by.......................................    48
    Statements of 




Kerry, Hon. John F., Secretary, Department of State..............     1
    Prepared Statement of........................................     8
    Questions Submitted to.......................................    34
    Summary Statement of.........................................     4
Kirk, Senator Mark, U.S. Senator From Illinois, Questions 
  Submitted by...................................................    51

Landrieu, Senator Mary L., U.S. Senator From Louisiana, Questions 
  Submitted by...................................................    35
Leahy, Senator Patrick J., U.S. Senator From Vermont:
    Opening Statements of 



    Prepared Statements of 



    Questions Submitted by.......................................   100

Shah, Dr. Rajiv, Administrator, United States Agency for 
  International Development......................................    59
    Prepared Statement of........................................    65
    Questions Submitted to.......................................   100
    Summary Statement of.........................................    63
Shaheen, Senator Jeanne, U.S. Senator From New Hampshire, 
  Questions Submitted by.........................................    44

                             SUBJECT INDEX

                              ----------                              

                          DEPARTMENT OF STATE

                        Office of the Secretary

                                                                   Page

Africa Initiatives...............................................    26
Aid to Orphans...................................................    17
Camp Liberty.....................................................    30
Central African Republic.........................................    29
Child Welfare Systems Strengthening..............................    42
Fly America Act..................................................    54
How the President's Emergency Plan for AIDS Relief (PEPFAR) Puts 
  Family Care First..............................................    42
International Monetary Fund (IMF)................................    12
Iranian:
    Funding for Hezbollah........................................    25
    Nuclear Program..............................................    20
    Trade With Iran..............................................    24
Keystone Pipeline................................................    16
National Endowment for Democracy.................................    53
    Fiscal Year 2011-2015 Appropriations (Chart).................    53
Nuclear Development..............................................    32
PEPFAR...........................................................    28
    How PEPFAR Puts Family Care First............................    42
    Support for Children Outside of Family Care..................    42
    Why PEPFAR Focuses on Family Preservation....................    41
Russian:
    Aggression in Ukraine........................................    15
    Sanctions....................................................    19
Syrian:
    Chemical Weapons.............................................    22
    Refugee Crisis...............................................    14
    Turkey and Syrian Relations..................................    31
Trade With Iran..................................................    24
Turkey and Syrian Relations......................................    31
U.S. Support of Ukraine..........................................    10
Why PEPFAR Focuses on Family Preservation........................    41

           UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

A Blog From the United States Agency for International 
  Development, April 7, 2014, ``Eight Facts About ZunZuneo''.....    78
A New Model for Development......................................    65
Afghanistan......................................................    81
Associated Press Story ``U.S. Secretly Created `Cuban Twitter' to 
  Stir
  Unrest''.......................................................    72
Child Survival...................................................    92
Children's Vaccines..............................................    93
Core Priorities..................................................    66
    Climate Change...............................................    68
    Education....................................................    68
    Feed the Future..............................................    66
    Global Health................................................    67
    Power Africa.................................................    68
    Water........................................................    69
Cuba 



Eight Facts About ZunZuneo.......................................    78
Feed the Future..................................................    82
Food Aid.........................................................    87
Hepatitis C......................................................    83
Miami Herald Story of April 3, 2014, ``U.S. Secretly Created 
  `Cuban Twitter' to Stir Unrest''...............................    72
National Action Plan for Children................................    84
Nutrition........................................................    93
Power Africa.....................................................    89
Supporting Regional Priorities and Strengthening National 
  Security.......................................................    69
Ukraine..........................................................    83
USAID:
    Central America Fiscal Year 2015 Funding Priorities (Chart)..   113
    Operating Expenses...........................................    71
    Recent Foreign Assistance Achievements (Chart)...............   112
    Response to the Associated Press Story ``U.S. Secretly 
      Created `Cuban Twitter' to Stir Unrest''...................    78

                                   [all]